FOR SALE Prime Industrial Unit Investment 17 YEAR INCOME STREAM
Investment Summary Well located on established industrial/trade park just 3 miles from Nissan car plant with rapid dual carriageway access to the, A1(M) and the regional road network. Modern well specified industrial unit totalling 7,151.7 sq m (76,981 sq ft). Single let to Interflex Scotland Limited on a full repairing and insuring lease with 17 years unexpired, at a passing rent of 325,940 per annum. Tenant heavily embedded in a unit designed to their specification and have recently expanded into the adjacent unit. Parent guarantee from Interflex Acquisition Company LLC, a leading player in the speciality printing market. Buoyant occupational market with a critical shortage of good quality units particularly over 50,000 sq ft. The tenant has taken a lease extension and acquired further space next door on a 20 year lease, demonstrating their commitment to the building. Offers in excess of 4.22m which reflects an attractive Net Initial Yield of 7.25% after standard purchaser s costs at 6.55% and only 54.82 per sq ft.
A66 Location SOUTHWICK Scotland Glasgow Edinburgh Newcastle Sunderland Carlisle Leeds Manchester Liverpool Nottingham Birmingham Wales Cardiff England London Bristol A68 HEXHAM A66 A68 A689 A69 A696 A688 Newcastle Airport GATESHEAD CHESTER-LE-STREET SCOTCH CORNER A690 A688 A68 56 57 A1(M) A167 58 NEWCASTLE UPON TYNE DURHAM 65 63 59 62 61 60 A66 A690 A181 DARLINGTON Durham Tees Valley Airport TYNEMOUTH Port of Tyne SOUTH SHIELDS SUNDERLAND Port of Seaham SEAHAM A689 HARTLEPOOL Teesport MIDDLESBROUGH A171 A1231 TO WASHINGTON & THE A1 TO TYNE TUNNEL & NORTH CASTLETOWN TO TEESSIDE & SOUTH WASHINGTON ROAD Hylton Castle A1231 SUNDERLAND ENTERPRISE PARK HYLTON RED HOUSE HYLTON RIVERSIDE RETAIL PARK New bridge and link roads River Wear NORTH HYLTON ROAD WESSINGTON WAY HYLTON PARK HYLTON PARK ROAD SUNDERLAND ENTERPRISE PARK NORTHERN WAY A1231 B1289 Queen Alexandra Bridge SOUTHWICK SUNDERLAND CITY CENTRE A1(M) Location Sunderland is situated on the North East coast and spans the River Wear, approximately 12 miles south east of Newcastle upon Tyne, 8 miles east of Durham City and 25 miles north of Middlesbrough. The City has a population of approximately 275,500 people (2011 Census) and is readily accessible to the region s road network with direct links onto the which runs north-south on the western periphery of the city. The city is also linked with the A1(M) approximately 8 miles to the west via the A690 and A1231 dual carriageways. By rail, Sunderland benefits from direct rail services to Newcastle of 21 minutes and onward journey times to London Kings Cross from Newcastle on the East Coast Main Line are 2 hours 40 minutes and Edinburgh can be reached within 1 hour 30 minutes. Situation The property lies on Sunderland Enterprise Park, the city s principal industrial park, just off Wessington Way (A1231) the main arterial route into the city. Access to the city and the prominence of Sunderland Enterprise Park will be further enhanced by the completion of the new Wear bridge in 2018. The park is an established industrial/trade, office and car showroom location with notable occupiers including Plumbase, PTS, Vauxhall, Peugeot, and Royal Mail. Air connections are available via Newcastle airport located approximately 20 miles North West of Sunderland.
Description The property was purpose built for the current tenant in 1998 and comprises a modern steel portal frame building of standard layout, but with an enhanced specification. The unit is of modern steel portal frame construction formed of 2 bays, both with profile steel pitched roofs incorporating 10% rooflights and elevations of profile steel cladding and brickwork. Internally, the unit is fitted to a modern specification including: Two storey office area with air conditioning and lift Eaves mounted gas fired hot air blowers Fork lift charging points to warehouse An eaves height of approximately 6m to underside of haunch Two electrically operated roller shutter doors Externally the property benefits from a dedicated fenced yard and generous parking provision on a fenced self contained site of 1.551 ha (3.822 acres). The approximate site cover is 44%. INTERFLEX
Accommodation Description sq m sq ft Ground Floor Warehouse 5,906.8 63,581 Ground & First Floor Offices 736.7 7,930 First Floor Mezzanine 508.2 5,470 Total 7,151.7 76,981
Information Tenancy The property is single let to Interflex Scotland Limited on a 25 year FRI lease from 24 June 1998 which was extended in 2015 by a reversionary lease dated 12 August 2013 lengthening the lease by a further 10 years and thereby providing an unexpired term of 17 years, at 325,940 per annum subject to 5 yearly upward only rent reviews. The lease also benefits from a parent guarantee from Interflex Acquisition Company LLC. Covenant Summary Interflex Scotland Ltd are specialists in the printing of packaging for the food industry. They undertake a range of printing techniques on plastic and wax coated papers for the speciality bakery biscuit, confectionery, processed meat and cosmetic markets with an almost exclusively domestic customer base. Their processes are at the higher end of the value add scale and they have recently undertaken substantial investment in new machinery to both widen their capabilities and improve efficiency. Further information is available at: www.interflexgroup.com. The Interflex Group operates five manufacturing locations in the UK and US. Interflex is ultimately owned by Nicolet Capital Partners LLC, a Chicago based private equity firm with a portfolio of companies in the plastics, packaging and speciality converting markets. We set out below recent key financial figures for the tenant with details for the guarantor available on request: Tenant Year Turnover Pre-tax Profit Net Assets Interflex Scotland Ltd 31.12.15 31.12.14 31.12.13 Tenure Freehold 40.5m 40.1m 38.3m 2.2m 1.9m 1.7m 6.0m 4.6m 4.0m
Occupational Market The occupational market in the North East benefits from strong dynamics, with no Grade A buildings available in excess of 50,000 sq ft. This lack of supply of good quality buildings filters down through all size ranges leaving occupiers with a lack of choice of modern good quality buildings. Demand in the industrial sector remains strong, driven by a very buoyant manufacturing sector and a growing presence in the offshore and advanced manufacturing sectors. More locally, the Washington and Sunderland markets, which have always done well due to their central location, are now seeing Nissan being a significant driver of the market. Nissan have announced the production of five new models at Sunderland in the last two years and production has now comfortably gone through the 500,000 cars per year mark and accounts for one out of every three cars built in the UK. This has driven significant demand from their supply chain. For example Vantec, who are specialists in the automotive logistics sectors, built a 417,000 sq ft warehouse in 2013 followed by a further 436,000 sq ft in 2016. The imbalance between supply and demand is now beginning to manifest itself in increasing rents and hardening incentives. For example, at Follingsby Park, a 1m sq ft development to the north west of Washington, rents have moved on from 3.50 psf to 5.25 psf over the last 5 years. In 2014 Interflex acquired the adjacent 24,900 sq ft warehouse on a 20 year lease, further demonstrating the success of their business and commitment to the location. EPC Rating: B37. A full copy of the EPC and Recommendation Report is available upon request. VAT The property is elected for VAT.
Proposal We are instructed to seek offers in excess of 4.22m which reflects an attractive Net Initial Yield of 7.25% after standard purchaser s costs at 6.55%. A purchase at this level reflects 54.82 psf Capital Value. Further Informatiom Richard Turner Tel: 0191 223 5720 richard.turner@cushwake.com Peter Atkinson Tel: 0191 223 5715 peter.atkinson@cushwake.com Gagan Jagpal Tel: 0191 223 5709 gagan.jagpal@cushwake.com DTZ Debenham Tie Leung Limited and Dodds Brown (the Agents ) give notice to anyone who may read these particulars as follows: 1. These particulars are prepared for the guidance only of prospective purchasers. They are intended to give a fair overall description of the property only and do not constitute any part of an offer or contract. 2. Any information contained in these particulars (whether in the text, plans or photographs) is given in good faith but should not be relied upon as being a statement or representation of fact or that the property is in good condition or otherwise nor that any services or facilities are in good working order. 3. The photographs appearing in these particulars show only certain parts and aspects of the property at the time when the photographs were taken. Certain aspects may have changed since the photographs were taken and it should not be assumed that the property remains precisely as displayed in the photographs. Furthermore no assumptions should be made in respect of parts of the property which are not shown in the photographs. Any areas, measurements or distances referred to herein are approximate only. 4. Where there is reference in these particulars to the fact that alterations have been carried out or that a particular use is made of any part of the property this is not intended to be a statement that any necessary planning, building regulations or other consents have been obtained and these matters must be verified by any intending purchaser. 5. No person in the employment of the Agents has any authority to make or give any representation or warranty whatsoever in relation to this property. 6. This property is offered subject to contract and unless otherwise stated all rents are quoted exclusive of VAT. 7. Unless otherwise stated, no investigations have been made by or on behalf of the Agents regarding pollution, or potential land, air or water contamination. Interested parties are advised to carry out their own investigations as required. July 2016 Designed & produced by www.creativestreakdesign.co.uk ref: 951