PRIME AUTOMOTIVE INVESTMENT

Transcription

1 PRIME AUTOMOTIVE INVESTMENT Silverlink Business Park, Middle Engine Lane, Newcastle upon Tyne, NE28 9NZ 15 years unexpired let to Honda (no breaks) with fixed uplifts

2 INVESTMENT CONSIDERATIONS The property occupies a prominent position within an established Automotive Business Park just outside of Newcastle City Centre Let to the excellent covenant of Honda Motor Europe Limited who reported an annual turnover of 5.9 billion in 2018 with a pre-tax profit of over 112 million Currently sub-let to Vertu Motors trading as a Vertu Specialist Cars dealership Current rent passing 211,731 pa Freehold Annually compounded 2% fixed uplifts every 5 years with a minimal rental uplift to 233,768 pa in 2023 Let until 2033 with no breaks Expanding Business Park with a new Jaguar showroom being constructed opposite the subject property Surrounding occupiers include Aston Martin, Porsche, Audi, Bentley, Mini, Toyota, BMW and Volkswagen Extensive site area of approximately acres (0.56 hectares), providing a low site coverage of circa 19% The property provides 12,677 sq ft GIA (1,178 sq m) of car showroom, workshop space and ancillary accommodation Offers sought in excess of 3,310,000 (Three Million Three Hundred and Ten Thousand Pounds) subject to contract and exclusive of VAT. This reflects a net initial yield of 6%, after allowing for purchaser s costs of 6.52%. The investment shows the below yield profile based on the fixed uplifts: Date NIY 24th June % 24th June % 24th June %

3 A195 LOCATION Newcastle International Airport A696 A1 North Gosforth Gosforth A1056 East Brunton South Gosforth A189 Longbenton A188 A19 A1058 A191 A192 North Shields A187 Whitley Bay A193 South Shields Located on the north bank of the River Tyne, the City of Newcastle-upon-Tyne is the regional and economical capital of the North-East of England. The City benefits from some 280,000 residents and forms part of the wider Tyneside conurbation. Newcastle is the North East s primary retailing, leisure and office destination and is located approximately 280 miles (451 km) north of London, 100 miles (160 km) north of Leeds and 109 miles (175 km) south of Edinburgh. The City benefits from excellent transport links being located in close proximity to the A1 and A19, providing access to both the north and south of the UK and the A69 connecting the city to Carlisle and Cumbria to the west. Rail services are provided via the East Coast Mainline from Newcastle Central with quickest journey times to Sunderland, Edinburgh and London Kings Cross of 19 minutes, 1 hour 27 minutes, and 2 hours 50 minutes respectively. Newcastle International Airport is located 6 miles north west of the City Centre on the outskirts of Newcastle. The airport handles approximately 4.8 million passengers annually with direct routes to 80 UK, European and International destinations. A69 Blaydon A167 A191 Arthur's Hill A186 A695 A1 Dunston NEWCASTLE UPON TYNE Gateshead Byker A184 A193 A186 Wallsend Hebburn Jarrow A194 A185 A19 A1300 South Tyneside A1018 A183 A167 A194(M)

4 SITUATION DESCRIPTION The property is situated on Silverlink Business Park in North Tyneside, a well-established and successful dealership location adjacent to the A19 and A1058 Coast Road. Newcastle City Centre is approximately 6 miles east of the property with both Sunderland and Teesside being easily accessible via the A19 trunk road. The property is located in an extremely prominent position on the roundabout between Middle Engine Lane and Cobalt Park Way adjacent to the Aston Martin dealership and opposite the Bentley and Audi car dealerships. The UK s largest business park, Cobalt Park, is located adjacent to the subject property which benefits from 1,618,000 sq ft of office accommodation and approximately 14,000 staff. The Silverlink Shopping Park scheme is located just to the south of the property with occupiers including Odeon, Marks & Spencer, Nando s, JD Sports and a number of national occupiers. The Business Park benefits from excellent public transport links, with a regular bus service from Newcastle City Centre and also access to nearby Metro Stations, which serve Tyne and Wear. As one of the premier motor retailing destinations in the north east, Silverlink Business Park benefits from a cluster of automotive occupiers including Porsche, Audi, Bentley, Mini, Aston Martin Toyota, BMW and Volkswagen, alongside a number of multi-brand car dealerships. Jaguar Land Rover are building a new showroom opposite the property further confirming the business park as an automotive location. The property comprises a modern, purpose built vehicle showroom and servicing facility constructed in 2006, incorporating showroom, offices, workshop, parts and ancillary accommodation. The showroom is arranged over ground and first floor levels providing full visibility of Middle Engine Lane and Cobalt Park Way. The property is of steel frame construction with full height glazing and flat panel profile clad elevations and provides a total GIA of approximately 12,677 sq ft. Internally the showroom is fitted to a high specification throughout and benefits from a ground floor double height glazed showroom with prominent reception desk, four glazed partitioned offices, customer waiting area, handover bay, WCs and internal storage. To the rear of the ground floor is the secure parts department and the car servicing workshop. The workshop comprises 6 individual bays which are all self contained benefiting from automated roller shutter door vehicular access from the rear. In total the workshop has 6 servicing ramps and one MOT ramp which can be viewed from the MOT viewing point to the rear of the showroom. The first floor is accessed via the main staircase in the showroom and comprises an open plan mezzanine level with further glazed partitioned offices and internal storage. Externally to the rear of the property is a separate valet building which provides two wet and two dry valeting bays. The property provides a total of 65 display car spaces, 6 internally, with further extensive parking to the side and rear of the property for cars that are sold, to be or in need of servicing and new arrivals that are to be processed. There is a piece of land to the south of the property that is used for further parking but is not included in the sale. The property was fully refurbished in 2014 to Infiniti s standard corporate branding, however, the subtenant Vertu is currently in the process of re-branding to their own Specialist Cars corporate styling. El Sub Sta Shelter Garage Crown Copyright, ES For identification purposes only.

5 SITE AREA The site extends to approximately acres (0.56 hectares) with a low site coverage of 19%. TENURE The property is held Freehold. TENANCY The property is let in its entirety to Honda Motor Europe Limited on a full repairing and insuring lease, for a term of 25 years from 23rd June 2008 at a current rent passing of 211, pa. The unexpired lease term is therefore approximately 15 years. The rent is subject to fixed uplifts equal to the higher of either 2% pa compounded or open market rent, receivable 5 yearly. This would guarantee a minimum uplift to 233,768 pa at the next rent review in The property was sublet to Vertu Motors (Property) Ltd in July 2014 and the property is now operating as a Vertu Specialist Cars dealership. ACCOMMODATION* The property provides the following areas: Ground Area Sq m Area Sq Ft Showroom ,512 Office Handover Ancillary Workshop ,094 Parts Valet Covered Valet First Area Sq m Area Sq Ft Ancillary ,342 Parts Mezzanine Office Total 1,178 12,677 *Measurements have been provided by the vendor, any interested party should carry out their own measured survey.

6 COVENANT Honda Motor Europe Ltd is a wholly owned subsidiary of Honda Motor Company (Japan), one of the world s leading manufacturers of motor cars, motorcycles and power products, with a market capitalisation of $46.85 billion USD. The principal function of Honda Motor Europe Ltd is to coordinate Honda s operations in Europe, including the manufacturing of vehicles and components as well as distribution, wholesale and retail activities. Honda Motor Europe Ltd also manufactures and distributes Honda products across Africa and the Middle East. In 2017 Honda was confirmed as the fastest growing mainstream car brand in Europe with a 20.8% per cent increase in sales in 2016 compared to the same period in The period between 2017 and 2018 has seen a continued consistency of unit sales albeit with an increase of 7.8% in motorcycle sales. In total for the year ended 31/03/ ,000 automobiles, 234,000 motorcycles and 1,022,000 power products were sold. Honda set a target of 2025 for electrified technology in two thirds of its new car sales in Europe. Turnover at Honda Motor Europe Ltd grew to 5.9 billion in the 12 months ending 31 March 2018, up from 5.2 billion Pre-tax profit also soared to million from million the year before. The subtenant Vertu Motors (Property) Ltd is a subsidiary of Vertu Motors plc which is the 6th largest automotive retailer in the UK with a network of 125 sales and aftersales outlets across the country. Its dealerships operate predominantly under the Vertu Specialist Cars, Bristol Street Motors, Vertu Honda, Vertu Volkswagen, Farnell Land Rover and Macklin Motors brand names. The property is currently trading as a Vertu Specialist Cars dealership which deals with specialist branded car makes only. It is also a dedicated Infiniti service centre. Honda Motor Europe Limited have provided the following accounts: 31 Mar Mar Mar 2016 Turnover 5,918,931,000 5,211,258,000 4,056,096,000 Profit before taxes 112,553,000 73,293,000 31,733,000 Vertu Motors plc have provided the following accounts: 28 Feb Feb Feb 2016 Turnover 2,796,068,000 2,822,589,000 2,423,279,000 Profit before taxes 30,447,000 29,820,000 25,962,000 Vertu Motors (Property) Ltd have provided the following accounts: 29 Feb Feb 2016 Turnover 11,609,000 8,882,000 Profit before taxes 7,249,000 5,264,000

7 AUTOMOTIVE INVESTMENT EVIDENCE Given the lack of prime stock with long leases currently available in the market, the UK Automotive sector remains resilient despite the UK s political turmoil. Institutional and private equity firms continue to demonstrate unwavering demand for further exposure to the sector, attracted by the robust covenants of the manufacturers. This is evident by the recent comparable investment transactions below: Date Location Tenant (Guarantor) Term Certain (years) Price Net Initial Yield Aug-18 Fiat Liverpool Stonacre ,200, % Dec-17 Audi Huddersfield Audi (UK) Ltd ,290, % Sep-17 Jaguar Land Rover Leeds Jaguar ,150, % Aug-17 BMW High Wycombe Sytner Properties Ltd (Sytner Group Ltd) ,100, % Jun-17 VW Huddersfield Goodman Retail Ltd (VW Group UK Ltd) ,300, % May-17 Peugeot / Citroen York Pendragon Property Holdings Ltd ,920, % Mar-17 Bentley, Knutsford R Stratton & Co (Sytner Group Ltd) ,000, % Feb-17 VW / Volvo Solihull Volkswagen Group UK Ltd ,000, %

8 VAT The property has been elected for VAT and it is anticipated that the transaction will be treated as a Transfer of a Going Concern (TOGC). EPC A copy of the Energy Performance Certificate is available in the dataroom. DATAROOM For access to the Allsop dataroom please use the following link: PROPOSAL Offers sought in excess of 3,310,000 (Three Million Three Hundred and Ten Thousand Pounds) subject to contract and exclusive of VAT. This reflects a net initial yield of 6%, after allowing for purchaser s costs of 6.52%. For further information or to make arrangements for viewing please contact: TEAM Liam Stray liam.stray@allsop.co.uk Andrew Lister andrew.lister@allsop.co.uk The investment shows the below yield profile based on the fixed uplifts: Date NIY 24th June % 24th June % 24th June % Misrepresentation Act: 1. Allsop LLP on its own behalf and on behalf of the vendor/lessor of this property whose agent Allsop LLP is, gives notice that: (a) these particulars do not constitute in whole or in part an offer or contract for sale or lease; (b) none of the statements contained in these particulars as to the property are to be relied on as statements or representations of fact; and (c) the vendor/lessor does not make or give, and neither Allsop LLP nor any of its members or any person in its employment has any authority to make or give, any representation or warranty whatsoever in relation to the property. The only representations, warranties, undertakings and contractual obligations to be given or undertaken by the vendor/lessor are those contained and expressly referred to in the written contract for sale or agreement for lease between the vendor/lessor and a purchaser or tenant. 2. Prospective purchasers or tenants are strongly advised to: (a) satisfy themselves as to the correctness of each statement contained in these particulars; (b) inspect the property and the neighbouring area; (c) ensure that any items expressed to be included are available and in working order; (d) arrange a full structural (and where appropriate environmental) survey of the property; and (e) carry out all necessary searches and enquiries. Allsop is the trading name of Allsop LLP. Design CommandD