High Yielding Prime Town Centre Investment

57/57a Greengate Street | Stafford | ST16 2JE

£682,500

subject to contract

EXCHANGED

Summary

  • Freehold retail investment opportunity

  • Let to Waterstone’s Booksellers Limited

  • Rebased rent to £57,400 from £82,500 per annum

  • Prime position on pedestrianised Greengate Street

  • Over 9.5 years unexpired lease term

  • £682,500 subject to contract

  • 8.0% Net Initial Yield

  • Potential for residential conversion of upper floors (subject to consents)

investment opportunities stafford uk ST16 2JE

Location

Stafford is a busy historic market town, which first made a name for itself as a centre for shoe manufacturing expanding as an industrial hub in the nineteenth century. Stafford boasts a resident population of 64,000 and a district population of 120,000.

The town is situated in the county of Staffordshire, approximately 25 miles (40 km) to the north of Birmingham and 15 miles (24 km) to the south of Stoke-on-Trent.

Stafford benefits from good transport links, with Junctions 13 and 14 of the M6 Motorway approximately 3 miles (5 km) to the north and south of the town respectively. The property is a short 5 minute walk from rail services available at Stafford Railway Station offering frequent high speed trains to Birmingham New Street in approximately 33 minutes and London Euston in just over 1 hour and 15 minutes. The nearest airports are Birmingham Airport 40 miles (64 km) to the south and Manchester Airport 51 miles (82 km) to the north.

Situation

The Stafford retail market is focused on the pedestrianised streets of Gaolgate Street and Greengate Street, along with Gaolgate Place and the covered Guildhall Shopping Centre. The property is situated in an excellent trading location on the long western side of Greengate Street with the Guildhall Shopping Centre entrance only a short walk from the property.

Occupiers close by include HSBC, Clinton Cards, WHSmith and Greggs. Other nearby national retailers include Boots, Thorntons, Starbucks, Pandora, Thomson and Thomas Cook.

investment opportunities stafford uk ST16 2JE
investment opportunities stafford uk ST16 2JE

Description

The property is a three-storey period building on the western side of Greengate Street, close to Market Square. The building is Grade II Listed. The premises are arranged over basement, ground, first and second floors.

The ground floor comprises of retail space to the front of the property, with a raised area to the rear used as a kitchen and staff room. The first and second floors were formerly used as office space.

The premises benefit from separate access to the upper floors via an entrance onto Greengate Street.

The entire property is let to Waterstone’s. The upper floors are currently not utilised. Since these floors have a separate entrance, it is suggested that there is potential for future redevelopment / conversion to residential accommodation.

Accommodation

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

Gross Frontage 7.95 m 26ft 1 inch
Net Frontage 6.32 m 20ft 9 inches
  Sq M Sq Ft
Zone A 49.33 531
Zone B 48.68 524
Zone C 39.58 426
Zone D 33.91 365
ITZA   945
Total Ground Floor 200.85 2,162
     
Ancillary 9.10 98
Remainder 20.25 218
Basement Ancillary 224.82 2,420
First Floor Ancillary 149.66 1,611
Second Floor Ancillary 93.55 1,007
Total Net Internal Area 668.88 7,200

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

investment opportunities stafford uk ST16 2JE
investment opportunities stafford uk ST16 2JE

Tenure

Freehold

Tenancy

The entire property is let on full repairing and insuring terms to Waterstone’s Booksellers Limited for a term of 10 years from 14th September 2018, expiring 13th September 2028.

The current passing rent is £57,400 per annum, equating to £47.50 Zone A. This is based upon £4.00 per sq ft on the rear ancillary, £2.00 per sq ft on the basement, £3.00 per sq ft on the first floor and £2.00 per sq ft on the second floor.

Waterstone’s have recently renewed their lease. The previous rent was £82,500 per annum. The tenants have an option to break the lease in the 5th year, subject to 6 months’ notice.

investment opportunities stafford uk ST16 2JE
investment opportunities stafford uk ST16 2JE

Covenant

Waterstone’s Booksellers Limited (Co No. 00610095) is a long established British book retailer employing over 3,000 people over 280 bookshops. The company has reported the following accounts:

  28 April 2018 29 April 2017
Revenue £385,715,000 £387,973,000
Pre-Tax Profits £19,984,000 £19,157,000
Net Assets £18,496,000 £3,374,000

Waterstone’s have recently underlined their expansion drive under new owners, Hedge Fund Elliot Advisers, with a view to opening a significant number of shops over the next few years. Confidence in the retailers is supported and strengthened by the purchase of 115-year-old Foyles Books in September 2018. For further information see www.waterstones.com.

VAT

The property is elected for VAT. We anticipate that the sale should be capable of being treated as a Transfer of Going Concern (TOGC).

investment opportunities stafford uk ST16 2JE
investment opportunities stafford uk ST16 2JE

Upper Floors Potential

Although they are demised to Waterstones the tenant does not use the upper floors. We assess the passing rent attributable to the upper floors at approximately £7,000 per annum. Based upon the asking yield of 8.0%, this allocates a purchase price to this area of the property at only £87,500.

Subject to consents, it is suggested that the upper floors could potentially provide four residential units with an exit value in the region of £4/500,000 after refurbishment, providing an opportunity to enhance value.

Proposal

We are instructed to seek offers in the region of £682,500 (Six Hundred and Eighty Two Thousand, Five Hundred Pounds), subject to contract, reflecting a net initial yield of 8.0%, assuming standard purchaser’s costs of 5.26%.

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

Please note that a purchaser will be charged a Transaction Fee of £3,750 plus VAT.

investment opportunities stafford uk ST16 2JE
investment opportunities stafford uk ST16 2JE

Investment Considerations

  1. An opportunity to acquire a freehold prime retail investment in the heart of Stafford town centre;

  2. The property occupies a prime position near the Guildhall Shopping Centre;

  3. Let to the strong covenant of Waterstone’s Booksellers Limited;

  4. A purchase at the asking price will provide an investor with an attractive net initial yield of 8.0%;

  5. Potential redevelopment / conversion of the upper floors to provide residential accommodation.

 

27.2.19

Contact Us

Singer Vielle   +44 (0) 207 935 7200
Dale Henry dale@singervielle.co.uk +44 (0) 203 701 1356
Neil Singer neil@singervielle.co.uk +44 (0) 203 478 9120
Daniel Elia daniel@singervielle.co.uk +44 (0) 203 478 1353

Vendors Solicitor

Knights Plc +44 (0) 116 242 1258
Tom Bower Tom.Bower@knightsplc.com

Joint Agent

John Loveday johnloveday@smithprice.co.uk
Stephen Powell stephenpowell@smithprice.co.uk
Charlie Taylor charlietaylor@smithprice.co.uk
+44 (0) 207 409 2100

customer service