stop 15-years-to-co-op--open-rpi-rent-reviews-kirkby - Singer Vielle Sales

15 years to Co-Op – Open RPI Rent Reviews

2 Station Road | Kirkby-in-Ashfield | Nottinghamshire | NG17 7AR

£1,850,000

subject to contract

EXCHANGED

Summary

  • Lease guaranteed by Co-Operative Group Limited

  • Secure income – Total Equity £2.954 billion

  • Approximately 15 years unexpired lease term

  • Uncapped RPI Rent Reviews

  • Highly prominent retail property with extensive frontage

  • Freehold interest comprising 0.64 acres

  • Offers in excess of £1,850,000 subject to contract

  • 7.0% net initial yield

Location

Kirkby-in-Ashfield is an attractive and thriving market town in central Nottinghamshire approximately 19 km (12 miles) north of Nottingham, 55 km (34 miles) south of Sheffield and 226 km (140 miles) north of London. The town benefits from good road communications being easily accessible situated south of the A38 between Mansfield and M1 Motorway which is just 5 km (3 miles) away.

Kirkby-in- Ashfield is connected to the national rail network; trains to London St Pancras International have a journey time of approximately 2 hours and 30 minutes.

Situation

The property occupies a prominent corner position in the town centre with extensive frontage to Station Road at the junction of Lindleys Lane which provides vehicular access to the rear car park and access for loading / unloading. Kirkby-in-Ashfield Railway Station is less than half a mile west of the property.

Ashfield District Council offices are almost diagonally opposite and the property benefits from continuous traffic flow in both directions. The surrounding streets off of Station Road are predominantly residential comprising a blend of detached and terraced housing.

The town centre is compact and pedestrian friendly, known for its range of national and local owned shops and business. In addition, a traditional English market is held every Tuesday, Thursday, Friday and Saturday.

Description

The property is a detached modern purpose built single storey retail / supermarket property with its main entrance fronting Station Road. The property is of portal frame and brick construction beneath a slated pitched roof. There is an entrance at the rear as well as rear loading facilities and there is a designated car park within the freehold for 40 cars.

The property is sub-let to The Factory Shop and the property has been fitted out to a high standard in their corporate style. The main retail area is open plan with the tenants merchandise strategically laid out across the store. There is also an area for storage as well as for staff accommodation.

Accommodation

The property has been measured by Commercial Measured Surveys Limited and provides the following accommodation;

  Sq M Sq Ft
Total 904.6 9,737


A set of floor plans is available to download and the measured survey report will be re-addressed to a purchaser.

Site

We estimate the site area to be approximately 0.26 hectares (0.64 acres).

Tenure

Freehold.

Tenancy

The property is let to Rochpion Properties (4) LLP whose covenant is guaranteed by Co-Operative Group Limited, on a Full Repairing and Insuring lease for term of 25 years from 11th December 2006 expiring on 10th December 2031, therefore having approximately 15 years unexpired lease term with no breaks.

The lease benefits from 5 yearly rent reviews to the higher of Open Market Rental Value or the Retail Price Index (RPI) uncapped. The December 2016 has been documented at £137,011.73 per annum (£151.46 per sq m / £14.07 per sq ft).

The property is sub-let to The Factory Shop Limited from 27th August 2013 until 26th August 2023 at a rent of £52,500 per annum. On 27th August 2018 the rent will rise to £59,399 until the end of the term.

The Co-Operative Group acquired this property as part of their takeover of Somerfield in 2008. Already having the only other supermarket in the town at the time at Ashfield Precinct prior to it’s redevelopment the Co-Op has strategically sub-let the property to a retailer and not a food retailer, which we understand could have enabled the Co-Op to achieve a higher rent for the property. Prior to the sub-letting to The Factory Shop the property was occupied by Haldanes Stores. The nearest Co-op food store is under a mile away from the property.

Covenants

The property is well secured to Co-Operative Group Limited (No. 00525R) which has reported the following figures;

  31st January 2015 31st January 2014
Revenue £9.301 billion £9.388 billion
Underlying Pre-Tax Profit £ 81 million £ 73 million
Total Assets £8.769 billion £8.485 billion
Total Equity £2.954 billion £2.865 billion

With origins tracing back to 1844 the Co-Operative Group has become one of the world’s largest consumer co-operatives and the largest mutual business in the United Kingdom, with interests across food, funerals, insurance, electrical and legal services. Its food business has reported strong performance with a 3.8% increase in convenience like-for-like sales and 97 new food stores. For further information visit www.co-operative.coop.

The sub-tenant, The Factory Shop Limited (Co. No. 04176887) has reported the following figures;

  27th March 2016  27th March 2015
Turnover £184,496,000 £174,334,000
Pre-Tax Profit £ 6,015,000 £ 6,526,000
Shareholders’ Funds  £ 49,879,000 £ 44,917,000

Established in 1969 The Factory Shop is a retailer of a wide variety of goods including clothing and footwear for all ages and genders, cosmetics and fragrances, fashion accessories, electrical goods, housewares and home furnishings as well as toys, books and confectionery. The company trades from over 200 stores nationwide from Thurso, past John o’ Groats, to Helston in Cornwall. For further information visit www.tofs.com.

Vat

The property has been registered for VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).

Proposal

We are instructed to seek offers in excess of £1,850,000 (One million, eight hundred and fifty thousand pounds), subject to contract, reflecting a net initial yield of 7.0%, assuming standard purchaser’s costs of 6.23%.

Investment Considerations

  1. An opportunity to acquire highly prominent retail property with extensive frontage and its own designated car park;

  2. The lease is guaranteed by the highly secure covenant of Co-Operative Group Limited and underpinned by a secure sub-tenant, The Factory Shop Limited;

  3. Approximately 15 years unexpired with no breaks;

  4. The lease benefits from open RPI rent reviews;

  5. Freehold interest comprising 0.64 acres;

  6. The property occupies a prominent trading position;

  7. A purchase at the asking price will provide an investor with an attractive net initial yield;

Contact Us

Singer Vielle   +44 (0) 207 935 7200
Neil Singer neil@singervielle.co.uk +44 (0) 203 478 9120
Dale Henry dale@singervielle.co.uk +44 (0) 203 701 1356
Richard Wolfryd richard@singervielle.co.uk +44 (0) 203 701 1353
Faye Langoulant faye@singervielle.co.uk +44 (0) 203 478 9122
Louanne Malan louanne@singervielle.co.uk +44 (0) 203 701 1386

Vendors Solicitor

Gateley Plc   +44 (0)161 836 7725
Andrew Ward andrew.ward@gateleyplc.com  

Joint Agent

12 York Place
Leeds LS1 2DS
Tel: 0113 245 0099

Tom Day tom@stephensonday.co.uk

customer service