High Yielding Mixed Use Investment - 28.26%
128-130 High Street | Ayr | KA7 1PR
Retail unit let to Superdrug Stores plc (Shareholders Funds £319M)
Offices let to established local occupier
Prominent Grade B listed building
Asset management opportunities
Offers over £695,000 subject to contract
Very attractive net initial yield of 28.26%
The coastal town of Ayr has a population of 46,000 and is situated on the West coast of Scotland. Glasgow is approximately 36 miles (50 km) to the north east and is easily accessible via the A77. Ayr is 3 miles (5 km) south of Glasgow Prestwick International Airport and benefits from excellent road and rail links, with regular train services to Glasgow and Edinburgh.
Ayr is the administrative centre for South Ayrshire and benefits from a large tourist trade given its close proximity to both Troon and Turnberry Open Golf Championship venues and is also immediately adjacent to Alloway – the birthplace of Robert Burns.
The building occupies a prominent position on the east side of High Street in the heart of the town centre. The High Street is the principal retail street running north/south through the town and comprises a mix of national retailers and independent operators. Nearby occupiers include Santander, Tesco, Boots, Bank of Scotland, Marks & Spencer and Wilko.
Diagonally opposite the subjects, the Council has recently completed the refurbishment of the former Clydesdale Bank, a 3 storey detached building. The concept for the refurbishment of the building has created an indoor/outdoor food market and events space on the ground floor with office accommodation on the floors above.
It is intended that this project will improve permeability and footfall at this important juncture of Newmarket Street and High Street.
Further boosting the town centre is the granting of Planning Consent for the redevelopment of The Kyle Centre which lies approximately 2 minutes walk from the subjects. Approval has been granted for a 7 screen cinema and a variety of food outlets within the Centre.
Further information on the regeneration proposals: www.south-ayrshire.gov.uk.
The property comprises an entire traditional sandstone building over ground, first and second floors. The ground floor was extended in 2006, specifically to accommodate the tenant’s requirements for additional retail space and ancillary storage. This created larger open plan sales accommodation at ground floor with substantial mezzanine storage above.
The sales area is accessed both by steps to the front with ramped access provided for disabled customers and internally is fitted out to the tenant’s quality standard.
There is a separate self-contained access to the office accommodation, via an attractive stairwell and the offices are a mixture of cellular rooms, with kitchen and toilet facilities over first and second floors.
We have been provided with the following net internal floor areas:
|Ground Floor||489.97 sq m (5,274 sq ft)|
|Mezzanine||356.06 sq m (3,833 sq ft)|
|ITZA||226.03 sq m (2,433 sq ft)|
|First Floor||122.34sq m (1,317sq ft)|
|Second Floor||153.40sq m (1,651sq ft)|
We understand the building is Listed as being of Architectural or Historical Importance, Category B.
Heritable (Scottish equivalent of English Freehold).
The ground floor and mezzanine are let on a Full Repairing and Insuring lease to Superdrug Stores plc on a 15 year term, expiring on 7th May 2021. The current rent is £195,000 pa equivalent to a Zone A rate of approximately £80.15/sq ft and there are no further rent reviews.
The first and second floor offices are let on a Full repairing and Insuring lease to Sprig Ltd on a 5 year term, expiring on 12th December 2023. The current rent is £11,500pa and Sprig Ltd occupy both floors.
Superdrug Stores plc (Company No 00807043) has reported the following figures:
|31st December 2018||31st December 2017|
|Turnover||£1,283 million||£1,241 million|
|Pre-Tax Profits||£88.34 million||£92.93 million|
|Shareholders’ Funds||£319 million||£254 million|
Superdrug was founded in 1964 and is the United Kingdom's second-largest beauty and health retailer currently operating over 800 stores in England, Scotland, Wales, Northern Ireland and the Republic of Ireland. They currently have 200 in-store pharmacies and employ 14,000 people.
For further information visit www.superdrug.com.
Sprig Ltd operate 4 pubs and 2 nightclubs within the Ayr area and also organise Gambling Trips to Las Vegas. They use the offices for admin purposes.
The property has been elected for VAT and therefore VAT will be payable on the purchase price. It is anticipated that the transaction will be treated as a Transfer of a Going Concern (TOGC).
We are instructed to seek offers over £695,000 (Six hundred and ninety five thousand pounds), subject to contract, which reflects a net initial yield of 28.26%, after allowing for standard purchaser’s costs of 5.27%.
Opportunity to acquire substantial town centre building;
Significant Town Centre regeneration within immediate vicinity;
Asset management opportunities including re-gearing and extending existing lease to Superdrug;
Grade B listed building so no Empty Property Rates payable;
Let to the undoubted covenant of Superdrug Stores plc – net assets of £319million;
Very attractive net initial yield of 28.26%.
|Burness Paull LLP|
|Mark Pattersonfirstname.lastname@example.org||+44 (0) 141 273 6745|