SWANsea 801-812 Oxford Street, 4-20 Whitewalls & 33-38 Union StreeT Prime Retail City Centre Estate OPPORTUNITY
Investment Summary Swansea is Wales 2 nd City and the dominant commercial and administrative centre for South West Wales with a primary catchment of more than 549,000 people A City that is growing and benefiting from investment in tourism, leisure, retail and expanding Universities 100% prime pitch surrounding Swansea s historic market at the heart of the City Unbroken retail estate of 108,599 sq ft comprising 26 well configured retail units and a reversionary hotel Net income of 1,803,006 pa, 90% to national multiples on FRI terms including Lloyds Bank, Costa Coffee, Accessorize, Lush, Starbucks, O2, F Hinds, EE and Greggs Attractive WAULT of 11.7 years and WAULT to breaks of 9.9 years, with 17% of income secured to Lloyds TSB Bank plc & Whitbread Properties Ltd for over 40 years long leasehold providing 111 years unexpired on a side by side basis of 10% of the net income New owner will benefit from the recent roof works with assignable warrants for a further 11 years Rateable values for the retail element of the property have reduced by an average of 33.3% in the 2017 Draft Rating List Asset management opportunities to enhance income and maximise potential of unused upper parts Offers in excess of & exclusive of VAT 17,750,000 Subject to contract Net Initial Yield 9.52% Equivalent Yield 8.66% Reversionary Yield 8.65% Running Yield (2028) 8.93%
HEREFORD A470 A40 A40 A48 A483 BRECON BEACONS NATIONAL PARK A470 Location Swansea, Wales second City, is the commercial and administrative centre for South West Wales. The City is located 42 miles (69 km) west of Cardiff, 81 miles (131 km) west of Bristol and 187 miles (301 km) west of London. LLANELLI SWANSEA A465 M4 PONTYPRIDD PONYTPOOL A449 A470 M4 NEWPORT CARDIFF M48 BRISTOL The City has excellent road communications lying just 4 miles south of the M4 with access to multiple junctions. The M4 provides a direct link to Cardiff, London and the wider motorway network. Swansea train station provides a direct service to Cardiff, Bristol Parkway and London Paddington with a fastest journey time to London of 2 hours 55 minutes. Network Rail are about to modernise the service on this busy route with the electrification of the lines from the Severn Tunnel to Swansea which will reduce the journey time to London by 20 minutes. BRISTOL CHANNEL CARDIFF M5 WESTON-SUPER-MARE BRISTOL A38 Population & Economy The City of Swansea has a population of 241,300 people (2014) that is projected to grow by almost 12% to 270,000 by 2036. Swansea s catchment covers the majority of South West Wales. The primary retail catchment has a total population of 549,000, ranking the city 31 out of the PROMIS Centres. Swansea retail spend is supported by a vibrant student culture with over 24,000 students studying within the City at Swansea University (third largest in Wales) and The University of Wales Trinity St David. Swansea University are creating a new world-leading research, innovation and educational complex. Phase 1 ( 75m) completed in September 2015 by upgrading Singleton Park Campus and has already resulted in student and staff numbers increasing by 20%. Phase 2 ( 450m) is set to complete in 2020, potentially increasing the numbers of students in Swansea to 30,000. It is one of the largest knowledge economy projects in the UK and within the top five in Europe. The success of the city s football team, now a premier league regular, has boosted the local economy and enhanced the profile of Swansea. Retail expenditure is also supported by 4.56 million tourists visiting Swansea Bay in 2015 (2.1% increase on 2014), with an estimated spend of over 402 million (City of County of Swansea). Major employers in Swansea include; Admiral Insurance, BT, City Council of Swansea, DVLA, HM Land Registry & HSBC.
Swansea Retail Swansea City Centre provides approximately 1.65 million sq ft of retail accommodation and is considered the dominant centre in the region, ranking 29th of the PROMIS retail centres in the UK. 100% prime pitch is focussed on the pedestrianised section of Oxford Street running east to west between Union Street and Princess Way. Retailers situated here include Marks & Spencer, Next, H&M, Zara, River Island Topshop, Costa Coffee and Starbucks. The Quadrant Shopping Centre (440,000 sq ft of retail accommodation) located to the south of Oxford Street is anchored by Debenhams, Boots, Superdry and New Look. The Shopping Centre incorporates the city s bus station on its western side which is an important part of the retail circuit for the town. At the centre of the city and its historic focal point, between Oxford Street and the Quadrant Centre is Swansea Market, the largest indoor market in Wales. Open six days a week the market has been in its current position for over 100 years and provides a major draw for shoppers across the city s catchment. The council have recently completed a 1.9m refurbishment of the market including a brand new roof. The subject property is situated at the centre of the retail district for the City and effectively surrounds Swansea Market. The property provides retail accommodation across three shopping streets; Oxford Street, Whitewalls and Union Street. The Oxford Street section forms part of the prime pitch and occupiers include Costa Coffee, Starbucks, Card Factory and Lloyds Bank. Whitewalls benefits from strong footfall, generated from being on the main retail circuit between Oxford Street pitch and the Quadrant Shopping Centre. The presents of Primark on Whitewalls further increases the streets pull for shoppers. Pedestrianised Union Street also links Oxford Street into the Quadrant Centre and provides space for occupiers including Vodafone, Burger King and Santander. Town centre car parking is provided by the two main multi storey car parks, Quadrant Shopping Centre (565 spaces) and at the former St David s Shopping Centre (460 spaces) on the south side of St Mary s church. The St David s Shopping Centre was partly demolished in 2012 and in January 2015, outline proposals to redevelop it and the current civic centre site off Oystermouth Road to the south, into a predominantly leisure complex with retail, residential and a 3,500 seat arena were approved by owners Swansea Council. Rivington Land has been selected by the council to project manage the development which will further improve Swansea as a retail and leisure destination. Works are expected to start in 2017
NORTH Swansea marina SWANSEA RAIL Station National Waterfront Museum N Rivington Land/Council Leisure Development Site Multi Story Car Park (565 spaces) Swansea Market QUADRANT SHOPPING CENTRE Swansea Bus Station
100% prime pitch surrounding Swansea s historic market at the heart of the City
8 7 Description The prominent building occupies a site of approximately 1.00 acre (4,047 sq m) and forms the heart of Swansea City Centre surrounding the historic and popular market. It comprises three sides to the market site providing 11 retail units with frontage to Oxford Street, 10 retail units with frontage to Whitewalls and 5 retail units with frontage to Union Street. One of the retail units on Whitewalls is also the reception to the Dolphin Hotel which comprises three floors of hotel accommodation albeit only one floor has currently been refurbished and is in use. On all three frontages there are entrance points to the Market Hall which is owned by Swansea Council. The retail units are arranged over a combination of basement, ground, first and second floor retail accommodation. The retail units benefit from a glazed canopy which extends along the full perimeter of the ownership. TCBs LB 1 14 to 16 30 812 256 2 805 810 809 804 807 808 806 Oxford Street 803 802 Bank 801 8 6 4 12 to 14 10 1 3 5 9 11 The building extends to a total area of 108,599 sq ft and the individual unit areas are set out in the accompanying tenancy schedule. 5 to 6 Union Sreet 33 34 35 Market 16 20a 20c 18 WHITE WALLS Tenure The property is held long leasehold from The Council of the City and County of Swansea for a term of 125 years from 25th December 2002. The total unexpired lease term is therefore approximately 111 years. 1 4 2 1a 36 37 38 39 20b LB Lych Gate The head rent is the higher of; the base rent (currently 15,000 pa) or 10% of the gross rents received but net of shortfalls effectively a side by side basis. The base rent is reviewed every 15th anniversary of the lease start date at 0.7% of the property s rack rented value. The next base rent review date is 25th December 2017. Further information available on request. We calculate the current ground rent to be 200,618 pa. The red outline shows the extent of the property but the yellow shaded areas exclude the ground floor S
EST AG BAY NORTH ANN SUMMERS ACCESSORIZE JENKINS LUSH CAFFE LUCIA CARD CENTRE THE CREPE VINE STA GREGGS WARREN JAMES YOURS LLOYDS BANK MARKET EE CARD MARKET CEX STARBUCKS O2 VACANT CARD FACTORY COSTA F HINDS LIME FONE ZONE YORKSHIRE BUILDING SOCIETY CLAIRE S BLUE BANANA 17% OF INCOME secured to Lloyds TSB Bank plc & Whitbread Properties Ltd for over 40 years
Experian Goad Plan C For more information on our pr www.experian.co.uk/goad goad.sales@uk.experian.c Income Profile Gross Annual Income Tenancies The property is let in accordance with the tenancy schedule in the dataroom on effectively Full Repairing and Insuring terms. Tenants include Accessorize, Lloyds Bank, Lush, Costa Coffee, Starbucks, O2, F Hinds, Yours Clothing, Card Factory, Ann Summers, EE, CEX and Greggs. 2,073,500 Less Deductible Shortfalls ( 67,317) Less Head Rent at 10% ( 200,618) Less Non-deductible Shortfalls Net Annual Rent ( 2,559) 1,803,006 Income duration to to break Income duration breaks Income by OCCUPIER Income by Occupier 4% 6% 10% Holding Over 17% 12% 0-5 years Copyright and confidentiality Experian, 2016. Crown copyright and database rights 2016. OS 100019885 50 metres 52% Oxford Street Whitewalls National Multiple 5-10 years 25% Income by Location Income by location Local Occupier 40 years + 22% 62% Hotel 90% Market Rent The city has seen a substantial re-basing of retail rents following the economic downturn and subsequent recession. During the height of the market rents on Oxford Street reached 165-170 Zone A. The latest letting to Costa at 810 Oxford Street reflects 95 Zone A which illustrates a re-basing of rents by 44%. In our opinion, for the second largest City in Wales with a catchment of 549,000 people and a growing vibrant student population, this represents good value for retailers and provides a good basis for future rental growth. There are a number of recent open market lettings and lease renewals that support the following rental tone: Location Union Street ERV Zone A Oxford Street 95.00 Whitewalls 80.00 Union Street 65.00
Landlord Shortfalls The accompanying tenancy schedule sets out details of the landlord s irrecoverable shortfalls resulting from the vacant unit and inclusive lettings & service charge caps. WALES SECOND CITY WITH A PRIMARY CATCHMENT OF MORE THAN 549,000 PEOPLE Shortfalls from the Vacant Unit (808 Oxford Street): 46,906 Shortfall temporary from Letting (33/34 Union Street): 20,411 Landlord s management shortfall: 2,559 Total Shortfall: 69,876 Service Charge Landlords costs are recovered through a service charge provision. Costs are apportioned on a fair and reasonable basis as determined by the landlord. The service charge is currently recovered in arrears, based on expenditure. The service charge budget for the year ending December 2016 is 319,491 equating to an average service charge of 2.94 per sq ft. The service charge was considerably higher in 2015 and 2016 following an extensive refurbishment of the property s flat roof. These costs have been split over two service chargeable years. It is expected that the service charge should return to a level inline with previous years, prior to the works in 2017. There are 11 years remaining on the works warranties which are assignable to a new owner. Y/E December 2015 Actual - 319,326 Y/E December 2014 Actual - 28,851 Y/E December 2013 Actual - 30,875 Service charge accounts for previous service charge years and the current budget are available in the dataroom.
Asset Management Opportunities Let 808 Oxford Street and implement a series of re-gears to improve WAULT. The Dolphin Hotel s rent is in our opinion reversionary and the outstanding rent review should be activated. Whilst the space works well as a hotel alternative uses such as student accommodation should be considered and could release more of the ground floor for a café operator in isolation. Target successful retailers in the market that want to upsize from the relatively small units to Union Street, with a possible split of 33/34 currently occupied on a temporary letting. The 2017 draft rating list has been published by the VOA and the shops within the subject property have seen a reduction in their rateable values by 33.3% on average. This should result in occupational costs reducing from April 2017 which will be a considerable benefit to the retailers and help build a platform for future rental growth. Marriage value and more importantly control for future redevelopment would be gained from negotiating a purchase of the freehold from the council. Operating a more standard service charge with tenants paying upfront would improve efficiencies and potentially reduce management shortfalls. Planning We understand that the property is neither listed nor sits within a conservation area. Capital Allowances The vendor will retain the benefit of any capital allowances. RENT FREE S The vendor will top-up any outstanding rent free periods on completion.
VAT It is envisaged that the sale will take place as a Transfer of a Going Concern (TOGC). EPC s A full list is available in the dataroom. Dataroom Please contact us for access to the dataroom. Measured Survey Greenhatch Group conducted a full measured survey in 2015 which is assignable and will be made available to the purchaser. Pricing We are seeking offers in excess of 17,750,000 (Seventeen Million, Seven Hundred and Fifty Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level would show the following yield profile: Net Initial Yield 9.52% Equivalent Yield 8.66% Reversionary Yield 8.65% Running Yield (2028) 8.93% FURTHER INFORMATION For further information please contact: James Pearson T: 020 7647 4817 M: 07817 410361 james.pearson@gcw.co.uk Oli Horton T: 020 7647 4806 M: 07788 695859 oliver.horton@gcw.co.uk 7-10 Chandos Street London W1G 9DQ T: 020 7408 0030 F: 020 7495 4248 www.gcw.co.uk Disclaimer - Whilst every effort has been made to ensure accuracy, no responsibility is taken for any error, omission or mis-statement in these particulars which do not constitute an offer or contract. No responsibility or warranty whatever is made or given either during negotiations or in particulars by vendor, lessor or the agent. Gooch Cunliffe Whale LLP. Registered in England No. OC376010. Registered office: 30 City Road, London EC1Y 2AB. GCW: October 2016. Produced by Barbican Studio T: 020 7634 9573