MCDONALD'S - Prime Freehold Retail Investment - 162-164 HIGH STREET SOUTHEND-ON-SEA SS1 1JX - LoopNet
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MCDONALD’S 162-164 HIGH STREET • SOUTHEND-ON-SEA • SS1 1JX Prime Freehold Retail Investment
PRIME FREEHOLD MCDONALD’S
RETAIL INVESTMENT 162-164 HIGH STREET
02 SOUTHEND-ON-SEA • SS1 1JX
EXECUTIVE SUMMARY
• 100% prime restaurant • Freehold.
investment including • Let to McDonald’s Real Estate LLP
underutilised upper parts. for a term of 10 years until 22nd
• Southend-on-Sea is a major November 2025 (approximately 3.9
seaside resort and commuter town years unexpired) at a current rent
as well as one of Essex’s principal of £200,000 per annum reflecting
commercial centres. just £28.86 per sq ft (overall).
• Southend attracts over 7 million • Guaranteed by McDonald’s
tourists per year and is located Restaurants Limited.
approximately 45 miles (72km) • McDonald’s Real Estate LLP has a
east of London. D&B rating of 5A 1 and Creditsafe
• The property has a prominent rating of 100.
position fronting the High Street, • McDonalds have been in
just 100 metres south of The occupation since 1990.
Victoria Shopping Centre.
• The restaurant trades well and
• Neighbouring occupiers include offers the opportunity for a
Holland & Barratt, 02, Vodafone, lease regear with the tenant
Clintons Cards, Costa Coffee, closer to expiry.
Metro Bank, HSBC, WHSmith
• There is also potential for a
and Boots.
comprehensive refurbishment
• The double frontage property and change of use of the upper
provides 6,931 sq ft NIA of floors to residential use which are
ground floor retail and ancillary in poor condition and significantly
accommodation over two underused by the tenant (subject
upper floors. to planning and negotiations with
the tenant).
Offers are sought in excess of £2,500,000 (Two Million
Five Hundred Thousand Pounds) reflecting an attractive 100% PRIME RESTAURANT
Net Initial Yield of 7.52% and a low capital value of £361
per sq ft (assuming purchaser’s costs of 6.38%). INVESTMENT INCLUDING
UNDERUTILISED UPPER PARTS
STANSTEAD
AIRPORT
BISHOP’S
A120
PRIME FREEHOLD STORTFORD
RETAIL INVESTMENT
A1(M) COLCHESTER
03 M11 A131
A12
A10
HARLOW CHELMSFORD
LOCATION
A414
Southend-on-Sea is one of Essex’s principal commercial centres and attracts M25
over 7 million visitors per year. It is located approximately 45 miles (72km)
east of London with easy access to/from London by road via the A13 and A10 A130
M11 M25
A127 and by direct train in less than one hour to London Fenchurch Street. SHENFIELD
M1 BRENTWOOD
The renowned and popular seaside resort boasts the largest leisure pier
in the world and is positioned 20 miles (32km) south east of Chelmsford, CENTRAL A12
A127 LONDON
41 miles (66km) south of Colchester and 15 miles (24km) east of Billericay. LONDON SOUTHEND
TO A13 AIRPORT
HEATHROW A13
Demographics Commuter Town AIRPORT
LONDON SOUTHEND
Southend-on-Sea is the tenth most Southend provides excellent LIVERPOOL CITY AIRPORT -ON-SEA
STREET
densely populated area in the UK connections with central London and
STATION A2
(outside of the London Boroughs) has become a popular commuter M25
with a resident population of town. A BBC report in 2018 TO GATWICK A2
approximately 180,000 people. highlighted that Southend was found AIRPORT
There are few competing towns to be one of the most affordable
locally and therefore Southend places for London commuters to
London Southend Airport is located 1.9 miles
benefits from a large and loyal live when taking into account house
primary catchment population, with prices, rents and train season tickets. (3.1 km) north of the property and is looking forward
around 310,000 persons being within to the summer of 2022 following the announcement
The subject property is 215 metres from by Easyjet that they will operate flights to Palma de
a 20 minute drive time. Analysis of
Southend Victoria and 235 metres from Mallorca and Malaga from London Southend Airport.
this catchment reveals a moderately
Southend Central stations.
affluent population.
Southend Central station provides
regular and frequent services to
London Fenchurch Street Station
with a fastest journey time of 51
20 minutes. Southend Victoria station
minutes also provides frequent rail services to
drive London Liverpool Street with a
fastest journey time of 60 minutes.
51 60
MINS MINS
310,000 SOUTHEND LONDON LONDON
CENTRAL / FENCHURCH LIVERPOOL
VICTORIA STREET STREET
STATIONS
PRIME FREEHOLD MCDONALD’S
RETAIL INVESTMENT 162-164 HIGH STREET
04 SOUTHEND-ON-SEA • SS1 1JX
VACANT
VACANT
NH
S
TOWN CENTRE
COOKIES
VICTORIA
& GROCER
3RD SPACE
& CONES
GADGETS
IES
ESSEX BEAUTY
PALACE
N
ATIO
LTER
ER A
UND
G
UN
YO
IS ON
T / AV
VACAN
N
PRIME FREEHOLD MCDONALD’S
RETAIL INVESTMENT 162-164 HIGH STREET
05 SOUTHEND-ON-SEA • SS1 1JX
TO LONDON
SOUTHEND
A127
SOUTHEND SITUATION
AIRPORT VICTORIA VICTORIA STATION
AVENUE B1015 The property benefits from a 100% prime position on
QUEENSWAY the High Street in the centre of Southend-on-Sea.
A13 BETTER The restaurant is prominently positioned on the eastern
QUEENSWAY
side of the High Street at its northern end, less than
Victoria PROJECT
100m from the Victoria Shopping Centre, between
VICTORIA SHOPPING CENTRE
A13
Southend Victoria and Southend Central Stations and
Essex Street
a short walk from four large car parks.
Neighbouring occupiers include:
UNIVERSITY OF ESSEX VICTORIA SHOPPING CENTRE
HIGH
STREET
Warrior Square
A1160
SOUTH ESSEX COLLEGE
SOUTHEND Also in close proximity to the restaurant are the
CENTRAL STATION University of Essex Southend Rooms and South Essex
NCP Southend College’s Main campus including a new £27m library.
Central Station Tylers Avenue Together they are home to over 1,000 students. Since
2019 McDonalds has been delivering to these and the
large office and residential buildings that line Victoria
Avenue between 250-750 metres from the property
as well as other significant local catchments.
SOUTHEND ROOMS
THE FORUM LIBRARY
ROYALS SHOPPING CENTRE
SOUTHEND CLIFF GARDENS
GROSVENOR CASINO
WESTERN
ESPLANADE
ADVENTURE ISLAND
RIVER THAMES
PRIME FREEHOLD MCDONALD’S
RETAIL INVESTMENT 162-164 HIGH STREET
06 SOUTHEND-ON-SEA • SS1 1JX
INFRASTRUCTURE PROJECTS
Business owners and the Local Better Queensway
Authority are proactively improving The Better Queensway masterplan is
Southend with significant monies a £575m project which will facilitate
being invested, strategies being the construction of 1,760 new homes
executed and regular events on a large site by Queensway, just
being hosted: 350 metres to the north east of the
property and the High Street. The
Better Southend Local Council secured approval of
Southend has secured £25m of their hybrid Planning Application in
funding which is being allocated to April 2021. Enabling works will start
improving transport to / from and shortly so that work to deliver new
within the Borough. homes can be started this year.
SOUTHEND-ON-SEA
Southend Business Improvement District & Cultural Events
A Business Improvement District is a defined geographical area and within it
businesses opt to pay an additional amount so that services can be provided
that they, as a group of businesses, want to have.
The Southend BID was formed in 2013 to ensure that the High Street and
Seafront make the most of their combined potential via collaboration and
their aims are to raise the profile of Southend, increase footfall, dwell time
and spend within the BID zone and Southend generally.
Southend hosts a Horror Film Festival, a Jazz Festival and a (non-Horror!)
Film Festival. Regular events are scheduled throughout the year to mark
special occasions (e.g. Chinese New Year) with music, dancing, fire works
displays and other free entertainment.
BETTER QUEENSWAY CGI VISION
MCDONALD’S
162-164 HIGH STREET
07 SOUTHEND-ON-SEA • SS1 1JX
DESCRIPTION
The property comprises a double frontage period
terraced building arranged over ground and two upper
floors. McDonalds operate the restaurant and kitchens
on the ground floor, with additional ancillary
accommodation on part first floor.
The remainder of the first floor and the whole of the
second floor, are underutilised by the tenant and in
poor condition. The unit benefits from rear servicing via
Leather Lane and there is a freezer room and goods lift.
The latest McDonalds corporate fit out has been
incorporated by way of a Licence for Alterations
dated March 2016.
A VIRTUAL TOUR OF THE PROPERTY
IS AVAILABLE BY CLICKING HERE
THE UPPER PARTS
ARE SIGNIFICANTLY
UNDERUTILISED ACCOMMODATION
BY THE TENANT. The property was measured by Plowman Craven in April
2018 in accordance with the RICS Code of Measuring
Practice (Sixth Edition). The approximate NIA floor areas
of the property are as follows:
Area Sq M Sq Ft ITZA
Ground Floor Sales 337.1 3,629 1,395
1st Floor Ancillary 212.8 2,290
2nd Floor Ancillary 94.0 1,012
Total 643.9 6,931 1,395
A copy of the report including floor plans are available
upon request.
PRIME FREEHOLD MCDONALD’S
RETAIL INVESTMENT 162-164 HIGH STREET
08 SOUTHEND-ON-SEA • SS1 1JX
TENURE
Freehold.
TENANCY
The property is let to McDonald’s
Real Estate LLP (D&B rating of 5A1
and Creditsafe score of 100) for a term
of 10 years until 22nd November 2025
(approximately 3.9 years unexpired).
The lease is guaranteed by
McDonald’s Restaurants Limited.
The rent passing totals £200,000
per annum reflecting just £28.86
per sq ft (overall).
McDonald’s have been in occupation
of the subject property since 1990.
There is a franchise lease between
McDonald’s and Mark Charles Bartrip
from 26th June 2016 until 22nd
August 2024.
This store is one of three restaurants
operated by the franchisee in
Southend, a respected, popular and
successful local businessman with
deep ties and active involvement
within the Southend-on-Sea business
community. This restaurant is the
franchisee’s strongest performer and
we believe his businesses have a
turnover in excess of £12m.
PRIME FREEHOLD MCDONALDS
RETAIL INVESTMENT 162-164 HIGH STREET
09 SOUTHEND-ON-SEA • SS1 1JX
TENANCY SCHEDULE
Tenant Area Lease Lease Rent Rent
(sq ft) Start Expiry (£/pa) (£/psf) Comments
The lease is guaranteed by
McDonald’s 23 Nov 22 Nov
6,931 £200,000 £28.86 McDonald’s Restaurants Limited
Real Estate LLP 2015 2025
and there is a franchisee lease.
COVENANT INFORMATION
McDonald’s is an American fast food restaurant chain established in 1940 and is regarded as the
9th most valuable global brand. McDonald’s is the world’s largest restaurant chain, serving
approximately 69 million customers daily in over 100 countries across approximately 37,000
outlets. There are 1,355 McDonalds restaurants in the UK.
Covid-19 restrictions have led to significant acceleration of digital innovation with McDonalds
investing heavily in to their digital ordering apps and delivery partnerships.
The tenant, McDonald’s Real Estate LLP (Company No. OC303157) has a Dun & Bradstreet
rating of 5A 1 “Minimum risk of business failure”, a score of 86 from Creditsafe and has
reported the following financial information for the three years up to December 2020:
Year to Date 31 Dec 2020 31 Dec 2019 31 Dec 2018
Turnover £85,481,000 £105,941,000 £90,706,000
Pre-Tax Profits £43,609,000 £450,840,000 £599,059,000
Shareholder Funds £116,078,000 £117,291,000 £121,875,000
The guarantor, McDonald’s Restaurants Limited (Company No. 00675247) has a Dun &
Bradstreet rating of 5A 2 “lower than average risk of business failure”, score of 86 from Creditsafe
and has reported the following financial information for the three years up to December 2020:
Year to Date 31 Dec 2020 31 Dec 2019 31 Dec 2018
Turnover £970,266,000 £1,402,777,000 £1,514,374,000
Pre-Tax Profits -£23,350,000 £405,994,000 £406,278,000
Shareholder Funds £960,120,000 £1,014,114,000 £1,112,189,000
PRIME FREEHOLD MCDONALD’S
RETAIL INVESTMENT 162-164 HIGH STREET
10 SOUTHEND-ON-SEA • SS1 1JX
ASSET MANAGEMENT POTENTIAL
We understand the unit trades very well. The challenges of Covid-19 have
led to an increased use of technology and greater demand from customers
seeking delivery locally. As a result the restaurant is thriving with sustained
demand from traditional walk-in customers too.
Lease Renewal Conversion of the upper parts
Given the above, we anticipate a The upper parts, in particular
strong likelihood of a lease renewal the 2nd floor are underutilised by
in November 2025 (in what is the tenant and are in very poor
anticipated as a stronger overall decorative order. There is therefore
macroeconomic climate). potential for a comprehensive
refurbishment and change of use
of the upper floors to residential
use (subject to planning and
negotiations with the tenant).
UK GDP FORECASTS: OECD
2021 2022 2023
7%
6%
5%
4%
3%
MCDONALD’S HAVE BEEN IN 2%
OCCUPATION OF THE SUBJECT 1%
PROPERTY SINCE 1990. 0%
Japan Germany Canada USA Italy France UKPRIME FREEHOLD MCDONALD’S
RETAIL INVESTMENT 162-164 HIGH STREET
11 SOUTHEND-ON-SEA • SS1 1JX
VAT VIRTUAL TOUR CONTACT
The property is elected for VAT and A virtual tour of the property PROPOSAL Barry Marshall
therefore we expect that the sale is available by clicking here. Offers are sought in excess of £2,500,000 (Two +44 (0)203 026 1533
will be treated as a Transfer of Going
Million Five Hundred Thousand Pounds) reflecting +44 (0)7968 037 643
Concern (TOGC) for VAT purposes.
DATAROOM an attractive Net Initial Yield of 7.52% and a low b.marshall@marshallre.co.uk
EPC A data room has been set up which
contains information on the sale of
capital value of £361 per sq ft (assuming
A Copy of the EPC Report is the property. Access is available purchaser’s costs of 6.38%).
available upon request. upon request.12
marshallre.co.uk
Important Notice: Marshall Real Estate Investment
Limited and their clients give notice that: 1. They are
not authorised to make or give any representations
or warranties in relation to the property either
here or elsewhere, either on their own behalf or on
behalf of their client or otherwise. They assume no
responsibility for any statement that may be made in
these particulars. These particulars do not form part
of any offer or contract and must not be relied upon
as statements or representations of fact. 2. Any
areas, measurements or distances are approximate.
The text, photographs and plans are for guidance
only and are not necessarily comprehensive.
It should not be assumed that the property has
all necessary planning, building regulation or other
consents and Marshall Real Estate Investment
Limited have tested any services, equipment
or facilities. Purchasers must satisfy themselves
by inspection or otherwise. January 2022.
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