WALKERS SNACKS MIDDLEMARCH BUSINESS PARK, COVENTRY, CV 3 4PE - High quality distribution investment providing 11 years' secure income in a core ...
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WALKERS SNACKS M I D D L E M A R C H B U S I N E S S PA R K , C O V E N T R Y, C V 3 4 P E High quality distribution investment providing 11 years’ secure income in a core Midlands location
WALKERS SNACKS High quality distribution
MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE investment providing 11 years’
secure income in a core
Midlands location
INVESTMENT SUMMARY
• Situated on Middlemarch Business Park directly adjacent
to Coventry Airport.
• Coventry has a strong occupier base being a core
Midlands manufacturing and logistics hub.
• The property comprises a single let modern distribution
warehouse of 227,199 sq ft (21,107 sq m) with 38 loading
doors, two storey ancillary offices and a minimum yard
depth of 50m.
• The site has additional yard and potential expansion
land, extending to approximately 1.68 acres.
• Secure site extending to 13.2 acres, providing a very low
site density of 38%.
• The property is fully let to Walkers Snacks (Distribution)
Ltd on an FRI lease providing an unexpired term certain
of over 11 years.
• Total rental income of £1,312,095 per annum, reflecting
a low rent of £5.50 per sq ft for the unit (not including
expansion land rent).
• Prospect for rental growth in the short term, with an
upcoming rent review on 28/11/2020.
• Walkers Snacks (Distribution) Ltd are the
distribution arm of Walkers Snacks, the We are instructed to
UK’s largest crisp manufacturer. They seek offers in excess of
provide warehousing and distribution £23,410,000 (Twenty Three
services to the other group companies. Million Four Hundred and Ten
Thousand Pounds) subject to
• The tenant has a long-term commitment contract and exclusive of VAT.
to the site due to its strategic importance, A purchase at this level reflects
sitting directly adjacent to one of Walkers a Net Initial Yield of 5.25%
Snacks largest factories. and a low capital value of
• Virtual Freehold. £103 per sq ft, assuming
purchaser’s costs
6.76%.
WALKERS SNACKS
MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE
Coventry City Centre
Jaguar Land Rover
Kuehne+Nagel
A45
A45 M6/M69 Interchange (5.5 miles)
Coventry Airport
Zooplus
Funko.com World of Books Unipart
Menzies Distribution Innovare
Volvo Prologis Park, Ryton (0.5 miles)
Royal Mail Walkers Snacks Factory
Royal Mail GEFCO SUBJECT PROPERTY
Unipart
HTA Group
Gist
Aubrey Allen
Royal Mail
The property is situated
on Middlemarch Business Park,
one of the West Midlands most
sought-after distribution locations
A45 A45
WALKERS SNACKS
NS ROAD
STONEBRID
GE HIGHWAY
A4
5
RTI
44
A4
MA
MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE
ST.
ROAD
LEY
ROW LO
M N DO
ILL NR
E
H IL L OA
RIV
D
LOCATION
ND I
SISK
Walkers Snacks Factory
46
Coventry is located in the West Midlands and lies directly adjacent
A
to the ‘Golden Triangle’ – the UK’s premier distribution area with Coventry
A4
WAY
Airport
AY
23
some 85% of the UK’s population (c.47m people) being accessible Coventry
PA R K W
RK
within the 4.5-hour HGV drive-time limit. It is approximately Golf Club
PA
IN
24 miles (38.6 km) south east of Birmingham, 25 miles (40.2 km) SI
SK
IN
south west of Leicester and 89 miles (143 km) north west of Central
SUBJECT
SK
London.
SI
The town benefits form excellent road connectivity being served by PROPERTY
ST
the M1, M6 and A45 motorways. The M6/M1 interchange at Rugby is
ON
BUBB
just east of the city, meaning direct access from the M6 motorway
ELIEGH ROAD
R OA D
via the A46 and A444. The M1 is accessed via the M45/A45 and the
NH E
M69 motorways, allowing access to London and the wider South
AL L
NTRY
East. The A45 Birmingham to Coventry trunk road provides access
RO
AD
to the M42 which in turn, links the M40 and M5 motorways.
COVE
The town also benefits from excellent rail and air connections
with Coventry Airport situated directly adjacent to the subject
NOTTINGHAM
property. Frequent direct trains run from Coventry to Birmingham
in just 28 minutes and regular services operate to London Euston in
approximately 1 hr.
14
24 SITUATION Destination
Coventry
Miles
5.2
KM
8.4
Drive Times
13m
LE
AM
IN GT
Stafford COVENTRY
ROAD
Town Centre
The property is situated on
Newport 13 23
Middlemarch Business Park, one of Birmingham 26.0 42.0 40m
M6 M1
the West Midland’s most sought-after
12 11
22
distribution locations. Middlemarch TOWNS
5
Manchester 108.0 174 2hr 10m
11 Tamworth Business Park extends to 110 acres and & CITIES
M54 Leicester
2
M6(T) sits directly adjacent to Coventry Airport;
London 94.2 151.6 2hr 20m
Wolverhampton 10 Walsall
21
the subject property is approximately
M69 1.9 miles from the entrance. The site
8 7 Hinckley
9
Nuneaton
2
sits 6.5 miles south of Coventry town A45 1.2 1.9 10m
1
1 6 5 8 M1 centre and approximately 5 miles from
2
BIRMINGHAM M6 3
Coventry Railway Station. M6 5.9 9.5 20m
20
M5
3 BIRMINGHAM 6 2
Situated on Siskin Parkway East, the ROADS
Solihull M42 1 19
M1 17.0 27.4 32m
4
5
main road running through the estate,
4
M42 Rugby 18 the adjoining site is owner occupied by
1 2
3 COVENTRY
Bromsgrove 16 M45 17 one of Walkers Snacks largest factories. Coventry 1.9 3.1 6m
Warwick Leamington Other occupiers on the estate include Airport
5
Redditch Spa Volvo, Unipart, Royal Mail, Menzies, Gist
15 14 Daventry Birmingham 15.0 24.0 32m
13 and World of Books (see aerial on the Airport
6 previous page). AIRPORTS
Worcester Stratford
12
7
upon Avon M40
Great
WALKERS SNACKS
MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE
ACCOMMODATION
The property has been measured in accordance with
the RICS Code of Measuring Practice (6th Edition) on
a Gross Internal Area (GIA) basis, and provides the
following approximate areas:
Demise Area sq m Area sq ft
Unit 1
Office 936 10,074
Warehouse 7,469 80,392
Covered loading 691 7,437
Unit 1 Total 9,096 97,903
Unit 2
Office 1,206 12,983
Warehouse 10,806 116,313
DESCRIPTION
Unit 2 Total 12,012 129,296
The property was constructed in 1999 and comprises a single let unit of steel portal frame construction.
Due to previous occupation by two tenants it remains labelled as Units 1 & 2. The current tenant operates OVERALL TOTAL 21,107 227,199
the site as a single cross docked unit, with the total floor area extending to 227,199 sq ft (21,107 sq
m). The site benefits from additional secure yard space to the south western elevation, extending to
approximately 1.68 acres. This is currently utilised as extra HGV parking, but also provides clear expansion
land for a potential extension to Unit 1.
The warehouse benefits from the following specification:
• Minimum clear internal eaves height of 10m.
• 26 dock level loading doors.
• 12 level access loading doors.
• Minimum yard depth of 50m.
The unit also benefits from two storey office accommodation with a dedicated secure reception,
suspended ceilings and integral diffused lighting.
WALKERS SNACKS
MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE
SITE AREA TENURE
The site extends to approximately 13.2 acres, The property is held on a 999 year lease from
providing a very low site density of 38%. the 26th February 1993 at a peppercorn rent.
TENANCY
Current Leases
The property is let to Walkers Snacks (Distribution) Limited on two assigned FRI leases from
Macfarlane Group UK Limited expiring 27 November 2020. Part of the ancillary office building
remains sub-let to Macfarlane Group UK Limited until 16 November 2020 (Outside the Act).
The passing rent is £1,312,095 per annum, which reflects the following:
Unit 1
KWAY EAST
• £522,845 per annum (£5.34 per sq ft)
• £61,437 per annum (apportioned to the extension land)
• Total: £584,300 per annum
UNIT 2
Unit 2
• £727,795 per annum (£5.63 per sq ft)
Total
PAR
• £1,312,095 per annum (£5.50 per sq ft excluding the extension land) UNIT 1
Reversionary Leases
KIN
In 2019 Walkers Snacks (Distribution) Limited signed two co-terminus FRI reversionary leases
for a term of 10 years from 28 November 2020, providing a WAULT of 11 years.
SIS
Upon commencement of the reversionary leases there will be an upwards only open market
rent review with 5 yearly reviews thereafter.
There is a rent free period between 29th September 2019 to 26th April 2020, which will be
topped up by the vendor and deducted from the purchase price at the date of completion.
WALKERS SNACKS The site is of significant strategic
MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE
importance as it sits directly adjacent to
the Walkers Snacks factory
COVENANT
Walkers Snacks (Distribution) Limited
(03566410)
Founded in 1948, Walkers Snacks is a British
snack food manufacturer best known
for producing potato crisps. They are the UK’s largest crisp
manufacturer, producing over 11 million packets a day. Other than
Walkers Originals, they are responsible for brands such as Doritos,
Quavers, Wotsits, Monster Munch, French Fries and Frazzles.
The company employs over 4,000 people in fifteen locations
around the UK. The sole function of Walkers Snacks (Distribution)
Limited is to provide the Walkers Snacks group companies with
warehousing and distribution services.
Walkers Snacks is a wholly owned subsidiary of PepsiCo after it
was acquired in 1989. The US giant, which has its UK headquarters
in London, is behind brands such as Pepsi, Lays, Lipton, Tropicana
and Quaker Oats.
Walkers Snacks
Dec-18 Dec-17 Jan-16 Dec-15
(Distribution)
(000 GBP) (000 GBP) (000 GBP) (000 GBP)
Limited
Turnover 98,528 107,368 105,186 109,765
Pre-tax Profit 827 4,130 3,843 3,988
Net Worth 25,370 24,851 21,639 18,968
Cash 40,529 27,468 17,719 13,188 THE OPERATION
The subject property is one of two UK distribution hubs operated by Walkers Snacks, the other
being in Warrington. This site is of significant strategic importance as it sits directly adjacent
to the Walkers Snacks factory. Walkers Snacks operate four factories around the UK, with their
headquarters located in Leicester. The subject property is used to provide distribution services
to the Coventry factory as well as the other factories in Leicester, Lincoln and Skelmersdale.
Walkers Snacks owner occupy their factory in Coventry which is responsible for the Doritos
and French Fries service lines. In 2015, it underwent a substantial upgrade to install new state-
of-the-art packing equipment. This significant investment in the Coventry site and the recent
re-gear on the subject property clearly demonstrates the tenant’s long-term commitment to
the location.
WALKERS SNACKS
MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE
OCCUPATIONAL MARKET COMMENTARY
The UK’s logistics occupational market is as strong as ever with 2018 take-up totalling 31.50m sq ft across 101 deals; this was 82% higher than 2017 and exceeded the annual
record from 2016 of 29.35m. Take-up has been dominated by online retailers, who were responsible for 9.98m sq ft of logistics space, representing 32% of the total take-up. This
trend has continued into 2019 as online sales in the UK keep growing – now accounting for over 20% of total retail transactions.
The Midlands finished the year setting a new record for take-up of any region of the UK, with 43 deals totalling 13.97m sq ft, an increase of 110% compared to 2017 (6.65m sq ft).
This accounted for 44% of total take-up in 2018. This trend has continued to grow with the Midlands accounting for over 50% of national take-up in H1 2019, demonstrating
steady growth.
Coventry is at the heart of both the UK’s manufacturing and distribution markets with 10% of the automotive sector’s employment located there. This includes the global
headquarters for Jaguar Land Rover. The strong labour supply, booming residential development market and affluent demographic make Coventry a sought-after location for
occupiers and investors alike. Notable occupiers that have recently committed to the wider region include DHL Supply Chain Ltd, Parts Alliance Group Ltd and Kitchencraft.
A schedule of comparable letting evidence is outlined below:
Building Tenant Date Size Build Rent Lease
(sq ft) Status (Psf) Terms
Unit 1, Imperial Funko.com Jul-19 349,355 Grade A £6.25 10 year lease
Park, Middlemarch,
Coventry
Midpoint 105, Parts Alliance Aug-18 105,506 Second Hand £6.25 5 year lease
Birmingham Group Limited
Carbon 103, World of Buzz Apr-18 103,000 Grade A £6.40 15 year lease
Middlemarch, (World of Books)
Coventry
Carbon 207, Zooplus Apr-18 207,340 Grade A £6.23 15 year lease
Middlemarch,
Coventry
Coventry 210, Martin Brower Jul-18 210,628 Grade A £7.10 20 year lease
Dolomite Avenue, Limited
Coventry
Lyons 135, Jaguar Land Mar-18 135,048 Grade A £6.50 10 year lease
Lyons Park, Rover
Coventry
WALKERS SNACKS
MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE
INVESTMENT MARKET COMMENTARY
The industrial sector has performed extremely well despite the political and
economic headwinds faced over the past year.
Whilst total industrial transaction volumes are down from this time last year,
volumes for logistics assets are approximately 20% up. This strong investment
performance is testament to the continued positive sentiment that surrounds this
asset class and sub sector, both from an occupier and investor perspective.
The logistics investment market is underpinned by a very robust occupational
story driven by a structural shift in demand, and an acute undersupply of space.
Industrial sector total returns reached 18.1% for the whole of 2018, thanks largely to
capital value growth of 12.4%.
In the current market, there continues to be a significant weight of money
targeting the sector, in particular for those assets that benefit from strong property
fundamentals in established industrial locations such as this.
A schedule of key logistics transactions is outlined below:
Property Date Purchase NIY Cap Val Area AWULT Passing Rent Vendor Purchaser
Price (per sq ft) (sq ft) (Years) Pa (per sq ft)
Movianto - Sep-2019 £44,560,000 4.90% £118 377,000 10 £2,331,250 Morley Estates Warrington
Haydock (£6.25) County Council
Puma - Aug-2019 £30,350,000 4.60% £117 259,236 10 £1,490,607 Barwood, Equites
Wakefield (£5.75) Tungsten Property Fund
Properties
Limited
F&P - Jun-2019 £12,480,000 4.71% £124 100,511 10 £628,194 Barwood, Private
Birmingham (£6.25) Panattoni Individual
Amazon - Dec-2018 £37,293,500 4.95% £90 415,065 10 £1,971,558 Aberdeen NFU
Doncaster (£4.75) Standard
HelloFresh - Dec-2018 £26,650,000 4.99% £107 236,580 8 £1,419,480 BA Pension NFU
Banbury (£6.00) Fund,
db symmetry
WALKERS SNACKS
MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE
PROPOSAL
We are instructed to seek offers in excess of £23,410,000 (Twenty Three Million Four
Hundred and Ten Thousand Pounds) subject to contract and exclusive of VAT. A
purchase at this level reflects a Net Initial Yield of 5.25% and a low capital value of
£103 per sq ft, assuming purchaser’s costs 6.76%
FURTHER INFORMATION
For further information, or to arrange an inspection, please contact the following:
Tom Woolhouse Nick Woodward
T: 020 7182 2113 T: 0121 616 5561
M: 07818 012 428 M: 07983 329 642
E: tom.woolhouse@cbre.com E: nick.woodward@cbre.com
John Doleman Will Sherlock
T: 020 3214 1911 T: 0121 616 5563
M: 07464 980 354 M: 07795 606 832
E: john.doleman@cbre.com E: will.sherlock@cbre.com
Monty Powell CBRE Ltd
T: 020 7182 2404 55 Temple Row
M: 07584 108 037 Birmingham B2 5LS
EPC E: monty.powell@cbre.com
Available on request. CBRE Ltd
Henrietta House
London W1G 0NB
VAT
The property has been elected for VAT and the purchase price is
exclusive of any VAT that may be chargeable. It is envisaged that the CBRE for themselves and for the vendors or lessors of the property whose agents they are give notice that:
(i) these particulars are given without responsibility of CBRE or the vendors or lessors as a general outline only for the guidance of prospective purchasers
transaction will be treated as a Transfer of a Going Concern. or tenants, and do not constitute the whole or any part of an offer or contract; (ii) CBRE cannot guarantee the accuracy of any descriptions, dimensions,
references to condition, necessary permissions for use and occupation and other details contained herein and any prospective purchaser or tenant should
not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the accuracy of each of them; (iii)
no employee of CBRE (and their joint agents where applicable) has any authority to make or give any representation or warranty or enter into any contract
whatsoever in relation to the property; (iv) VAT may be payable on purchase price and/or rent, all figures are quoted exclusive of VAT, intending purchasers
or lessees must satisfy themselves as to the applicable VAT position, if necessary by taking appropriate professional advice; (v) except in respect of death or
DATAROOM personal injury caused by the negligence of CBRE, its employees or servants, CBRE will not be liable, whether in negligence or otherwise howsoever, for any
loss arising from the use of these particulars save to the extent that any statement made in these particulars has been made fraudulently. November 2019
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