Bromsgrove District Council - Prime Waitrose Supermarket & Council Car Park Funding Opportunity - Franck-Steier Price
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AND
Bromsgrove
District Council
Prime Waitrose Supermarket & Council Car Park Funding Opportunity
Market Place, Bromsgrove, Worcestershire B61 7AB
INVESTMENT SUMMARY
n Located in Bromsgrove town centre in close proximity to the prime n Total income £190,240 per annum
retail pitch
n Practical completion 1st March 2017
n A new build supermarket extending to 837 sq.m (9,009 sq.ft) let to
Waitrose Ltd n Offers are sought for the forward funding of the investment in
excess of £3,530,000
n Adjoining 86 space car park let to Bromsgrove District Council
n Net initial yield 5.25%, assuming costs of purchase on the site
n Both units are pre-let for 15 years with 5 yearly reviews to of 5.80% and 1.80% on the balancing payment
compounded CPI collared at 1% and capped at 3% per annum
LOCATION Bromsgrove is situated approximately 15 miles south west of Birmingham and 14 miles to the north east of Worcester. The town benefits from excellent road communications being 2 miles from Junction 1 of the M42 motorway. Junction 4 of the M5 motorway is 3 miles to the north and Junction 5 of the M5 lies 4 miles to the south both via the A38 dual carriage way. Bromsgrove is a prosperous and busy market town with a resident population of approximately 29,237 and a district population of 91,500 which is forecast to increase to over 100,000 by 2021. The catchment population within six miles of the town is 150,000. In terms of social economic profile, 11.7% are described as affluent executives compared to a national average of 4.3%. Bromsgrove railway station is operated by London Midland and provides regular services to Birmingham, Worcester, Hereford, Malvern and Cheltenham. SITUATION The property is prominently situated on the corner of St John Street and Hanover Street with access from both roads. Bromsgrove’s pedestrianised High Street and prime retail pitch is within short walking distance. High Street is well represented by national retailers including Boots, New Look, M&Co, Burton, Dorothy Perkins, Costa Coffee, Poundland, Greggs, Iceland and Argos. Bromsgrove School, one of the region’s top private schools, is opposite the Hanover Street entrance High Street underwent a major regeneration in 2014 which was part of a £100m Town Centre Regeneration Project including a new health centre, library and police and fire stations. In addition, Bromsgrove’s railway station has been upgraded to provide a new interchange. Further information is available at www.betterbromsgrove.com. The subject site is currently operated as a council car park.
DESCRIPTION SITE AREA
The property will comprise a supermarket constructed to Waitrose’s latest The site extends to 0.49 hectares (1.21 acres), a low site density of 13%.
specification with a sales area on ground floor and storage and ancillary
staff accommodation at first floor level. A detailed specification together ACCOMMODATION
with floor plans is available on request.
The unit will be constructed to the following target gross internal areas:
Externally there will be an 86 space car park.
DESCRIPTION SQM SQFT
Ground floor 635.00 6,835
First floor 202.00 2,174
TOTAL 837.00 9,009
TENURE
The property is held freehold.
TENANCIES
The supermarket is pre-let to Waitrose Limited for a term of 15 years from
practical completion. The lease is to be held on full repairing and insuring
terms subject to 5 yearly upward only reviews to CPI, collared at 1% and
capped at 3% per annum compounded. The commencing rent will be
£165,240 per annum (£18.34 per sq.ft). Waitrose has the right to renew the
lease for a further 15 on expiry on the same terms.
The car park is pre-let to Bromsgrove District Council for a term of 15 years
from completion. The lease is to be held on full repairing and insuring
terms subject to 5 yearly upward only reviews to CPI, collared at 1% and
capped at 3% per annum compounded. The commencing rent will be
£25,000 per annum.
The total income will therefore be £190,240 per annum.
Bromsgrove District Council and Waitrose have agreed to provide a
concessionary one hour’s free parking to Waitrose customers, subject to a
minimum £5 in store spend.
Waitrose is one of the UK’s highest profile and most prestigious supermarket SUPERMARKET INVESTMENT MARKET
chains. The company is the supermarket arm of the John Lewis Partnership, one
of the UK’s top ten retailers, with a Dun & Bradstreet rating of 5A1 representing
a minimum risk of business failure. Waitrose has approximately 280 branches Address Tenant Area Term Transaction Price Yield
Sq.ft Certain Date £
across the UK, including 30 “Little Waitrose” convenience stores.
South Street, Waitrose 31,694 12.5 years Sold £13,160,000 5.00%
Waitrose reported an increase in like for like sales of 1.1% for H1 2015 and 1.4% Crewkerne Dec 2015
in 2014. The company continues to expand with 14 new stores in 2015. The
Great North Marks & 17,222 19.5 years Sold £5,028,000 4.70%
company recently won the Verdict customer satisfaction award for Best Food
Road, Gosforth Spencer Sep 2015
Retailer ahead of Aldi and Marks & Spencer.
Eastwood Road, Marks & 38,502 20 years Sold £10,000,000 4.50%
A summary of the last three years’ accounts is set out below:
Rayleigh Spencer Aug 2015
Waitrose Limited 31/01/2015 25/01/2014 26/01/2013 Pinfold Street, Waitrose 36,500 20 years Funded £12,560,000 4.75%
(£’000s) (£’000s) (£’000s) Uttoxeter from PC Feb 2015
Turnover 6,016,700 5,640,900 5,416,100 London Road, Waitrose 52,614 20 years Funded £20,00,000 4.40%
Worcester from PC dec 2014
Pre Tax Profit 80,600 109,100 147,500
Pentwyn Road, Waitrose 37,956 14 years Sold £20,00,000 4.73%
Net Worth 853,700 796,600 1,202,500 Cardiff Jun 2014
Bromsgrove
District Council
Bromsgrove District Council is an undoubted covenant.PLANNING VAT
A planning application was submitted on 20 November 2015 to Bromsgrove District Council The property is elected for VAT and therefore VAT will be payable on the purchase price. It is
(reference 15/0994) for the erection of a food store (use A1) with associated parking and anticipated that the sale will be dealt with as a TOGC.
landscaping works. Planning consent is expected prior to 29 April 2016.
PROPOSAL
DEVELOPER We are instructed to seek offers for the forward funding of the property in excess of £3,530,000
(Three Million Five Hundred and Fifty Thousand Pounds) subject to contract and exclusive
of VAT.
A purchase at this level would reflect a net initial yield of 5.25%, assuming costs of purchase on
the site of 5.80% and 1.80% on the balancing payment.
The property will be developed by Hinton Group, who is one of the leading developers in
the region. Hinton Group is a privately owned company specializing in land acquisition,
development, architectural design and construction, principally for the retail and leisure
FUNDING STRUCTURE
sectors. The purchaser will acquire the site for £750,000 with Hinton Group simultaneously entering
into a development agreement with the purchaser to develop the supermarket and car park in
Hinton has been delivering innovative development solutions for over two decades and accordance with the agreed specifications.
to date Hinton has developed over 1,000,000 sq ft of commercial, retail, leisure and office
space. Recent projects include: The purchaser with make stage payments throughout the development period to Hinton
following key development milestones with a final balancing payment on Practical Completion
of the development and completion of the leases to Waitrose Limited and Bromsgrove District
n 18,500 sq.ft Aldi supermarket, Leicester
Council.
n 2,700 sq.ft KFC Drive-Thru and 16,000 sq.ft Aldi supermarket, Telford
n 83 bed Travelodge Hotel, Oxford
n 67 bed Premier Inn Hotel, Birkenhead
n 50,000 sq.ft Wickes, 6,000 sq.ft Ford car showroom, 4,000 sq.ft Halfords and 60 CONTACTS
bed Travelodge Hotel, Birmingham
Further information can be found on the company website www.hintongroup.co.uk. BEN BLACKWALL ANDREW PRICE
0121 513 0893 0121 513 0892
ben.blackwall@fspproperty.co.uk andrew.price@fspproperty.co.uk
DEVELOPMENT PROGRAMME
A contract has been exchanged with Bromsgrove District Council to acquire the site following
approval of the planning application which is expected prior to 29 April 2016. Hinton has also Franck Steier Price Ltd
exchanged contracts with the Council on the adjacent development plot (Phase 2) which is Third Floor, Victoria House
intended for retail/leisure development. 114-116 Colmore Row, Birmingham, B3 3BD
Following receipt of the planning consent development will commence with Practical
Completion scheduled for 1 March 2017. Misrepresentation Clause : The accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and
other details contained herein are not guaranteed and are for general guidance only and prospective purchasers or tenants must not rely on them
as statements of fact or representations and must satisfy themselves of their accuracy. Neither Franck-Steier Price Ltd, nor any of their employees
or representatives has any authority to make or give any representation or warranty or enter into any contract whatever in relation to the property.
A full suite of contractor warranties will be provided to the purchaser upon Practical Completion Prices and rents quoted in these particulars may be subject to VAT in addition. The reference to any mechanical or electrical equipment or other
of the development. facilities at the property shall not constitute a representation (unless otherwise stated) as to its state or condition or that it is capable of fulfilling
its intended function. Prospective tenants/purchasers should satisfy themselves as to the condition of such equipment for their requirements.You can also read
