DOMINANT LEISURE INVESTMENT THE BARRACKS, FORTHSIDE, STIRLING FK8 1QZ
INVESTMENT SUMMARY Stirling is a regionally dominant retail and leisure destination which attracts a host of high profile national and international brands Approximately 2.9 million people live within an hour s drive of Stirling Long income WAULT of 11.48 years to expiry and 8.35 years to breaks Rent reviews in 2018 offer significant potential for reversion 95% of income from national covenants of Gross income of 449,781 pa & net income of 421,108 pa Long leasehold from Stirling Council for 125 years expiring on 9th May 2132, at 5% of annual rents receivable Offers in excess of 5,300,000 (Five Million Three Hundred Thousand Pounds Sterling) 7.50% niy after allowing for purchaser s costs 2
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STIRLING IS STRATEGICALLY POSITIONED IN THE HEART OF SCOTLAND, WITH EXCELLENT COMMUTER CONNECTIONS TO GLASGOW (42KM) AND EDINBURGH (58KM) VIA THE M80 AND M9 RESPECTIVELY. The city has a primary catchment of 224,000 people within a 40 minute drive time Raplock Raplock River Forth River Forth Dunblane Dunblane M9 M9 Cambuskenneth Cambuskenneth Stirling Stirling Golf Club Golf Club A91 A91 Stirling Stirling The TheBarracks Barracks A81 11 A81 Springkerse Springkerse Industrial Estate Industrial Estate The Thistles The Thistles Kings Park Kings Park A91 A91 Bannockburn Bannockburn by 2039 Valleyfield Valleyfield M80 M80 Stirling Royal Stirling Royal Infirmar yy Infirmar Dunfermline Dunfermline A985 A985 M876 Denny M876 Denny Falkirk Falkirk M9 M9 Queensferry Queensferry A90 A90 Linlithgow Linlithgow Cumbernauld Cumbernauld The city population is expected to grow by Kirkcaldy Kirkcaldy M90 M90 A876 A876 A905 A905 StStNinians Ninians 9.17 A92 A92 Cowdenbeath Cowdenbeath M9 M9 Cambusbarron Cambusbarron % The University of Stirling employs over 1,400 staff with approximately 12,300 students A902 A902 Edinburgh Edinburgh Broxburn Broxburn Newington Newington M80 M80 A793 A793 Glasgow Glasgow M74 M74 M77 M77 Bathgate Bathgate M8 M8 Bonnyrigg Bonnyrigg A703 A703 Chapelhall Chapelhall Penicuik Penicuik A73 A73 A725 A725 A7 11 A7 Balerno Balerno M73 M73 A8 A8 Livingston Livingston Hamilton Hamilton Wishaw Wishaw A71 A71 A702 A702 A701 A701 A726 A726 4
SITUATION B C The subject property is situated within the Forthside Quarter between the city centre and out of town retail parks. Accessed via the new rail bridge immediately adjacent to the development, the scheme is within a 2 minute walk of Stirling rail station and a 5 minute walk of Thistle Shopping Centre and Stirling Bus Station. A E D F G H KEY A. Thistle Shopping Centre B. AMF Bowling C. The Engine Shed D. The Barracks E. The Barracks Office Development F. Premier Inn & Beefeater G. 600-space Car Park H. Stirling Enterprise Park 5
DESCRIPTION The property was constructed in 2008 and comprises a 29,607 sq ft modern leisure development, consisting of an 8-screen, 1,071-seat multiplex cinema, three restaurant units and one kiosk unit. The scheme benefits from excellent pedestrian links and connectivity with the city centre via the stunning Forthside Bridge, which also provides direct access to the city s mainline train station and principal bus station. The Barracks provides the only cinema and modern casual dining restaurants in the Stirling area, attracting the city s large affluent catchment population. The next alternative cinema and leisure destination is located over 15 miles to the south east of the subject property, in Falkirk. C I N EM A UNIT 2B UNIT 2A U NI T 1 6 UNIT 2C
TENANCY The subject property has been measured on a gross internal areas (GIA) basis in accordance with the RICS Code of Measuring Practice (6th Edition) and the approximate areas are as follows: ADDRESS TENANT FLOOR AREAS (GIA) LEASE START LEASE EXPIRY BREAK DATE RENT REVIEW RENT (PA) RENT PSF COMMENTS Multiplex Cinema Vue Entertainment Limited 1,909.05 sq m 20,554 sq ft 23/01/2008 24/01/2028-23/01/2018 244,812 11.91 RPI linked service charge cap. Estimated shortfall for 2018 is 6,184.43. Upwards only rent review to open market value in 2018. Unit 1 Nando s Chickenland Limited 331.05 sq m 3,563 sq ft 21/04/2008 20/04/2028 21/04/2023 21/04/2018 82,179 23.06 Tenant break option subject to 6 months notice. Upwards only review to open market value in 2018. Unit 2A Miss Claudia Stewart & Mr Peter Keenan, partners of the firm Toast 68.85 sq m 741 sq ft 15/09/2008 14/09/2028-28/08/2018 16,790 22.66 Upwards only rent review to open market value in 2018. Unit 2B The Restaurant Group (UK) Limited T/A Frankie & Benny s 411.93 sq m 4,434 sq ft 23/01/2008 22/01/2033 23/01/2023 23/01/2018 100,000 22.55 Upwards only rent review to open market value in 2018. Unit 2C Stephen Dennehy T/A Flip and Shake 29.30 sq m 315 sq ft 14/12/2015 13/12/2020 14/12/2018-6,000 19.05 Tenant break option subject to 6 months notice. 2,750.13 sq m 29,607 sq ft 449,781 EPC The full EPC reports can be provided on request. 7
TENANT COVENANT TENANT YEAR TO DATE TURNOVER PRE TAX PROFIT NET WORTH EXPERIAN RATING 24/11/2016 282,647,000 33,939,000 293,174,000 26/11/2015 283,094,000 31,186,000 265,945,000 100 (Very Low Risk) Toast is a privately owned cafe operation which has been trading out of The Barracks since 2008. 27/11/2014 244,899,000 17,888,000 301,645,000 28/02/2016 602,031,000 79,175,000-184,207,000 22/02/2015 517,849,000 64,663,000-261,779,000 23/02/2014 470,744,000 68,693,000 73,999,000 92 (Very Low Risk) Flip and Shake is a privately owned American style café operation which has been trading out of The Barracks since 2015. 27/12/2015 511,074,000 69,353,000 96,216,000 27/12/2014 483,722,000 73,487,000 98,199,000 97 (Very Low Risk) 27/12/2013 446,787,000 64,724,000 85,813,000 8
FORTHSIDE QUARTER Stirling is a regionally dominant city with a strong retail and leisure offer. The city centre is anchored by The Thistles Shopping Centre which provides approximately 500,000 sq ft of high quality retail space and 1,350 car parking spaces. Springkerse Retail Park provides 264,000 sq ft of non-food, DIY and Household retailing, and Burghmuir Retail Park provides 58,300 sq ft of Open Class 1 retailing, providing the principal out of town retail warehouse destination. Forthside is a newly established 40-acre, vibrant and sustainable city quarter, which occupies a prominent position beside the city centre. The area has been significantly redeveloped to provide a high quality mixed use environment and includes the following: 60-bedroom Premier Inn hotel and Beefeater restaurant. The hotel has planning consent for a 3 storey extension adding a further 30 rooms. 16,000 sq ft of high quality office accommodation within former Army barracks. Let to the Water Industry Commission, Volunteer Development Scotland, Central Registered Body in Scotland and Zero Waste Scotland. Stirling Council and The Robertson Trust have recently announced plans to re-develop the remaining former Army barracks to create a new 5 million third sector hub. In July 2017, Stirling welcomed Scotland s first dedicated building conservation centre, the Engine Shed. Located adjacent to the subject property, the Engine Shed is run by Historic Environment Scotland and serves as a central hub for building and conservation professionals and the general public. 600 car parking spaces operated by Stirling City Council provide the major parking for the scheme, charging 1.20 per day. 9
LEISURE MARKET The UK F&B market has seen sustained growth and expansion since 2008. Spending in the eating out market has consistently grown since 2014 and is forecast to increase by a further 17% over the next five years. As a result, in primary centres and regional malls across the UK the proportion of comparison retail (clothing, footwear, white goods) as a percentage of total retail is decreasing and is being partially replaced by food and beverage (F&B) and leisure offerings. Occupier demand in the F&B sector is expected to strengthen over the medium term and as competition for the best locations increases, rental growth within the sector is anticipated. Rental Growth Potential Rents for prime casual dining in Scotland have grown from approximately 23.00 psf to 30.00 psf over the last 5 years. This indicates that the passing rents of the restaurant units are reversionary. Recent comparable rental uplifts have been achieved at: McDonalds, Fife Leisure Park - rent increased from 23.50 to 29.50 psf (Q4, 2016 rent review) Frankie & Benny s, Straiton Retail Park - rent increased from 28.22 to 29.32 psf (Q2, 2015 rent review) In the last 12 months the following new leases have been agreed: Frankie & Benny s agreed a rent of 30.00 psf at Inverness Shopping Park Nando s agreed a rent of 30.00 psf at Inverness Shopping Park 10
TENURE Long leasehold from Stirling Council for 125 years expiring on 9th May 2132, at 5% of annual rents receivable. VAT The property has been elected for VAT and therefore VAT will be payable on the purchase price. However, it is anticipated that the sale will be treated as a Transfer Of a Going Concern (TOGC). 11
PROPOSAL We are instructed to seek offers in excess of 5,300,000 (Five Million Three Hundred Thousand Pounds Sterling) subject to contract and exclusive of VAT for the Long Leasehold. A purchase at this level would reflect a net initial yield of 7.50% after allowing for purchaser s costs of 6.12% based on Scotland s Land and Buildings Transaction Tax (LBTT). FOR VIEWINGS & ENQUIRIES: Sarah Stewart Tel: +44(0)131 222 4524 Email: sarah.stewart@cushwake.com Stephen Bibby Tel: +44(0)131 222 4523 Email: stephen.bibby@cushwake.com Erin Mills Tel: +44(0)131 222 4564 Email: erin.mills@cushwake.com MISREPRESENTATION ACT Cushman and Wakefield LLP (and any joint agent appointed) on their own behalf and for vendors or lessors of this property, whose agents they are, give notice that: (i) These particulars are produced in good faith, but are a general guide only and do not constitute any part of a contract and must not be relied upon as statements or representations of fact. (ii) No person in the employment of the agent(s) has any authority to make or give representation or warranty whatever in relation to this property. (iii) the property is offered subject to contract and unless otherwise stated all rents and outgoings are stated exclusive of VAT. (iv) Floor areas, measurements or distances given are approximate. (v) Nothing in these particulars should be deemed a statement that the property is in good condition, or that any services or facilities are in working order. (vi) Unless otherwise stated, no investigations have been made regarding pollution, or potential land, air or water contamination. Interested parties are advised to carry out their own investigations as required. September 2017.