Centrally Located Trade Counter/Showroom Investment
Keyline Builders Merchants Ltd, County Park, Shrivenham Road, Swindon, SN1 2NS
• Trade counter unit(1990’s)of29,765sqftGIA,withextensiveyardandlow site coverage: 24%
• Tenant – Travis Perkins (Properties) Ltd - D&B 5A1
• Occupier - Keyline Builders Merchants Ltd(TravisPerkinsplcsubsidiary)–D&B 5A1
• FRIleasefor12.4 years, expiring 30th November 2031(subjecttoaScheduleofCondition)
• Virtual Freehold–200yearleaseholdfrom2006atapeppercornrentalwithanOption to purchase Freehold for £1
• Lowcommencingrentof£4.54 psf(payablemonthly)forthetradeunit;(assuming45%sitecoverage,£1.50psfforadditionalyardandmezzaninesat50%)
• Minimum fixed increases at rent review in Dec 2022 & Dec 2027 to the higher of two thirds of Market Rent or 3% pa(15.93%)
• Current estimated Market Rent: £195,000 pa(£6psfGIAplus£1.50psfforadditionalyard)
• Offers in excessof £2,615,000,exclusiveofVAT(£88psfCapitalValue,incl.mezzanines)
Investment Summary
Keyline Builders Merchants Ltd, County Park, Shrivenham Road, Swindon, SN1 2NS
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Income Yield
NetInitialYield £146,037pa 5.25%
MinimumRev.Yield-1stDec2022 £169,297pa 6.09%
MinimumRev.Yield-1stDec2027 £196,262pa 7.05%
NetEquivalentYield - 6.55%
YieldProfile:assuming 6.40% Purchaser’s Costs
LocationSwindon is Wiltshire’s principal town and commercial centre. It is strategically located on the M4 corridor, between Jcts.15 & 16 and is home to a diverse employment base, including many national and international companies such as BMW, Intel, Catalent Pharma. Solutions and Nationwide Building Society.
Swindon has excellent road links to major conurbations and the motorway network, being 80 miles west of London; 40 miles equidistant between Bristol or Reading, and 34 miles south east of Gloucester, via the A419 to the M5. This has cemented the town as a logistics hub with established occupiers such as Howard Tenens, with new facilities for B&Q and Iceland Foods.
First Great Western’s £10bn upgrade to the principal east/west rail-line will improve connections into Bristol, Reading and London. Regular services of c 50 mins to London Paddington have made Swindon a viable commuter town for the capital. The current population is 220,363 (2017), projected to grow to 264,300 by 2036.
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J7
J9
J11
J6
J5
A24
CRAWLEY
LEATHERHEAD
TONBRIDGE
BURGESS HILL
BRIGHTONWORTHING
HORSHAM
EASTBOURNE
M25
M25
M23
A264
A23
A24
A272
A27
A27
A22A26
A272
A26 A21
A21
A264
A22
A22
A273A23
M4
M40
M4
M5
A40
A419A420
A346
A34M3
MAIDENHEAD
AYLESBURY
BASINGSTOKE
BATH
BRISTOL
CHELTENHAM
STROUD
SWINDON
GLOUCESTER
J15
J16
J12
J8a
J9
J13
J15J20
J11a
J11
A417
Keyline Builders Merchants Ltd, County Park, Shrivenham Road, Swindon, SN1 2NS
BURGESSHILL
A273
CHARLES AVENUE
YORK ROAD
ALBERT DRIVE
VIC TORIA CLOSE
VICTORIA ROADVICTORIA WAY
ROYAL GEORGE ROAD LOWER CHURCH RD
PARK ROAD
CRESCENT ROAD
CIVI
C WAY
STATION ROAD
CHAN
CTON
BURY
ROA
D
KEYMER ROAD
JUNC
TION
ROA
D
MILL ROAD
LEYLANDS ROAD
VICT
ORIA AVE
SWINDON TOWNFOOTBLL CLUB
SWINDON RUGBY CLUB
COPSE AVE
SHRIVENHAM RD
BRIDGE END RD
CHAPEL ST
CIRENCESTER RD
A4313
OCOTAL WAY
SHRIVENHAM RD
A4289
A4312
DRAKES WAY
QUEENS DRIVE
MARLOWE AVE
STRATON RD
SWINDON RD
Keyline Builders Merchants Ltd
BMW Swindon Pressings
Empire Imax Cinema
Greenbridge Retail & Leisure Park
Mercedes Benz
Big Yellow Self Storage
CarShop Swindon
MG
Allen Ford
Enterprise Rent-a-car
Keyline Builders Merchants Ltd
M4 Self Storage A4312
SHR
IVEN
HA
M R
D
Keyline Builders Merchants Ltd, County Park, Shrivenham Road, Swindon, SN1 2NS
WH Smiths
SituationThe property is situated in an established commercial area c.1.5 miles to the east of the town centre. Greenbridge Retail Park is the dominant OOT location for the town and is 0.5 miles to the east. Roundabout access is off Shrivenham Rd and the property occupies a prominent self contained site fronting the estate road within County Business Park. The remaining properties within the Park comprise three purpose built, multi-let office and warehouse blocks. Tenants include Hills of Swindon, Verelogic, and Vets Now Referrals.
There are a number of automotive operators in the immediate area, including Carshop Swindon, Ford and Mercedes Benz. Additional trade operators including Kellaway, Wickes and Screwfix, which are all located on the Techno Trading Estate.
A recent residential scheme, centred on Culverhouse Rd, immediately abuts the property to the south west.
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Keyline Builders Merchants Ltd, County Park, Shrivenham Road, Swindon, SN1 2NS
The property comprises a single light industrial unit, incorporating trade counter/showroom; office, mezzanine and ancillary accommodation. The extensive service yards have a maximum depth of 45m to the rear and 29m to the side of the unit with dual vehicular access from the estate road, permitting future subdivision and/or extension of the unit.
Description
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Keyline Builders Merchants Ltd, County Park, Shrivenham Road, Swindon, SN1 2NS
Principal features include:
• Steelportalframeconstructionwithprofiledmetalsheetcladding/roofing
• Concreteslabfloorsand5.6meavesheight
• Twosteel-framedmezzaninefloors,usedforstorage
• Customeraccesstothetradecounterandoffices
• Threerollershutterdoors
• Serviceyardsecuredbybrickwalls,palisadefencingandgates
Accommodation
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Keyline Builders Merchants Ltd, County Park, Shrivenham Road, Swindon, SN1 2NS
Area Sq m GIA Sq ft GIA
Ground Floor
Warehouse 1,784.6 19,209
Office 152.0 1,636
Ground Floor Total 1,936.6 20,845
Overall Total 2,765.3 29,765
First Floor Office 151.8 1,634
Mezzanine 1 401.7 4,324
Mezzanine 2 275.2 2,962
A Plowman Craven report can be provided on a ‘non-reliance’ basis.
N.B. Mezzanines rentalised at review.
Total site area is approximately 1.98 acres (0.80 h.a.) with a site coverage of 24% (based on ‘building footprint’).
Site Area
Site boundary indicated in red for illustrative purposes only.
• Term:200 years from 1st December 2006 at a peppercorn rental
• Freeholder:KeylineBuildersMerchantsLtd
• Guarantor:TravisPerkins(Properties)Ltd.
• ‘CallOption’:The Freehold interest can be bought for £1 by the Head Leaseholder, exercisable on expiry of the occupational lease or if a Group company of Travis Perkins plc ceases to have an interest in it.
Tenure - Virtual Freehold
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Keyline Builders Merchants Ltd, County Park, Shrivenham Road, Swindon, SN1 2NS
Accounts Turnover Pre-Tax Profit Total Equity
Y/end12/2018 £92.2m £52.2m £277.1m
Y/end12/2017 £87.3m £68.9m £332.7m
Y/end12/2016 £76.9m £44.9m £324m
Both companies have a 5A1 D&B Rating, representing a “minimum risk of business failure” and summaries from the available accounts for the three previoustradingyearsare:
Travis Perkins (Properties) Ltd (Reg. No: 00468024)
Tenant’s and Occupier’s Covenant
Keyline Builders Merchants Ltd (Reg.No:SC042425)
Accounts Turnover Pre-Tax Profit Total Equity
Y/end12/2018 £523.3m £24.6m £209m
Y/end12/2017 £517.3m £29.1m £239.2m
Y/end12/2016 £484.4m £32.7m £266m
Travis Perkins plc is the UK’s leading company in the builders’ merchanting and home improvement markets, with 20 businesses trading from over 2,000 sites. It reported a 4.9% increase in like-for-like Group sales to £6.74bn in 2018, with EBITA 1.3% lower at £375m and total Assets of £5.12bn. The Group reported a 7.3% increase in ‘like for like’ sales in their Q1 2019 trading update. Keyline sits within the ‘Merchanting Division’ which reported a ‘like for like’ sales increase of 10.6%.
• Tenant:Travis Perkins (Properties) Ltd
• Term:25yearsfrom1stDecember2006 (12.4 years unexpired), FRI (subject to a Schedule of Condition).
• CurrentRental:£146,037 pa, payable monthly
• Rent Review – 5 Yearly to higher of two-thirds of Market Rent or 3% pa compound increase (15.93% increase).
• Minimum Reversionary Rental: 1st December 2022 - £169,297 pa 1st December 2027 - £196,262 pa
• Occupier:KeylineBuildersMerchantsLtd,asapermittedGroupoccupierof Travis Perkins plc.
• RenewalOption:TheTenanthasanoptiontorenewtheleasefor25years,atMarket Rent but otherwise on identical lease terms, including the rent review basis.
Occupational Lease
Current estimated Market Rent: £195,000 pa (at £6 psf on GIA & £1.50 psf for surplus yard, assuming 45% site coverage and excl. mezzanines).
ERV
Occupational Market
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Keyline Builders Merchants Ltd, County Park, Shrivenham Road, Swindon, SN1 2NS
Date Address Postcode Sq Ft Rent PA Rent PSF Comment Tenant
U/O Unit18,EquityTrade&IOCentre SN34NS 3,816 £47,700 £12.50 CurrentlyU/O Kitchen+BathroomCo
Jun-19 Unit1Westerngate,HillmeadPark SN55WN 25,449 £176,616 £6.94 Detachedwarehousewithyard MTDUK&IRE
Mar-19 UnitB2StirlingCourt SN34TQ 25,589 £166,329 £6.50 Modernsemi-detachedwarehouse RecyclingTechnologies
Jul-18 12MurdockRoad,DorcanIndEst SN35HY 38,278 £290,000 £7.58 Detachedwarehousewithyard ConstructorGroup
Jun-18 Unit10TechnoTradingEstate SN28ER 3,415 £24,008 £7.03 Endterracetradecounterunit BarryShadickTyresLtd
Apr-18 Unit13KembreyPark SN28UU 3,119 £20,274 £6.50 Modernmulti-letunits SJHarrisServices
Investment Market Date Address Price NIY Sq Ft Rent PSF Cap Val psf Comment
Jun-19 Selco,Erdington £5,270,000 4.96% 37,961 £7.35 £139.00 Selcowith12.5yrsunexp(OMV)+25%sitecoverage.
May-19 Fedex,LysanderRd,Bristol £6,180,000 4.40% 49,120 £5.90 £126.00 Fedexwith6.25yrsunexp(OMV)+43%sitecoverage.
May-19 SpeedyHire,Gloucester £1,950,000 5.50% 18,923 £5.99 £103.00 SpeedyHire,new10yearlease(omv),TOB5yrs+22%sitecoverage.
Dec-18 MKMBuilders,Crewe £3,430,000 4.94% 19,709 £9.16 £174.00 MKMBuildingServiceswith15yrsunexp(OMV)
Oct-18 TravisPerkins,MeltonMowbray £1,400,000 4.38% 8,966 £7.24 £156.00 TravisPerkinswith9yrsunexp(OMV)
Jun-18 Jewson,Huntingdon £2,650,000 4.72% 16,668 £7.97 £159.00 LettoJewsonwith9.8yrsunexp(OMV)+18%sitecoverage.
May-18 TravisPerkins,AcreRoad,Reading £4,825,000 3.79% 15,863 £12.30 £304.00 TravisPerkins,7.9yrsWAULT+30%Sitecoverage
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PlanningPlanning permission was granted for ‘County Park’ in 1990, permitting “the construction of four B1,B2 and B8 business/storage units, including use as a builders merchants, offices (B1), associated car parking and construction of a new vehicular access off Shrivenham Road”.
Business Rates CurrentRateableValue:£107,000.
EPC ThepropertyhasanEPCratingof:C 75. A copy of the report is available on request
VATThe property has been elected for VAT and the transaction will be treated as a TOGC.
Keyline Builders Merchants Ltd, County Park, Shrivenham Road, Swindon, SN1 2NS
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Keyline Builders Merchants Ltd, County Park, Shrivenham Road, Swindon, SN1 2NS
MISREPRESENTATION ACT 1967 DISCLAIMER - Messrs Hoddell Stotesbury Morgan Limited (9050701) trading as HSM, for themselves and for the vendors of this property whoseagentstheyaregivenoticethat:-(i)theparticularsaresetoutasageneraloutlineonlyfortheguidanceofintendingpurchasersand do not constitute, nor constitute part of, an offer or contract; (ii) all descriptions, dimensions, references to conditions and necessary permissions for use and occupation, and other details are given in good faith and are believed to be correct but any intending purchaser should not rely upon them a statement or representations of fact but should satisfy themselves by inspection or otherwise as to the correctness of each of them; (iii) no person in the employment of HSM has any authority to make or give any representation or warranty whatever in relation to this property. (iv) unless otherwise stated all rents or prices quoted are exclusive of VAT which may be payable in addition. (v) HSM has not made any investigations or otherwise of any issues concerning pollution and potential land, building, air or watercontamination.Prospectivepurchasersmustundertaketheirownenquiriesandsatisfythemselvesinthisregard.Date:June2019.
An electronic dataroom has been prepared. Please contact the selling agentsforaccesstothedataroomandforformalinspections:
Additional Information and Inspections
Tom Larkin
E:[email protected]:02073181938
www.hsmuk.com
Paul Yeadon
E:[email protected]:02073181931
ProposalSeeking offers in excess of £2,615,000 (Two Million, Six Hundred and Fifteen Thousand Pounds) for the virtual freehold interest, subject to contract and exclusive of VAT. A purchase at this price would show the following yield profile, assuming the minimum fixed increases in income at review and standard Purchaser’sCostsof6.40%.(incl.SDLT):
SUBJECT TO CONTRACT
AML When submitting a bid for the property, potential purchasers will need to provide appropriate documentation capable of satisfying the requirements of the Anti Money Laundering Regulations.
Income Yield
NetInitialYield £146,037pa 5.25%
MinimumRev.Yield-1stDec2022 £169,297pa 6.09%
MinimumRev.Yield-1stDec2027 £196,262pa 7.05%
NetEquivalentYield - 6.55%
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