MID SUSSEX RETAIL PARK - B&Q AND PETS AT HOME BURGESS HILL, RH15 9UG PRIME SOUTH EAST RETAIL WAREHOUSE INVESTMENT OPPORTUNITY WITH RPI LINKED ...
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MID SUSSEX RETAIL PARK
MID SUSSEX RETAIL PARK, B&Q AND PETS AT HOME , BURGESS HILL , RH15 9 UG
B&Q AND PETS AT HOME
BURGESS HILL, RH15 9UG
P R I M E S O U T H E A S T R E TA I L W A R E H O U S E I N V E S T M E N T
O P P O R T U N I T Y W I T H R P I L I N K E D R E N TA L U P L I F T S
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MID SUSSEX RETAIL PARK, B&Q AND PETS AT HOME , BURGESS HILL , RH15 9 UG INVESTMENT SUMMARY • Burgess Hill is situated in the county of West Sussex in the South East of England, 36 miles south of Central London. • Affluent population with 42.3% of the 15 minute drive time catchment within the top Acorn Group ‘Affluent Achievers’. • Very limited supply of retail warehousing in the town and the surrounding area. • The property was developed in 2013 to a BREEAM standard of ‘Very Good’. • The scheme extends to 54,429 per sq ft GIA. • Let to B&Q plc and Pets at Home Ltd – ‘5A1’ covenants – on 15 year leases with no breaks, giving a WAULT of 11.00 years. • Current income of £869,941 per annum, off low rents of £15.46 per sq ft and £18.57 per sq ft. • The B&Q lease benefits from 5 yearly RPI linked rent reviews with collars and caps of 1.0% and 2.5% per annum compounded. • Significant RPI related reversion in the B&Q rent and potential reversion in the Pets at Home rent, both in 2018. • The property benefits from a ‘wide bulky goods’ planning consent and unimplemented mezzanine consent. • Freehold. • We are instructed to seek offers in excess of £14,810,000 (Fourteen Million Eight Hundred and Ten Thousand pounds), subject to contract and exclusive of VAT. This reflects an attractive net initial yield of 5.50% (assuming purchaser’s costs at 6.8%). • The yield rises to an anticipated 6.09% following a rent review settlement at £22.00 per sq ft, upon the Pets at Home rent review in July 2018 and the RPI linked B&Q rent review in August 2018. 2
MID SUSSEX RETAIL PARK, B&Q AND PETS AT HOME , BURGESS HILL , RH15 9 UG
“ LET TO B&Q AND PETS AT HOME
WITH A WAULT OF 11.0 YEARS
“
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MID SUSSEX RETAIL PARK, B&Q AND PETS AT HOME , BURGESS HILL , RH15 9 UG
LOCATION
A3 M20 M2
Epsom
A243
Woking M25 A217 A23 M20
M3
Farnborough A3 Caterham
Burgess Hill is located in the affluent county of West Sussex in the South East of England. A331 M26
Aldershot A21 A228
The town lies approximately 11 miles north of Brighton, 26 miles south west of Tunbridge Guildford
Wells, 15 miles south of Crawley and 36 miles south of Central London. Farnham A22
A24 Edenbridge Tonbridge
A31 M23
A21
The town benefits from excellent road communications, being adjacent to the A23, which A3
Gatwick
Airport
Royal
provides access north to Crawley and Junction 11 of the M23 motorway, which, in turn, Tunbridge
Crawley Wells
leads to the M25 motorway. Access is also provided south, via the A23, to Brighton and Haslemere A22
the A27, connecting east and west along the coast. London Gatwick International Airport A3 Horsham
A21
is situated 20 miles north of the town. A23
Billingshurst A26
A272 A272
Burgess Hill railway station offers direct services to both London Bridge and London A272
Victoria with fastest journey times of approximately 50 minutes, whilst also running local Uckfield
services to Brighton and surrounding towns. A24
BURGESS HILL A26
A23 A22
SITUATION A27
Chichester
A280 A27
A27
A259 Worthing Brighton A26
The subject property is situated approximately 1.5 miles from the town centre in a Bognor Regis
prominent and highly visible edge-of-town location, on the A273 (Jane Murray Way), circa Eastbourne
3 miles from the A23.
The scheme is positioned to the north west of the roundabout junction of Charles Avenue
and Hammonds Ridge, adjacent to a Tesco superstore. The immediate surrounding area is
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OA
predominantly office and light industrial, whilst there is a high concentration of residential EN
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A273 JANE MURRAY WA
ESC
LONDON ROAD
CR
areas to the north and east.
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Local bus services connect the property with the town centre.
ROA
C WAY
MILL
CIVI
VICTORIA ROAD
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TORIA WAY
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STATIO
YORK ROAD BETH AVE
QUEEN ELIZA N
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VIC T
O RIA CLOSE
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CONSORT WAY
CH A R
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BURGESS HILL
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RAILWAY STATION
JUBILEE WAY
STATION ROAD
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STATION ROAD
R I A GA
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AV
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A 27
TO
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VI
3
ALBERT DRIVE
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EMN
CHARLES AVE
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RA
MEADOW LANE
W HAMMONDS R
Y
AY IDGE
AD
N RO
P O T TER S L A N E
A2
LONDO
73
E
RID G
HA MM O N D S
SUBJECT
PROPERTY
A2
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JAN
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WAY NCT
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A 2 73 RY R
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MID SUSSEX RETAIL PARK, B&Q AND PETS AT HOME , BURGESS HILL , RH15 9 UG
DEMOGRAPHICS Weekly Catchment Expenditure versus CACI Average
Burgess Hill is a fast growing affluent town in West Sussex. It has a resident population of approximately
30,635 people, whilst the population of ‘Mid Sussex’ is estimated at 155,900 people, according to the
2011 Census. The town is also seeing significant amounts of residential development with the Burgess
Hill Town Wide Strategy aiming to deliver 4,000 new homes in the town.
Within the subject property’s 15 minute drive time catchment, 83.5% of households are categorised
within the 3 highest Acorn Category Groups (ABC1), significantly above the CACI base average of 58.8%.
The highest Acorn Group ‘Affluent Achievers’ accounts for 42.3% of the catchment, significantly above
the CACI base average of 22.7%.
A summary of key Acorn sub-categories is provided below:
% Versus CACI Base Comparison to Base
Acorn Group Category % of Catchment Social Grade Description
Average (GB) Average
Executive Wealth 24.1 +95 Higher and intermediate managerial /
Affluent Achievers AB +45%
admin / professional
Mature Money 15.9 +77
C1 Supervisory / professional +13%
Rising Prosperity Career Climbers 15.8 +159
C2 Skilled manual workers -11%
Successful Suburbs 8.2 +33
Comfortable Communities Semi-skilled / unskilled workers /
Steady Neighbours 9.3 +12 DE -45%
unemployed
Modest Means 1.6 -79
Financially Stretched
Striving Families 6.2 -22 CACI provide that 75% of Mean Household Income
households within the 15 minute
CACI provide that within the 15 minute drive time catchment, the mean annual income is £47,644, drive time catchment are privately High £45k - £60k+
which is 30.7% above the base average. owned, 18% above the average. Very High £60k+
15 min drivetime
Conversely, just 10% of the Southwater
Haywards Heath
catchment live in ‘social rented’
homes, 42% below the average.
£ £ £ £
Car ownership is 21% higher than
the UK average. This information Burgess Hill
describes an affluent car-borne Henfield Hurstpierpoint
population.
£40k to £60k pa £60k to £80k pa £80k to £100k pa £100k+ pa
Ringmer
22% above average 51% above average 76% above average 105% above average The level of unemployment for Steyning
Catchment = 21.4% Catchment = 12.4% Catchment = 7.4% Catchment = 8.2% people aged between 16 and 74
Lewes
Average = 17.5% Average = 8.2% Average = 4.2% Average = 4.0% stands at 1.3%, significantly less
than the CACI base average of 2.0%. Southwick
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MID SUSSEX RETAIL PARK, B&Q AND PETS AT HOME , BURGESS HILL , RH15 9 UG
RETAIL WAREHOUSE PROVISION
There is a substantial undersupply of retail warehousing in Burgess Hill and the surrounding
area. The only other retail warehouse provision in the town is located on the B2036
(London Road) and comprises a Wickes (19,776 sq ft), Halfords (7,676 sq ft) and Carpetright (8,907
sq ft). The Wickes was recently sold by Travis Perkins as part of a sale and leaseback portfolio and
the Halfords and Carpetright are owned by Canada Life.
The lack of retail warehouse supply in the town and the surrounding area, coupled with the
prominent positioning of the subject property, provides B&Q and Pets at Home with a competitive
trading platform from where we understand each tenant trades well.
The table below identifies the DIY stores within a 15 mile radius of the subject property, and further
highlights the lack of competition for B&Q in Burgess Hill.
Town Retailer Size (sq ft) Distance (miles)
0-5 Miles
Burgess Hill Wickes 19,776 1.0
5-10 Miles
Hove Homebase 35,550 9.3
FOODSTORE PROVISION
10-15 Miles
The town’s dominant food offer is the 78,000 sq ft Tesco store, situated
B&Q 42,034 10.0
Brighton adjacent to the subject property. The only other substantial food offer is the
Wickes 28,400 10.1 Waitrose in the centre of Burgess Hill. Sainsbury’s, Morrisons and Asda are not
in the town.
Shoreham Homebase 23,697 12.2
Lewes B&Q 36,192 13.7
Shoreham
Crawley
B&Q
Homebase
37,373
35,444
15.0
15.0
TOWN CENTRE
The retail provision in the town centre is focused around The Martlets Shopping
There are no other national multiple pet shops/operators in Burgess Hill. The nearest Pets at Home Centre, which comprises 124,000 sq ft and is anchored by Lidl, Iceland, Argos
stores are in Hove (9.4 miles) and Horsham (14.5 miles). and New Look. The owner, NewRiver Retail, are currently redeveloping the
scheme to include a new cinema, hotel, residential apartments and improved
retail and leisure offer.
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MID SUSSEX RETAIL PARK, B&Q AND PETS AT HOME , BURGESS HILL , RH15 9 UG
DESCRIPTION
The subject property was constructed in 2013 and comprises an attractive and modern The property was designed and constructed to a BREEAM standard of ‘Very Good’ and
development of circa 54,429 sq ft GIA, arranged across 2 units and there is also a garden centre. includes permeable paving, solar hot water and rainwater harvesting tanks. The fabric
of the building exceeds the requirements of Building Regulations which minimises the
The units are of steel portal frame construction finished to a high specification with property’s future carbon footprint.
significant glazing and prominent tenant signage.
Customer access and egress to the property is from a dedicated junction on the A273
(Jane Murray Way). The tarmacadam surfaced customer car park is situated to the front
EPC
of the units with approximately 196 parking spaces, giving a good ratio of 1 space per 278 The EPC rating for both units is as follows:
sq ft GIA.
Unit Tenant Rating
The service yard is situated to the rear of the property and is accessed from a dedicated
service road, accessed off Charles Avenue to the east of the site. A B&Q A 16
B Pets at Home A 23
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MID SUSSEX RETAIL PARK, B&Q AND PETS AT HOME , BURGESS HILL , RH15 9 UG
TENURE
The site delineated in red is held freehold. This is provided
for indicative purposes only.
SIZE
Access to The site extends to approximately 4.25 acres (1.7
Service Area
hectares), giving a site cover of 26.8%.
PLANNING
The property benefits from a ‘wide bulky goods’ consent
allowing the sale of:
Charles Ave
• DIY builders merchant and home improvements
• Kitchens, bathrooms and associated accessories
• Wall and floor coverings
• Furniture, homewear and furnishings
nue
• Electrical and gas products
Jan • Motor parts/car accessories
eM
urr • Pets and pet supplies and accessories
ay
Wa
y • G
arden supplies and equipment (including plants)
and seasonal goods (related to Christmas).
Goods falling outside this range may be sold where they
form a minor ancillary part of the store’s operations.
Copies of the planning consents are available on request.
“ CURRENT INCOME OF £869,941 PER
ANNUM, OFF LOW RENTS OF £15.46 PER
SQ FT AND £18.57 PER SQ FT.
“
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MID SUSSEX RETAIL PARK, B&Q AND PETS AT HOME , BURGESS HILL , RH15 9 UG
TENANCIES
The scheme is let to 2 market leading ‘5A1’ retailers and benefits from a WAULT of 11.00 years.
Next Rent Current Rent Current Rent
Unit Tenant GIA (Sq ft) Lease Start Date Expiry Date Comments
Review (per annum) (per sq ft)
Original planning consent included a trading
A B&Q plc 45,272 19/08/2013 18/08/2028 19/08/2018* £699,941 £15.46
mezzanine of 10,000 sq ft.
Assumed as 8,500 sq ft in the rent review
B Pets at Home Ltd 9,157 15/07/2013 14/07/2028 15/07/2018 £170,000 £18.57
clause.
54,429 £869,941 £15.98
*The B&Q lease benefits from 5 yearly upward only rent reviews, linked to RPI, with collars and caps of 1.0% and 2.5% per annum compounded.
B&Q – RPI Linked Rent Reviews
We set out below RPI information based on actual and forcasted RPI figures:
Unit Year RPI figure (%) B&Q Cap (%) Rent
2014 2.52 £717,440
A 2015 1.02 £724,757
2016 1.86 2.50 £738,238
2017 3.20* £756,694
B
2018 3.50* £775,611
*Provided by the Office of Budget Responsibility.
Based on the above, the B&Q rent will increase to £775,611 per annum at
the August 2018 rent review.
The Office of Budget Responsibility forecast that RPI will be in excess of
3.0% in years 2019, 2020 and 2021. It is therefore anticipated that the 2.5%
rental cap will be achieved in these years, following the August 2018 rent
review.
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MID SUSSEX RETAIL PARK, B&Q AND PETS AT HOME , BURGESS HILL , RH15 9 UG
RENTAL COMMENTARY
Good quality locations, especially in the South East of England, have continued to see
strong levels of tenant demand over recent years. The lack of available sites and the high
levels of consumer spending have resulted in increasing rental levels in locations such
as Burgess Hill.
In particular, we believe the ‘DIY’ market is particularly strong at the current time,
with good trading performances from established occupiers, being B&Q, Wickes and
Homebase, and increased competition following Bunnings’ acquisition of the Homebase
business. We would highlight recent relevant transactions:
Wickes - Burgess Hill
Wickes have agreed to take a 15 year lease at a rent of £325,000 per annum equating to
£16.43 per sq ft.
COVENANT INFORMATION B&Q - St Albans
B&Q is the largest home improvement and garden centre retailer in the UK, We understand B&Q have agreed to pay a rent equating to circa £24.00 per sq ft on a new
employing over 27,000 people across their 300 strong UK store portfolio. 45,000 sq ft unit.
Their most recent accounts are as follows: Wickes - Kingston
We understand an uplift was agreed at the 2015 rent review to a rent equating to £28.00
Year Ending Sales Turnover Pre Tax Profit / Net Worth D&B Rating per sq ft on the 25,200 sq ft unit. They also agreed a 15 year reversionary lease.
(000’s) Loss (000’s) (000’s)
Tapi - Hove
31/01/2016 £3,704,000 -£68,900 £4,493,200
5A1
31/01/2015 £3,664,000 £5,400 £4,368,900 We understand that Tapi have agreed to take the 10,000 sq ft former Staples unit on
Davigdor Road, at a rent equating to £32.00 per sq ft with 9 months’ rent free.
The B&Q rent review is related to RPI, subject to a 2.5% cap.
Pets at Home has a rent review in July 2018, to open market value, and we would suggest
Pets at Home is the UK’s leading pet supplies retailer with more than 370 the unit is reversionary with an ERV in the region of £22.00 per sq ft. A rent review
stores and 6,000 employees. Their most recent accounts are as follows: settlement at this level would result in an uplift to £187,000 per annum, based on a floor
area of 8,500 sq ft, as stated in the rent review clause.
Year Ending Sales Turnover Pre Tax Profit / Net Worth D&B Rating
(000’s) Loss (000’s) (000’s) VAT
31/03/2016 £739,726 £81,843 £598,310 The property has been elected for VAT, however, it is anticipated that the transaction will
5A1
26/03/2015 £689,697 £79,920 £517,138 be treated as a Transfer of a Going Concern (TOGC).
10MID SUSSEX RETAIL PARK, B&Q AND PETS AT HOME , BURGESS HILL , RH15 9 UG
11MID SUSSEX RETAIL PARK, B&Q AND PETS AT HOME , BURGESS HILL , RH15 9 UG
PURCHASE PRICE
We are instructed to seek offers in excess of £14,810,000 (Fourteen Million Eight Hundred and Ten Thousand Pounds), subject
to contract and exclusive of VAT. This reflects an attractive net initial yield of 5.50% (assuming purchaser’s costs at 6.8%).
The yield rises to an anticipated 6.09% following a rent review settlement at £22.00 per sq ft, upon the Pets at Home rent review in
July 2018 and the RPI linked B&Q rent review in August 2018.
The property is held in a Jersey based SPV and further details are available upon request.
FURTHER INFORMATION
Should you require any further information on the property or wish to arrange an inspection, please do not hesitate to contact:
Hamish Whiteman Miles Marten
hamish@stauntonwhiteman.co.uk T: 020 7317 3777 / M: 07770 748 290
m.marten@wilkinsonwilliams.co.uk
Nick Staunton
nick@stauntonwhiteman.co.uk Jack Lloyd
T: 020 7317 3796 / M: 07747 883 231
j.lloyd@wilkinsonwilliams.co.uk
Staunton Whiteman LLP Wilkinson Williams LLP
9-10 Savile Row Heathcoat House
London 20 Savile Row
W1S 3PF London W1S 3PR
020 7287 2228
MISREPRESENTATION ACT 1967 AND DECLARATION
Messrs Staunton Whiteman LLP and Wilkinson Williams LLP for themselves and for the vendors of this property whose agents they are, give notice that:
i) the particulars are set out as a general outline only for the guidance of intending purchasers, and do not constitute, nor constitute part of, an offer or contract:
ii) all descriptions, dimensions, references to condition and necessary permission for use and occupation and other details are given in good faith and are believed to be correct, but any intending purchasers should not rely on them as statements or representations of fact and
must satisfy themselves by inspection or otherwise as to the correctness of each of them:
iii) no person in the employment of Staunton Whiteman LLP or Wilkinson Williams LLP has any authority to make or give any representation or warranty in relation to this property.
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