BRUNEL RETAIL PARK - bulkloader.prd.pl.artirix.com.s3 ...bulkloader.prd.pl.artirix.com.s3.amazonaws.com/0da... · BRUNEL RETAIL PARK ROSE ILN LANE, READING RG2 0HS 8 DESCRIPTION AND

BRUNEL RETAIL PARK – ROSE KILN LANE, READING RG2 0HS

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BRUNELRETAIL PARK

ROSE KILN LANE, READING RG2 0HS

SOUTH EAST RETAIL PARK INVESTMENT


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" PRIME SOUTH EAST 8.34 ACRE FREEHOLD SITE WITH STRONG ALTERNATIVE USE POTENTIAL"


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INVESTMENT SUMMARY

Reading is a large, affluent town in the South East of England within the Thames Valley region, located approximately 37 miles west of central London.

Large catchment population of 290,138 people within a 15 minute drive-time.

The opening of the Elizabeth Line (Crossrail) will provide up to six services an hour to central London and will provide a further catalyst for economic and demographic growth. Reading train station is one of the busiest rail hubs in the country, providing regular services to London in 25 minutes.

The property is prominently positioned on Rose Kiln Lane adjacent to a Morrisons foodstore, close to its junction with the A33, one mile to the south of Reading town centre.

The scheme comprises 11 retail warehouse units across two terraces totalling 121,939 sq ft and two restaurant units.

Let to a strong retailer line-up anchored by B&M and Go Outdoors, alongside Halfords, Pets at Home, Next, Dreams, Laura Ashley, Shoezone, Subway and Costa.

Total net income of £1,712,275. There is currently 33,054 sq ft of vacant space providing a significant opportunity to grow the net income.

Long WAULT of approximately 6.9 years to lease expiry and 5.7 years to tenant breaks.

Open A1 non-food planning consent with unit by unit restrictions.

Extensive 8.34 acre freehold site with strong alternative use potential for a residential or industrial development, subject to planning.

Low capital value of £180 psf.

PROPOSAL

£22,000,000Our client is seeking offers in excess of

(Twenty Two Million Pounds) subject to contract and exclusive of VAT. A purchase at this level would provide an attractive 7.29% Net Initial Yield, based on purchaser’s costs of 6.75% and the net income of £1,712,275.


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LOCATIONReading is a large, affluent town within the South East of England. The town is the administrative and commercial centre of the Thames Valley, located 37 miles west of central London, 26 miles south of Oxford and 16 miles north of Basingstoke.

The town benefits from excellent road and transport communications. The M4 motorway runs to the south of the town, providing a direct route east into central London via the A4 and west to Bristol. The M25 London Orbital Motorway can be accessed within 24 miles to the east via the M4 motorway. In addition, the A33 provides a direct link to the M3 motorway to the south at Basingstoke within 17 miles.

Reading train station is one of the busiest rail hubs in the country, used by approximately 20 million passengers a year. There are over 200 trains a day to London with a fastest journey time of only 25 minutes.

Crossrail

Having undergone significant refurbishment works over recent years, Reading Station will also facilitate up to six Crossrail (Elizabeth Line) services an hour at peak times to central London and up to four services an hour between Maidenhead and Reading. Bond Street will be accessible in 54 minutes, with services to London Heathrow Airport in 45 minutes and Maidenhead in 12 minutes.

London Heathrow Airport

The UK’s busiest airport is located 22 miles to the east. Plans for phase 1 have recently revealed the proposed expansion incorporating a third runway, which will become operational in 2026. The airport’s annual passenger capacity is due to increase from its current capacity of 78 million to over 130 million, making it the world’s busiest airport.

M1M11

M25

M25

M23

M3

M4

M40

A41

A413

A4010

A418

A40

A34

A34 A339

A33

A3

A24

A3

A30

A404

A316 A3

A4

A40A41 A10 A12

A102

A205

A232

A22A23

A217

A10

A406

A406

A414

A414

A1

A406

A331

A420

A413

WatfordWatfordAmershamAmersham

OxfordOxford

ReadingReading

AbingdonAbingdon

NewburyNewbury

BasingstokeBasingstoke

CamberleyCamberley WokingWoking

StainesStaines

SloughSlough LONDONLONDON

HighWycombe

HighWycombe

BRUNELRETAIL PARKBRUNELRETAIL PARK

IVER

SOUTHALL PADDINGTON

BOND STREET

12 mins

46 mins

54 mins

61 mins

READING

LIVERPOOL STREET

SLOUGH JubileeCentral

MAIDENHEAD

CentralNorthernHammersmith & City

CircleMetropolitan

StanstedSouthendHEATHROW

PiccadillyHeathrow

TWYFORD

HAYES & HARLINGTON

EALINGBROADWAY

Hammersmith & CityBakerloo

Circle

District

CentralDistrict

Crossrail


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BRUNELRETAIL PARK

A33

Rose Kiln Lane

Basingstoke Road

Madejski Stadium

Cooper BMW

Reading Gate Retail Park

Warehouse

Kennet Island, Berkeley Homes Development

Residential Mixed Use Development

(430 Residential Units)

Universal Global Corporate

Beacontree Plaza Business Park

Manor Park Business Park

M4 (J11)


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CATCHMENT AND DEMOGRAPHICSWithin a 10 minute drive-time of the subject property the catchment population is 157,182, which increases to 290,138 within a 15 minute drive-time (ORC). Population forecasts for Reading show significantly above average growth over the period 2018-2022. Within a 10 minute drive-time, the most affluent AB social groups are significantly over-represented at 32.7% of the population against the UK average of 22.7%.

Reading also has a strong local economy and has been ranked as the UK’s top economic area for economic success and well-being, according to factors such as employment, health, income and skills. Major employers in the town include Microsoft, Prudential, Oracle, EY, John Lewis, PWC, SSE and Thames Water.

The Draft Reading Borough Local Plan (2018) sets out the development pipeline within the borough and details the requirement for 3,610 new residential dwellings to be provided over the period 2018/19-2023. The adjacent Kennet Island (Berkeley Group) development provides for 1,350 new homes and apartments.

SITUATIONBrunel Retail Park is situated one mile south of Reading’s town centre, adjacent to the A33 dual carriageway.

The property forms part of a significant critical mass of retail and industrial property. To the north is a large industrial estate including occupiers such as Screwfix and Kwik Fit. A Morrisons superstore is located to the east of the retail park whilst DHL occupy a large industrial unit immediately to the south.

A41

A413

A4010

A418

A40

A34

A34A339

A33

A322

A3

A24

A3

A30

A404

A316 A3

A4

A40

A41 A10 A12

A102

A205

A232

A22A23

A217

A10

A406

A406

A414

A414

A1

A406

A331

A420

A413 M1M11

M25

M25

M23

M3

M4M4

M40 WatfordWatfordAmershamAmersham

OxfordOxford

ReadingReading

NewburyNewbury

BasingstokeBasingstoke

CamberleyCamberley WokingWoking

SloughSloughMaidenheadMaidenhead LONDONLONDON

High WycombeHigh Wycombe


157,182population 10 min

Drive-time


Drive-time


Drive-time

20 mins 15 mins 10 mins

Crossrail will provide a significant demographic and economic boost


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RETAIL WAREHOUSE PROVISION

A33

A33

A327

A327

A3290

M4

A329(M)

M4

READINGREADING

SouthcoteSouthcote

CalcotCalcot

BurghfieldBurghfield

TilehurstTilehurst

SandfordSandford

Lower EarleyLower Earley

ShinfieldShinfield

WhitleyWhitley


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An overview of the key retail warehouse provision is provided below.

Reading Gate Retail Park (L&G Investments 50% / NFU Mutual 50%)

Size – 202,578 sq ft.

Tenants – B&Q, Oak Furnitureland, Carpetright, Tapi, TK Maxx, Smyth Toys, Currys PC World, KFC, Pizza Hut, McDonald’s.

Planning – Bulky goods consent.

Rental Tone – £25.00 - 33.00 per sq ft.

Reading Link Retail Park (Sorbon Estates)

Size – 69,083 sq ft.

Tenants – Matalan, Bensons, Magnet, The Food Warehouse (Iceland), Home Bargains.

Planning – Part bulky goods and part open A1 with food.

Rental Tone – £13.00 - £17.50 per sq ft.

Reading Gateway (Aberdeen Standard Investments)

Size – 110,000 sq ft.

Tenants – Wren Kitchens, Schmidt Kitchens, Premier Inn, Beefeater, Costa, Burger King Drive Thru.

Planning – Open A1 (including food) consent.


Forbury Retail Park (Phase 1 – Aberdeen Standard Investments) (Phase 2 – Aviva Investors)

Size – 145,769 sq ft.

Tenants – Homesense, Furniture Village, Harveys, DFS, Sofology, Natuzzi, Hobbycraft, Argos Extra, Decathlon, McDonald’s Drive Thru.

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2

3

4

Planning – Bulky goods and open A1 non-food consent.


Calcot (IKEA, Junction 12, M4 and retail cluster)

Size – 340,000 sq ft Ikea, 24,000 sq ft Dunelm.

Tenants – IKEA, Dunelm, Sainsbury’s, Next, Boots, Sports Direct.


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Planning – Open A1 non-food (Phase 1) and bulky goods (Phase 2) consent.

Rental Tone – £20 - £30 per sq ft (Phase 1) / £18 - £22 per sq ft (Phase 2).

Station Shopping Park (Aviva Investors)

Size – 62,567 sq ft.

Tenants – Mothercare World, Aldi, Majestic Wine, The Range, TGI Friday’s.

Planning – Open A1 (including food) consent.


Reading Retail Park (Columbia Threadneedle)

Size – 116,541 sq ft.

Tenants – Wickes, Halfords, Carpetright, The Gym, B&M, Pets At Home, KFC Drive Thru.

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5

3

2

456

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DESCRIPTION AND SITE

TENURE

The subject property comprises a terrace of modern retail warehouse units in an ‘L’ formation totalling 121,939 sq ft. Adjacent to the units are a total of 351 car parking spaces providing a ratio of 1:347 sq ft.

The units benefit from generous rear servicing areas, which are accessed via Gillette Way.

The total site area extends to approximately 8.3 acres with low site coverage of 34%.

The park is held freehold.

TO L

ET

TO L

ETROSE KILN LANE

GIL

LETT

E W

AY

TO LET

P.F.S

WAULT of 6.9 years to lease expiry

1,350 new homes


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Unit Tenant GIA (sq ft) Mezz (sq ft) Lease Start Lease Expiry Tenant Break Rent Review Rent (pa) Rent (psf) Comments EPC

Unit 1 Halfords Ltd (Halfords)

7,541 3,678 29/09/1995 28/09/2025 - 29/09/2020 £177,500 £23.54 5 year reversionary lease completed in May 2017 from 29/09/2020, subject to 9 months' rent free. 2019 service charge cap of £8,651.05. Shortfall of £444. Rent paid monthly by side letter.

C-52

Unit 2 Pets at Home Ltd (Pets at Home)

10,060 - 29/09/1995 28/09/2025 - 29/09/2020 £233,174 £23.32 5 year reversionary lease from 29/09/2020. 2019 service charge cap of £11,415.60. Shortfall of £728. Rent paid monthly by side letter. Assumed area at review of no more than 10,000 sq ft.

C-53

Unit 3a Vacant 12,943 - - - - - £0 £0.00 Formerly 99p Store. The tenant has been dissolved so the lease vests in the Crown expiring 06/12/2021, resulting in no rates liability. 2019 S/C shortfall of £15,592.

D-79

Unit 3b Next Holdings Ltd (Next)

13,054 6,454 02/08/2018 01/08/2021 - - £0 £0.00 Lease variation being documented at nil rent to lease expiry with tenant breaks removed. Landlord breaks remain. Lease completed 02/08/2018 for 3 year term at £125,000 pa. Landlord breaks any time after 02/08/2019 with no less than 6 months' notice. Assumed area at review of 10,000 sq ft. Landlord covenant to provide no less than 283 car parking spaces.

C-54

Unit 4 Go Outdoors Ltd (Go Outdoors)

20,104 16,551 03/01/2018 02/01/2038 02/01/2033 03/01/2023 £400,000 £19.90 New 20 year lease with 5 yearly rent reviews linked to RPI with a cap and collar of 1-3% pa. 12 month capital incentive. Tenant break option at year 15. Rent paid monthly by side letter.

B-32

Unit 5 Vacant 10,024 - - - - - £0 £0.00 Formerly occupied by ScS. Lease expired 24/06/2019. Full rates liability of £123,984 from 25/09/2019 following 3 month exemption. 2019 S/C shortfall of £12,161.

C-75

Unit 6a Dreams Ltd (Dreams)

5,028 3,652 30/01/2006 29/01/2026 - - £133,083 £26.47 Reversionary lease in place for 5 years commencing 30/01/2021. 2019 service charge cap of £5,761.23. Rent paid monthly under side letter. Shortfall of £296.

B-44

Unit 6b Shoe Zone Ltd (Shoezone)

4,942 - 29/10/2018 28/10/2023 - - £99,000 £20.03 New 5 year lease subject to 14 months' rent free expiring 29/12/2019, to be topped-up by vendor (extra 2 months due to roof repairs). Service charge cap of £6,090 grown at RPI. Rent paid monthly under side letter. Exclusion zone in place.

C-64

Unit 7 Vacant 10,087 - - - - - £0 £0.00 Formerly Brantano. Lease expires 28/09/2020 and is with administrator with no rates liability. 2019 S/C shortfall of £12,133.

D-76

Unit 8 B&M Retail Ltd (B&M)

20,420 2,965 29/09/1995 28/09/2020 - - £618,000 £30.90 Ongoing discussion with B&M to take 4-9 year reversionary lease and extend into adjacent former Brantano. Lease varied in 06/2005 to provide fixed 5 yearly uplifts. 09/2015 uplift to £618,000 pa. Assigned in 2014 to B&M. 2019 service charge cap of £23,461.43. 2019 S/C shortfall of £1,204. Assumed area at review of lesser of GIA or 20,000 sq ft.

C-55

Unit 9 Laura Ashley Ltd (Laura Ashley)

4,947 3,810 20/11/2006 19/11/2021 - 20/11/2016 £137,500 £27.79 C-71

Unit 10 Subway Realty Ltd (Subway)

1,009 - 05/10/2015 04/10/2030 04/10/2025 05/10/2020 £30,000 £29.73 Tenant break option. Service charge cap of £1,022. 2019 S/C shortfall of £184. Sublease in place.

B-31

Unit 11 Costa Ltd (Costa)

1,780 - 13/10/2015 12/10/2025 - 13/10/2020 £50,750 £28.51 Costa tenant break option at year 6, only operable in the event that a competitor (named in agreement) opens a unit on the scheme or nearby.

A-24

Substation Southern Electric Plc - - 02/02/1996 01/02/2038 - - £1 -

Total / Average 121,939 37,110 £1,879,008

TENANCY

After deducting landlord shortfalls, the estimated net operating income is £1,712,275 pa. The WAULT to expiry is 6.9 years to expiry and 5.7 years to breaks.


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TENANT COVENANTS

Latest Accounts Turnover Pre-Tax Profits Net Worth D&B

Rating

2018 £804,848,000 £53,922,000 £690,294,000 5A1


Rating

2018 £215,400,000 £792,700,000 £781,300,000 5A1


Rating

2018 £35,107,808 £1,530,929 £1,574,725 2A3


Rating

2018 £160,615,000 £11,433,000 £39,128,000 5A1

of the current gross income is secured by covenants rated 5A1 (minimum risk) by Dun & Bradstreet, offering excellent income security.

70%


Rating

2017 £290,288,000 £30,477,000 £13,765,000 3A2


Rating

2018 £2,629,145,000 £236,006,000 £600,542,000 5A1


Rating

2018 £930,800,000 £74,500,000 £765,900,000 5A1


Rating

2018 £232,471,000 £8,975,000 £14,958,000 3A1


Rating

2018 £243,354,000 £1,279,000 £82,769,000 5A1


Rating

2018 £951,684,000 £105,215,000 £521,738,000 5A1

Misrepresentation Act 1967Montagu Evans LLP for themselves and for the vendors or lessors of this property whose agents they are, give notice that : (i) The particulars are set out as a general guideline only for the guidance of intending purchasers or lessees and do not constitute the whole or any part of an offer or contract.(ii) All descriptions, dimensions, references to condition and necessary permissions of the use and occupation, and other details are given in good faith without responsibility whatsoever and any intending purchasers or tenants should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise as to the correctness of each of them. (iii) Neither Montagu Evans LLP nor their employees has any authority to make or give any representation or warranties whatsoever in relation to the property. (iv) Unless otherwise stated, all prices and rents are quoted exclusive of VAT and intending purchasers or lessees must satisfy themselves independently as to the applicable VAT position. (v) All the plans and maps provided within the particulars are for identification purposes only. August 2019

16790.001 | August 2019 Designed and produced by THE GROUP www.completelygroup.com

Mark GirlingT: 020 7312 7460M: 07770 851 123E: [email protected]

Will CollinsT: 020 7312 7405M: 07972 148 262 E: [email protected]

FURTHER INFORMATION

Edward GeorgeT: 020 7312 7489M: 07818 012 489 E: [email protected]

ASSET MANAGEMENTThe scheme presents a number of asset management opportunities, outlined below:

Opportunity to let vacant units to national retailers.

Re-gearing existing leases to improve the WAULT.

Negotiate a re-gear and possible extension with B&M into Unit 7.

Consider relocating Halfords and Pets into vacant space, freeing up a potential redevelopment site.

Longer term redevelopment potential for residential and logistics in part or all of the site, subject to planning.

PLANNINGThe property has Open A1 non-food planning consent with unit by unit restrictions. Further details are available upon request.

ENVIRONMENTALAn environmental and ground conditions report is available upon request.

EPCsAvailable upon request.

VATThe property is elected for VAT.

PROPOSAL

£22,000,000Our client is seeking offers in excess of

(Twenty Two Million Pounds) subject to contract and exclusive of VAT. A purchase at this level would provide an attractive 7.29% Net Initial Yield, based on purchaser’s costs of 6.75% and the net income of £1,712,275.

Nick RichardsonT: 020 7312 7420M: 07818 012 420 E: [email protected]

Documents

BRUNEL RETAIL PARK - bulkloader.prd.pl.artirix.com.s3 ...bulkloader.prd.pl.artirix.com.s3.amazonaws.com/0da... · BRUNEL RETAIL PARK ROSE ILN LANE, READING RG2 0HS 8 DESCRIPTION AND