CHELTENHAM - 91-97 HIGH STREET - Prime Retail Investment New store opens September 2018 - Fastly
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Prime Retail Investment
CHELTENHAM – 91-97 HIGH STREET
New
store opens
September 2018
Sat Nav Ref: GL50 1DP
INVESTMENT SUMMARY
• Comprises two well configured retail units, let to Argos Limited on a lease expiring in August 2021, with a co-terminus sub-lease to
2
Superdrug Stores Plc.
• Cheltenham has an affluent catchment and is a very strong retail centre.
• The pitch is set to improve upon the opening of a John Lewis department store nearby, later this year.
• The tenant and sub-tenant both renewed their leases in 2016, at rebased rents.
• Rebased rent of £190,000 per annum (£72 Zone A) which compares very favourably with prime rents on High Street of £160 Zone A.
• Excellent rental growth prospects
• Quoting offers in excess of £2,750,000, a Net Initial Yield of 6.50%, net of purchaser’s costs.
Fawcett Mead
CHELTENHAM – 91-97 HIGH STREET
A470
A44 A44
Worcester A422
A4112 A423
A417
A46
A438 A49 A4103
A438 A429
A449
Cheltenham has an affluent
3
A470 A46
A429
A465
A449
catchment and is a very strong
A417 A424 A44
A49
A465
Cheltenham
retail centre
A479 A44
A40
Gloucester A436
A48 A34
A40
A465 A40
A4042 A417 Oxford
LOCATION A470 A449
A429
A420
A419
Cheltenham is an attractive spa town, a very strong retail centre A470
and a tourist destination. It is situated in the Cotswolds, 110 miles
west of London, 48 miles south west of Oxford, 51 miles south of
Cardiff
Fawcett Mead
CHELTENHAM – 91-97 HIGH STREET
Birmingham and 42 miles north east of Bristol. Bristol
The town has excellent road communications, lying 4 miles
A36
east of the M5, which is accessed via the A40. The A40
runs through the town and provides links to Gloucester and
Ross on Wye to the west and Oxford to the east. Computer Generated Image
Cheltenham has a mainline railway station providing a
fast and frequent service to London Paddington with a
fastest journey time of 1 hour 50 mins. It also provides
direct access to Swindon (1 hour), Bristol (45 minutes) and
Birmingham (40 minutes).
Birmingham Airport and Bristol Airport are both situated
approximately one hour drive time from Cheltenham.
DEMOGRAPHIC & ECONOMIC PROFILE
Cheltenham has a primary catchment population of 392,000
people. The population has an above average proportion of people
characterised in the more affluent AB Social Groups and per capita
spending levels are above the UK average. The town benefits
significantly from tourism and there are an estimated 460,000
staying visitors and 5.6 million day-trippers per annum, spending
£235 million in the local economy, according to Gloucestershire
County Council.
RETAILING IN CHELTENHAM 4
Cheltenham’s central shopping area has an estimated 1.3 million sq ft of retail
floor space which is principally concentrated on High Street and Promenade.
High Street largely accommodates main market retailers including:
The Promenade largely accommodates higher end fashion retailers including;
Fawcett Mead
CHELTENHAM – 91-97 HIGH STREET
Retailing in the town will be given a
significant boost when John Lewis
open a new department store on High
Street, close to this property, later this
year. This will enhance Cheltenham’s
retail profile and provide a significant
boost to High Street, benefitting the
subject property.
Next are currently refurbishing their store on High Street,
close to this property, which will re-open this summer.
SITUATION DESCRIPTION
5
The property is located on the pedestrianised section of High Street, close to the new John This is a modern, purpose built retail property,
Lewis and Next stores. Other nearby retailers include Costa Coffee, New Look, Sports with rendered elevations and a flat roof.
Direct and The Works.
Internally, the property provides two very well
Cheltenham Borough Council has recently announced a £725,000 investment in the configured retail units, with ground floor sales
pedestrianised section of High Street between Winchcombe Street and Bath Road, a pitch accommodation and first and second floor
that includes the subject property. They have said that the street paving will be improved and ancillary accommodation.
new street furniture will be provided. The work is scheduled for completion later this year.
Fawcett Mead
CHELTENHAM – 91-97 HIGH STREET
ACCOMMODATION 6
The property comprises the following approximate net
internal floor areas:
91 High Street
Ground Floor Sales 5,095 sq ft
Ground Floor ITZA 1,339 units
First Floor Ancillary 4,916 sq ft
Second Floor Ancillary 1,784 sq ft
Total 11,795 sq ft
Fawcett Mead
CHELTENHAM – 91-97 HIGH STREET
93-97 High Street
Ground Floor Sales 4,545 sq ft
Ground Floor ITZA 1,158 units
Total 4,545 sq ft
TENURE
Freehold.
TENANCY
The entire property is let to Argos Limited on full
repairing and insuring terms at a rent of £190,000 per
annum. The lease commenced on 16 July 2015 and
expires 18 August 2021.
The new lease was signed in August 2016 and the
previous passing rent had been £261,500 per annum.
No. 93-97 High Street is sub-let to Superdrug Stores
Plc on effective FRI terms, on a five year sublease,
which commenced on 19 August 2016 and expires 18
August 2021, at a current rent of £85,000 per annum.
7
COVENANT
Fawcett Mead
CHELTENHAM – 91-97 HIGH STREET
Argos Limited (Company No. 01081551) is one of the largest retailers in the UK,
with 740 stores and 430 million website visits annually. It offers more than 33,000
products through its website to its 130 million annual customers. The company was
acquired by Sainsburys for £1.4 billion in September 2016.
In the past three years the company has reported the following figures in their
annual accounts:
11/03/2017 27/02/2016 28/02/2015
Turnover £4,285,775,000 £3,995,930,000 £3,919,176,000
Pre-Tax Profit (£25,664,000) (£178,360,000) £97,146,000
Shareholder’s Funds £736,415,000 £938,357,000 £1,423,179,000
Superdrug Stores PLC (Company No. 00807043) is one of the largest health and
beauty retailers in Europe and has nearly 800 stores in the UK and Ireland.
In the past three years the company has reported the following figures in their
annual accounts:
31/12/2016 31/12/2015 31/12/2014
Turnover £1,213,600,000 £1,099,223,000 £1,047,696,000
Pre-Tax Profit £80,385,000 £56,842,000 £35,002,000
Shareholder’s Funds £225,898,000 £192,738,000 £152,064,000
RENTAL ANALYSIS 8
The passing rent of £190,000 pa for the entire property was
agreed at the recent lease renewal. We devalue the rent to
show £72 Zone A, with first floor ancillary at £5.00 psf, second
floor ancillary at £2.50 psf, a 5% discount for quantum on 91
High Street and a 10% discount for management / voids on
93-97 High Street.
This compares very favourably with the prime section of High
Street, which is just the other side of the new John Lewis store.
The most recent letting in this pitch, at 163-165 High Street,
Fawcett Mead
CHELTENHAM – 91-97 HIGH STREET
in May 2017, reflects £160.60 Zone A.
Number 124 High Street was let in June 2016 at £120 Zone
A and two doors away from the subject property, 101 High
Street was let to The Works in October 2017 at £74 Zone A.
In our opinion, the passing rent on this property is off a very
low base and has excellent potential for growth.
INVESTMENT COMPARABLES
Address Tenant/s Term Certain Date Price NIY
211 High Street Caffe Nero 2 years Current £1.36m 4.50%
84 Promenade White Company 1 year Feb 2018 £3.35m 4.31%
124 High Street Flight Centre 9.50 years Sep 2016 £2.00m 4.94%
162/164 High Street EE 4.50 years Apr 2016 £3.97m 3.95%
This pitch will
9
FT
be transformed
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upon the opening
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of a John Lewis
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department
SE PA
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store nearby
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later this year
5
11
Fawcett Mead
CHELTENHAM – 91-97 HIGH STREET
Let 5/2017
£160.60 ZA
Let 10/2017
£74 ZA
RR 5/2016
£160.60 ZA
Sold 4/2016
TE
£3.97m
ET
AR
CIG
E
EPC 3.95% NIY
The property has an EPC Rating of
Let 6/2016
E (117).
£120 ZA
VAT Sold 9/2016
4.94% NIY
We understand that the property is
elected for VAT. It is anticipated that
the sale will be treated as a transfer For indicative purposes only.
of a going concern (TOGC). Title plan available upon request. HE
T
AR N
H ATIO
IS
IT ND
BR FOU
KEY
PEDESTRIAN AREA TO BE IMPROVED
BY THE COUNCIL DURING 2018
10
Fawcett Mead
CHELTENHAM – 91-97 HIGH STREET
PROPOSAL
We are instructed to seek offers
in excess of £2,750,000 (two
million seven hundred and fifty
thousand pounds), subject to
contract and VAT, for our client’s FURTHER INFORMATION
freehold interest. A purchase at
this level would reflect a net initial
yield of 6.50%, after allowing for Richard Bashford Jonathan Mills Craig Cawthorne
purchasers costs of 6.42%. richard@fawcettmead.co.uk jonathan@fawcettmead.co.uk craig@fawcettmead.co.uk
020 7182 7497 020 7182 7483 020 7182 7498
07774 619 204 07795 333 195 0781 1141 407
Misrepresentation Act: The particulars in this brochure are believed to be correct, but accuracy cannot be guaranteed and they are expressly excluded from any contract. SUBJECT TO CONTRACT
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