EAST MIDLANDS TRADE COUNTER INVESTMENT WITH SIGNIFICANT REVERSIONARY POTENTIAL 1-4 Queens Road, Nottingham, NG2 3AS
INVESTMENT SUMMARY Highly reversionary trade counter investment opportunity in a prime Nottingham City Centre location. Nottingham City Centre is strategically located within close proximity to the and motorway, providing unrivalled national connectivity. Excellently situated on a highly prominent City Centre site adjacent to Nottingham Railway Station and close to City Centre amenities. Self-contained multi-let industrial estate comprising four units extending to 33,089 sq ft. 1-4 Queens Road offers significant reversionary potential through various asset management initiatives including re-letting the vacant unit, refurbishment or redevelopment. Fully let to three tenants with a total headline rent of 116,414 per annum reflecting a low average rent of 3.52 per sq ft. Vacant possession over the estate is achievable within three months serving notice. Freehold. We are instructed to seek offers in excess of 2,100,000 subject to contract and exclusive of VAT. A purchase at this level would reflect an attractive Net Initial Yield of 5.25% and a low capital value of 63 per sq ft, after deducting purchaser s costs of 6.29%, with an attractive reversionary position. 2 1-4 Queens Road, Nottingham, NG2 3AS
1. 2. 3. 4. 5. 6. 7. 8. 18 9. 17 A60 Subject Property The Hicking Building Saffron Court PRS Scheme The Picture Works Loxley House Eversheds Sutherland Nottingham Crown Court INTU Broadmarsh Centre Redevelopment Site Nottingham One 10. 11. 12. 13. 14. 15. 16. 17. 18. Trent House Nottingham One Tower Waterfront House Jurys Inn Premier Inn Virgin Active Nottingham College Notts County FC Nottingham Forest FC 3 4 2 QUEEN S ROAD 1 16 15 13 10 12 14 3 11 1-4 Queens Road, Nottingham, NG2 3AS 5 9 7 6 8
LOCATION OL M58 Wigan Knowsley M62 Warrington MANCHESTER M60 Stockport A628 Rotherham 8 SHEFFIELD A1M 8 A631 A156 A15 Grimsby A16 Nottingham Train Station 0.1 miles / 1 min Nottingham City Centre 1.4 miles / 8 mins M56 A41 A49 M6 Crewe A34 A34 3 3 A623 A515 Chesterfield A6 A61 A60 A614 A1 Newark-on-Trent Lincoln A158 A16 3.5 miles / 11 mins 95 A495 A53 Stoke-on-Trent A50 Derby NOTTINGHAM A17 Junction 26 5.9 miles / 19 mins Shrewsbury A53 A41 M6 Stafford A34 A515 A38 A511 A6 A607 Melton Mowbray A1 A15 A17 Junction 25 9.0 miles / 18 mins A458 M54 M6TOLL M42 A444 LEICESTER A47 A606 A16 Peterborough East Midlands Airport 13 miles / 22 mins Central London 127 miles / 2 hrs 38 mins A49 A456 Wolverhampton BIRMINGHAM A442 Yardley Kidderminster M42 Redditch A449 M5 Nuneaton M69 M6 Coventry Rugby Royal Leamington Spa Whetstone A14 A6 Northampton A43 A45 A605 A14 A1M A141 A14 A141 4 1-4 Queens Road, Nottingham, NG2 3AS
SITUATION HGV DRIVE TIMES & DISTANCES Nottingham is the economic powerhouse of the East Midlands and the principal commercial and administrative centre for the region. Nottingham has a resident population of approximately 1.3 million people making it the 8th largest urban area in the UK. Nottingham s centralised location provides access to c.90% of the UK s population within a 4.5 hour drive time. The property is situated within the heart of Nottingham City Centre occupying a strategic site accessed from Queens Road in an established commercial location. The immediate surrounding area comprises a mix of industrial, office, retail, leisure and residential uses. Nottingham railway station adjoins the site to the west, providing direct trains to Leicester, Birmingham, Manchester and London St Pancras with a fastest journey time to London of 1 hour 37 minutes. London 2 hr 38 mins 127 miles Derby 32 mins 16 miles Leicester 45 mins 30 miles Birmingham 59 mins 50 miles Jnc. 25 18 mins 9.0 miles 11 mins 3.5 miles Jnc. 26 19 mins 5.9 miles Heathrow 2 hrs 18 mins 129 miles 11 mins 3.5 miles East Midlands 22 mins 13 miles Birmingham Int. 60 mins 48 miles Manchester 1 hr 50 mins 88 miles J26 A610 WOODTHORPE A6097 MAJOR OCCUPIERS IN THE VICINITY INCLUDE: A60 ILKESTON HYSON GREEN CARLTON SHELFORD NOTTINGHAM STATION WEST BRIDGFORD NOTTINGHAM BEESTON J25 CLIFTON CLIPSTON LONG EATON BRADMORE J24 LOCKINGTON 5 1-4 Queens Road, Nottingham, NG2 3AS
DESCRIPTION SITE The property comprises four industrial warehouse units of steel portal frame construction and was constructed in the 1970 s. The site extend to approximately 1.50 acres (0.60 hectares) equating to a site coverage of 50%. Minimum Eaves Height 5.5m Total Area 33,089 sq ft Unit Sizes 8,279-16,026 sq ft Steel Portal Frame Construction Roof Lights 10% translucent Profile steel clad elevations 6 1-4 Queens Road, Nottingham, NG2 3AS
TENANCY TENURE The property is let to three tenants in accordance with the below schedule and benefits from a short AWULT of 0.3 years to break options and 2.05 years to lease expiries. All leases are contracted out of the LTA 1954 Act and subject to a mutual three monthly rolling break, offering significant potential for future refurbishment/ redevelopment of the site. The property is held freehold under Title Numbers NT166152 and NT435820. Unit Tenant Size (sq ft) Lease Start Lease End Break Date Passing Rent ( pa) Passing Rent ( psf) ERV ( pa) ERV ( psf) 1 United Carpets 8,784 09/02/2017 07/02/2022 Rolling break subject to 3 months notice 35,000 3.98 54,900 6.25 2 Vacant 8,279 - - - - - 51,744 6.25 3 & 4 Magpie 2 Ltd 16,026 02/01/2017 01/01/2020 Advertising Hoarding Space Outdoor Ltd - 09/12/2015 07/12/2021 Rolling break subject to 3 months notice Rolling break subject to 3 months notice 77,914 4.86 96,156 6.00 3,500 3,500 3,500 3,500 33,089 116,414 3.52 206,300 6.24 ASSET MANAGEMENT INITIATIVES The property provides several active asset management opportunities that provide tangible means of creating significant value, some of which include: Rationalising existing lease positions to improve the AWULT and security of income. Re-letting the vacant unit to increase the total passing rental income. Refurbishing and reletting the vacant unit to increase the headline rent within the scheme. Exercising the landlord break options on a phased basis to maintain the income whilst altering the profile of the scheme. 7 1-4 Queens Road, Nottingham, NG2 3AS
REDEVELOPMENT The property is underpinned by excellent development potential subject to obtaining the relevant planning consent. Under the revised Local Plan the site sits within the Southside Regeneration Area. The Local Plan identifies the Southside Regeneration Area as having the potential to become a vibrant extension of the City Centre and a gateway to the City from the south, reinforcing the revitalisation of The Meadows centred around the recently redeveloped railway station. The subject site has been identified within the Local Plan as a potential redevelopment site due to its prominent position and active frontages at ground floor level to both Queens Road and London Road. The aim of the Southside Regeneration Area is to create an area of vibrancy, encouraging a mix of retail and leisure uses at ground floor level with alternate use classes on the upper levels. Indicative student housing scheme There may be scope to undertake a conversion for a change of use to residential, especially given the strong strategic nature of the site in Nottingham City Centre. The sites strong connectivity characteristics and proximity to the City Centre provides opportunity to explore potential residential development, as seen in the immediate vicinity of the property where Cording Real Estate Group is currently developing a 350 unit residential scheme off the junction of Eugene Street and Crocus Street. A high level study of the site has indicated that a scheme of approximately 280 residential units could be accommodated along with ground floor retail provision. There is also potential to explore alternative options such as student accommodation and hotel uses which could also be viable subject to gaining the relevant consents. Indicative hotel scheme 8 1-4 Queens Road, Nottingham, NG2 3AS
OCCUPATIONAL MARKET The current passing rent of 116,414 per annum reflects a very low 3.52 per sq ft. Based on the evidence set out below, the reversionary potential would mean producing a rent of 206,300 per annum reflecting and industrial ERV of 6.00-6.25 per sq ft once refurbished. Property Area (sp ft) Specification Tenant Lease Terms Rent ( psf) Date Suite 8, Ilkeston Road, Nottingham 3,130 1980s build, 4.7m eaves Roller shutter access ESB Developments Ltd 3year lease 5.11 Mar-18 Suite 8, Linkmel Close, Nottingham 5,417 1990s build, 6.0m eaves 2 level access loading doors Secure shared yard Hertz 5year lease 3 month rent free incentive 5.75 Mar-18 Unit 17, Lenton Lane, Nottingham 30,131 2000 s build, 8.0m eaves Secured service yard Car Parking Vision Logistics 10 year lease, 5 year break 3 month rent free incentive 6.15 Feb-18 Unit 13, Ilkeston Road, Nottingham 5,834 1980s build, 4.7m eaves Roller shutter access Retex 3 year lease 4.80 Sep-17 Unit F, Harrimans Lane, Nottingham 4,510 1970s build, 4.9m eaves Single roller shutter door Bravo Lighting Ltd 5 year lease 3 month rent free incentive 5.25 Sep-17 Unit A, Harrimans Lane, Nottingham 4,004 1970s build, 4.9m eaves Single roller shutter access Ross Auto Engineering Ltd 7 year lease 6 month rent free incentive 4.90 Sep-17 Unit 1. Ashville Close, Nottingham 7,437 1980s build, 5.7m eaves Full height level access loading door Universal Works 10 year lease, 5 year break 3 month rent free incentive 5.95 Sep-17 9 1-4 Queens Road, Nottingham, NG2 3AS
INVESTMENT MARKET There has been a consistent depth of demand for regional single let industrial investments, which has led to multiple phases of bidding and strong yield compression. Demand continues to be strong for industrial assets with investors drawn to towards the compelling fundamentals of a strong occupational market with very low availability rates, strong rental growth and limited speculative development. The industrial sector looks set to continue to deliver strong investment returns, driven by a combination of both capital growth and ongoing rental growth. Recent industrial investment transactions highlighting the strength in this sector include: Property Location Tenant Area Rent ( psf) Earliest Determination NIY Sale Price Sale Price (psf) Sale Date Pinnacle Point, Stafford Road, Wolverhampton Midlands Various 156,019 5.47 2.30 Years 6.79% 11,775,000 75 May-18 Greenwood Industrial Estate, Cartmel Drive, Shrewsbury Midlands Various 44,611 4.70 2.30 Years 6.70% 2,950,000 66 Apr-18 Units 9-12 Walton Industrial Estate, Stone Midlands Various 57,449 5.09 3.30 Years 7.42% 3,700,000 64 Nov-17 Units 14-22 Coleshill Industrial Estate, Birmingham Midlands Various 66,160 5.25 3.70 Years 6.30% 5,450,000 82 May-17 The Breydon Centre, Padholme Road, Peterborough Midlands Various 15,210 5.78 8.0 Years 6.53% 1,270,000 83 Feb-17 Titan Drive Industrial Estate, Fengate East, Peterborough Midlands Various 109,820 5.20 2.4 Years 6.50% 8,250,000 75 Apr-17 Units 10-13 Coleshill Industrial Estate, Birmingham Midlands Various 40,952 3.64 5.0 Years 6.84% 2,050,000 50 Dec-16 Trafford Park Industrial Estate, Redditch Midlands Various 51,894 4.64 1.70 Years 6.50% 3,500,000 67 Dec-16 10 1-4 Queens Road, Nottingham, NG2 3AS
EPC Energy Performance Certificates can be made available upon request. VAT VAT will not be payable on the purchase price due to the sale being treated as a Transfer of a Going Concern (TOGC). DATA ROOM Data room access will be provided upon request. PROPOSAL We are instructed to seek offers in excess of 2,100,000 subject to contract and exclusive of VAT. A purchase at this level would reflect an attractive Net Initial Yield of 5.25% and a low capital value of 63 per sq ft, after deducting purchaser s costs of 6.29%, with an attractive reversionary position. FURTHER INFORMATION For further information or to arrange and inspection, please contact the following: Ross Cuthbert T: 020 3486 3479 E: rcuthbert@geraldeve.com Callum Robertson T: 016 1259 0480 E: crobertson@geraldeve.com Charlotte Campbell T: 016 1259 0469 E: ccampbell@geraldeve.com Conditions under which these particulars are issued All details in these particulars are given in good faith, but Gerald Eve LLP for themselves and the Vendors/Lessors of this property for whom they act give notice that:- 1. These particulars do not and shall not constitute, in whole or in part, an offer or a contract or part thereof, and Gerald Eve LLP have no authority to make or enter into any such offer or contract. 2. All statements contained in these particulars are made without acceptance of any liability in negligence or otherwise by Gerald Eve LLP, for themselves or for the Vendors/Lessors. 3. None of the statements contained in these particulars is to be relied on as a statement or representation of fact or warranty on any matter whatsoever, and intending purchasers must satisfy themselves by whatever means as to the correctness of any statements made within these particulars. 4. The Vendors/Lessors do not make, give or imply, nor do Gerald Eve LLP or any person in their employment have any authority to make, give or imply, whether in these particulars or otherwise, any representation or warranty whatsoever in relation to the property. The statement does not affect any potential liability under the Property Misdescriptions Act 1991. Particulars issued August 2018. 2018 Gerald Eve LLP. All rights reserved. Gerald Eve LLP is a limited liability partnership registered in England and Wales with registered number OC339470 and its registered office at 72 Welbeck Street, London, WIG 0AY