stop high-yielding-town-centre-retail-investment-cornish-bakery-torquay - Singer Vielle Sales

High Yielding Town Centre Retail Investment

Cornish Bakery | Unit 3 | 42-44 Fleet Street | Torquay  | Devon  | TQ2 5DW

£265,000

subject to contract

EXCHANGED

Summary

  • Popular retail and tourist location

  • Prominent town centre retailing pitch

  • Established tenant

  • New lease from June 2016

  • £265,000, subject to contract

  • 9.2% net initial yield

Location

Torquay is a seaside town in Devon located in the district of Torbay, approximately 35 km (22 miles) south of Exeter and 53 km (33 miles) east of Plymouth.

The town benefits from good road communications, being served by the A380 which in turn links with the M5 Motorway approximately 29 km (18 miles) to the north. The town is also connected to the national railway network with a fastest journey time to London Paddington of 2 hours 45 minutes. Exeter Airport is some 42 km (21 miles) to the north-east and serves a number of UK and European destinations.

Torquay forms part of the ‘English Riviera’ and is a popular tourist resort, attracting a large number of visitors each year. Situated on the South Devon Coast, the town is famous for its sandy beaches and family attractions. The population of Torquay is boosted significantly during the summer months.

Situation

The property is located on the western side of Fleet Street, one of the principal pedestrianised shopping streets in the heart of Torquay town centre. Nearby retailers include Santander, William Hill, Tesco Metro, The Edinburgh Woollen Mill, Subway and Superdrug.

The Fleet Walk Shopping Centre is immediately to the south. Home to over 50 high street names together with a mix of specialist and independent shops, the centre also benefits from 414 car parking spaces. Retailers include Sportsdirect.com, Bonmarche, Starbucks, Greggs and TK Maxx.

Union Street, the prime retailing pitch for the town, is immediately to the north. Occupiers include Primark, H&M, River Island, WHSmith, JD Sports and Carphone Warehouse.

Description

The property comprises a ground floor retail unit. 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 and accessible from Fleet Street, have been sold off on a long lease.

Accommodation

The property has been measured by BKR Floor Plans and provides the following Net Internal floor areas:

Gross Frontage 5.64 metres 18’6”
Net Frontage 5.21 metres 17’1”
     
Zone A 35.49 sq m 382 sq ft
Zone B 33.91 sq m 365 sq ft
Zone C 21.09 sq m 227 sq ft
ITZA   621
Total 90.48 sq m 974 sq ft

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

Planning

The property is located in the Torquay Harbour conservation area.

Tenure

A new 999 year long leasehold interest at a peppercorn rent.

Tenancy

The ground floor is let to The Cornish Bakery Shops Limited on a full repairing and insuring lease for a term of 10 years from 1st June 2016, expiring on 31st May 2026. The current passing rent is £25,000 per annum. The lease benefits from an upwards only rent review in the fifth year of the term. There is a tenant’s break option on 1st June 2019 and 1st June 2022, subject to 6 months’ prior written notice.

The upper floors have been let on a 199 year lease from 26th April 2017 at a peppercorn rent.

Covenant

The Cornish Bakery Shops Limited (Co. No.02177016) has reported the following figures;

  27th November 2016 27th November 2015
Turnover £9,831,280 £8,209,675
Pre-Tax Profits £324,101 £206,961
Net Assets £681,125 £457,332

The principal activity of the company is of a high end bakery. The Cornish Bakery opened its first store in Mevagissey and now has 36 stores throughout the United Kingdom. Four new shops were opened during the last financial year which are all trading to expectations and a further five were due to open by Spring 2017 with further openings expected. The company has won several awards including a Design Business Association (DBA) award, as well as a Food and Beverage (FAB) prize for their interiors. For further information, please visit www.thecornishbakery.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).

Management Company

On completion the Buyer will become a shareholder and director of a Management Company and following the disposal of all four shop units comprised in the Seller’s title and the upper parts of the Property on long leases, the Seller will transfer the freehold reversion to such Management Company for the sum of £10.00.

Proposal

We are instructed to seek offers in the region of £265,000 (Two Hundred and Sixty Five Thousand Pounds), subject to contract, reflecting a net initial yield of 9.2%, assuming purchaser’s costs of 2.84%.

Investment Considerations

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

  2. The property occupies a prominent retailing pitch;

  3. Let on a new lease from June 2016;

  4. Let to an established, award-winning tenant;

  5. Attractive lot size to an investor;

  6. A purchase at the asking price reflects 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

Edwards Duthie +44 (0) 208 514 9000
Michael Bonehill michael.bonehill@edwardsduthie.com
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