20pp 104530 Lady Bay RP 11

Lady Bay Retail Park | NottinghamOPEN A1 (NON FOOD OR FASHION CLOTHING) RE TAIL PARK INVESTMENT

n Nottingham is the dominant retail and commercial centre for the East Midlands region and benefits from a large resident urban area population of 666,358

n Lady Bay Retail Park is situated in a highly prominent location 1 mile south east of the city centre at the roundabout junction of two major carriageways (A612/A6011)

n Catchment of 492,969 persons within a 20 minute a drive time of the subject property

n Freehold retail park developed in 1998 consisting of 97,358 sq ft, well let to 8 tenants including ScS, JJB Sports, Staples, Dreams, The Range and Hobbycraft

n The development benefits from an open A1 non-food (excluding fashion) planning consent

n Compared to other schemes in Nottingham the property is let off relatively low passing rents of between £13.52 - £20.00 per sq ft for the small units and £11.82 per sq ft for The Range, with strong reversionary potential

n There are a series of asset management opportunities available, including the downsize of existing tenants and development of additional space

n Offers are invited at a price in excess of £24,925,000 (Twenty Four Million, Nine Hundred and Twenty Five Thousand Pounds), subject to contract and exclusive of VAT for the freehold interest. This price reflects the following yield profile, assuming purchaser’s costs of 5.7625%:

Investment Summary

Initial 5.50%

Reversionary 5.79%

Nominal Equivalent 5.75%

True Equivalent 5.96%

L A D Y B A Y R E T A I L PA R K | N O T T I N G H A M

The City of Nottingham is located approximately 16 miles east of

Derby, 25 miles north of Leicester and 40 miles south of Sheffield,

and is generally considered the dominant retail and commercial

centre for the East Midlands region.

Nottingham is strategically located adjacent to the M1 motorway

to the west of the city, with access provided at Junctions 24-26 via

a major A road network, including the A610 and the A52, which

connects directly to the city centre. The A52 runs in an east/west

direction and also provides access to the A1(M). Whilst the A52,

A6154 and A60 form the circular Nottingham relief road. Nottingham

is also served by a direct rail service to London St Pancras, with a

fastest journey time of approximately 1 hour 45 minutes.

Nottingham has a large resident urban area population of 666,358

(2001 Census) extending to 956,055 within 12 miles of the city centre

(1994 estimate). Within this catchment, some 130,477 persons live

within a 10 minute drive time from the subject property with 492,969

persons living within a 20 minute drive time.

The city has become a regionally significant retail centre, being

ranked the fifth most important retail centre in 2006 (source: CACI

Retail Footprint 2006). Nottingham has two main shopping centres;

the Victoria Centre (961,000 sq ft) and the Broadmarsh Shopping

Centre (430,000 sq ft). The Broadmarsh Shopping Centre is currently

undergoing a £400 million redevelopment to create 300 shops (1.36

million sq ft) with two new shopping centres also due to open in

2007, Trinity Square and The Pod, increasing the shopping sales area in

the city centre by 28% (4.3 million sq ft).

Nottinghams economy has been dominated by manufacturing

industries, in a particular the textile and lace sectors. In more recent

times, the city has diversified its economy into service based activities

and modern industries such as pharmaceuticals and Bioscience.

The city is one of the UK’s 6 ‘Science Cities’, developing from a large,

successful university and its historical associations with Boots the

Chemist who still provide some 2,800 jobs in the city. The financial

and business services sector also grew rapidly during the 1990’s with

major employers including Experion Credit Services, Capital One and

Siemens Communications.

Under the class groupings within the 2001 Census, the higher two

categories, AB and C1 are over represented within the 10 minute drive

time at 52.64%, compared to a national average of 51.10%.

Both car ownership and household owner occupation are broadly

in line with the national average. Some 44.10% of the urban area

have 1 car as compared to a GB average of 43.80% whilst 66.0% of

households are owner occupied compared to 68.3% nationally.

Location1 Demographics2


NOT TINGHAM


Lady BayRetail Park

Lady Bay Retail Park is situated approximately 1 mile south east

of Nottingham city centre in a highly prominent location at the

roundabout junction of Manvers Street (A612), Daleside Road

(A612) and Meadow Lane (A6011). All three roads provide an

effective connection to both the city centre and east and south

east Nottingham, including direct connections to both the A52

and A60.

The subject property benefits from excellent visibility to both

the A612 and A6011, with much of the vehicle traffic entering

the city centre from the A52, A60 and A612, passing directly past

the subject property.

Surrounding occupiers include principally industrial and

commercial uses in addition to both Notts County Football Club

and Nottingham Forest Football Club, located on either side of

the River Trent.

Situation3


Lady BayRetail Park


Retail warehouse floor space is estimated at 2.2 million sq ft, according to PROMIS, ranking the city below the PROMIS national average in terms of overall provision per

household. Fashion/other high street, electrical and DIY goods are particularly under represented within Nottingham.

Lady Bay Retail Park is a highly prominent, well configured open A1 non-food (excluding fashion) scheme, serving the extensive catchment of east and south Nottingham,

and we would highlight the relatively low level of rents on the scheme when compared with the majority of competing schemes which are summarised below:

Competing Retail Parks4

Castle Meadow Retail Park – RREEF/LaSalle Investment Management

Situated approximately 1.5 miles west of the subject property just off Castle

Boulevard (A6005), this scheme extends to circa 187,000 sq ft of open A1

non food accommodation, albeit with certain restrictions. Occupiers are

predominantly bulky including Currys, DFS, Furniture Village and Mothercare

World. The most recent evidence is a letting to Furniture Village at £33.00 per sq

ft on 10,063 sq ft from June 2007.

Victoria Retail Park – Hammerson

Located 3.5 miles east of the subject property on the A612 in the suburb of

Netherfield, the park extends to 167,000 sq ft. The scheme was originally

occupied by bulky occupiers, including Focus, Halfords and Allied Carpets and

was subsequently extended to include a B&Q Warehouse. B&Q were due to

vacate their store, but have instead downsized into a mini warehouse format,

permitting new lettings to both Argos and Next. We understand the highest

rent currently achieved is a letting at £18.75 per sq ft to Carpetright from

December 2006.

Riverside Retail Park – Merrill Lynch Property Fund

Riverside Retail Park comprises 220,000 sq ft of open A1 retail accommodation

with certain exceptions. The park is formed of 7 units, the majority occupied by

fashion retailers such as Next, Argos and Outfit, alongside B&Q Warehouse and

Toys R Us. Rent reviews are due across the scheme between 2007-08, with the

highest rent passing being a letting to Boots at £35.00 per sq ft from June 2003.

Castle Retail Park – UBS Global Asset Management

This scheme is situated in a secondary position on the A6130, 1 mile north west

of Nottingham city centre. The park comprises 112,000 sq ft of food, non-food

and leisure accommodation arranged in an ‘L’ shape construction. Occupiers are

predominantly discount based including Dunelm, Aldi and Topps Tiles, alongside

Gala Bingo. We understand the highest rent currently achieved is around

£13.00 per sq ft.


Victoria Retail Park

Lady BayRetail Park

Castle Retail Park

Riverside Retail Park

Castle Meadow Retail Park

Lady Bay Retail Park is a modern, purpose built retail park developed

in 1998, extending to a total of approximately 97,358 sq ft GIA.

The park comprises a linear terrace of 6 units alongside an adjacent

single unit, effectively forming an ‘L’ shape development. In addition,

there is also a standalone fast food unit at the entrance to the park.

Construction is by way of traditional steel portal frames under

pitched roofs, with elevations being clad with half height brickwork

and profile metal cladding above. The units benefit from a clear

height to eaves of approximately 6 metres. The Range unit also

benefits from a covered garden centre.

Customer access and egress to the scheme is provided via a traffic

light controlled junction leading directly from the roundabout

junction of Meadow Lane (A6011) and Manvers Street (A612).

Service vehicles may use a separate access and egress road via

Meadow Lane (A6011), leading to a large concrete rear service yard

and rear unit loading for all units.

A tarmacadam customer car park is situated to the front of all units,

providing approximately 431 spaces, equating to a ratio of 1:226 sq

ft. In addition, there are also approximately 45 staff spaces to the

rear of the units.

At present ScS, Hobbycraft, Dreams, JJB Sports and The Range all

contain additional non-rentalised mezzanine accommodation.

We estimate the site area is approximately 7.73 acres (3.12 hectares).

Description5



Planning consent was originally granted in January 1998 for:

“the erection of a 95,000 sq ft retail park and associated car

parking and service areas.”

The consent was granted subject to;

“the goods to be sold from the retail warehouse floor space

hereby permitted shall not include food or fashion clothing

(other than ancillary items) without the prior consent of the

City Council.”

A Certificate of Lawfulness of Proposed Use or Development was issued in May 2002 stating that the

use restrictions within the planning permission do not include footwear, i.e., units can be used for the

sale of footwear.

Consent was then granted for the Burger King unit, for use as a fast food restaurant (Class A3).

An unimplimented consent exists for an additional 3,000 sq ft pod unit adjoining the entarance to

the scheme. However, this is restricted to the sale of mobile phones and incorporates a car fitting bay.

Planning6


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

Tenure7


Meadow La

ne (A6011)

Manvers Street (A612)

Garden Centre

Unit Tenant area Term From Expiry Reviews Next Rent Rent Rent ERV ERV

(sq ft) (years) Review (p.a.) (p.s.f.) (p.s.f.) (p.a.)

1 A Share & Sons Ltd t/a ScS 7,480 15 25/12/2005 24/12/2020 5 yearly * 25/12/2015 ** £134,500 £17.98 £20.00 £149,600

2 Hobbycraft Group Ltd 9,730 15 27/02/2006 26/02/2021 5 yearly 27/02/2011 £175,000 £17.99 £17.99 £175,000

3 Dreams plc 6,260 15 25/12/2005 24/12/2020 5 yearly 25/12/2010 £125,200 £20.00 £20.00 £125,200

4 JJB Sports plc 11,015 25 29/09/2001 30/09/2023 5 yearly 29/09/2011 £198,600 £18.03 £18.03 £198,600

5 Staples UK Ltd 17,310 25 29/09/1998 28/09/2023 5 yearly 29/09/2008 £234,000 £13.52 £15.50 £268,305

6 Magnet Ltd 7,818 25 29/09/1999 28/09/2024 5 yearly 29/09/2004 *** £113,579 £14.52 £18.00 £140,724

7 CDS (Superstores International) Ltd 35,000 20 25/03/2006 24/03/2026 5 yearly 25/03/2011 £413,531 £11.82 £11.82 £413,531

t/a The Range

8 Burger King Ltd 2,745 25 25/03/2000 24/03/2025 5 yearly 25/02/2010 £54,900 £20.00 £20.00 £54,900

Total 97,358 £1,449,310 £1,525,760

* There is no rent review in 2010.

** Fixed increase at 26/12/2012 to £149,500 per annum.

*** Rent review outstanding.

Schedule of Tenancies8

The property is let on 8 full repairing and insuring leases, as detailed below:

(all upwards only)


Unit Tenant accounts Turnover PreTax Profit Net Worth d&B year Ending £(000’s) £(000’s) £(000’s) Rating

1 A Share & Sons Ltd t/a ScS * 30/09/06 195,828 18,278 38,355 5A1 30/09/05 158,295 17,507 27,527

ScS Upholstery plc 30/09/06 195,828 17,238 37,029 5A1 30/09/05 158,295 17,160 29,118

2 Hobbycraft Group Ltd 26/02/06 51,209 2,155 12,690 3A1 27/02/05 44,046 3,827 10,485

3 Dreams plc 24/12/06 131,488 7,065 12,826 3A1 24/12/05 107,600 5,133 8,672

4 JJB Sports plc 29/01/06 745,238 33,747 168,318 5A1 30/01/05 773,339 50,374 169,290

5 Staples UK Ltd ** 28/01/06 58,872 5A 29/01/05 279,156 (4,451) 57,372

6 Magnet Ltd 31/12/06 310,569 5,745 29,780 4A2 31/12/05 280,510 3,109 8,915

7 CDS (Superstores International) Ltd 31/01/06 107,819 6,590 21,160 4A1 t/a The Range 31/01/05 90,375 8,744 16,286

8 Burger King Ltd 30/06/06 53,801 (9,545) (10,608) N2 30/06/05 61,608 (18,211) (1,302)

Tenant’s Covenants9

* Guarantee provided by ScS Upholstery plc

** Guarantee provided by Staples (Europe) Ltd and Staples International Inc.


address Tenant area Transaction Effective Passing Passing Comments sq ft date Rent (p.a.) Rent (p.s.f)

Lady Bay Retail Park Hobbycraft 9,730 Open Market Letting 27/02/06 £175,000 £18.00

Dreams 6,260 Open Market Letting 25/12/05 £125,000 £20.00

ScS 7,480 Open Market Letting 25/12/05 £149,5000 £20.00

Castle Meadow Retail Park Furniture Village 10,063 Rent Review 24/06/07 £332,079 £33.00

Victoria Retail Park Carpetright 11,085 Open Market Letting 25/12/06 £207,843 £18.75

Chilwell Retail Park Halfords 9,231 Open Market Letting 26/10/06 £240,006 £26.00

Comparable Rental Evidence10

For the smaller units, evidence is primarily available from the park itself, with the last lettings being to Hobbycraft at a rent of £18.00 per sq ft on 9,730 sq ft

and Dreams at £20.00 per sq ft on 6,260 sq ft. Further details of other evidence from the subject property and other comparable schemes in Nottingham are set out below:

10.1 Small Unit Evidence


The Range currently occupy the largest unit on the park, extending to some 35,000 sq ft. The tenant entered into a new lease in March 2006 at a rent of £11.82 per sq ft, which

we consider to be the current ERV. However, we set out below further supporting larger unit evidence from across Nottingham, which we believe provides a platform for future

rental growth.

10.2 Large Unit Evidence

address Tenant area Transaction Effective Passing Passing Comments sq ft date Rent (p.a.) Rent (p.s.f)

Lady Bay Retail Park The Range 35,000 Open Market Letting 25/03/06 £413,531 £11.82

Chilwell Retail Park Wickes 31,456 Rent Review 29/09/05 £495,432 £15.75

Matalan 32,568 Open Market Letting 19/07/05 £472,236 £14.50

Mansfield Road Wickes 23,800 Rent Review 25/12/04 £345,100 £14.50

Madford Retail Park Homebase 34,125 Rent Review 24/06/04 £477,750 £14.00

Queens Drive Homebase 80,045 Open Market Letting 16/07/02 £1,200,000 £15.00 Rent Review Outstanding

Chilwell Retail Park TK Maxx 24,510 Open Market Letting 23/07/01 £324,758 £13.25 Rent Review Outstanding


We are of the opinion that the subject property provides a

number of potential asset management opportunities as

set out below:

n Downsize part of Unit 4 (Staples) and re-let to either a

further bulky operator or a more open based retailer,

taking advantage of the wide planning consent and

the relatively low levels of rent

n Install mezzanines in units 5 and 6 subject to the

necessary planning consents

n Capitalise on the existing consent for a stand alone

mobile phone unit and obtain consent to develop a

further restaurant pod unit, making use of the ample

car parking ratio. The pod unit could be let to a series

of small unit occupiers such as Pizza Hut, Starbucks,

Carphone Warehouse, Subway or Game, promoting an

increased dwell time on the park

The property has been elected for VAT, and therefore VAT will be

payable on the purchase price.

Asset Management Opportunities11

VAT12


Offers are invited at a price in excess of £24,925,000

(Twenty Four Million, Nine Hundred and Twenty Five

Thousand Pounds), subject to contract and exclusive of VAT

for the freehold interest. This price reflects the following yield

profile, assuming purchaser’s costs of 5.7625%;

Proposal13

Initial 5.50%

Reversionary 5.79%

Nominal Equivalent 5.75%

True Equivalent 5.96%


www.wilkinsonwilliams.co.uk

Lady Bay Retail Park | Nottingham | Sept 07 | Ref: 104530

Wilkinson Williams Mellier House 26a Albemarle Street London, W1S 4HY

For further information please contact:

Miles MartenTel: 020 7317 3777 Fax: 020 7495 [email protected]

Printed on 55% recycled paper

James HoneymanTel: 020 7317 3790 Fax: 020 7495 [email protected]

MISREPRESENTATION NOTICE Wilkinson 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. 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.

Documents

20pp 104530 Lady Bay RP 11