Prime High Yielding Retail Investment

8 Eastgate Street | Gloucester | GL1 1PA

£830,000

subject to contract

FOR SALE

Summary

  • To be sold by clicktopurchase® "Best Offers" by 3.00pm 25th September 2019

  • Gloucester is an historic Cathedral City and the county town of Gloucestershire

  • Located in the 100% prime retail pitch

  • Well configured floorspace

  • Let to the highly secure covenant of Carphone Warehouse Limited

  • Freehold

  • Guide price £830,000, subject to contract

  • 12.00% Net Initial Yield

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Location

The historic Cathedral City of Gloucester is the county town of Gloucestershire and is one of the principal commercial centres in the South West of England. The city is situated approximately 104 miles west of London, 35 miles north of Bristol and 54 miles south of Birmingham.

The town has excellent road communications as it is located at the intersection of the A40 and the A438, providing a direct link to the M5 at Junctions 11, 11A and 12. In turn, the M5 provides a continuous motorway link to the M4, M50, M6 and M42 and the rest of the national motorway network.

By rail, Gloucester benefits from direct services to London (Paddington), with a fastest journey time of approximately 2 hours. Direct services also operate to Birmingham, Bristol and Cardiff with journey times of around 1 hour.

In addition, Bristol International Airport is located approximately 37 miles to the south, providing a range of national and international flight options.

In addition, Bristol International Airport is located approximately 59 km (37 miles) to the south, providing a range of national and international flight options.

Demographic and Economic Profile

Gloucester provides a primary catchment population of approximately 363,000 persons, ranking 66th of the PROMIS Centres. The catchment population is moderately affluent, ranking 85th of the PROMIS Centres and per capita spending levels are above average.

Visit England have projected a near doubling in economic activity from the visitor economy in Gloucestershire, from £728million in 2010 to £1.5billion by 2025.

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Retailing in Gloucester

Gloucester is one of the principal retailing centres in the South West with 1.48 million sq ft of city centre retail floor space, ranking the town 34th of the 200 PROMIS Centres. Prime retailing is located on the pedestrianised Eastgate Street, where principal retailers include Marks & Spencer, Boots, H&M and Primark.

Gloucester has a below average proportion of managed floorspace, with approximately 18% of the total retail floorspace accounted for by the city’s two principal dedicated shopping centres. Both schemes have their primary entrances on to Eastgate Street, both in close proximity to the subject property.

The Eastgate Shopping Centre provides 250,000 sq ft of retail space and is anchored by Marks & Spencer, which has both external and internal frontages. Other tenants include JD Sports and H&M. The centre also comprises a 370 space car park at first floor level. King’s Walk Shopping Centre provides approximately 400,000 sq ft of retail space and is anchored by Primark and WH Smith. The Centre also comprises a multi-storey car park with approximately 300 spaces. Reef completed the purchase of King’s Walk Shopping Centre in a strategic joint venture with Gloucester City Council in September 2017 and have ambitious plans to significantly enhance the Centre including extensions, façade treatments, installing an atrium roof, general refurbishment and improvement to the public realm.

Situation

The property occupies an unequivocally 100% prime trading location on the pedestrianised Eastgate Street, close to the junctions with Northgate Street and Southgate Street. Retailers in the immediate vicinity include: Marks & Spencer, H&M, Waterstones, Top Shop and Primark.

As a result of this prime trading location, the property benefits from excellent levels of pedestrian footfall.

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Description

The subject property comprises a three story retail unit of concrete frame construction with clad infill.

The property is currently arranged to provide well configured retail sales accommodation at ground floor with ancillary accommodation at first floor level. The adjacent building, let to TopShop, oversails the front of the property at first floor level and the entire second floor level.

Accommodation

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

Net Frontage 8.59 m 28’2”
Gross Frontage 8.94 m 29’4”
     
Zone A 52.86 sq m 569 sq ft
Zone B 53.70 sq m 578 sq ft
Zone C 54.16 sq m 583 sq ft
Remainder 37.35 sq m 402 sq ft
Total Ground Floor 198.06 sq m 2,132 sq ft
ITZA   1,054
First Floor Ancillary (rear) 48.59 sq m 523 sq ft
Total 246.65 sq m 2,655 sq ft

Note that the property comprises the ground floor and first floor rear. The first floor front and second floor are owned by an adjoining landlord.

A set of floor plans is available to download and the measured survey report will be readdressed to a purchaser at a cost of £495 + VAT.

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Tenure

Freehold.

The ownership extends to the ground floor and first floor rear. The first floor front and second floor are owned by an adjoining landlord who let to Topshop. There are mutual support and maintenance covenants between the vendor and adjoining landlord. A Deed Granting Mutual Rights of escape for fire or other emergency is in place.

Tenancy

The entire property is let to The Carphone Warehouse Limited on Full Repairing and Insuring terms for 15 years from 9th March 2011, expiring 8th March 2026, at a current rent of £105,000 per annum. The lease provides for rent reviews every fifth year of the term. There is a tenant option to determine on 9th March 2021, subject to 6 months notice.

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Rental Analysis

We devalue the passing rent to equate to approximately £97 Zone A, with the first floor valued at A/20.

Prime rents in Gloucester peaked at £145 Zone A and the passing rent therefore represents a rebased level.

Covenant Information

The Carphone Warehouse was founded in 1989 and is now part of Dixons Carphone. It is the largest independent telecommunications retailer in Europe and a FTSE 250 Company. They have more than 1,100 stores across the UK and Ireland.

For the past 3 years, Carphone Warehouse Limited have reported the following figures:

Year to Date Turnover Pre-Tax Profit Shareholder’s Funds
28/04/2018 £2,057,800,000 (£233,400,000) £876,000,000
29/04/2017 £2,125,700,000 £48,400,000 £1,142,600,000
30/04/2016 £2,104,700,000 £86,100,000 £1,086,500,000
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VAT

We understand that the property is elected for VAT. It is anticipated that the sale will be treated as a transfer of a going concern (TOGC).

Proposal

We are instructed to seek offers in the region of £830,000 (Eight Hundred and Thirty Thousand Pounds), subject to contract and exclusive of VAT for our client’s freehold interest. A purchase at this level would reflect a net initial yield of 12.00% after allowing for purchaser’s costs at 5.53%.

Please note that a purchaser will be re-charged the costs of the searches and surveys which are provided in the data room.

Please note a purchaser will be charged a Transaction Fee of £5,000 + VAT.

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Investment Considerations

  1. An opportunity to acquire a freehold retail investment in an historic Cathedral City;

  2. Let to the highly secure covenant of The Carphone Warehouse Limited;

  3. The property occupies a 100% prime retailing pitch;

  4. The property provides well configured retail accommodation;

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

Data Room and clicktopurchase®

Access to the data room and for the ability to purchase online with speed and ease, please click the clicktopurchase® “C” icon or the clicktopurchase® side bar. Purchasers will be able to access the complete legal package, clear verification and submit legally-binding offers to acquire the property.

Purchasers benefit from the trust, security and transparency provided by the platform. All activities, including the online contract execution, will form part of the electronic audit trail which is anchored in the clicktopurchase® Blockchain.

clicktopurchase® provides the opportunity for any investor, whether located UK or abroad, to uniquely purchase online with ease and certainty. To learn more about clicktopurchase®, click here.

Finance

We have partnered with a leading finance adviser to provide loan services. To learn more, please visit our “Finance” section.

finance

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

Vendors Solicitor

Knights Plc    
Rebecca Horgan Rebecca.Horgan@knightsplc.com +44 (0) 116 242 1258

Joint Agent

Fawcett Mead   +44 (0) 207 182 7480
Richard Bashford richard@fawcettmead.co.uk +44 (0) 207 182 7497
Craig Cawthorne craig@fawcettmead.co.uk +44 (0) 207 182 7498

customer service