ST NICHOLAS RETAIL PARK€¦ · St Nicholas Retail Park is made up of a detached Wickes unit and a terrace of 4 units let to Farmfoods, Lituanica, Sue Ryder and The Norfolk Hospice

ST NICHOLAS RETAIL PARK King’s Lynn, PE30 2HW

PRIME RETAIL WAREHOUSE INVESTMENT

INVESTMENT SUMMARY• Well secured retail warehouse park, totalling 58,370 sq ft,

located in a dominant market town.

• 15 years unexpired to Wickes with further tenants including; Farmfoods, Sue Ryder, Lituanica, The Norfolk Hospice and Domino’s Pizza.

• Located adjacent to a new Home Bargains store, helping establish the area as a retail destination.

• Low rents ranging from £10.00 – £13.50 per sq ft.

• Open and restricted (food / non-food) planning consents.

• Long WAULT of 12.6 years (11.1 years to break).

• Significant primary catchment population of 230,000 people.

• Potential development options available to enhance A3 offer.

• Residential development site immediately adjacent to park.

PROPOSALWE ARE INSTRUCTED TO SEEK OFFERS FOR THE FREEHOLD INTEREST IN THE SUBJECT PROPERTY IN EXCESS OF £8,377,000 (EIGHT MILLION, THREE HUNDRED AND SEVENTY SEVEN THOUSAND POUNDS), WHICH, ON THE BASIS OF THE RENT GUARANTEE, REFLECTS A NET INITIAL YIELD OF 7.75%, ASSUMING PURCHASER’S COSTS OF 5.8%, SUBJECT TO CONTRACT AND EXCLUSIVE OF VAT.

INVESTMENT SUMMARY & PROPOSAL

ST NICHOLAS RETAIL PARK, KING’S LYNN, PE30 2HW

KING’S LYNN LOCATION, CATCHMENT & DEMOGRAPHICS

SITUATION, DESCRIPTION & TENURE

TENANCIES & RENTAL COMMENTARY

INVESTMENT RATIONALETENANTS’ COVENANTS, PLANNING, SERVICE CHARGE, EPC

VAT, PROPOSAL & CONTACT DETAILS


TOWN CENTRE

ST NICHOLAS RETAIL PARK

A1078

KING’S LYNN RAILWAY STATION

KING’S LYNN • Significant catchment of 230,000

• Over 37 miles from nearest competing town

• Retailing focal point for Norfolk

RESIDENTIAL DEVELOPMENT Planning permission was granted on 21 December 2012 (originally from July 2009) for approximately 98 residential dwellings on this 6 acre site. The site is currently on the market for sale.

Carousel Cafe

EDWARD BENEFER WAY • Retail frontage in excess of 325 metres

• Retail destination for north King’s Lynn

• Informal car count on Edward Benefer Way in excess of 80% to that of Hardwick Road








KING’S LYNN

BELGRAVE RETAIL PARK / PE14 0SL

A1175 A1101

A141

A141

A42B

A1

A606

A148

A134

A134

A140

A140

A47

A10

A10

A17

A16

A15

A11

A47

A1065

A1065

A1066

A1

A14

A14

A11

A47 A47

A140

A143

Ruskington

Boston

Wyberton

Kirton

Long Sutton

HolbeachSt Johns

Hunstanton

Heacham Docking

DersinghamFakenham

ShiphamSwaffham

Watton

DownhamMarket

Elm

Outwell

March

WarboysSutton

Ely

Haddenham

Alconbury

Brandon

Lakenheath Thetford

MildenhallSoham

Fordham

Burwell

Barrow

Crowland

Eye

Peterborough

Yaxley

Ramsey Chatteris Littleport

Feltwell

Mundford

Ruskington

Boston

Wyberton

Kirton

Long Sutton

HolbeachSt Johns

Hunstanton

Heacham Docking

DersinghamFakenham

ShiphamSwaffham

Watton

DownhamMarket

Elm

Outwell

March

WarboysSutton

Ely

Haddenham

Alconbury

Brandon

Lakenheath Thetford

MildenhallSoham

Fordham

Burwell

Barrow

Crowland

Eye

Peterborough

Yaxley

Ramsey Chatteris Littleport

Feltwell

Mundford

CambridgeCambridge

NorwichNorwich

HorsfordHorsford

ShimplingStreet

ShimplingStreet

DerehamDereham

ReephamReepham

NewmarketNewmarket

BournBourn

IxworthIxworth

EyeEye

BanhamBanham

BunwellBunwell

GressenhallGressenhall

StradbrokeStradbroke

FressingfieldFressingfield

BactonBacton

King’s Lynn

LOCATIONKing’s Lynn is situated in Norfolk approximately 40 miles north of Cambridge, 42 miles west of Norwich and 37 miles east of Peterborough. The town is situated at the mouth of River Ouse.

The town benefits from good road communications, lying just north of the A47, which links the town to both Norwich and Peterborough and the A10, providing the main road to Cambridge. London is approximately 105 miles to the south and can be accessed via the A1M and the M11 motorway.

King’s Lynn benefits from a mainline railway station, providing rail travel to all major UK cities and to London King’s Cross on an hourly basis with a journey time of approximately 1 hour and 35 minutes.

King’s Lynn’s economy is dominated by agriculture and food processing and the town is now a vibrant retailing destination benefiting from a distinct and loyal catchment being over 37 miles from the nearest competing town. St. Nicholas Retail Park has established itself as a successful retail destination, is close to the town centre and fronts the A1078, a busy carriageway.

CATCHMENT & DEMOGRAPHICSThe total population within the King’s Lynn primary catchment area, as defined by PROMIS, is 230,000 people, which compares to larger towns such as Oldham (235,000), Staines (235,000) and smaller towns such as High Wycombe (224,000) and Basingstoke (222,000). PROMIS state that King’s Lynn is projected to see above average growth in population over the period 2014–19. The closest major towns and cities to King’s Lynn are Norwich (45 miles), Cambridge (44 miles) and Peterborough (37 miles) respectively, providing a large captive geographical catchment. A selection of catchment statistics is noted below:

King’s Lynn PMA Centre: Average Town

Total catchment population 2014 230,000 181,000

Projected population growth 2014–19 (pa) 0.9% 0.7%

Per capita RW expenditure 2014 £500 £463

Car ownership 2011 (households with 1 car) 45% 42%

Car ownership 2011 (households with 2 cars) 38% 34%

20 MINUTE DRIVE TIME(87,303 people)

30 Minute DRIVE TIME (190,682 people)

SOURCE: EXPERIAN








LOCATION, CATCHMENT & DEMOGRAPHICS

FOR INDICATIVE PURPOSES ONLY

FOR INDICATIVE PURPOSES ONLY

ST NICHOLAS RETAIL PARK


SITUATIONSt Nicholas Retail Park is situated less than half a mile to the north of King’s Lynn town centre on the A1078 (Edward Benefer Way). The property benefits from a prominent position, being visible from the busy junction of the A1078, Loke Road and Cross Bank Road. The A1078 is a busy carriageway providing the main link for traffic from the north of the town to the town centre. A recent informal traffic survey suggested this road has a car count in excess of 80% to that of Hardwick Road, the main retail thoroughfare leading to town from the south.

Light industrial and residential are the predominant uses in the surrounding area, with housing forming the majority of the area to the north and east of the subject property, and industrial to the west.

In April 2014, as a consequence of healthy trading from the previous 10 years, Farmfoods expanded from c.5,500 sq ft in Unit 2 to c.12,000 sq ft in Unit D1.

In July 2014, Home Bargains opened its unit, which is owner occupied and situated at the northern end of the scheme. Home Bargains is an attractive retailer and brings significant trade to the wider retail park.

DESCRIPTIONSt Nicholas Retail Park is made up of a detached Wickes unit and a terrace of 4 units let to Farmfoods, Lituanica, Sue Ryder and The Norfolk Hospice. There is also a small two unit terrace let to Domino’s Pizza and A Barrett & G Kerr (trading as Carousel Café) at the northern end of the scheme.

The property was developed in 2004 and provides a purpose built modern retail warehouse park extending to 58,370 sq ft (5,422.8 sq m) GIA.

The units are of steel frame construction, with the main elevations being clad with masonry and cladding panels. Internally, the units are fitted to the tenants’ specification, with Wickes benefiting from first floor offices and staff areas and Lituanica having installed a 4,600 sq ft mezzanine floor, which accommodates their café, hair and beauty salon and jewellery shop.

Fronting the retail units is a customer car park, which provides a total of approximately 253 spaces (1:231 sq ft).

We calculate that the site area extends to approximately 5.2 acres (2.1 hectares).

TENUREThe site as outlined in red opposite is held freehold. “ 2014 SAW SIGNIFICANT CHANGE

AT ST NICHOLAS RETAIL PARK WITH FARMFOODS AND HOME BARGAINS TAKING NEW SPACE, CONFIRMING THEIR CONFIDENCE IN THE SCHEME”

Carousel Cafe









Unit Tenant Name Trading AsGIA

(sq ft)Lease Start

Term (Years)

Expiry DateUnexpired

Term (Years)Next RR Break Option

Current Rent (per annum)

Rent (per sq ft)

% of Total Current Income

EPC Rating

Comment

1 Sue Ryder Sue Ryder 4,028 31/01/2012 11 30/10/2022 7.7 31/01/2017 – £54,378 £13.50 7.9% C –

1A Sue Ryder Sue Ryder 194 26/09/2012 10 30/10/2022 7.7 31/01/2017 – £2,620 £13.50 0.4% N/A Storage unit. Rent review linked to RPI.

2 The Norfolk Hospice Norfolk Hospice 5,585 09/02/2015 5 08/02/2020 5.0 –2 month rolling break option

£75,400 £13.50 11.0% B

MBO at any time. 2 months notice required. Concessionary rent agreed with Norfolk Hospice totals £52,000 per annum exclusive. Vendor to provide 2 year rental, rates and service charge guarantee based off £75,400 per annum (£13.50 per sq ft).

3 Lituanica Retail Limited Lituanica 5,400 29/09/2004 15 28/09/2019 4.6 29/09/2014 – £64,800 £12.00 9.4% BAGA with Turnstone Estates Limited. Tenant mezzanine extending to approximately 4,600 sq ft. OSRR 29/09/2014.

3A Lituanica Retail Limited Lituanica 248 06/09/2012 7 28/09/2019 4.6 – – £3,180 £12.82 0.5% N/A Storage unit. Rent review linked to RPI.

D1 Farmfoods Limited Farmfoods 12,110 21/03/2014 20 20/03/2034 19.1 21/03/2024 21/03/2029 £121,000 £10.00 17.6% C

TBO 20/03/2029. 12 months notice required. 6 months rental penalty if TBO exercised. Old Unit 2 rent (£68,619 per annum) paid to 21/06/2018. Vendor to top up to £121,000 per annum. No uplift at 21/03/2019 rent review but 5 yearly thereafter.

4Wickes Building Supplies Limited

Wickes 28,630 29/09/2004 25 28/09/2029 14.6 29/09/2014 – £322,000 £11.25 46.9% BWickes have 1st floor office space totalling approximately 1,500 sq ft GIA. OSRR 29/09/2014.

F1 A Barrett & G Kerr Carousel Diner 1,171 29/03/2010 15 28/03/2025 10.1 29/03/2015 – £23,428 £20.00 3.4% C –

F2 DP Realty Limited Domino’s Pizza 1,004 24/09/2009 20 23/09/2029 14.6 24/09/2014 23/09/2020 £20,087 £20.00 2.9% C TBO 23/09/2020. 6 months notice required. OSRR 24/09/2014.

Total 58,370 12.6 years 11.1 years £686,893 £11.77 100%

TENANCIESThe property is let on 9 full repairing and insuring leases to Wickes, Farmfoods, Lituanica, Sue Ryder, Norfolk Hospice, Domino’s Pizza and A Barrett & G Kerr.

The vendors recently signed a letting to The Norfolk Hospice (www.norfolkhospice.org.uk) on Unit 2. In 2014 the charity moved into a new £3.4m hospice in Hillington, c.5 miles east of King’s Lynn. It currently has 9 shops, mostly in central and west Norfolk. The subject unit will be the charity’s ‘Hub’, acting as its largest shop and providing a sorting service for other units. Assuming the unit is operationally successful, the purchaser will have an opportunity to re-gear the lease for a longer term at a rack rent. The concessionary rent is £52,000 per annum and the lease has a mutual rolling two month break clause. The vendor will top this rent up to £75,400 per annum (£13.50 per sq ft) and guarantee the rates and service charge for a period of 24 months from purchase.

The investment has a weighted unexpired term of 12.6 years (11.1 years to break) and the total current passing rent is £686,893 per annum providing a low average rental rate for the retail units of £11.77 per sq ft.

RENTAL COMMENTARYThe retail units are let at rents between £10.00 and £13.50 per sq ft, with the scheme having an average rent of £11.77 per sq ft. These levels are very low when compared to rents elsewhere in the town. On Hardwick Road rents are generally closer to £20.00 per sq ft.

The rent on the Wickes unit at £11.25 per sq ft is modest. Homebase are due to close their store on Hardwick Road, which should have a beneficial impact on the trade of this unit, resulting in a positive effect on the unit’s rental value. We are aware Wickes has agreed to take a new store in Saffron Walden at a rent of £13.00 per sq ft, and believe in the medium term more evidence will establish a reversion for the Wickes unit at the subject property.

In addition we believe the rate on the food takeaway units are relatively low and provide scope for rental growth.










TENANTS’ COVENANTSThe park is let to national retailers, with 73% of the total income derived from Dun & Bradstreet 5A1 rated covenants. We summarise below the most recent accounts for each of the tenants.

PLANNINGThe park benefits from several planning permissions as set out below:

Wickes

Use is restricted to the sale of goods for the purpose of a DIY store and garden centre.

Retail Terrace

Units 1-3 on the terrace benefit from an open A1 (food and non–food) planning permission.

The Lituanica unit includes a mezzanine floor, which is restricted to the sale of convenience goods only, with up to 145 sq m also permitted to be used as a café (Use Class A3).

Unit D1 possesses a bulky planning consent but allows the sale of food and the unit can be split to a maximum of three units with a minimum floor space of 3,800 sq ft GIA.

Restaurants

Units F1 and F2 trade under an A5 use consent (hot food takeaway). No conditions were imposed on the planning permission which would prevent permitted development rights to change the use of either unit from A5 to A1, A2 or A3 use.

SERVICE CHARGEAll of the tenants contribute on a pro rata basis to the service charge. The budget for 2015 provides a rate of £0.78 per sq ft.

EPCEPC ratings are shown in the tenancy schedule on the previous page. Full certificates and recommendation reports are available upon request.

Unit Tenant Year Ending Sales Turnover

(000’s)Pre Tax Profit / Loss

(000’s)Net Worth

(000’s)D&B Rating

1 Sue Ryder31/03/2014 – £410 £45,341

5A131/03/2013 – £1,285 £44,480

2 The Norfolk Hospice31/03/2014 £3,615 £1,796 £4,107

2A131/03/2013 £1,670 £373 £2,313

3 Lituanica Retail Limited31/03/2014 £14,439 £226 £525

A401/10/2012 £7,728 £169 £472

D1 Farmfoods Limited28/12/2013 £689,129 £15,110 £67,085

5A129/12/2012 £569,329 £27,009 £69,736

4 Wickes Building Supplies Limited28/12/2013 £972,038 £49,441 £298,859

5A129/12/2012 £976,136 £55,550 £273,471

F1A Barrett & G Kerr (t/a Carousel Café)

05/04/2014 £155 £5 ––

05/04/2013 £119 -£7 –

F2DP Realty Limited (Domino’s Pizza)

31/12/2013 £16,421 –£744 –£183N1

30/12/2012 £15,530 –£620 £348








TENANTS’ COVENANTS, PLANNING, SERVICE CHARGE, EPC

INVESTMENT RATIONALEProven Trading Destination

From our investigations all the existing occupiers trade well from this scheme. This is evidenced by the fact that Farmfoods previously occupied Unit 2 (5,585 sq ft) but in 2014 ‘upsized’ into Unit D1 (12,110 sq ft) on the basis of their strong trading performance.

Secure Income

73% of the income is secured to D&B 5A1 rated covenants, with Wickes and Farmfoods providing guaranteed unexpired terms of over 14 years. Wickes are proposing to bring one of their sister companies (Tile Giant) to share occupation of the unit, further establishing their trading presence on the scheme. This secure income underpins this investment and we believe there is the opportunity to improve the remaining income profile through ongoing asset management.

Retailer Demand / Rental Levels

On the southern side of King’s Lynn, there is retailer activity at Pierpoint Retail Park and Campbell’s Meadow Retail Park. Homebase are vacating the area, Next are upsizing, DFS are downsizing and there is demand from the likes of B&M and Dunelm. Rents here are in the region of £20.00 per sq ft. The subject property is let at much lower levels (avg. £11.77 per sq ft) and therefore provides a far more affordable alternative which should attract new occupiers in the medium term.

Pod Development

Subject to planning we believe there is an opportunity to develop a pod unit to improve the existing leisure / A3 offer. The current car parking ratio of 1:231 sq ft would allow such a development and a further softer user would complement the scheme and the adjacent new Home Bargains unit.

Adjacent Residential Development

There is a desire from King’s Lynn & West Norfolk Borough Council to see the adjacent site (highlighted on page 3) developed for residential dwellings. The site has historic planning permission and is currently for sale. This future development should provide a concentrated immediate catchment and improve footfall levels and retailer demand.

Alternative Uses

The subject property has an historic consent for the construction of 3 10,000 sq ft Class B8 (storage and distribution) units with trade counter consent at the northern end of the scheme. Furthermore, plans were drawn up for a 60 bed Travelodge to sit above the ground floor B8 units. These plans / permissions date from 2008 but show the willingness of the local council to encourage development and demonstrate the scheme’s flexibility.

“ 73% OF THE INCOME IS SECURED TO D&B 5A1 RATED COVENANTS WITH A WAULT OF 12.6 YEARS… THERE ARE OPPORTUNITIES TO FURTHER ASSET MANAGE THIS INVESTMENT CONFIRMING ST NICHOLAS RETAIL PARK AS A CORE PLUS INVESTMENT OPPORTUNITY.”








INVESTMENT RATIONALE

CONTACT DETAILS

ELLIE KIRKBYT: 020 7317 3790 E: [email protected]

WWW. WILKINSONWILLIAMS .CO.UK

Ref: 13139.001 / St Nicholas Retail Park / King’s Lynn / February 2015Designed and produced by THE GROUP www.completelygroup.com

Property Misrepresentation Act Wilkinson Williams LLP give notice to anyone who may read these particulars as follows: 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.

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. 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. 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 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.

Any areas, measurements or distances referred to herein are approximate only. 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. 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.

MILES MARTENT: 020 7317 3777 E: [email protected]

PROPOSALWE ARE INSTRUCTED TO SEEK OFFERS FOR THE FREEHOLD INTEREST IN THE SUBJECT PROPERTY IN EXCESS OF £8,377,000 (EIGHT MILLION, THREE HUNDRED AND SEVENTY SEVEN THOUSAND POUNDS), WHICH, ON THE BASIS OF THE RENT GUARANTEE, REFLECTS A NET INITIAL YIELD OF 7.75%, ASSUMING PURCHASER’S COSTS OF 5.8%, SUBJECT TO CONTRACT AND EXCLUSIVE OF VAT.

February 2015 13139.001 Designed and produced by THE GROUP www.completelygroup.com

VATThe subject property has been elected for VAT and it is expected that the sale will be treated as a TOGC.







VAT, PROPOSAL & CONTACT DETAILSVAT, PROPOSAL & CONTACT DETAILS

Documents

ST NICHOLAS RETAIL PARK€¦ · St Nicholas Retail Park is made up of a detached Wickes unit and a terrace of 4 units let to Farmfoods, Lituanica, Sue Ryder and The Norfolk Hospice