Attractive Town Centre Retail Investment

17 Wellington Street | Teignmouth | Devon  | TQ14 8HW

£300,000

subject to contract

EXCHANGED

Summary

  • Popular retail and tourist location

  • Prominent town centre retailing pitch

  • Let to Subway Realty Limited

  • 4.5 years unexpired lease term

  • No VAT payable

  • £300,000, subject to contract

  • 8.0% net initial yield

17 Wellington Street | |  | | Devon  | Teignmouth | | TQ14 8HW

Location

Teignmouth is a seaside town in Devon, approximately 15 km (9 miles) north of Torquay, 64 km (40 miles) north-east of Plymouth and 24 km (15 miles) south of Exeter.

The town benefits from good road communications, being served by the A380 some 6.4 km (4 miles) to the west which in turn links with the M5 Motorway approximately 18 km (11 miles) to the north. The A38 is 16 km (10 miles) to the west and provides access to Plymouth. The town is also connected to the national railway network with a fastest journey time to London Paddington of 2 hours 40 minutes. Exeter Airport is some 30 km (19 miles) to the north and serves a number of UK and European destinations.

Teignmouth is an attractive coastal town on the edge of the mouth of the River Teign and the South Devon Coast. With long sandy beaches and family attractions, the town is a popular seaside tourist resort benefitting from a large number of visitors throughout the year with the population boosted significantly during the summer months.

Situation

The property is located on Wellington Street, one of the principal shopping streets in the heart of Teignmouth town centre. The train station is located less than 0.3 km (0.2 miles) to the north and Teignmouth Town Beach is a couple of minutes’ walk to the south. Nearby retailers include Holland & Barrett, William Hill, Greggs, Lloyds Bank, Costa, WHSmith and Boots Chemist.

17 Wellington Street | |  | | Devon  | Teignmouth | | TQ14 8HW
17 Wellington Street | |  | | Devon  | Teignmouth | | TQ14 8HW

Description

The property comprises a retail unit arranged over ground floor. Internally, the retail floor area is predominately open plan with ancillary areas and has been fitted out by the tenant to their usual corporate style.

The upper floors, which are self-contained, have been sold off on long leases and in which the seller has no interest.

Accommodation

We understand the ground floor unit has a Net Internal Area of approximately 97.8 sq m (1,053 sq ft).

17 Wellington Street | |  | | Devon  | Teignmouth | | TQ14 8HW
17 Wellington Street | |  | | Devon  | Teignmouth | | TQ14 8HW

Planning

We understand that the property is Grade II Listed and lies within the Teignmouth Conservation Area.

Tenure

A 999 year long leasehold interest from 24th November 2006 at a peppercorn rent.

17 Wellington Street | |  | | Devon  | Teignmouth | | TQ14 8HW
17 Wellington Street | |  | | Devon  | Teignmouth | | TQ14 8HW

Tenancy

The ground floor is let to Subway Realty Limited (t/a Subway) on a full repairing and insuring lease for a term of 15 years from 26th March 2008, expiring on 25th March 2023. The current passing rent is £25,000 per annum.

The tenant had a right to terminate the lease on 26th March 2018 but has chosen not to exercise this break option. The tenant may terminate their lease at any time during the remainder of the term, provided they give the Landlord no less than 12 months’ written notice and pay a break penalty of £40,000.

The tenant has an option to renew the lease for a further 15 years, exercisable at any time after the expiry of the fourteenth year of the term, subject to 6 months’ prior written notice.

The ground floor has been underlet on identical terms to a Subway franchisee, Kevin Tilling and Christopher White, for a period of fifteen years less three days, from 26th March 2008, expiring on 22nd March 2023. This lease excludes the provisions of sections 24-28 of the Landlord and Tenant Act 1954.

Covenant

Subway Realty Limited (Co. No. 04174473) has reported the following figures:

  2017 2016
Turnover £35,424,835 £33,266,345
Pre-Tax Profits £1,741,628 £1,385,920
Net Assets £4,337,408 £2,933,924

Subway Realty Limited is a wholly owned subsidiary of Subway International Holdings BV and operates as part of the group’s European division. Subway Realty Limited enters into leases with landlords and subleases these to franchisees. It has become one of the leading UK franchises.

The Subway brand began in 1965 in the USA and has since expanded to become the world’s largest submarine sandwich chain with over 44,000 stores in over 110 countries. Across the UK and Ireland there are over 2,500 stores. For further information please visit www.subway.com.

The sub-tenant and franchisee, Mr Chris White and Mr Kevin Tilling, have advised that they own and operate a group of Subway sandwich shops in six further locations throughout the South West of the UK and have been trading since 2005.

17 Wellington Street | |  | | Devon  | Teignmouth | | TQ14 8HW
17 Wellington Street | |  | | Devon  | Teignmouth | | TQ14 8HW

VAT

The property has not been registered for VAT. Therefore, no VAT will be payable on the purchase price.

Proposal

We are instructed to seek offers of £300,000 (Three Hundred Thousand Pounds), subject to contract, reflecting a net initial yield of 8.0%, assuming standard purchaser's costs of 3.30%.

17 Wellington Street | |  | | Devon  | Teignmouth | | TQ14 8HW
17 Wellington Street | |  | | Devon  | Teignmouth | | TQ14 8HW

Investment Considerations

  1. An opportunity to acquire a town centre retail investment;

  2. The property occupies a prominent retailing pitch;

  3. Let to Subway Realty Limited, a secure and highly established tenant;

  4. Approximately 4.5 years unexpired lease term;

  5. The tenant’s 2018 break option has not been exercised, demonstrating their commitment to the property;

  6. VAT free investment;

  7. Attractive lot size to an investor;

  8. A purchase at the asking price reflects an attractive net initial yield.

 

30/08/2018

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
Faye Langoulant faye@singervielle.co.uk +44 (0) 203 478 9122
Louanne Malan louanne@singervielle.co.uk +44 (0) 203 701 1386

Sellers Solicitor

Vivash Brand LLP +44 (0) 20 8641 2771
Michael Rowe mr@vbllp.co.uk
customer service