14/20 SOUTH STREET WORTHING BN11 3AA

Transcription

1 14/20 SOUTH STREET WORTHING BN11 3AA PRIME RETAIL INVESTMENT LONG INCOME FREEHOLD DEPARTMENT STORE gva.co.uk/8619

2 INVESTMENT SUMMARY Freehold department store located in Worthing, the largest shopping destination of West Sussex. The property is let to Debenhams Retail Plc rated 5A 1 by Dun and Bradstreet. Let for a term of 30 years from March 2004 (19 years unexpired). Annual fixed uplifts of 2.5% until Thereafter, the rent is reviewed 5 yearly to the higher of OMV or 2.5% per annum compound. Well-configured department store providing high quality sales accommodation over 6 levels (44,898 sq ft GIA). The current rent passing is 374,605 per annum (March 2015) reflecting 8.34 per sq ft. Offers are sought in excess of 6,580,000 (Six Million, Five Hundred and Eighty Thousand Pounds), subject to contract and exclusive of VAT. This reflects a net initial yield of 5.40% a reversionary yield of 7.46% and an equivalent yield of 6.81%, assuming purchaser s costs of 5.80%.

3 CRESCENT RD WORTHING A259 LYNDHURST ROAD MADEIRA AVE CHAPEL ROAD PARK ROAD RICHMOND ROAD A259 BRIGHTON ROAD LOCATION SHELLE Y ROAD MONTAGUE STREET SOUTH ST MARINE PL STEYNE GDNS MARINE PARADE MARINE PARADE Bognor Regis WORTHING WORTHING PIER LOCATION Worthing is the largest town in West Sussex, strategically located on the south coast, 55 miles south west of London and 10 miles west of Brighton. This prosperous and thriving regional retail centre benefits from excellent road communications. The A24 provides dual carriageway access to the M25 and the A27 links to the east and west with Brighton and Chichester respectively. The town is served by a direct rail link to London Bridge and London Victoria with a fastest journey time of 1hour and 20 minutes. Gatwick is 35 miles to the north of Worthing and Southampton International Airport is approximately 55 miles to the west of the town.

4 DEMOGRAPHICS RETAILING IN WORTHING DEMOGRAPHICS RETAILING IN WORTHING The town was granted its Royal Charter in The total population within the Worthing primary catchment area is 289,000 people of which it attracts a regular comparison goods shopping population of 158,000. Worthing is forecast to see an above trend population growth between 2014 and 2019 in comparison to the national average. Worthing s catchment population is considered moderately affluent ranking 69 out of the PROMIS centres. It also benefits from a low unemployment rate of 1.3% as compared to the national unemployment rate of 2.2% in September The comparison retail expenditure growth forecast between 2014 and 2019 is due to rise by 3.2% as compared to 2.5% set for the national average, placing Worthing in the top quartile for UK towns. Worthing is one of the premier shopping destination of West Sussex. The core retailing area is principally located along Montague Street and South Street where prime rents are 70 and 50 Zone A respectively. The coastal town benefits from a broad retail offer including national multiple retailers, department stores, as well as established family businesses and a variety of specialist shops. As well as Debenhams many of the UK s major department and variety store operators are represented in the town including Beales, Marks & Spencer and Bhs. Other national retailers include Monsoon, Next, River Island, Superdrug and Boots the Chemist.

5 SITUATION DESCRIPTION SITUATION DESCRIPTION The subject property is located in a central position on the eastern side of South Street, close to the junction with pedestrianised Montague Street, Worthing s prime retail area. Nearby retailers include TK Maxx, Vodafone, Beales Department Store, Mothercare, Robert Dyas and WH Smith. The store has an extensive and prominent frontage to South Street. Servicing and staff access is provided off Marine Place. The property comprises a purpose built department store of an Art Deco design, dating from the late 1920s. The property is of brick and concrete frame construction over basement, ground and four upper floors. The primary frontage incorporates modernised glazed display windows at ground level, with part glazing on the upper levels. Internally, the store comprises retail accommodation at ground, first, part second and part third floor level, with ancillary office and storage at part second and part third floors, with plant and machinery housed on the basement and fourth floor. Modern improvements include suspended ceilings with recessed lighting and spot-lighting, and air conditioning units in the retail areas.

6 ACCOMMODATION TENURE The property is a purpose built department store and provides a total of 44,898 sq ft of retail and ancillary accommodation arranged over basement, ground, and four upper floors as summarised below: Freehold 4th Plant 2, rd Part Sales, Office, Staff, Storage 9, ACCOMMODATION 2nd Part Sales, Office, Storage 10, TENURE 1st Sales 10, Ground Sales 11,254 1,045.5 Basement Plant Total 44,898 SQ FT 4,171.1 SQ M (GIA) Debenhams also occupy and trade from the adjoining first floor retail area above the adjacent Iceland car park immediately to the south of the property. This is held on a separate occupational lease and is not included in the interest for sale.

7 TENANCY COVENANT STRENGTH TENANCY COVENANT STRENGTH The property is let to Debenhams Retail Plc for a term of 30 years from 24th March 2004 on full repairing and insuring terms. The current rent passing is 374,605 per annum (March 2015) reflecting 8.34 psf, rising to 383,990 in March 2016 in accordance with stipulated annual fixed uplifts of 2.5% for the first fifteen years of the term. In 2019 and for the remainder of the term the rent is to be reviewed on a 5 yearly basis to the higher of 1. the 2018 rent with a 2.5% uplift 2. open market rental value ascertained on 25 March 2019 and every 5 years thereafter (the subsequent reviews on an upwards only basis) 3. minimum fixed uplifts in 2019, 2024, and 2029 to 405,523, 458,813 and 519,104 respectively The tenant has the option at lease expiry to renew for a further 25 years. Debenhams is a leading international, multichannel brand with a proud British heritage trading out of 245 stores in 28 countries and online in 67 countries. In addition Debenhams fully transactional website is one of the fastest growing in the sector. Debenhams currently sits alongside a select few retailers who have continued to perform strongly in recent years, despite the wider economic slowdown. The company recently reported 2.0% like-for-like sales growth in 2013 and a further 1.00% in 2014, demonstrating its increasing market share in the sector. Dun and Bradstreet rates Debenhams Retail Plc 5A 1, reflecting the lowest risk of business failure and a financial strength based the company s net assets of million. For the year ending September 2014 Debenhams sales turnover was 2,312 million. Their operating profit over the same period was million. For the last three years available, Debenhams Retail Plc produced the following results: Year 30/08/ /08/ /08/2012 Turnover 2,312,700,000 2,282,200,000 2,229,800,000 Operating Profit 128,600, ,400, ,000,000 Shareholder Funds 767,400, ,400, ,000,000

8 EPC VAT FURTHER INFORMATION If you require any further information or wish to arrange an inspection please contact:- The building has an EPC rating of 69, reflecting an asset rating of C. We understand the property has been elected for VAT purposes. GVA 65 Gresham Street, London, EC2V 7NQ Mark Frampton EPC / VAT PROPOSAL FURTHER INFORMATION PROPOSAL We are instructed to seek offers in excess of 6,580,000 (Six Million, Five Hundred and Eighty Thousand Pounds), subject to contract, and exclusive of VAT. A purchase at this level reflects the following yield profile allowing for purchaser s costs of 5.8%: 5.40% Net Initial Yield 6.81% Equivalent Yield 7.46% Reversionary Yield Date Gross Rent Yield 25-Mar , % 25-Mar , % 25-Mar , % 25-Mar , % 25-Mar , % 25-Mar , % 25-Mar , % Gavin Quinn gavin.quinn@gva.co.uk Jonathan Cornwell jonathan.cornwell@gva.co.uk Lawrence Fisher lawrence.fisher@gva.co.uk gva.co.uk/8619 March 2015 Misrepresentation Act Unfair Contract Terms Act 1977 The Property Misdescriptions Act These particulars are issued without any responsibility on the part of the agent and are not to be construed as containing any representation or fact upon which any person is entitled to rely. Neither the agent nor any person in their employ has any authority to make or give any representation or warranty whatsoever in relation to the property.