Lady Bay Retail Park | Nottingham OPEN A1 (NON FOOD OR FASHION CLOTHING) RE TAIL PARK INVESTMENT
L A D Y B AY R E TA I L PA R K
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NOT TINGHAM
Investment Summary n Nottingham is the dominant retail and commercial centre for the East Midlands region and benefits from a large resident urban area population of 666,358 n Lady Bay Retail Park is situated in a highly prominent location 1 mile south east of the city centre at the roundabout junction of two major carriageways (A612/A6011) n Catchment of 492,969 persons within a 20 minute a drive time of the subject property n Freehold retail park developed in 1998 consisting of 97,358 sq ft, well let to 8 tenants including ScS, JJB Sports, Staples, Dreams, The Range and Hobbycraft n The development benefits from an open A1 non-food (excluding fashion) planning consent
n Compared to other schemes in Nottingham the property is let off relatively low passing rents of between £13.52 - £20.00 per sq ft for the small units and £11.82 per sq ft for The Range, with strong reversionary potential n There are a series of asset management opportunities available, including the downsize of existing tenants and development of additional space n Offers are invited at a price in excess of £24,925,000 (Twenty Four Million, Nine Hundred and Twenty Five Thousand Pounds), subject to contract and exclusive of VAT for the freehold interest. This price reflects the following yield profile, assuming purchaser’s costs of 5.7625%: Initial
5.50%
Reversionary
5.79%
Nominal Equivalent
5.75%
True Equivalent
5.96%
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NOT TINGHAM
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Location
Demographics
The City of Nottingham is located approximately 16 miles east of
Nottinghams economy has been dominated by manufacturing
Derby, 25 miles north of Leicester and 40 miles south of Sheffield,
industries, in a particular the textile and lace sectors. In more recent
and is generally considered the dominant retail and commercial
times, the city has diversified its economy into service based activities
centre for the East Midlands region.
and modern industries such as pharmaceuticals and Bioscience.
Nottingham is strategically located adjacent to the M1 motorway
The city is one of the UK’s 6 ‘Science Cities’, developing from a large,
to the west of the city, with access provided at Junctions 24-26 via
successful university and its historical associations with Boots the
a major A road network, including the A610 and the A52, which
Chemist who still provide some 2,800 jobs in the city. The financial
connects directly to the city centre. The A52 runs in an east/west
and business services sector also grew rapidly during the 1990’s with
direction and also provides access to the A1(M). Whilst the A52,
major employers including Experion Credit Services, Capital One and
A6154 and A60 form the circular Nottingham relief road. Nottingham
Siemens Communications.
is also served by a direct rail service to London St Pancras, with a fastest journey time of approximately 1 hour 45 minutes. Nottingham has a large resident urban area population of 666,358 (2001 Census) extending to 956,055 within 12 miles of the city centre NOT T I N G H AM
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(1994 estimate). Within this catchment, some 130,477 persons live within a 10 minute drive time from the subject property with 492,969 persons living within a 20 minute drive time. The city has become a regionally significant retail centre, being ranked the fifth most important retail centre in 2006 (source: CACI Retail Footprint 2006). Nottingham has two main shopping centres; the Victoria Centre (961,000 sq ft) and the Broadmarsh Shopping Centre (430,000 sq ft). The Broadmarsh Shopping Centre is currently undergoing a £400 million redevelopment to create 300 shops (1.36 million sq ft) with two new shopping centres also due to open in 2007, Trinity Square and The Pod, increasing the shopping sales area in the city centre by 28% (4.3 million sq ft).
Under the class groupings within the 2001 Census, the higher two categories, AB and C1 are over represented within the 10 minute drive time at 52.64%, compared to a national average of 51.10%. Both car ownership and household owner occupation are broadly in line with the national average. Some 44.10% of the urban area have 1 car as compared to a GB average of 43.80% whilst 66.0% of households are owner occupied compared to 68.3% nationally.
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Lady Bay Retail Park
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NOT TINGHAM
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NOT TINGHAM
Situation
Lady Bay Retail Park is situated approximately 1 mile south east of Nottingham city centre in a highly prominent location at the roundabout junction of Manvers Street (A612), Daleside Road (A612) and Meadow Lane (A6011). All three roads provide an effective connection to both the city centre and east and south east Nottingham, including direct connections to both the A52 and A60. The subject property benefits from excellent visibility to both the A612 and A6011, with much of the vehicle traffic entering the city centre from the A52, A60 and A612, passing directly past the subject property. Surrounding occupiers include principally industrial and commercial uses in addition to both Notts County Football Club and Nottingham Forest Football Club, located on either side of the River Trent.
Lady Bay Retail Park
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NOT TINGHAM
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Competing Retail Parks Retail warehouse floor space is estimated at 2.2 million sq ft, according to PROMIS, ranking the city below the PROMIS national average in terms of overall provision per household. Fashion/other high street, electrical and DIY goods are particularly under represented within Nottingham. Lady Bay Retail Park is a highly prominent, well configured open A1 non-food (excluding fashion) scheme, serving the extensive catchment of east and south Nottingham, and we would highlight the relatively low level of rents on the scheme when compared with the majority of competing schemes which are summarised below: Castle Meadow Retail Park – RREEF/LaSalle Investment Management
Riverside Retail Park – Merrill Lynch Property Fund
Situated approximately 1.5 miles west of the subject property just off Castle
Riverside Retail Park comprises 220,000 sq ft of open A1 retail accommodation
Boulevard (A6005), this scheme extends to circa 187,000 sq ft of open A1
with certain exceptions. The park is formed of 7 units, the majority occupied by
non food accommodation, albeit with certain restrictions. Occupiers are
fashion retailers such as Next, Argos and Outfit, alongside B&Q Warehouse and
predominantly bulky including Currys, DFS, Furniture Village and Mothercare
Toys R Us. Rent reviews are due across the scheme between 2007-08, with the
World. The most recent evidence is a letting to Furniture Village at £33.00 per sq
highest rent passing being a letting to Boots at £35.00 per sq ft from June 2003.
ft on 10,063 sq ft from June 2007. Castle Retail Park – UBS Global Asset Management Victoria Retail Park – Hammerson
This scheme is situated in a secondary position on the A6130, 1 mile north west
Located 3.5 miles east of the subject property on the A612 in the suburb of
of Nottingham city centre. The park comprises 112,000 sq ft of food, non-food
Netherfield, the park extends to 167,000 sq ft. The scheme was originally
and leisure accommodation arranged in an ‘L’ shape construction. Occupiers are
occupied by bulky occupiers, including Focus, Halfords and Allied Carpets and
predominantly discount based including Dunelm, Aldi and Topps Tiles, alongside
was subsequently extended to include a B&Q Warehouse. B&Q were due to
Gala Bingo. We understand the highest rent currently achieved is around
vacate their store, but have instead downsized into a mini warehouse format,
£13.00 per sq ft.
permitting new lettings to both Argos and Next. We understand the highest rent currently achieved is a letting at £18.75 per sq ft to Carpetright from December 2006.
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Castle Retail Park
Castle Meadow Retail Park
Riverside Retail Park
Lady Bay Retail Park
Victoria Retail Park
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NOT TINGHAM
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NOT TINGHAM
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Description Lady Bay Retail Park is a modern, purpose built retail park developed in 1998, extending to a total of approximately 97,358 sq ft GIA. The park comprises a linear terrace of 6 units alongside an adjacent single unit, effectively forming an ‘L’ shape development. In addition, there is also a standalone fast food unit at the entrance to the park. Construction is by way of traditional steel portal frames under pitched roofs, with elevations being clad with half height brickwork and profile metal cladding above. The units benefit from a clear height to eaves of approximately 6 metres. The Range unit also benefits from a covered garden centre. Customer access and egress to the scheme is provided via a traffic light controlled junction leading directly from the roundabout junction of Meadow Lane (A6011) and Manvers Street (A612). Service vehicles may use a separate access and egress road via Meadow Lane (A6011), leading to a large concrete rear service yard and rear unit loading for all units. A tarmacadam customer car park is situated to the front of all units, providing approximately 431 spaces, equating to a ratio of 1:226 sq ft. In addition, there are also approximately 45 staff spaces to the rear of the units. At present ScS, Hobbycraft, Dreams, JJB Sports and The Range all contain additional non-rentalised mezzanine accommodation. We estimate the site area is approximately 7.73 acres (3.12 hectares).
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Planning Planning consent was originally granted in January 1998 for: “the erection of a 95,000 sq ft retail park and associated car parking and service areas.”
A Certificate of Lawfulness of Proposed Use or Development was issued in May 2002 stating that the use restrictions within the planning permission do not include footwear, i.e., units can be used for the sale of footwear. Consent was then granted for the Burger King unit, for use as a fast food restaurant (Class A3).
The consent was granted subject to; “the goods to be sold from the retail warehouse floor space hereby permitted shall not include food or fashion clothing (other than ancillary items) without the prior consent of the City Council.”
An unimplimented consent exists for an additional 3,000 sq ft pod unit adjoining the entarance to the scheme. However, this is restricted to the sale of mobile phones and incorporates a car fitting bay.
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Tenure
Ma nv ers
NOT TINGHAM
Str ee t (A
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The site, as outlined in red, is held freehold.
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Ga ad
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La
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(A 6
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1)
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2)
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NOT TINGHAM
Schedule of Tenancies The property is let on 8 full repairing and insuring leases, as detailed below: Unit Tenant Area (sq ft)
Term From Expiry Reviews Next Rent (years) (all upwards Review only)
1
A Share & Sons Ltd t/a ScS
7,480
15
25/12/2005
24/12/2020
5 yearly *
2
Hobbycraft Group Ltd
9,730
15
27/02/2006
26/02/2021
3
Dreams plc
6,260
15
25/12/2005
4
JJB Sports plc
11,015
25
5
Staples UK Ltd
17,310
6
Magnet Ltd
7
CDS (Superstores International) Ltd
t/a The Range
8
Burger King Ltd
Total
Rent (p.a.)
Rent (p.s.f.)
ERV (p.s.f.)
ERV (p.a.)
25/12/2015 **
£134,500
£17.98
£20.00
£149,600
5 yearly
27/02/2011
£175,000
£17.99
£17.99
£175,000
24/12/2020
5 yearly
25/12/2010
£125,200
£20.00
£20.00
£125,200
29/09/2001
30/09/2023
5 yearly
29/09/2011
£198,600
£18.03
£18.03
£198,600
25
29/09/1998
28/09/2023
5 yearly
29/09/2008
£234,000
£13.52
£15.50
£268,305
7,818
25
29/09/1999
28/09/2024
5 yearly
29/09/2004 ***
£113,579
£14.52
£18.00
£140,724
35,000
20
25/03/2006
24/03/2026
5 yearly
25/03/2011
£413,531
£11.82
£11.82
£413,531
2,745
25
25/03/2000
24/03/2025
5 yearly
25/02/2010
£54,900
£20.00
£20.00
£54,900
97,358
* There is no rent review in 2010. ** Fixed increase at 26/12/2012 to £149,500 per annum. *** Rent review outstanding.
£1,449,310
£1,525,760
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Tenant’s Covenants
Unit
Tenant Accounts Year Ending
Turnover £(000’s)
PreTax Profit £(000’s)
Net Worth D&B £(000’s) Rating
1 A Share & Sons Ltd t/a ScS *
30/09/06 30/09/05
195,828 158,295
18,278 17,507
38,355 27,527
5A1
ScS Upholstery plc
30/09/06 30/09/05
195,828 158,295
17,238 17,160
37,029 29,118
5A1
2 Hobbycraft Group Ltd
26/02/06 27/02/05
51,209 44,046
2,155 3,827
12,690 10,485
3A1
3 Dreams plc
24/12/06 24/12/05
131,488 107,600
7,065 5,133
12,826 8,672
3A1
4 JJB Sports plc
29/01/06 30/01/05
745,238 773,339
33,747 50,374
5 Staples UK Ltd **
28/01/06 29/01/05
279,156
(4,451)
58,872 57,372
5A
6 Magnet Ltd
31/12/06 31/12/05
310,569 280,510
5,745 3,109
29,780 8,915
4A2
7
31/01/06 31/01/05
107,819 90,375
6,590 8,744
21,160 4A1 16,286
30/06/06 30/06/05
53,801 61,608
(9,545) (18,211)
CDS (Superstores International) Ltd t/a The Range
8 Burger King Ltd
* Guarantee provided by ScS Upholstery plc ** Guarantee provided by Staples (Europe) Ltd and Staples International Inc.
168,318 5A1 169,290
(10,608) (1,302)
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NOT TINGHAM
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Comparable Rental Evidence
10.1 Small Unit Evidence For the smaller units, evidence is primarily available from the park itself, with the last lettings being to Hobbycraft at a rent of £18.00 per sq ft on 9,730 sq ft and Dreams at £20.00 per sq ft on 6,260 sq ft. Further details of other evidence from the subject property and other comparable schemes in Nottingham are set out below:
Address
Tenant Area Transaction Effective sq ft Date
Passing Rent (p.a.)
Passing Rent (p.s.f)
Lady Bay Retail Park
Hobbycraft
9,730
Open Market Letting
27/02/06
£175,000
£18.00
Dreams
6,260
Open Market Letting
25/12/05
£125,000
£20.00
ScS
7,480
Open Market Letting
25/12/05
£149,5000
£20.00
Castle Meadow Retail Park
Furniture Village
10,063
Rent Review
24/06/07
£332,079
£33.00
Victoria Retail Park
Carpetright
11,085
Open Market Letting
25/12/06
£207,843
£18.75
Chilwell Retail Park
Halfords
9,231
Open Market Letting
26/10/06
£240,006
£26.00
Comments
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10.2 Large Unit Evidence The Range currently occupy the largest unit on the park, extending to some 35,000 sq ft. The tenant entered into a new lease in March 2006 at a rent of £11.82 per sq ft, which we consider to be the current ERV. However, we set out below further supporting larger unit evidence from across Nottingham, which we believe provides a platform for future rental growth.
Address
Tenant Area Transaction Effective sq ft Date
Passing Rent (p.a.)
Passing Rent (p.s.f)
Comments
Lady Bay Retail Park
The Range
35,000
Open Market Letting
25/03/06
£413,531
£11.82
Chilwell Retail Park
Wickes
31,456
Rent Review
29/09/05
£495,432
£15.75
Matalan
32,568
Open Market Letting
19/07/05
£472,236
£14.50
Mansfield Road
Wickes
23,800
Rent Review
25/12/04
£345,100
£14.50
Madford Retail Park
Homebase
34,125
Rent Review
24/06/04
£477,750
£14.00
Queens Drive
Homebase
80,045
Open Market Letting
16/07/02
£1,200,000
£15.00
Rent Review Outstanding
Chilwell Retail Park
TK Maxx
24,510
Open Market Letting
23/07/01
£324,758
£13.25
Rent Review Outstanding
NOT TINGHAM
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Asset Management Opportunities We are of the opinion that the subject property provides a number of potential asset management opportunities as set out below: n Downsize part of Unit 4 (Staples) and re-let to either a
n Capitalise on the existing consent for a stand alone
further bulky operator or a more open based retailer,
mobile phone unit and obtain consent to develop a
taking advantage of the wide planning consent and
further restaurant pod unit, making use of the ample
the relatively low levels of rent
car parking ratio. The pod unit could be let to a series of small unit occupiers such as Pizza Hut, Starbucks,
n Install mezzanines in units 5 and 6 subject to the necessary planning consents
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VAT The property has been elected for VAT, and therefore VAT will be payable on the purchase price.
Carphone Warehouse, Subway or Game, promoting an increased dwell time on the park
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Proposal Offers are invited at a price in excess of £24,925,000 (Twenty Four Million, Nine Hundred and Twenty Five Thousand Pounds), subject to contract and exclusive of VAT for the freehold interest. This price reflects the following yield profile, assuming purchaser’s costs of 5.7625%; Initial
5.50%
Reversionary
5.79%
Nominal Equivalent
5.75%
True Equivalent
5.96%
NOT TINGHAM
www.wilkinsonwilliams.co.uk For further information please contact: Wilkinson Williams Mellier House 26a Albemarle Street London, W1S 4HY
Miles Marten Tel: 020 7317 3777 Fax: 020 7495 5432 m.marten@wilkinsonwilliams.co.uk
James Honeyman Tel: 020 7317 3790 Fax: 020 7495 5432 j.honeyman@wilkinsonwilliams.co.uk
MISREPRESENTATION NOTICE Wilkinson 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. 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.
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Lady Bay Retail Park | Nottingham | Sept 07 | Ref: 104530