FREEHOLD RETAIL & RESIDENTIAL ... - Boddy & Edwards
FREEHOLD RETAIL & RESIDENTIAL INVESTMENT Dowse House, Grayshott Hampshire GU26 6LB
A40
A13
A205 A30
A282 A214 A2
A23
A34
A33 A3
A13
A13 A102
A4
A3
A240
A20
A24
A2
INVESTMENT CONSIDERATIONS
A232
A243
A339
A217 A23 A331 A21
A34
A26 A228
A3 A303
A303
A24
A31 A3
A31
A22 A26
A24 A264
Grayshott
A34
A22 A21
A31
A23 A22 A26
A3 A272
A272
A272
• • • • • •
Freehold Two retail units with two residential flats Located in Hampshire’s affluent commuter belt Current income of £48,900 pax VAT free The commercial element of the property reflects a NIY of 7.30%
A272 A3
A26
A23
A27
A280
A27 A259
A27 A26
A27
LOCATION
Grayshott is an affluent village located immediately to the west of Hindhead, approximately 12 miles south-west of Guildford in Hampshire’s affluent commuter belt. Grayshott is situated to the north of nearby Haslemere and is no longer separated from the town by the A3 trunk road since the opening of the Hindhead Tunnel in 2011. The A3 Provides access to junction 10 of the M25 London Orbital Motorway approximately 19 miles to the north-east, and Portsmouth approximately 25 miles to the south-west. Grayshott and the surrounding villages are very popular with London commuters. Haslemere station, approximately two miles to the south-east has regular services to London Waterloo with an approximate journey time of 52 minutes, and is known for having one of the highest percentage of first-class rail season ticket holders in the UK.
SITUATION
Dowse House is situated on Headley Road, Grayshott’s main shopping street and benefits from close proximity to one of the village’s three free car parks. Headley Road is a bustling high street and is home to a number of national multiple retailers and small independent retailers alike.
2 FREEHOLD RETAIL & RESIDENTIAL INVESTMENT Dowse House, Grayshott, Hampshire GU26 6LB
free parking
DESCRIPTION
The property consists of a two storey, mixed use building with two retail units on the ground floor and two flats on the first floor. The building is of brick and timber construction with brick and tiled elevations beneath a pitched and hipped slate tiled roof. To the rear of the property there is a parking area, with one space allocated to each of the four units, together with a communal bin store. The property was largely refurbished and rebuilt by our client between 2011 and 2013 where the original shop was divided into two units and the single flat was rebuilt into two no. two bedroom flats, all with independent access. The property comprises: Unit 1 is currently used as a Café and is arranged over ground floor only with a large open plan seating area to the front of the unit with the rear used as a kitchen and storage space. There is also a disabled/male/female W/C facility located to the rear of the property. Unit 2 is also located on the ground floor only and is currently arranged as a retail shop selling vintage homewares and women’s clothing. The unit provides an open plan sales area to the front and ancillary storage to the rear, together with staff W/C and kitchenette. Both units benefit from access to the communal bin store via rear egress and are each allocated one parking space. The property also benefits from being located opposite one of Grayshott’s three free public car parks. Flat 1 comprises modern two bedroom flat with one bathroom, a spacious living room, kitchen/ dining room and utility room. Flat 2 comprises spacious open plan flat with two bedrooms one of which has an ensuite shower room. The kitchen/dining room and living room are open plan and there is also a separate bathroom. Both flats have their own balconies, accessed from the kitchen/dining room.
SERVICE CHARGE
There is currently no formal annual service charge in place, at present items are charged back to the tenants on an ad-hoc basis. However, the leases on the two retail units allow for a service charge to be put in place to cover the cost of maintaining and repairing the common parts.
COVENANT INFORMATION
Mrs Katarzyna Anna Dziubek and Mrs Rosa Maria Armstrong are the directors of Red Rose Tea Room LTD which was incorporated 30th December 2014. Mrs Dziubek and Mrs Armstrong have been trading as the Red Rose Tea Room at Unit 1 Dowse House since January 2015. Mrs Annabel Margret Hill trading as Hill & Co. Hill & Co have been trading from Unit 2 of the subject property since 2013. We understand that the Landlord is currently negotiating a new lease.
3 FREEHOLD RETAIL & RESIDENTIAL INVESTMENT Dowse House, Grayshott, Hampshire GU26 6LB
TENANCIES Unit 1
Let to Mrs K A Dziubek and Mrs R M Armstrong (trading as Red Rose Tea Room) on a 5 year Effective FRI lease from 14th January 2015, at a passing rent of £12,000, expiring 13th January 2020 (therefore just over 2 years until lease expiry) with an RPI rent review provision as at 14th January 2018. The Landlord is currently in negotiations with the tenants to extend their lease.
Unit 2
Let to Mrs Annabel Margret Hill (trading as Hill & Co) on a 5 year Effective FRI lease from 15th February 2013, at a passing rent of £11,400, expiring 30th September 2018. There is an outstanding RPI rent review dated 15th February 2016. We have been informed that the tenant would like to renew their lease and the landlord is shortly to begin negotiations in this respect.
Flat 1
Currently let to Mrs Adina Minea on a Shorthold Tenancy at a rent of £12,000 per annum. The landlord currently holds a deposit of £1,500. The lease can be brought to an end by either the landlord or tenant on no less than two months notice. We are advised that the current tenant wishes to renew the tenancy and they have been in occupation since 2013.
Flat 2
Currently let to Miss Tara Osborough and Mr James McArtney on a Assured Shorthold Tenancy dated 1st December 2017 at a rent of £13,500 per annum. The landlord currently holds a deposit of £1,687.50.
TOTAL ANNUAL INCOME: £48,900 TENURE
The property is held Freehold.
4 FREEHOLD RETAIL & RESIDENTIAL INVESTMENT Dowse House, Grayshott, Hampshire GU26 6LB
ACCOMMODATION
The commercial elements of this property have been measured on a Net Internal Area (NIA) basis in accordance with the 6th edition of the RICS Code of Measuring Practice and provide the following overall floor areas: Description Unit 1 (Red Rose Tea Room)
Area sq ft
Area sq m
1,075
99.8
Unit 1 (Rear Store)
232
21.6
Unit 2 (Hill & Co)
775
72
2,082
193.4
Total
The two residential flats have been measured on a Gross Internal Area (GIA) basis providing the following floor areas: Description
Area sq ft
Area sq m
Flat 1
1,040
96.6
Flat 2
903
83.9
Total
1,893
175.9
A small ground floor room is currently let to the tenant of flat 2, in line with her business, paying a rent of £100 pcm which is included in the flat rent. The room provides a GIA of 132 sq ft.
5 FREEHOLD RETAIL & RESIDENTIAL INVESTMENT Dowse House, Grayshott, Hampshire GU26 6LB
MARKET COMMENTS
Following the completion of the Hindhead Tunnel Grayshott has become significantly more accessible, opening the village up to Haslemere and increasing demand for housing and local amenities. Vacancy on Headley Road is relatively low and there is a mixture of both multiple national and independent retailers trading from this location. We are of the opinion that the retail units could see rental uplift and that the rents on the flats are in line with the current market. Investment opportunities in Grayshott and the surrounding areas are rare and often highly sought after by both local and regional investors especially given the lot size and potential to sell off the residential upper parts which hold significant value.
ENERGY PERFORMANCE CERTIFICATES
Units 1 and 2 have EPC ratings of C (71) and C (64) respectively. Flats 1 and 2 have EPC ratings of C (73) and C (74) respectively.
RATEABLE VALUE / COUNCIL TAX Unit 1 Unit 2 Flat 1 Flat 2
£13,000 £10,000 C C
FURTHER INFORMATION VAT
The property is not VAT elected and VAT will not be charged on the purchase price.
PROPOSAL
We are marketing this opportunity at a Guide Price of £860,000 (Eight Hundred and Sixty Thousand Pounds) for the freehold, subject to contract. A purchase at this price will provide a Net Initial Yield of 5.39% assuming purchasers costs of 5.58%, including the residential flats.
For further information and to make arrangements to inspect the property please contact:
Barry Munday 01483 668262 [email protected] Jamie Gordon 01483 668263 [email protected]
Boddy & Edwards LLP Chartered Surveyors Commercial Property Consultants 5 Riverview, Walnut Tree Close, Guildford Surrey GU1 4UX Important Notice: Boddy & Edwards LLP for themselves (for their joint agents where applicable) and for the vendors or lessors of this property give notice that: 1. These particulars are set out as a general outline only for guidance to intending Purchasers or Lessees, and do not constitute any part of an offer or contract. 2. Whilst Boddy & Edwards LLP uses reasonable endeavours to ensure that the information in these particulars is materially correct, any intending Purchasers, Lessees or Third Parties should not rely on them as statements or representations of fact, but must satisfy themselves by inspection, searches, enquiries, surveys or otherwise as to their accuracy. Boddy & Edwards LLP as such cannot be held responsible for any loss or damage including without limitation, indirect or consequential loss or damage, expenses incurred or any loss of profits resulting from direct or indirect actions based upon the content of these particulars. 3. No partner nor person in the employment of Boddy & Edwards LLP has any authority to make any representation or warranty whatsoever in relation to this property. 4. Unless otherwise stated, all purchase prices and rents are correct at the date of publication and, unless otherwise stated, are quoted exclusive of VAT. Lease details, service charge and ground rent (where applicable) are given as a guide only and should be checked and confirmed by your solicitor prior to exchange of contracts. The date of this publication is December 2017 SUBJECT TO CONTRACT
6 FREEHOLD RETAIL & RESIDENTIAL INVESTMENT Dowse House, Grayshott, Hampshire GU26 6LB
A40
A13
A205 A30
A282 A214 A2
A23
A34
A33 A3
A13
A13 A102
A4
A3
A240
A20
A24
A2
INVESTMENT CONSIDERATIONS
A232
A243
A339
A217 A23 A331 A21
A34
A26 A228
A3 A303
A303
A24
A31 A3
A31
A22 A26
A24 A264
Grayshott
A34
A22 A21
A31
A23 A22 A26
A3 A272
A272
A272
• • • • • •
Freehold Two retail units with two residential flats Located in Hampshire’s affluent commuter belt Current income of £48,900 pax VAT free The commercial element of the property reflects a NIY of 7.30%
A272 A3
A26
A23
A27
A280
A27 A259
A27 A26
A27
LOCATION
Grayshott is an affluent village located immediately to the west of Hindhead, approximately 12 miles south-west of Guildford in Hampshire’s affluent commuter belt. Grayshott is situated to the north of nearby Haslemere and is no longer separated from the town by the A3 trunk road since the opening of the Hindhead Tunnel in 2011. The A3 Provides access to junction 10 of the M25 London Orbital Motorway approximately 19 miles to the north-east, and Portsmouth approximately 25 miles to the south-west. Grayshott and the surrounding villages are very popular with London commuters. Haslemere station, approximately two miles to the south-east has regular services to London Waterloo with an approximate journey time of 52 minutes, and is known for having one of the highest percentage of first-class rail season ticket holders in the UK.
SITUATION
Dowse House is situated on Headley Road, Grayshott’s main shopping street and benefits from close proximity to one of the village’s three free car parks. Headley Road is a bustling high street and is home to a number of national multiple retailers and small independent retailers alike.
2 FREEHOLD RETAIL & RESIDENTIAL INVESTMENT Dowse House, Grayshott, Hampshire GU26 6LB
free parking
DESCRIPTION
The property consists of a two storey, mixed use building with two retail units on the ground floor and two flats on the first floor. The building is of brick and timber construction with brick and tiled elevations beneath a pitched and hipped slate tiled roof. To the rear of the property there is a parking area, with one space allocated to each of the four units, together with a communal bin store. The property was largely refurbished and rebuilt by our client between 2011 and 2013 where the original shop was divided into two units and the single flat was rebuilt into two no. two bedroom flats, all with independent access. The property comprises: Unit 1 is currently used as a Café and is arranged over ground floor only with a large open plan seating area to the front of the unit with the rear used as a kitchen and storage space. There is also a disabled/male/female W/C facility located to the rear of the property. Unit 2 is also located on the ground floor only and is currently arranged as a retail shop selling vintage homewares and women’s clothing. The unit provides an open plan sales area to the front and ancillary storage to the rear, together with staff W/C and kitchenette. Both units benefit from access to the communal bin store via rear egress and are each allocated one parking space. The property also benefits from being located opposite one of Grayshott’s three free public car parks. Flat 1 comprises modern two bedroom flat with one bathroom, a spacious living room, kitchen/ dining room and utility room. Flat 2 comprises spacious open plan flat with two bedrooms one of which has an ensuite shower room. The kitchen/dining room and living room are open plan and there is also a separate bathroom. Both flats have their own balconies, accessed from the kitchen/dining room.
SERVICE CHARGE
There is currently no formal annual service charge in place, at present items are charged back to the tenants on an ad-hoc basis. However, the leases on the two retail units allow for a service charge to be put in place to cover the cost of maintaining and repairing the common parts.
COVENANT INFORMATION
Mrs Katarzyna Anna Dziubek and Mrs Rosa Maria Armstrong are the directors of Red Rose Tea Room LTD which was incorporated 30th December 2014. Mrs Dziubek and Mrs Armstrong have been trading as the Red Rose Tea Room at Unit 1 Dowse House since January 2015. Mrs Annabel Margret Hill trading as Hill & Co. Hill & Co have been trading from Unit 2 of the subject property since 2013. We understand that the Landlord is currently negotiating a new lease.
3 FREEHOLD RETAIL & RESIDENTIAL INVESTMENT Dowse House, Grayshott, Hampshire GU26 6LB
TENANCIES Unit 1
Let to Mrs K A Dziubek and Mrs R M Armstrong (trading as Red Rose Tea Room) on a 5 year Effective FRI lease from 14th January 2015, at a passing rent of £12,000, expiring 13th January 2020 (therefore just over 2 years until lease expiry) with an RPI rent review provision as at 14th January 2018. The Landlord is currently in negotiations with the tenants to extend their lease.
Unit 2
Let to Mrs Annabel Margret Hill (trading as Hill & Co) on a 5 year Effective FRI lease from 15th February 2013, at a passing rent of £11,400, expiring 30th September 2018. There is an outstanding RPI rent review dated 15th February 2016. We have been informed that the tenant would like to renew their lease and the landlord is shortly to begin negotiations in this respect.
Flat 1
Currently let to Mrs Adina Minea on a Shorthold Tenancy at a rent of £12,000 per annum. The landlord currently holds a deposit of £1,500. The lease can be brought to an end by either the landlord or tenant on no less than two months notice. We are advised that the current tenant wishes to renew the tenancy and they have been in occupation since 2013.
Flat 2
Currently let to Miss Tara Osborough and Mr James McArtney on a Assured Shorthold Tenancy dated 1st December 2017 at a rent of £13,500 per annum. The landlord currently holds a deposit of £1,687.50.
TOTAL ANNUAL INCOME: £48,900 TENURE
The property is held Freehold.
4 FREEHOLD RETAIL & RESIDENTIAL INVESTMENT Dowse House, Grayshott, Hampshire GU26 6LB
ACCOMMODATION
The commercial elements of this property have been measured on a Net Internal Area (NIA) basis in accordance with the 6th edition of the RICS Code of Measuring Practice and provide the following overall floor areas: Description Unit 1 (Red Rose Tea Room)
Area sq ft
Area sq m
1,075
99.8
Unit 1 (Rear Store)
232
21.6
Unit 2 (Hill & Co)
775
72
2,082
193.4
Total
The two residential flats have been measured on a Gross Internal Area (GIA) basis providing the following floor areas: Description
Area sq ft
Area sq m
Flat 1
1,040
96.6
Flat 2
903
83.9
Total
1,893
175.9
A small ground floor room is currently let to the tenant of flat 2, in line with her business, paying a rent of £100 pcm which is included in the flat rent. The room provides a GIA of 132 sq ft.
5 FREEHOLD RETAIL & RESIDENTIAL INVESTMENT Dowse House, Grayshott, Hampshire GU26 6LB
MARKET COMMENTS
Following the completion of the Hindhead Tunnel Grayshott has become significantly more accessible, opening the village up to Haslemere and increasing demand for housing and local amenities. Vacancy on Headley Road is relatively low and there is a mixture of both multiple national and independent retailers trading from this location. We are of the opinion that the retail units could see rental uplift and that the rents on the flats are in line with the current market. Investment opportunities in Grayshott and the surrounding areas are rare and often highly sought after by both local and regional investors especially given the lot size and potential to sell off the residential upper parts which hold significant value.
ENERGY PERFORMANCE CERTIFICATES
Units 1 and 2 have EPC ratings of C (71) and C (64) respectively. Flats 1 and 2 have EPC ratings of C (73) and C (74) respectively.
RATEABLE VALUE / COUNCIL TAX Unit 1 Unit 2 Flat 1 Flat 2
£13,000 £10,000 C C
FURTHER INFORMATION VAT
The property is not VAT elected and VAT will not be charged on the purchase price.
PROPOSAL
We are marketing this opportunity at a Guide Price of £860,000 (Eight Hundred and Sixty Thousand Pounds) for the freehold, subject to contract. A purchase at this price will provide a Net Initial Yield of 5.39% assuming purchasers costs of 5.58%, including the residential flats.
For further information and to make arrangements to inspect the property please contact:
Barry Munday 01483 668262 [email protected] Jamie Gordon 01483 668263 [email protected]
Boddy & Edwards LLP Chartered Surveyors Commercial Property Consultants 5 Riverview, Walnut Tree Close, Guildford Surrey GU1 4UX Important Notice: Boddy & Edwards LLP for themselves (for their joint agents where applicable) and for the vendors or lessors of this property give notice that: 1. These particulars are set out as a general outline only for guidance to intending Purchasers or Lessees, and do not constitute any part of an offer or contract. 2. Whilst Boddy & Edwards LLP uses reasonable endeavours to ensure that the information in these particulars is materially correct, any intending Purchasers, Lessees or Third Parties should not rely on them as statements or representations of fact, but must satisfy themselves by inspection, searches, enquiries, surveys or otherwise as to their accuracy. Boddy & Edwards LLP as such cannot be held responsible for any loss or damage including without limitation, indirect or consequential loss or damage, expenses incurred or any loss of profits resulting from direct or indirect actions based upon the content of these particulars. 3. No partner nor person in the employment of Boddy & Edwards LLP has any authority to make any representation or warranty whatsoever in relation to this property. 4. Unless otherwise stated, all purchase prices and rents are correct at the date of publication and, unless otherwise stated, are quoted exclusive of VAT. Lease details, service charge and ground rent (where applicable) are given as a guide only and should be checked and confirmed by your solicitor prior to exchange of contracts. The date of this publication is December 2017 SUBJECT TO CONTRACT
6 FREEHOLD RETAIL & RESIDENTIAL INVESTMENT Dowse House, Grayshott, Hampshire GU26 6LB
