stop well-secured-retail-store-investment-west-midlands - Singer Vielle Sales

Well Secured Retail Store Investment

23 New Road | Willenhall  | West Midlands | WV13 2AA

£1,150,000

subject to contract

EXCHANGED

Summary

  • Highly secure retail investment opportunity

  • Let to Poundland Limited (Net Assets £95.7m)

  • New lease from March 2017

  • Re-based rent

  • Substantial 1.85 acre site in prominent town centre location

  • Located close to Poundland’s HQ

  • £1,150,000, subject to contract

  • 9.0% net initial yield

Location

Willenhall is a densely populated West Midlands town in the Metropolitan Borough of Walsall. The town is located approximately 8 km (5 miles) west of Walsall, 5.6 km (3.5 miles) east of Wolverhampton and 22 km (14 miles) north-west of Birmingham.

The town benefits from good road communications and is served by the A454 Black Country Route which links directly to Junction 10 of the M6 Motorway approximately 4.8 km (3 miles) to the east. The A454 is one of the main arterial routes in the West Midlands and connects to Walsall to the east and Wolverhampton City Centre to the west.

Wolverhampton railway station is approximately 4.8 km (3 miles) to the west and provides regular direct services to London Euston with a fastest journey time of 1 hour 40 minutes. Birmingham Airport is approximately 32 km (20 miles) to the south-east.

Situation

The property occupies a prominent position fronting the busy B4464 New Road at the junction with Ensdale Row, within the heart of Willenhall town centre. The B4464 forms one of the principal routes from the town to the A454 which lies approximately 0.8 km (0.5 miles) west of the subject property.

The property is in an established location surrounded by a blend of commercial uses and residential housing. A Lidl supermarket is situated within 300 feet of the property on New Road and a Morrisons supermarket is approximately 0.4 km (0.25 miles) to the north-east.

The property is situated approximately 1.6 km (1 mile) north-east of Poundland’s head office.

Much of Willenhall town centre is a designated conservation area and a programme of £1 million has been undertaken to support enhancements to local buildings, funded by Heritage Lottery and Walsall Housing Group (Source: Walsall Council).

Description

The property occupies a large corner site comprising a detached retail property fronting New Road. The property, which is a former supermarket, is of portal frame and brick construction beneath a slated pitched roof. There is a goods entrance and loading area at the rear. The property benefits from a large surface car park for approximately 137 cars.

Internally, the property has been fitted out by the tenant to a high standard in their usual corporate style. The main retail area is open plan with the tenants merchandise strategically laid out across the store. There is also an area for storage as well as for staff accommodation.

Accommodation

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

Ground Floor Sales 880.04 sq m 9,473 sq ft
Ground Floor Storage 335.28 sq m 3,609 sq ft
Ground Floor Entrance Sales 81.29 sq m 875 sq ft
First Floor 343.54 sq m 3,698 sq ft
Total 1,640.15 sq m 17,655 sq ft

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

Site

We estimate the site area to be approximately 0.75 hectares (1.85 acres).

The property is not situated within a Conservation Area.

An Environmental Desk Study was carried out by WSP in April 2017. The report concluded that the site represents a low/medium risk with respect to potential contaminated land liability issues and that “no further contaminated land assessment works are considered necessary for the continued on going retail use of the site”. A copy of this report is available to download and can be made assignable to a purchaser.

Tenure

Freehold.

Tenancy

The property is entirely let to Poundland Limited on a new 5 year lease from 17th March 2017, expiring on 16th March 2022. The current passing rent is £110,000 per annum (£67.01 per sq m / £6.23 per sq ft overall). The lease is subject to a Schedule of Condition and is outside 1954 Act protection.

The tenant has been granted a 12 month rent free period expiring on 16th March 2018. In order that a purchaser does not suffer an income shortfall the vendor will top up the rent on completion by way of an adjustment to the purchase price.

The property was previously let to 99p Stores Limited (which was acquired by Poundland in 2015) pursuant to a lease dated 21st October 1987 which was assigned to 99p Stores Ltd by Somerfield Stores Ltd for a term of 35 years from 25th March 1987, expiring on 24th March 2022. On completion of the current new lease, the former lease was simultaneously surrendered.

The rent has been re-based to its current level from £176,500 per annum.

Covenant

Poundland Limited (Co. No. 02495645) has reported the following figures:

  27th March 2016 27th March 2015
Turnover £1,214,818,000 £1,111,526,000
Pre-Tax Profits £34,653,000 £42,560,000
Net Assets £95,695,000 £85,951,000

Poundland is Europe’s largest single price value retailer, offering for sale throughout the UK, Ireland and Isle of Man a wide variety of general merchandise from 850 high street, city centre and retail park stores. The Company trades under the “Poundland” fascia in the UK where all items of merchandise have a single selling price of £1 and under the “Dealz” facia in republic of Ireland, where the majority of products have a selling price of €1.50.

In September 2015 Poundland Limited acquired 99p Stores Limited and subsidiary undertakings by Poundland Group plc, the Company’s ultimate parent. This added 252 stores to the Group portfolio, an increase of 40%. By the end of April 2016, 235 of the 99p Stores had been rebranded as Poundland. For further information visit www.poundland.co.uk.

In July 2016 the South African retail conglomerate, Steinhoff Europe AG acquired Poundland for £597 million. Steinhoff also owns Harveys and Bensons for Beds in the United Kingdom and the parent company, Steinhoff International, was listed on the Frankfurt Stock Exchange in December 2015 with a market capitalisation of 19.27 billion Euros.

Poundland’s head office is situated in Willenhall, approximately 1 km (1 mile) from the subject property.

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 £1,150,000 (One Million, One Hundred and Fifty Thousand Pounds), subject to contract, reflecting a net initial yield of 9.0%, assuming purchaser’s costs of 5.89%.

Investment Considerations

  1. An opportunity to acquire a freehold retail store investment;

  2. The investment provides highly secure income being let to Poundland Limited – Net Assets £95.7 million;

  3. New letting from March 2017 at a re-based rent;

  4. A prominent retail store, formerly a supermarket, with extensive frontage and its own designated car park;

  5. The property is located close to Poundland’s Headquarters;

  6. Substantial site comprising 1.85 acres;

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

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
Graham Waddell graham@johnstonwaddell.co.uk +44 (0) 203 701 1388
Faye Langoulant faye@singervielle.co.uk +44 (0) 203 478 9122
Louanne Malan louanne@singervielle.co.uk +44 (0) 203 701 1386

Vendors Solicitor

CMS Cameron McKenna +44 (0) 20 7367 2436
Chris Lee chris.lee@cms-cmck.com
Sally Badham sally.badham@cms-cmck.com
customer service