PRIORY PLACE CITY CENTRE MIXED USE INVESTMENT AND ASSET MANAGEMENT OPPORTUNITY FAIRFAX STREET COVENTRY CV1 5SQ

Transcription

1 PRIORY PLACE CITY CENTRE MIXED USE INVESTMENT AND ASSET MANAGEMENT OPPORTUNITY FAIRFAX STREET COVENTRY CV1 5SQ

2 Investment Summary A rare opportunity to acquire a multi tenanted mixed use development in the heart of Coventry city centre, surrounded by extensive student developments A mixed use development completed in 2004, incorporating 10 restaurants, 2 retail units, an ATM and the BBC radio broadcasting studio with offices, totalling 30,750 sq.ft (2, sq.m). Prime city centre leisure location, current occupiers include the BBC and Pizza Hut Located in a high footfall area close to Coventry s main tourist attractions of the Medieval Cathedral Quarter, Coventry Cathedral, Lady Godiva s Priory of St Mary Visitor Centre and The Transport Museum. Next to Coventry University, with close proximity to main Shopping areas and opposite the city centre bus station Net Initial Yield of 7.5% (after purchasers costs), rising to 7.58% within 2018 and 8.20% Reversionary Yield Initial income of 503,600 per annum Long leasehold with 134 years remaining at a peppercorn ground rent WAULT (Weighted Average Unexpired Lease Term) is years Proposal We are instructed to seek offers based on 6,300,000 subject to contract and exclusive of VAT.

3 COVENTRY IS A YOUNG DIVERSE AND MODERN CITY WITH STRONG HISTORICAL ROOTS Coventry is a city of renewed optisim and rapid growth, investing heavily in its people, infrastucture and businesses Coventry is home to major employers investing in the city, including Jaguar Land Rover, Severn Trent, Barclays PLC, Amazon, National Grid and Kuehne + Nagel. The city is the 9th largest city in England with a cultural and ethnically diverse population of 378,000 people (2018), projected to grow to 426,000 by Coventry has the fifth youngest city population in the UK with an average age of 36.2 years (2018) 71,000 people commute to Coventry for work every day. 50% of the UK population are within 2 hours drive time The City of Culture title will bring about real change in the city, laying the foundations for cultural, social and economic prosperity. A huge boost to tourist numbers is expected UK City of Culture, Hull attracted more than five million visitors. Increased investment. Coventry is planning a 100m initial investment in the public realm. It is calculated that the 2017 Hull bid attracted 220m of overall inward investment. Engineering and Computing Building, Coventry University Job Creation. The experience of Liverpool and Hull suggests that the City of Culture year will lead to a major expansion of the hospitality industry in the city centre which will continue improve after the year creating 1,000s of jobs.

4 Student Population The city has two renowned universities, Coventry University and University of Warwick with a total of c55,000 students with the expectation of growth to c60,000 by 2021 and is the only City to have both universities in the UK top 15. Coventry University is highly regarded for its expertise in engineering and design, especially in the automotive sector and digital media with strong links to industry. The University is very popular with overseas students, particularly from the Far and Middle East, with it is estimated c30% of the student population coming from outside the UK and EU. The success of the universities have inspired a raft of developments of student housing accommodation, as per the below map which shows in excess of 14,000 beds having been developed or being developed in the immediate area. The cities two Universities are ranked in the top 15 best universities in the UK The Guardian University League Table 2019 Warwick University recently ranked fourth best University in Europe for teaching Times Higher Education Coventry Cathedral Herbert Art Gallery 385 BEDS RINGWAY A BEDS 1192 BEDS 391 BEDS 291 BEDS 693 BEDS 347 BEDS 212 BEDS 600 BEDS 995 BEDS 407 BEDS 148 BEDS 145 BEDS PRIORY VISITOR CENTRE FAIRFAX STREET 332 BEDS COVENTRY UNIVERSITY 769 BEDS 464 BEDS Coventry University Lady Godiva Statue 219 BEDS 134 BEDS RINGWAY A4053 RINGWAY A BEDS 100 BEDS COVENTRY CATHEDRAL 778 BEDS 285 BEDS 736 BEDS 462 BEDS 266 BEDS 353 BEDS 105 BEDS 583 BEDS NEW UNION ST 200 BEDS 200 BEDS 153 BEDS 707 BEDS 155 BEDS 115 BEDS 117 BEDS St Mary's Guildhall Priory Ruins & Visitor Centre

5 Location Accommodation Priory Place is one of the premier leisure destinations in Coventry city centre and is part of the award winning 60m Phoenix Initiative, lying next to Millennium Square and opposite the main city centre bus station, next to Coventry University, Coventry Cathedral and close to the city central retail core and Cathedral Lanes restaurant development. The development already contains the BBC Coventry and Warwickshire radio station and headquarters, as well as a mixture of far eastern restaurants, pizza and grilled food offering and a crepe restaurant helping to create a World Food Court destination. The lower units front on to Fairfax Street facing the city central bus station and Millennium Square housing the British Transport Museum, but also next to Sainsburys supermarket and one of the country s most successful Nandos. The development lies next to Coventry University, which now has around 28,000 students, many of which are housed in a number of student housing developments currently being developed in the immediate vicinity. Priory Place has 3 separate buildings around an attractive central square with external seating areas for the restaurants. The square has attractive waterfall and pool features and is maintained by the council. Block A Comprises East Asian restaurant units one of which includes a Chinese supermarket. These west facing units have external seating areas overlooking the square and waterfall Block B Upper level 3 south facing restaurant units fronting the square with external seating Lower level 5 restaurants, an ATM and a hairdressers fronting the main Fairfax st road frontage Block C 4 units are combined under a single lease to the BBC, to house the Coventry and Warwickshire Radio Station and associated offices, providing a secure AAA base income PEDESTRIAN ONLY AREAS PALMER LANE Description Priory Place is a mixed use development completed in 2004, incorporating 10 restaurants, 2 retail units, an ATM and a radio station with offices, totalling 30,750 sq.ft (2, sq.m), together with 85 residential apartments above, sold off on long leasehold with ground rent at a peppercorn. TRINITY STREET FAIRFAX STREET BUS STATION C B PRIORY PLACE A Tenure The development is owned on a long lease of 150 years from 31/1/2002 at a peppercorn rental, with The Council of the City of Coventry as the landlord. The upper floors are let on a single lease for 150 years less 3 days to KingsOak Homes, a wholly owned subsidiary of Barratt Homes. This provides a single collection point for service charge recovery from a major PLC. IRONMONGER ROW wetherspoon NEW BUILDINGS PRIORY RUINS PRIORY VISITOR CENTRE COVENTRY CATHEDRAL

6 Investment Summary Unit Trading as Unit Size SQ.m Unit Size Sq.Ft Start Date Term Lease End Break Date Current Full ERV Current Per Sq.ft Step 1 Step 2 Step 3 Review 1 Review 2 Review 3 Review 4 1 Han Dynasty /5/ /5/34 45,000 51, /5/19 21/5/24 21/5/29 2 Shin Ramen Top Express Supermarket /11/ /11/34 52,500 64, /11/19 18/11/24 18/11/29 R1 Parham Ahmadi (letting in process to Mr. Anhi To at 25,000) /6/ /6/30 25, /7/23 2/7/28 2/7/33 2/7/38 R2 Yipinbasu /1/ /1/ /1/22 26/1/27 R3 Pizza Hut Delivery /3/ /3/ /3/22 23/3/27 R4 Yaki Sushi /7/ /7/27 42,500 42, /7/22 ATM Coventry Building Society /1/ /1/22 5,000 5, R4A Crepe Fresh /7/ /7/27 10/7/22 10,000 10, /7/22 R4B The Turkish Barber /11/ /11/25 9,000 9, /11/20 R5 Jinseon Korean BBQ ,423 18/11/ /11/46 18/11/26 46,600 59, /11/18 47,000 18/11/19 48,000 18/11/20 50,000 18/11/21 18/11/26 18/11/31 18/11/36 R6 Top Express Supermarket /10/ /10/36 10/10/26 16,000 17, /10/21 10/10/26 10/10/31 R7 & R8 PGR (Pizza Grill Restaurant) ,627 17/6/ /6/34 37,000 45, /6/19 17/6/24 17/6/24 5,6,7&8 BBC ,160 24/3/ /3/24 180, , /3/19 Totals 2, ,750 Roll 503, ,

7 Covenants and Tenant Description Unit Leased to 1 Shou Zhang Han Dynasty has operated since 2009 and is very popular with Chinese students. Recently split the unit to also include a Bubble Tea and Snacks takeaway 2 Mamita Ltd Unit split between Jinseon restaurant, operator has another similar restaurant in Cheltenham and Top Express Chinese supermarket, the operator has 6 in the same style throughout the Midlands. Guarantor for the whole rent Mr. Zhiming Zhao R1 Currently leased to Parham & Charlotte Ahmadi Currently finalising a surrender and new lease. Operator to open a Vietnamese street food restaurant, has another similar operation, also the major UK supplier of Tofu R2 Mr. An Lin Xi & Mr Guodong Chen Former chefs from unit 1 Han Dynasty, set up a complimentary Chinese food offer to work alongside Han Dynasty R3 J & R Pizza Limited, trading as Pizza Hut Delivery Midlands Pizza Hut Delivery Franchise, operates four delivery outlets currently under this company. R4 Miss Fangxi Gu Yaki Sushi has been operating since 2012, the operator also operates multiple noodle vans in prime retailing locations throughout Coventry ATM Coventry Building Society Recently renewed on a further 5 year term. Incorporated in 2008, Coventry Building Society is the UKs second largest with total assets of more than 42.5 Billion at 31/12/2017 R4A Mr Wen Chai Chen Operating as Crepe Fresh since December 2013, business purchased for a premium in July 2017 and a new term granted Millennium Square R4B Mr Lutfu Cagribay The tenant operates two more businesses in the city centre in council units, Council provided reference to good tenant conduct on existing leases R5 Mr James Kwong & Ms. Camay Chi Wai Kwong The operators second restaurant in Coventry City Centre of a similar nature, strong business accounts and references provided before the grant of the tenancy R6 Mr Wenqing Liu The same tenant as Top Express supermarket in Unit 2. In the process of creating an oriental tea, coffee and cake shop, previously used as stock storage for the supermarket R7 & R8 Masoud Behgozin TTenant operates two similar restaurants in Coventry and a further restaurant in nearby Hinkley. Good tenant references received prior to grant of tenancy 5,6,7&8 British Broadcasting Corporation BBC is publicly funded, the world s oldest national broadcasting organisation and the largest by employees, 35, /17 Revenue Billion, Total Assets Million Coventry Cathedral Coventry City Coat of Arms

8 Asset Management There are a number of initiatives a purchaser can progress: Negotiate rent reviews for unit s 1, 2, R7 - R8. Potential to increase outside seating in the square and potentially another free standing unit Working in partnership with the City Council for the City of Culture 2021 to host events and boost trade PRIORY PLACE CITY CENTRE MIXED USE INVESTMENT AND ASSET MANAGEMENT OPPORTUNITY FAIRFAX STREET COVENTRY CV1 5SQ improve covenant strength Proposal We are instructed to seek offers based on 6,300,000 subject to contract and exclusive of VAT. It is expected that the sale will be treated as a Transfer Of a Going Concern. A purchase at this level reflects a Net Initial Yield of 7.5% and a Reversionary Yield of 8.2% assuming standard purchasers costs. Service Charge There is a service charge operated at Priory Place and split between the commercial tenants and residential underlease, with 70% of external repairs attributable to the residential element. EPC Viewing By appointment through the sole agents. James Brookes james.brookes@bromwichhardy.com Tom Bromwich tom.bromwich@bromwichhardy.com All of the units have current Energy Performance Certificates with a number of years to run and ratings all falling between bands B and E. Legal and Surveying Costs Each party to bear their own legal and surveying costs. Bromwich Hardy 1 The Cobalt Centre Siskin Parkway East Middlemarch Business Park Coventry CV3 4PE VAT All prices quoted are exclusive of VAT, which may be chargeable. Misrepresentations Act Unfair Contract Terms Consumer Protection Regulations under Unfair Trading Regulations The Business Protection Regulations from Misleading Marketing Regulations These particulars are issued without any responsibility on the part of the agent and are not to be construed as containing any representations or fact upon which any person is entitled to rely. Neither the agent or any person in their employ has an authority to make or give any representation or warrant whatsoever in relation to the property. July 2018.