Walkers Snacks

MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE

High quality distribution investment providing 11 years’ secure income in a core Midlands location WALKERS SNACKS High quality distribution MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE investment providing 11 years’ secure income in a core Midlands location INVESTMENT SUMMARY

• Situated on Middlemarch Business Park directly adjacent to Coventry Airport. • Coventry has a strong occupier base being a core Midlands manufacturing and logistics hub. • The property comprises a single let modern distribution warehouse of 227,199 sq ft (21,107 sq m) with 38 loading doors, two storey ancillary offices and a minimum yard depth of 50m. • The site has additional yard and potential expansion land, extending to approximately 1.68 acres. • Secure site extending to 13.2 acres, providing a very low site density of 38%. • The property is fully let to Walkers Snacks (Distribution) Ltd on an FRI lease providing an unexpired term certain of over 11 years. • Total rental income of £1,312,095 per annum, reflecting a low rent of £5.50 per sq ft for the unit (not including expansion land rent). • Prospect for rental growth in the short term, with an upcoming rent review on 28/11/2020. • Walkers Snacks (Distribution) Ltd are the distribution arm of Walkers Snacks, the We are instructed to UK’s largest crisp manufacturer. They seek offers in excess of provide warehousing and distribution £23,410,000 (Twenty Three services to the other group companies. Million Four Hundred and Ten Thousand Pounds) subject to • The tenant has a long-term commitment contract and exclusive of VAT. to the site due to its strategic importance, A purchase at this level reflects sitting directly adjacent to one of Walkers a Net Initial Yield of 5.25% Snacks largest factories. and a low capital value of • Virtual Freehold. £103 per sq ft, assuming purchaser’s costs 6.76%. WALKERS SNACKS

MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE

Coventry City Centre

Jaguar Land Rover Kuehne+Nagel

A45 A45 M6/M69 Interchange (5.5 miles)

Coventry Airport Zooplus

Funko.com World of Books Unipart

Menzies Distribution Innovare Volvo Prologis Park, Ryton (0.5 miles) Royal Mail Walkers Snacks Factory

Royal Mail GEFCO SUBJECT PROPERTY Unipart

HTA Group

Gist Aubrey Allen

Royal Mail

The property is situated on Middlemarch Business Park, one of the West Midlands most sought-after distribution locations A A45 45

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MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE T

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LOCATION S

4 Walkers Snacks Factory

Coventry is located in the West Midlands and lies directly adjacent A A

4 4 Coventry Y 5

to the ‘Golden Triangle’ – the UK’s premier distribution area with Y 2

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Coventry Airport W W some 85% of the UK’s population (c.47m people) being accessible K K R Golf Club A R within the 4.5-hour HGV drive-time limit. It is approximately P A P

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S 24 miles (38.6 km) south east of Birmingham, 25 miles (40.2 km) SI N I K south west of Leicester and 89 miles (143 km) north west of Central S I S London. SUBJECT O X F

The town benefits form excellent road connectivity being served by S

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the M1, M6 and A45 motorways. The M6/M1 interchange at Rugby is N U R

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just east of the city, meaning direct access from the M6 motorway I A E E

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A H via the A46 and A444. The M1 is accessed via the M45/A45 and the H O A

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O L M69 motorways, allowing access to London and the wider South Y

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D O T A East. The A45 Birmingham to Coventry trunk road provides access N D E to the M42 which in turn, links the M40 and M5 motorways. V O

C The town also benefits from excellent rail and air connections with Coventry Airport situated directly adjacent to the subject property. Frequent direct trains run from Coventry to BirminghamNOTTINGHAM D in just 28 minutes and regular services operate to London Euston in A RO N approximately 1 hr. Destination Miles KM Drive Times TO ING 24 AM 14 SITUATION LE Coventry 5.2 8.4 13m Stafford Y RO COVENTR AD Town Centre The property is situated on Newport 13 23 Middlemarch Business Park, one of Birmingham 26.0 42.0 40m M6 M1 the West Midland’s most sought-after 22 12 11 TOWNS 5 distribution locations. Middlemarch Manchester 108.0 174 2hr 10m 11 & CITIES M54 Tamworth Business Park extends to 110 acres and 2 Leicester M6(T) sits directly adjacent to Coventry Airport; 21 London 94.2 151.6 2hr 20m Wolverhampton 10 Walsall the subject property is approximately M69 1.9 miles from the entrance. The site 8 7 Hinckley 9 2 sits 6.5 miles south of Coventry town A45 1.2 1.9 10m Nuneaton 1 1 6 5 8 M1 2 centre and approximately 5 miles from BIRMINGHAM M6 3 Coventry Railway Station. M6 5.9 9.5 20m 20 3 M5 BIRMINGHAM 6 2 Situated on Siskin Parkway East, the ROADS Solihull 1 M425 19 main road running through the estate, M1 17.0 27.4 32m 4 4 2 Rugby 18 1 M42 3 the adjoining site is owner occupied by Bromsgrove COVENTRY 16 M45 17 one of Walkers Snacks largest factories. Coventry 1.9 3.1 6m Other occupiers on the estate include Airport 5 Warwick Leamington Redditch Spa Volvo, Unipart, Royal Mail, Menzies, Gist 15 14 Daventry Birmingham 15.0 24.0 32m 13 and World of Books (see aerial on the Airport 6 previous page). AIRPORTS Worcester Stratford 12 7 upon Avon M40

Great Malvern WALKERS SNACKS

MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE

ACCOMMODATION

The property has been measured in accordance with the RICS Code of Measuring Practice (6th Edition) on a Gross Internal Area (GIA) basis, and provides the following approximate areas:

Demise Area sq m Area sq ft

Unit 1

Office 936 10,074

Warehouse 7,469 80,392

Covered loading 691 7,437

Unit 1 Total 9,096 97,903

Unit 2

Office 1,206 12,983 DESCRIPTION Warehouse 10,806 116,313 Unit 2 Total 12,012 129,296 The property was constructed in 1999 and comprises a single let unit of steel portal frame construction. Due to previous occupation by two tenants it remains labelled as Units 1 & 2. The current tenant operates OVERALL TOTAL 21,107 227,199 the site as a single cross docked unit, with the total floor area extending to 227,199 sq ft (21,107 sq m). The site benefits from additional secure yard space to the south western elevation, extending to approximately 1.68 acres. This is currently utilised as extra HGV parking, but also provides clear expansion land for a potential extension to Unit 1.

The warehouse benefits from the following specification:

• Minimum clear internal eaves height of 10m. • 26 dock level loading doors. • 12 level access loading doors. • Minimum yard depth of 50m.

The unit also benefits from two storey office accommodation with a dedicated secure reception, suspended ceilings and integral diffused lighting. WALKERS SNACKS

MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE

SITE AREA TENURE

The site extends to approximately 13.2 acres, The property is held on a 999 year lease from providing a very low site density of 38%. the 26th February 1993 at a peppercorn rent.

TENANCY

Current Leases

The property is let to Walkers Snacks (Distribution) Limited on two assigned FRI leases from Macfarlane Group UK Limited expiring 27 November 2020. Part of the ancillary office building remains sub-let to Macfarlane Group UK Limited until 16 November 2020 (Outside the Act). The passing rent is £1,312,095 per annum, which reflects the following:

Unit 1 T

• £522,845 per annum (£5.34 per sq ft) S

• £61,437 per annum (apportioned to the extension land) A

• Total: £584,300 per annum E UNIT 2

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A • £727,795 per annum (£5.63 per sq ft)

Total K • £1,312,095 per annum (£5.50 per sq ft excluding the extension land) UNIT 1 R A

P Reversionary Leases

N In 2019 Walkers Snacks (Distribution) Limited signed two co-terminus FRI reversionary leases I for a term of 10 years from 28 November 2020, providing a WAULT of 11 years. K S Upon commencement of the reversionary leases there will be an upwards only open market I rent review with 5 yearly reviews thereafter. S There is a rent free period between 29th September 2019 to 26th April 2020, which will be topped up by the vendor and deducted from the purchase price at the date of completion. WALKERS SNACKS The site is of significant strategic importance as it sits directly adjacent to MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE the Walkers Snacks factory COVENANT

Walkers Snacks (Distribution) Limited (03566410) Founded in 1948, Walkers Snacks is a British snack food manufacturer best known for producing potato crisps. They are the UK’s largest crisp manufacturer, producing over 11 million packets a day. Other than Walkers Originals, they are responsible for brands such as Doritos, Quavers, Wotsits, Monster Munch, French Fries and Frazzles. The company employs over 4,000 people in fifteen locations around the UK. The sole function of Walkers Snacks (Distribution) Limited is to provide the Walkers Snacks group companies with warehousing and distribution services.

Walkers Snacks is a wholly owned subsidiary of PepsiCo after it was acquired in 1989. The US giant, which has its UK headquarters in London, is behind brands such as Pepsi, Lays, Lipton, Tropicana and Quaker Oats.

Walkers Snacks Dec-18 Dec-17 Jan-16 Dec-15 (Distribution) (000 GBP) (000 GBP) (000 GBP) (000 GBP) Limited

Turnover 98,528 107,368 105,186 109,765

Pre-tax Profit 827 4,130 3,843 3,988

Net Worth 25,370 24,851 21,639 18,968 Cash 40,529 27,468 17,719 13,188 THE OPERATION

The subject property is one of two UK distribution hubs operated by Walkers Snacks, the other being in Warrington. This site is of significant strategic importance as it sits directly adjacent to the Walkers Snacks factory. Walkers Snacks operate four factories around the UK, with their headquarters located in Leicester. The subject property is used to provide distribution services to the Coventry factory as well as the other factories in Leicester, Lincoln and Skelmersdale. Walkers Snacks owner occupy their factory in Coventry which is responsible for the Doritos and French Fries service lines. In 2015, it underwent a substantial upgrade to install new state- of-the-art packing equipment. This significant investment in the Coventry site and the recent re-gear on the subject property clearly demonstrates the tenant’s long-term commitment to the location. WALKERS SNACKS

MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE

OCCUPATIONAL MARKET COMMENTARY

The UK’s logistics occupational market is as strong as ever with 2018 take-up totalling 31.50m sq ft across 101 deals; this was 82% higher than 2017 and exceeded the annual record from 2016 of 29.35m. Take-up has been dominated by online retailers, who were responsible for 9.98m sq ft of logistics space, representing 32% of the total take-up. This trend has continued into 2019 as online sales in the UK keep growing – now accounting for over 20% of total retail transactions.

The Midlands finished the year setting a new record for take-up of any region of the UK, with 43 deals totalling 13.97m sq ft, an increase of 110% compared to 2017 (6.65m sq ft). This accounted for 44% of total take-up in 2018. This trend has continued to grow with the Midlands accounting for over 50% of national take-up in H1 2019, demonstrating steady growth.

Coventry is at the heart of both the UK’s manufacturing and distribution markets with 10% of the automotive sector’s employment located there. This includes the global headquarters for Jaguar Land Rover. The strong labour supply, booming residential development market and affluent demographic make Coventry a sought-after location for occupiers and investors alike. Notable occupiers that have recently committed to the wider region include DHL Supply Chain Ltd, Parts Alliance Group Ltd and Kitchencraft.

A schedule of comparable letting evidence is outlined below:

Building Tenant Date Size Build Rent Lease (sq ft) Status (Psf) Terms

Unit 1, Imperial Funko.com Jul-19 349,355 Grade A £6.25 10 year lease Park, Middlemarch, Coventry

Midpoint 105, Parts Alliance Aug-18 105,506 Second Hand £6.25 5 year lease Birmingham Group Limited

Carbon 103, World of Buzz Apr-18 103,000 Grade A £6.40 15 year lease Middlemarch, (World of Books) Coventry

Carbon 207, Zooplus Apr-18 207,340 Grade A £6.23 15 year lease Middlemarch, Coventry

Coventry 210, Martin Brower Jul-18 210,628 Grade A £7.10 20 year lease Dolomite Avenue, Limited Coventry

Lyons 135, Jaguar Land Mar-18 135,048 Grade A £6.50 10 year lease Lyons Park, Rover Coventry WALKERS SNACKS

MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE

INVESTMENT MARKET COMMENTARY

The industrial sector has performed extremely well despite the political and economic headwinds faced over the past year. Whilst total industrial transaction volumes are down from this time last year, volumes for logistics assets are approximately 20% up. This strong investment performance is testament to the continued positive sentiment that surrounds this asset class and sub sector, both from an occupier and investor perspective. The logistics investment market is underpinned by a very robust occupational story driven by a structural shift in demand, and an acute undersupply of space. Industrial sector total returns reached 18.1% for the whole of 2018, thanks largely to capital value growth of 12.4%. In the current market, there continues to be a significant weight of money targeting the sector, in particular for those assets that benefit from strong property fundamentals in established industrial locations such as this. A schedule of key logistics transactions is outlined below:

Property Date Purchase NIY Cap Val Area AWULT Passing Rent Vendor Purchaser Price (per sq ft) (sq ft) (Years) Pa (per sq ft)

Movianto - Sep-2019 £44,560,000 4.90% £118 377,000 10 £2,331,250 Morley Estates Warrington Haydock (£6.25) County Council

Puma - Aug-2019 £30,350,000 4.60% £117 259,236 10 £1,490,607 Barwood, Equites Wakefield (£5.75) Tungsten Property Fund Properties Limited

F&P - Jun-2019 £12,480,000 4.71% £124 100,511 10 £628,194 Barwood, Private Birmingham (£6.25) Panattoni Individual

Amazon - Dec-2018 £37,293,500 4.95% £90 415,065 10 £1,971,558 Aberdeen NFU Doncaster (£4.75) Standard

HelloFresh - Dec-2018 £26,650,000 4.99% £107 236,580 8 £1,419,480 BA Pension NFU Banbury (£6.00) Fund, db symmetry WALKERS SNACKS

MIDDLEMARCH BUSINESS PARK, COVENTRY, CV3 4PE PROPOSAL

We are instructed to seek offers in excess of £23,410,000 (Twenty Three Million Four Hundred and Ten Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level reflects aNet Initial Yield of 5.25% and a low capital value of £103 per sq ft, assuming purchaser’s costs 6.76%

FURTHER INFORMATION For further information, or to arrange an inspection, please contact the following:

Tom Woolhouse Nick Woodward T: 020 7182 2113 T: 0121 616 5561 M: 07818 012 428 M: 07983 329 642 E: [email protected] E: [email protected]

John Doleman Will Sherlock T: 020 3214 1911 T: 0121 616 5563 M: 07464 980 354 M: 07795 606 832 E: [email protected] E: [email protected]

Monty Powell CBRE Ltd T: 020 7182 2404 55 Temple Row M: 07584 108 037 Birmingham B2 5LS EPC E: [email protected]

Available on request. CBRE Ltd Henrietta House London W1G 0NB VAT

The property has been elected for VAT and the purchase price is exclusive of any VAT that may be chargeable. It is envisaged that the CBRE for themselves and for the vendors or lessors of the property whose agents they are give notice that: (i) these particulars are given without responsibility of CBRE or the vendors or lessors as a general outline only for the guidance of prospective purchasers transaction will be treated as a Transfer of a Going Concern. or tenants, and do not constitute the whole or any part of an offer or contract; (ii) CBRE cannot guarantee the accuracy of any descriptions, dimensions, references to condition, necessary permissions for use and occupation and other details contained herein and any prospective purchaser or tenant should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the accuracy of each of them; (iii) no employee of CBRE (and their joint agents where applicable) has any authority to make or give any representation or warranty or enter into any contract whatsoever in relation to the property; (iv) VAT may be payable on purchase price and/or rent, all figures are quoted exclusive of VAT, intending purchasers or lessees must satisfy themselves as to the applicable VAT position, if necessary by taking appropriate professional advice; (v) except in respect of death or personal injury caused by the negligence of CBRE, its employees or servants, CBRE will not be liable, whether in negligence or otherwise howsoever, for any loss arising from the use of these particulars save to the extent that any statement made in these particulars has been made fraudulently. November 2019 DATAROOM Designed and produced by Creativeworld Tel: 01282 858200.

Further information is available upon request.