Prime Greater London Trade/ Warehouse Investment Units A-D 101 Blackhorse Lane, Walthamstow E17 6DJ

Transcription

1 Prime Greater London Trade/ Warehouse Investment Units A-D 101 Blackhorse Lane, Walthamstow E17 6DJ

2 INVESTMENT SUMMARY A leading Greater London Industrial Location; Excellent frontage to Blackhorse Lane, the main arterial route to the North Circular; A well specified terrace of four trade counter units extending to a Gross Internal Area of 28,475 sq ft; Let to established tenants Speedy Hire, Howden Joinery and C&C Marshall Ltd; All leases recently renewed at increased rents; A net rent passing of 234,102 per annum reflecting a low average rent of 8.22 per sq ft; Virtual freehold; Offers are invited in excess of 3,160,000, subject to contract and exclusive of VAT. A purchase at this level would reflect a NIY of 7.0% after purchasers costs of 5.80%. LOCATION Walthamstow is one of the strongest industrial locations in Greater London and is situated at the western fringe of the London Borough of Waltham Forest. The area is one of the closest industrial areas North of Central London. Blackhorse Lane benefits from excellent transport links both into Central London and the national motorway network. It is bound to the south by Forest Road which links to the A10 which in turn provides direct access into The City. Additionally, Blackhorse Lane provides direct access into the A406 North Circular to the north which in turn provides rapid links to the national motorway network and the remainder of Greater London. The area has excellent public transport links with extensive connections to mainline rail and the London underground network. Blackhorse Road mainline and underground station is situated on the junction with Forest Road and provides regular services on the Gospel Oak to Barking London Overground Network and Victoria line underground services (Zone 3). Blackhorse Lane is also served by a number of London bus routes. Approximate distances from the subject property: A406 North Circular 1.6 miles M1 (Junction 1) 12.1 miles A1 5 miles M11 (Junction 1) 3.5 miles M25 (Junction 25) 10.2 miles Central London 7.3 miles Heathrow Airport 47.3 miles Stansted Airport 29.1 miles City Airport 8.8 miles Walthamstow is home to a wide variety of businesses including a vast number of national trade operators and multi-national companies such as Screwfix, City Plumbing, Barr and Delph. The Blackhorse Lane Regeneration Area Blackhorse Lane is one of Waltham Forest s key growth locations. An ongoing framework is in place proposing new development over the next decade including the provision of 2,000 new residential units and the creation of 1,000 new jobs. This growth will necessitate significant improvements to infrastructure that will benefit the area. The first phase of the re-generation is currently being completed with the development of 241 new homes on Sutherland Road. A major objective of the re-generation is the transformation of the Blackhorse Road station area to the south of the subject property which will provide an attractive gateway to Waltham Forest and the Lea Valley Regional Park. Proposals include the demolition of a number of industrial estates opposite the station to make way for mixed use residential led re-development on the area bounded by Hookers Road, Blackhorse Lane and Forest Road. A new business park has been earmarked for the Webbs Industrial Estate whilst further residential phases are planned for a number of dilapitated industrial areas along Sutherland Road. Prime Greater London Trade/Warehouse INVESTMENT

3 A406 North Circular Blackhorse Lane 2 Blackhorse Road Station 3 Station Hub Proposed Development Area 3 4 Barr 5 Webbs Industrial Estate Proposed Redevelopment 2 6 Uplands Business Centre 7 Waltham Forest Borough Council 8 Sutherland Road Regeneration Area 9 Waltham Parkway 10 Crooked Billet Roundabout A10 Central London

4 Situation The property is located on Blackhorse Lane to the north west of Central Walthamstow and due east of Tottenham Hale. Blackhorse Lane serves as the main north/south route through the area linking directly to the A406 North Circular approximately 1.6 miles to the north east and to Forest Road which in turn links to the A10 at Tottenham Hale approximately 1.6 miles to the south west. The property occupies a highly prominent position with excellent frontage to the western side of Blackhorse Lane. Blackhorse Road station is within 5 minutes walk to the south. The area has seen significant regeneration within the last 5 years with the development of the 241 home development on nearby Sutherland Road. This is set to continues with the Regeneration plans centred around Blackhorse Road Station that will include wholesale mixed use re-development. The Blackhorse Lane Industrial Area is a mixed area with the majority of accommodation of inferior quality to the subject property. Description Units A-D 101 Blackhorse Lane were built in the mid 1980 s and consists of a modern terrace of four warehouse and trade units with ancillary trade counter and office accommodation to the front elevations over ground and first floor level. The property benefits from a wide main road frontage and provides the prime trade counter facility in the vicinity. The units are of concrete frame construction with brick and block elevations under dual pitched roofs. Each unit provides an eaves height of 5.39 metres. There are extensive loading facilities to the front of each unit within a self contained shared yard with access from Blackhorse Lane. Each unit is serviced via a single sliding concertina loading door to the front. The estate benefits from 24 parking spaces to the front whilst Unit A benefits from an additional 7 spaces to the side elevation. The tenants have invested significant capital expenditure on the units with enhanced fit out work including mezzanine, racking and trade counter fit out. Environmental WSP Environmental undertook a Phase I Environmental Audit of the site in October The site was allocated a risk assessment of low with respect to environmental considerations. It concluded that no issues of significant environmental concern were identified associated with the current activities of the site. Further details are available on request. Prime Greater London Trade/Warehouse INVESTMENT

5 Accommodation The property has been measured in accordance with the RICS Code of Measuring Practice (6th Edition) and extends to 28,475 sq ft (2, sq m) as per the Schedule of Accommodation and Tenancies. The site is regular in shape and extends to 0.49 hectares (1.21 acres). There is a service charge in place which for the year ending 31 st December 2013 has a budget equating to 0.74 per sq ft. Tenancy Details The property is multi-let to three tenants with leases on effective Full Repairing and Insuring terms as per the Schedule of Accommodation and Tenancies below. The current weighted average unexpired lease term is 6.7 years whilst the property has an excellent letting history. All three tenants have been in occupation for in excess of 10 years. Howden Joinery originally occupied Unit B with C&C Marshall occupying Units C & D. In November 2012 the vendor undertook negotiations to provide Howden with a new 10 year lease on Units B&C with C&C Marshall downsizing into Unit D only. Speedy Hire did not exercise a recent break option. Unit Tenant Area Sq.Ft. Lease Start Lease Expiry Passing Rent pa A Speedy Asset Services Limited 6, Sep Sep , n/a B&C Howden Joinery Properties Limited 14, Nov Nov , Nov-17 D C & C Marshall Limited 7, Nov Nov , Neither Tenant Financial Information Totals: 28, ,202 Rent psf Rent Review Comments 2 months rent free on renewal. Speedy Hire Centres (Southern) Limited are guarantor. 9 car spaces. 6 months rent free on renewal / extension. Schedule of Condition on unit C only. 16 car spaces. 4 months rent free on renewal. Rent paid monthly in advance. 6 car spaces. Speedy Asset Services Ltd are a wholly owned subsidiary of Speedy Hire Plc, the largest provider of equipment hire services in the UK with over 500 branches. The company has a wide range of hire services from tools through to power generators and has a diverse customer base from local contractors to public sector companies. Summary accounts for Speedy Asset Services Limited are as follows: 31 st March st March 2011 Revenue 311,893, ,314,000 Profit / (Loss) 23,620,000 ( 4,910,000) Net Assets 27,810,000 ( 2,420,000) The guarantor, Speedy Hire Centres (Southern) Ltd is a non trading company. For the year ending 31st March 2012 the company reported net assets of million. For the year ending 31st March 2012, Speedy Hire Plc reported a pre-tax profit of 8.3 million on a turnover of million and net assets of million. Howden Joinery Properties Ltd are a wholly owned subsidiary of Howden Joinery Ltd, one of the largest trade suppliers of joinery and domestic appliances in the UK. The business has a diverse range of products, ranging from internal and external doors through to cookers, microwaves, dishwashers, refrigerators, kitchen units and bathroom ranges, all provided solely to trade customers. Summary accounts for Howden Joinery Properties Ltd are as follows: 24 th Dec th Dec 2010 Rental Income 33,240,000 33,130,000 Profit / (Loss) 1,620, ,000 Net Assets 2,210,000 1,620,000 For the year ending 24th December 2011, Howden Joinery Group Plc reported a pre-tax profit of million on a turnover of million and net assets of 70.2 million. C&C Marshall Ltd are a private company that trade under the Marshall Tufflex brand. They manufacture and install cable management solutions and guttering systems to a diverse customer base from facilities in Hastings, Manchester and the subject property. The company has recently acquired the assets of PQE Ltd to add power factor correction to it s energy management systems porfolio. Summary accounts for C&C Marshall Ltd and it s subsidiary companies are as follows: 31 st May st May 2010 Sales turnover 22,270,000 20,540,000 Profit / (Loss) ( 2,032,000) 2,266,186 Group Shareholders 16,610,000 15,550,000 Funds Units A-D 101 Blackhorse Lane, Walthamstow E17 6DJ

6 Walthamstow Industrial Market Walthamstow is one of London s leading industrial locations serving primarily Central and North London. Prime rents are now above their 2007 peak and remained relatively static throughout the recession. The last 2 years has seen a return to rental growth and a reduction in tenant incentives. There is no pipeline development in the area and limited development pipeline in surrounding areas such as Enfield and Tottenham which has led to a restriction on good quality supply. Additionally, the ongoing re-generation programme for the Blackhorse Lane area has and will continue to diminish existing stock with redevelopment to alternative uses. With no designated trade park on Blackhorse Lane, trade occupation is dispersed. Blackhorse Lane forms the main arterial route through the area to the North Circular and units with prominent frontage are therefore heavily sought after. The recent renewals on the subject property demonstrate the strength of the occupational market. The restriction in existing and future supply is forecast to protect current rental levels and provides excellent prospects for rental growth. Prime rents stand at per sq ft for conventional modern industrial and trade units. Restrictions in this supply have led to rental growth in the secondary markets, notably at nearby Uplands Business Centre where the tone is now 8.00 per sq ft for units on flexible lease terms. There is also a dearth of supply of good quality sub 10,000 sq ft units further afield with recent lettings in Enfield setting the tone of rents at per sq ft for modern accomodation in competing locations. In addition, recent unit sales have attracted considerable interest from owner occupiers keen to purchase their own premises. With a lack of good quality small unit options, this has helped underpin demand further. We are therefore of the opinion that the property offers excellent reversionary potential bearing in mind the recent renewals were undertaken in a weak economic environment. This will be assisted by the medium to long term re-generation being planned for the area. Recent letting transactions of relevance include the following: Address Tenant Date Unit D Blackhorse Lane Units B&C 101 Blackhorse Lane Unit 6 Peacock Industrial Estate, Tottenham Unit 26 Great Cambridge Industrial Estate, Enfield Unit 16 Waltham Park Way Units Waltham Park Way Size (sq ft) Rent per sq ft C&C Marshall Nov , Howden Joinery Screwfix Direct Nov , Aug , Wolesley Feb , Private Feb , Screwfix Direct Dec , Prime Greater London Trade/Warehouse INVESTMENT

7 Investment Market Commentary Pressure on land supply in Greater London continues and loss of employment land to alternative uses has focussed occupier demand on the established industrial areas such as Walthamstow. As a result, industrial investments with a trade element continue to attract investor interest due to the prospects for rental growth. Recent Trade Park and Greater London deals are as listed below: Date Town Address Description July-12 Park Royal 1-4 Minerva Road 4 units totalling 38,959 sq ft fully let to 2 tenants. 8 years to breaks. June-12 Poyle Riverside Cargo Centre 3 units totalling 43,063 sq ft, fully let at an average rent of 9.19 per sq ft. Lot Size ( CV psf) 5,690,000 ( ) 6,150,000 ( ) NIY Vendor Purchaser 6.30% Eskmuir Teeside Council Pension Fund 6.08% Segro/Aviva Orchard Street May-12 Park Royal Abbot House, Abbey Road Single let refurbished 1970 s industrial /trade unit. 32,449 sq ft, let for 3.75 years to break. Rent at 9.50 psf. 4,590,000 ( ) 6.37% AIF All Souls College, Oxford. Nov-11 Harlow Ascent Trade Park 9 units totalling 90,799 sq ft let to 8 tenants with a WAULT of 7.4 years. August-11 Mitcham Puma Trade Park 11 units totalling 47,359 sq ft let to 6 tenants with a WAULT of 8.25 years. 9,790,000 ( ) 8,075,000 ( ) 5.67% AXA Ignis 6.05% Aegon Ignis TENURE The property is held long leasehold from Lancaster Holdings on a 999 year lease from 15th November 2005 at a fixed rent of 100 per annum. VAT The property has been elected for VAT and VAT will be chargeable on the purchase price. It is therefore anticipated that the acquisition will be treated as a Transfer of a Going Concern (TOGC). EPC s Energy Performance Certificate s have been prepared and can be made available on request. PROPOSAL We are inviting offers in excess of 3,160,000, subject to contract and exclusive of VAT. A purchase at this level would reflect a net initial yield of 7.0%, reversionary to 7.22% on the future re-letting of Unit B & C individually at 8.45 per sq ft. A purchase at this level would also reflect a low capital value of per sq ft. Units A-D 101 Blackhorse Lane, Walthamstow E17 6DJ

8 CONTACT For further information or to arrange an inspection of the property please contact: Nick Harrison Chris Dickin Clay Street Property Consultants 11 St Christopher s Place London W1U 1NG Tel: IMPORTANT INFORMATION 1. No description or information given by Clay Street Ltd whether or not in these Particulars and whether written or verbal ( information ) about the property or its condition or its value may be relied upon as a statement or representation of fact. Neither Clay Street Ltd (nor any joint agents) have any authority to make any representations and accordingly any information given is entirely without responsibility on the part of the agents or the seller. 2. These particulars do not constitute, nor constitute part of, an offer or contract, nor shall they merge in any offer or contract which may hereafter be made between the sellers or lessors and the recipient of the information. 3. The photographs show only certain parts of the property at the time they were taken. Any areas measurements or distances given are approximate only. 4. Any reference to alterations to or use of any part of the property is not a statement that any necessary planning, building regulations or other consent has been obtained. These matters must be verified by any intending buyer. 5. Any buyer must satisfy himself by inspection or otherwise as to the correctness of any information given. Designed and produced by Hobs Reprographics plc. March 2013