Solihull Gate Retail Park - Avison Young Retail · 2018. 10. 17. · Investment Summary Location...

Solihull Gate Retail ParkStratford Road (A34), Solihull, Birmingham, B90 4BA

A Prime Retail Investment Opportunity

ENTER

Investment Summary Location – Solihull is one of the UK’s most affluent towns and one of Birmingham’s most attractive residential suburbs.

Place Making – This park forms part of Solihull’s principal out of town retail hub, serving not only Solihull but the wider south-east Birmingham conurbation.

Captive Catchment – Within a 10 minute drive time, there is in excess of 100,000 people. In addition there are over 22,800 cars passing the property every week, which is highly visible from the A34, (Stratford Road).

44,963 sq ft Floor Space – A resilient and flexible layout with the ability to either sub-divide or combine units.

Strong Trading Profile – All the occupiers report strong trading in what is a key location.

Institutional Income Stream – Secured from strong covenants with a WAULT of 6.6 years to expiry.

Price – A price is sought of £18,700,000, reflecting an attractive net initial yield of 7% after allowing for purchaser’s costs of 6.74%.

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1.

Investment Summary

Aerial View Location Demographics Local Economy

Retail Warehousing in Solihull

Description Tenure, Planning Tenancy Schedule

ERV, Tenant’s Covenants

Investment Comparables

VAT / EPC Proposal, Contact

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A34

B4102

SEARS RETAIL PARK

SOLIHULL RETAIL PARK

SOLIHUL GATE RETAIL PARK

2.

Investment Summary







SOLIHULL GATE RETAIL PARK

LocationSolihull is the most affluent town in the west Midlands conurbation, located approximately 8 miles south-east of Birmingham and 18 miles west of Coventry.

The town benefits from excellent road and rail communications, being within 2 miles of junctions 4 and 5 of the M42 motorway, which links with the M40, M5 and M6. Rail services to London Marylebone have an approximate fastest journey time of 1 hour and 20 minutes. There are also quick (50 minutes) and frequent (96 trains per day) rail services between Solihull and Birmingham (Snow Hill).

Unlike central Birmingham, the industrial revolution largely passed Solihull by and the town developed in the 20th century, principally as an attractive and affluent residential suburb.

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EASTMIDLANDS

BIRMINGHAM

GLOUCESTERSHIRE

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123

24

4

2

18

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11

12

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3

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16

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321

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131415

78

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10

4

56

15

16

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1

20

19

18

17

9

856

78

21

2

1

11

1

2

5

6

3

25

24

23

22

26

2716

10

11

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15

2

67 5

M40

M40

M40

M1

M1

M1

M5

M5

M5

M50

M45

M6

M6(T)

M6

M5 M42

M42

M42

M69

M54

M48

A44

9

A4112

A438

A40

A49

A4103

A40

A438

A419A433

A465

A48

A436

A417

A44

A40

A42

9

A40

A44

A44

A40

A46

A46

A46

A607

A52

A1

A607A606

A47

A6

A427

A5

A508

A40A418

A41

A4

010

A43

A420

A34

A43

A422

A419

A458

A50

A51

A5

A50

A38A42

A34

A38

A52

A52

A53

A500

A515

A449A448

A441

A435

A429

A428

A508

A442A44 A46

A45

Cirencester

Didcot

Stroud

Witney Kidlington

Cwmbran

Marlow

LeightonBuzzard

Thame

Abingdon

Bicester

Aylesbury

Daventry

Banbury

Newark-on-Trent

Grantham

Evesham

Bromsgrove

GreatMalvern

Tewkesbury

Nantwich

Newport

Chepstow

Hereford

Uttoxeter

Ashbourne

Cirencester

Didcot

Stroud

Witney Kidlington

Cwmbran

Marlow

LeightonBuzzard

Thame

Abingdon

Bicester

Aylesbury

Daventry

Banbury

Newark-on-Trent

Grantham

Evesham

Bromsgrove

GreatMalvern

Tewkesbury

NantwichWrexham

Newport

Chepstow

Hereford

Uttoxeter

Ashbourne

Redditch

Cheltenham

Newport

HighWycombe

Oxford

Milton Keynes

LeamingtonSpa

Gloucester

Cannock

Newcastle-Under-Lyme

Stafford

Crewe

Redditch

Cheltenham

Newport

HighWycombe

Oxford

Milton Keynes

LeamingtonSpa

Gloucester

Cannock

Newcastle-Under-Lyme

Stafford

Crewe

Wigston

Eastwood

Ilkeston

Rugeley

Stone

Halesowen

Telford

West Bromwich

Walsall

Dudley

Kidderminster

NuneatonHinckley

Burton uponTrent

Rugby

LEICESTER

WOLVERHAMPTON

BIRMINGHAM

DERBY

COVENTRY

BIRMINGHAM

LEICESTER

WOLVERHAMPTON

NOTTINGHAMNOTTINGHAMDERBY

COVENTRY

SOLIHULL

Dicken

s Heath Rd

B

4102

B410

2

B4102 B4025

Mon

kspa

th H

all R

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Widney M

anor Rd

Widney Rd

Longmore Rd Widney Ln Widney Ln

B4102

Sharmans Cross Rd

Danford Ln

Stratford Road Stratford Road

Stratford Road Stratford Road

Shirley

Monkspath

Solihull

Dickens Heath

M42SOLIHULL GATE

RETAIL PARKSolihull is one of the UK’s most affluent towns and one of Birmingham’s most attractive residential suburbs.

3.

Investment Summary







Demographics Solihull is the most affluent town in the West Midlands and is one of the most affluent areas in the UK, outside London. The ‘You Switch Quality of Life Index’ named Solihull as ‘The Best Place to Live’ in the United Kingdom.

PMA class Solihull as a “Regional Centre” on the basis of the volume and quality of its town centre provision. The total population within the Solihull Primary Retail Market Area is estimated at 240,000 people, of which PMA estimates 225,000 form the consumer base of Solihull.

The CACI 10 minute drive time for the subject property gives a total population of 104,000 people. The more affluent social grades AB are significantly over represented within the catchment at 51%, in excess of the UK average, with the C1 social grade also above the national rate. In contrast the least affluent social grades C2, D2 and DE are relatively under represented.

The Solihull CACI 10 minute drive time also reports on weekly expenditure and generally those categories under “Furnishings, Household Equipment and Routine Household Maintenance” show above average spending, as compared to the UK average.

In terms of households, CACI classify some 56.4% as “Affluent Achievers” with only 10% and 4% classed as “Financially Stretched” and “Urban Adversity”, respectively.

The “ACORN” group profile report that out of a 10 minute catchment of 107,000 people, 31,400 could be described as “Executive Wealth” (236% of the UK average Index), some 24,700 as “Mature Money” (254%) and finally 14,500 as “Successful Suburbs” (220%).

All the statistics show that Solihull has a most affluent catchment population. For good reason it is generally regarded as Birmingham’s most attractive and desirable residential suburb.

M42

M42

M40

M5

Solihul

4.

Solihul

Dickens Heath

Wood End

Bicken Hill

Balsall HeathSouth YadleyEdgbaston

Hollywood

Wythall Green

Hockley Heath

Dorridge

Brandwood Yardley Wood

SOLIHULL GATERETAIL PARK

The CACI socio-economic classifications are set out below for the 10 minute drive time:

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NS Socio Economic Classification Profile % for Area % for Base Index 0 100 200

All People aged 16- 74 74,316 100 100 100

1. Higher Managerial, administrative and professional occupations 11,145 15.0 10.1 148

1.1 Large employers and higher managerial and admin occupations 2,412 3.2 2.3 142

1.2 Higher professional occupations 8,733 11.8 7.8 150

2. Lower managerial, administrative and professional occupations 18,343 24.7 20.8 119

3. Intermediate occupations 11,157 15.0 12.8 118

4. Small employers and own account workers 6,815 9.2 9.2 99

5. Lower supervisory and technical occupations 4,060 5.5 7.1 77

6. Semi-routine occupations 8,655 11.6 14.2 82

7. Routine occupations 5,089 6.8 11.3 61

8. Never worked long-term unemployed 3,291 4.4 5.5 80

9. Full time students / SEC unclassified 5,761 7.8 9.0 86

Solihull has been named as ‘The Best Place to Live’ in the UK. (You Switch Quality of Life Index)

4.

The 10 minute drive time

Investment Summary







Local EconomyThe town’s accessibility makes it an attractive location for office occupiers, many of whom are located on out of town business parks.

The service sector as a whole accounts for 63% of the total employment in Solihull above the national average.

The professional and business sector includes St James Place and Prime Chartered Accountants.

Furthermore, National Grid Transco and NPower have large offices in the town centre.

The ICT sector is well represented on the M42 business parks, especially Birmingham Business Park and Blythe Valley with occupiers including Fujitsu, Nokia, Siemens, Oracle and ASOS. Virgin Media announced at the start of 2015 that they plan to create 1,000 new apprentice positions at its Eagle Court facility as part of a nationwide expansion. Additionally Blythe Valley Park also accommodates a number of large offices for international construction/engineering firms such as Enzen, Kier Group and Arup.

Excellent road communications have made Solihull an attractive location for distribution/transport firms. Furthermore, there is a successful conference industry based around the NEC.

Birmingham International Airport lies just to the north of the catchment and an extension to the runway was completed in 2014, now making long-haul flights possible.

The manufacturing sector in Solihull accounts for 10% of the total employment with the automotive industry of particular significance. Both Jaguar Land Rover and BMW operating major facilities within the area. JLR has recently revealed plans to expand its Solihull factory in order to facilitate the development of electrical equipment for the company’s cars and plans to hire a further 1,000 employees in addition to the 10,000 staff currently employed. The manufacturer has also submitted plans to build a 1m sq ft logistics operations centre at Damson Parkway, near the Solihull factory.

In March 2018, the local unemployment count was 0.7% of the population aged 16-64, as compared to the national unemployment count at 1.1%.(PMA)

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5.

Investment Summary







Retail Warehousing in SolihullTotal retail warehouse supply for Solihull is estimated at 568,000 sq ft with an overall provision per household below the PROMIS average. In particular, the DIY and furniture/furnishing are relatively under represented.

The vast majority of retail warehousing is situated around the subject property, adjoining Marshall Lake Road (B4102) close to its junction

with Stratford Road (A34).

Immediately behind the subject property is Solihull Retail Park totalling 190,000 sq ft anchored by B&Q, who extended in 2012, together with Currys / PC World. Other tenants include Halfords, Pets at Home, Hobbycraft, Dreams and SCS.

Adjacent to this is Sears Retail Park totalling 125,000 sq ft, which is generally occupied by “softer” retailers including Boots, Argos, M&S Foodhall, Homesense and TK Maxx.

Adjoining this is a new format Next lifestyle store of 30,000 sq ft which was completed in June 2014.

Adjacent to the Sears Retail Park is a former Toys ‘R’ Us unit of 44,000 sq ft which was owned freehold by the related property company. We understand however there is good interest in a sub-division of this unit with the main area going to one of the discount food retailers.

Finally, adjoining Solihull Retail Park and the former Toys ‘R’ Us, but fronting onto Stratford Road, is a large state-of-the-art Sainsbury’s of some 80,000 sq ft which forms the principal food offer for the surrounding area.

On Stratford Road there are some solus retail warehousing units and notably a 27,000 sq ft store recently occupied by Sports Direct diagonally opposite the subject property, and fitted out to the retailer’s latest format.

At the roundabout junction between Marshall Lake Road and Stratford Road, is an impressive Porcelanosa destination store.

All in all, this immediate location should provide investors with the ideal scenario of being situated in a strong and established retail pitch which is relatively under supplied as compared to the strength of the catchment. Furthermore, we are not aware of any further retail developments proposed which would materially increase the supply of accommodation.

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44,963 sq ft Floor Space – a resilient and flexible layout with the ability to either sub-divide or combine units.

Investment Summary







LOCAL OCCUPIERS »

SOLIHUL GATE RETAIL PARK

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6-7

Investment Summary







138.1m

139.0m

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Retail Park

0m 20m 40m 60m

Ordnance Survey © Crown Copyright 2018. All rights reserved. Licence number 100022432. Plotted Scale - 1:1431

DescriptionThe development comprises an attractive terrace currently arranged as 4 units totalling 44,963 sq ft. The development is currently arranged in unit sizes between 10-15,000 sq ft. It was completed in May 2007 to a high specification to include full glazing to the store entrances, contrasting profile metal sheeting with a large area for occupier signage and block paving adjoining the entrances. It is otherwise of standard retail warehouse construction with a steel portal frame structure and pitched roofs. There is a customer vehicle entrance/exit to the eastbound carriageway of the A34 with roundabout junctions on either side of the scheme to permit easy access to both sides of the carriageway. This segregated servicing with an entrance from Marshall Lake Road at the back of the development. The customer and vehicle entrance is shared with the adjoining Jaguar Land Rover showrooms. There is car parking for 171 customer cars, giving a ratio of 1:263 sq ft. There is a site area of 2.99 acres (1.21 ha) giving a low site cover of 34.5%.

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Tenant Area (Sq Ft)

Lease Start Lease End Next Rent Review

Rent (p.a) Rent (Per Sq Ft)

Wren Kitchens Ltd 9,957 10-Apr-2013 09-Apr-2023 £296,221 £29.75

Sofology Ltd 14,985 08-Apr-2013 07-Apr-2023 £445,804 £29.75

Tapi Floors & Carpets 10,021 24-Jul-2017 23-Jul-2027 24-Jul-2022 £330,693* £33.00

Furniture Village Ltd 10,000 04-May-2007 03-May-2027 04-May-2022 £325,000 £32.50

44,963 £1,397,718 £31.09

Tenancy Schedule

8.Tenure Freehold as delineated in red on the plan opposite.

Planning Consent The development benefits from a “standard bulky goods” planning consent, permitting the sale of DIY, furniture, furnishings, beds, electricals and carpets.

Site Plan The site totals 3.98 acres, giving a low site cover of 34.6%

Environmental Prior to redevelopment in 2006, the site was occupied by a car garage from the 1930s to the 1970s. Some remediation works were carried out prior to the subject development. A Phase One report is available for assignment, which gives the site a low risk rating.

*Tenant currently paying half rent, 24/01/2018 - 23/01/2019 – to be topped up by vendor.

Investment Summary







Estimated Rental ValueThe most recent letting on the scheme was on Unit 2 to Tapi in July 2017 at a headline rent reflecting £33 per sq ft. This letting was subject to just 12 months rent free. This equates to a net effective rent of £30.53 per sq ft. The previous tenant in this unit, Starplan, were paying a marginally lower headline rent reflecting £32.50 per sq ft.

The Solihull Retail Park to the rear, is fully let, having been refurbished and re-geared between 2012/2015. The most recent letting was to Dreams of 7,072 sq ft at £33.00 per sq ft, with effect from March 2015 subject to a 12 month rent free period. Passing rents generally range from £30 - £37.50 per sq ft on the units of between 7-16,000 sq ft and there are no voids on this scheme.

On the Sears Retail Park, the smaller units between 10-15,000 sq ft are let at rents between £30-£38.50 per sq ft. The most recent evidence emanates from a Boots re-gear carried out in April 2016 at £30 per sq ft for 15,346 sq ft.

Adjoining the Sears Retail Park is the ex-Toys ‘R’ Us unit at 44,100 sq ft. We understand there is good interest in occupying this unit on behalf of discount food retailers linked up with either Home Bargains or B&M for the balance.

The Next lifestyle unit of 30,000 sq ft is subject to a lease commencing 24th June 2014 at a rent equating to £26.67 per sq ft.

Overall, we consider the subject scheme can be considered rack-rented. Over recent years, any voids in this overall pitch have been quickly re-let and there is good competition for the available Toys ‘R’ Us unit.

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Unit Tenant Year Ending Sales Turnover(000’S)

Pre TaxProfit / Loss (000’S)

Net Worth(000’S)

D&B Rating

1A Wren Kitchens Ltd31/12/2017 £406,685 £16,571 £18,594

4A231/12/2016 £338,094 £11,007 £6,153

1B Sofology Ltd*31/12/2016 £143,008 -£8,917 -£14,276

N231/12/2015 £142,860 -£385 -£5,726

2 Tapi Carpets & Floors31/12/2016 £30,294 -£10,195 £8,255

3A202/01/2016 £1,253

3 Furniture Village Ltd02/04/2017 £238,064 £1,675 £13,452

3A127/03/2016 £213,912 £3,864 £13,840

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Tenant’s Covenants

*Owned by DFS PLC

Investment Summary







Investment ComparablesSet out below are a number of investment comparables, all of which have transacted since February of this year and most of which are in the general Birmingham area. It will be seen that the price quoted for this property reflects a significant discount to the prevailing net initial yield levels of between 5.2 – 6.0% shown from the comparables. Furthermore the overall quality of this property is considered to be at least as good as all the other properties detailed:

Property Size Sq Ft

Tenants Lease Details Passing Rent (Psf)

Price (£M) Initial Yield

Vendor Purchaser Date

Birmingham (Wednesbury) - Gallagher Shopping Park (aka Junction 9)

230,822 Currys PC World, Next, M&S Foodhall, DFS, Harveys, Bensons, JD, Furniture Village, TK Maxx, Outfit, Boots, Mamas & Papas, ScS, Sofology, Oak, Tapi, Nando’s, Costa, Smashburger, Burger King, KFC, Pizza Hut.

WAULT 10.2 yrs (9.7 inc brks)

£9,474,754 pa (£41.05 psf)

£175,000,000 5.20% KKR (Quadrant Estates)

Korea Asset Investment Management (KAIM) / HANA Financial Investment

Jul-18

Slough - Slough Retail Park

153,000 The Range, Sofology, AHF, ScS, Harveys, Smyths Toys, DFS and Carpetright.

WAULT c. 6.0 yrs £3,526,913 pa £63,030,000 5.44% Benson Elliot Orchard Street May-18

Birmingham - Selly Oak Shopping Park

210,000 Sainsbury’s, Next, M&S Foodhall, JD, Superdrug, Wilko, Card Factory, Costa, Greggs.

N/A N/A £94,000,000 5.00% JV - LandSec / Sainsbury’s

M&G May-18

Birmingham - Longbridge

312,549 M&S, Poundland, Boots, Mountain Warehouse, Smyths Toys, Holland & Barrett, and Card Factory

WAULT 13 yrs+ inc brks

£3,405,933 pa £53,600,000 6.00% St Modwen Columbia Threadneedle May-18

Solihull Sports Direct

26,795 Sports Direct WAULT 10 yrs £589,490 (£22.00 psf)

£10,000,000 5.50% Sports Direct IM Properties Apr-18

Birmingham (Selly Oak) - Battery Retail Park

135,578 Homebase, Currys PC World, Next, TK Maxx, Halfords, Pets at Home, Carpetright, Sports Direct, Poundland, Iceland, Maplin, Frankie & Benny’s.

WAULT 7.15 yrs £3,748,331 pa (£27.67 psf)

£57,500,000 6.00% Hammerson NFU Mutual Feb-18

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Investment Summary







10.

Contact

Paul Wilkinson

Tel: 020 7317 3799

Mobile: 07770 585 313

Email: [email protected]

Ellie Kirkby

Tel: 020 7317 3790

Mobile: 07764 241 898

Email: [email protected]

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VATThe property is elected for VAT and it is envisaged that the property will be sold by a way of Transfer of a Going Concern (TOGC).

EPCEPC certificate and recommendation reports are available and can be provided on request.

ProposalWe are instructed to seek a price of £18,700,000 subject to contract and exclusive of VAT. This would give a net initial yield of 7.00%, after allowing for purchaser’s costs of 6.74%.

11.

MISREPRESENTATION NOTICE. Avison Young give notice to anyone who may read these particulars as follows:

1. These particulars are prepared for the guidance only of prospective purchasers. They are intended to give a fair overall description of the property but are not intended to constitute part of an offer or contract. 2. Any information contained herein (whether in the text, plans or photographs) is given in good faith but should not be relied upon as being a statement of representation or fact. 3. Nothing in these particulars shall be deemed to be a statement that the property is in good condition or otherwise nor that any services or facilities are in good working order. 4. The photographs appearing in this brochure show only certain parts of the property at the time when the photographs were taken. Certain aspects may have changed since the photographs were taken and it should not be assumed that the property remains precisely as displayed in the photographs. Furthermore, no assumptions should be made in respect of parts of the property which are not shown in the photographs. 5. Any areas, measurements or distances referred to herein are approximate only. 6. Where there is reference in the particulars to the fact that alterations have been carried out or that a particular use is made of any part of the property, this is not intended to be a statement that any necessary planning, building regulations or other consents have been obtained and these matters must be verified by an intending purchaser. 7. Descriptions of the property are inevitably subjective and the descriptions contained herein are given in good faith as an opinion and not by way of statement of fact. Plans are published for convenience of identification only and although believed to be correct, their accuracy is not guaranteed and they do not form part of any contract. October 2018.

Designed and produced by Creativeworld Tel: 01282 858200.

Investment Summary







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Solihull Gate Retail Park - Avison Young Retail · 2018. 10. 17. · Investment Summary Location...

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Transcript of Solihull Gate Retail Park - Avison Young Retail · 2018. 10. 17. · Investment Summary Location...