Highly Secure Iceland Supermarket Investment
Iceland | Hunslet Green Retail Park | 1 The Oval | Hunslet | Leeds | LS10 2AP
subject to contract
Freehold supermarket investment
Highly secure income - let to Iceland Foods Ltd (Pre-Tax Profits £73m, Net Worth £722m)
Situated in popular shopping destination south of Leeds City Centre
Property constructed in 1996
Tenant has extended the unit
Low passing rent of £45,500 pa (£9.13 per sq ft / £98.25 per sq m)
£720,000, subject to contract
6.0% net initial yield
Reversionary yield of 7.25% should tenant remain in occupation
Reversionary yield of 8.20%, should tenant vacate and unit re-let
Hunslet is an inner city suburb in Leeds, located approximately 1.5 miles (2.4 km) south of Leeds City Centre, 25 miles (40 km) south west of York, 32 miles (51.5 km) north of Sheffield and 40 miles (64 km) north east of Manchester.
Hunslet benefits from an excellent road network and sits along the A639 which is a main arterial route that links with junction 7 of the M621 motorway to the south and the A61 to the north which, in turn, links with junction 4 of the M621 motorway to Leeds city centre.
Hunslet provides a mix of industrial, retail warehouse, retail and office accommodation. Much of the industrial/retail warehousing sites have been redeveloped to residential housing. Hunslet draws in a wide catchment extending to Beeston, Belle Isle and Middleton.
The suburb is served by Leeds railway station, providing direct services to London Kings Cross with the fastest journey time being approximately 2 hours and 15 minutes.
Leeds Bradford Airport is located 9.3 miles (15 km) north west of Hunslet.
There are approximately 315,000 households and a population of approximately 750,000 within a 20-minute catchment [www.citypopulation.de].
The property occupies a highly prominent position being adjacent to the busy junction of Church Street and The Oval.
The Hunslet Green Retail Centre comprises the subject property, a KFC Drive Thu, Lidl and ample car parking.
The property is also adjacent to the Penny Hill Centre which is anchored by an 80,000 sq ft / 7,432 sq m Morrisons and petrol filling station.
City South Retail Park is located approximately 350 metres from the property and is occupied by, The Range, B&M, Pure Gym, Carpetright and Magnet.
Other nearby occupiers include, Greggs, Pizza Hut, Sue Ryder, William Hill and Lloyds Bank.
The property comprises a high-quality supermarket constructed in 1996 and is arranged over ground floor only. Internally the unit has been fitted out by the tenant to their usual corporate style with an open plan retail area and additional staff, storage and WC accommodation.
The property benefits from rear servicing with access off a service road running to the right-hand side of the premises.
There is an ample amount of free car parking spaces within Hunslet Green Retail Centre.
The tenant extended the property (at their own cost) in 2013, increasing the floor area by 663 sq ft / 61.60 sq m. The Licence to Carry Out Works can be downloaded from the dataroom.
The property has recently been measured by BKR Floor Plans and provides the following accommodation:
|Net Internal Area|
|Ground Floor Tenant’s Extension||61.60||663|
|Gross Internal Area|
|Ground Floor Tenant’s Extension||61.60||663|
A set of floor plans is available to download and the measured survey report will be re-addressed to a purchaser at a cost of £670 + VAT.
Note – The ground floor tenant’s extension is a tenant’s improvement.
The property is let to Iceland Foods Limited, on a full repairing and insuring lease for a term of 5 years from 29th September 2020, expiring on 28th September 2025.
The tenant has been in occupation since 2013, when they took an assignment of a pre-existing lease which was due to expire in September 2020 and signed a reversionary lease extending the term until September 2025. At the time, the tenant extended the property by 663 sq ft / 61.60 sq m; the tenant’s improvement is disregarded at rent review.
Should a landlord re let the property to any other tenant at any time, the extension is be rentalised.
The passing rent is £45,500 per annum which equates to £9.13 per sq ft / £98.25 per sq m over the rentalised area. However, based upon the actual area of the property, the passing rent equates to £8.06 per sq ft / £86.22 per sq m.
The rentalised area is 4,985 sq ft / 463.12 sq m.
Estimated Rental Value
We are advised that the passing rent of the KFC Drive Thru within Hunslet Green Retail Park and directly opposite the property reflects £22 per sq ft / £236.72 per sq m.
We have also been advised that Unit 11 (3,850 sq ft / 357.68 sq m), City South Retail Park (350 metres from the property) is let to Angling Direct from November 2019. The passing rent reflects £10 per sq ft / £107.60 per sq m. SIZE
Advice from local letting agents is that there is strong demand for retail warehousing properties in Hunslet with limited supply. It is suggested that the property would let on the open market at a minimum rental of £11.00 per sq ft / £118 per sq m.
Applying £11 per sq ft / £118 per sq m to the rentalised floor area of 4,985sq ft / 463.12 sq m, the estimated rental value personal to the current tenant (excluding the extension) is £54,835 per annum and the estimated rental value over the total floor area is £62,128 per annum.
Iceland was established in 1970 and specialises in frozen foods but also offer convenience and value. The company operates from over 900 stores and experienced a 16.4% rise in sales in the year ending March 2021.
Iceland is one of Britain’s fastest growing and most innovative retailers, recognised as one of the best companies to work for in the UK.
Iceland have experienced substantial growth in recent years and its share of the market is expected to continue to grow, after it became the first major retailer globally to commit to eliminating plastic packaging from all own brand products by the end of 2023.
Iceland Foods Limited (01107406) has reported the following figures:
|26 March 2021||27 March 2020||29 March 2019|
|Total Net Worth||£721,700,000||£810,000,000||£810,700,000|
For further information visit www.iceland.co.uk.
The property has been opted for tax and it is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).
We are instructed to seek offers of £720,000 (Seven Hundred and Twenty Thousand Pounds), subject to contract. This price reflects a net initial yield of 6%, assuming purchasers’ costs of 5.34%.
Based on our ERV calculations, the reversionary yield from September 2025 will be 7.25% should Iceland remain in occupation and 8.2% should Iceland vacate, and a new letting take place.
Please note that a purchaser will be re-charged the costs of the measured survey (£670+ VAT) and searches (£1,471.06) which are provided in the data room.
Please note that a purchaser will be charged a Transaction Fee of £5,000 plus VAT.
Freehold supermarket investment within an established retail centre;
Tenant made substantial investment to extend the property in 2013;
Highly secure investment let to Iceland Foods Limited (Net Worth £721m);
Low passing rent given that the extension is not rentalised;
Property sits opposite an 80,000 sq ft / 7,432 sq m Morrisons Superstore;
Attractive lot size for an investor;
Reversionary yield of 7.25% from 2025, should tenant remain in occupation;
Reversionary yield of 8.2% should the landlord gain vacant possession and re let.
Data Room and clicktopurchase®
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