WW Alton Retail Park

ALTON RETAIL PARK ENTER ALTON, HAMPSHIRE, GU34 2QS

PRIME FOODSTORE AND RETAIL WAREHOUSE INVESTMENT WITH RPI LINKED RENT REVIEWS Investment Location & Demographics Retail Description & Tenure, Tenancies Covenant Rental VAT, Proposal & Summary Situation Warehouse EPC Planning Information Commentary Contact Details ALTON RETAIL PARK Provision & Asset ALTON, HAMPSHIRE, GU34 2QS Management

INVESTMENT SUMMARY

Alton is a town in Hampshire, 50 miles from Central Very attractive WAULT of approximately 12.0 years (10.9 We are instructed to seek offers in excess of London. years including Pets at Home 2025 tenant break option). £10,300,000 (Ten Million, Three Hundred Thousand Pounds), subject to contract and exclusive of VAT. This Affluent population with 44.6% of the 15 minute drive Aldi benefits from 5 yearly RPI linked rent reviews reflects an attractivenet initial yield of 5.00% (assuming time catchment within the top Acorn Group ‘Affluent between 1.5% and 2.5% per annum compounded. purchaser’s costs at 6.70%). Achievers’. Significant RPI related reversion in the Aldi rent in 2019 An acquisition at the quoting price would see the yield The subject property provides the only retail and potential reversion in the Wickes and Pets at Home increase to 5.22% in May 2019 following Aldi’s RPI linked warehousing in the town and surrounding area. rents in 2019 and 2020, respectively. rent review.

A modern retail warehouse development providing Unrestricted A1 planning consent. Following rental uplifts on the Wickes and Pets at Home 32,620 sq ft, GIA. OMV rent reviews, to our opinion of ERV, the running Freehold. yield further increases to 5.37%. Let to Aldi, Wickes and Pets at Home – All ‘5A1’ strength covenants. Potential for the construction of an additional unit. The adjoining site is likely to be developed for A1, A3 and / or Leisure use.

AY W AD E RO IT N H DO W N O T L A31 LOCATION R E B L I Alton is an affluent market town located in the county of Hampshire, in the South East of G

P B 3 L A 0 England. The town lies approximately 29 miles north east of Southampton, 26 miles south of O N 0 Y V S 4 A E T A M O W R E N O L S S Y N Reading and 50 miles south west of Central London. EY S D T W L T TE O O A A E C O Y N Y C L W Development H D E M IO H IL A L Site W M L AY Alton A The M3 motorway is 12 miles from the town which connects to the M25 motorway to the north R N O Football E A Club east. The M3 motorway also provides access to the south west and to the M27 motorway which D runs east to west along the coast. The town is located along the A31 which provides access to B ROAD 3 RD D 3 Alton A ALTON W A Guildford and Winchester. Alton railway station offers direct train services to London 4 Waterloo, College D O 9 E R RETAIL Y N E

E T S PARK with a journey time of approximately 70 minutes. Other services also run to Woking andW smaller N

O L surrounding towns. 4 D 3 2 H 4 2 A

M NE 1 R A L 1 O N A A M D E E Uxbridge ENU W N Maidenhead AV E A Slough DS N L EL L FI IL 7 LONDON N M 6 EE 4 4 1 R 0 3 2 G 30 Reading B HEATHROW ALTON M4 14 Kingston 14 13 13 12 upon Thames A31 10 Staines 1 11 Bracknell River Wey 11 Croydon Kings Newbury M3 Sutton Alton Pond T 3 E Museum E R Camberley Epsom T 10 S 4 M25 9 B3349 BASINGSTOKE R H Woking OAD IG 9 H 7 T W E E I Farnborough M25 R L T S 5 8 6 K S O UR M Basingstoke 6 Oxted ER T OW Aldershot Redhill L R O A Reigate D 7 Farnham Guildford M23 Andover 8 A31 Godalming GATWICK 9

M3 10 ALTON Crawley East Grinstead SITUATION Haslemere 11 9

10 Winchester Horsham The subject property is situated approximately 1 mile from the town centre, prominently 11 Petersﬁeld positioned on the northern side of the A31 (Mill Lane). The A31 connects Alton with Farnham, 12 Haywards 10 miles to the north east and with Winchester, 18 miles to the south west. The area 13 14 Eastleigh Heath surrounding Alton Retail Park to the north and east is predominantly residential, whilst to the 4 2 3 4 5 west are light industrial, offices and trade counter uses. Southampton 1 8 Lewes 9 3 M27 10 11 Chichester 5 ADJACENT SITE 12 12 Littlehampton Hove Brighton Portsmouth Worthing The site, immediately to the north east of the subject property, has planning consent for a Bognor Regis 66,000 sq ft foodstore. We understand Tesco have recently exchanged contracts to sell the site to a developer and we anticipate further A1, A3 and / or leisure will be constructed. This would further strengthen the area as an attractive retail destination.

DEMOGRAPHICS Weekly Catchment Expenditure versus CACI Average

Catchment According to CACI, within the 15 minute drive time catchment: £27.01 Food CACI Average +5% £25.78 · There are 48,871 people, rising to 101,222 people within 20 minutes.

· 44% are classified as “Affluent Achievers” – 105% above the UK average of 21.8%. Pet Food £1.17 & Pet Care +25% £0.94 · Mean annual income of £50,790 – 35.5% above the UK average. Pet £1.38 · 71% of households are privately owned – 11% above the UK average. Services +27% £1.08

· Car ownership is 32% higher than the UK average. House Repair, £0.49 Maintenance & +52% £0.32 · Unemployment for people aged 16 to 74 stands at 1.4%, significantly less than the UK Decoration average of 2.0%. Tools & Equipment £1.33 for House & Garden +21% £1.10

Social Grade of Catchment Mean Household Income Description Comparison to Base (GB) Average Farnham AB Higher and intermediate managerial / +59% professional C1 Supervisory / professional +1% C2 Skilled manual workers -13% DE Semi-skilled / unskilled workers / -42% ■ Low / Medium ■ unemployed ALTON High ■ Very High 15 min drive Household Income Profile Headley Bordon Four Marks Whitehill £40k to £60k pa £60k to £80k pa £80k to £100k pa £100k+ pa 19% above average 49% above average 84% above average 124% above average Catchment = 21.6% Catchment = 13.0% Catchment = 8.1% Catchment = 10.3% Liphook Average = 18.1% Average = 8.7% Average = 4.4% Average = 4.6%

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RETAIL WAREHOUSE PROVISION FOODSTORE PROVISION The subject property provides the only retail warehouse accommodation in Alton and the Aldi is the town’s only out of town foodstore. Waitrose and Sainsbury’s both have foodstores in surrounding area. The lack of retail warehouse supply in the town along with being in a highly the town centre. Lidl are not represented in the town. The only other substantial food offer is accessible location provides Aldi, Wickes and Pets at Home with a competitive trading platform. an M&S Foodhall and an Iceland, both located on the main High Street to the south of the town centre. The nearest retail park to Alton is in Farnham. The scheme has an open A1 (non-food) planning consent and comprises a 36,380 sq ft Homebase let off a rent of £19.75 per sq ft, a 10,051 sq The nearest Aldi store is in Camberley which is circa 35 minutes’ drive away. ft Pets at Home off a rent of £24.13 per sq ft and a 7,663 sq ft Halfords at a rent equating to £23.82 per sq ft. The nearest Wickes store is in Basingstoke which is circa 30 minutes’ drive away.

DESCRIPTION EPC The subject property comprises an attractive, modern, purpose At the front of the development is a tarmacadam customer car Unit Rating built retail warehouse scheme. The units are of steel portal park providing 157 parking spaces and 1 trolley bay. This gives frame construction with part brick, part steel profile clad facade a good parking ratio of 1 : 233 sq ft. 1 B 43 incorporating steel profiled pitched roofs and prominent and There is a dedicated service yard situated to the rear and side 2 D 99 highly visible retailer signage. of the terrace, which is accessed from a dedicated service 3 A 13 Wickes occupy a unit extending to circa 15,272 sq ft, with an access road from the A31 (Mill Lane). outdoor garden centre to the side. A mezzanine level has We believe there may be space to potentially develop an been built by the tenants and covers circa 20% of the internal additional small retail unit or pod at the end of the Pets at SITE AREA floor space. Home unit, subject to planning consent being granted. The site extends to approximately 4.16 acres (1.68 hectares), The mid-terrace unit is occupied by Aldi and extends to giving a low site cover of 20%. circa 15,000 sq ft and has a highly attractive and prominent entrance feature. The third unit comprises circa 6,348 sq ft and is occupied by Pets at Home. This unit also has a mezzanine level that covers circa 25% of the internal floor space.

TENURE

2 T 5 2 WI T C

H 2 The site delineated in red is held freehold. This is provided for

1 EN 5 4 indicative purposes only. S 1 R O A D PLANNING

The property benefits from an unrestricted A1 planning consent. A

5 copy of the planning consent can be provided on request.

1 1

7 ASSET MANAGEMENT

0 6

There is an opportunity to create an additional A1/A3 unit by 4

7 extending the terrace on land to the north east of the existing Pets

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A 9

W o 3 rk at Home unit, subject to planning consent being obtained. This

5 to S 3 1 a N its P

n l additional unit could be achieved without the loss of any existing car

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R 0m 25m 50m 75m C Warehouse

TENANCIES

The scheme is fully let to three market leading ‘5A1’ retailers and benefits from a long weighted average unexpired lease term of 12.0 years (10.9 years including the Pets at Home 2025 tenant break option).

Unit Tenant GIA Lease Term Expiry Break Option Next Rent Current Rent Current Rent ERV ERV (sq ft) Start (years) Date Review (p.a.) (psf) (p.a.) (psf) 1 Wickes Building Supplies Ltd 15,272 09/05/2014 15 08/05/2029 - 09/05/2019 £203,931 £13.35 £213,808 £14.00 2 Aldi Stores Ltd 15,000 09/05/2014 15 08/05/2029 - 09/05/2019 £225,000 £15.00 £249,624 £16.64 3 Pets at Home Ltd 6,348 30/11/2015 15 29/11/2030 30/11/2025 30/11/2020 £120,612 £19.00 £126,960 £20.00 36,620 £549,543 £15.01 £590,392 £16.12

COVENANT INFORMATION

100% of the rental income is secured against ‘5A1’ covenants, as rated by Dun & Bradstreet. Pets at Home is the UK’s leading pet supplies retailer with more than 370 stores and 6,000 employees. Within their stores they also operate ‘Vets 4 Pets’ Wickes is one of the UK’s leading DIY retailers and is owned by Travis a veterinary care practice and ‘the groom room’ offering dog grooming and Perkins plc, a large builder’s merchant, which has approximately 1,900 microchipping. The most recent accounts for Pets at Home Ltd are as follows: outlets and 24,000 employees. Wickes trades from approximately 230 stores throughout the UK. The most recent accounts for Wickes Building Supplies Limited are as Year Sales Turnover Pre-Tax Profits/ Net Worth D&B follows: Ending (000’s) Loss (000’s) (000’s) Rating 31/03/2016 £739,726 £81,843 £598,310 Year Sales Turnover Pre-Tax Profits/ Net Worth D&B 5A1 Ending (000’s) Loss (000’s) (000’s) Rating 26/03/2015 £689,697 £79,920 £517,138 31/12/2016 £1,213,269 £65,403 £304,109 5A1 26/12/2015 £1,104,950 £60,133 £404,992

Aldi is one of two leading global ‘discount supermarkets’ with over 10,000 stores in over 18 countries. They currently trade in excess of 650 stores in the UK and have plans to increase their store portfolio to 1,000 by 2022. The most recent accounts for Aldi Stores Limited are as follows:

Year Sales Turnover Pre-Tax Profits/ Net Worth D&B Ending (000’s) Loss (000’s) (000’s) Rating 31/12/2015 £7,705,140 £212,621 £2,073,988 5A1 31/12/2014 £6,893,256 £250,584 £1,948,445

RENTAL COMMENTARY

Good quality locations, especially in the South East of England, have seen strong levels of Aldi tenant demand in recent years. The lack of available sites and the high levels of consumer spending in the more affluent catchment areas has resulted in increasing rental levels. The unit let to Aldi is subject to a lease with five yearly upwards only rent reviews equivalent to the increase in RPI over the relevant period of between 1.5% and 2.5% per annum compounded. DIY Units The Office for Budget Responsibility forecast that RPI will be in excess of 2.5% per annum in The ‘DIY’ market is particularly strong at present, with good trading performances from 2018 and 2019. Assuming the 2.5% cap is reached, and based on the actual RPI figures for established occupiers, being Wickes, B&Q and Homebase, and increased competition following years 2015, 2016 and 2017, the rent will increase to £249,624 per annum (£16.64 per sq ft) at the Bunnings’ acquisition of Homebase in 2016. We would highlight the following recent relevant May 2019 rent review. rental transactions: Conclusion Retailer Town Size (sq ft) Rent (pa) Rent (per sq ft) Year Based on the recent rental evidence, we are of the opinion that the property benefits from a Wickes Burgess Hill 21,069 £325,000 £15.43 Q2 2017 significant potential rental reversion. Wickes Christchurch 18,820 £281,330 £14.95 Q2 2017 Wickes Kingston 25,200 £705,600* £28.00 Q2 2017 B&Q St Albans 45,000 £1,080,000 £24.00 Q2 2017 Wickes Ashford 28,029 £434,500 £15.50 Q2 2016

* This rent was agreed at review, increasing from £23.75 per sq ft. Wickes also agreed a 15 year reversionary lease.

Smaller Units

A number of comparable letting transactions for units, of circa 7,000 to 10,000 sq ft, in the South East of England are provided below:

Retailer Town Size (sq ft) Rent (pa) Rent (per sq ft) Year Hobbycraft Farnborough 7,002 £245,070 £35.00 Q2 2017 Tapi Hove 10,000 £320,000 £32.00 Q2 2017 DFS Ashford 10,000 £225,000 £22.50 Q4 2016 Tapi Slough 9,969 £343,931 £34.50 Q3 2016 Tapi Ashford 8,000 £184,000 £23.00 Q1 2016

VAT FURTHER INFORMATION

The property has been elected for VAT, however, it is Please contact: anticipated that the transaction will be treated as a “Transfer of a Going Concern” (TOGC). Wilkinson Williams LLP Heathcoat House 20 Savile Row PROPOSAL London W1S 3PR

We are instructed to seek offers in excess of£10,300,000 Miles Marten (Ten Million, Three Hundred Thousand Pounds), subject to Tel: 020 7317 3777 contract and exclusive of VAT. This reflects an attractivenet Mobile: 07770 748 290 initial yield of 5.00% (assuming purchaser’s costs at 6.70%). Email: [email protected]

An acquisition at the quoting price would see the yield Jack Lloyd increase to 5.22% in May 2019 following Aldi’s RPI linked rent Tel: 020 7317 3796 review. Mobile: 07747 883 231 Email: [email protected] Following rental uplifts on the Wickes and Pets at Home OMV rent reviews, to our opinion of ERV, the running yield further www.wilkinsonwilliams.co.uk increases to 5.37%.

MISREPRESENTATION NOTICE. Wilkinson Williams LLP give notice to anyone who may read these particulars as follows: 1. These particulars are prepared for the guidance only of prospective purchasers. They are intended to give a fair overall description of the property but are not intended to constitute part of an offer or contract. 2. Any information contained herein (whether in the text, plans or photographs) is given in good faith but should not be relied upon as being a statement of representation or fact. 3. Nothing in these particulars shall be deemed to be a statement that the property is in good condition or otherwise nor that any services or facilities are in good working order. 4. The photographs appearing in this brochure show only certain parts of the property at the time when the photographs were taken. Certain aspects may have changed since the photographs were taken and it should not be assumed that the property remains precisely as displayed in the photographs. Furthermore, no assumptions should be made in respect of parts of the property which are not shown in the photographs. 5. Any areas, measurements or distances referred to herein are approximate only. 6. Where there is reference in the particulars to the fact that alterations have been carried out or that a particular use is made of any part of the property, this is not intended to be a statement that any necessary planning, building regulations or other consents have been obtained and these matters must be verified by an intending purchaser. 7. Descriptions of the property are inevitably subjective and the descriptions contained herein are given in good faith as an opinion and not by way of statement of fact. Plans are published for convenience of identification only and although believed to be correct, their accuracy is not guaranteed and they do not form part of any contract. October 2017. Designed and produced by Creativeworld Tel: 01282 858200.

PRIME FOODSTORE AND RETAIL WAREHOUSE INVESTMENT WITH RPI LINKED RENT REVIEWS