stop ground-rent-investment-opportunity-aberdeen - Singer Vielle Sales

Ground Rent Investment Opportunity

Site 30 | Greenhole Place | Bridge of Don Industrial Estate | Aberdeen | AB23 8EE

£1,000,000

subject to contract

SOLD

Summary

  • Rarely Available Investment Opportunity

  • Heritable (Scottish Freehold)

  • Ground lease for a further 87.5 years

  • Rent 17.38% of rental value

  • 5 yearly “upward” rent reviews

  • Established, prime commercial location

  • Occupied by Homebase

  • Guide Price £1,000,000, subject to contract

  • 5.0% net initial yield

Location

Aberdeen is located approximately 180 km (125 miles) north of Edinburgh and 210km (145 miles) north east of Glasgow. The city benefits from excellent road communications with the A90 and A96 offering direct links to Dundee and Inverness. In addition, the city is connected to the national rail network with direct services to London Kings Cross with a fastest journey time of 4 hours 20 minutes. Aberdeen International Airport is approximately 9.6 km (6 miles) north-west of the city centre and is used by around 3 million passengers a year for scheduled and charter holiday flights.

Aberdeen city & Shire is the third largest city region in Scotland and home to almost 0.5 million people of which 230,000 live in Aberdeen. Aberdeen is one of the world's top five energy cities and has been ranked as one of the UK's most competitive cities with innovative industries, excellent academic and research capabilities and a highly skilled workforce. Alongside continued investment in energy, life sciences, tourism and hospitability, food, drink and agriculture, digital and the creative sectors are industries on the rise (Source: Aberdeen City Council).

Situation

The Bridge of Don Industrial Estate is situated in a prime commercial location approximately 3.2 km (2 miles) to the north of Aberdeen city centre. The property, which benefits from being highly visible, is accessed directly from The Parkway (A90 Trunk Road) which is the main arterial route connecting Aberdeen from the south. The property is located at the junction of Greenhole Place and Broadfold Road which is the main access road through the estate approximately 100 metres from its junction with the A90.

The area is an established, prime commercial location with surrounding occupiers including Buildbase, Jewson, Nu-Style Products, Murison Commercials, Yardbury Engineering, Bilfinger Salamis, TWMA, Weltec and GE Oil & Gas.

Description

The property comprises 2.35 acres, as specified in the ground lease, at the junction of Greenhole Place and Broadfold Road.

On the site, currently is built a solus purpose retail warehouse of streel frame construction with a pitched roof and profiled metal cladding on a rectangular site with good road frontage. Externally, the property benefits from a garden centre service area to the west and north respectively plus a total of 102 car parking spaces are provided to the south of the site equating to a ratio of 1: 37.78 sq m /      1: 406.72 sq ft.

Internally, the property is fitted out to the sub-tenants standard corporate image and includes an open plan sales area together with staff facilities, a canteen and rear stockroom. An extension to the west elevation incorporates a garden centre of steel frame construction with brick walls and double glazed windows.

The built property has been measured by Square Foot Media and provides the following Gross Internal floor areas;

  Sq M Sq Ft
Warehouse 3,689.52  39,715 
Garden Centre    159.14    1,713 
Total 3,853.86 41,484

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

Site

With the site extending to approximately 0.951 hectares (2.35 acres), the site cover of the built property is in the order of 40.5%.

Environmental

An Environmental Phase 1 Report was carried out by Ramboll Environ in September 2017 concluding the site represents a low to moderate risk to contamination. A copy of the report is available to download and reliance of the same can be made available to a purchaser on completion.

Planning

Planning permission was granted in 2005 for unrestricted non-food retail use within Class 1 of the Town and Country Planning (Use Classes) (Scotland) Order 1997.

Rateable Value

The current rateable value of the built property is £300,000 effective as at 1st April 2017. For more information click here.

Tenure

Heritable (Scottish equivalent of English freehold).

Tenancy

The property is let to The Trustees of the John R. Weir Limited Retirement Benefits Scheme on a lease from 1st June 1980 expiring 31st May 2105, therefore having 87.5 years unexpired.

The current passing rent is £52,394 per annum.

The rent is reviewed 5 yearly on an upward only basis to 17.38% of the rack rental value of the approved development, being a non-food retail warehouse.

The rent is paid half yearly in advance and the next rent review is on 15th May 2020. There are no arrears and the next rental payment is due in November 2017.

The property is sub-let and occupied by Homebase Limited on a Full Repairing and Insuring sub-lease for a term of 20 years from 20th December 2000 expiring 21st December 2020 at a current passing rent of £301,464 per annum.

The ground rent equates to only £10.76 per sq m / £1.26 per sq ft, in comparison to the occupation rent at £78.22 per sq m / £7.26 per sq ft.

Covenant

  • Tenant

The Trustees of the John R. Weir Limited Retirement Benefits Scheme is registered at 163 Bath Street, Glasgow G2 4SQ. John R. Weir was one of the most recognisable names in the Scottish motor industry; in September 2012 the company was sold to Arnold Clark Automobiles, however, the director’s pension scheme remained with Mr John Weir.

  • Sub-Tenant

Homebase Limited (Co. No. 533033), has reported the following figures;

  27th February 2016 28th February 2015
Turnover £1,360,112,000 £1,408,807,000
Pre-Tax Profit £ 43,299,000 £ 16,769,000
Shareholders’ Funds £ 50,142,000 £ 420,012,000

Homebase sells home improvement products from Homebase stores in Great Britain. The company was part of the Home Retail Group until February 2016 when it was acquired by Bunnings (UK & I) Limited, part of the Bunnings Group of Australia who are part of the Wesfarmers Group.

VAT

The property has been opted to tax. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).

Proposal

Guide price £1,000,000 (One Million Pounds), subject to contract, reflecting a net initial yield of 5.0%, assuming purchasers' costs of 5.33%.

To be sold by "best offers" by 5:00pm, Monday 27th November 2017.

 

Investment Considerations

  1. A rare ground rent opportunity;

  2. Rent based upon 17.38% of rental value;

  3. 5 yearly “upward” rent reviews;

  4. Established commercial location providing first class property fundamentals;

  5. The long leasehold interest was sold to The Trustees of the John R. Weir Limited Retirement Benefits Scheme for £2.375m on the 3rd July 2013;

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
Graham Waddell graham@singervielle.co.uk +44 (0) 203 701 1388
Faye Langoulant faye@singervielle.co.uk +44 (0) 203 478 9122
Louanne Malan louanne@singervielle.co.uk +44 (0) 203 701 1386

Vendors Solicitor

CMS CMNO LLP +44 141 304 6242
Eilidh Mactier Eilidh.Mactier@cms-cmno.com 
Lisa Kinloch Lisa.Kinloch@cms-cmno.com 

 

 

customer service