Reversionary South East Retail Investment - Shoe Zone - 6.5% NIY
Shoe Zone, 39 London Road | East Grinstead | RH19 1AW
subject to contract
Highly secure reversionary income
Town centre retail investment opportunity
Let to Shoe Zone - Total Equity £30m
Affluent South East market town
Attractive lot size - £440,000, subject to contract
6.5% net initial yield
To be sold by clicktopurchase Best Offers by 3.00pm Wednesday 31st January 2018, unless sold prior
East Grinstead is an affluent and attractive market town in West Sussex located approximately 43 km (27 miles) south of London, 34 km (21 miles) north-east of Brighton and 61 km (38 miles) north east of Chichester.
The town is well connected with strong transportation links being situated on the A22 which provides direct access to London and Brighton to the north and south respectively. The M23 Motorway is accessed via Junction 10 which is approximately 15.5 km (10 miles) to the west which provides direct access to the M25 Motorway at Junction 7.
There is a direct rail service between East Grinstead and London Victoria with an average journey time of less than 1 hour and numerous daily bus services connect the town to the surrounding areas including Brighton, Crawley and Horsham. London Gatwick Airport is located approximately 8 km (13 miles) to the west.
The property is situated in a prime retailing pitch on London Road, East Grinstead’s main retail thoroughfare. London Road is the centre of activity for the town and national retailers trading alongside Shoe Zone include Carphone Warehouse, EE, Waterstones, M&Co as well as The Edinburgh Woollen Mill, Costa Coffee, Boots, O2, Clarks and Poundland.
The town is set to benefit from the redevelopment of Queens Walk. Sitting alongside London Road works are underway to redevelop the site into a mixed-use scheme to provide approximately 130 new homes plus commercial accommodation and associated public realm. As part of the scheme Martells Department Store relocated from Queens Walk to new premises on Whitehall Parade and the new store opened in May 2017.
The property comprises a retail unit arranged on ground floor only. Internally, the retail floor area is predominately open plan with ancillary areas and has been fitted out by the tenant to their usual corporate style.
The upper parts are being converted into residential flats which will enhance the overall quality of the property. Copies of the plans are available to download for information.
We have been advised the property provides the following accommodation;
|Sq M||Sq Ft|
|Ground Floor GIA||203.00||2,185|
A term of 999 years less 3 days from 21st March 2017 at a peppercorn.
The property is let to Shoe Zone Retail Limited on a Full Repairing and Insuring lease from 3rd November 2014 expiring on 2nd November 2019, therefore providing approximately 2 years unexpired lease term, at a current passing rent of £30,000 per annum which equates to £40.21 Zone A.
Waterstones at No. 37 London Road which forms part of the same parade renewed their lease in September 2017 at a rent equating to £48.19 Zone A.
A service charge is in place for repair, maintenance and insuring the common parts which is fully recoverable from the tenant.
Shoe Zone Retail Limited (Co. No 00148038) has reported the following figures;
|1st October 2016||3rd October 2015|
|Pre-Tax Profit||£ 10,410,000||£ 12,723,000|
|Total Equity||£ 30,145,000||£ 36,809,000|
The company is a direct subsidiary of Shoe Zone plc. A leading specialist value footwear retailer selling over 20 million pairs of shoes a year the company has been established for 100 years and operates a portfolio of over 500 stores and employing nearly 4,000 staff across the United Kingdom and Republic of Ireland. For more information visit www.shoezone.com.
VAT will be payable on the purchase price due to the sale not being treated as a Transfer of a Going Concern (TOGC).
We are instructed to seek offers in the region of £440,000 (Four hundred and forty thousand pounds), subject to contract, reflecting a net initial yield of 6.5%, assuming purchaser’s costs of 5.40%.
An opportunity to acquire a highly secure town centre retail investment in an affliuent South East market town;
Based upon the lease renewal to Waterstones at £48.19 Zone A in September 2017 the current passing rent of £40.21 for the subject property is approximately 20% reversionary;
Let to the strong covenant, Shoe Zone Retail Limited, part of Shoe Zone plc;
The property occupies a prime retailing pitch on London Road – the focal point for activity in the town;
Attractive lot size for an investor;
A purchase at the asking price reflects an attractive net initial yield;
A purchase at the asking price would provide an investor with an estimated potential reversionary yield in 2019 of 7.8%.
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