High Yielding Secure Retail Investment with Asset Management Potential - 11.7%
39/42 Market Place & 4a Nelson Place | Dereham | Norfolk | NR19 2AP
subject to contract
Coronavirus Act 2020
The property is sold with the benefit of a rent guarantee from the vendor to 28th September 2020 to ensure an investor has no issues receiving income in light of the Coronavirus Act 2020 Part 1 Section 82. This is no reflection upon the tenants ability to meet their rental obligations but an understandable protection for a purchaser.
Located in a market town in the heart of Norfolk
Highly secure income from Superdrug Stores Plc (Net Assets £319m) and Poundland Ltd (Net Assets £129.4m)
Future development potential, subject to planning
Long standing tenants
100% prime retailing position
Capital value of £61.22 per square foot
£1,375,000, subject to contract
11.7% net initial yield
East Dereham is located in a market town located in the heart of Norfolk within the boundary of Breckland District Council. The town is located approximately 15 miles (24 km) west of Norwich, 25 miles (40 km) east of Kings Lynn and 108 miles (173 km) north east of London.
The town benefits from good road communications with the A47 providing links to Great Yarmouth to the east (via Norwich) and Peterborough to the west (via Kings Lynn). Norwich railway station is 35 minutes from the town and provides direct journeys to London Liverpool Street within 1 hour and 50 minutes.
Norwich International Airport is located 16 miles (25.7 km) to the East of the town and Luton Airport is located 90 miles (145 km) to the South West.
East Dereham is one of the main retail destinations in central Norfolk, hosting a market every Tuesday and Friday and is renowned for the Mid-Norfolk Heritage Railway tourist attraction. The town comprises an attractive arrangement of Georgian buildings accommodating a mixture of both national multiples and local independent occupiers. The town benefits from ample free parking.
The Poundland is situated in a 100% prime position on Market place with a 50 foot frontage. Nearby occupiers include Lloyds Bank (adjacent) The Co-operative Food, Prezzo, Greggs, Boots, Specsavers and subway.
The Superdrug is located on the pedestrianised Nelson Place and is adjacent to New Look and Nationwide Building Society.
The property benefits from pedestrian flow from Cowper Street car park which is located to the rear of the property.
The property was initially let to Woolworths in its entirety with Superdrug being its sub tenant of the property at 4a Nelson Way. In 2009, Poundland took occupation and Superdrug remained in situ under its own occupational lease.
The Poundland comprises a retail shop arranged over ground, first and second floors. Poundland currently use the ground and first floors as sales accommodation. The second floor is not demised to Poundland, thought under the terms of the lease they are responsible for the repair and maintance of the second floor (including the roof). Poundland have incorporated their successful value fashion brand Pep&Co into the property with a dedicated frontage and sales area.
The Poundland store benefits from a rear customer entrance leading to the Cowper Street car park. The store also benefits from two goods lifts.
There is a yard and delivery bay to the rear with staff car parking.
The Superdrug Store benefits from a return frontage to the main square of Nelson Place and is arranged over ground and first floor. The first floor is accessed via the public car park to the rear and is currently used as the plant room. The roof above the Superdrug unit is not included in the title.
The property has been measured by BKR Floor Plans and provides the following Net Internal Areas:
|Poundland - 39/42 Market Place|
|Sq Ft||Sq M|
|Net Frontage||49'6"||15.09 m|
|Gross Frontage||58'3"||17.75 m|
|Subtotal Net Internal Area||16,195||1,504.52|
|Subtotal Gross Internal Area||17,922||1,664.95|
|Superdrug - 4a Nelson Place|
|Sq Ft||Sq M|
|Net Frontage||44'7"||13.59 m|
|Gross Frontage||46'7"||14.20 m|
|First Floor||Plant Room|
|Subtotal Net Internal Area||4,312||400.58|
|Subtotal Gross Internal Area||4,537||421.49|
|Total Net Internal Area||20,507||2,086.44|
|Total Gross Internal Area||22,459||1,905.1|
The measured survey is available to download and will be re-addressed to a purchaser at a cost of £675 + VAT.
The property is not listed and benefits from A1 planning consent.
As of 1st September 2020, new planning regulations will allow significantly greater flexibility to change uses within towns across England without the need to obtain planning permission.
Therefore, the property will benefit from a range of permitted uses, including office, restaurant, retail, financial and professional services, research and development, light industrial, clinic, health centre, nursery and indoor sports and recreation.
39/42 Market Place – Poundland
Let to Poundland Limited on a full repairing and insuring basis for a term of 15 years from 10th August 2009, expiring on 9th August 2024. The current passing rent is £125,000 per annum equating to a low overall rent of £7.75 per square foot GIA. There is a schedule of condition within the occupational lease.
4a Nelson Place – Superdrug
Let to Superdrug Stores Plc on a full repairing and insuring basis for a term of 5 years from 17th December 2019, expiring on 16th December 2024. The There is a tenant’s break option on 17th December 2022, subject to 6 months prior written notice. If the tenant does not exercise their break clause, they are to receive a 3 month rent free period. The current passing rent is £45,000 per annum which, based on our analysis, equates to £24.14 Zone A. The rent remained unchanged at the lease renewal in December 2019.
Therefore, an investor will benefit from a total income of £170,000 per annum.
Poundland Limited has reported the following figures:
|Year Ending||29th September 2019||30th September 2018|
Poundland is a British variety store chain that is established as one of the UK’s leading High Street names. The chain was founded in 1990 and has grown to operate from 875 stores employing over 10,000 members of staff. The company have recently announced further expansion plans for their value focused fashion brand Pep&Co.
Superdrug Stores Plc Limited has reported the following figures:
|Year Ending||29th December 2018||30th December 2017|
Superdrug is the second largest beauty and health retailer in the UK, operating in approximately 800 stores throughout the UK and the Republic of Ireland. The chain was founded in 1964 and has demonstrated improving profits in recent years, with the opening of 23 new stores and the investment of £33 million into store refurbishments and expansion.
The property has been registered for VAT. It is anticipated that the sale will be treated as a Transfer as a Going Concern (TOGC).
We are instructed to seek offers in excess of £1,375,000 (One Million, Three Hundred and Seventy Five Thousand Pounds), subject to contract. This price reflects an attractive net initial yield of 11.7%, assuming purchasers’ costs of 6.04%.
Please note that a purchaser will be re-charged the cost of searches and surveys which are provided in the data room.
Please note a purchaser will be charged a Transaction Fee of £5,000 + VAT.
A purchase at the asking price reflects a net initial yield of 11.7%;
Let to the highly secure covenants of Poundland Ltd and Superdrug Stores Plc;
Long standing tenants
The property occupies a prime retailing pitch in the heart of the town centre;
Opportunities for asset management including converting the upper floors to residential, subject to planning;
The property may offer redevelopment potential, subject to planning;
A purchase at the asking price reflects a capital value of £61.22 psf
Data Room and clicktopurchase®
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|Hill Dickinson||+44 (0) 161 817 7290|