prime distribution investment opportunity - Realla
COSFORD LANE | VALLEY PARK | RUGBY | CV21 1TN
PRIME DISTRIBUTION INVESTMENT OPPORTUNITY
INVESTMENT SUMMARY INVESTMENT SUMMARY n Prime distribution warehouse located within the heart of the’ Golden Triangle’. n Strategically located in Rugby, close to J1 of the M6. n Situated on Valley Park. n Modern distribution facility totalling 145,989 sq ft. n Let to DHL Supply Chain Limited (company number 00528867). Guarantor Exel Holdings Limited (company number 01505040). n Let on full repairing and insuring lease until 30 September 2026 subject to a tenant only break on the 28 September 2021. n Current income of £868,634.55 (£5.95 psf) n Freehold investment. n The tenant has been in occupation since the unit was built in November 2000. n We are instructed to seek offers in excess of £13,570,000, subject to contract, which reflects a net initial yield of 6%. This assumes normal purchaser’s costs of 6.72%. This would produce a capital value of £92.95 psf.
PAGE 2
A607
LOCATION
A15
A46 A1
A47
A42 A46
Leicester
M42
Market Harborough
M6
LOCATION
A5 M69 M6
Birmingham
The property is located in the town of Rugby approximately 33 miles east of Birmingham, 22 miles south of Leicester and 21 miles north-west of Northampton. The town has excellent road communications with Junction 1 of the M6 being 2 miles to the north of the town centre. Rugby lies within the ‘Golden Triangle’ a prime distribution location and is formed by the M1, M6 and M69. 80% of the country’s population can be reached from this area within a 4 hour drive time.
A422
Worcester A44
A423
Stratford upon-Avon
M40
A43
Banbury
A505
A40
A420
A34
Reading M4 M4
33
London
89
Manchester
117
Bristol
119
A40
Heathrow Staines M25
A12
A1
LONDON A41
Richmond
A12 M25
Dartford A20 M25
M20
VALLEY DR
Y HAYNES WA
ER OV NS OW R B
A426
SWIFT VALLEY INDUSTRIAL ESTATE
IN MA
BROWNSOVER RD
RD
RD ARM BE F GLE
SWIF T PA RK
RD SUL CON
RD END FOS
LN
SAT NAV: CV21 1TN
A426
ST
B4112
ER OV NS OW BR
RD
Birmingham
M25
M1
Slough
Stanstead Harlow
A414
M25
Maidenhead
Hertford
Hatfield A10
A41
Watford
M40
M3
LE IC ES TE R
22
Hemel Hempstead
Aylesbury
High Wycombe
Swindon A436
VALLEY DR
Leicester
Stevenage A1(M)
Oxford
Cirencester
COSFORD LN
9.1
M11
A44 A34
COSFORD
M1
Luton
A40
1
A11
A1
Milton Keynes
Stow-onthe Wold
M6
A14
A5
A44
A419
Newmarket
A1
Northampton Cambridge Bedford
COSFORD LN
M1 Junction 18 / DIRFT
A14
M45
A429
Rugby borough has a total population of 100,500 inhabitants. Major employers in Rugby include Alstom, Cemex, Gap Clothing, Morgan Technical Ceramics and Pearson Group.
2
A142
A1(M)
Kettering A45
A46
A417
M6 Junction 1
A14
A14
Rugby has good rail communications with Virgin trains providing access to London Euston with a fastest journey time of 50 minutes. Rugby is located close to the DIRFT rail facility. Rugby is conveniently located for air travel with good access via the M6 and M42 motorway to Birmingham International Airport which is located approximately 30 miles away.
MILES
A141
A605
M1
M6
RUGBY A46
A1122
A47
A1139
Corby
Warwick
A46
DESTINATION
Coventry
A45 A452
Peterborough A47
Hinckley
A38
A606
R TE ES IC LE
RD
TO RUGBY
PAGE 3
SITUATION
SITUATION The property is situated on Cosford Lane / Valley Drive within the established Valley Park, the principal distribution location within the area. The Park has direct access to the Leicester Road (A426) connecting with Junction 1 of the M6 which is less than 2 miles to the north which in turn gives access to the M1, M69, M42 and A14. Nearby occupiers include Technicolour, The Range, DHL, H&M, Gap, Pearson and Volvo.
PAGE 4
DESCRIPTION • THE SITE • ACCOMMODATION
DESCRIPTION The property comprises a modern distribution warehouse completed in 2000. The warehouse is of a steel portal frame construction, and profile steel clad elevations. There is a two storey office building to the front. OFFICE
The unit has the benefit of: n n n n n n
Self-contained yard 50 m 10 loading docks 7 ground level 13 m eaves height 190 car parking spaces 2 storey fully fitted offices
CANOPY AREA
WAREHOUSE
139,995 SQ FT THE SITE
50m
The property occupies a site of approximately 7.7 acres with a site cover of 44%.
190 CAR PARK SPACES
ACCOMMODATION The property has been measured in accordance with the RICS Code of Measuring Practice (6th edition) and provides the following approximate gross internal floor areas: ACCOMMODATION Warehouse Offices Total (GIA) Canopy
SQ FT 139,995 5,994 145,989 8,078
SQ M 13,006 557 13,563 750
NOT TO SCALE
PAGE 5
TENANCY • TENURE • COVENANT
TENANCY
COVENANT
DHL have been in occupation since the unit was built in 2000. Operating the unit as part of their contract with the NHS Supply Chain.
The property is fully let to DHL Supply Chain Limited. Originally founded in 1969, DHL is part of the German logistics company Deutsche Post AG providing international express mail services. Deutsche Post is the world’s largest logistics company operating around the world, particularly in sea and air mail.
DHL have entered into a new reversionary lease for a further term of 10 years expiring on 30 September 2026 on full repairing and insuring terms.
There is an upward only rent review on the 1 October 2021.
DHL is present in over 220 countries across the globe, making it ‘the most international company in the world’. With a workforce exceeding 325,000 employees, they provide solutions for an almost infinite number of logistics needs. DHL encompasses the business units DHL Express, DHL Parcel, DHL eCommerce, DHL Global Forwarding, DHL Freight and DHL Supply Chain.
There is a tenant only break on 28 September 2021 subject to 6 months notice. Should the tenant exercise their break they would be subject to a 3 month rental penalty.
A summary of the last 3 years accounts for DHL Supply Chain Limited is set out below and shows a D&B rating of 5A1.
The new rent is £868,634.55 per annum (£5.95 psf).
The property is let to DHL Supply Chain Limited and the guarantor is Exel Holdings Limited.
TENURE
Turnover Pre-tax Profit Net worth
31/12/2015 (GBP 000)
31/12/2014 (GBP 000)
31/12/2013 (GBP 000)
£4,010,360 £108,161 £360,100
£4,132,161 £91,683 £249,515
£3,850,546 £40,922 £154,621
The property is held freehold. Guarantor Exel Holdings Limited also have a D&B rating of 5A1.
Further information is available at: www.dhl.co.uk. The unit operates as part of DHL’s supply chain with the NHS. NHS end-to-end supply chain services incorporate procurement, logistics, e-Commerce and customer and supplier support. With over 2,400 employees, the NHS transact over 325,000 product lines through their systems, procuring a further 386,000 for the NHS to access directly from their suppliers ranging from bandages to baked beans, from gloves to implants and even diagnostic equipment such as MRI scanners. Further information can be found at www.supplychain.nhs.uk.
PAGE 6
MARKET COMMENTARY • INVESTMENT MARKET OVERVIEW MARKET COMMENTARY The ‘Golden Triangle’ is recognised as the premier distribution location in the UK and as such the majority of available supply has been absorbed within this area. Demand for new warehouse accommodation in the Midlands has remained consistent with occupiers identifying locations such as Rugby for its excellent connectivity. Supply for Grade A product now stands at circa 11 months, and the supply / demand imbalance has seen rents rise and incentives shorten. Prime rents for new Grade A warehouses in the ‘Golden Triangle’ are between £6.25 - £6.50 psf. DATE
PROPERTY
£PSF
TENANT
TENURE
5010 Middlemarch, Coventry
SIZE SQ FT 165,785
Aug 16
£5.95
Gist
Jun 16
DC1 Ryton, Coventry
141,225
£6.25
JLR
May 16
4400 Magna Park, Lutterworth
258,873
£6.35
Wayfair.com
10 year lease 7 year break 10 year lease 8 year break 10 year lease
May 16
Silver Bullet, Birmingham
144,996
£6.30
Sertec
15 year lease
Mar 16
Northampton Commercial Park
303,824
£6.25
Clipper
10 year lease
INVESTMENT MARKET OVERVIEW This attractive well let investment offers a prime warehouse opportunity. The demand and supply market dynamics offer further prospects for rental growth. The distribution sector remains competitive and details of relevant transactions are set out below: DATE
PROPERTY
SIZE SQ FT
TERM CERTAIN
TENANT
RENT £ psf
£ pa
PURCHASE PRICE
NIY
CAP VAL (£PSF)
Aug 16
Kingston Park, Peterborough
549,788
8.7 years to expiry
Amazon UK Services Ltd
£4.50
£2,474,046
£42,900,000
5.60%
£78.03
Jul 16
Trafford Park, Manchester
176,080
9.8 years to expiry
Amazon UK Services Ltd
£5.95
£1,047,676
£19,235,000
5.10%
£109.24
Jul 16
Chrome 102, Minworth, Birmingham
102,750
9.6 years to break
DHL
£6.50
£667,875
£12,400,000
5.05%
£120.68
Jun 16
Plot V Airport City South, Manchester
271,350
14.6 years to expiry
Amazon
£6.00
£1,628,100
£35,000,000
4.50%
£128.98
Feb 16
Apex Park, Heartlands Business Park, Daventry
98,983
6.5 years to expiry
Hankook Tyres
£4.48
£443,308
£6,885,000
6.00%
£69.56
PAGE 7
EPC • VAT • PROPOSAL • FURTHER INFORMATION
EPC The property has an EPC rating of C51. Copies of the EPC are available upon request.
VAT The property is elected for VAT however it is anticipated that the transaction will be considered as a Transfer of Going Concern (TOGC).
PROPOSAL We are instructed to seek offers in excess of £13,570,000 (thirteen million, five hundred and seventy thousand pounds) subject to contract, which reflects a net initial yield of 6% subject to contract, subject to purchaser’s costs of 6.72%.
FURTHER INFORMATION
For further information or to arrange an inspection, please contact either of the following: ROBERT RAE PETER KEIR [email protected] [email protected] Avison Young for themselves and for the vendors or lessors of this property whose agents they are give notice that: (i) the particulars are set out as general outline only for the guidance of intended purchasers or lessees, and do not constitute part of; an offer or contract; (ii) all descriptions, dimensions, reference to condition and necessary permissions for use and occupation, and other details given without responsibility and any intending purchasers or tenants should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them; (iii) no person in the employment of Avison Young has any authority to make or give any representation or warranty whatever in relation to this property. SEPTEMBER 2016
024 7663 6888
020 7493 2180
07860 398 744
07889 908 267
PAGE 8
PRIME DISTRIBUTION INVESTMENT OPPORTUNITY
INVESTMENT SUMMARY INVESTMENT SUMMARY n Prime distribution warehouse located within the heart of the’ Golden Triangle’. n Strategically located in Rugby, close to J1 of the M6. n Situated on Valley Park. n Modern distribution facility totalling 145,989 sq ft. n Let to DHL Supply Chain Limited (company number 00528867). Guarantor Exel Holdings Limited (company number 01505040). n Let on full repairing and insuring lease until 30 September 2026 subject to a tenant only break on the 28 September 2021. n Current income of £868,634.55 (£5.95 psf) n Freehold investment. n The tenant has been in occupation since the unit was built in November 2000. n We are instructed to seek offers in excess of £13,570,000, subject to contract, which reflects a net initial yield of 6%. This assumes normal purchaser’s costs of 6.72%. This would produce a capital value of £92.95 psf.
PAGE 2
A607
LOCATION
A15
A46 A1
A47
A42 A46
Leicester
M42
Market Harborough
M6
LOCATION
A5 M69 M6
Birmingham
The property is located in the town of Rugby approximately 33 miles east of Birmingham, 22 miles south of Leicester and 21 miles north-west of Northampton. The town has excellent road communications with Junction 1 of the M6 being 2 miles to the north of the town centre. Rugby lies within the ‘Golden Triangle’ a prime distribution location and is formed by the M1, M6 and M69. 80% of the country’s population can be reached from this area within a 4 hour drive time.
A422
Worcester A44
A423
Stratford upon-Avon
M40
A43
Banbury
A505
A40
A420
A34
Reading M4 M4
33
London
89
Manchester
117
Bristol
119
A40
Heathrow Staines M25
A12
A1
LONDON A41
Richmond
A12 M25
Dartford A20 M25
M20
VALLEY DR
Y HAYNES WA
ER OV NS OW R B
A426
SWIFT VALLEY INDUSTRIAL ESTATE
IN MA
BROWNSOVER RD
RD
RD ARM BE F GLE
SWIF T PA RK
RD SUL CON
RD END FOS
LN
SAT NAV: CV21 1TN
A426
ST
B4112
ER OV NS OW BR
RD
Birmingham
M25
M1
Slough
Stanstead Harlow
A414
M25
Maidenhead
Hertford
Hatfield A10
A41
Watford
M40
M3
LE IC ES TE R
22
Hemel Hempstead
Aylesbury
High Wycombe
Swindon A436
VALLEY DR
Leicester
Stevenage A1(M)
Oxford
Cirencester
COSFORD LN
9.1
M11
A44 A34
COSFORD
M1
Luton
A40
1
A11
A1
Milton Keynes
Stow-onthe Wold
M6
A14
A5
A44
A419
Newmarket
A1
Northampton Cambridge Bedford
COSFORD LN
M1 Junction 18 / DIRFT
A14
M45
A429
Rugby borough has a total population of 100,500 inhabitants. Major employers in Rugby include Alstom, Cemex, Gap Clothing, Morgan Technical Ceramics and Pearson Group.
2
A142
A1(M)
Kettering A45
A46
A417
M6 Junction 1
A14
A14
Rugby has good rail communications with Virgin trains providing access to London Euston with a fastest journey time of 50 minutes. Rugby is located close to the DIRFT rail facility. Rugby is conveniently located for air travel with good access via the M6 and M42 motorway to Birmingham International Airport which is located approximately 30 miles away.
MILES
A141
A605
M1
M6
RUGBY A46
A1122
A47
A1139
Corby
Warwick
A46
DESTINATION
Coventry
A45 A452
Peterborough A47
Hinckley
A38
A606
R TE ES IC LE
RD
TO RUGBY
PAGE 3
SITUATION
SITUATION The property is situated on Cosford Lane / Valley Drive within the established Valley Park, the principal distribution location within the area. The Park has direct access to the Leicester Road (A426) connecting with Junction 1 of the M6 which is less than 2 miles to the north which in turn gives access to the M1, M69, M42 and A14. Nearby occupiers include Technicolour, The Range, DHL, H&M, Gap, Pearson and Volvo.
PAGE 4
DESCRIPTION • THE SITE • ACCOMMODATION
DESCRIPTION The property comprises a modern distribution warehouse completed in 2000. The warehouse is of a steel portal frame construction, and profile steel clad elevations. There is a two storey office building to the front. OFFICE
The unit has the benefit of: n n n n n n
Self-contained yard 50 m 10 loading docks 7 ground level 13 m eaves height 190 car parking spaces 2 storey fully fitted offices
CANOPY AREA
WAREHOUSE
139,995 SQ FT THE SITE
50m
The property occupies a site of approximately 7.7 acres with a site cover of 44%.
190 CAR PARK SPACES
ACCOMMODATION The property has been measured in accordance with the RICS Code of Measuring Practice (6th edition) and provides the following approximate gross internal floor areas: ACCOMMODATION Warehouse Offices Total (GIA) Canopy
SQ FT 139,995 5,994 145,989 8,078
SQ M 13,006 557 13,563 750
NOT TO SCALE
PAGE 5
TENANCY • TENURE • COVENANT
TENANCY
COVENANT
DHL have been in occupation since the unit was built in 2000. Operating the unit as part of their contract with the NHS Supply Chain.
The property is fully let to DHL Supply Chain Limited. Originally founded in 1969, DHL is part of the German logistics company Deutsche Post AG providing international express mail services. Deutsche Post is the world’s largest logistics company operating around the world, particularly in sea and air mail.
DHL have entered into a new reversionary lease for a further term of 10 years expiring on 30 September 2026 on full repairing and insuring terms.
There is an upward only rent review on the 1 October 2021.
DHL is present in over 220 countries across the globe, making it ‘the most international company in the world’. With a workforce exceeding 325,000 employees, they provide solutions for an almost infinite number of logistics needs. DHL encompasses the business units DHL Express, DHL Parcel, DHL eCommerce, DHL Global Forwarding, DHL Freight and DHL Supply Chain.
There is a tenant only break on 28 September 2021 subject to 6 months notice. Should the tenant exercise their break they would be subject to a 3 month rental penalty.
A summary of the last 3 years accounts for DHL Supply Chain Limited is set out below and shows a D&B rating of 5A1.
The new rent is £868,634.55 per annum (£5.95 psf).
The property is let to DHL Supply Chain Limited and the guarantor is Exel Holdings Limited.
TENURE
Turnover Pre-tax Profit Net worth
31/12/2015 (GBP 000)
31/12/2014 (GBP 000)
31/12/2013 (GBP 000)
£4,010,360 £108,161 £360,100
£4,132,161 £91,683 £249,515
£3,850,546 £40,922 £154,621
The property is held freehold. Guarantor Exel Holdings Limited also have a D&B rating of 5A1.
Further information is available at: www.dhl.co.uk. The unit operates as part of DHL’s supply chain with the NHS. NHS end-to-end supply chain services incorporate procurement, logistics, e-Commerce and customer and supplier support. With over 2,400 employees, the NHS transact over 325,000 product lines through their systems, procuring a further 386,000 for the NHS to access directly from their suppliers ranging from bandages to baked beans, from gloves to implants and even diagnostic equipment such as MRI scanners. Further information can be found at www.supplychain.nhs.uk.
PAGE 6
MARKET COMMENTARY • INVESTMENT MARKET OVERVIEW MARKET COMMENTARY The ‘Golden Triangle’ is recognised as the premier distribution location in the UK and as such the majority of available supply has been absorbed within this area. Demand for new warehouse accommodation in the Midlands has remained consistent with occupiers identifying locations such as Rugby for its excellent connectivity. Supply for Grade A product now stands at circa 11 months, and the supply / demand imbalance has seen rents rise and incentives shorten. Prime rents for new Grade A warehouses in the ‘Golden Triangle’ are between £6.25 - £6.50 psf. DATE
PROPERTY
£PSF
TENANT
TENURE
5010 Middlemarch, Coventry
SIZE SQ FT 165,785
Aug 16
£5.95
Gist
Jun 16
DC1 Ryton, Coventry
141,225
£6.25
JLR
May 16
4400 Magna Park, Lutterworth
258,873
£6.35
Wayfair.com
10 year lease 7 year break 10 year lease 8 year break 10 year lease
May 16
Silver Bullet, Birmingham
144,996
£6.30
Sertec
15 year lease
Mar 16
Northampton Commercial Park
303,824
£6.25
Clipper
10 year lease
INVESTMENT MARKET OVERVIEW This attractive well let investment offers a prime warehouse opportunity. The demand and supply market dynamics offer further prospects for rental growth. The distribution sector remains competitive and details of relevant transactions are set out below: DATE
PROPERTY
SIZE SQ FT
TERM CERTAIN
TENANT
RENT £ psf
£ pa
PURCHASE PRICE
NIY
CAP VAL (£PSF)
Aug 16
Kingston Park, Peterborough
549,788
8.7 years to expiry
Amazon UK Services Ltd
£4.50
£2,474,046
£42,900,000
5.60%
£78.03
Jul 16
Trafford Park, Manchester
176,080
9.8 years to expiry
Amazon UK Services Ltd
£5.95
£1,047,676
£19,235,000
5.10%
£109.24
Jul 16
Chrome 102, Minworth, Birmingham
102,750
9.6 years to break
DHL
£6.50
£667,875
£12,400,000
5.05%
£120.68
Jun 16
Plot V Airport City South, Manchester
271,350
14.6 years to expiry
Amazon
£6.00
£1,628,100
£35,000,000
4.50%
£128.98
Feb 16
Apex Park, Heartlands Business Park, Daventry
98,983
6.5 years to expiry
Hankook Tyres
£4.48
£443,308
£6,885,000
6.00%
£69.56
PAGE 7
EPC • VAT • PROPOSAL • FURTHER INFORMATION
EPC The property has an EPC rating of C51. Copies of the EPC are available upon request.
VAT The property is elected for VAT however it is anticipated that the transaction will be considered as a Transfer of Going Concern (TOGC).
PROPOSAL We are instructed to seek offers in excess of £13,570,000 (thirteen million, five hundred and seventy thousand pounds) subject to contract, which reflects a net initial yield of 6% subject to contract, subject to purchaser’s costs of 6.72%.
FURTHER INFORMATION
For further information or to arrange an inspection, please contact either of the following: ROBERT RAE PETER KEIR [email protected] [email protected] Avison Young for themselves and for the vendors or lessors of this property whose agents they are give notice that: (i) the particulars are set out as general outline only for the guidance of intended purchasers or lessees, and do not constitute part of; an offer or contract; (ii) all descriptions, dimensions, reference to condition and necessary permissions for use and occupation, and other details given without responsibility and any intending purchasers or tenants should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them; (iii) no person in the employment of Avison Young has any authority to make or give any representation or warranty whatever in relation to this property. SEPTEMBER 2016
024 7663 6888
020 7493 2180
07860 398 744
07889 908 267
PAGE 8
