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

15 Years Undoubted Income

Bank of Scotland plc | 31 High Street | Montrose | DD10 8LT

£525,000

subject to contract

EXCHANGED

Summary

  • Let to Bank of Scotland plc

  • 15 years from 29th December 2016

  • No breaks

  • Assignment restricted to undoubted covenants

  • Strong Position

  • Heritable (Scottish Freehold)

  • VAT free

  • 5.5% Net Initial Yield

 

Location

Montrose is an attractive traditional Scottish market town situated in the fomer Royal Burgh of Angus on the River Esk coastline located approximately 56 km (35 miles) south of Aberdeen and 48 km (30 miles) north of Dundee along the A92 Aberdeen to Dundee coastal route.

The town lies on the main East Coast National Rail Network, linking London and Aberdeen. The closest major airports are Aberdeen Airport and Dundee Airport which lie approximately 73 km (46 miles) and 51 km (32 miles) from Montrose respectively.

Montrose is an important service and employment centre for the north east of Scotland with a commercial port and employers in the town include GlaxoSmithKline and GE Oil &Gas. As well as being an attractive place to live, it is also a popular destination for visitors and tourists.

Situation

The property occupies a strong position on the eastern side of the High Street on the corner with John Street in a prime position towards its northern end. The High Street is the main retailing location within Montrose town centre. Other operators present on the High Street include Boots the Chemist, Card Factory, Burton, Clintons, Greggs, New Look and WH Smith.

Description

The property comprises the ground floor and basement of an end of terrace Grade B Listed building of traditional stone construction with a pitched and slated roof. The ground floor is fitted to a high standard in the typical Bank of Scotland corporate style to provide an open plan banking hall and several meeting / consultation rooms. The basement is used as ancillary accommodation by the tenant.

Accommodation

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

Floor Sq M Sq Ft
Basement 30.10 324
Ground  208.38 2,243
ITZA 152.73 1,644
Total 238.48 2,567

  

   
 
  
  

Tenure

Heritable

Tenancy

The property is let to Bank of Scotland plc from 29th December 2016 until 28th December 2031 providing 15 years term certain at an initial rent of £30,750 per annum, upon full repairing and insuring terms. The passing rent equates to a Zone A rate of £19.00 before a 2.5% deduction for quantum.

The lease benefits from an upwards only rent review on 29th December 2021 and 29th December 2026. The tenant has the option to extend the lease for 10 years by giving notice no later than 12 months prior to expiry of the lease.

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 £19.00 Zone A which is in line with recent lettings on the High Street, from our enquiries, as follows;

We understand 2 High Street which provides an area of 742 sq ft ITZA was let to Diabetes Aid Limited on a 3 year lease in October 2016 at an initial rental of £11,000 per annum reflecting £14.82 Zone A. We understand no incentives were granted.

116 High Street we understand was let to SCS Mobility Limited in January 2016 on a 5 years lease with a tenant break option at year 3 at a rent of £17,900 per annum. We understand two month’s rent free was granted and based on an ITZA of 993 sq ft this reflect £18.00 Zone A.

18 High Street we understand was let to Turkish Barbers in May 2014 on a 10 year lease at a rent of £10,000 per annum. The lease is Internal Repairing only and 6 months’ rent free was granted. Based on an ITZA of 491 sq ft the passing rent reflects £20.37 Zone A.

Each of the above units occupies an inferior position to the subject property which benefits from prominence due to its return frontage onto John Street and is surrounded by a number of national multiples.

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 £525,000 (Five hundred and twenty five thousand pounds), subject to contract, reflecting a net initial yield of 5.5% assuming purchasers’ costs of 6.72%.

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. The property occupies a strong position on the High Street;

  5. VAT free investment;

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

Contact Us

Singer Vielle   +44 (0) 207 935 7200
Graham Waddell graham@singervielle.co.uk +44 (0) 141 221 4545
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

 

 

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Andrew McCowan amcc@lesliewolfson.co.uk 0141 270 7444
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