PARK3&4 Admiralty Way, Seaham SR7 7DN

Transcription

1 FOXCOVER DISTRIBUTION PARK3&4 Admiralty Way, Seaham SR7 7DN Modern Distribution Investment For Sale

2 FOXCOVER DISTRIBUTION PARK3&4 Admiralty Way, Seaham SR7 7DN INVESTMENT SUMMARY Modern Distribution investment Two, 2007-build modern warehouses, providing approximately 99,300 sq ft of accommodation over a site of 4.24 acres Let to a strong covenant mix, with excellent value-add opportunities through lease re-gear Excellent access to the national road network via the Total rent passing of 394,787 per annum Offers sought at 4,035,000, equating to a net initial yield of 9.25%, allowing for purchaser s costs at 5.8%

3 A1(M) TO SOUTH & TEESSIDE TO NORTH & TYNESIDE A182 Cricket Ground Playing Fields SEAHAM HEXHAM 9 A696 A69 Newcastle Airport CHESTER-LE-STREET A A167 NEWCASTLE UPON TYNE GATESHEAD DURHAM 63 A1(M) TYNEMOUTH Port of Tyne SOUTH SHIELDS A181 SUNDERLAND A182 Port of Sunderland SEAHAM Port of Seaham HARTLEPOOL Scotland Glasgow Edinburgh OFFICE PARK TO MIDDLESBROUGH Football Ground Edith Street HOTEL/PUB SITE DAWDON SEAHAM HARBOUR & MARINA 8 SCOTCH CORNER A1(M) DARLINGTON Durham Tees Valley Airport 9 Port of Hartlepool A171 Teesport MIDDLESBROUGH Newcastle Sunderland Carlisle Leeds Manchester Liverpool Nottingham Birmingham Wales England Cardiff London Bristol LOCATION Seaham is an attractive coastal town located in east County Durham approximately 15 miles south east of Newcastle upon Tyne, 10 miles east of Durham and 20 miles north of Middlesbrough. The town benefits from excellent road communications with the dual carriageway approximately 1.5 miles to the west providing easy access to the main conurbations in the north east including Newcastle, Sunderland, Durham and Middlesbrough. The A1(M), the region s other main arterial route, is located approximately 6 miles to the west, running parallel north to south with the. The East Coast main line provides services to Durham, Newcastle and Darlington, all of which are a short drive from Seaham. The quickest journey time from Durham to London Kings Cross is around 2 hours and 30 minutes with Edinburgh being approximately 1 hour 40 minutes. The area is served by two airports with Newcastle International Airport approximately 25 miles to the north west with Durham Tees Valley International Airport approximately 25 miles to the south.

4 DEMOGRAPHICS Seaham has an urban population of 21,153 with the district population of Easington being 93,993 (Source: Focus). The town is one of Durham County Council s key employment sites with support from Business Durham, the county s inward business development arm. Business Durham work closely with UK Trade and Investment introducing not only national but international enquiries to the region. Private service sector organisations are the principal employers in the area. Major employers in the town include The BE Group, Seaham Harbour Dock, Trillium, Durham County Council and Jacques Vert Plc. The key locations of Teesport, Middlesbrough, Newcastle upon Tyne, Darlington, Newcastle International Airport and Durham Tees Valley Airport are all accessible within a 60 minute drivetime, making Foxcover uniquely situated to serve the North East region. SITUATION Foxcover Distribution Park provides Seaham s most modern, high specification accommodation with major occupiers including Interserve, Yearsley Group, Metro Mail, Cumbrian Seafoods and Robertson Timberkit alongside Gruma and Sofaworks in the subject units. Other major industrial occupiers in the location include Jacques Vert Logistics Division, Finn Machine Electronic Equipment and Woodland Group, situated on the older Seaham Grange Industrial Estate to the north of the town centre, and Seaham Harbour Dock Company adjacent to the harbour and town centre. Foxcover benefits from excellent road communications, connecting directly to the, 1.5 miles to the west via the A182. The key locations of Teesport, Middlesbrough, Newcastle upon Tyne, Darlington, Newcastle International Airport and Durham Tees Valley Airport are all accessible within a 60 minute drivetime, making Foxcover uniquely situated to serve the North East region. 60 minute journey time HEXHAM 9 A69 A696 8 A1(M) Newcastle Airport GATESHEAD CHESTER-LE-STREET SCOTCH CORNER A690 8 A167 NEWCASTLE UPON TYNE DURHAM A1(M) A181 DARLINGTON Durham Tees Valley Airport TYNEMOUTH Port of Tyne SOUTH SHIELDS SUNDERLAND A182 Port of Seaham SEAHAM 9 HARTLEPOOL Teesport MIDDLESBROUGH A171 A1(M)

5 DESCRIPTION The property comprises two 2007-build detached warehouses of steel portal frame construction, with insulated profile sheeting envelope and providing both dock loading facilities and roller shutter door access. There is extensive secure car parking and yard areas with the building benefitting from the following specification:- 10m clear height to eaves; Dock leveller and level loading positions; Super flat floor with a loading of 50KN/m 2 ; 5% office content capable of expansion vertically and horizontally. ACCOMMODATION Warehouse Unit Sq M Sq Ft Unit 3 5,733 61,700 Unit 4 3,477 37,600 Total 9,210 99,300

6 UNIT 3 TENURE The property will be sold on the basis of a new 125 year lease less 5 days from 11th November 2005 at a peppercorn rent. TENANCY Unit 3 is fully let to Gruma Seaham Limited for a term of 5 years from 18th October The passing rent is 185,500 per annum with a fixed increase to 215,950 per annum on 18 October The vendor will top up the rent passing to the October 2015 level at sale, which equates to 3.50 per sq ft. Unit 4 is fully let to Sofaworks Limited for a term of 15 years from 21st August 2008, with a tenant s break option on the tenth anniversary of the term, exercisable on 6 months notice. The rent passing is 178,837 per annum ( 4.75 per sq ft), which is subject to review on 21st August Both leases are drawn on full repairing and insuring terms. UNIT 4

7 COVENANT Gruma Seaham limited Gruma is the largest manufacturer of corn flour and tortillas in the world with brand names including Mission, Maseca and Guerrero. The company was founded in 1949 and is headquarter in Monterry, Mexico. Gruma have a strong presence in Seaham, occupying units at Spectrum and Seaham Grange, 3 miles to the north. Wraps and tortillas are manufactured at the Seaham Grange unit and are stored and distributed from the subject site. Gruma Seaham Limited have current shareholder s funds of 18.9M and three year average turnover of 33.8M. The parent company, Gruma S.A.B. de C.V. produces worldwide turnover of $4.9Bn per annum with 20,000 employees throughout subsidiaries in the USA, China, Central America, Venezuela and England. The current market capitalisation of Gruma S.A.B. de C.V. on the New York Stock Exchange is $5.72Bn. Sofaworks Limited Sofaworks Limited were founded in 1981 and operated under the name CSL Sofas until The company sells, distributes and arranges finance for sofas and soft furnishings with 31 store locations across the country and 4 distribution centres, employing more than 1,000 staff. Recently, Sofaworks has achieved fame through sponsorship of the popular Channel 4 television series Gogglebox and the character Neal the Sloth. The company have occupied the subject property since August 2008 as a north east distribution hub. Three year average turnover to the accounting period end December 2013 is 84.7M and average pre-tax profit over the same period is 1.05M. Current Shareholder s Funds are 6.3M.

8 OCCUPATIONAL MARKET/SUPPLY Other areas of growth in the manufacturing sector have included Hitachi Trains who are building a 400,000 sq ft unit Train assembly facility in Newton Aycliffe. Both Rolls Royce and BAE Systems have also recently had a purpose built manufacturing facilities in excess of 300,000 sq ft constructed replacing older factories showing commitment to the region. The region s Ports have also enjoyed a period of growth and have recently announced plans to expand further. Port of Tyne, the region s main northern port, is located within 15 miles of the subject site and caters largely for bulk shipping with cars, coal and bio-mass forming a large part of their business. Foxcover provides among the most modern industrial accommodation along the corridor, benefitting from proximity to the junction of the and A690, with the latter dual carriageway connecting to the A1(M) 6 miles to the west. We have listed the most recent comparable lettings in the table below: Address Size (sq ft) Status & Date Rent per sq ft Comments The industrial occupier market throughout the North East is buoyant. Key areas such as the automotive, manufacturing, distribution and offshore sectors have seen significant growth. The corridor in particular, which acts as the principal north-south route through Teesside to the Scottish borders, is historically strong and highly competitive, particularly for distribution uses. A lack of new development through the recession has caused an imbalance in the net supply/demand position and the availability of good quality, mid-sized to larger industrial stock is now becoming restricted. Demand, meanwhile, continues to improve and asking rental levels are rising as tenant incentives decrease. Portobello Trade Park, located on the A1(M) near Washington, is the only speculative industrial scheme currently in development in the region, providing 100,000 sq ft across 7 units with asking rents between 6 and 8 per sq ft. Nissan, whose main UK facility is located on the, account for 1 in 3 new cars produced in the UK and their expansion in production has seen significant take up from their supply chain over the last months. Vantec, their main 3PL partner built a 421,000 sq ft facility adjacent to the Nissan plant last year and they now occupy over 1 million sq ft in various buildings around Washington. They also have current enquiries in the market for a further 400,000 sq ft of space. Unit 3 Delta Bank Road, Metro Riverside, Gateshead Former Citylink Unit, Cathedral Park, Durham Unit 2, Follingsby Park, Gateshead 20,000 50,000 40,000 Open Market Letting May 2015 Open Market Letting April 2015 Open Market Letting April Agreement to lease signed for a new, unbroken 10 year term. Geopost Limited took a new unbroken 10 year term. Older unit with irregular layout Situated between and A1(M). DFS have taken an unbroken 10 year term Given the above evidence and with regard to the rising occupier market, we consider the subject property to have the following ERVs: Unit 3 Unit 4 Total ERV 262,225 per annum ( 4.25 per sq ft) 178,600 per annum ( 4.75 per sq ft) 440,825 per annum

9 INVESTMENT MARKET Recent sales evidence is summarised in the table below: Address Description Lease Term Price/Date Yield Kingsway Interchange, Team Valley Trading Estate, Gateshead Multi-let estate in established commercial location off the A1(M), totalling 180,430 sq ft GIA. Let to 17 tenants including trade and logistics operators with a WAULT of 4.84 years to expiry and 3.72 years to break. Total rent roll of 883,563 per annum 12.1M May % West Chirton Industrial Estate, North Shields Multi-let estate off the comprising eight 1980s units totalling 94,287 sq ft. Let to a range of tenants including Wolseley Group, fud International and Seafood holdings Ltd. WAULT of 4.85 years to expiry and 4.15 years to break 4.4M Feb % Densitron Unit, New York Way, New York Industrial Estate Modern, 37,700 sq ft unit located nearby the Let to Densitron Technologies PLC for 20 years from January 2003 at a rent of 150,000 per annum. The tenant is not currently in occupation. 1.65M Dec % Gateway West, Newburn Riverside, Newcastle Upon Tyne Mixed use estate comprising 52,956 sq ft of offices and 113,325 sq ft of industrial space. Located to the east of Newcastle Upon Tyne, adjacent to the A1. Multi-let with 9.47 WAULT to expiry across the estate. Average industrial rent is 5.40 per sq ft M Oct % (7.44% apportioned to industrial units) Booker Cash & Carry Warehouse, First Avenue, Team Valley, Gateshead 77,810 sq ft warehouse operated as a cash and carry unit, located on premier industrial estate in the north east Let to Booker Ltd for 25 years from Feb 1995 at rent passing of 279,000 per annum, equating to 3.59 per sq ft. 3.42m July % City & Northern Portfolio 7no. modern, mid-2000 build units over 3 estates in Blyth, South Shields and Gateshead, with a total GIA of 99,722 sq ft WAULT of 5.5 years across the portfolio 5.43M July % Units 1 & 2 Monkton Business Park, Hebburn 2no build units totalling 55,590 sq ft in a less prominent pitch Let to Variable Messaging Signs and Ford Components Ltd with WAULT of 9.5 years. Total rent roll 204, M July % Units A & B, Hadrian Industrial Park, New York, North Shields 2 industrial units constructed in late 1990s extending to 161,249 sq ft on a site of 9.17 acres. Unit A let to Freudenberg Technical Products until Dec 2024 at a rent passing of 232,000 per annum. Unit B let to Elanders Graphics Ltd until October 2022 at a rent passing of 370,000 per annum. 6.9M Mar %

10 VAT The property has been elected for VAT and it is envisaged that the transaction will be treated as a ToGC. EPCs EPCs available on request. ASKING TERMS Our client is seeking offers of 4,035,000 (Four Million, and Thirty-Five Thousand pounds) subject to contract and exclusive of VAT for the long leasehold interest. A purchase at this price equates to a net initial yield of 9.25%, allowing for purchaser s costs at 5.8%. At our view of ERV, the potential reversionary yield is 10.33%. gva.co.uk/8884 GVA Grimley Limited Conditions under which Particulars are issued GVA Grimley Limited for themselves, for any joint agents and for the vendors or lessors of this property whose agents they are, give notice that: 1.) The particulars are set out as a general outline only for the guidance of intending purchases or lessors and do not constitute, nor constitute part of, an offer or contract. 2.) All descriptions, dimensions, references to condition and necessary permission for use and occupation, and other details, are given in good faith and are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them. 3.) No person in the employment of GVA Grimley Limited or any joint agents has any authority to make or give any representation or warranty whatever in relation to this property. 4.) All rentals and prices are quoted exclusive of VAT. Reproduced by courtesy of the Controller of HMSO. Crown Copyright reserved. Licence No If applicable, with consent of Chas E Goad, Cartographers, Old Hatfield, Geographers A-Z Map Co Ltd and/or The Automobile Association. For identification purposes only. For further information or to arrange an inspection please contact the following: Luke Symonds Direct Dial: luke.symonds@gva.co.uk Simon Beanland Direct Dial: simon.beanland@gva.co.uk Designed & produced by Ref-767