Multi-Let South East Industrial Investment

Units 12-39 Redhills Industrial Estate | South Woodham Ferrers | Chelmsford | CM3 5UL

£2,950,000

subject to contract

SOLD

Summary

  • South-East Industrial Investment

  • Established commercial location

  • Low passing rents

  • Multi-let with active management opportunities

  • Offers in the region of £2,950,000, subject to contract

  • 7.5% Net Initial Yield

  • 12.0% Reversionary Yield

  • £46 per sq ft Capital Value

Location

South Woodham Ferrers is a town in the borough of Chelmsford, in South East Essex. It is approximately 64 km (40 miles) north-east of Central London, 13 km (8 miles) south-east of Chelmsford, 16 km (10 miles) north-east of Basildon and 24 km (15 miles) north-west of Southend-on-Sea.

The town benefits from good road communications being served by the A132, A130 and A127 which in turn links directly to Junction 29 of the M25 Motorway some 27 km (17 miles) to the south-west.

In addition, the town is connected to the national railway network with a fastest journey time to London Liverpool Street of 52 minutes. London Southend Airport is approximately 24 km (15 miles) to the south and serves almost one million business and leisure passengers every year, reaching destinations across the UK and Europe. The Port of Tilbury is approximately 38 km (21 miles) to the south-west and is London’s major port, providing fast, modern distribution services for the benefit of the South East of England and beyond.

Situation

The property is situated in an established commercial location on the Redhills Road Industrial Estate. The Blackall Industrial Estate is immediately to the north and South Woodham Ferrers railway station is 1.6 km (1 mile) to the west. Access to the property is via Redhills Road.

Description

The property comprises 16 industrial/warehouse units of steel portal frame construction with brick and block work elevations supporting lined and insulated roofs with inset translucent roof panels. In addition, there is one office unit (17 Redhills Road).

Each industrial unit has a roller shutter door with forecourt loading access and estate car parking provided.

Accommodation

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

Unit Ground Floor Sq M Ground Floor Sq Ft Mezzanine   Sq M Mezzanine Sq Ft
Unit 12 170.19 sq m 1,832 sq ft    
Unit 14 170.19 sq m 1,832 sq ft 18.02 sq m 194 sq ft
Unit 15 290.41 sq m 3,126 sq ft    
Unit 16 170.19 sq m 1,832 sq ft    
Unit 17 Front 212.93 sq m 2,292 sq ft 107.21 sq m 1,154 sq ft
Unit 17 Rear 164.99 sq m 1,776 sq ft    
Unit 18 382.84 sq m 4,121 sq ft 69.95 sq m 753 sq ft
Units 19-21 506.03 sq m 5,447 sq ft    
Unit 23 1,024.69 sq m 11,030 sq ft 37.90 sq m 408 sq ft
Units 25-27 878.56 sq m 9,457 sq ft 76.92 sq m 828 sq ft
Units 29-31 609.70 sq m 6,563 sq ft 303.04 sq m 3,262 sq ft
Unit 33 168.80 sq m 1,817 sq ft    
Unit 35 168.80 sq m 1,817 sq ft    
Unit 37 189.79 sq m 2,043 sq ft    
Unit 39 189.79 sq m 2,043 sq ft    
Total 5,297.90 sq m 57,028 sq ft 613.05 sq m 6,599 sq ft

A set of floor plans is available to download and the measured survey report is available for assignment to a purchaser.

Rateable Value

Accommodation Rateable Value
Unit 12 £8,800
Unit 14 £9,200
Unit 15/17 £25,750
Unit 16 £9,300
Unit 17 (rear) £12,500
Unit 18 £9,750
Unit 19-21 £26,000
Unit 23 £50,000
Unit 25/27 £41,750
Unit 29/31 £29,500
Unit 33 £9,000
Unit 35 £8,800
Unit 37 £9,600
Unit 39 £10,500

The 2017/18 Uniform Business Rate is 47.9 pence per pound for rateable values of £51,000 and above, and 46.6 pence per pound for rateable values below £51,000.

Site

We estimate the site area to be approximately 0.97 hectares (2.4 acres).

A Phase I Environmental Risk Assessment was carried out by Delta Simons Environmental Consultants in November 2017 which concluded that “with regard to potential land contamination issues and associated environmental liabilities, in its current use, the Site represents an overall investment opportunity with a Low risk”. A copy of the report is available to download and is available for assignment to a purchaser.

Tenure

Long leasehold for a term of xx years from xx expiring on xx at a peppercorn rent.

Tenancies

The property is currently let to 10 tenants under 14 leases in accordance with the attached tenancy schedule. There is one vacant unit which is currently on the market.

The total current income is £234,726 per annum.

The tenants are required to contribute towards an estate service charge. The Service Charge Accounts and Service Charge Budget are available to download.

Market Commentary

The supply of industrial buildings similar in size to the subject units in South Woodham Ferrers is very limited with a healthy level of demand.

Redhills Industrial Estate has a range of rents spreading from £32.20 per sq m (£2.98 per sq ft) to £66.24 per sq m (£6.13 per sq ft) with an average rent of just £49.49 per sq m (4.58 per sq ft).

In May 2017 an industrial/warehouse unit on Bancrofts Road (immediately adjacent to Redhills Road) totalling approximately 180 sq m (1,945 sq ft) was let on a new 5 year FRI lease at a rent of £13,000 per annum, equating to £72 per sq m / £6.68 per sq ft. No rent free period was granted.

In July 2016 an industrial/warehouse unit incorporating two storey air-conditioned offices on Bancrofts Road totalling approximately 224 sq m (2,417 sq ft) was let on a new 3 year FRI lease at a rent of £17,000 per annum, equating to £76 per sq m / £7.03 per sq ft. No rent free period was granted.

Therefore, we believe that the subject property offers immediate prospects for rental growth. Based upon our opinion of ERV which ranges from £54 per sq m (£5.00 per sq ft) to £70 per sq m (£6.50 per sq ft), depending on the unit sizes, we suggest the total rental income could rise to approximately £378,233 per annum.   Note: this assumes the mezzanine areas are rentalised - TBC.

Covenants

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

The company accounts are also available to download for the following tenants:

Valco UK (Engineering) Limited
Kingdom Industrial Supplies Limited
Fork Truck Direct Limited
Actionbrook Services Limited
PT Pipe Fabrications Limited
Woodham Joinery (UK) Limited
Carpets Direct UK Limited
N A Hayes Limited

VAT

The property has not been registered for VAT. Therefore, VAT will not be payable by a purchaser.

Proposal

We are instructed to seek offers in the region of £2,950,000 (Two Million, Nine Hundred and Fifty Thousand Pounds), subject to contract. This reflects a net initial yield of 7.5% rising to 7.85% upon letting the vacant unit and an ultimate reversionary yield of 12.0%, assuming standard purchaser’s costs of 6.44%. The purchase price reflects a capital value of £499 per sq m / £46 per sq ft.

Investment Considerations

  1. An opportunity to acquire a South-East industrial investment;

  2. The property is multi-let;

  3. The property is situated in a well-established commercial and industrial location;

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

  5. A purchase at the asking price will provide an investor with an attractive net initial yield with potential to significantly improve;

  6. A purchase at the asking price would provide a total potential reversionary yield of 12%.

  7. VAT free investment.

BROCHURE

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
Richard Wolfryd richard@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

Vendors Solicitor

Freeths +44 (0) 845 077 9655
Robert Morris Robert.Morris@freeths.co.uk
Guy Winfield Guy.Winfield@freeths.co.uk

Joint Agent

Paul Cooper  paul.cooper@kemsley.com

+44 (0) 126 829 0291

customer service