ALDI, Tarvin Road

ALDI, Tarvin RoadBoughton, Chester, CH3 5ND

Prime Food Store Investment Opportunity

ALDI Tarvin RoadBoughton, Chester, CH3 5ND

Executive Summary Opportunity to purchase a supermarket

investment within the affluent and historic cathedral City of Chester

Limited supply for additional retail schemes within the city

Let to ALDI (5A1) for 20 years from 2 September 2013 at a current rent of £548,729 pa

Current rent equates to only £14.37 /sq ft

Fixed five yearly rent reviews based upon 2.5% pa uplifts with the next uplift September 2023

Aldi are currently refurbishing their Supermarket

Our clients are seeking offers in excess of

£12,100,000 (twelve million, one hundred thousand pounds) which reflects a net initial yield of 4.25%, rising to 4.81% in September 2023 and 5.44% by September 2028, net of costs at 6.71%


Prime Food StoreInvestment Opportunity

Location

Chester is an attractive and affluent historical cathedral city, an important tourist destination and the administrative centre for the county of Cheshire. Chester is located approximately 45 miles (72km) south west of Manchester and 13 miles (21 km) south of Liverpool.

It is one of the major retailing centres in the North West ranked 27th in the UK having an estimated catchment of 326,000 which increases with the influx of tourists which are estimated at over 8 million each year.

The city’s major attractions include shopping, Chester Cathedral, Roman archaeology, Chester Zoo (currently having a £300m extension), the racecourse, the castle and the historic Rows and Amphitheatre.

The District of Chester has a very affluent population, well above the national average in terms of wealth. Over 80% of the City’s working population are involved in the service sector with major employers being Lloyds Bank, HSBC, Marks and Spencers and MBNA Europe Bank.

Chester benefits from excellent road communication links, with the M53 Motorway accessed via junction 12, situated approximately 3 miles (5 km) to the east. In turn the M53 provides direct access to the Wirral to the north west, to the

M56 Motorway and the national Motorway network via the M6. In addition, the A55 (coast road) provides access to North Wales.

Manchester nternational Airport is situated approximately 30 miles (48 km) to the east and Liverpool’s John Lennon Airport situated 24 miles (39 km) to the north, both service the City. Rail access is via Crewe to London Euston (2 hours 20 minutes), Liverpool Lime Street (45 minutes) and Manchester Oxford Road (1 hour 10 minutes).

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WALKDEN

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WIGAN

HORWICH

CHORLEY

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BURNLEY

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LEYLAND

TARLETON

BLACKBURN

WHALEY

CLITHEROE

LYTHAM ST ANNES

BLACKPOOL

GARSTANG

LONGRIDGE

CHIPPING

DUNSOP BRIDGE

BARNOLDSWICK

GISBURN

LONG PRESTON

MALHAM

FLEETWOODPILLING

SOUTHPORT

FORMBY

BOOTLE

WALLASEY

BIRKENHEAD

HESWALL

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WHITCHURCH

DENBIGH

PRESTATYN

BODELWYDDANELLESMERE PORT

MACCLESFIELD

WILMSLOW

STOCKPORT

KNUTSFORD

WARRINGTON ALTRINCHAM

CONGLETON

NANTWICH

CREWE

WINSFORD

NORTHWICH

WIDNES

RUNCORN

ORMSKIRK

SKELMERSDALE

BOLTON

BURY

ROCHDALE

RAWTENSTALL

HEBDEN BRIDGE

HAWORTH

SKIPTON

SALFORD

HOLMESCHAPEL

MANCHESTER

CHESTER

LIVERPOOL

STOKE-ON-TRENT

LANCASTER

PRESTON

ST ASAPH

RIVER MERSEY

RIVER DEE

RIVER RIBBLE

MANCHESTERAIRPORT

LIVERPOOL JOHN LENNON

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To Ellesmere PortTo Manchester

To North Wales

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Chester

Bache

Hawarden

Buckley

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QueensferryConnah’sQuay

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A5 1 TARVIN ROADA5115 WHITCHURCH ROAD

A41 RING

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CHESTER

Situation

The property is situated in the densely populated residential suburb of Boughton, approximately 1.5 miles east of the City centre. The property is accessed directly off the A51 which is the main arterial route out of the city connecting to the A41 and A55. In turn the A55 then connects with the M53 and M56 motorways.

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Watergate Street

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Princess Street

Trinity Street

Hunter Street

King Street

City W

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Garden Lane

Canal Street George Stre et

Raym

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Bouverie Street

Garden Lane

Cheyney Road

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Abbey Stre

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Castle

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The Groves

Grosvenor Park Road

B5130 Sand

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Lightfeet Street

Lightfeet Street

Westm

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Hoole Lane

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Black Friars

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Castle Street

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A5268 Saint Oswalds Way

A46

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A5268 A51 Boughton A51 Tarvin Road

A5115

A540

A51 Tarvin Road

A5115 Christleton Road

ChesterRacecourse

GrosvenorPark

Earl’s EyeMeadows

HooleParkChester Rail

Station

SAT NAV:CH3 5ND



Accommodation

The property extends to approximately 38,178 sq ft (3,547 sq m).

Out of this total area approximately 8,081 sq ft is sublet to Baycrown Ltd, trading as The Carpet Factory and 12,000 to TJ Morris trading as Home Bargains.



DESCRIPTION

The property comprises a detached retail warehouse unit constructed in the mid 1990’s on an island site of 3.6 acres (1.46 hectares).

The property which completely refurbished in 2013 and creates effectively three units, the supermarket occupied by ALDI and 2 other retail warehouse units occupied by Home Bargains and the Carpet Factory.

The property is of a steel portal frame construction under a pitched roof with external part brick and part metal clad elevations.

The unit benefits from approximately 196 car spaces providing an excellent ratio 1:195 sq ft.



PLANNING

Planning consent was granted on 5th July 2013. The permission grants an open A1 discount retail food store use on the area to be occupied by Aldi with a maximum 15% of net sales floorspace for comparison goods. The area occupied by Home Bargains has the benefit of non food class A1 use with a maximum 30% of floor area for convenience goods and 25% for food and drink products. The area occupied by The Carpet Factory has a restriction to electrical goods, home furnishings and motor accessories.

TENURE

Freehold.

TENANCY

The property has been let on an overriding lease to Aldi Stores Limited for a term of 20 years on FRI term from 2 September 2013 subject to five-yearly, upwards-only rent reviews based upon 2.5% per annum compounded.

The current rent passing is £548,729 per annum equating to a low base of £14.37 per sq ft.

The fixed rental uplifts are as follows:

Date Rent Rent Per Sq Ft

Current £548,729 £14.37

Sept 2023 £620,832 £16.26

Sept 2028 £702,409 £18.40

T J Morris Limited trading as Home Bargains have sublet approximately 12,000 sq ft of the total floor space from Aldi Stores Limited on a 20 year sublease at an initial rent of £156,000 pa. Rent reviews are five yearly to 2% pa compound.

A further part of the property (approximately 8,081 sq ft) has been sub let to Baycrown Ltd, trading as The Carpet Factory on FRI terms for 15 years from 25 March 2010 at £72,000 pa subject to five yearly rent reviews.



Covenant Information

Aldi is a leading global discount supermarket chain established in Germany in 1913 with over 9000 stores in 18 countries with an estimated combined turnover in excess of €50 billion. Further information on the company can be found at www.aldi.com.

Aldi is now the fifth largest supermarket in the UK having doubled its market share to 7.5% since 2010 (Kantar). With a current portfolio of 700 stores within the UK, Aldi is looking to expand to over 1,000 stores by 2022. Globally, Aldi currently has 10,000 stores worldwide across 18 countries within Europe and the United States.

Aldi Stores Limited has a Dun & Bradstreet rating of 5A1, representing a minimum risk of business failure. Their most recent accounts are shown in the table below.

Years End 31 Dec 2016 31 Dec 2015 31 Dec 2014

Sales Turnover £8,744,385,000 £7,705,140,000 £6,893,256,000

Profit Before Tax £214,795,000 £212,621,000 £250,584,000

Tangible Net Worth £2,321,983,000 £2,073,988,000 £1,948,445,000



Rental Commentary

We understand the store has a strong trading profile and we consider there would be significant competition for this site if it was available to let, with upside over the passing rental level of £14.37 per sq ft.

In terms of rental value, we would highlight the following comparable evidence:

Property Transaction Date GIA (sq ft) Rent (psf)

Aldi, Old Trafford Manchester Letting 2017 19,890 £19.00

Aldi, Newton Le Willows Manchester Letting 2017 18,557 £15.25

Aldi, Ormskirk Letting 2017 17,000 £15.00

Aldi Coventry Letting 2016 20,128 £17.75

Aldi, Sale Manchester Letting 2014 19,132 £18.00



Investment Market

Property Date Initial Yield /NIY Lease Term (Break) Rent Review Comments

Lidl, Acton U/o Quoting 4.25% 25 (20) 5 yearly RPI (1-2.5%) Under offer ahead of quoting terms

Aldi, Romford Oct 2018 Sub 3.5% 24.5 5 yearly RPI Understood other interest at similar levels

Aldi, Sale Aug 2018 4.5% 15.5 5 yearly (2.5% fixed) Upper floors sold off for residential flats

Aldi, Hasting Aug 2018 4.2% 20 5 yearly RPI (1-2.5%) Forward commitment

Aldi, Leigh May 2018 4.2% 13.5 5 yearly RPI (1-2.5%) Purchased with adjoining B+M split analysis

Aldi, Bedford (Clapham Road) May 2018 4% 20 5 yearly RPI (1-3%) -

Aldi, Royston Apr 2018 4.25% 15 5 year RPI (1-3%) Forward funding. Purchased with M&S split analysis

Aldi, Hull Feb 2018 4.22% 20 5 yearly RPI (1-3%) Forward commitment

Aldi, Bedford (Ampthill) May 2017 4.3% 20 5 year RPI (1-3%)


Further Information

Should you wish to inspect the property or require additional information, please contact:

Misrepresentation Act 1967. Unfair Contract Terms Act 1977 The Property Misdescriptions Act 1991. These particulars are issued without any responsibility on the part of the agent and are not to be construed as containing any representation or fact upon which any person is entitled to rely. Neither the agent nor any person in their employ has any authority to make or give any representation or warranty whatsoever in relation to the property. October 2018. RB&Co 0161 833 0555. www.richardbarber.co.uk

David Winterbottom0161 956 410307836 225 [email protected]

gva.co.uk/146620161 834 7187

EPC

The property has an EPC rating of B.A full copy can be downloaded at gva.co.uk/14662

VAT

We are advised that the property is elected for VAT purposes and therefore the sale of the property will attract VAT. It is anticipated that the sale will be treated as a transfer of a going concern.

Adam Wildig0161 956 402907739 325 [email protected]

Matt Jones0161 956 410507904 629 [email protected]

Our clients are seeking offers in excess of

£12,100,000 (twelve million, one hundred thousand pounds) subject to contract and exclusive of VAT for the freehold interest. A purchase at this level would show the following yield profile:

Proposal

Initial 4.25%

Sept 2023 4.81%

Sept 2028 5.44%

Net of costs at 6.71%.

Documents

ALDI, Tarvin Road