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bearwood shopping centre, smethwick, birmingham B66 4BH
Well Secured, Food Store Anchored, Freehold Retail Investment
Well Secured, Food Store Anchored, Freehold Retail Investment Bearwood Shopping Centre, Smethwick, Birmingham B66 4BH
Investment Summary | Location & Communications | Local Ecomony & Demographic Profile | Retailing in Bearwood | The Bearwood Shopping Centre |Accommodation | Tenure | Tenancies | Current Income & Analysis | Property Management & Service Charge | VAT | EPC | Proposal | Further Information |
2
BEARWOOD ROAD (A4030)
RU
TLAND
RO
AD
S
ANDON ROAD (B4125)
POPLAR ROAD
ST
MA
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S R
OA
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For illustrative purposes only
Well Secured, Food Store Anchored, Freehold Retail Investment Bearwood Shopping Centre, Smethwick, Birmingham B66 4BH
Investment Summary | Location & Communications | Local Ecomony & Demographic Profile | Retailing in Bearwood | The Bearwood Shopping Centre |Accommodation | Tenure | Tenancies | Current Income & Analysis | Property Management & Service Charge | VAT | EPC | Proposal | Further Information |
3
INVESTMENT SUMMARY■ A prominent and substantial retail parade situated within the
busy Birmingham suburb of Smethwick
■ 5,413m² (58,268 sq.ft) comprising a food store, 9 retail units and 120 space surface car park
■ An extensive site comprising circa 2.35 acres
■ Well secured to a variety of popular national multiple retailers including Aldi, Argos, Poundland, Greggs, Card Factory and Lloyds Pharmacy
■ Freehold
■ Average weighted unexpired lease term (AWULT) of 10.5 years to expiry
■ Asset management opportunities
■ Low base rental tone
■ Offers in excess of £8,650,000 (Subject to Contract and Exclusive of VAT)
■ Reflecting an attractive net initial yield of 7.5%
Well Secured, Food Store Anchored, Freehold Retail Investment Bearwood Shopping Centre, Smethwick, Birmingham B66 4BH
Investment Summary | Location & Communications | Local Ecomony & Demographic Profile | Retailing in Bearwood | The Bearwood Shopping Centre |Accommodation | Tenure | Tenancies | Current Income & Analysis | Property Management & Service Charge | VAT | EPC | Proposal | Further Information |
4
Location & CommunicationsBearwood is a thriving commercial and residential suburb and forms the
southern part of Smethwick to the north of the Hagley Road (A456). The
town is centred on Bearwood Road at the crossroads of Sandon Road and
Three Shire Road, bordering the city centre, 4 miles (6.4 km) to the east. The
town also benefits from excellent communications strategically lying within
the motorway network which skirts the city (M5, M6, and M42). Bearwood
is approximately 117 miles (188km) north-west of London and 84 miles
(135km) south of Manchester.
Smethwick benefits from direct, frequent train services into Birmingham
New Street (8 minutes) and Birmingham Moor Street (13 minutes) every
10 minutes. New Street station is 80 minutes from London Euston and 90
minutes from Manchester Piccadilly with trains running every 20 minutes.
A frequent train service also provides access to Birmingham airport in a
journey time of 30 minutes. The airport attracts over 9 million passengers a
year, making it the 7th busiest airport in the UK. The proposed HS2 railway
will indirectly benefit the subject location as it will link London to Birmingham
in a journey time of circa 49 minutes.
A45A45
A41
A34A452
A452
A453
A435
A441
A441
A441
A435A446
A448
A491
A456
A456
A449
A449
A491
A449
A450
A452
A452
A454
A4177
A38
A456A4123
A4123
A4123
A458
A41
A41 A38
A34
A5
A5
M5
M6
M6 Toll
M5
M5
M6
M6
M6
M42
M42
M42
M40
M40M40
BIRMINGHAM
Bromsgrove
Redditch
Solihull
Stourbridge
DudleyWest
Bromwich
WolverhamptonWalsall Sutton
Coldfield
Kenilworth
Marston Green
Kingsbury
Knowle
Yardley
King’s Heath
Castle Bromwich
Aldridge
Wombourne
Coleshillsmethwick
A4040
A4030
A4092
A4040
B4125
A457
B4136
A457A457B4182
A4123A4123
B4121
B4166
B4125
B4129
A457
A41
A41
A34
A4123
A456
A456
A441
A456
A456
A456
A4123M5
M5
M5
M5
A38(M)
BIRMINGHAM
Bearwood
Handsworth
West Bromwich
Oldbury
Hurst Green
Harborne
SmethwickHockley
Wit ton
Ladywood
EgbastonQuinton
bearwood shopping centre
click on the map to view in Google Maps
Well Secured, Food Store Anchored, Freehold Retail Investment Bearwood Shopping Centre, Smethwick, Birmingham B66 4BH
Investment Summary | Location & Communications | Local Ecomony & Demographic Profile | Retailing in Bearwood | The Bearwood Shopping Centre |Accommodation | Tenure | Tenancies | Current Income & Analysis | Property Management & Service Charge | VAT | EPC | Proposal | Further Information |
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Local Economy & Demographic ProfileSmethwick forms part of Sandwell Metropolitan District having a resident
population of 55,000 (2011 Census) and circa 200,000 persons residing
within a 10 minute drive time. The area has a diverse and eclectic population
mix and demographic profile with a high representation of 25-34 year olds
and a high proportion within the socio-economic group C1.
Manufacturing dominates Smethwick’s employment sector representing 26%
of the workforce with a number of company headquarters situated in the area
including Interlink Express, a major employer who have been located in the
town since the early 2000s. The Smethwick area is set to benefit greatly from
important regeneration projects specifically the development by SWBH NHS
Trust of a new Midland Metropolitan Hospital. The £353m project will create
a ‘state of the art’ 670 bed hospital on a substantial brown field site, north of
Bearwood, amalgamating the Sandwell General Hospital at West Bromwich and
the City Hospital on Dudley Road. Construction work will commence in 2016
with completion due in 2019.
Retailing in Bearwood Retailing in the area is focussed on Bearwood Road. The busy pitch in a
densely populated residential area is well suited to its convenience led offer.
National multiple occupiers represented adjacent and near to the subject
property include Iceland, Select, Superdrug, Peacocks, NatWest, Holland
& Barrett, Lloyds Bank, Greggs, Co-operative, Barclays and Paddy Power.
The Bearwood Shopping CentreThe property occupies a 100% prime retailing pitch on Bearwood Road and
comprises an Aldi food store (part sublet to Argos) and an ‘unbroken’ retail
parade of 9 adjoining units which are arranged over ground (retail) and first
floors (ancillary). The car park to the rear of the property (demised to Aldi) is the
main 120 space surface car park in Bearwood and links directly via a covered
pedestrian passageway through the subject property to Bearwood Road. Aldi/
Argos also benefit from a separate loading bay and service area accessed via
Rutland Road with servicing for the other retail units accessed through the car
park whose entrance is also on Rutland Road. There is also a public toilet and a
substation onsite.
Well Secured, Food Store Anchored, Freehold Retail Investment Bearwood Shopping Centre, Smethwick, Birmingham B66 4BH
Investment Summary | Location & Communications | Local Ecomony & Demographic Profile | Retailing in Bearwood | The Bearwood Shopping Centre |Accommodation | Tenure | Tenancies | Current Income & Analysis | Property Management & Service Charge | VAT | EPC | Proposal | Further Information |
6
STORE TWENTY
ONE
Card Factory
Lloydspharmacy
This Goad Plan is for identification only and not to be scaled as working drawing. No part of this plan may be entered into an electronic retrieval system without prior consent of the publisher. © Crown copyright 2010. Licence number PU100017316. For full terms and of copyright conditions visit www.goadplans.co.uk/copyright
Well Secured, Food Store Anchored, Freehold Retail Investment Bearwood Shopping Centre, Smethwick, Birmingham B66 4BH
Investment Summary | Location & Communications | Local Ecomony & Demographic Profile | Retailing in Bearwood | The Bearwood Shopping Centre |Accommodation | Tenure | Tenancies | Current Income & Analysis | Property Management & Service Charge | VAT | EPC | Proposal | Further Information |
7
AccommodationThe property provides an approximate total floor area of 5,413 m² (58,268 sq.ft) as set out in the Tenancy Schedule.
ADDRESS TENANT
AREAS Lease Start
DateLease Expiry
DateOption To
Break Next RR Current Rent
Service Charge April 2015/ March 2016 RV
Rates Payable
@ £0.482 CommentsDescription Sq. Ft. M²
545/565 Bearwood Rd (Unit A) ALDI STORES LIMITED GF (GIA) 14,697 1,365 24/10/2005 23/10/2030 23/10/2020 (T) 24/10/2015 £300,000 £14,485.07 £203,000 £97,846 Aldi report positive like for like trading. Argos sublease 15 yrs from 31/10/07. Exp. 30/10/22@£98,000pa. Argos Tenant break option 31/10/17. 120 space car park to the rear demised to Aldi. Lease Plan available on request. No RRM for Argos
1st (GIA) 1,824 169
Argos (part sublet) GF (sublet) 10,281 955
1st (sublet) 2,095 195
567/569 Bearwood Rd POUNDLAND LIMITED GFS 3,788 352 22/08/2012 21/08/2022 22/08/2017 £100,000 £5,600.58 £81,500 £39,283
1st 3,357 312
ITZA 1,959 units
571 Bearwood Rd (Unit 2) ALAN WARWICK LIMITED GFS 995 92 16/05/2005 15/05/2015 £27,000 £1,172.27 £25,500 £12,291
1st 559 52
ITZA 595 units
573 Bearwood Rd (Unit 3) GREGGS PLC GFS 969 90 18/05/2005 17/05/2015 £26,600 £1,172.27 £24,500 £11,809 Tenant recently re-fitted. No LTA
1st 578 54
ITZA 586 units
575 Bearwood Rd (Unit 4) SCRIVENS LIMITED GFS 963 89 15/05/2005 14/05/2020 15/05/2015 £25,750 £1,172.27 £25,500 £12,291 Chose not to exercise TBO on 14/05/2015.
1st 581 54
ITZA 582 units
577 Bearwood Rd (Unit 5) SPORTSWIFT LIMITED GFS 971 90 08/11/2007 07/11/2017 08/11/2012 £32,500 £1,172.27 £24,750 £11,930
1st 574 53
ITZA 588 units
579 Bearwood Rd (Unit 6) STORE TWENTY ONE GFS 1,793 167 27/01/2015 26/01/2025 27/01/2020 (T) 27/01/2020 £41,000 £2,097.22 £40,750 £19,642 Service charge capped at current level plus RPI uplifts. At rent review the tenant's liability is capped to £45,000 pax. By way of a personal side letter the tenant pays monthly in advance. TBO in 5th year subject to 6 month rent penalty. Tenant was given 12 months rent free to be topped up by the vendor. 1st 860 80
ITZA 941 units
581 Bearwood Rd (Unit 7) LLOYDS PHARMACY LIMITED GFS 1,827 170 05/03/2004 04/03/2019 £42,750 £2,100.97 £40,000 £19,280
1st 857 80
ITZA 949 units
583 Bearwood Rd (Unit B) LEVINE BROTHERS (HOME FURNISHINGS) LTD
GFS 5,491 510 05/12/2005 04/12/2025 04/12/2020 (T) 05/12/2020 £90,000 £8,542.09 £84,000 £40,488 Break is being removed from 2015 to 2020 and term extended to 2025. Rent has reduced from £90,900 pax to £90,000 pax and tenant given 6 months rent free. RR in 12/2015 is removed. Next RR in 12/2020 is to be capped at £94,500 pax. Expected to complete before sale completes.
1st 5,208 484
ITZA 1,675 units
Public Toilet THE BOROUGH COUNCIL OF SANDWELL
n/a n/a 02/08/2006 01/01/2020 £0 - - -
Sub Station CENTRAL NETWORKS WEST PLC n/a n/a 16/10/2004 15/10/2018 £50 - - -
Total 58,268 Sq.Ft 5,413 M² Gross Passing Rent £685,650.00 £37,515.00
Well Secured, Food Store Anchored, Freehold Retail Investment Bearwood Shopping Centre, Smethwick, Birmingham B66 4BH
Investment Summary | Location & Communications | Local Ecomony & Demographic Profile | Retailing in Bearwood | The Bearwood Shopping Centre |Accommodation | Tenure | Tenancies | Current Income & Analysis | Property Management & Service Charge | VAT | EPC | Proposal | Further Information |
8
Well Secured, Food Store Anchored, Freehold Retail Investment Bearwood Shopping Centre, Smethwick, Birmingham B66 4BH
Investment Summary | Location & Communications | Local Ecomony & Demographic Profile | Retailing in Bearwood | The Bearwood Shopping Centre |Accommodation | Tenure | Tenancies | Current Income & Analysis | Property Management & Service Charge | VAT | EPC | Proposal | Further Information |
9
TenureFreehold.
TenanciesThe Bearwood Shopping Centre provides an eclectic but balanced mix of quality retailers providing a strong convenience
led retail offer. The property is predominantly anchored by Aldi (44% of gross income) who have sublet part to Argos.
Other major national multiple retailer tenants include Poundland, Greggs, Card Factory, Lloyds Pharmacy and Store
Twenty One.
The leases are largely drawn on institutional terms with outgoings recovered through a comprehensive service
charge.
Current Income & AnalysisThe current gross income is £685,650 pax.
44% of the income is secured to Aldi until October 2030 (TBO in 2020). The current Aldi rent devalues to £10.35 psf.
The subject property has an AWULT of 10.5 years to expiry and 5.6 years to break.
79% of the current gross income is let to national covenants.
44% of the income is secured to Aldi Stores Ltd. 79%
is secured to National Multiple tenants”“
21%Let to Local Operators
79%Let to National
Multiple Tenants
Income Profile
The most recent letting within the property was to Store Twenty One (579 Bearwood Road) in January 2015. The
tenant agreed a new 10 year lease with a TBO in year 5 subject to a 6 month rent penalty. The agreed rent of
£41,000 pax devalues to £41.75 psf ZA (Headline). Levine Bros (583 Bearwood Road) has also recently agreed a
lease re-gear removing a TBO in 2020 in exchange for a 6 month rent free period and a reduction in rent to £90,000
pax devaluing to £47.51 psf ZA (Headline). Opposite the property at 546 Bearwood Road, Paddy Power in May 2014
agreed a new 15 year lease at £25,000 pa devaluing to £45.43 psf ZA. Taking this into account we believe there
is a strong argument for future rental growth from this low base level.
21%
44%
14%
6%
6%5%
4%
Local Operators
Card Factory
Aldi
Store Twenty One
Poundland
Lloyds
Greggs
Income Analysis by Tenant
Well Secured, Food Store Anchored, Freehold Retail Investment Bearwood Shopping Centre, Smethwick, Birmingham B66 4BH
Investment Summary | Location & Communications | Local Ecomony & Demographic Profile | Retailing in Bearwood | The Bearwood Shopping Centre |Accommodation | Tenure | Tenancies | Current Income & Analysis | Property Management & Service Charge | VAT | EPC | Proposal | Further Information |
10
Property Management & Service ChargeThe service charge for the property is operated under two schedules with
the tenants having apportioned percentage contributions based on weighted
gross lettable floor area occupied.
The proposed service charge budget for the year ending 31st March 2016
amounts to £37,515 per annum. Aldi contribute 38.6% of this figure. A
service charge report is available upon request.
VATWe understand that the property is elected for VAT.
EPCEnergy Performance Certificates (EPCs) are available on request.
Asset Management Opportunities• Pursue lease renewal discussions with Greggs and Alan Warwick (both
in 2015) to improve the AWULT. Both parties have indicated they want
to stay.
• Negotiate removal of Aldi’s TBO in 2020. Initial discussions suggest
Aldi are receptive to this.
• Approach Card Factory for lease re-gear discussions.
• Increase low rental tone and improve tenant mix through pro-active
asset management.
• Explore break-up value potential for the asset.
• Amalgamate/ extend retail units.
ProposalWe have been instructed to seek offers of £8,650,000 (Eight Million, Six
Hundred and Fifty Thousand Pounds, subject to contract and exclusive
of VAT for the freehold interest reflecting a net initial yield of 7.5% allowing
for purchaser’s costs of 5.8%.
FURTHER INFORMATION
For further information please contact:
David Freeman James Baillie Ed Smith Patrick Over
020 7659 4830 020 7659 4839 020 7659 4831 020 7659 4832
[email protected] [email protected] [email protected] [email protected]
MISREPRESENTATION These particulars do not constitute an offer or contract. They are intended as a guide to prospective purchasers. All reasonable care has been taken in the preparation of these particulars but their accuracy is not guaranteed. The purchaser should satisfy himself and as to the correctness of these details. Neither the agents nor the vendors or lessors are to be or become under any liability or claim in respect of these particulars. These particulars are supplied on the understanding that all negotiations are conducted through this office. March 2015.
Adrian Gates Photography & Design 07710 316991