Multi-Let Roadside Commercial Investment

Dutton Court | Chainbridge Road |  Blaydon | Gateshead | NE21 5ST

£3,100,000

subject to contract

EXCHANGED

Summary

  • Multi-let roadside commercial investment

  • Highly prominent roadside location fronting the busy A695

  • Fully income producing

  • Low passing rents

  • Add value opportunities including potential to develop a further unit on the site

  • Offers in the region of £3,100,000, subject to contract

  • 7.25% Net Initial Yield

  • 8.0% Guaranteed Reversionary Yield in March 2019

Location

Blaydon is located in the North East of England in the Metropolitan Borough of Gateshead. The town is approximately 8 km (5 miles) west of Newcastle Upon Tyne, 26 km (16 miles) north of Durham and 26 km (16 miles) north-west of Sunderland.

The town benefits from good road communications with the A1 Western Bypass approximately 1.6 km (1 mile) to the east, connecting with Junction 34 of the A1(M) Motorway to the south-east. The A1 also connects with the A69 to the north, with the A695 and B6317 both leading into Blaydon.

In addition, the town is connected to the national railway network with a fastest journey time to London Kings Cross of 3 hours 32 minutes. Direct rail connections are also provided to Newcastle of approximately 15 minutes. Newcastle International Airport is approximately 13 km (8 miles) to the north.

Situation

The subject property occupies a highly prominent position fronting the busy A695 (Chainbridge Road), approximately 1.6 km (1 mile) east of Blaydon town centre. The A695 dual carriageway experiences a high volume of traffic which the property benefits from. The site is also highly visible from the A1 Western Bypass Bridge.

The property is in a well-established commercial location, forming part of the wider Chain Bridge Trading Estate. The surrounding area benefits from a variety of uses including industrial, trade counter and retail. Blaydon Park Trade Park is directly opposite the subject property.

The intu Metrocentre, Europe’s largest covered shopping and leisure centre, is approximately 3.2 km (2 miles) to the south-east. With a catchment population of 2.6 million and an annual footfall of 21 million, the centre attracts visitors across the north-east and as far afield as Edinburgh. The centre hosts over 300 shops with stores including Debenhams, Zara, Primark, Apple, TopShop, All Saints, H&M, J D Sports, plus a 12 screen Odeon IMAX cinema (Source: www.intugroup.co.uk).

Team Valley Trading Estate is approximately 6.4 km (4 miles) to the south-east. One of the largest commercial estates in Europe, Team Valley is home to 700 businesses and over 25,000 employees, providing a range of office and industrial premises.

Description

The property comprises a mixed use building incorporating retail showrooms, trade counter, industrial units and a gymnasium, totalling 4687 sq m (50,453 sq ft), together with two advertising hoardings.

The building is of steel frame construction, incorporating a mixture of rendered and profile metal sheet clad walls, with metal trussed pitched roofing.

The showroom units (Units 4&5) are situated to the front of the building with trade counters to the north elevation and an industrial unit to the rear (eastern elevation).

The trade counter and industrial use units have a useable eaves height of approximately 5.11 m (16 ft 9 inches). Externally there is a yard area with loading areas to the northern and rear elevations with a larger parking area to the north and front of the building.

The gymnasium (Units 7&8) is situated at first floor level, above retail units 4&5 (Beds4U and HSL).

Accommodation

The property has been measured by BKR Floor Plans and provides the following Gross Internal Areas;

Unit 1 420.09 sq m 4,522 sq ft
Unit 2 555.54 sq m 5,980 sq ft
Unit 3 282.97 sq m 3,046 sq ft
Unit 4 635.44 sq m 6,840 sq ft
Unit 5 923.15 sq m 9,937 sq ft
Unit 6 1,007.59 sq m 10,846 sq ft
Units 7&8 862.30 sq m 9,282 sq ft
Total 4,687.08 sq m 50,453 sq ft


A set of floor plans is available to download and the measured survey report can be re-addressed to a purchaser.

Planning

On 18 December 2014 the following planning consent was granted for the construction of a single storey trading unit to the east of the site, providing an internal area of approximately 500 sq m (5,382 sq ft), along with refurbishment works to the existing units:

Planning permission (reference DC/14/01204/FUL) for the “erection of a new building for B2 (General Industry) and B8 (Storage and Distribution) use. Refurbishment of existing units including external alterations to the east elevations of the units and reconfiguration of the car park”.

Although the planning consent has now lapsed, it is reasonable to suggest that Gateshead Council would grant planning permission if a new application was submitted.

A copy of the planning permission, along with the architect’s Design and Access Statement are available to download.

Rateable Value

Accommodation Description Rateable Value
Unit 1, Dutton Court Warehouse & Premises £13,750
Unit 2, Dutton Court Warehouse & Premises £17,500
Unit 3, Dutton Court Workshop & Premises £8,900
Unit 4, Dutton Court Showroom & Premises £33,250
Unit 5, Dutton Court Showroom & Premises £48,750
Unit 6, Dutton Court Workshop & Premises £33,750
Unit 7, Dutton Court Offices & Premises £16,750
Unit 8, Dutton Court Gymnasium & Premises £15,000


The Uniform Business Rate is 46.6 pence per pound for rateable values below £51,000.

Site

We estimate the site area to be approximately 0.92 hectares (2.27 acres).

A Phase I Environmental Risk Assessment was carried out by Delta Simons in April 2018 which concluded that “with regard to potential land contamination issues and associated environmental liabilities...the Site represents an overall investment opportunity with a Low to Moderate risk”. A copy of the report is available to download and is available for assignment to a purchaser.

Tenure

Freehold.

Tenancies

The property is fully let to 7 tenants, plus two advertising hoardings, in accordance with the attached tenancy schedule. The total current income is £239,390 per annum, rising to £263,293 per annum in March 2019.

The weighted average unexpired lease term (WAULT) to expiry is 4.2 years.

The leases are internal repairing and insuring with the tenants contributing towards a service charge for recovery on the fabric and external area maintenance. There are no shortfalls and the service charge budget for 2018 is £33,215.00. The Service Charge Accounts and the Service Charge Budgets are available to download.

Covenants

Please refer to the Covenant Table which is available to download.

The payment history shows good payments and no significant arrears.

The company accounts for each tenant are also available to download:

Contract Fencing (NE) Limited
Site Joinery Limited
The Kitchen Works (North East) Limited
Beds4U Limited
High Seat Limited
Bolton Gate Company Limited
Inline Fitness Limited
City Outdoor Advertising Limited

VAT

The property has been registered 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 £3,100,000 (Three Million One Hundred Thousand Pounds), subject to contract, reflecting a net initial yield of 7.25%, rising to a guaranteed 8.0% in March 2019, assuming standard purchaser’s costs of 6.16%.

Investment Considerations

  1. An opportunity to acquire a multi-let, mixed-use investment;

  2. The property occupies an extremely prominent roadside location fronting the busy A695 and is highly visible from the A1;

  3. The property is fully let and income producing;

  4. The property offers a purchaser excellent opportunities to actively manage and enhance the passing rents;

  5. Add-value opportunities include the potential to develop a further trading unit on the site;

  6. A purchase at the asking price will provide an investor with an attractive yield profile;

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
Ed Jeffs ed@singervielle.co.uk +44 (0) 203 701 1353
Faye Langoulant faye@singervielle.co.uk +44 (0) 203 478 9122
Louanne Malan louanne@singervielle.co.uk +44 (0) 203 701 1386

Vendor's Solicitor

Eversheds Sutherland +44 113 200 4802
Claire Burns ClaireBurns@eversheds-sutherland.com
customer service