FOR SALE
45-47 Fargate, Sheffield S1 2HD
P R I M E
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I N V E S T M E N T
P R I M E
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I N V E S T M E N T
FOR SALE
45-47 Fargate, Sheffield S1 2HD INVESTMENT SUMMARY •
Major city centre location
•
100% prime
•
5A1 covenant
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Highly prominent corner unit
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Freehold
•
FRI lease
•
Rebased, reversionary rent
Offers are invited in excess of £3,230,000 for the freehold interest. This reflects an attractive net initial yield of 6.47% and a reversionary yield of 6.72% after allowance of graduated purchaser’s costs increasing to 6.80%.
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A1(M)
M6 M55 M62
M18
M180
M1
M60 M53
I N V E S T M E N T
Sheffield is the administrative centre of South Yorkshire and is England’s 3rd largest metropolitan authority.
M62 M6
R E T A I L
M56
M1
M6
M54
M42
SHEFFIELD Sheffield is the administrative centre of South Yorkshire and is
2037 (ONS). A large part of the Sheffield’s population is in the
people work in sectors including aerospace, automotive, power,
England’s 3rd largest metropolitan authority. The city is located
young 15-24 age bracket and this is mostly due to the city’s large
oil and gas, rail and medical technologies. Companies including
approximately 35 miles south of Leeds, 40 miles south east of
student population. The University of Sheffield and Sheffield
Boeing, Rolls Royce, BAE Systems and Siemens have facilities in
Manchester and 165 miles north of London. It benefits from
Hallam University together provide a pool of some 62,000
the area. The city still retains a worldwide reputation for
excellent travel communications, being situated immediately
students with more than 21,000 people graduating annually.
excellence in finished metal goods such as cutlery, precision
adjacent to junctions 33 and 34 of the M1 motorway. Direct
Sheffield College is also a leading college of higher education
engineering and tool making.
trains run approximately every 20 minutes from the city’s
and has some 20,000 students.
mainline railway station to London with a journey time of around
The city also has a thriving tech sector with around 25,000
2 hours. There are also 5 international airports within an hour’s
Over the course of the last century, Sheffield’s economy has
people working in the digital, media and telecom industries.
journey time from Sheffield (Doncaster Sheffield, Manchester,
diversified substantially from being predominantly focused on
Sheffield is contributing to the next generation of digital
East Midlands, Leeds Bradford and Humberside). Sheffield has
heavy industry. The city has some 117,000 people employed in
entrepreneurs through its University Technological College that
been highlighted as one of the UK’s least congested cities given
the financial and professional services sectors; in particular the
is working with companies such as Sumo Digital, Team Cooper
its modern public transport system which brings together its
legal business which accounts for some 8,500 professionals. DLA
and G2G3 Digital to bring through young talent.
light railway service, Supertram and local bus network.
Piper, Nabarro and Irwin Mitchell all have offices in the city.
In mid 2011 Sheffield’s population was reported as being around
While manufacturing is no longer the predominant employment
around Sheffield. Attractions including the Winter Gardens, The
552,000 with its wider metropolitan area incorporating some
sector in Sheffield, both its universities are particularly strong in
Crucible Theatre and the Peak District National Park receive an
1,569,000 people. The city’s population is increasing and is
engineering and materials and Sheffield remains at the heart of
estimated 20 million visitors a year.
expected to expand by around 75,800 people over the period to
the UK’s manufacturing industry. Across the city, some 94,000
Tourism is also a notable contributor to the local economy in and
P R I M E
R E T A I L
I N V E S T M E N T
45-47 Fargate, Sheffield S1 2HD
SHEFFIELD’S RETAILING Sheffield city centre has a large and varied retail offer extending to around 1.56 million sq ft of floorspace. The city has an estimated primary shopping population of some 640,000 people and ranks 7th on the PMA Anchor score. The city’s prime retail pitch is linear, with 100% prime being the pedestrianised Fargate, extending south down Pinstone Street and thereafter to the more secondary, value-orientated, The Moor. Most of the UK’s main national multiples are represented including John Lewis, Marks & Spencer, Debenhams, H&M, Boots, River Island, WH Smith and Waterstones.
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I N V E S T M E N T
45-47 Fargate, Sheffield S1 2HD SITUATION The property is arguably the most prominent unit on Fargate, situated on its east side on the corner with Norfolk Row. This location is in the mid, 100% prime, part of pedestrianised Fargate where other nearby retailers include Marks & Spencer, Vision Express, Topshop, WH Smith and H&M.
ACCOMMODATION The property comprises a prominent, 3 storey, corner unit with the benefit of a large return frontage onto Norfolk Row. The tenants trade from basement, ground and first floors and there is additional storage at 2nd floor. The accommodation has been measured in accordance with the RICS Property Measurement (incorporating International Property Measurement) Standards on a Net Internal Area basis as follows: sq m
sq ft
Ground Sales
197.46
2,125
Ground ITZA
101.57
1,093
Basement Sales
77.18
831
Basement Storage/Staff
34.71
374
Basement Restricted Height
62.80
676
207.41
2,232
51.89
559
631.45
6,797
First Sales Second Storage Total NIA
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I N V E S T M E N T
TENURE Freehold.
TENANCY The property is let in its entirety to Next Group plc on a 5 year full repairing and insuring lease expiring 1st May 2018 at a current rent of £222,500 per annum. A personal side letter permits the current tenant to pay rent monthly in advance.
PASSING RENT ANALYSIS AND MARKET RENT We calculate that the passing rent equates to approximately £164 psf ITZA (applying nil to the restricted height areas in the basement, a/12 to 1st sales, a/15 to basement sales, a/25 to basement storage and a/60 to 2nd floor). Rents on Fargate peaked at around £250 psf ITZA in 2006 and have been substantially rebased since then. There is now a consistent body of evidence supporting the current prime tone on Fargate of £170 psf ITZA: Address
Tenant
Date
Transaction
£ psf ITZA
10 -12 Fargate
Carphone Warehouse
Mar-15
LRnwl
£174
14 Fargate
Office
Mar-16
LRnwl
£170
16 Fargate
Pandorra
Oct -14
OML
£177
42-48 Fargate
New Look
Sept -13
Re-gear
£170
We are aware of ongoing lease renewal negotiations which will further substantiate a tone of £170 psf ITZA. Further details can be provided upon request. We are therefore of the opinion that £170 psf ITZA is applicable to the subject location. Applying this, we calculate that the property has a current Market Rent of around £231,000 per annum: an uplift of some £8,500 per annum on the current rent.
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45-47 Fargate, Sheffield S1 2HD PLANNING We understand that the property is located within the city centre conservation area but is not listed.
TENANT COVENANT Originally born out of the Hepworths chain, the first Next shop opened in 1982. The group now trades from more than 500 stores in the UK and Eire and around 200 stores in more than 40 countries abroad. In 1988 the group launched its groundbreaking mail order Next Directory business and online shopping was introduced in 1999. Next are one of the UK’s best known multiple fashion brands and have a 5A1 Dun & Bradstreet rating: 24/01/2015 (£,000s)
25/01/2014 (£,000s)
26/01/2013 (£,000s)
Turnover
202,200
197,700
212,300
Profit Before Tax
139,400
53,000
322,500
Tangible Net Worth
772,700
1,296,600
1,747,900
Net Current Assets
742,100
1,267,600
1,726,000
VAT It is intended that the sale shall take place by way of a Transfer of a Going Concern (TOGC).
EPC The property has an EPC Rating of D with a score of 83. Certificate upon request.
PROPOSAL
CONTACTS
Our clients are seeking offers in excess of ÂŁ3,230,000 for the benefit of their
For further information or to arrange viewings, please contact sole selling agents, CWM & Partners LLP.
freehold interest. A purchase at this level would reflect a net initial yield of 6.47% and a reversionary yield of 6.72% after allowing for graduated purchaser’s costs increasing to 6.80%
John Miles +44 (207) 494 6922 +44 (7789) 243 998 jhm@cwm.co.uk
Ben Simpson +44 (207) 494 6932 +44 (7781) 220 817 bs@cwm.co.uk
Jamie Whitelaw +44 (207) 494 6946 +44 (7738) 684 881 jw@cwm.co.uk
MISREPRESENTATION ACT. CWM & Partners LLP for themselves and for the vendors/lessors of the property whose agents they are, give notice that: 1. These particulars are set out as a general outline for the guidance of the intended purchasers or lessees, and do not constitute part of, an offer or contract; 2. All descriptions, dimensions, reference to condition and necessary permissions for the use and occupation, and other details are given without responsibility and any intending purchaser or tenant should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them; 3. No person in the employment of CWM & Partners LLP has any authority to make or give any representations or warranty in relation to this property. March 2016. Alamo Design 01924 471114.