234-254 ROAD , TS1 3QP

WELL LET RETAIL PARADE ADJACENT TO UNIVERSITY CAMPUS gva.co.uk/7915 234-254 WELL LET RETAIL PARADE ADJACENT TO UNIVERSITY CAMPUS MIDDLESBROUGH, TS1 3QP 234-254 LINTHORPE ROAD LOCATION MIDDLESBROUGH, TS1 3QP

Middlesbrough is the principal retail and service centre within the conurbation and lies approximately 10 miles east of Darlington, 20 miles south east of Durham and approximately 15 miles north east of Northallerton. The town has an estimated urban area population of 142,691 persons (FOCUS) and an estimated population within 10km of the centre of 373,551. Major employers in the town include University of Teesside, St Lukes Hospital, the Port Harbour & Dock Authorities, Middlesbrough DCT, PASF plc, Gazette Media Co Ltd and Petroplus.

The town has excellent links to the UK road network via the A66, which forms the town’s inner ring road and also is the Tees Valley link road connecting to the A1(M) and national motorway network, 19 miles (30.4km) to the west.

Rail services to London Kings Cross are available with a fastest journey time of 3 hours 4 minutes, with regular services to Newcastle in 1 hour 9 minutes and Leeds in 1 hour 32 minutes.

Middlesbrough’s Durham-Tees Valley Airport is located 12 miles (19km) to the south west and Newcastle Airport is located 39 miles (62km) to the north. Both provide regular flights to domestic and European destinations.

ROLL OVER MAP FOR REGIONAL LOCATION 234-254 RETAILING IN LINTHORPE ROAD MIDDLESBROUGH MIDDLESBROUGH, TS1 3QP

Middlesbrough is one of the UK’s largest retail centres by catchment size with a primary catchment population of 550,000 people, ranking the town 27th of the PROMIS centres on this measure.

The total in-store comparison retail expenditure in the town is one of the highest of all the UK retail centres, estimated at £1.218 billion and ranking the town 29th on the 200 PMA CENRES. In terms of non-food spend, the town is in line with the GB average and food spend is 9% above average (Source: FSP/CES).

Middlesbrough provides an estimated 1.36m sq ft of town centre retail accommodation (PROMIS ranking 48th) in total and has an excellent provision of anchor Road providing a further 40,000 sq ft of affordable/value stores (PROMIS ranking 23rd). Anchor tenants within the units let to B & M Bargains, Boyes Store and others. town include Debenhams, Boots, Top Shop, New Look, River Island and USC. Middlesbrough has an active student population and has an enrolment of 28,000 full time The town’s core shopping facilities are located in the and part time students. Of this number 11,754 are either central section of Linthorpe Road to the north of the full time, under graduates, post graduates or international subject premises and include the Cleveland Centre students. The University’s principal courses are social providing approximately 400,000 sq ft of space mainly science and law, computing, science and engineering, for fashion retailers, the Hill Street Centre located at the arts and media, with further courses available at Teesside northern end of Linthorpe Road providing 237,000 sq University Business School. ft focussed on value retailers, Captain Cook’s Square (244,554 sq ft) providing big box space situated off the central section of Linthorpe Road and the Dundas shopping mall situated to the northern end of Linthorpe MIDDLESBROUGH INSTUTUTE OF MODERN ART

TEESIDE CENTRAL STUDENT ACCOMMODATION 234-254 LINTHORPE ROAD WOODLAND HALLS CLEVELAND STUDENT MIDDLESBROUGH, TS1 3QP CENTRE & ACCOMMODATION RETAILING CORE SITUATION

TEESIDE UNIVERSITY CAMPUS

KING EDWARD’S SQUARE STUDENT ACCOMMODATION

LINTHORPE HALL 248 STUDENT ACCOMMODATION THE PROPERTY

The property is located centrally on Linthorpe Road There has been significant development within the immediate between its junctions with Victoria Road and Waterloo surrounds. Linthorpe Hall was constructed in 2011 and Road, immediately adjoining Teesside University Campus. provides 248 state of the art student rooms. We are informed The Campus extends to 30 Buildings and Student Halls. this block has been fully let since completion. There are Immediately opposite the parade is Linthorpe Hall - currently 4 student halls, operated by the University, Teesside Middlesbrough’s most recently constructed student Central (386 rooms) and other managed University houses residential block. providing over 1,750 student bedrooms within a few hundred yards of the subject section of Linthorpe Road along with The street is very much an improving location and is now other private sector housing. home to a number of restaurants, food outlets and bars as well as other uses such as opticians, dental practices, The University has recently constructed a number of new insurance brokers, solicitors practices, The Sleep Centre and buildings within their campus immediately behind the subject developing fashion outlets driven to a large extent by the parade including a new medical centre and sports facility. density of student numbers. Site works have recently begun on construction of a £20M conference and lecture complex 100 yards to the north Recent arrivals on the street include Tesco, KFC, Costa east, alongside an £8M conversion of an existing university Coffee, Pizza Express and Wetherspoons t/a Swatter’s Carr. building to provide modern teaching space. 234-254 LINTHORPE ROAD DESCRIPTION MIDDLESBROUGH, TS1 3QP

The property comprises a two storey building of steel frame construction in a highly visible high street location, providing six retail units to the ground floor and live arena and events venue to the first floor. External elevations are formed by a combination of cavity brick and composite cladding, with retail display glazing to the ground floor parade and aluminium framed double glazed fenestration to the upper floor. The property is surmounted by a flat roof with a profiled metal covering. Parking for 32 vehicles is provided to the rear in marked bays, operated by a pay and display system.

Internally, the retail accommodation is specified to a good standard, with a combination of carpet and ceramic tile floor coverings over a solid concrete slab, painted plaster walls and mineral fibre suspended ceiling grid incorporating recessed fluorescent lighting. Heating provision forms part of the individual tenant’s fit out.

The upper floor leisure facility provides a fully fitted concert venue with two large bars, a commercial kitchen and server, artist dressing rooms and main auditorium, alongside cloakroom and welfare facilities. The venue can be subdivided to make the space more suitable for smaller events. To the rear of the property a large rooftop area has been earmarked for development into an external bar and terrace. Access to the upper floor is provided by a main internal stair from Linthorpe Road, with three escape stairs to the rear of the property. 234-254 LINTHORPE ROAD UPPER FLOOR INTERIOR MIDDLESBROUGH, TS1 3QP 234-254 LINTHORPE ROAD ACCOMMODATION MIDDLESBROUGH, TS1 3QP

Overall Unit Use ITZA Sq m (Sq ft)

234 Linthorpe Road Restaurant 916 551

236/238 Linthorpe Road Restaurant 1,922 1,226

240 Linthorpe Road Restaurant 835 552

242/244 Linthorpe Road Retail 1,947 1,189

246 Linthorpe Road Retail 806 526

Retail 5,166 2,459 248/254 Linthorpe Road Storage 4,894

234/254 Linthorpe Road (First Floor) Leisure / Concert Hall 12,854

Total 29,340

TENURE

The property is held on a full repairing and insuring ground lease for a term of 125 years from from 5th February 2013 at a rent of £21,750 p.a. subject to upward only rent review on the 25 March 2017 and every 10 years thereafter. The lease makes use of the ground floor as retail units and the first floor as concert/live venue (Use D2).

Reviews are to 18.0475% in market rent of the property let as a whole with vacant possession and with an unexpired lease term equal to the residue of the contractual term or 60 years whichever is the greatest. On the March 2017 review the unexpired lease term will be 121 years. The review clause specifically ignores investment value and goodwill. Other review, assumptions and disregards are in standard format. In our opinion, the assumption to value as a whole and with assumed, unexpired term equal to the residue of current lease and the specific disregards referred to above will be prohibitive and make future rental increases unlikely. This may offer a negotiated position with Middlesbrough Council in the future. 234-254 LINTHORPE ROAD TENANCIES MIDDLESBROUGH, TS1 3QP

The property is subject to 7 occupational leases to 6 tenants with additional income derived from pay and display car parking supervised by a 3rd party to the rear. A summary of the basic lease terms are provided below:-

Address Tenant Term Rent Review Comments

234 Linthorpe Road Yanyin Gaun (T/A Mandarin 10 years from £10,000 Per Annum 05/04/2018 Tenant break option on 3rd anniversary of the term on six months’ notice. Ground floor Chinese Restaurant) 05/04/2013

Yanyin Gaun (T/A Mandarin 20 years from 236/238 Linthorpe Road £23,000 Per Annum 21/05/2017 5 yearly rent reviews to the greater of MR or the increase in the retail price index. Chinese Restaurant) 21/05/2012

Abdul Qoodus Akrami 10 years from 3 yearly rent reviews to the greater of MR or an increase in the retail price index. Tenant break option on 3rd anniversary of the 240 Linthorpe Road £10,000 Per Annum 14/06/2017 (T/A Meza) 14/06/2012 term on six months’ notice.

Let on two co-terminus leases on the same terms. 5 yearly rent reviews to the greater of MR or an increase in the retail price Aram Husseini 15 years from 242/244 Linthorpe Road £22,000 Per Annum 14/06/2017 index. The leases contain a covenant whereby the landlord will not permit another off-licence use within the property, where (T/A Multi Culti) 14/06/2012 such use is the sole or major use.

20 years from 246 Linthorpe Road William Hill PLC £10,000 Per Annum 5 yearly upwards only rent reviews to OMR. Tenant’s break option on 5th, 10th and 15th anniversaries with 12 months’ notice. 05/10/2012

248/254 Linthorpe Road 10 years from Iceland Foods Limited £60,000 Per Annum 19/06/2019 Internally repairing and insuring. 5 yearly upwards only rent reviews to OMR. Ground Floor 19/06/2014

234/254 Linthorpe Road 15 years from Live music arena very experienced tenant in the music industry with a capex for fit out in excess of £2milion. TFM (Bauer Group) Loose Cannon Live Limited £52,000 Per Annum 24/09/2018 1st Floor 09/12/2014 have negotiated the naming rights for the arena. 5 yearly rent reviews to the greater of MR or an increase in the retail price index

Car park at rear £25,000 Per Annum

Total £212,000 Sub Total Per Annum

The leases are mainly drawn on full repairing and insuring terms by service charge. The Iceland lease is let on an internal repairing and insuring The average weighted unexpired lease term to expiry is 12.7 years and 11.1 years to break. Total occupational rent is £212,000 per annum, lease which is subject to specified works being undertaken by the current landlord. The liability for the roof over part of the Iceland unit (main equating to £190,250 per annum net of ground rent. external liability) is with the upper floor tenant. 234-254 COVENANT LINTHORPE ROAD INFORMATION MIDDLESBROUGH, TS1 3QP

William Hill and Iceland are two national retailers both providing strong recognisable covenants with Credit Safe ratings of “very low risk”. A summary of the latest accounts information on both companies are provided in the table below.

Tenant Year End Turnover TTP Shareholders Fund Credit Rating

William Hill 31/12/2013 £1.49Bn £1.02Bn 92/100

Iceland Foods Limited 28/03/2014 £2.69Bn £656.38M 87/100

Yanyin Gaun t/a Mandarin Restaurant has been in occupation of and events venue catering for up to 3,000 people. This makes 236/238 Linthorpe Road for the last 20 years and have recently it the largest entertainment venue in Middlesbrough. We are renewed their lease for a further 20 years from 5 May 2012. The advised the first 3 concerts held at the premises have been same tenants renewed their lease on 234 Linthorpe Road for a sell out events to Tiny Tempah, Little Mix and Babyshambles further 10 years from April 2013 with a break option in May 2016. (accompanied by Pete Docherty). Yanyin Gaun have recently rearranged their restaurant and put kitchen and staff areas into 234 Linthorpe Road expanding the The venue is associated with TFM radio station which is owned restaurant area. by the Bauer Group who also own Metro FM and Metro Arena in Newcastle. The venue is otherwise booked through the summer Abdul Qoodus Akrami operates a take away business from 240 for a number of Asian weddings which require large facilities not Linthorpe Road and Akram Husseini occupies 242/244 Linthorpe provided elsewhere. Road as a foreign food (multi culture) convenience supermarket. Both tenants have recently renewed their leases in 2012 for 10 All of the aforementioned tenants benefit from being situated in a years and 15 years respectively. high density residential area with a large student presence.

The 1st floor (234/254 Linthorpe Road) is let to Loose Cannon Live Limited, Middlesbrough’s leading music promotions company with a track record of attracting major artists to Teesside including Olly Murs, Snoop Dogg and UB40. We are advised that the upper floors have benefitted from an extensive fit out and conversion from a snooker hall to a D2 live arena 234-254 LINTHORPE ROAD FURTHER INFO MIDDLESBROUGH, TS1 3QP

RENTAL EPC COMMENTARY Information on EPCs can be provided on request.

Lettings on the parade devalue to a low level of between £18 - £18.50 per sq ft Zone A. The latest agreement to Iceland equates to approximately £20.50 per sq ft Zone A, applying £2 per sq ft to the store PROPOSAL (internal repairing allowance offset by adjustment for quantum). Applying this Zone A rate to all the retail Offers are sought for the long leasehold interest at units, £2 per sq ft to the Iceland store and assuming £2,000,000 (Two Million pounds), reflecting a net initial £25,000 is received from the Pay and Display car park yield on the current rent after deduction of ground rent and that the 1st floor is rack rented, this produces an of 9.00%. estimated rental value of £220,079 p.a. or net of ground The yield at reversion to Market Rent equates to 9.37% rent income of £198,329. with the potential for higher reversionary yield based on current Retail Price Index projections and the inclusion of RPI-linked reviews for a number of units.

The Office for Budget Responsibility currently forecast VAT five year average RPI growth of 3.02% per annum.

We anticipate that this matter will be treated as a transfer of a going concern. 234-254 LINTHORPE ROAD CONTACTS MIDDLESBROUGH, TS1 3QP

For futher information please contact the agents GVA.

Luke Symonds T 0191 269 0095 E [email protected]

Simon Beanland T 0191 269 0512 E [email protected]

gva.co.uk/ 7915

Misrepresentation Act 1967. Unfair Contract Terms Act 1977 The Property Misdescriptions Act 1991. These particulars are issued without any responsibility on the part of the agent and are not to be construed as containing any representation or fact upon which any person is entitled to rely. Neither the agent nor any person in their employ has any authority to make or give any representation or warranty whatsoever in relation to the property. December 2014. RB&Co 0161 833 0555. www.richardbarber.co.uk