WELL-SECURED FOODSTORE & RETAIL INVESTMENT OPPORTUNITY Sainsbury s and Majestic, Haddricks Mill Road, South Gosforth, Newcastle-Upon-Tyne NE3 1SR
INVESTMENT SUMMARY Prime Foodstore and Retail Investment Located in an affluent and populated catchment area Prominently situated on the busy A186 Haddricks Mill Road, 2.5 miles (4 km) to the north of Newcastle city centre Recently completed development comprising two modern units with associated car parking spaces Let to the strong covenants of Sainsbury s Supermarkets Ltd and Majestic Wine Warehouses Limited on new 15 year leases The Sainsbury s lease is subject to RPI linked reviews providing guaranteed future growth Freehold Total initial income of 130,000 per annum, equating to a low average rent of 15.00 per sq ft We are instructed to seek offers in excess of 2,050,000 (Two Million and Fifty Thousand Pounds) for the Freehold interest, subject to contract and exclusive of VAT. A purchase at this level will reflect a Net Initial Yield of 6.00%, after allowing for normal purchaser s costs of 5.8%. 2
LOCATION Newcastle is the principal commercial centre and seaport in the northeast and renowned as one of the busiest retailing centres in the UK. It is approximately 167 km (104 miles) to the north of Leeds with nearby centres including Gateshead 5 km (3 miles), Sunderland 23 km (14 miles), Durham 32 km (20 miles) and Middlesbrough 64 km (40 miles). The city is accessed from the A1(M), connecting to Leeds in the south and Edinburgh in the north. To the west, the A69 provides convenient access to Corbridge and Carlisle. There are regular train services from Newcastle Central Station to London and Edinburgh with a fastest journey time of 2 hours 49 minutes and 1 hour 25 minutes respectively. Newcastle International Airport is located to the northwest of the city and offers both domestic and international flights with a journey time to London of approximately 1 hour. 3
DEMOGRAPHICS Newcastle has an urban population of approximately 189,863 and a district population estimated to be in the region of 259,500. The city is an important and major Regional Shopping Centre and is ranked 3 out of the PROMIS Centres with an estimated primary retail catchment population of approximately 1,481,000. Newcastle is also a popular university city with a significant student population of 18,000. SITUATION The subject site is situated within the affluent suburb of Gosforth in a highly prominent and accessible position on the busy A186 Haddricks Mill Road, 2.5 miles (4 km) to the north of Newcastle city centre. The local area is densely populated and mainly residential in nature, with other uses including commercial and retail. Occupiers trading in the surrounding area include Jewson and Wickes. DESCRIPTION The property comprises two modern purpose built units of steel construction under flat roofs with external cladding and glazed façades. The site extends to approximately 0.714 acres (0.288 hectares). Internally, each unit comprises sales area with ancillary and staff accommodation to the rear. Unit 1 (Sainsbury s) further benefits from a first floor area. Externally there is customer car parking. The development was completed in 2014. 4
ACCOMMODATION The property provides the following approximate gross internal areas:sq m Sq ft Sainsbury s Ground Floor First Floor Total 355.5 108.2 463.7 3,826 1,165 4,991 Majestic Ground Floor 343 3,692 806.7 8,683 Total GIA TENURE Freehold TENANCY Unit 1 2 Total Tenant Sainsbury s Supermarkets Ltd Majestic Wine Warehouses Limited GIA sq ft Lease Terms 4,991 15 years from 6 January 2014 3,692 8,683 15 years from PC Rent Reviews 5 yearly, upward only to RPI, capped and collared at 3.5% and 1% per annum Rent pa 60,000 5 yearly, upward only to open market reviews 70,000 130,000 5
PLANNING TENANT COVENANTS Sainsbury s Supermarkets Ltd Majestic Wine Warehouses Ltd Sainsbury s Supermarkets Limited (company number 3261722) is one of the UK s leading foodstore operators and is firmly established as one of the Big Four owning 16.7% of the total market share (Sainsbury s Investor Annual Report). The company trades from over 1,200 supermarkets and convenience stores employing approximately 161,000 people. Majestic Wine Warehouses Ltd (company number 01594599) is the UK s leading wine warehouse retailer, trading from 211 stores throughout the UK. The company continues to increase its market share which currently stands at 4.2%. The latest interim result to September 2014 confirm total group sales growth of 2.8%. Sainsbury s Supermarkets Ltd have a D&B rating of 5A1, reflecting a minimum risk of business failure. A summary of their most recent company accounts is set out below:- Majestic Wine Warehouses Ltd have a D&B rating of 5A1, reflecting a minimum risk of business failure. A summary of their most recent company accounts is set out below:- 15/03/2014 16/03/2013 17/03/2012 Sales Turnover 23,919,000 23,290,000 22,288,000 Pre-Tax Profits 810,000 616,000 1,114,000 Tangible Net Worth 4,706,000 4,507,000 4,509,000 01/04/2013 02/04/2012 28/03/2011 Sales Turnover 248,541 253,216 234,217 Pre-Tax Profits 20,443 20,013 18,571 Tangible Net Worth 51,448 46,730 36,475 6
PLANNING Planning was originally granted on 27 April 2009 and renewed on 27 April 2012 reference 2008/1576/07/REN for the, Erection of a wine warehouse (Class A1) (372sqm) and erection of an Outline development for retail units (Class A1) (665sqm) all with associated access, car parking and landscaping as amended by plans received 21/02/12 and 29/02/12. Further information is available upon request. VAT The property is not elected for VAT. EPC Energy Performance Certificates are available upon request. The properties achieved ratings of C 67 and C 75 for Units 1 and 2 respectively. PROPOSAL We are instructed to seek offers in excess of 2,050,000 (Two Million, Fifty Thousand Pounds) for the Freehold interest, subject to contract and exclusive of VAT. A purchase at this level will reflect a Net Initial Yield of 6.00%, after allowing for normal purchaser s costs of 5.8%. 7
For further information please contact: Martin Carey 020 7255 8085 mic@rapleys.co.uk Rick Mcintosh-Whyte 020 7255 8064 rdmw@rapleys.co.uk Rebecca James 020 7255 8040 rcj@rapleys.co.uk Rapleys LLP is registered as a Limited Liability Partnership in England and Wales. Registration No: OC308311. Registered Office at Falcon Road, Hinchingbrooke Business Park, HUNTINGDON PE29 6FG. A full list of Members is available on our website or at any of our offices during normal business hours. Rapleys LLP operates an Environmental Management System which complies with the requirements of ISO 14001:2004. Regulated by RICS. Any maps are for identification purposes only and should not be relied upon for accuracy. Reproduced by permission of Geographers A-Z Map Co. Ltd. Licence No. A0203. This product includes mapping data licensed from Ordnance Survey - Crown Copyright 2001. Licence No. 100017302 and Crown Copyright, All rights reserved. Licence No. ES 100004619. Misrepresentation Act: These particulars are produced in good faith and believed to be correct. Neither Rapleys, their joint agents (where applicable) or their client guarantees their accuracy and they are not intended to form any part of a contract. No person in the employment of Rapleys or their joint agents has authority to give any representation or warranty in respect of this property. All prices or rents are quoted exclusive of VAT. January 2015 8