retail warehouse investment opportunity - Aston Rose
RETAIL WAREHOUSE INVESTMENT OPPORTUNITY
Waymills Road • Whitchurch Shropshire • SY13 1RT
Investment Summary
• Modern, well congured standalone retail warehouse totalling 26,294 sq ft with 7,183 sq ft garden centre. • Monopoly trading position. • Let to HHGL Limited (trading as Homebase) until 2031 (tenant only break option in 2026). • An unexpired term of 14.1 years to expiry, with 9.1 years to tenant’s break option. • Producing £395,000 net income per annum, reecting £15.02 psf. • Freehold. • We are instructed to seek offers in excess of £4,950,000 (Four Million, Nine Hundred and Fifty Thousand Pounds) (Subject to Contract). • A purchase at this level reects a Net Initial Yield of 7.49% assuming usual purchaser’s costs at 6.59%.
Waymills Road • Whitchurch • Shropshire • SY13 1RT
Location Whitchurch is located in North Shropshire, 14 miles south west of Crewe and 16 miles south west of Wrexham. Chester is 41 miles to the north and Shrewsbury 20 miles to the south. The town has excellent road communications being at the centre of the A49, A41 and A525. These roads provide further access to the wider UK motorway network via the M6 and M54.
Demographics The estimated population of Shropshire is 306,000. Shropshire is home to 4 military bases which bring large amounts of employment and disposable income to the area. The proportion of residents aged 45 and above is higher than the national average. Average salaries are £30,152 pa, compared to £26,500 pa nationally (12% above).
WHITCHURCH
Situation The property fronts the B5398 Waymills Road, approximately 1 mile east of the town centre, close to the railway station. The B5398 is one of the main arterial routes into the town.
WAY M
Waymills Road • Whitchurch • Shropshire • SY13 1RT
ILLS R OAD
Description The property comprises a modern retail warehouse built in 2006 and totals 26,294 sq ft GIA. It also benefits from a 7,183 sq ft garden centre. The building is of steel frame construction with steel profile cladding and an eaves height of approx 6m. There are a total of 93 car parking spaces providing a ratio of 1:283 sq ft. The site extends to 1.83 acres and this provides a coverage of 32% excluding the garden centre.
Planning Planning was granted on 28/04/05 and is effectively DIY and bulky goods consent with certain restrictions. These are against the sale of food and drink, clothing, shoes, sports goods and fashion accessories, watches, jewellery, pharmaceuticals and personal care products. There are also restrictions against the primary use of the unit for the sale of electrical goods, car parts, pet foods and pet goods.
Tenure The property is held Freehold.
Whitchurch Retail Warehouse Market The subject property is the only out of town retail warehouse in Whitchurch. The nearest competing towns are Shrewsbury, Wrexham and Crewe and as such enjoys the benefit of a monopoly trading position.
Tenancy Information Unit
Tenant
Warehouse
HHGL Limited
1
Area (sq ft)
Current Rent (pa)
Current Rent (psf)
Lease Start
Next Review
Lease Expiry
Unexpired Term
26,294
£395,000
£15.02
09/11/2006
09/11/2016
08/11/2031
14.1 years 2
1formerly 2
Homebase Limited Break clause 09/11/2026 (9.1 years unexpired term certain)
Waymills Road • Whitchurch • Shropshire • SY13 1RT
Retail Warehousing Market Retail warehouse vacancy rates are at a 15 year low at 5.3%, which is considerably below the peak gure of 11.8% in 2009. The retail warehouse construction pipeline has fallen by 9.5% since H2 2016 and a restricted pipeline over the next few years will lead to pressure on rents. CBRE research forecasts retail warehousing to experience a 1.6% rental growth in 2021. CBRE's Prime Rent Index shows the retail warehouse index experienced a 4.7% annual growth rate over 30 years, outpacing that of CBRE's All Property Index which measured 3.6%. The DIY market continues to strengthen as stamp duty increases have pushed numerous home owners to renovate their homes rather than move house.
Investor demand for retail warehouse product remains robust with year end transactional volumes likely to be similar to 2016 at £2.4 billion. Lack of stock in the south east is pushing investors to look at other parts of the UK. In H1 2017 approximately 37% of investment transactions were completed by UK institutions after limited activity in 2016. Demand from UK institutions and local councils looks set to continue as retail warehouse stock offers attractive lease lengths, stable tenant covenants and potential rental growth prospects. Prime yields are likely to remain stable throughout 2017.
Retail Warehouse Investment Transactions
Waymills Road • Whitchurch • Shropshire • SY13 1RT
Date
Town
Property
Price £(m)
Yield %
Unexpired Lease Term
Size sq ft
Tenant
Aug-17
Ipswich
Felixstowe Road
£8.525
6.72
4.50
34,968
Homebase
Jul-17
Leek
Barnseld Road
£5.05
6.25
10.60
26,675
B&M
Jun-17
Spalding
Westlode Street
£5.77
6.75
11.40
23,500
Homebase & Carpetright
Jan-17
Norwich
Drayton Road
£8.61
5.05
18.00
35,650
Home Bargains & Aldi
Dec-16
Bedford
Rivereld Way
£6.4
6.81
4.30
36,140
Homebase
Dec-16
Basildon
London Road
£6.75
6.30
8.00
45,242
Homebase
Sep-16
Leighton Buzzard
Vimy Road
£7.12
6.91
6.50
35,650
Homebase
Aug-16
Grantham
London Road
£6.925
6.25
10.00
42,000
B&Q
Mar-16
Fakenham
Enterprise Way
£3.64
6.50
11.00
23,062
B&Q
Covenant Details HHGL Limited (company number: 00533033 - formerly known as Homebase Limited) has an Experian rating of 78/100 which is below average risk. Homebase Limited changed their name to HHGL Limited on 23 December 2016. HHGL Limited trading as Homebase is the UK's second largest home improvement retailer with over 270 stores in the UK and Republic of Ireland, serving around 64 million customers a year. In February 2016 Australian company Wesfarmers acquired Homebase for £340m. Wesfarmers are the largest private sector employer in Australia with 220,000 staff and a market valuation of £27bn. The company has announced plans to invest £500m in the business and rebrand the Homebase stores to Bunnings. Accounts for the last three years are summarised as follows:
HHGL Limited (formerly Homebase Ltd) 2014 2015 2016 Turnover £1,415,829,000 £1,408,807,000 £1,360,112,000 Prot Pre-Tax -£20,221,000 £7,551,000 £32,824,000 Net Worth £377,402,000 £379,666,000 £8,263,000
EPC The Energy Performance rating for the property is B(41). A full copy of the EPC is available on the datasite.
VAT We understand that the property has been elected for VAT and, as such, it is expected the sale will be treated as a Transfer of a Going Concern (TOGC).
Proposal Offers are sought in excess of £4,950,000 (Four Million Nine Hundred and Fifty Thousand Pounds), subject to contract, reflecting an attractive net initial yield of approximately 7.49% assuming purchaser's costs of 6.59%.
1 2
Waymills Road • Whitchurch • Shropshire • SY13 1RT
For further information please contact joint agents:
Matt Hunter MRICS 020 7079 1954 [email protected]
Alex Whiting MRICS 0113 394 8810 [email protected]
Rob Woods MRICS 0161 233 5668 [email protected]
Ken Morgan FRICS 020 7079 1953 [email protected]
Robin Bullas MRICS 0113 394 8817 [email protected]
Frankie Isherwood 0161 233 5428 [email protected]
St Albans House 57/59 Haymarket London SW1Y 4QX
Toronto Square Toronto Street Leeds LS1 2HJ
Belvedere Booth Street Manchester M2 4AW
www.astonrose.co.uk
www.cbre.com
www.cbre.com
OS Plans reproduced with permission. ©Crown Copyright 2017. All rights reserved. Licence Number 100047514
These particulars are believed to be correct and, where practicable, reasonable steps have been taken to ensure their accuracy, however this cannot be guaranteed. They do not form part of any offer or other contract. The owner of this property does not make or give, representations or warranties in relation to this property. Aston Rose (West End) Limited and CBRE Limited and their employees do not accept any responsibility for information supplied to them by the owner or any third party. Any intending purchaser or lessee must satisfy itself by inspection or otherwise as to the correctness of the particulars. All measurements are approximate. The plans in these particulars are published for convenience of identification only, and although believed to be correct, their accuracy is not guaranteed and do not form part of any contract.
OCTOBER 2017
MISREPRESENTATION ACT
Waymills Road • Whitchurch Shropshire • SY13 1RT
Investment Summary
• Modern, well congured standalone retail warehouse totalling 26,294 sq ft with 7,183 sq ft garden centre. • Monopoly trading position. • Let to HHGL Limited (trading as Homebase) until 2031 (tenant only break option in 2026). • An unexpired term of 14.1 years to expiry, with 9.1 years to tenant’s break option. • Producing £395,000 net income per annum, reecting £15.02 psf. • Freehold. • We are instructed to seek offers in excess of £4,950,000 (Four Million, Nine Hundred and Fifty Thousand Pounds) (Subject to Contract). • A purchase at this level reects a Net Initial Yield of 7.49% assuming usual purchaser’s costs at 6.59%.
Waymills Road • Whitchurch • Shropshire • SY13 1RT
Location Whitchurch is located in North Shropshire, 14 miles south west of Crewe and 16 miles south west of Wrexham. Chester is 41 miles to the north and Shrewsbury 20 miles to the south. The town has excellent road communications being at the centre of the A49, A41 and A525. These roads provide further access to the wider UK motorway network via the M6 and M54.
Demographics The estimated population of Shropshire is 306,000. Shropshire is home to 4 military bases which bring large amounts of employment and disposable income to the area. The proportion of residents aged 45 and above is higher than the national average. Average salaries are £30,152 pa, compared to £26,500 pa nationally (12% above).
WHITCHURCH
Situation The property fronts the B5398 Waymills Road, approximately 1 mile east of the town centre, close to the railway station. The B5398 is one of the main arterial routes into the town.
WAY M
Waymills Road • Whitchurch • Shropshire • SY13 1RT
ILLS R OAD
Description The property comprises a modern retail warehouse built in 2006 and totals 26,294 sq ft GIA. It also benefits from a 7,183 sq ft garden centre. The building is of steel frame construction with steel profile cladding and an eaves height of approx 6m. There are a total of 93 car parking spaces providing a ratio of 1:283 sq ft. The site extends to 1.83 acres and this provides a coverage of 32% excluding the garden centre.
Planning Planning was granted on 28/04/05 and is effectively DIY and bulky goods consent with certain restrictions. These are against the sale of food and drink, clothing, shoes, sports goods and fashion accessories, watches, jewellery, pharmaceuticals and personal care products. There are also restrictions against the primary use of the unit for the sale of electrical goods, car parts, pet foods and pet goods.
Tenure The property is held Freehold.
Whitchurch Retail Warehouse Market The subject property is the only out of town retail warehouse in Whitchurch. The nearest competing towns are Shrewsbury, Wrexham and Crewe and as such enjoys the benefit of a monopoly trading position.
Tenancy Information Unit
Tenant
Warehouse
HHGL Limited
1
Area (sq ft)
Current Rent (pa)
Current Rent (psf)
Lease Start
Next Review
Lease Expiry
Unexpired Term
26,294
£395,000
£15.02
09/11/2006
09/11/2016
08/11/2031
14.1 years 2
1formerly 2
Homebase Limited Break clause 09/11/2026 (9.1 years unexpired term certain)
Waymills Road • Whitchurch • Shropshire • SY13 1RT
Retail Warehousing Market Retail warehouse vacancy rates are at a 15 year low at 5.3%, which is considerably below the peak gure of 11.8% in 2009. The retail warehouse construction pipeline has fallen by 9.5% since H2 2016 and a restricted pipeline over the next few years will lead to pressure on rents. CBRE research forecasts retail warehousing to experience a 1.6% rental growth in 2021. CBRE's Prime Rent Index shows the retail warehouse index experienced a 4.7% annual growth rate over 30 years, outpacing that of CBRE's All Property Index which measured 3.6%. The DIY market continues to strengthen as stamp duty increases have pushed numerous home owners to renovate their homes rather than move house.
Investor demand for retail warehouse product remains robust with year end transactional volumes likely to be similar to 2016 at £2.4 billion. Lack of stock in the south east is pushing investors to look at other parts of the UK. In H1 2017 approximately 37% of investment transactions were completed by UK institutions after limited activity in 2016. Demand from UK institutions and local councils looks set to continue as retail warehouse stock offers attractive lease lengths, stable tenant covenants and potential rental growth prospects. Prime yields are likely to remain stable throughout 2017.
Retail Warehouse Investment Transactions
Waymills Road • Whitchurch • Shropshire • SY13 1RT
Date
Town
Property
Price £(m)
Yield %
Unexpired Lease Term
Size sq ft
Tenant
Aug-17
Ipswich
Felixstowe Road
£8.525
6.72
4.50
34,968
Homebase
Jul-17
Leek
Barnseld Road
£5.05
6.25
10.60
26,675
B&M
Jun-17
Spalding
Westlode Street
£5.77
6.75
11.40
23,500
Homebase & Carpetright
Jan-17
Norwich
Drayton Road
£8.61
5.05
18.00
35,650
Home Bargains & Aldi
Dec-16
Bedford
Rivereld Way
£6.4
6.81
4.30
36,140
Homebase
Dec-16
Basildon
London Road
£6.75
6.30
8.00
45,242
Homebase
Sep-16
Leighton Buzzard
Vimy Road
£7.12
6.91
6.50
35,650
Homebase
Aug-16
Grantham
London Road
£6.925
6.25
10.00
42,000
B&Q
Mar-16
Fakenham
Enterprise Way
£3.64
6.50
11.00
23,062
B&Q
Covenant Details HHGL Limited (company number: 00533033 - formerly known as Homebase Limited) has an Experian rating of 78/100 which is below average risk. Homebase Limited changed their name to HHGL Limited on 23 December 2016. HHGL Limited trading as Homebase is the UK's second largest home improvement retailer with over 270 stores in the UK and Republic of Ireland, serving around 64 million customers a year. In February 2016 Australian company Wesfarmers acquired Homebase for £340m. Wesfarmers are the largest private sector employer in Australia with 220,000 staff and a market valuation of £27bn. The company has announced plans to invest £500m in the business and rebrand the Homebase stores to Bunnings. Accounts for the last three years are summarised as follows:
HHGL Limited (formerly Homebase Ltd) 2014 2015 2016 Turnover £1,415,829,000 £1,408,807,000 £1,360,112,000 Prot Pre-Tax -£20,221,000 £7,551,000 £32,824,000 Net Worth £377,402,000 £379,666,000 £8,263,000
EPC The Energy Performance rating for the property is B(41). A full copy of the EPC is available on the datasite.
VAT We understand that the property has been elected for VAT and, as such, it is expected the sale will be treated as a Transfer of a Going Concern (TOGC).
Proposal Offers are sought in excess of £4,950,000 (Four Million Nine Hundred and Fifty Thousand Pounds), subject to contract, reflecting an attractive net initial yield of approximately 7.49% assuming purchaser's costs of 6.59%.
1 2
Waymills Road • Whitchurch • Shropshire • SY13 1RT
For further information please contact joint agents:
Matt Hunter MRICS 020 7079 1954 [email protected]
Alex Whiting MRICS 0113 394 8810 [email protected]
Rob Woods MRICS 0161 233 5668 [email protected]
Ken Morgan FRICS 020 7079 1953 [email protected]
Robin Bullas MRICS 0113 394 8817 [email protected]
Frankie Isherwood 0161 233 5428 [email protected]
St Albans House 57/59 Haymarket London SW1Y 4QX
Toronto Square Toronto Street Leeds LS1 2HJ
Belvedere Booth Street Manchester M2 4AW
www.astonrose.co.uk
www.cbre.com
www.cbre.com
OS Plans reproduced with permission. ©Crown Copyright 2017. All rights reserved. Licence Number 100047514
These particulars are believed to be correct and, where practicable, reasonable steps have been taken to ensure their accuracy, however this cannot be guaranteed. They do not form part of any offer or other contract. The owner of this property does not make or give, representations or warranties in relation to this property. Aston Rose (West End) Limited and CBRE Limited and their employees do not accept any responsibility for information supplied to them by the owner or any third party. Any intending purchaser or lessee must satisfy itself by inspection or otherwise as to the correctness of the particulars. All measurements are approximate. The plans in these particulars are published for convenience of identification only, and although believed to be correct, their accuracy is not guaranteed and do not form part of any contract.
OCTOBER 2017
MISREPRESENTATION ACT
