Well Secured Retail Investment in Historic Market Town Centre
Argos | 3 New Street | Boston | Lincolnshire | PE21 6LP
subject to contract
Freehold commercial property investment
Let to the secure covenant of Argos Limited (Net Assets £501m), owned by FTSE 100 company J Sainsbury plc
New 5 year lease from September 2021
Tenant has been in occupation since 1995
Rent recently rebased on lease renewal by 23% reduction from previous rent, from £73,000 pa to £56,000 pa
Situated in the heart of the town centre
The only store in Boston for either Argos or J Sainsbury Ltd
No rent arrears. No rent payment delays during lockdown
£665,000, subject to contract
8.0% Net Initial Yield
The market town of Boston has a rich history dating back to Medieval times and is located on The Haven. The town lies approximately 34 miles (54 km) south east of Lincoln, 35 miles (56 km) north of Peterborough and 50 miles (80 km) east of Nottingham. Communications to Boston are good being located on the A16/A52 road intersection.
Direct rail services to London (King’s Cross) are available from Boston Railway Station with a journey time of approximately 2 hours 30 minutes. Air transport facilities are easily accessible with Humberside and East Midlands International Airports being within a one-hour drive of the town centre.
Boston is one of the fastest growing locations in the eastern region and offers a borough population of 83,500. [Source: Lincolnshire Research Observatory March 2020].
The subject property is situated within the heart of Boston town centre fronting New Street, close to its junction with Strait Bargate which along with Wide Bargate and Market Place combine to form Boston’s prime retailing pitch. Nearby occupiers include Caffe Nero, EE, Vision Express, New Look, WH Smith and Santander.
The Pescod Square Shopping Centre is in close proximity, further increasing footfall in the area. Totalling approximately 93,000 sq ft with a 400 space car park the centre has a range of stores including Wilko, Greggs, Waterstones, Next, Costa, Superdrug and O2.
The 200-space Boston Market Place car park is immediately to the rear of the subject property. Every Wednesday and Saturday there is a market on Strait Bargate close to the property thereby increasing footfall.
This is the only Argos in Boston with the closest branch being in Spalding, some 22 km (14 miles) away.
The property comprises a two storey retail unit built in the mid-1990’s of brick and block construction. The ground floor is predominantly open plan with ancillary storage and office space to the rear. The first floor comprises further storage, staff room, goods lift and plant room. The property benefits from a goods entrance.
Internally the unit has been fitted out to the typical corporate style of Argos.
We understand that the property provides the following approximate Net Internal Areas:
|Ground Floor||Retail, Office & Stores||483.18 sq m||5,201 sq ft|
|First Floor||Storage & Ancillary||504.12 sq m||5,426 sq ft|
|Total||987.30 sq m||10,627 sq ft|
The entire property is let on a full repairing and insuring lease to Argos Limited for a term of 5 years from 3rd September 2021, expiring on 2nd September 2026. The lease is subject to a tenant only break option on 3rd September 2024, subject to not less than six months’ notice.
The current passing rent is £56,000 per annum (£56.72 per sq m / £5.27 per sq ft overall).
We understand the tenant has been in occupation since 1995 (26 years) and entered into a lease renewal in 2021, demonstrating their desire to remain in the property. The rent has been rebased from £73,000 per annum to £56,000 per annum.
Following Sainsbury’s acquisition of Argos many Argos stores on the high street have been integrated into Sainsbury’s supermarkets. However, Sainsbury’s does not have any stores in Boston (either in-town or out-of-town) and the fact that the tenant has just renewed their lease indicates that the subject unit is highly regarded and there are no plans to integrate it.
All rent is paid and up to date, with no arrears.
Argos Limited (Co. No. 01081551), has reported the following figures:
|7th March 2020||9th March 2019|
|Pre-Tax Profits (Loss)||(£141,736,000)*||(£57,868,000)*|
*Exceptional costs totalling £89.1 million for 2020 (2019: £53.6m) were in respect of costs associated with the integration of Argos into the J Sainsbury Group, following acquisition.
Argos Limited is wholly owned by J Sainsbury’s plc which is a FTSE 100 company and listed on the London Stock Exchange. Notwithstanding the challenges of COVID-19, the First Quarter Trading Statement for the 16 weeks to 26th June 2021 (published by J Sainsbury’s plc, July 2020) reported Argos sales being up 6.7% on a two-year basis, ahead of expectations and guidance.
Argos have an estimated 29 million store customers and over 1 billion online customers per year. The company offer 60,000 different products with a national network of over 1,000 stores and collection points. For further information please visit: www.about.sainsburys.co.uk/great-products-and-services/argos.
J Sainsbury’s plc (Co No. 00185647) has reported the following figures:
|7th March 2020||10th March 2019|
The property is elected for VAT. We anticipate that the sale should be capable of being treated as a Transfer of Going Concern (TOGC).
We are instructed to seek offers in the region of £665,000 (Six Hundred and Sixty-Five Thousand Pounds) for this commercial property investment, subject to contract, reflecting a net initial yield of 8.0%, assuming standard purchaser’s costs of 5.22%.
Please note that a purchaser will be re-charged the costs of searches (£548.25) which are provided in the data room.
Please note that a purchaser will be charged a Transaction Fee of 1.00% of the Purchase Price plus VAT.
An opportunity to acquire a freehold commercial property investment in the heart of Boston town centre;
New letting at a re-based rent;
Let to the strong covenant of Argos Limited (Net Assets £501 million), owned by FTSE 100 company J Sainsbury plc;
Argos have been in occupation for 26 years and renewed their lease in 2021, demonstrating their continued commitment to the property;
This is the only Argos in Boston, with the closest branch being in Spalding, some 22 km (14 miles) away;
A purchase at the asking price for this commercial property investment will provide an investor with an attractive net initial yield of 8.0%;
Attractive lot size for an investor;
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