stop 15-years-undoubted-income-neath - Singer Vielle Sales

15 Years Undoubted Income

Bank of Scotland plc | 31 Queen Street | Neath | South Wales | SA11 1DN

£540,000

subject to contract

SOLD

Summary

  • Let to Bank of Scotland plc t/a Halifax

  • 15 years from 29th December 2016

  • No breaks

  • Assignment restricted to undoubted covenants

  • Freehold

  • VAT free

  • 5.5% Net Initial Yield

Location

Dating back to Roman times Neath is an historic South Wales market town located in the County Borough of Neath Port Talbot approximately 16 km (10 miles) north east of Swansea and 56 km (35 miles) west of Cardiff. Junction 43 of the M4 Motorway is approximately 5 km (3 miles) south via the A474 and A465.

Neath Railway Station provides frequent daily services to the surrounding conurbations including Swansea and Cardiff with a journey time of 10 minutes and 40 minutes respectively. In addition, Neath is connected to the national railway network with journey times to London Paddington of approximately 2 hours 50 minutes.

Major regeneration work is taking place in Neath town centre as part of the Council’s overall strategy to make Neath an attractive place to live, visit and do business. With funding from the Regeneration Investment Fund for Wales contractor Kier has completed the development of a 24,000 sq ft Wilko retail unit plus a 600 space car park. Other initiatives include Victoria Gardens which is located diagonally opposite the entrance to Queen Street at the southern end. Visited by approximately 500,000 people every year these artistically laid out gardens are a scenic site. The Council has also rebuilt the historic Gwyn Hall into a modern arts and cultural venue incorporating a traditional auditorium theatre, 3D digital cinema, multipurpose studio and a café bistro. For more information visit www.npt.gov.uk.

Situation

The property is well located within the pedestrianised section of the town centre within close proximity to the prime retail pitch for the town and within easy walking distance of the railway station and the town centres amenities. The property is diagonally opposite Sports Direct and other multiple retailers in close proximity include Bonmarche, Marks & Spencer, Peacocks, The Works and Shoe Zone.

Description

The property comprises a terraced two storey building providing a ground floor retail unit with office and ancillary accommodation on the first floor. The ground floor comprises a fully glazed frontage with the entrance in the centre of the building. Internally, the property has been fitted out to a high standard in Halifax’s corporate image. The first floor is also finished in Halifax’s corporate image.

Accommodation

We are advised the property provides the following net internal floor areas;

Floor Sq M Sq Ft
Ground 210.88 2,270
ITZA  124.49 1,340
First Floor 152.08 1,637
Total 362.97 3,907

  

  
 
  
  

Tenure

Freehold.

Tenancy

The property is let to Bank of Scotland plc t/a Halifax from 29th December 2016 until 28th December 2031 providing 15 years term certain at an initial rent of £31,000 per annum, upon full repairing and insuring terms. The lease benefits from an upwards only rent review on 29th December 2021 and 29th December 2026. The passing rent equates to a Zone A rate of £20.00.

The tenant is only able to assign the lease for the full term to the Government, a Local or Public Authority, or a company which has had a Dunn & Bradstreet rating of 5A1 or better for three years.

Market Commentary

The passing rent equates to £20.00 Zone A which from our enquiries we understand is in line with recent lettings within close proximity to the subject property.

We understand 36 Queen Street which is located directly opposite the subject property was let in March 2016 to Fahuluzz at a rent of £7,000 per annum equating to £19.36 Zone A.

We understand 1 The Parade was let in July 2015 to Cabana Boutique Limited on a 10 year lease at £10,200 per annum equating to £25.39 Zone A. The property is in a similar location and we understand it is smaller than the subject property.

We understand 3 Parade was let in June 2014 to two individuals who entered into a 2 year lease at a rent of £9,300 per annum, equating to £20.00 Zone A. Again, the property is in a similar location.

Rental levels in Neath town centre have been rebased from a historic level of circa £80 Zone A to a current level of circa £40 Zone A for prime retail properties.

In addition, we are aware of the following recent investment activity;

In December 2016, we understand that Barclays Bank Plc, 87 High Street, Godalming, Surrey was sold for £1,230,000 / 4.42% NIY. The property is let until March 2026 with a tenants break option in March 2021, therefore having 4.25 years term certain. The lease is also subject to a Schedule of Condition.

In December 2016, we understand that Lloyds Bank plc, 8 Thoroughfare, Woodbridge, Suffolk was sold for £1,170,000 / 4.76% NIY. The property is let until February 2026, therefore having just over 9 years unexpired lease term. The property is Grade II listed.

Covenant

Bank of Scotland plc (Co. No. SC327000) has reported the following figures;

  31st December 2015 31st December 2014
Total Income £ 7,285 million £ 7,825 million
Pre-Tax Profit £ 2,663 million £ 3,400 million
Total Assets  £351,935 million £390,464 million
Total Equity £ 14,390 million £ 19,621 million

Bank of Scotland plc is a direct subsidiary of HBOS plc and a wholly owned subsidiary of Lloyds Banking Group plc. It is one of the main operating companies of the Group.

Vat

The property has not been registered for VAT. Therefore, VAT will not be payable by a purchaser.

Proposal

We are instructed to seek offers in the region of £540,000 (Five hundred and forty thousand pounds), subject to contract, reflecting a net initial yield of 5.5% after purchasers’ costs of 4.85%.

Investment Considerations

  1. Investment opportunity let to the undoubted covenant of Bank of Scotland plc;

  2. 15 years term certain from 29th December 2016;

  3. The tenant is only able to assign the lease for the full term to the Government, a Local or Public Authority, or a company which has had a Dunn & Bradstreet rating of 5A1 or better for three years.

  4. VAT free investment;

  5. A purchase at the asking price will provide an investor with an attractive net initial yield for a highly secure freehold investment.

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

Fladgate LLP +44 (0) 203 036 7000
Gavriel Cohen GCohen@fladgate.com  
Philip Turner PTurner@fladgate.com  

Joint Agent

Phil Hay                phay@jacksoncriss.co.uk        +44 (0) 20 7637 7100
Brook Wannop  brookw@jacksoncriss.co.uk  +44 (0) 20 3714 0502

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