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st andrews retail park coventry road, birmingham Open A1 non food retail warehouse investment


investment summary Open A1 non food retail warehouse investment Birmingham is the UK’s second largest city located approximately 48 miles south east of Stoke-on-Trent and 118 miles north west of London.

Open A1 non-food planning consent on the Woolworths unit, with potential to install mezzanine accommodation, subject to planning.

The city benefits from an extensive resident urban area catchment population of 970,892, rising to 2,383,081 within 12 miles of the city centre. Birmingham’s population is expected to increase by 12.2% between 2003-2028. This compares with a projected growth rate of 11.04% nationally.

Freehold.

Situated in a prominent, established retail warehouse location, just off Birmingham’s inner ring road (A4540). Modern, purpose built retail park comprising a Woolworths unit of 80,000 sq ft, together with an 88,185 sq ft adjacent Wm. Morrison foodstore.

Asset management initiatives available to downsize Woolworths and create further open A1 non-food accommodation. Well let to the substantial national covenant of Woolworths plc for a term of 20 yearsfrom 19/10/2001 at a passing rent of £14.50 per sq ft. The foodstore element has been sold off to Wm. Morrison Supermarkets plc on a 250 year long leasehold at a peppercorn rent under a lease dated 28/07/00. Woolworths unit reversionary to an assumed ERV of £15.00 per sq ft.

Offers are invited at a price in excess of £21,940,000 (Twenty One Million, Nine Hundred and Forty Thousand Pounds), subject to contract and exclusive of VAT. This price reflects the following yield profile, assuming purchaser’s costs at 5.7625%:Initial 5.00% Reversionary

5.17%

Nominal Equivalent

5.14%

True Equivalent

5.31%


Birmingham City FC


SUTTON COLDFIELD M6

1.0 location

WEST BROMWICH

M6

n The city of Birmingham is located at the centre of the

n The city has a regionally dominant retail provision

West Midlands conurbation, approximately 48 miles south east of Stoke on Trent, 44 miles west of Leicester and 118 miles north west of London.

n Birmingham is the UK’s second largest city and benefits

from excellent road communications, being situated at the centre of the national motorway network. The city is bordered by the M5, M6 and M42 motorways, which in turn connect directly to the M1, M40, M54 and M69 motorways. Birmingham is served by three mainline rail stations providing an extensive nationwide rail service and a direct link to London Euston, with a fastest journey time of approximately 1 hour 30 minutes.

and in recent years has undergone significant regeneration. This includes the UK’s second largest retail centre, the redeveloped Bullring Shopping M5 Centre (Source: CACI), providing 1.2 million sq ft of prime retail space, anchored by Debenhams and Selfridges department store. Although traditionally a manufacturing and engineering city, today Birmingham has broadened its economy to include more service based industries, with a strong focus towards the A4123 conference and exhibition sectors.

M5 The Fort Shopping Park J6

A5127

Castle Vale Retail Park

B4114 Stechford Retail Park

B4145

Birmingham City Centre

A47

St Andrews Retail Park

A456 A4540 A41

A45 B4145

n Birmingham has a substantial resident urban area

population of 970,892 (2001 Census), extending to 2,383,081 within 12 miles of the city centre (1994 estimate). The population of Birmingham is projected to increase by 4,000-5,500 persons per year until 2028, representing a 12.2% increase overall between 2003-2028. This compares with a projected growth of 11.04% nationally (Source: Office for National Statistics).

M6

A34

A38

A435 A34

Battery Retail Park

A41

Sears Retail Park

n  The subject property is located within the district of Hodge Hill and the ward of Bordesley Green. Hodge Hill has a population of 107,826 (2001 Census) and Bordesley Green 31,343 persons (2001 Census).

Solihull Retail Park

B4102


M6 Toll

2.0 situation Vauxhall

A47

Saltley

A41

M42

St Andrew’s Retail Park is situated 2.5 miles east of Birmingham city centre, in a prominent location at the junction of Coventry Road and Cattell Road (B4128), just off the city’s inner ring road (A4540). National Indoor Arena

New Street Station

M

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A45

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HIG HG AT E

A4540

AY Highgate EW DL D I

Bordesley Green

A4145

RD

ST

A4132

JE N KI N S

A38

D

CO VE NT RY

A4130

B4128

HILL OCK RO

Five Ways

Lee Bank

RY R COVENT

OAD LL R TTE CA

Little Bromwich

ST

A4540

Digbeth

Birmingham City FC

Adderley Park

ORIA

Carpetright, MFI, Dunelm, Brantano and Halfords. Birmingham City Football Club is also located opposite the property on Cattell Road.

Deritend

S

Birmingham International Airport

St Andrews Retail Park

Bordesley

A4100

n As detailed on the attached map, the property forms part of an established retail warehouse pitch, with approximately 135,000 sq ft of cluster developments located off the inner ring road. Retailers represented include Currys, PC World, DFS,

BORDESLEY GREEN ROAD

A4132

VICT

(forming the start of the A38(M) Aston Expressway) and the inner ring road (A4540) and Birmingham city centre to the west.

A4540

A4114

Birmingham City Centre

DLEWAY ATE MID HG HIG

n The B4128 is a busy arterial route connecting to the A45, A34

B4145

HIG HW AY

A41

Small Heath

A45 A4540

M42


3.0 retail warehousing in birmingham Birmingham is served by a strong retail warehouse provision with important schemes including The Fort Shopping Park, Solihull Retail Park and Castle Vale Retail Park. However, as detailed on the attached street map, only limited developments serve the substantial population of south east Birmingham between the city centre and Solihull, providing the potential to create a dominant scheme serving this catchment.

The Fort Shopping Park (Co-ownership) Situated just off the M6 motorway, approximately 4 miles north east of the subject property, this scheme extends to 256,000 sq ft of open A1 non food accommodation. Major occupiers include Bhs, Next, Arcadia and Marks & Spencer, with the highest rent currently achieved being £50.00 per sq ft to New Look in March 2006.

Castle Vale Retail Park (Prupim) Comprising 182,000 sq ft of open A1 accommodation, this park consists of a single retail terrace anchored by a Sainsbury’s foodstore. The scheme is situated 0.5 miles east of the Fort Shopping Park with tenants including Comet, TK Maxx and Argos. The most recent evidence is a letting to SCS at £25.00 per sq ft from July 2005.

Stechford Retail Park (Morley Fund Management) Stechford Retail Park comprises 107,000 sq ft of open A1 non food accommodation, situated 2.5 miles north east of the subject property. Occupiers include Matalan, Argos and Currys, with a highest letting to Dreams at £16.50 per sq ft from September 2004.

Solihull Retail Park (Standard Life Investments) Located approximately 5 miles south east of the subject property, this park comprises 180,000 sq ft of open A1 non food accommodation. The scheme is, however, occupied by predominantly bulky goods occupiers including B&Q, MFI, Currys and Mothercare World. The most recent evidence on the park is a rent review of the SCS unit at £36.00 per sq ft from March 2007.


4.0 description St Andrews Retail Park is a modern, purpose built retail park developed in 2000, comprising Woolworths and Wm. Morrison. Both units are of steel portal frame construction with half height brick elevations under profile metal cladding, complete with extensive entrance lobby features. The Woolworths unit has a clear eaves height of approximately 6.0 metres, therefore providing the ability to install a mezzanine, subject to planning. Customer vehicle access to both units is provided directly via Coventry Road, leading from the inner ring road and Cattell Road. Service vehicles may access the Woolworths unit via Cattell Road and Wm. Morrison via Greenway Street, leading from Coventry Road. Customer car parking is situated to the front of both units providing approximately 670 spaces, equating to a ratio of 1:251 sq ft. The car parking area has been demised to each of the occupiers, although there is a specific provision that customers have the right to use the whole car park. In practicality, customers use either section of the car park freely. We estimate the site area is approximately 10.13 acres (4.10 hectares).

5.0 accomodation The subject property provides the following measured gross internal areas:

Unit sq ft sq m Woolworths

80,000

7,432

Wm. Morrison

88,185

8,192

168,185

15,624

Total


6.0 planning Planning consent for the Woolworths unit was originally granted in February 2001 to provide:

“ Construction of non food retail unit, car parking and associated works.”

B4128) Road ( Cattell

Condition C14 of the consent sets out the following restriction:

“ The unit indicated…should not be further subdivided without the prior consent of the Local Planning Authority.” car park

7.0 tenure The site, as outlined in red, is held freehold.

car park

8.0 tenancies The Woolworths unit is let to Woolworths plc for a term of 20 years from 19/10/2001 (expiring 18/10/2021), with a passing rental of £1,160,000 per annum, equating to £14.50 per sq ft. The lease is drafted on a full repairing and insuring basis, subject to upwards only rent reviews every 5 years. At present, the 19/10/2006 rent review remains outstanding. The Wm. Morrison unit was sold to the occupier on a 250 year long leasehold at a peppercorn rent under a lease dated 28/07/2000.

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sold off to WM. Morrison long leasehold

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9.0 estimated rental value The Woolworths unit is located in a prominent position within a busy retail warehouse pitch, adjacent to a large foodstore and benefits from an open A1 non food planning consent. We consider the unit to be reversionary with the rent low both in a regional context and compared to open A1 rents within Birmingham. At present, the 19/10/2006 rent review remains outstanding. The table below illustrates a number of comparable transactions and rent reviews that in our opinion, demonstrate that the subject property has an ERV of £1,200,000 per annum, equating to £15.00 per sq ft.

Li

e ttl

en re G

ne La

Town

Address

Tenant

Birmingham

Dunlop Way

Milton Keynes

Area (sq ft)

Transaction

Effective Date

Passing Rent (p.a.)

Passing Rent (p.s.f)

B&Q Warehouse 106,245

Rent Review

01/12/2005

£1,809,225

£17.03

Cairngorn Drive

Homebase

81,675

Open Market Letting

15/10/2005

£1,420,000

£17.40

Milton Keynes

Grafton Gate

Toys R Us

47,544

Rent Review

15/07/2005

£832,195

£17.50

Kidderminster

Crossley Retail Park

B&Q Warehouse 126,556

Rent Review

24/06/2005

£1,578,970

£15.50

Halesowen

Mucklow Hill

B&Q Warehouse

92,400

Rent Review

16/11/2004

£1,560,000

£16.88

Birmingham

Dartmouth Circus

Matalan 43,382

Rent Review

25/03/2001

£555,900

£12.81

Comments

Unit has now been subdivided

2006 rent review outstanding


10.0 asset management opportunities

11.0 tenant covenant

We are of the opinion that the subject property provides a number of attractive asset management options. These are set out below:-

Woolworths plc is one of the UK’s leading general merchandise businesses, successfully operating 5 subsidiary companies. These include Woolworths, Entertainment UK (UK’s leading distributor of entertainment products with an annual turnover in excess of £1.1 billion), 2 Entertain (joint venture audio and video business), the Bertram Group (book wholesaler, distributor and library services) and Total Home Entertainment (combined wholesalers and distributors of books, audio, video, multimedia and computer games). Woolworths was established in 1909 and as at March 2007 traded from 818 stores both in and out of town.

n Downsize part of the existing Woolworths unit to provide valuable open A1 space to

let. Given the excellent configuration and eaves height of the subject property, this could either be let as a whole or in part complete with mezzanine accommodation (subject to planning). n Seek to agree a regear of the Woolworths plc lease in conjunction with creating new

space to let.

Woolworths plc is the main operating company and therefore as expected provides a strong covenant. Their latest available 3 year accounts are summarised as follows:-

n Construct either a restaurant or retail pod unit in the car park. This could be let to a

restaurant operator such as Pizza Hut or KFC, both of whom have requirements for Birmingham. Alternatively, a unit could be let to a series of small unit occupiers such as Starbucks, Subway or Game. Given the draw of the Wm. Morrison foodstore and the proximity of Birmingham City Football Club, this should provide an attractive location.

Turnover £ (000’s)

Pre-Tax Profit

£ (000’s)

Tenant

Woolworths plc

Accounts Year End

Net Worth £ (000’s)

28/01/06

1,868,940

15,438

29/01/05

2,058,431

(44,584)

95,501

31/01/04

2,120,078

22,421

130,220

D&B Rating

18,312 4A1


12.0 vat The property has been elected for VAT, and therefore VAT will be payable on the purchase price.

13.0 proposal Offers are invited at a price in excess of £21,940,000 (Twenty One Million, Nine Hundred and Forty Thousand Pounds), subject to contract and exclusive of VAT. This price reflects the following yield profile, assuming purchaser’s costs at 5.7625%:-

Initial

5.00%

Reversionary

5.17%

Nominal Equivalent

5.14%

True Equivalent

5.31%


Contacts for further information: Wilkinson Williams Mellier House 26a Albemarle Street London W1S 4HY

James Honeyman Tel: 020 7317 3790 Fax: 020 7495 5432 E-mail: j.honeyman@wilkinsonwilliams.co.uk

st andrews retail park coventry road, birmingham Open A1 non food retail warehouse investment

Paul Wilkinson Tel: 020 7317 3799 Fax: 020 7495 5432 E-mail: p.wilkinson@wilkinsonwilliams.co.uk

www.wilkinsonwilliams.co.uk MISREPRESENTATION NOTICE  ilkinson Williams LLP give notice to anyone who may read these particulars as follows: 1. These particulars are prepared for the guidance only of prospective purchasers. W 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, artist impressions, photographs or digitally enhanced imagery) 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 plans, artist impressions, photographs or digitally enhanced imagery appearing in this brochure show only certain parts of the property and certain aspects may have changed since they were produced and it should not be assumed that the property remains precisely as displayed within these particulars. Furthermore, no assumptions should be made in respect of parts of the property which are not shown. 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 are proposed, 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. 8. 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.


12pp 104476 Birmingham St Andrews RP Inv bro7