stop prime-retail-investment-let-to-wilkos-Epsom-Greater-London - Singer Vielle Sales

Prime Retail Investment Let to Wilko’s

78/80 High Street | Epsom | Greater London | KT19 8BA

£5,600,000

subject to contract

EXCHANGED

Summary

  • Let to Wilko Retail Limited for 11 years with a tenant break at year 7.

  • Wilko recently extended their occupation beyond the initial lease which was due to expire in 2019.

  • Highly prominent retail property with extensive high street frontage.

  • Freehold

  • Subject to consent, there is potential to convert the upper floors to residential at the end of the lease.

  • £5,600,000, subject to contract

  • 5.7% net initial yield

  • Guaranteed rise to 6.0% in April 2019

Location

Epsom is an affluent Greater London commuter town within the M25. It is situated approximately 15 miles south west of Central London and within 3 miles of the M25 (Junction 9). The town is well-known for the popular Epsom Downs Racecourse which hosts the famous Epsom Derby.

The town benefits from the main A24 and A3 roads which provide access into Central London. The A24 south provides convenient access to the South Coast via Horsham.

Epsom is served by the Epsom mainline railway station, which provides direct services into London Waterloo, London Victoria and London Bridge with journey times of approximately 30 minutes.

Both Gatwick and Heathrow Airports are readily accessible and accordingly the town is perceived to be one of the most strategically located suburban centres within the Greater London area.

Situation

The property forms a significant site in the prime retail trading pitch on the High Street. It is located adjacent to a pedestrian crossing leading to the main entrance of Epsom’s main shopping centre – the Ashley Centre. Epsom mainline railway station is situated less than a two minute walk from the store.

The store is highly visible from the high street and occupies a very prominent position opposite Epsom’s main taxi rank. Nearby occupiers include Barclays next door, with TK Maxx in occupation further along the High Street. Opposite the premises are branches of Natwest and Nationwide bank with Lakeland located immediately adjacent to the Ashley Centre’s main entrance.

Description

The building was constructed in 1999 and is of frame construction with brick cladding. The property comprises a large purpose built retail unit arranged over ground, first and second floors. Loading and access to the rear is from a shared side road off Waterloo Road.

The property is divided to form three large footplates each of approximately 15,000 sq ft and there is an escalator link between ground and first floors.

Accommodation

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

Ground Floor 1,420.44 sq m 15,290 sq ft
First Floor 1,462.34 sq m 15,741 sq ft
Second Floor 1,460.30 sq m 15,719 sq ft
Total 4,343.08 sq m 46,750 sq ft

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

Tenure

Freehold.

Tenancy

The property is let to Wilko Retail Limited on a full repairing and insuring basis until 29th April 2029 (11 years unexpired), subject to a tenant break option 30th April 2024 (7 years term certain).

The tenant has occupied by way of a lease from 30th April 1999 expiring 29th April 2019 at a rent of £340,000 per annum.

In accordance with a Deed of Variation of 16th April 2018, and Reversionary Lease of 16th April 2018, the rent has been reduced to £113,333 per annum until the 29th April 2019, equivalent to an eight month rent free period. At the start of the reversionary lease, the rent increases to £360,000 per annum, with a personal concession to the tenant to pay rent monthly.

The reversionary lease runs from 30th April 2019 until 29th April 2029. If the tenant does not exercise the break option on 30th April 2024, the rent then due will halve until 30th April 2025. A rent review is due 30th April 2024.

The vendor will “top-up” the rent until 29th April 2019 so a purchaser benefits from an income of £340,000 per annum.

In summary, an investor will benefit from the following income:

£340,000 per annum - until 29th April 2019 ( Rent of £113,333 per annum plus vendor top-up)
£360,000 per annum – 30th April 2019 to 29th April 2024
£360,000 per annum or open market rent, whichever is the higher - 30th April 2024 to 29th April 2029
• Half rent for 1 year from 30th April 2024 in the event that the break option is not exercised

Rateable Value

We understand the rateable value for the property is as follows:

Accommodation Description Rateable Value
78-80 High Street Shop & Premises £365,672

The Uniform Business Rate is 47.9 pence per pound for 2017/2018.

Covenant

The property is well secured to Wilko Retail Limited (Co. No. 0365335) which has reported the following figures;

  28th January 2017 30th January 2016
Revenue £1,512,763,000 £1,464,475,000
Pre-Tax Profit £5,198,000 £25,955,000
Net Assets £146,438,000 £182,398,000

Wilko is a family owned private limited company which has been trading for over 85 years. Established from a single shop in Leicester in 1930, today the company trades from more than 400 stores throughout the United Kingdom. In 2013 the company changed its name from Wilkinson to Wilko and according to its website 6 out of 10 shoppers in the United Kingdom shop with Wilko. For further information visit www.wilko.com.

VAT

The vendor has elected the property 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 £5,600,000 (Five Million, Six Hundred Thousand Pounds), subject to contract, reflecting a net initial yield of 5.7%, rising to a guaranteed 6.0% in April 2019, assuming standard purchaser’s costs of 6.61%.

Investment Considerations

  1. An opportunity to acquire a highly prominent purpose built retail unit with extensive high street frontage opposite Epsom’s main shopping centre the Ashley Centre;

  2. Located in one of Greater London’s major commuter towns;

  3. Let on a re-geared lease to the highly secure covenant of Wilko Retail Limited who recently extended their initial lease which was due to expire in April 2019;

  4. Let for a period of 11 years with a tenant break option after 7 years and an open market rent review after 5 years;

  5. The tenant has been in occupation since 1999, demonstrating their commitment to the property;

  6. The property is less than a two minute walk from Epsom’s main railway station;

  7. Freehold interest;

  8. A purchase at the asking price reflects an attractive net initial yield of 5.7% rising to a guaranteed 6.0% in April 2019;

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

Vendors Solicitor

Ingram Winter Green LLP +44 (0) 207 845 7400
Nick Green nickgreen@iwg.com
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