18-26 CRICKLADE STREET & BISHOP S WALK SHOPPING CENTRE CIRENCESTER

Transcription

1 18-26 CRICKLADE STREET & BISHOP S WALK SHOPPING CENTRE CIRENCESTER Freehold Shopping Centre investment opportunity in affluent Cotswold market town David Allberry Commercial

2 INVESTMENT SUMMARY Affluent market town located in heart of the Cotswolds Covered Shopping Centre providing a link between one of the town s main carparks to Cricklade Street, the town s main retailing thoroughfare 54% of income secured to national multiples 47% of income secured to tenants on Cricklade Street Rents offering good future rental growth prospects 6.3 years WAULT to expiry Freehold Various asset management angles 2

3 PRICING We are seeking offers in excess of 6,750,000 (Six Million Seven Hundred and Fifty Thousand Pounds), for our client s freehold interest in the property, subject to contract and exclusive of VAT. A purchase at this level reflects an initial yield of 7.2% and a reversionary yield of 7.4% after purchaser s costs of 6.64%. 3

4 Milton Keynes M5 M1 Cheltenham Aylesbury Aylesbury A40 A417 Oxford M25 High Wycombe Reading M4 A46 Chelmsford Southend-on-Sea LONDON M4 London Gateway Ramsgate Bath M25 Basingstoke A346 Guildford Amesbury M5 M3 A303 Salisbury A303 Maidstone A24 Crawley A3 Yeovil Stevenage M40 CIRENCESTER M5 on-super-mare ton-super-mare Felixstowe A41 Swindon Bristol Colchester Stansted Gloucester M5 M11 Luton Winchester Dove r Royal Tunbridge Wells Folkestone A350 Southampton Hastings A27 A37 A338 Bournemouth Portsmouth Brighton Eastbourne Newport LOCATION & DEMOGRAPHICS Cirencester is an attractive market town in east Gloucestershire, located 93 miles northwest of London, 36 miles north east of Bristol and 19 miles south east of Gloucester in the heart of the Cotswolds.The town benefits from excellent road communications being equidistant from both Junction 13 of the M5 motorway to the west and Junction 17 of the M4 motorway to the south-west. Cirencester s nearest railway station is at Kemble which is located 5 miles from Cirencester with services to Gloucester, Cheltenham, Swindon and London Paddington. Cirencester is the largest town in the South Cotswolds with a population of approximately 23,000 and is a dominant retail centre with a shopping catchment of 80,000. There has been a significant increase in house building in recent years with much more in the pipeline. There is a proposal for a further 2,500 houses on the edge of the town. 4

5 Affluent market town located in heart of the Cotswolds Reflecting the demographic profile and spending habits of the catchment population, spending levels per capita are significantly above the PROMIS average. Cirencester area contains a significantly above average proportion of adults of working age categorised within the most affluent AB social group (which includes those in managerial and professional occupations). In contrast, the least affluent D and E social groups (which includes those in skilled and unskilled manual employment, the unemployed and those on state benefits) are particularly under-represented within the Cirencester area and social group C1 (which includes junior non manual employees) is moderately under-represented. In December 2016 the local claimant count was 0.4% of the population aged 16-64, compared to the national claimant count at December 2016 of 1.2%. The town is home to the Royal Agricultural University, the oldest agricultural college in the UK, founded in 1840 attracting over 1,200 students across 45 countries drawing in an annual average spend of approximately 6,000,000 to the local economy. This is further boosted by tourism with the likes of the Roman Amphitheatre and the Corinium Museum. One of the town s major employers is St. Jame s Place Wealth Management which has its headquarters in the town. 5

6 47% of income secured to tenants on Cricklade Street RETAILING IN CIRENCESTER Cirencester is often referred to as the capital of the Cotswolds, largely due to its size and status from Roman times, when it was known as Corinium and was the second largest town in the country, second only to London. Today Cirencester is the largest town in the South Cotswolds with approximately 480,000 sq ft of retail space. Prime retailing is focused on Cricklade Street, the town s historic retailing thoroughfare and still remains home to many of the multiples including Waterstones, Boots The Chemist, Poundland and Superdrug. Market Place/Dyer Street offers a mix of large floor plates attracting the likes of Argos, M&S Simply Food and House of Fraser and the more boutique offer around the historic St John the Baptist Church including Crew, Joules, Phase 8 and Fat Face. Bishop s Walk, which has frontage onto Cricklade Street, is the town s only covered shopping centre comprising a mixed use offer of approximately 25,000 sq ft. There is limited out of town retailing in Cirencester with Cirencester Retail Park being the only retail park on the edge of town. 6

7 DESCRIPTION Bishop s Walk is a 25,492 sq ft covered shopping centre arranged on ground and first floor. The scheme provides 4 units fronting Cricklade Street (Nationwide, O2, Holland & Barrett and Western Computer Group - an Apple Franchise), a gym, and nightclub on the first floor and 12 lock-up units varying in size from 250 sq ft 1,800 sq ft. The scheme provides a thoroughfare from one of the town s busiest car parks providing 300 spaces and a 33,000 sq ft Tesco Superstore at the rear to Cricklade Street and therefore benefits from excellent footfall. The Centre has a strong tenant mix with a value/ convenience offer complimented by a food and leisure offer. The scheme offers a 50% discount in rent to Cricklade Street. TENURE The property is held freehold. There is a licence from Cotswold District Council to permit access from the Brewery car park dated 5th January 1998 at a licence fee of 4,686 per annum. Further details available upon request. TENANCIES The property is let on effective FRI leases in accordance with the tenancy schedule. In summary the income from the centre is as follows: Current net rent (assuming rental top-ups on units 2A & 3 and Licence) Reversionary net income The current WAULT to expiry is 6.4 years and 5.3 years to break. 512,914per annum 529,354 per annum 7

8 TENANCY SCHEDULE Tenant/ Trading Name Term Lease Commencement Lease Expiry Rent Review (Break) Passing Rent Floor Area (sq ft) ITZA Ground Floor Ancillary Rent ZA/ PSF ERV (ZA) Comment Unit 1 JG Foods Grape Tree 10 years , ,25 Unit 2 Vacant 30, , ,00 Unit 3 Longfield 10 years a Bishops Walk 3b Bishops Walk ( ) 35, , ,00 Vacant 20, ,06 Michael Hart & Sons 10 years , ,75 Unit 4 RSPCA South Cotswold 10 years ( ) 30, ,50 Unit 4a Cotswold Cobbler 5 years , ,5 45,32 Unit 5 Cotswold Artisan Coffee 3 years , ,50 Unit 6 + Store 1 Unit 7 + Store 2 Phantom Moon 3 years ,000 Barnardos 10 years ,750 Unit 8 Nationwide 10 years ,000 GF 582 FF 286 GF 571 FF 366 GF FF , ,00 474,5 38,05 981,9 61,33 Unit 9/10 Reva Night Club 20 years , ,51 Unit 11/13 Reva Night Club 20 years , ,59 Kiosk 1 Phonebox Gadgets 3 years , ,07 Kiosk 2 Rose's 3 years , ,86 22 Cricklade Street 24 Cricklade Street 26 Cricklade Street O2 (Talk Talk) 10 years ,000 Holland & Barrett 10 years ,350 Western Computer 10 years ( ) 50,000 GF FF 877 GF FF 816 GF FF ,00 649,5 67, ,00 22,500 ( 37.25) 30,000 ( 45.00) 35,000 ( 50.00) 20,500 ( 31.06) 21,500 ( 33.75) 30,000 ( 49.50) 15,750 ( 45.32) 17,250 ( 37.50) 18,000 ( 32.00) 18,750 ( 38.05) 79,500 ( 75.00) 27,665 ( 9.17 psf) 24,000 ( 9.17 psf) 9,250 ( 38.00) 7,500 ( 38.86) 54,625 ( 75.42) 51,750 ( 75.00) 50,500 ( 75.00) 12 month rental guarantee 12 month rental guarantee Lease renewal in solicitors hands Tenant holding over Sub-let to The Fitness Space for 10 years from 24/03/2016 at 24,000 per annum. Tenant option to break in 24/03/2021 5% allowance for return frontage. On-going rent review. Further updates available On-going rent review. Further updates available Licence ,686 Payable to Cotswold District Council TOTAL 512,914 GF FF TOTAL ,354 8

9 INCOME ANALYSIS 12% Bishop s Walk First Floor 10% Vacant 41% Cricklade Street Split of Income 47% Bishop s Walk Ground Floor Income by Covenant 36% Local 54% Multiple Top 5 Tenants by Rent Tenant Rent % of income Covenant Rating-Experian Rating/100 Nationwide 65, % Very Low Risk 100/100 Reva Night Club* 60, % Low Risk 83/100 O2 50, % Very Low Risk 94/100 Western Computer 50, % Very Low Risk 100/100 Holland & Barrett 46, % Very Low Risk 99/100 TOTAL 271, % * Sub-let part to The Fitness Space at a passing rent of 24,000 per annum. Further information can be provided on request. 9

10 ERVS Cricklade Street Address Tenant Type Date Rent Zone A 7 Cricklade Street Sea Salt OML March , Cricklade Street Miles Morgan Travel OML March , There are no vacancies along the prime section of Cricklade Street between Dorothy Perkins and the junction with Castle Street. Bishop s Walk This offers a 50% discount in rent to Cricklade Street, which is fully let within the prime pitch. SERVICE CHARGE The last 3 years accounts are as follows: Year Amount PSQ , , ,519.85* Budget 80, *2016 was especially high due to exceptional expenditure on building repairs and maintenance. Further information available upon request. ASSET MANAGEMENT There are a number of potential asset management initiatives that could be undertaken including: Complete outstanding rent reviews on 22 & 24 Cricklade Street and Unit 3B. Let vacant units. Re-gear Barnardos lease who are currently holding over Redevelop the whole to create an MSU. 10

11 UNDER OFFER 11

12 PRICING We are seeking offers in the region of 6,750,000 (Six Million and Seven Hundred and Fifty Thousand Pounds) for our client s freehold interest in the property, subject to contract and exclusive of VAT. A purchase at this level reflects an initial yield of 7.2% and a reversionary yield of 7.4% after purchaser s costs of 6.64%. EPC EPCs are available on request. VAT The property is elected for VAT, although it is proposed the property will be treated as a TOGC. CONTACTS Ed Gambarini +44 (0) egambarini@klmretail.com Rupert Guy +44 (0) rguy@klmretail.com Langham House Regent Street LONDON W1B 3AT David Allberry +44 (0) david@davidallberry.co.uk MISREPRESENTATION ACT: KLM Retail, for themselves and for the vendors of this property, whose agents they are, give notice that (i) the particulars and any further information communicated by any means to potential purchasers of the property described in the particulars, or their advisers, in connection with the possible sale of the property are provided solely for the purpose of assisting potential purchasers in deciding whether they wish to proceed with further investigation of the property and do not constitute either the whole or any part of an invitation, offer or contract for sale of the property; (ii) all descriptions, dimensions, references to condition and necessary permissions for use and occupation and other details are given in good faith and are believed to be correct as at the date of the particulars (or the date of the relevant information if earlier). However, potential purchasers are not entitled to rely on them as statements or representations of fact but should satisfy themselves by searches, enquiries, surveys and inspections or otherwise with regard to the accuracy of such details. No responsibility or liability is or will be accepted by KLM Retail, the vendor(s) of the property or any of their respective subsidiaries, affiliates, directors, officers, representatives, employees, advisors, or agents for any loss or damage suffered by any party, resulting from reliance on the particulars or any other information communicated by any means to that party, or its advisers, in connection with the possible sale of the property. No person in the employment of KLM Retail or the vendor(s) has authority to make or give any representation or warranty, express or implied, in relation to the property. References to KLM Retail include any joint agents acting with KLM Retail