P r i m e
R e t a i l
P a r k
I n v e s t m e n t
Pontardulais Road Retail Park Swansea SA5 4BA
Pontardulais Road Retail Park forms an integral part of a major shopping destination, which includes the Fforest Fach Shopping Park and Tesco Extra, situated directly opposite, which provide a total of approximately 355,000 sq ft of retail accommodation. 04 Investment Summary 06 Location 07 Demographics & Catchment 09 Situation 10 Other Retail Warehousing in Swansea 14 Description 16 Planning 17 Tenure 18 Tenancies 19 Tenant’s Financial Information 20 Tenant Demand / Asset Management Opportunities 21 VAT 21 Proposal
Pontardulais Road Retail Park
Pontardulais Road
Fforest Fach Shopping Park
Investment Summary n Swansea
is the second largest city in Wales, with in excess of 405,477 people living within 12 miles of the city centre, and an unemployment rate of 2.20% within the travel to work area, as compared to a GB average of 2.20%. Road Retail Park is situated in a highly prominent and accessible position approximately 1.75 miles south of Junction 47 of the M4 motorway and 3 miles north west of Swansea city centre.
n The
subject property comprises recently redeveloped retail park extending to approximately 79,726 sq ft, with tenants including Marks & Spencer Simply Food, Argos, Laura Ashley, Currys, Land of Leather, Carpetright and Dreams. There is one unit To Let extending to 12,000 sq ft.
n Pontardulais
n The
scheme is let off low passing rents of between £17.33 and £25.00 per sq ft.
n The
subject property forms an integral part of a major shopping destination, which includes the Fforest Fach Shopping Park and Tesco Extra, situated directly opposite, which provide a total of approximately 355,000 sq ft of retail accommodation.
site is held Freehold.
n The
n Opportunities
for asset management and rental growth following a recent letting to Argos and potential relocations from the shopping park opposite.
n Offers n The scheme’s excellent communications ensures the
scheme serves a large catchment population estimated to be in excess of 386,000 within a 20 minute drive time contour. n The
property benefits from a wide restricted planning consent which allows the sale of food and drink in up to 35,000 sq ft of accommodation.
04
are sought of £14.90 million, which would provide a purchaser with the following initial yield profile: Current Income including Land of Leather Current Income excluding Land of Leather Current Income including Land of Leather and Currys uplift Current Income excluding Land of Leather but including Currys uplift Potential Fully let income including Currys uplift Potential Reversionary Income Purchasers costs have been taken at
9.00% 8.01% 9.19% 8.20% 10.83% 11.54% 5.7625%
05
A48
A438
BRECON BEACONS NATIONAL PARK
GLANAMAN
A48
A438 47
M4 PENTREBACH
48
Pontardulais Road Retail Park FAERDRE A48
BURRY PORT
47
46
LLANELLI
45
A465
A438
NEATH
44 43
SWANSEA
A48 42
A48
A438
GLANAMAN A438
PORT TALBOT
M4 M4
Location
PORT EYNON
GLANAMAN
A48
A438
PENTREBACH 10 minute drive time
BRISTOL CHANNEL
48 minute drive time 20
FAERDRE
M4
BURRY PORT
47PENTREBACH 46 LLANELLI
One of the key factors for the
These include the A465, leading to
in Wales, and has developed into a
city’s success are its excellent road
BURRY PORTto Merthyr Tydfil
principal retailing and commercial
communications, being situated
the A483 and the A48, which lead to the
centre for this part of the country.
approximately 5 miles to the south of
north and west respectively.LLANELLI
Swansea is situated approximately 50
the M4 motorway and direct access to
miles (78 km) west of Cardiff and 190
various parts of the city can be gained
(304 km) west of London.
from Junctions 42 through to 47.
Swansea is the second largest city
Road connections are also very good in a more northerly direction by virtue of a range of A roads which provide access to
45 44
48
F
4
the east, together with 47
SWANSEA 46 4
Swansea mainline rail station provides direct services to both Cardiff and London
SW
(Paddington), with a journey time of PORT approximately 52 minutes and 2 hours, EYNON
40 minutes respectively.
BRISTOL CHAN
and from the M4. 06
PORT EYNON
BRIST
Demographics & Catchment Swansea’s economy has developed from
Major employers in the city include
CACI have calculated that within a 10
its original manufacturing base and over
various government agencies such as the
minute drive time contour of the subject
the last 20 years it has seen substantial
DVLA and the Benefits Agency, together
property there is a resident population
inward investment. This has resulted in
with 3M, British Telecom, Boots and HSBC.
of approximately 129,000, rising to
a continued number of new jobs being created both within the manufacturing and more importantly the services sector. Within the district area at 2001, 13.5% of employment was within manufacturing industries, as compared with the national average of 14.8%, whilst banking, finance
The successful nature of the city’s economy is demonstrated by the fact that as at October 2008 the unemployment rate within the travel to work area stood at 2.70%, as compared to a national average of 2.70%.
approximately 387,000 within a 20 minute drive time. You will see from the plan opposite that the 20 minute drive time catchment extends to a considerable distance to the north where there is a limited amount of competing accommodation. Indeed, due to the
and business services accounted for
excellent road communications we believe
12.8%, as opposed to a national average
that the effective catchment population
of 17.5%. Other services account for
for the subject property may extend to a
27.8%, as opposed to 23.9%.
greater distance in a northerly direction. 07
A484
Pontardulais Road Retail Park
Cadle Rd ulais tard Pon 83 A4
Car ma rthe n
Rd
Fforest Fach Shopping Park
Situation
Ravenhill Fforestfach
Pontardulais Road Retail Park is
The immediate location has established
range of attractive retailers including
situated in a highly prominent and
itself as one of the strongest out of town
Borders, Marks & Spencer, River Island,
accessible position fronting the A483,
retail destinations in Wales, which serves
Clarks, Clintons Cards, Boots, Dixons,
Pontarddulais Road. This road forms
an extensive catchment population.
JJB, Next and The Outfit.
Directly opposite the subject property
The success and strength of the scheme
lies a highly successful Tesco Extra store,
is indicated by the level of passing rents,
extending to approximately 109,000 sq
with the most recent letting being in
ft, immediately adjacent to which is the
excess of ÂŁ62.00 per sq ft.
the principal dual carriageway linking the city centre, being approximately 3 miles to the south east of the subject property with Junction 47 of the M4 motorway, being approximately 1.75 miles directly to the north. Pontarddulais Road therefore forms the principal carriageway serving the western side of the conurbation.
Fforest Fach Shopping Park. Fforest Fach Shopping Park has developed into Wales’ premier out of town shopping park, extending to approximately 135,000 sq ft and is occupied by a
Adjacent to the subject property is a unit which extends to approximately 30,000 sq ft, being owned and occupied by Dunelm. 09
Other retail warehousing in Swansea In our opinion, the Pontardulais
Morfa Retail and Leisure Park
Road Retail Park is the best quality
This scheme, which extends to a total of 250,000 sq ft, has an element of open
restricted retail park in the city and
non food accommodation, with occupiers including B&Q Warehouse,
particularly on the western side
TK Maxx, Sports World, Next, New Look and Peacocks. There are two units to let.
where there is limited competition. Nearby developments are restricted to a number of dated and standalone schemes occupied by the likes of Matalan and Wickes, being situated along Pontardulais Road to the south of the property.
It is important to note this scheme is situated on the eastern side of the city and therefore in our opinion serves a different catchment to the subject property. Parc Tawe (Phase I and Phase II) This comprises two developments of retail warehouse and leisure accommodation in total extending to approximately 350,000 sq ft, to the east of the city centre. Occupiers include Toys “R� Us, Carpetright, Hypervalue, Staples, UCI, Megabowl, Lidl and JJB Sports.
Elsewhere in the city, the principal
We do not consider that either of these schemes are particularly successful trading
concentrations of retail warehousing
destinations, as there are a number of vacant units and leases on the market.
are summarised as follows: Enterprise Zone To the eastern side of the city there is a concentration of retail warehousing, with much being secondary and dated. Occupiers here include PC World, Currys and Allied Carpets. Due to its location on the eastern side of the city and its fragmented nature, we do not consider this to be in direct competition with the subject property. 10
Swansea is the second largest city in Wales, with in excess of 405,477 people living within 12 miles of the city centre, and an unemployment rate of 2.50%, as compared to a GB average of 2.60%
45
47
46
M4
A48
M4
A4240
Pontardulais Road Retail Park A4067 A484
Morfa Retail and Leisure Park
Enterprise Zone
A384 A4217
Parc Tawe Phase I and Phase II
A4216
Swansea A4118
A483
11
12
he subject property forms an integral part of a major shopping T destination, which includes the Fforest Fach Shopping Park and Tesco Extra, situated directly opposite, which provide a total of 355,000 sq ft of retail accommodation
13
Description The retail park was subject to
Current occupiers are Marks & Spencer
The front elevations are clad with flat
redevelopment/refurbishment works
Simply Food, Dreams, Carpetright,
cladding panels with glazing being
in 2004 to create a highly attractive
Land of Leather, Laura Ashley, Argos and
provided at ground level, above which is
and modern retail park in a single
Currys. The scheme provides a total of
a glass canopy running the length of the
terrace which is currently divided
approximately 79,726 sq ft.
development. Each unit benefits from
to provide 8 units of between 5,114 sq ft and 16,765 sq ft.
The extensive redevelopment/ refurbishment works undertaken in 2004 included stripping the property back to the steel portal frame effectively creating “new” retail accommodation in line with institutional and occupier requirements.
an attractive full height entrance feature, with an extensive signage zone. The side and rear elevations are similarly clad with steel cladding panels. The entire property was re-roofed using profiled composite cladding panels and internally each unit was completed to the tenant’s required specification. Internally, the development provides a clear eaves height to the underside of the haunch of approximately 6.50 m.
14
The property benefits from a wide restricted planning consent which allows the sale of food and drink in up to 35,000 sq ft of accommodation
Along the front of the development is a
Road. There is a second access/egress
tarmacademed surfaced customer car park,
point connecting directly to the southern
which is divided from the front elevation
carriageway of Pontardulais Road, just to the
by way a pedestrian walkway surfaced
south of the property. There is a separate
with concrete paviers. We understand
service vehicle access point off Pentregethin
the customer car park provides a total of
Road, which leads directly to a concrete
approximately 266 car parking spaces,
surfaced service yard running along the rear
equating to a ratio of one per 299 sq ft
of the units.
(27.81 sq m). There is pedestrian access from the car park to the customer car park of the adjacent Dunelm unit.
In summary, therefore, the property provides a modern purpose built retail park providing an attractive range of units in flexible
Customers can gain access/egress from the
accommodation which can be further
property from two points along Pontardulais
subdivided and which is highly prominent
Road. The first is situated at the northern
and accessible from Pontardulais Road.
end of the site via Pentregethin Road, which is connected by an “all ways� traffic light controlled junction from Pontardulais
15
Planning The subject development is subject to a number of planning consents and Section 52/106 Agreements. We are advised that under the most relevant of these, the goods that can be sold from the property is controlled as follows:
n The sale of food and drink is permitted save that it is restricted to an area no greater than 35,000 sq ft. n The retail sale of cosmetics, toiletries and pharmaceutical products permitted, save that it is restricted to an area no greater than 15,000 sq ft. n The retail sale of men and women’s fashion clothing or footwear, fashion accessories or jewellery are totally prohibited, save that recent planning consent has been obtained to allow jewellery to be sold from a total area of no greater than 40 sq m (431 sq ft). n We understand the council have agreed to allow ancillary fashion goods to be sold from unit 6 (restricted to no more than 93 square metres).
We are advised that there are no restrictions with regards to minimum unit size or against the installation of mezzanine accommodation
Therefore, it can be interpreted from the various restrictions that the property can be used for the sale of any other goods, including DIY, books, sports goods, children’s wear, travel, electrical goods, motorcycle goods, pets, furniture, carpets, computers. In addition, we are advised that there are no restrictions with regards to minimum unit size or against the installation of mezzanine accommodation.
16
LAU R A A S H L E Y
To be Let
Pentregethin Road
Tenure The site, as outlined in red, is held freehold.
Pontarddulais Ro
ad (A483 )
d
a re Ro Cyno
17
Tenancies The property is let on leases which are drafted on essentially full repairing and insuring terms with five yearly upwards only rent reviews. The principal terms of these leases are summarised below:
Tenant Name GIA
Rent (p.a.)
Rent (psf)
ERV (psf)
ERV (p.a.)
Lease Years Start
Expiry Date
Marks & Spencer (i)
12,000
£207,984
£17.33
£21.50
£258,000
24/06/2004
15
23/06/2019
Dreams
9,250
£166,500
£18.00
£22.00
£203,500
12/07/2004
15
11/07/2019
Carpetright
8,000
£152,076
£19.01
£22.00
£176,000
23/07/2004
15
22/07/2019
Land of Leather (in administration) 6,496
£155,904
£24.00
£24.00
£155,904
24/05/2007
15
23/05/2022
To be Let
-
-
£21.50
£258,000
-
-
-
5,114
£122,280
£24.00
£24.00
£122,736
27/06/2007
15
26/06/2022
Argos (iii)
10,101
£252,525
£25.00
£25.00
£252,525
12/05/2008
15
11/05/2023
Currys (iv)
16,765
£360,448
£21.50
£26.16
£391,259
25/12/2006
15
24/12/2021
79,726
£1,417,717
Laura Ashley (ii)
12,000
£1,817,924
(i) Tenant has benefit of restriction against food sales on remainder of park (ii) T’s break after 5 and 10 yrs with 6 months notice. If exercised after 5 yrs tenant to repay £112,500. RR’s capped at 2.50% pa (iii) 5 yearly rent reviews to open market value capped at 2.5% pa compounded 18
(iv) 5 yearly upwards only rent reviews to the greater at OMV or the increase in RPI with each review capped at no more than 4.00% pa compounded. ERV assumes actual increase in RPI from 11/06 to 12/08 (201.1 to 212.9) and 1.00% pa to 12/2011 (to 218.29)
Tenant’s financial information The property is let to leading UK out of town retailers. We summarise their most recent accounts below:
Tenant Name
Accounts Turnover Year Ending
PreTax Profit
Net Worth
D&B Rating
Marks and Spencer plc
29/03/2008
£9,022.00
£1,129.00
£4,296.20
5A1
31/03/2007
£8,588.10
£936.10
£3,542.40
Dreams plc
24/12/2007
£166.77
£13.28
£21.28
24/12/2006
£131.49
£7.07
£12.83
Carpetright plc
03/05/2008
£521.50
£59.50
£12.10
28/04/2007
£475.90
£67.00
£29.10
Land of Leather Ltd (in administration)
03/08/2008
£231.86
£-0.143
£9.78
29/07/2007
£239.98
£16.13
£10.96
Laura Ashley Ltd
26/01/2008
£236.06
£26.52
£43.22
27/01/2007
£221.76
£18.85
£27.65
Argos Ltd
01/03/2008
£4,099.73
£439.14
£1,381.67
31/03/2007
£3,726.05
£150.64
£969.44
DSG Retail Ltd
30/05/2008
£4,657.89
£140.14
£763.72
28/04/2007
£4,500.90
£219.53
£861.10
4A4
3A1
3A4
5A1
5A1
5A1
19
Tenant demand / asset management opportunities The last letting on the scheme was to Laura Ashley
We believe Laura Ashley provide a very attractive
Our clients have been considering reletting options for
and Argos at headline rents of £24.00 psf and £25.00
addition to the existing tenants particularly
the former MFI unit which extends to 12,000, but could
psf respectively. The Laura Ashley letting involved no
complementing the Marks & Spencer Simply Food store.
be subdivided and the Land of Leather unit at 6,496.
rent free period and a capital payment of £150,000 per annum (of which 75% will be repaid to the landlord if the tenant operates their break at year 5).
In May of last year Argos took a lease on a unit extending to 10,090 sq ft. In our opinion these two recent lettings
In addition we believe there are good prospects of
now generate considerable additional customer footfall
attracting retailers from the Fforest Fach Shopping Park
and will act as a stimulus for future rental growth.
who can trade within the subject properties planning
remains vacant. Subsequently Land of Leather have
20
Cotswold Outdoors and Kütchenhaus.
have created a highly attractive tenant line up which will
In 2009 MFI went into administration and their unit
Opportunities for asset management and rental growth following a recent letting to Laura Ashley and potential relocations from the shopping park opposite
Potential interest exists from the likes of Mothercare,
gone into administration but continue to trade this unit whilst they have closed others.
consent such as Boots and JJB.
VAT The property has been elected for VAT and therefore VAT will be payable on the purchase price.
Proposal Our clients are seeking a price in excess of ÂŁ14.90 million which would provide a purchaser with the following yield profile:
Current Income including Land of Leather Current Income excluding Land of Leather Current Income including Land of Leather and Currys fixed uplift Current Income excluding Land of Leather but including Currys fixed uplift Potential Fully let income including Currys fixed uplift Potential Reversionary Income Purchasers costs have been taken at
9.00% 8.01% 9.19% 8.20% 10.83% 11.54% 5.7625%
21
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.
Miles Marten Tel: 020 7317 3777 Fax: 020 7495 5432 m.marten@wilkinsonwilliams.co.uk Wilkinson Williams Mellier House 26a Albemarle Street London W1S 4HY
www.wilkinsonwilliams.co.uk
Pontardulais Road RP | February 09 | Ref: 104505.003