223 226 HIGH STEET, EXETER Tesco Metro and Marston s Estates Limited 100% PRIME RETAIL INVESTMENT
INVESTMENT CONSIDERATIONS > Prime retail investment > Fully let to Tesco (91% of passing income) and Marston s Estates Limited, both 5A1 covenants > WAULT of 7.7 years > Combined net passing rent of 530,750 per annum > Surrounding national and international retailers: Marks & Spencer, H&M, House of Fraser, Clarks, Primark and Urban Outfitters > Prominent position on High Street centrally located with close proximity to the main in-town schemes - Princesshay and Guildhall Shopping Centre Offers sought in excess of 6,220,000 reflecting a Net Initial Yield of 8.00% subject to contract & exclusive of VAT. Yields are net of purchaser s costs of 6.63%.
LOCATION & COMMUNICATIONS M4 CARDIFF A370 M34 BRISTOL A39 M4 CHIPPENHAM BATH DEVIZES TROWBRIDGE A36 WOOLACOMBE CROYDE A39 LYNTON MINEHEAD A396 BRIDGEWATER A39 WELLS A361 GLASTONBURY A371 WARMINSTER A303 A39 M5 SALISBURY SOUTH MOLTON A361 TAUNTON A378 A303 A386 A377 CHULMLEIGH EXETER A358 A30 Exeter Airport YEOVIL A37 BLANDFORD FORUM A31 A354 WINBORNE MINSTER A338 A30 CHAGFORD M5 A3052 SIDMOUTH LYME REGIS BRIDPORT A35 WEYMOUTH BOURNEMOUTH STUDLAND EXMOUTH SWANAGE A380 NEWTON ABBOT A386 A38 PAIGNTON PLYMOUTH Exeter is a historic cathedral and university city, representing the administrative centre of Devon. Situated in the south-west of England, 47 miles (76 km) north-east of Plymouth, 82 miles (132 km) south-west of Bristol and 173 miles (278 km) south-west of London. Established communications include: Car Rail Airport Exeter is in close proximity to the M5, providing a direct link to the M4 and London. The South Devon Expressway (A380) provides access to Torbay and South Devon while the A30/A303 provides links to Dorset and Hampshire. Exeter is a rail hub for Devon, connecting Exeter to the wider Devon region while Exeter Central station provides direct services to London Waterloo with a travel time of approximately 2 hours and 25 minutes. Exeter Airport is a 10-minute drive-time from the city centre, offering direct flights to more than 10 UK airports in addition to European cities Paris, Dublin, Amsterdam and Geneva.
primary catchment RETAILING shopping population 508,000 Exeter is a dominant retail destination in the south-west of England, boasting a large primary catchment of 508,000 and an estimated shopping population of 337,000. The town is ranked 26 out of the PROMIS Centres (in terms of shopping population) as it draws consumers from the surrounding peripheral towns with an inferior retail offering. The city s main competition in terms of retail is Plymouth to the south and Bristol to the north both over 1-hour drivetime away. 337,000 1. 2. In town, the prime pitch is Princesshay Shopping Centre (1-minute walk from the subject property), developed by Land Securities in 2007, the scheme comprises 60 units including major retailers Debenhams, Next, Apple, Superdry and Zara. Further in-town retail includes the High Street and Guildhall Shopping Centre (adjacent to the subject property), which is shortly undertaking redevelopment to increase its leisure offering. SITUATION The subject property occupies a prominent and central corner position on the north side of High Street. Centrally positioned between the two in-town schemes, Princesshay and Guildhall Shopping Centre, both less than 1-minute walk and a 4-minute walk to Exeter Central Station. 1 23 3.
DEMOGRAPHICS 22,000 students 66 million retail tourism spend pa Exeter benefits from a retail spending per capita significantly above the PROMIS average (source CACI). The high level of retail spending is attributed to an affluent primary catchment of mature residents, established university population and growing tourism industry. The Exeter catchment population is moderately affluent, ranking 69 of the PROMIS centres on the PMA Affluence Indicator, with the population having a high portion of working adults (45-64 years) and retired (65 and over) overrepresented. The University of Exeter has a large annual enrolment of approximately 22,000 students, contributing 8% or 320m to Exeter s goods and services annually and accounting for 7% of employment within Exeter (source: University of Exeter). Furthermore, the city is supported by a growing tourism industry, with an estimated average retail tourism spend of 66 million in Exeter (source: Visit Britain).
DESCRIPTION 223-226 High St, Exeter EX4 3RH The subject property comprises a multi-let retail investment of concrete frame construction, providing large, modern and versatile floor plates fully let to Tesco, Sportsdirect.com (sub-lease) and Marston s Estates Limited. The retailers trade over ground, basement and first floor with ancillary accommodation on second floor and convenient rear loading access via Little Queen Street. Part of the front facade is listed. TENANCY ACCOMMODATION The property has the following approximate areas: Tesco Metro (inc. Sports Direct) Description Gross Internal Area (GIA) Net Internal Area (NIA) Sq Ft Sq M Sq Ft Sq M Ground Floor: 10,111 939.3 9,591 891.0 ITZA: 2,133 2,133 Basement: 6,529 606.6 5,538 514.5 First Floor: 10,839 1,007.0 10,304 957.3 Second Floor: 851 79.1 851 79.1 Total 28,330 2,632.0 26,284 2,441.9 Marston s Estates Limited Description Gross Internal Area (GIA) Sq Ft Sq M Ground Floor: 175 16.3 Basement: 4,695 436.2 Total 4,870 452.5 Tesco Metro Let to Tesco Stores Limited for a term of 25 years (7.8 years unexpired) from 25 December 2000 at a passing rent of 700,000 per annum. The tenant is subject to rent reviews on a 10-year hypothetical term basis. Marston s Estates Limited Let to Marston s Estates Limited for a term of 25 years (6 years unexpired) from 25 March 1999 at a passing rent of 70,750 per annum with 5-yearly open market reviews. Sports Direct (sub-lease) Sportdirect.com Retail Limited is on a sub-lease from Tesco Stores Limited paying 135,000 pa with a lease expiry on 24th October 2025.
COVENANT INFORMATION TENURE 125 year long leasehold from the council commencing 24th June 2012 (119 years unexpired) at 240,000 pa until 2045. Rent reviews in years 33, 66 and 99 of the term to the higher of 240,000 or 25% of the yearly rack rental value of the property. Tesco Stores Ltd (company number 519500) is wholly owned by Tesco Plc, one of the largest retailers in the world. Established in 1919, Tesco now operate from over 6,902 stores nationwide, employing over 476,000 staff. Tesco is the leading food store operator within the UK, the largest of the Big Four supermarket chains dominating the UK s grocery market. Tesco holds a current market share of 27.9% (at 25/02/2018), well ahead of its nearest rival Sainsbury s at 16.2%, followed by Asda at 15.6%. The covenant is one of the strongest in the supermarket sector with a Dun & Bradsheet rating of 5A1 representing a minimum risk of business failure. Y/E 27/02/2017 27/02/2016 28/02/2015 Sales Turnover 40,134,000 39,843,000 41,731,000 Pre-Tax Profit 266,000-231,000-3,962,000 Net Worth 749,000 1,077,000-4,835,000 Y/E 30/04/2017 30/04/2016 30/04/2015 Founded in 1982, Sports Direct International Plc is the UK s largest sporting goods retailer. Listed on the London Stock Exchange since 2007, Sports Direct have approximately 700 stores across the UK and 19 European countries. Sales Turnover 3,245,300 2,904,300 2,832,560 Pre-Tax Profit 281,600 361,800 313,446 Net Worth 1,053,300 1,177,800 908,997 Marston s Estates Limited (company number 00466771) is a top 250 company listed on the FTSE, with over 1,700 pubs and six breweries across the UK, the company employs more than 13,000 employees. The covenant has a Dun & Bradsheet rating of 5A1 representing a minimum risk of business failure. Y/E 30/09/2017 1/10/2016 1/10/2015 Sales Turnover 1,011,300 937,300 878,600 Pre-Tax Profit 100,300 80,800 31,300 Net Worth 633,500 487,300 517,800
ASSET MANAGEMENT 1. Scope for potential long-term alternative use such as student accommodation on the upper floors and/or by adding further massing (subject to all necessary consents). 2. Bring shop front forward at ground in front of existing Tesco and Sports Direct. 3. Create two uniform units of approximately 5,000 sq ft on basement, ground and first floors respectively. VAT The property has been elected for VAT purposes and it is expected that the investment sale will be treated as a Transfer of Going Concern (TOGC). EPC The property has an EPC rating of D and the certificates can be obtained upon request. PROPOSAL Offers sought in excess of 6,220,000 reflecting a Net Initial Yield of 8.00% subject to contract & exclusive of VAT. Yields are net of purchaser s costs of 6.63%. FURTHER INFORMATION Andrew Marshall 020 7344 6854 Andrew.Marshall@colliers.com Tim McIntosh 020 7487 1852 Tim.McIntosh@colliers.com Colliers International 50 George Street London W1U 7GA MISREPRESENTATION ACT DISCLAIMER Colliers International give notice that these particulars are set out as a general outline only for the guidance of intending Purchasers or Lessees and do not constitute any part of an offer or contract. Details are given without any responsibility and any intending Purchasers, Lessees or Third Party should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise as to the correctness of each of them. No person in the employment of Colliers International has any authority to make any representation or warranty whatsoever in relation to this property. Colliers International is the licensed trading name of Colliers International UK Plc. Company registered in England & Wales no. 4195561. Registered office: 50 George Street, London W1U 7GA. Designed and produced by Oracle Creative www.oraclecreative.co.uk