stop retail-investment-let-to-1bn-tenant-grinstead - Singer Vielle Sales

Reversionary South East Retail Investment - The Carphone Warehouse - 6.0% NIY

The Carphone Warehouse, 41 London Road | East Grinstead  | RH19 1AW

£335,000

subject to contract

SOLD

Summary

  • Highly Secure Reversionary Retail Opportunity

  • Let to The Carphone Warehouse Limited

  • First Class Covenant - Total Equity £1 billion

  • Affluent South East “Waitrose” town

  • Attractive lot size - £335,000, subject to contract

  • 6.0% net initial yield

  • To be sold by clicktopurchase Best Offers by 3.00pm Tuesday 30th January 2018, unless sold prior

Location

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.

Situation

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 The Carphone Warehouse include EE, Shoe Zone, 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. 

Description

The property comprises a retail unit arranged on ground floor and basement. 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 wiull enhance the overall quality of the property. Copies of the plans are available to download for information.

Accommodation

We have been advised the property provides the following accommodation;

      Sq M    Sq Ft
Total GIA    97.40    1,048
ITZA    47.10       507

 

Tenure

A term of 999 years less 3 days from 21st March 2017 at a peppercorn.

Tenancy

The property is let to The Carphone Warehouse Limited on a Full Repairing and Insuring lease from 3rd April 2016 expiring on 2nd April 2021, therefore providing approximately 3.4 years unexpired lease term. The current passing rent is £21,000 per annum which equates to £41.42 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.

Covenant

The Carphone Warehouse Limited (Co. No 02142673) has reported the following figures;

  30th April 2016 2nd May 2015
Turnover £2,104,671,000 £2,056,123,000
Pre-Tax Profit £ 86,056,000 £ 78,282,000
Total Equity £1,096,573,000 £1,019,488,000


The company is a wholly owned subsidiary of Dixons Carphone plc, Europe’s leading specialist electrical and mobile phone retailer and services-company. Listed on the London Stock Exchange the company is active in 9 countries with circa 41,000 employees and has a total of 2,139 stores. Further information is available at www.dixonscarphone.com.

VAT

VAT will be payable on the purchase price due to the sale not being treated as a Transfer of a Going Concern (TOGC).

Proposal

We are instructed to seek offers in the region of £335,000 (Three hundred and thirty-five thousand pounds), subject to contract, reflecting a net initial yield of 6.0%, assuming purchaser’s costs of 4.67%.

Investment Considerations

  1. An opportunity to acquire a highly secure town centre retail investment in an affiuent South East market town;

  2. The current passing rent equates to £41.42 Zone A which is reversionary based upon the new rent of the Waterstones that was set at lease renewal in September 2017 at £48.19 Zone A;

  3. Let to the first class covenant of The Carphone Warehouse Limited – Total Equity £1,096,573,000;

  4. The property occupies a prime retailing pitch on London Road – the focal point for activity in the town;

  5. Attractive lot size to an investor;

  6. A purchase at the asking price reflects an attractive net initial yield;

  7. A purchase at the asking price will provide an investor with an estimated potential reversionary yield of 7.0%.

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

Philip Ross Solicitors +44 (0) 207 636 6969
Sofia Loizidou Sofia.Loizidou@philipross.com
Alun Williams Alun.Williams@philipross.com
customer service