FOLKESTONE - klm-re.com

SOUTH EAST SUPERMARKET ANCHORED RETAIL INVESTMENT

F O L K E S T O N E

S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T

F O L K E S T O N E

I N V E S T M E N T S U M M A RY

Well-Located South-East town

Dominant retail offer for the town centre

256,000 sq ft of retail accommodation

Anchored by a 86,000 sq ft Asda

570 space NCP car park let on a long lease

14% increase in NOI since 2013

Strong covenant weighting of 67.4% to 5A1 tenants which include Primark, TK Maxx, SportsDirect and Next

Strong retailer trading performance

Modern open-air scheme

Low service charge

WAULT 6.2 years to expiry

SANDGATE ROADA2033

SAGA

LIDL

WILKO

FOLKESTONE MUSEUM

A2034 CHERITON ROAD

BOUVERIE ROAD WEST

SAINSBURY’S

FOLKESTONE CENTRAL

B O U V E R I E P L A C E F O L K E S T O N E S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T

LO C AT I O N & CO N N EC T I V I T YThe coastal town of Folkestone is situated in Kent approximately 6 miles south west of Dover and 70 miles south east of London.

Folkestone has excellent road access, located at the end of the M20/A20, which provides fast access to the Channel Tunnel at Ashford, Maidstone, London and the M25. The A259 south coast trunk road is also in close proximity providing access to Hastings, Eastbourne and Brighton.

The scheme benefits from direct access to the town’s bus station with regular services between Ashford and other nearby towns.

The town is served by two railway stations, with Folkestone West providing a regular rail service to London Charing Cross with a fastest journey time of 1 hour 30 minutes and Folkestone Central running to London St Pancras with a fastest journey time of 55 minutes. High speed commuter services from Dover also stop at Folkestone and via the South Eastern main line link to Ashford International. The journey time to London via this route has been reduced to under 1 hour.

The closest airport to Folkestone is Lydd Airport which is a distance of 13.2 miles away.

M20

M2

M25

M25M25

M25

M23

M20

M26

M4M4

M3

M40

M1 M11

M11A1(M)

CHANNELTUNNEL

TERMINAL

STANSTED

HEATHROW

GATWICK

SHOREHAM

CITY

LYDD/ASHFORD

LUTON

A2070

A28

A259

A259

A259

A256

A229

A299

A2

A2

A20

A21

A2

A27A27

A21

A22

A22

A22

A24

A24

LONDONLONDON

SOUTHEND-ON-SEA

MARGATE

BASILDON

DOVER

FOLKESTONEFOLKESTONE

MAIDSTONE

HASTINGS

EASTBOURNE

CHATHAM

BRIGHTON

WORTHING

WOKING

DARTFORD

EPSOM

CRAWLEY

GUILDFORD

SLOUGH

BARNET

HARLOW

CHELMSFORD

CANTERBURY

ASHFORD

B O U V E R I E P L A C E F O L K E S T O N E

A259

A259

EAR

LS AV

ENU

E

A25

9A

259

RADN

OR

PARK

RO

AD A259

A259 B LACK BU

LL R

D

A2034

A2033 SANDGATE ROAD

BOUVERIE RD WEST

CHERITO

N G

ARDEN

S MID

DELBURG SQ

SHEL

LON

S ST

CHERITON ROAD

MID

DELBURG SQ

A2033 FO

OR

D RO

AD

N

EW ST DOVER RO

AD

A20

33

DOVER ROAD

A20

33

DO

VER

RD

RADNOR BRIDGE ROAD WEAR BAY RD

TON

TINE STREET T

RA

M R

OA

D

A

260

TRA

M R

OA

D

S OUTHERN WAY

SANDGATE R

OAD

SANDGATE ROAD

Radnor Park

Folkestone Central

SUBJECTPROPERTY



D E M O G R A P H I C SFolkestone is the principal town in the Shepway District of Kent with a population of 64,477 and a primary catchment population of 35,587.

The town captures a high proportion of its catchment and has an estimated comparison spend of £101m for 2018 which places Folkestone 50th, ahead of Ashford, Chichester and Walton On Thames, Surrey.

Tourism is a major part of the Folkestone economy with Folkestone & Hythe estimated to have a total tourism value of £252 million showing 2% annual growth. The town is a popular seaside resort with one of the only sandy beaches in the area and therefore attracts visitors from a large catchment due to the aforementioned good transport links.

Major employers in the town include Church and Dwight, the US company famous for such brands as Arm & Hammer and insurance firm Saga – both have their UK headquarters in the town.

The town’s population profile shows above average levels of “Affluent Greys” and “Aspiring singles”. The rural areas surrounding Folkestone are particularly affluent, containing high volumes of the most affluent

ACORN category “Wealthy Achievers”. These consumers have high levels of disposable income.

The town also benefits from the Folkestone Academy which boasts over 1,000 students and focuses in media and creative arts.

In the past 5 years the town has been transformed through large scale inward investment and development in and around the old town and harbour quarter area. This has resulted in the growth of the art community, galleries and independent cafes and bars.

Further planned investment into the town centre will continue to improve the town’s demographic and catchment profile.

Source : CACI

A259

A2070

A259

A259

A256

A299

A299

A299

A249

A28

A28

A28

A20

A2

A2

A2

M20

M20

M2

HAMSTREET

NEW ROMNEY

ST MARY’S BAY

RAMSGATE

CANTERBURY

DOVER

GRAVENEY

FOLKESTONE

SITTINGBOURNE

ASHFORD

FOLKESTONE

PRIMARY

SECONDARY

TERTIARY

64,477T O TA L

C AT C H M E N T P O P U L A T I O N

£252 millionE S T I M AT E D T O TA L

T O U R I S M V A L U E O F F O L K E S T O N E & H Y T H E

2%P R O J E C T E D A N N U A L

T O U R I S M G R O W T H O V E R T H E N E X T 1 2 M O N T H S

R E TA I L C AT C H M E N T

78%C A R S H O P P E R S

< 2 0 M I N S D R I V E T I M E


R E TA I L I N G I N F O L K E S T O N EThe pedestrianised Sandgate Road was historically the prime retailing pitch in the town, however, the opening of Bouverie Place Shopping Centre in 2007 has seen the prime retail pitch in the town consolidate into the scheme.

The town centre offers an attractive pedestrianised shopping environment linking Bouverie Place to Sandgate Road with national multiple retailers including Boots, Wilko’s, Bon Marche, Superdrug and WH Smiths.

Bouverie Place forms the town’s prime pitch anchored by an Asda Superstore and one of the town’s main car parks. Key retailers include Primark, TK Maxx, Sports Direct and Poundland. The retail provides a strong convenience and affordable fashion offer serving the local community.

The rents in Bouverie Place are currently between £40 – £65 psf Zone A. This provides the retailers with sustainable rents, which can

be further evidenced by the positive retailer turnover data in the scheme.

These sustainable rental levels are further supported by the fact that in the recent New Look CVA, there was no reduction in rent to this store. JD Sports are also under offer to take the Peacocks unit RU04 at the same passing rent. This signature letting further under pins the occupational demand for the scheme.

The nearest competing towns are Dover, Ashford and Canterbury which are located a substantial distance from Folkestone. The closest town, Dover has a smaller supply of shopping than Folkestone.


77%O F S H O P P E R S

V I S I T T H E C E N T R E O N C E A W E E K

50 minsA V E R A G E

D W E L L T I M E



G R O U N D L E V E L F I R S T F L O O R


Ownership

D E S C R I P T I O N Bouverie Place was opened in 2007 and consists of approximately 256,000 sq ft of retail accommodation situated in the heart of Folkestone town centre. The scheme is anchored by an 86,000 sq ft Asda superstore with 20 shops occupied by key national retailers such as Primark, TK Maxx, New Look, Deichmann, Sportsdirect and Poundland.

The scheme is arranged as a ‘High Street’ style scheme with the large MSUs located under the Asda superstore, which provides a covered shopping environment. A travellator located next to TK Maxx takes shoppers from the ground floor to the supermarket and the car park. The remainder of the scheme is open air with Starbucks and Caffe Delicia providing outside seating which helps create an attractive shopping and eating environment, which links into Sandgate Road and the rest of the town centre.

The ownership includes both the Superdrug and Costa Coffee on Sandgate Road which helps control the linkage with the town centre. In addition, there are two shops (Burger King and Subway) located to the rear of scheme on Bouverie Place.

There are 12 flats located above Starbucks / Cards Direct which have been sold off long leasehold. These flats are accessed from Oxford Terrace.

The scheme also sits adjacent to the main bus station in the town and only 650 metres from Folkestone Central Railway Station. The Harbour Quarter district lies 500m to the south and this area is currently undergoing extensive regeneration. Directly to the north west of the scheme is Middelburg Square, where a 480 space NCP car park is located.

The annual footfall is 4.2 million per annum.


256,000 sq ftR E TA I L A N D F O O D

I N T H E H E A R T O F F O L K E S T O N E T O W N

C E N T R E



I N V E S T M E N T A N D R E G E N E R AT I O N O F T H E T O W N C E N T R E

Folkestone has seen significant investment in the old town and harbour area over recent years. This has resulted in an influx of a trendy art community around the historic cobbled streets and the arrival of independent cafes, bookstores, bars and galleries.

In addition Folkestone and Hythe District Council in collaboration with other key stakeholders in the town have undertaken an exciting town centre vision based upon research and analysis of the needs of the Folkestone population. The focus will be to provide additional uses within the town centre such as a cinema, food and beverage, offices and residential uses (see next page).

This exciting vision for the town centre will complement the already vibrant creative and harbour quarters. The proposals include introducing leisure and entertainment in the form of a cinema in the Debenhams (see sketch plan above) with a complementary food and beverage offering.


C O A S TA L Q U A R T E R

H A R B O U R Q U A R T E R

T O W N C E N T R E

C I V I C Q U A R T E R

C R E AT I V E Q U A R T E R

S A N D G AT E R O A D

B O U V E R I E P L A C E

D E B E N H A M S

T O W N C E N T R E V I S I O N

K E Y

CAR PARK

CINEMA

FOOD & BEVERAGE

RESIDENTIAL / OFFICE

SHARED ENTERPRISE WORKPLACES

COMMUNITY SERVICES

RESIDENTIAL


T E N U R EFreehold.

C A R P A R K I N GThe centre benefits from a 570 space multi storey car park arranged over 3 levels. The car park is let and operated by NCP on a 35-year FRI lease, reviews 5 yearly, expiring in 2042. The lease provides a current income of £176,250 per annum.

In addition, Asda pays an annual car park contribution to supplement concessionary parking arrangements for customers. The rent payable by Asda for the first 35 years of the term is subject to annual RPI increases. The current passing rent received is £118,488 per annum.

The car park is open 24 hours per day Monday – Sunday. The current car park charges are as follows:

1 HOUR £1.70

1 TO 2 HOURS £2.90

2 TO 3 HOURS £4.10

3 TO 4 HOURS £5.60

4 TO 24 HOURS £7.00

WEEKEND 1 HOUR £1.70

WEEKEND 2 HOURS £2.90






I N C O M E A N A LY S I SWe set out below the property’s income as follows:

Gross Contracted Rent £2,363,014

Shortfalls £39,802

Marketing Contribution £40,000

Net Income £2,283,212

WAULT 6.2 years to expiry.

7.4% of the gross passing rent secured to National Car Parks Ltd for in excess of 23 years.

5% of the gross passing rent secured to the Asda car park for 23 years subject to annual RPI until 2042.

A S S E T M A N A G E M E N T O P P O R T U N I T I E SThere are numerous asset enhancement opportunities at Bouverie Place:

• Take advantage of strong retailer trading to re-gear lease.

• On lease expiry split the Choice unit to create 2 separate retail units on ground floor and a gym operator on the first floor.

• Potential residential use above the Asda.

• Target Sandgate Road retailers to create rental tension e.g. Boots, Wilko’s.

• Introduce further food and beverage to improve dwell times.

• Buy in or sell off ownership fronting Sandgate Road.

• The mixed use proposals for the town will further improve the customer dwell time and continue to consolidate Bouverie Place as the prime retail offer in the town centre.

The top five tenants at the shopping centre represent 47.1% of the entire net operating income.

T O P 5 T E N A N T S B Y I N C O M E

Primark £361,000

Next £233,968

NCP £176,250

New Look £155,000

TK Maxx £150,000

10.2%15.8%

6.6%6.8%

7.7%

I N C O M E P R O F I L E B Y C O V E N A N T

The scheme has 67.4% of the total net income secured to 5A1 Covenants.

94.8%

5.18%

National

Local/other


S E R V I C E C H A R G EThe current annual service charge budget for the year ending 31 December 2019 is £975,982 which equates to £3.75 per sq ft.

E P CA full EPC survey has been conducted and can be found in the data room.

B U I L D I N G S U R V E Y S All the surveys are assignable and are available on the data room.

V ATThe property is registered for VAT and it is proposed that the sale will be treated as a ‘Transfer of a Going Concern’.

C A P I TA L A L L O W A N C E SAvailable upon request.

D ATA R O O MAccess available upon request.

S P VThe property can be purchased either as a property transaction or corporate purchase of the Luxembourg SPV. Further information available upon request.

P R O P O S A LOffers are invited for the freehold interest subject to contract and exclusive of VAT.

C O N TA C T D E TA I L SMARK [email protected]: +44 (0)20 7317 3711T: +44 (0)7795 010 198

ROB DALES [email protected] D: +44 (0)20 7317 3705T: +44 (0)7740 535 395

ED [email protected]: +44 (0)20 7317 3713T: +44 (0)7825 689 037

MISREPRESENTATION ACT | COPYRIGHT | DISCLAIMER

KLM, for themselves and for the vendors of this property, whose agents they are, give notice that (1) the particulars and any further information communicated by any means to potential purchasers of the property described in the particulars, or their advisers, in connection with the possible sale of the property are provided solely for the purpose of assisting potential purchasers in decided whether they wish to proceed with further investigation of the property and do not constitute either the whole or any part of an invitation, offer or contract for sale of the property; (ii) all descriptions, dimensions, references to condition and necessary permissions for use and occupation and other details are given in good faith and are believed to be correct as at the date of the particulars (or the date of the relevant information if earlier). However, potential purchasers are not entitled to rely on them as statements or representations of fact but should satisfy themselves by searches, enquiries, surveys and inspections or otherwise with regard to the accuracy of such details. No responsibility or liability is or will be accepted by KLM, the vendor(s) of the property or any of their respective subsidiaries, affiliates, directors, officers, representatives, employees, advisors, or agents for any loss or damage suffered by any party, resulting from reliance on the particulars or any other information communicated by any means to that party, or its advisers, in connection with the possible sale of the property. No person in the employment of KLM or the vendor(s) has authority to make or give any representation or warranty, express or implied, in relation to the property. References to KLM include any joint agents acting with KLM. May 2019. Designed and produced by Creativeworld. Tel 01282 858200.

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FOLKESTONE - klm-re.com

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