Oaks Retail Park - Harlow · The Oaks Retail Park is situated in the centre of the main retail warehouse pitch within Harlow. The retail warehousing provision attracts significant

HOWARD WAY, HARLOW, CM20 2AB

RETAIL PARK INVESTMENT OPPORTUNITYE N T E R

OAKSThe

Retail Park

Investment Considerations

Harlow is an affluent commuter town, 23 miles north east of London.

The town benefits from excellent road links, being situated close to the M11 and M25.

The town has an extensive and affluent catchment population, which is predicted to expand significantly over the coming years.

The subject property is located in the main retail warehouse pitch for Harlow, with limited comparable competition from nearby towns.

The property totals 114,149 sq ft and is the dominant bulky goods scheme in Harlow.

The scheme is well let to 5A1 D&B rated tenants including B&Q, Home Bargains, Jollyes, Topps Tiles, Halfords, Maplin and Carpetright, providing an attractive WAULT in excess of 8.5 years.

The total income is £2,022,084 per annum equating to a low average rent of £17.72 per sq ft. Almost 50% of the income benefits from fixed or RPI uplifts at review.

We are instructed to seek offers in excess of £28,800,000 (Twenty Eight Million, Eight Hundred Thousand Pounds), subject to contract and exclusive of VAT. This reflects an attractive net initial yield of 6.60% (assuming purchaser’s costs at 6.76%). The yield increases to a minimum of 6.73% in August 2019 by virtue of the fixed uplifts in the Jollyes lease and annual RPI uplifts collared at 2.5% p.a. in the Topps Tiles lease.

The Oaks Retail Park | HOWARD WAY, HARLOW CM20 2AB

Home retail warehousing in harlow & situation

tenancies planning tenantS’ covenantS

asset management

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& demographicsdescription

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LUTON

STANSTED

HEATHROW

GATWICK

SHOREHAM

Lydd/Ashford

CITY

87

11 12

9

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13

6

12

43 5

763 54

7

6

3130

4

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2019

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M23

M1

M2

M27

M26

M25

M20

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M40

M4

M3

M25

M25

M25

M20

M1 A1(M)

M11

M40

M3 M20

M11

Hertford

WelwynGarden

City Ware

Hoddesdon

Royston

Felixstowe

SudburySaffronWalden

Harwich

HerneBay

Canterbury

Rayleigh

Chelmsford Maldon

Witham

Braintree

Bishop's Stortford

Faversham

Ashford

Tonbridge

Uckfield

Crowborough

Newhaven

East Grinstead

LewesHailsham

Sevenoaks

RedhillReigate

Horsham

Chichester

Haslemere

Littlehampton

Farnham

Aldershot

Leatherhead

Bracknell

Windsor

Croydon

Swanley

Didcot

Kidlington

Tilbury

Chigwell

EpsomSutton

Kingston upon Thames

Richmond

Barnet Enfield

HarrowUxbridgeHenley-

on-Thames

Letchworth

St Albans

Dunstable

Marlow

HemelHempstead

Bicester

Aylesbury

Stevenage

Ipswich

Margate

Brentwood

Colchester

Clacton-on-Sea

Basildon

Gravesend

Dover

Folkestone

Tunbridge Wells

Maidstone

Hastings

Chatham

Crawley

Brighton

Hove

Havant

Eastleigh

Basingstoke

Guildford

WokingCamberley

Staines

Reading

Slough

Watford

Luton

HighWycombe

Oxford

Milton Keynes

LONDON

HARLOW

LocationHarlow is an affluent London commuter town, located approximately 23 miles north east of Central London and 20 miles west of Chelmsford.

Located in close proximity to the M25 motorway, Harlow benefits from excellent road communications. The M25 provides access to central and outer London, whilst providing a link to the wider UK motorway network, including the A1(M), M1, M4, M3, M23 and the M26. J7 of the M11, 4 miles to the east of the subject property, provides easy access to Cambridge, the Midlands and the North.

Harlow has 2 railway stations, Harlow Town and Harlow Mill. Both stations provide regular services to London Liverpool Street (35 minutes), Cambridge (35 minutes) and Stansted Airport (20 minutes).

London Stansted Airport is located 16 miles north east of the town, and over recent years has transformed in to a major hub for both domestic and international flights.

Catchment & DemographicsThe total population within the Harlow primary catchment is 248,000 people with an estimated shopping population of 246,800 people. There are 99,202 people living within a 10 minute drive time of the subject property, increasing significantly to 290,808 people within a 20 minute drive time. The 10 minute drive time catchment population is forecasted to increase by 3.8% by 2020.

Harlow has an affluent catchment population ranking 70th of the top 200 PMA Retail Centres on the PMA Affluence Indicator. Within the 20 minute drive time population, 57% of households fall within the 2 highest social grade categories, AB and C1, compared to the national average of 53%.

Within a 20 minute drive time, 80% of the population have an annual household income in excess of £30,000. This compares to a national average of 62%. Within the 20 minute drive time, 82% of households own at least one car, compared to the national average of 74%.

In addition, per capita in-store comparison expenditure in 2015 for Harlow was £2,714, substantially above the PMA average of £2,600. Retail warehouse spend for the town was £589 per capita compared with the PMA average of £543.

Harlow has been identified for a large expansion project. By 2031, East Herts Council has forecast that it needs to build at least 15,000 new homes and Harlow Council has forecast that it needs to build a minimum of 7,500 new homes, with as many as 20,000 homes needed to fully provide for their requirements.

There is a proposal for 10,000 new homes 2 miles north of the subject property at Gilston Park Estate. In addition, the Council has plans to invest in the infrastructure of the town including building further schools and regenerating the town centre.

Harlow is likely to grow further with the ambitious growth plans for Stansted Airport. The airport currently serves over 20 million passengers annually, employs 10,000 people and generates around £770 million in gross value add. The growth plans for the airport would see it expand to serve 35 million passengers per annum by 2025, worth £1.6 billion to the UK economy. This is projected to increase further by 2030 to 45 million passengers per annum, worth £4.6 billion to the economy and generating an additional 10,000 jobs in the area.



asset management

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& tenureinvestment

summarylocation, Catchment

& demographics

Retail Warehousing in HarlowThe Oaks Retail Park is situated in the centre of the main retail warehouse pitch within Harlow. The retail warehousing provision attracts significant footfall to the immediate vicinity and provides a thriving retail destination.

The retail warehousing in the town is as follows:

Princes Gate Retail Park(IM Properties/Aberdeen Asset Management/CBRE Global Investors)This is a fragmented collection of retail warehouse units situated directly opposite the subject property, off Howard Way. It extends to approximately 100,000 sq ft and benefits from a bulky goods planning consent and is anchored by a Wickes Extra. Opposite are 2 inward facing terraces occupied by Go Outdoors and Lewis’s, with Dreams and B&M opposite.

Queensgate Centre(The Crown Estate)This is the dominant open ‘A1’ park in the vicinity totalling 225,240 sq ft, with a part restricted and part open A1 non-food planning consent. The park is situated on the opposite side of Edinburgh Way. Occupiers include Cineworld, Currys PC World, Toys R Us, Harveys, ScS, Hobbycraft, Laura Ashley, Brantano, Sports Direct, Wren Kitchens, Mothercare, Pizza Hut, Costa, EE, Subway, Decathlon and Next Home.

Harlow Retail Park(Canada Life)This is a bulky consented scheme situated to the east of the subject property, which extends to approximately 100,000 sq ft. Homebase anchor the scheme, with the other tenants including Argos, Dunelm and KFC.

St James Centre(LaSalle Investment Management)Located 0.5 miles further east along the A414, this scheme totals approximately 109,000 sq ft. It is let to Pets at Home, Staples, The Range and a charity shop. Opposite is a 65,000 sq ft Tesco foodstore.

There are currently no retail warehouse vacancies in Harlow.

SituationThe subject property is located in a highly accessible and easily visible location on Howard Way, just off Edinburgh Way (A414), to the north east of Harlow town centre. The park is situated in the heart of the town’s retail warehouse provision. The town’s largest scheme, the Queensgate Centre, is situated directly opposite the subject property on the opposite side of Edinburgh Way, whilst Princes Gate Retail Park is directly to the west.

A414

A414 EDINBURGH WAY

A414

A414

DUKES PATH

HOWARD W

AY

WEST ROAD

SOUTH ROAD

CENTRAL ROAD

RIVER WAY

RIVE

R STO

RT

WICKES

B&M

LEWIS’S

DREAMS

GOOUTDOORS

TOYSR US

CURRYSPC WORLD

HOBBYCRAFTLAURA ASHLEY

NEXT HOME

DECATHLONH

ARVEYSSCS

TAPISPORTS DIRECT

CINEWORLD

MOTHERCARE

WREN

HOME SENSE

ARGOS

STAPLES

PETSAT

HOME

DUNELM

HOMEBASE

QUEENSGATE CENTRE

HARLOW RETAIL PARK

PRINCES GATE RETAIL PARK

ST JAMES CENTRE

THE OAKS RETAIL PARK

Home tenancies planning tenantS’ covenantS

asset management



& tenureinvestment

summaryretail warehousing

in harlow & situation


HOWARD WAY

A414 EDINBURGH WAY

PRINCES GATERETAIL PARK

THE OAKSRETAIL PARK

Lewis’s

DescriptionThe subject property totals 115,000 sq ft and is arranged as 2 linear terraces, with a detached restaurant/retail unit.

The scheme is anchored by B&Q, who occupy one terrace along with Topps Tiles. The other terrace is anchored by Home Bargains at the opposite end of the park. Adjacent retailers here are Carpetright, Jollyes, Maplin, Halfords and Bathstore.

McDonald’s have a drive-thru restaurant unit at the front of the scheme fronting Edinburgh Way and have sublet part to Carphone Warehouse.

The retail units are of steel portal frame construction under a pitched roof and have a clear internal eaves

height of approximately 6 metres. Internally, the units are fitted to the individual tenants’ specifications.

The customer car park is situated to the front of each of the retail terraces, providing 382 car parking spaces, equating to a ratio of 1 : 301 sq ft.

Access and egress is through the middle of the scheme via Howard Way, which itself is accessed from Edinburgh Way.

Each retail terrace benefits from its own service yard, both of which are accessed off the main egress point to the park, through the centre of the scheme.

The site totals 7.14 acres.

Centre

13

CR

Ward Bdy

61.0m

61.9m

58.2m

Subway

Posts

Posts

Cycle Path

Cycle Path

HOWARD W

AY

DUKES PA

EDINBURGH WAY

HOWARD WAY

RK

El Sub Sta

Electricity Sub Station

6

Oaks Retail Park

El

3

Sub Sta

1

Works

El Sub Sta

El Sub Sta

1

4

5

15

0m 20m 40m 60m

0m 20m 40m 60m

TenureThe property is held freehold with the title delineated in red on the plan above.



asset management


& demographicsinvestment

summarydescription

& tenure



planning tenantS’ covenantS

asset management



& tenureinvestment

summarytenancies


TenanciesThe scheme is fully let benefiting from an income weighted average unexpired lease term in excess of 8.5 years. 46% of the income benefits from fixed or RPI linked uplifts, within the B&Q, Topps Tiles and Jollyes Pets leases.

Unit Tenant Name GIA (sq ft)

LeaseStart

Lease Term

Lease Expiry

Next Rent Review

Rent (per annum)

Rent (per sq ft)

Comments

Unit 1 B&Q plc 37,245 23/12/2010 15 22/12/2025 23/12/2020 £577,824 £15.51 5 yearly rent reviews to RPI capped at 3% pa compounded.

Unit 2 Multi-Tile Ltd t/a Topps Tiles

6,902 08/03/2011 15 07/03/2026 08/03/2017 £178,547 £25.87 Annual rent reviews to RPI collared at 2.5% and capped at 5%.

Unit 3a Bathstore.com Ltd 3,618 26/09/2014 10 25/09/2024 25/09/2019 £77,599 £21.45 Monthly rents (personal concession to the tenant).

Unit 3b Halfords Ltd 11,355 03/04/2009 15 28/09/2024 29/09/2019 £306,585 £27.00 Monthly rents (personal concession to the tenant).

Unit 4a Maplin Electronics Ltd 4,938 03/01/2012 10 02/01/2022 03/01/2017 £113,574 £23.00

Unit 4b Leonard F Jollye (Brookmans Park) Ltd t/a Jollyes

7,876 24/08/2009 15 23/08/2024 24/08/2019 £164,293 £20.86 Fixed uplift 24/08/2019 to £190,363 pa.

Unit 5 Carpetright plc 11,422 04/03/2011 14 28/09/2024 29/09/2019 £214,162 £18.75

Unit 6 T J Morris Ltd t/a Home Bargains

25,216 26/06/2015 15 25/06/2030 26/06/2020 £242,000 £9.60 Rent reviews capped at 2% pa compounded. Service charge cap of £23,000 pa, subject to annual RPI increases.

Unit 7 McDonald’s Restaurants Ltd 5,577 25/12/1994 25 24/12/2019 24/12/2019 £147,500 £26.45 Part sublet to Carphone Warehouse.

TOTAL 114,149 £2,022,084 £17.72

PlanningOn 14 March 1989, full planning permission was granted for:

“Retail Park development comprising 106,806 sq ft of non-food retail warehousing, 7,200 sq ft garden centre and a 5,600 sq ft restaurant.”

Condition 3 of this permission provided:

“The range of goods to be sold from the retail warehouses shall be restricted to D.I.Y. goods, furniture, floorcovering, leisure and garden products, motor accessories and electrical and other non-food bulky goods as may be agreed with the Local Planning Authority.”

There has been a subsequent amendment to the planning to allow Jollyes Pets and Home Bargains to trade. There is also permission for a café within Units 4 and 6 (not utilised), as well as for the sale of homeware products and hard furnishings from these units.

In our opinion, the park benefits from a wide bulky goods consent with certain exceptions.

Further details are available on request.


tenancies tenantS’ covenantS

asset management



& tenureinvestment

summaryplanning


Tenants’ Covenants100% of the income secured against ‘A’ graded covenants, as rated by Dun & Bradstreet. We set out below the most recent company accounts for each tenant:

UNIT TENANT YEAR ENDING SALES TURNOVER

(000’s)

PRE-TAX PROFIT/LOSS

(000’s)

NET WORTH (000’s)

D&B RATING

1 B&Q plc31/01/2016 £3,704,000 -£68,900 £4,493,200

5A131/01/2015 £3,664,000 £5,400 £4,368,900

2 Multi-Tile Ltd03/10/2015 £8,038 £162,103

5A127/09/2014 £8,793 £153,985

3 Halfords Ltd01/04/2016 £866,100 £86,200 £655,900

5A103/04/2015 £872,700 £92,600 £622,300

3a Bathstore.com Ltd31/07/2015 £124,099 £499 £997

1A231/07/2014 £112,012 -£2,272 £2,170

4a Maplin Electronics Ltd31/03/2015 £236,252 £13,254 £28,917

4A122/03/2014 £269,227 £13,351 £166,106

4b Leonard F Jollye (Brookmans Park) Ltd

31/05/2015 £62,635 £5,389 £1,6452A1

31/05/2014 £60,759 £5,021 £4,744

5 Carpetright plc30/04/2016 £456,800 £12,800 £16,900

4A102/05/2015 £469,800 £6,600 £3,400

6 T J Morris Ltd30/06/2015 £1,472,432 £147,121 £547,987

5A130/06/2014 £1,277,324 £124,760 £439,875

7 McDonald’s Restaurants Ltd31/12/2014 £1,432,592 £225,428 £931,302

5A131/12/2013 £1,497,573 £244,885 £799,006


tenancies planning asset management



& tenureinvestment

summarytenants’

covenantS


Asset ManagementThe scheme is fully let and trades well, as evidenced by B&Q, Halfords and Topps Tiles all regearing their leases when they came to expiry.

However, there are asset management opportunities for an investor to drive rental and capital value within the park as follows:

• B&Q trade well here and have indicated they would like to upsize their unit. This could be accommodated if a surrender of the Topps Tiles unit was undertaken. Alternatively the B&Q unit could be extended at the back if permission was obtained to remove the landscaping at the rear of the service yard.

• McDonald’s have a lease expiry in 2019 and have indicated they are willing to regear their lease. There may also be the possibility of them expanding into the Carphone Warehouse unit at the same time. Carphone Warehouse are a sub-tenant of McDonald’s, occupying 2,179 sq ft of the total 5,576 sq ft unit.

• In addition, the McDonald’s drive thru road currently passes the front of the unit. As part of a regear, discussions could be had to redirect this road away from the busy areas of the main car park, thus lessening congestion and enhancing the customer shopping experience.

• There is the potential, subject to planning and the necessary consents, to develop a further pod unit on the western boundary of the northern terrace’s car park, close to the McDonald’s unit. This would help extend the tenant mix on the scheme.


tenancies planning tenants’ covenants



& tenureinvestment

summaryasset

management


EPCEPC’s are available on request.

VATThe property has been elected for VAT, however, it is anticipated that the transaction will be treated as a Transfer of Going Concern (TOGC).

ProposalWe are instructed to seek offers in excess of £28,800,000 (Twenty Eight Million, Eight Hundred Thousand Pounds), subject to contract and exclusive of VAT. This reflects an attractive net initial yield of 6.60% (assuming purchaser’s costs at 6.76%). The yield increases to a minimum of 6.73% in August 2019 by virtue of the fixed uplifts in the Jollyes lease and annual RPI uplifts collared at 2.5% p.a. in the Topps Tiles lease.

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 or photographs) 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 photographs appearing in this brochure show only certain parts of the property at the time when the photographs were taken. Certain aspects may have changed since the photographs were taken and it should not be assumed that the property remains precisely as displayed in the photographs. Furthermore, no assumptions should be made in respect of parts of the property which are not shown in the photographs. 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 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. 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. November 2016. Designed and produced by Creativeworld Tel: 01282 858200.

www.wilkinsonwilliams.co.uk

ContactsEllie KirkbyT: 020 7317 3790M: 07764 241898E: [email protected]

Wilkinson WilliamsHeathcoat House20 Savile RowLondonW1S 3PR

Paul WilkinsonT: 020 7317 3799M: 07770 585313E: [email protected]



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Documents

Oaks Retail Park - Harlow · The Oaks Retail Park is situated in the centre of the main retail warehouse pitch within Harlow. The retail warehousing provision attracts significant