Chichester, 34-35 South Street, PO19 1EL
Chichester, 34-35 South Street, PO19 1EL Multi Let Freehold Retail Investment
INVESTMENT SUMMARY • Chichester is an affluent cathedral city in West Sussex • The city benefits from a diverse retailer mix, strong occupier demand and consistently low vacancy rates • South Street has seen strong rental growth over the last few years, which is likely to continue • 34 South Street let to Orvis Company,(The) until 28 September 2021. September 2016 rent review is outstanding with reversionary evidence • 35 South Street let to One Stop Convenience Store Limited t/a Tesco Express (5A 1 D & B rating) until 23 June 2023 • Future asset management opportunities • Total NIA 8,291 sq ft • Total net income £133,375 per annum exclusive • Offers are sought in excess of £2,285,000 subject to the tenancies and contract and exclusive of VAT • A purchase at this level would reflect a net initial yield of 5.50%, allowing for purchaser’s costs of 6.35%
LOCATION
CHICHESTER OCCUPIERS
The Cathedral City of Chichester is a historic and thriving administrative centre for West Sussex. The city is located approximately 65 miles south west of London, 15 miles east of Portsmouth and 30 miles west of Brighton. The city has excellent road communications, being situated on the A27 dual-carriageway which runs east to Worthing and Brighton and west to Portsmouth and Southampton where it connects with A3(M), M27 and M3 motorways. Gatwick Airport is located approximately 50 miles to the north east. By rail, there are frequent services to London Victoria. As a result, Chichester is a popular commuter location for those working in London’s City and West End, which has benefited the local economy accordingly.
RETAILING IN CHICHESTER Chichester City Centre is a vibrant and attractive retail centre with a core retail floor space totalling around 700,000 sq ft. The retail on offer in Chichester is concentrated within the city walls and is focused along two main shopping axes namely North Street/South Street and East Street/West Street; these intersect at the Market Cross. There are currently no managed shopping centres in Chichester and in light of the historic nature of the retail core, there is limited scope for future development. As a result, Chichester has one of the lowest vacancy rates in the UK. The city contains many national multiple retailers including; Marks & Spencer, Fat Face, Topshop / Topman, H&M, TK Maxx and River Island. These are accompanied by restaurant occupiers such as Cote Brasserie, Pizza Express, ASK, Brasserie Blanc and Wagamamas.
West Sussex PO19 1ES
SITUATION
ACCOMMODATION
The property is situated on the western side of South Street which is a prominent shopping destination within Chichester City Centre. South Street accommodates a number of popular fashion retailers including East, Mistral, White Stuff, JoJo Mama Bebe, Joules and Sea Salt. There are also a number of upmarket eateries including Wagamama, Cote Brasserie, Prezzo and Wahaca.
The property comprises a two-storey mid terraced building which is currently configured as two retail units over ground and first floors.
South Street is one of the main pedestrian routes into the centre, with Chichester train and bus stations located a short walk away from the property. The property is also within close proximity of a number of car parks which makes this an ideal location for a convenience store.
We calculate the accommodation to have the following approximate NIA:
35 South Street wraps around the back of 34 South Street so is slightly larger in floor area. Both shops are essentially open plan with ancillary storage and staff accommodation at first floor level.
Floor
Description
35 South Street Ground Ground Ground First Sub Total
Sales ITZA Storage Storage
34 South Street Ground Sales ITZA Ground Storage First Sub Total Grand Total
sq m
sq ft
EPC
200.11
2,154 855 610 2,102 4,866
C
187.01 318.19
1,412 765 2,013 3,425
E
770.25
8,291
56.67 195.28 452.06
131.18
TENANCIES AND COVENANT INFORMATION 35 South Street The property is let to One Stop Convenience Store Limited t/a Tesco Express who have a D & B rating of 5A 1. The lease is drawn on effectively full repairing and insuring terms, for a term of 10 years expiring on 23 June 2023. The lease has security of tenure. The passing rent is £75,500 per annum exclusive, agreed at the June 2013 lease renewal. The rent devalues to £77.50 per sq ft Zone A after applying £5 per sq ft on the ground floor ancillary and £3 per sq ft on the first floor ancillary space. There is an open market (upward only) rent review dated 23 June 2018.
34 South Street Orvis has been trading since 1856, specialising in the sale of fly-fishing and hunting equipment and clothing. As of 2017, Orvis has 69 retail stores and 10 outlets in the US, and 18 retail stores in the UK. The tenant has occupied the premises for over 10 years. The property is let to Orvis Company,(The). The lease is drawn on effectively full repairing and insuring terms, for a term of 15 years expiring on 28 September 2021. The lease has security of tenure. The passing rent is £62,000 per annum exclusive. The rent devalues to £73.25 per sq ft Zone A after applying £3 per sq ft on the first floor ancillary space. There is an open market (upward only) rent review dated 29 September 2016 which is outstanding and we believe it to be reversionary.
West Sussex PO19 1ES
RENTAL INCOME The current gross rent receivable is £137,500 pax. There is a fire escape licence with the adjoining land owner which gives rights to escape from the back of the property in emergencies. The licence fee is based upon 3% of the passing rent and is therefore currently £4,125 pax. This is currently paid by the landlord. The fee is payable quarterly in advance on the usual quarter days. Therefore the net receivable rent is £133,375 pax.
TENURE Freehold.
VAT The property is VAT elected. It is therefore assumed that any sale will be treated as a TOGC (Transfer of Going Concern) where possible.
RENTAL AND INVESTMENT COMMENTARY We believe that rental growth prospects for the property are excellent. Prime Zone A rents in Chichester are £190 per sq ft, with Zone A rates in South Street as high as £130 per sq ft. There is a restricted supply of retail accommodation in Chichester and very low vacancy rates, combined with strong levels of occupational demand.
CREW CLOTHING
35 South Street is currently passing off £77.50 per sq ft Zone A, while 34 South Street is passing off £73.25 per sq ft Zone A. Below we have summarised recent rental transactions on South Street, together with some investment transactions in the city: Rental Transactions Address
Tenant
Date
Transaction
Rent (HL)
57 South Street
Crew Clothing
Jan-17
OML
£80.00 ZA
46 South Street 66 South Street 29A South Street 35 South Street
CEX Exchange Headromance Subway Tesco Express
Sept-16 Sept-15 July-15 June-13
OML OML OML LR
£90.00 ZA £130.00 ZA £97.50 ZA £77.50 ZA
Investment Transactions Address
Tenant
30-33 South Street 24 South Street 16-17 North Street 4 East Street 81 North Street 13 North Street
Wahaca/Game Cath Kidston WH Smith Oasis Kooky’s Cupcakery Starbucks Coffee
Date
Price
NIY
June-17 Jan-17 Jan -17 Sept-16 Oct-15 June-15
£3,600,000 £1,522,500 £3,820,000 £2,550,000 £1,265,000 £1,645,000
5.20% 5.20% 4.02% 3.69% 5.50% 4.45%
West Sussex PO19 1ES
PROPOSAL
East Street
West Street
Offers are sought in excess of £2,285,000 (Two Million, Two Hundred and Eighty Five Thousand Pounds), subject to the tenancies and contract and exclusive of VAT. Assuming purchaser’s costs of around 6.35%, a purchase at this level would reflect an attractive net initial yield of 5.50%.
South Street
FURTHER INFORMATION Please contact the joint sole agents Flude Commercial and Fawcett Mead: Mark Minchell [email protected] 01243 929136 07711 630113
34/35 South Street South Pallant Car Park Southgate Car Park
Sebastian Martin [email protected] 01243 929135 07800 562509
Sout
hgat e
Jonathan Mills [email protected] 020 7182 7483 07795 333195
Long Stay Car Park
Train and Bus Stations
e venu A t arke
M
Flude Commercial for themselves and for the vendors or lessors of this property whose agents they are give notice that: i) these particulars are set out in good faith and are believed to be correct but their accuracy cannot be guaranteed and they do not form any part of any contract; ii) no person in the employment of Flude Commercial has any authority to make or give any representation or warranty whatsoever in relation to this property.
INVESTMENT SUMMARY • Chichester is an affluent cathedral city in West Sussex • The city benefits from a diverse retailer mix, strong occupier demand and consistently low vacancy rates • South Street has seen strong rental growth over the last few years, which is likely to continue • 34 South Street let to Orvis Company,(The) until 28 September 2021. September 2016 rent review is outstanding with reversionary evidence • 35 South Street let to One Stop Convenience Store Limited t/a Tesco Express (5A 1 D & B rating) until 23 June 2023 • Future asset management opportunities • Total NIA 8,291 sq ft • Total net income £133,375 per annum exclusive • Offers are sought in excess of £2,285,000 subject to the tenancies and contract and exclusive of VAT • A purchase at this level would reflect a net initial yield of 5.50%, allowing for purchaser’s costs of 6.35%
LOCATION
CHICHESTER OCCUPIERS
The Cathedral City of Chichester is a historic and thriving administrative centre for West Sussex. The city is located approximately 65 miles south west of London, 15 miles east of Portsmouth and 30 miles west of Brighton. The city has excellent road communications, being situated on the A27 dual-carriageway which runs east to Worthing and Brighton and west to Portsmouth and Southampton where it connects with A3(M), M27 and M3 motorways. Gatwick Airport is located approximately 50 miles to the north east. By rail, there are frequent services to London Victoria. As a result, Chichester is a popular commuter location for those working in London’s City and West End, which has benefited the local economy accordingly.
RETAILING IN CHICHESTER Chichester City Centre is a vibrant and attractive retail centre with a core retail floor space totalling around 700,000 sq ft. The retail on offer in Chichester is concentrated within the city walls and is focused along two main shopping axes namely North Street/South Street and East Street/West Street; these intersect at the Market Cross. There are currently no managed shopping centres in Chichester and in light of the historic nature of the retail core, there is limited scope for future development. As a result, Chichester has one of the lowest vacancy rates in the UK. The city contains many national multiple retailers including; Marks & Spencer, Fat Face, Topshop / Topman, H&M, TK Maxx and River Island. These are accompanied by restaurant occupiers such as Cote Brasserie, Pizza Express, ASK, Brasserie Blanc and Wagamamas.
West Sussex PO19 1ES
SITUATION
ACCOMMODATION
The property is situated on the western side of South Street which is a prominent shopping destination within Chichester City Centre. South Street accommodates a number of popular fashion retailers including East, Mistral, White Stuff, JoJo Mama Bebe, Joules and Sea Salt. There are also a number of upmarket eateries including Wagamama, Cote Brasserie, Prezzo and Wahaca.
The property comprises a two-storey mid terraced building which is currently configured as two retail units over ground and first floors.
South Street is one of the main pedestrian routes into the centre, with Chichester train and bus stations located a short walk away from the property. The property is also within close proximity of a number of car parks which makes this an ideal location for a convenience store.
We calculate the accommodation to have the following approximate NIA:
35 South Street wraps around the back of 34 South Street so is slightly larger in floor area. Both shops are essentially open plan with ancillary storage and staff accommodation at first floor level.
Floor
Description
35 South Street Ground Ground Ground First Sub Total
Sales ITZA Storage Storage
34 South Street Ground Sales ITZA Ground Storage First Sub Total Grand Total
sq m
sq ft
EPC
200.11
2,154 855 610 2,102 4,866
C
187.01 318.19
1,412 765 2,013 3,425
E
770.25
8,291
56.67 195.28 452.06
131.18
TENANCIES AND COVENANT INFORMATION 35 South Street The property is let to One Stop Convenience Store Limited t/a Tesco Express who have a D & B rating of 5A 1. The lease is drawn on effectively full repairing and insuring terms, for a term of 10 years expiring on 23 June 2023. The lease has security of tenure. The passing rent is £75,500 per annum exclusive, agreed at the June 2013 lease renewal. The rent devalues to £77.50 per sq ft Zone A after applying £5 per sq ft on the ground floor ancillary and £3 per sq ft on the first floor ancillary space. There is an open market (upward only) rent review dated 23 June 2018.
34 South Street Orvis has been trading since 1856, specialising in the sale of fly-fishing and hunting equipment and clothing. As of 2017, Orvis has 69 retail stores and 10 outlets in the US, and 18 retail stores in the UK. The tenant has occupied the premises for over 10 years. The property is let to Orvis Company,(The). The lease is drawn on effectively full repairing and insuring terms, for a term of 15 years expiring on 28 September 2021. The lease has security of tenure. The passing rent is £62,000 per annum exclusive. The rent devalues to £73.25 per sq ft Zone A after applying £3 per sq ft on the first floor ancillary space. There is an open market (upward only) rent review dated 29 September 2016 which is outstanding and we believe it to be reversionary.
West Sussex PO19 1ES
RENTAL INCOME The current gross rent receivable is £137,500 pax. There is a fire escape licence with the adjoining land owner which gives rights to escape from the back of the property in emergencies. The licence fee is based upon 3% of the passing rent and is therefore currently £4,125 pax. This is currently paid by the landlord. The fee is payable quarterly in advance on the usual quarter days. Therefore the net receivable rent is £133,375 pax.
TENURE Freehold.
VAT The property is VAT elected. It is therefore assumed that any sale will be treated as a TOGC (Transfer of Going Concern) where possible.
RENTAL AND INVESTMENT COMMENTARY We believe that rental growth prospects for the property are excellent. Prime Zone A rents in Chichester are £190 per sq ft, with Zone A rates in South Street as high as £130 per sq ft. There is a restricted supply of retail accommodation in Chichester and very low vacancy rates, combined with strong levels of occupational demand.
CREW CLOTHING
35 South Street is currently passing off £77.50 per sq ft Zone A, while 34 South Street is passing off £73.25 per sq ft Zone A. Below we have summarised recent rental transactions on South Street, together with some investment transactions in the city: Rental Transactions Address
Tenant
Date
Transaction
Rent (HL)
57 South Street
Crew Clothing
Jan-17
OML
£80.00 ZA
46 South Street 66 South Street 29A South Street 35 South Street
CEX Exchange Headromance Subway Tesco Express
Sept-16 Sept-15 July-15 June-13
OML OML OML LR
£90.00 ZA £130.00 ZA £97.50 ZA £77.50 ZA
Investment Transactions Address
Tenant
30-33 South Street 24 South Street 16-17 North Street 4 East Street 81 North Street 13 North Street
Wahaca/Game Cath Kidston WH Smith Oasis Kooky’s Cupcakery Starbucks Coffee
Date
Price
NIY
June-17 Jan-17 Jan -17 Sept-16 Oct-15 June-15
£3,600,000 £1,522,500 £3,820,000 £2,550,000 £1,265,000 £1,645,000
5.20% 5.20% 4.02% 3.69% 5.50% 4.45%
West Sussex PO19 1ES
PROPOSAL
East Street
West Street
Offers are sought in excess of £2,285,000 (Two Million, Two Hundred and Eighty Five Thousand Pounds), subject to the tenancies and contract and exclusive of VAT. Assuming purchaser’s costs of around 6.35%, a purchase at this level would reflect an attractive net initial yield of 5.50%.
South Street
FURTHER INFORMATION Please contact the joint sole agents Flude Commercial and Fawcett Mead: Mark Minchell [email protected] 01243 929136 07711 630113
34/35 South Street South Pallant Car Park Southgate Car Park
Sebastian Martin [email protected] 01243 929135 07800 562509
Sout
hgat e
Jonathan Mills [email protected] 020 7182 7483 07795 333195
Long Stay Car Park
Train and Bus Stations
e venu A t arke
M
Flude Commercial for themselves and for the vendors or lessors of this property whose agents they are give notice that: i) these particulars are set out in good faith and are believed to be correct but their accuracy cannot be guaranteed and they do not form any part of any contract; ii) no person in the employment of Flude Commercial has any authority to make or give any representation or warranty whatsoever in relation to this property.
