st andrews retail park coventry road, birmingham Open A1 non food retail warehouse investment
investment summary Open A1 non food retail warehouse investment Birmingham is the UK’s second largest city located approximately 48 miles south east of Stoke-on-Trent and 118 miles north west of London.
Open A1 non-food planning consent on the Woolworths unit, with potential to install mezzanine accommodation, subject to planning.
The city benefits from an extensive resident urban area catchment population of 970,892, rising to 2,383,081 within 12 miles of the city centre. Birmingham’s population is expected to increase by 12.2% between 2003-2028. This compares with a projected growth rate of 11.04% nationally.
Freehold.
Situated in a prominent, established retail warehouse location, just off Birmingham’s inner ring road (A4540). Modern, purpose built retail park comprising a Woolworths unit of 80,000 sq ft, together with an 88,185 sq ft adjacent Wm. Morrison foodstore.
Asset management initiatives available to downsize Woolworths and create further open A1 non-food accommodation. Well let to the substantial national covenant of Woolworths plc for a term of 20 yearsfrom 19/10/2001 at a passing rent of £14.50 per sq ft. The foodstore element has been sold off to Wm. Morrison Supermarkets plc on a 250 year long leasehold at a peppercorn rent under a lease dated 28/07/00. Woolworths unit reversionary to an assumed ERV of £15.00 per sq ft.
Offers are invited at a price in excess of £21,940,000 (Twenty One Million, Nine Hundred and Forty Thousand Pounds), subject to contract and exclusive of VAT. This price reflects the following yield profile, assuming purchaser’s costs at 5.7625%:Initial 5.00% Reversionary
5.17%
Nominal Equivalent
5.14%
True Equivalent
5.31%
Birmingham City FC
SUTTON COLDFIELD M6
1.0 location
WEST BROMWICH
M6
n The city of Birmingham is located at the centre of the
n The city has a regionally dominant retail provision
West Midlands conurbation, approximately 48 miles south east of Stoke on Trent, 44 miles west of Leicester and 118 miles north west of London.
n Birmingham is the UK’s second largest city and benefits
from excellent road communications, being situated at the centre of the national motorway network. The city is bordered by the M5, M6 and M42 motorways, which in turn connect directly to the M1, M40, M54 and M69 motorways. Birmingham is served by three mainline rail stations providing an extensive nationwide rail service and a direct link to London Euston, with a fastest journey time of approximately 1 hour 30 minutes.
and in recent years has undergone significant regeneration. This includes the UK’s second largest retail centre, the redeveloped Bullring Shopping M5 Centre (Source: CACI), providing 1.2 million sq ft of prime retail space, anchored by Debenhams and Selfridges department store. Although traditionally a manufacturing and engineering city, today Birmingham has broadened its economy to include more service based industries, with a strong focus towards the A4123 conference and exhibition sectors.
M5 The Fort Shopping Park J6
A5127
Castle Vale Retail Park
B4114 Stechford Retail Park
B4145
Birmingham City Centre
A47
St Andrews Retail Park
A456 A4540 A41
A45 B4145
n Birmingham has a substantial resident urban area
population of 970,892 (2001 Census), extending to 2,383,081 within 12 miles of the city centre (1994 estimate). The population of Birmingham is projected to increase by 4,000-5,500 persons per year until 2028, representing a 12.2% increase overall between 2003-2028. This compares with a projected growth of 11.04% nationally (Source: Office for National Statistics).
M6
A34
A38
A435 A34
Battery Retail Park
A41
Sears Retail Park
n The subject property is located within the district of Hodge Hill and the ward of Bordesley Green. Hodge Hill has a population of 107,826 (2001 Census) and Bordesley Green 31,343 persons (2001 Census).
Solihull Retail Park
B4102
M6 Toll
2.0 situation Vauxhall
A47
Saltley
A41
M42
St Andrew’s Retail Park is situated 2.5 miles east of Birmingham city centre, in a prominent location at the junction of Coventry Road and Cattell Road (B4128), just off the city’s inner ring road (A4540). National Indoor Arena
New Street Station
M
AL LH EA T
AD
H
A45
M
HIG HG AT E
A4540
AY Highgate EW DL D I
Bordesley Green
A4145
RD
ST
A4132
JE N KI N S
A38
D
CO VE NT RY
A4130
B4128
HILL OCK RO
Five Ways
Lee Bank
RY R COVENT
OAD LL R TTE CA
Little Bromwich
ST
A4540
Digbeth
Birmingham City FC
Adderley Park
ORIA
Carpetright, MFI, Dunelm, Brantano and Halfords. Birmingham City Football Club is also located opposite the property on Cattell Road.
Deritend
S
Birmingham International Airport
St Andrews Retail Park
Bordesley
A4100
n As detailed on the attached map, the property forms part of an established retail warehouse pitch, with approximately 135,000 sq ft of cluster developments located off the inner ring road. Retailers represented include Currys, PC World, DFS,
BORDESLEY GREEN ROAD
A4132
VICT
(forming the start of the A38(M) Aston Expressway) and the inner ring road (A4540) and Birmingham city centre to the west.
A4540
A4114
Birmingham City Centre
DLEWAY ATE MID HG HIG
n The B4128 is a busy arterial route connecting to the A45, A34
B4145
HIG HW AY
A41
Small Heath
A45 A4540
M42
3.0 retail warehousing in birmingham Birmingham is served by a strong retail warehouse provision with important schemes including The Fort Shopping Park, Solihull Retail Park and Castle Vale Retail Park. However, as detailed on the attached street map, only limited developments serve the substantial population of south east Birmingham between the city centre and Solihull, providing the potential to create a dominant scheme serving this catchment.
The Fort Shopping Park (Co-ownership) Situated just off the M6 motorway, approximately 4 miles north east of the subject property, this scheme extends to 256,000 sq ft of open A1 non food accommodation. Major occupiers include Bhs, Next, Arcadia and Marks & Spencer, with the highest rent currently achieved being £50.00 per sq ft to New Look in March 2006.
Castle Vale Retail Park (Prupim) Comprising 182,000 sq ft of open A1 accommodation, this park consists of a single retail terrace anchored by a Sainsbury’s foodstore. The scheme is situated 0.5 miles east of the Fort Shopping Park with tenants including Comet, TK Maxx and Argos. The most recent evidence is a letting to SCS at £25.00 per sq ft from July 2005.
Stechford Retail Park (Morley Fund Management) Stechford Retail Park comprises 107,000 sq ft of open A1 non food accommodation, situated 2.5 miles north east of the subject property. Occupiers include Matalan, Argos and Currys, with a highest letting to Dreams at £16.50 per sq ft from September 2004.
Solihull Retail Park (Standard Life Investments) Located approximately 5 miles south east of the subject property, this park comprises 180,000 sq ft of open A1 non food accommodation. The scheme is, however, occupied by predominantly bulky goods occupiers including B&Q, MFI, Currys and Mothercare World. The most recent evidence on the park is a rent review of the SCS unit at £36.00 per sq ft from March 2007.
4.0 description St Andrews Retail Park is a modern, purpose built retail park developed in 2000, comprising Woolworths and Wm. Morrison. Both units are of steel portal frame construction with half height brick elevations under profile metal cladding, complete with extensive entrance lobby features. The Woolworths unit has a clear eaves height of approximately 6.0 metres, therefore providing the ability to install a mezzanine, subject to planning. Customer vehicle access to both units is provided directly via Coventry Road, leading from the inner ring road and Cattell Road. Service vehicles may access the Woolworths unit via Cattell Road and Wm. Morrison via Greenway Street, leading from Coventry Road. Customer car parking is situated to the front of both units providing approximately 670 spaces, equating to a ratio of 1:251 sq ft. The car parking area has been demised to each of the occupiers, although there is a specific provision that customers have the right to use the whole car park. In practicality, customers use either section of the car park freely. We estimate the site area is approximately 10.13 acres (4.10 hectares).
5.0 accomodation The subject property provides the following measured gross internal areas:
Unit sq ft sq m Woolworths
80,000
7,432
Wm. Morrison
88,185
8,192
168,185
15,624
Total
6.0 planning Planning consent for the Woolworths unit was originally granted in February 2001 to provide:
“ Construction of non food retail unit, car parking and associated works.”
B4128) Road ( Cattell
Condition C14 of the consent sets out the following restriction:
“ The unit indicated…should not be further subdivided without the prior consent of the Local Planning Authority.” car park
7.0 tenure The site, as outlined in red, is held freehold.
car park
8.0 tenancies The Woolworths unit is let to Woolworths plc for a term of 20 years from 19/10/2001 (expiring 18/10/2021), with a passing rental of £1,160,000 per annum, equating to £14.50 per sq ft. The lease is drafted on a full repairing and insuring basis, subject to upwards only rent reviews every 5 years. At present, the 19/10/2006 rent review remains outstanding. The Wm. Morrison unit was sold to the occupier on a 250 year long leasehold at a peppercorn rent under a lease dated 28/07/2000.
Co
sold off to WM. Morrison long leasehold
ve ntr y
Ro ad
9.0 estimated rental value The Woolworths unit is located in a prominent position within a busy retail warehouse pitch, adjacent to a large foodstore and benefits from an open A1 non food planning consent. We consider the unit to be reversionary with the rent low both in a regional context and compared to open A1 rents within Birmingham. At present, the 19/10/2006 rent review remains outstanding. The table below illustrates a number of comparable transactions and rent reviews that in our opinion, demonstrate that the subject property has an ERV of £1,200,000 per annum, equating to £15.00 per sq ft.
Li
e ttl
en re G
ne La
Town
Address
Tenant
Birmingham
Dunlop Way
Milton Keynes
Area (sq ft)
Transaction
Effective Date
Passing Rent (p.a.)
Passing Rent (p.s.f)
B&Q Warehouse 106,245
Rent Review
01/12/2005
£1,809,225
£17.03
Cairngorn Drive
Homebase
81,675
Open Market Letting
15/10/2005
£1,420,000
£17.40
Milton Keynes
Grafton Gate
Toys R Us
47,544
Rent Review
15/07/2005
£832,195
£17.50
Kidderminster
Crossley Retail Park
B&Q Warehouse 126,556
Rent Review
24/06/2005
£1,578,970
£15.50
Halesowen
Mucklow Hill
B&Q Warehouse
92,400
Rent Review
16/11/2004
£1,560,000
£16.88
Birmingham
Dartmouth Circus
Matalan 43,382
Rent Review
25/03/2001
£555,900
£12.81
Comments
Unit has now been subdivided
2006 rent review outstanding
10.0 asset management opportunities
11.0 tenant covenant
We are of the opinion that the subject property provides a number of attractive asset management options. These are set out below:-
Woolworths plc is one of the UK’s leading general merchandise businesses, successfully operating 5 subsidiary companies. These include Woolworths, Entertainment UK (UK’s leading distributor of entertainment products with an annual turnover in excess of £1.1 billion), 2 Entertain (joint venture audio and video business), the Bertram Group (book wholesaler, distributor and library services) and Total Home Entertainment (combined wholesalers and distributors of books, audio, video, multimedia and computer games). Woolworths was established in 1909 and as at March 2007 traded from 818 stores both in and out of town.
n Downsize part of the existing Woolworths unit to provide valuable open A1 space to
let. Given the excellent configuration and eaves height of the subject property, this could either be let as a whole or in part complete with mezzanine accommodation (subject to planning). n Seek to agree a regear of the Woolworths plc lease in conjunction with creating new
space to let.
Woolworths plc is the main operating company and therefore as expected provides a strong covenant. Their latest available 3 year accounts are summarised as follows:-
n Construct either a restaurant or retail pod unit in the car park. This could be let to a
restaurant operator such as Pizza Hut or KFC, both of whom have requirements for Birmingham. Alternatively, a unit could be let to a series of small unit occupiers such as Starbucks, Subway or Game. Given the draw of the Wm. Morrison foodstore and the proximity of Birmingham City Football Club, this should provide an attractive location.
Turnover £ (000’s)
Pre-Tax Profit
£ (000’s)
Tenant
Woolworths plc
Accounts Year End
Net Worth £ (000’s)
28/01/06
1,868,940
15,438
29/01/05
2,058,431
(44,584)
95,501
31/01/04
2,120,078
22,421
130,220
D&B Rating
18,312 4A1
12.0 vat The property has been elected for VAT, and therefore VAT will be payable on the purchase price.
13.0 proposal Offers are invited at a price in excess of £21,940,000 (Twenty One Million, Nine Hundred and Forty Thousand Pounds), subject to contract and exclusive of VAT. This price reflects the following yield profile, assuming purchaser’s costs at 5.7625%:-
Initial
5.00%
Reversionary
5.17%
Nominal Equivalent
5.14%
True Equivalent
5.31%
Contacts for further information: Wilkinson Williams Mellier House 26a Albemarle Street London W1S 4HY
James Honeyman Tel: 020 7317 3790 Fax: 020 7495 5432 E-mail: j.honeyman@wilkinsonwilliams.co.uk
st andrews retail park coventry road, birmingham Open A1 non food retail warehouse investment
Paul Wilkinson Tel: 020 7317 3799 Fax: 020 7495 5432 E-mail: p.wilkinson@wilkinsonwilliams.co.uk
www.wilkinsonwilliams.co.uk MISREPRESENTATION NOTICE ilkinson Williams LLP give notice to anyone who may read these particulars as follows: 1. These particulars are prepared for the guidance only of prospective purchasers. W They are intended to give a fair overall description of the property but are not intended to constitute part of an offer or contract. 2. Any information contained herein (whether in the text, plans, artist impressions, photographs or digitally enhanced imagery) is given in good faith but should not be relied upon as being a statement of representation or fact. 3. Nothing in these particulars shall be deemed to be a statement that the property is in good condition or otherwise nor that any services or facilities are in good working order. 4. The plans, artist impressions, photographs or digitally enhanced imagery appearing in this brochure show only certain parts of the property and certain aspects may have changed since they were produced and it should not be assumed that the property remains precisely as displayed within these particulars. Furthermore, no assumptions should be made in respect of parts of the property which are not shown. 5. Any areas, measurements or distances referred to herein are approximate only. 6. Where there is reference in the particulars to the fact that alterations have been carried out, or are proposed, or that a particular use is made of any part of the property this is not intended to be a statement that any necessary planning, building regulations or other consents have been obtained and these matters must be verified by an intending purchaser. 7. Descriptions of the property are inevitably subjective and the descriptions contained herein are given in good faith as an opinion and not by way of statement of fact. 8. Plans are published for convenience of identification only and although believed to be correct, their accuracy is not guaranteed and they do not form part of any contract.