4-24 - Allsop · 2 4-24 Howardsgate & 6-8 Wigmore South, Welwyn Garden City, AL8 6BQ 3 INVESTMENT...

4-24

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6 - 8

H O WA R D S G AT E

W I G M O R E S O U T H

WELWYN GARDEN CITY, AL8 6BQ

Prime Pitch Retail Parade

2 34-24 Howardsgate & 6-8 Wigmore South, Welwyn Garden City, AL8 6BQ

INVESTMENTSUMMARY

• Prime pitch retail parade located in the centre of Welwyn Garden City.

• Welwyn Garden City is an affluent, well-connected South East commuter town.

• Prominent position on Howardsgate, Welwyn Garden City’s dominant high street retail pitch.

• Excellent footfall location, with Sainsbury’s supermarket and car park to the rear, accessed via Wigmore South.

• Nearby occupiers include Cote Brasserie, Bills, Pizza Express, Halifax, Costa and Prezzo.

• Currently configured as 8 retail units and 4 residential apartments.

• The retail is multi let to eight tenants including Superdrug, Zizzi’s Restaurant, Martins & Co, Cancer Research and The Salvation Army.

• Attractive Average Weighted Unexpired Lease Term of 8.2 years to expiries and 5.9 years to breaks.

• Total passing rent of £406,450 per annum.

• Reversionary potential to £413,171 per annum.

• Highly secure income with 93% rated by Creditsafe as Low Risk or Very Low Risk covenants.

• Strong trading pitch with recent lease regears demonstrating tenant commitment to the location and only two unlet units on Howardsgate.

• Virtual freehold - 999 year interest at a peppercorn rent.

• Asset management opportunities to regear leases with existing occupiers, convert the office space to residential.

• Seeking offers in excess of £5,600,000. Allowing for £1,100,000 for the residential element and Purchaser’s costs of 6.61% this reflects an attractive Net Initial Yield 7.36%.

LOCATION

WELWYN GARDEN CITY

LUTON AIRPORT13 MILES

KINGS CROSS28 MINS

MOORGATE46 MINS

CONNECTS TO 70 DESTINATIONS

Welwyn Garden City is an affluent commuter town in Hertfordshire located 22 miles (35 km) north of Central London.

The town benefits from an excellent position within London’s northern commuter belt.

Regular direct rail services to London (Kings Cross and Moorgate) are provided from Welwyn Garden City with fastest journey times of 28 and 46 minutes respectively making the town desirable for London commuters.

Luton Airport is conveniently located 13 miles (20 km) north west of the town, which connects to 70 national and international destinations.

WELWYN GARDEN CITY

CENTRALLONDON

22 MILES

STEVENAGE

9 MILES

ST ALBANS

8 MILES

LUTON

13 MILES

HATFIELD

4 MILES


Welwyn Garden City benefits from strong transport links. Junctions 4, 5 and 6 of the A1(M) are all within 2 miles (3 km) of the town centre, which provides a north to south arterial route between London and the north east of England.

Junction 23 of the M25 Motorway intersects with Junction 1 of the A1(M) just 8 miles (13 km) to the south.

Harrow

Wembley

Sevenoaks

Leatherhead

Woking

Windsor Dartford

Richmond

Woolwich

Maidenhead Uxbridge

Crawley

Slough

Beaconsfield

Watford

Amersham

High Wycombe

HATFIELD

Newbury

Didcot

Kidlington

ChigwellBarnet Enfield

ST ALBANS Berkhamsted

HemelHempstead

Abingdon

Bicester

Aylesbury

STEVENAGE

Basingstoke

Harlow

Oxford

Brentwood

LUTON

CENTRALLONDON

LUTON

HEATHROW

CITY

STANSTED

A24

A40

A41A413A4010

A23

A20

A24

A4

M1

M25

M40

M4

M3

M25

M25

M25

M25M26

M25

M20

M1

A1(M)

M11

M11

M23

M3GATWICK

WELWYNGARDENCITY

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BRIDGE ROAD

BRIDGE ROAD

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HOWARDSGATE

HOWARDSGATE

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10 MIN WALK

WELWYN GARDEN CITY RETAIL OFFER Welwyn Garden City has an estimated shopping population of approximately 90,000 with the area expected to benefit from significantly above average population growth in the next 5 years.

Welwyn Garden City is one of the most affluent PROMIS catchments, with a significantly above average proportion of adults categorised within the most affluent AB social group (which includes those in managerial and professional occupations).

The town centre’s retail provision extends to approximately 520,000 sq ft which is anchored by Land Securities’ Howard Centre.

The Howard Centre provides 58 units across 240,000 sq ft and is the town’s fashion retail focus with key occupiers below:

The town’s prime restaurant and convenience retail offer is centred around Howardsgate, an attractive square with central landscaped gardens, which fronts The Howard Centre to the east.

Howardsgate is anchored by a Sainsbury’s supermarket which is adjacent to the subject property alongside John Lewis and Debenhams department stores. Howardsgate’s strength as a retail location is reflected in there being almost no unit availability.

Key restaurants on Howardsgate include:

in addition to Boots, Halford’s, Holland & Barrett and Superdrug.


THE HOWARD CENTRE

SITUATION The Property is prominently located on the southernside of Howardsgate at its corner with Wigmore Southand Parkway.

In addition to the footfall generated fromHowardsgate, Wigmore South is a busy link to theentrance and c.380 space car park for the Sainsbury’s supermarket which is immediately to the rear of the Property.


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KEY DEVELOPMENT

Welwyn Garden City has seen a sustained increase in residential accommodation through the conversion of offices under Permitted Development Rights.

Approximately 500,000 sq ft of offices are understood to have been converted, which has led to an increase in the density of the town’s shopping population.

The former Shredded Wheat site at Broadwater Road, a 10 minutes walk from Howardsgate, is the town’s largest development with resolution to grant planning being achieved in December 2018 for the development of a residential led mixed use scheme, comprising 1 million sq ft including c.1,454 apartments. This should further boost retail spend within the town.

Plans are also being trialled by the Council along Howardsgate and Stonehills for a reduced speed limit and part pedestrianisation to further enhance the retail experience.

CGI of the proposed scheme for former Shredded Wheat factory


NEWRESIDENTIAL

SCHEME10 MINS WALK

FROMHOWARDSGATE

APPROX.500,000 SQ FT OF

OFFICE SPACE CONVERTED TO RESIDENTIAL

ACCOMMODATION


DESCRIPTION The Property forms half of an island block with frontage to Howardsgate and benefits from rear service access.

The upper parts in the main comprise residential accommodation which has been sold off. Unit 10 and 22/24 Howardsgate are the only units to include first floor accommodation. There is basement accommodation accessed via Parkway.

The Property comprises an attractive retail parade configured as eight units. Two of these are capable of subdivision, while independent units can equally be amalgamated.

SOLD OFF INTEREST SALE DEMISESALE DEMISE

For indication purposes only

SOLD OFF INTEREST SALE DEMISE

TENURE999 year long leasehold interest less 10 days, from 3 December 2015 at a peppercorn rent.

TENANCYThe Property is let in accordance with the below tenancy schedule and provides an Average Weighted Unexpired Lease Term of 8.2 years to expiries and 5.9 years to breaks.

Unit Tenant(Trading As) Floor GIA

(Sq Ft) ITZA Lease Start Lease Expiry Break Date Rent Review Rent (£ Pa)

Rent(£ ZA)

ERV(£ Pa)

ERV(£Psf / ZA) Comments

4/6 Howardsgate

Azzurri Restaurants Ltd(Zizzi’s) Ground 3,744 - 15-Feb-02 14-Feb-27 - 15-Feb-22 £75,000 £20.03 £75,000 £20.03 Lease guaranteed by Azzurri

Central Ltd.

10Howardsgate

Individuals(Ivory Dental Clinic)

Ground 1,426849.92 12-Mar-15 11-Mar-40 - 12-Mar-20 £26,000 £29.00 £26,000 £29.00 D2 consent.

Rent deposit in place.First 560

12/14Howardsgate Quacar Investments Corp. - - - 30-Jun-14 18-Jun-3013 - - £250 - £250 - Sold off on 999 year lease.

Occupied by HSBC.

16Howardsgate

ECP Lettings Ltd(Martins & Co) Ground 990 599.08 23-Dec-16 22-Dec-26 23-Dec-22 23-Dec-21 £33,000 £55.08 £33,000 £55.08 Lease guaranteed by Mr S. Dooley.

18Howardsgate

Salvation Army Trading Company Ltd Ground 918 587.50 07-Feb-13 06-Feb-23 - - £32,500 £55.32 £32,500 £55.32

Rent increased at Feb-18 review by £1,500 pa. Feb-18 break not exercised.

20Howardsgate Cancer Research UK Ground 910 585.75 31-Mar-15 30-Mar-25 30-Mar-20 31-Mar-20 £30,500 £52.07 £32,220 £55.01

22/24Howardsgate Superdrug Stores Plc

Ground 4,1761,536.50 29-Sep-18 28-Sep-28 29-Sep-23 29-Sep-23 £95,000 £60.01 £95,000 £60.01

Vendor to top up stepped rent to year 5 level. See Note 1. Tenant break option subject to £23,750 penalty.First 560

6/8Wigmore South

H. Backhouse (Baker Street) Ltd

(Backhouse Bookmakers)Ground 1,023 709.50 22-Nov-02 21-Nov-22 - £35,500 £50.04 £35,500 £50.04

York HouseWigmore South Adecco UK Ltd First 1,287 - 17-Aug-18 16-Aug-23 17-Aug-21 £25,000 £19.43 £25,000 £19.43 Lease surety from Office Angels Ltd.

PDR consent for two flats. See Note 2.

Denmark HouseParkway Vacant Basement 2,665 - - - - - £0 - £5,000 £1.88

Commercial Sub Total 15,594 £352,750 £359,471

8Howardsgate Private Individual Flat 1 829 15-Nov-19 £15,300 £15,300 2 bedroom, 2 bathroom.

8Howardsgate Private Individual Flat 2 549 08-Nov-19 £12,600 £12,600 2 bedroom, 1 bathroom.

4Wigmore South Private Individual Flat 3 926 11-Sep-19 £15,300 £15,300 2 bedroom, 1 bathroom.

4Wigmore South Private Individual Flat 4 441 17-Mar-19 £10,500 £10,500 1 bedroom, 1 bathroom.

Residential Sub Total 2,745 £53,700 £53,700

Totals 18,339 £406,450 £413,171

Notes: 1. Rent subject to stepped rents as part of lease renewal. Year 1 £75,000 pa, Year 2 £80,000 pa, Year 3 £85,000 pa, Year 4 £90,000 pa, Year 5 £95,000 pa. 2. Permitted Development Rights for 840 sq ft / 78sq m 2 bedroom, 1 bathroom flat and 484 sq ft / 45 sq m 1 bedroom 1 bathroom flat.



PERMITTEDDEVELOPMENT

RETAIL MARKET

The office accommodation currently let to Adecco provides future potential for conversion to residential use via Permitted Development Rights.

Welwyn Garden City benefits from a well trading, compact high street retail pitch, reflected in the lack of available space.

The vendor has obtained consent under PDR for the conversion of this space to two residential units, as shown in the below table and layout plan.

Welwyn’s strong commuter links render it a desirable residential location, as evidenced by the strength of demand for apartments in particular. Recent evidence supports Permitted Development apartment pricing of £400 per sq ft plus.

The Property and the surrounding retail offer benefit from strong tenant retention levels and limited available space.

Retail rental levels remain at a significant discount to surrounding major centres. Welwyn therefore provides very sustainable rental tone with future rental growth potential.

Superdrug have recently demonstrated their commitment to the town, renewing their lease at £60 Zone A, reflecting the prime position and prominence of their unit.

Snappy Snaps renewed their lease in December 2018 at an understood rent in excess of £55 Zone A.

We consider Snappy Snaps premises to an occupy inferior trading position to the Property.

PROPOSED FIRST FLOOR PLAN

Flat Type GIA Sq M GIA Sq Ft

1 1 Bed 45 484

2 2 Bed 78 840

Totals 123 1,324

COVENANTHIGHLIGHTS

93% of the commercial income is rated by Creditsafe as Low Risk or better.

SUPERDRUG STORES PLC

Superdrug is the UK’s second largest health and beauty retailer, operating across 800 stores, with c.200 in store pharmacies. Superdrug forms part of the A.S. Watson Group, the world’s largest international health and beauty retailer.

Superdrug Stores Plc are rated by Creditsafe as 78A reflecting Very Low Risk.

AZZURRI RESTAURANTS LTD

The Azzurri Group is one of the UK’s best known Italian casual dining restaurateurs, operating the Zizzi, ASK Italian, Coco Di Mama and Radio Alice brands. The Group employs 6,000 people and operates 260 restaurants. Zizzi is the Group’s largest concept, totalling 156 restaurants, 8 of which opened in 2018.

Azzurri Restaurants Ltd are rated by Creditsafe as 76A reflecting Very Low Risk.

30-Dec-17 31-Dec-16 26-Dec-15

Sales Turnover £1,241,783,000 £1,213,600,000 £1,099,223,000

Profit Before Tax £92,934,000 £80,385,000 £56,842,000

Net Worth £115,296,000 £86,291,000 £50,149,000

02-Jul-17 26-Jun-16 28-Jun-15

Sales Turnover £249,250,000 £226,636,000 £217,670,000

Profit Before Tax £19,289,000 £17,627,000 £17,095,000

Net Worth £76,115,000 £60,446,000 £45,330,000

27%

21%

10%

9%

9%

9%

7%7%

SUPERDRUG STORES

AZZURRI RESTAURANTS

BACKHOUSE BOOKMAKERS

MARTINS & CO

SALVATION ARMY

CANCER RESEARCH

IVORY DENTAL CLINIC

ADECCO

QUACAR INVESTMENTS


INVESTMENT CONSIDERATIONS• Prime pitch restaurant and convenience retail offer in an affluent South East commuter town.

• Reversionary potential with an ERV of £413,171 per annum.

• Ongoing residential development is increasing the town’s population density and therefore increasing the retail catchment.

• Located adjacent to Sainsbury’s supermarket and close to The Howard Shopping Centre which are key footfall drivers.

• Let to a range established tenants who have shown commitment to the location.

• Very limited availability within Howardsgate, demonstrating the strength of retailer trading performance.

• Opportunity to regear leases, amalgamate units and enhance tenant mix.

PROPOSALWe are instructed to seek offers in excess of £5,600,000 (Five Million, Six Hundred Thousand Pounds) subject to contract and exclusive of VAT.

A purchase at this level reflects the following attractive profile, allowing for Purchaser’s costs of 6.61%:

Residential Element £1,100,000

Net Initial Yield 7.36%

VATThe Property is elected for VAT which will therefore be payable on the purchase price. It is envisaged that the sale will be treated as a Transfer Of a Going Concern (TOGC).

EPCFurther information is available upon request.


SALE DEMISE

SOLD OFF INTEREST SOLD OFF INTERESTSALE DEMISE

SOLD OFF INTEREST

SALE DEMISE SALE DEMISE



INFORMATIONFor further information please contact:

Disclaimer:ADS RE Ltd (ADS RE) and Allsop on their own behalf and on behalf of the vendors / lessors of the properties whose agent ADS RE is, gives notice that:1 (a) All particulars provided are given as a general outline only for the guidance of the intending purchaser, lessee or tenant, and do not constitute in whole or in part, an offer of contract for sale or lease; (b) Whilst all particulars of properties given including but not limited to descriptions, dimensions, references to condition and necessary permissions for use and occupation and maps are believed to be correct and are given in good faith, they are however given without responsibility. None of the statements contained in these particulars as to the property are to be relied upon as statements or representations of fact; (c) The vendor / lessor does not make or give, and neither ADS RE, Allsop nor any of their members or any person in their employment has any authority to make or give any representation or warranty whatsoever in relation to any properties. The only representations, warranties, undertakings and contractual obligations to be given or undertaken by the vendor / lessor are those contained and expressly referred to in the written contract for sale or agreement for lease between the vendor / lessor and a purchaser or tenant. 2 Prospective purchasers / lessees or tenants should not rely on any particulars provided and are strongly advised to; (a) Satisfy themselves by inspection or otherwise as to the correctness of each statement contained in these particulars; (b) Inspect the property and the neighbouring area; ensure that any items expressed to be included are available and in working order; (c) Arrange a full measured, structural (and where appropriate environmental) survey of the property; and (d) Carry out all necessary searches and enquirie FEBRUARY 2019

Simeon Cohen George Collins 020 3418 2050 020 3418 2060 [email protected] [email protected]

Alex Butler Jonathan Butcher 020 7543 6722 020 7543 6755 [email protected] [email protected]

ADS Real Estate Advisors6 Brook Street, London W1S 1BBTel: 020 3418 2000 | Web: www.adsre.co.uk

Allsop33 Wigmore Street, London W1U 1BZTel: 020 7437 6977 | Web: www.allsop.co.uk

DATAROOMA dataroom has been set up for prospective purchasers’ due diligence. Further information is available on request.


4-24 - Allsop · 2 4-24 Howardsgate & 6-8 Wigmore South, Welwyn Garden City, AL8 6BQ 3 INVESTMENT...

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Transcript of 4-24 - Allsop · 2 4-24 Howardsgate & 6-8 Wigmore South, Welwyn Garden City, AL8 6BQ 3 INVESTMENT...