LONG LET INDEX LINKED INDUSTRIAL INVESTMENT OPPORTUNITY KINGSBRIDGE CENTRE | STURROCK WAY | PETERBOROUGH | PE3 8TZ INVESTMENT SUMMARY • Peterborough is one of the UK’s fastest growing cities and an important regional centre for commerce and industry. • The city benefits fromstrong transport links via the A1(M) north- south trunk road which provides direct access to the M25 (J23), the national motorway network and the east coast commercial ports of Felixstowe and Harwich. • The Kingsbridge Centre is strategically located next to Junction 17 of the A47 which in turn provides direct access to the A1(M) and the A14. • The property comprises a modern terrace of five industrial units totalling 160,510 sq ft (14,911.87 sq m). • Multi let to two tenants including E-Leather Ltd and Finning (UK) Ltd generating a rental income of £740,854.40 per annum (average passing rent of £4.62 per sq ft). • The property benefits from an attractiveAWULT of 15 years to expiry and 9.4 years to break. • E-Leather have recently signed a reversionary lease until March 2036 (tenant break option March 2029) and Finning have removed their break demonstrating commitment to the building and location. • E-Leather’s lease benefits from5 yearly index linked RPI rent reviews subject to a collar and cap of 1.5% - 4% (compounded). • The site extends to 4.01 hectares (9.92 acres) providing a low site coverage of 34%. • Freehold. • Both tenants have a Dun & Bradstreet rating of 5A1 representing a ‘minimum risk’ of business failure. • The property is used by E-Leather as their global HQ and main distribution facility. • The shortage of industrial stock continues to put upwards pressure on both rents and incentives. Prime headline rents in Peterborough currently stand at £6.50 per sq ft. • Offers sought in excess of £11,575,000 (Eleven Million Five Hundred and Seventy Five Thousand pounds) subject to contract and exclusive of VAT. This reflects anattractive net initial yield of 6.00%, after deduction of purchase costs of 6.71%, equating to a low capital value of £72 per sq ft. • Guaranteed reversionary yield rising to a minimum of 6.37% and a maximum of 7.04% in Oct 2025 based on 1.5% collar and 4.0% cap (compounded) at next E-Leather review.
KINGSBRIDGE CENTRE | STURROCK WAY | PETERBOROUGH | PE3 8TZ LOCATION 50 MILES Peterborough is an established Cathedral City in Cambridgeshire strategically Glasgow Edinburgh located 80 miles (128.7 km) north of London, 77 miles (123.9 km) east of Birmingham and 32 miles (51.5 km) north of Cambridge. 100 MILES
The city has been recognised as one of the fastest growing cities in the UK by 150 MILES population. Peterborough’s rise in prominence follows continued investment, 200 MILES underpinned by the city’s ambitions and new initiatives to support economic Newcastle growth. Its diverse economy ranging from innovative small businesses to large global headquarters has enabled it to establish itself as an important regional 250 MILES centre for commerce and industry. M6
ROAD M1 The city benefits from strong transport links via the A1(M) north-south trunk road which provides direct access to the M25 (J23) and the national motorway Leeds network, as well as Cambridge and the Midlands via the A14, and the east coast ports of Harwich and Felixstowe. The A1(M) serves as the principal connection between the south-east and the north-east of England. Over the last decade Manchester there has been an estimated expenditure of £180 million on Peterborough’s major road schemes to improve the city’s connectivity.
M6 M1 RAIL M54 Peterborough serves as a major interchange on the East Coast Main Line, which M42 provides high-speed inter-city train services between London, Yorkshire, the Birmingham PETERBOROUGH North East, and Scotland. The fastest journey time to London King’s Cross is 45 minutes and Cambridge is 50 minutes. Cambridge
M5 M40 M1 Felixstowe AIR & Harwich Oxford Ports The East Midlands Airport is 57.5 miles (92.5 km) to the west, Luton Airport is 60 miles (95.5 km) to the south west and Stansted Airport is 65 miles (104.6 km) to Cardi London M4 the south east with a direct train service. Bristol M3 M25 SEA The city is strategically positioned between the east coast commercial ports of Felixstowe and Harwich and in close proximity to one of their principal markets, the ‘Golden Triangle’ conurbation of Oxford, Cambridge and London.
LONG LET INDEX LINKED INDUSTRIAL INVESTMENT OPPORTUNITY W E R R I N G T O N P A R K W A Y
A 1 5 P A S TO N P AR K W AY SITUATION L I N C MARHOLM O L N KWAY R AR B O P R The property is situated at the junction of Bretton Way and Sturrock A E E D K T O T S O A47 N Way in close proximity to Junction 17 of the A47 which in turn provides SUBJECT PROPERTY W A Y direct access to the A1, approximately 8 miles (12.8 km) to the west.
G R E S L E Y
UPTON W The surrounding area is an established commercial location comprising A
Y To Birmingham & A14/M1/M6/M42 a mix of industrial, car showroom, retail warehouse and supermarket use classes.
A47 Y A
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K R A P E PETERBOROUGH Y K A O W Nearby occupiers include Morrison, Marks & Spencer, B&Q, Travis S 7 K A47 4 R A A CITY CENTRE P
S N Perkins, Europol and Chipper Logistics. I Peterborough K R E P K N A R F 9 3 1 1 A
A1 N E N E P A R K W A Y
ALWALTON TON PARKWAY 9 FLET A113
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Y CHESTERTON WA RK PA TON LET 39 F A11
A1(M) To London & Cambridge A605
KINGSBRIDGE CENTRE | STURROCK WAY | PETERBOROUGH | PE3 8TZ A47
AY Brotherhood Y W LE Retail Park ES GR
STU A47 RR OC K W SUBJECT PROPERTY AY
AY W A1(M) N TO ET BR Pear Tree Business Centre
LONG LET INDEX LINKED INDUSTRIAL INVESTMENT OPPORTUNITY DESCRIPTION The Kingsbridge Centre comprises a terrace of five industrial units totalling 160,510 sq ft (14,911.87 sq m) (GIA). The buildings are of steel portal frame construction beneath a pitched steel clad roof with part profile metal clad/part brick elevations.
The units benefit from the following institutional specification:
• 10 level access electronically operated loading doors (2 per unit) • Eaves height of 8.5 metres • Rear loading yard with c. 57 metre depth • Two storey ancillary office accommodation • Upgraded power supply on Units B, C and D.
The property is critical to E-Leather and used as their global
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9 6 Tank 1 7 M Unit Description Tenant Sq Ft Sq M P 2 0 .2 5 Chy The Kingsbridge Centre
Chy A Warehouse Finning (UK) Ltd 22,024 2,046.10
F F Tank Tank 2 4
1 6
2 1,2,5 Ancillary Office Finning (UK) Ltd 9,822 912.50 5 IQRA Academy
15.5m
1 B, C, D, E Warehouse E-Leather Ltd 116,917 10,861.96 Tank
9 2 9 3,4 Ancillary Office E-Leather Ltd 11,747 1,091.33
8 Total 160,510 14,911.87
B R
E MP 0.25
3 3 T 14.7m C T y O c l e N P E W a ESS t l h S A u b Y S ta
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1 Posts The property is held freehold. Shelter AY W Post K 1 15.9m OC 7 RR LB TU Shelter S S M
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W 8 7 2 KINGSBRIDGEOrdnance Survey © Crown Copyright 2018 CENTRE. All rights reserved. Licence number 1 0 0022432| STURROCK. Plotted Scale - 1:2740 WAY | PETERBOROUGH | PE3 8TZ TENANCY DETAILS The property is fully let to two tenants in accordance with the tenancy schedule below generating a total rental income of £740,854.40 per annum. The property benefits from an AWULT of 15 years to expiry and 9.4 years to break.
Area Area Lease Next Rent Lease Break Rent Rent Unit Tenant Comments Sq Ft Sq M Start Review Expiry Date £p.a. £psf
Finning have removed their break on 27/10/2020 in return A Incorporating Finning (UK) Ltd 31,846 2,958.59 01/01/2017 01/01/2022 31/12/2026 - £145,000.00 £4.55 for 4.5 months rent free (to Offices 1, 2 & 5 be topped up by the vendor). Outside of the act.
Lease ends if/when Unit A Car Parking Finning (UK) Ltd - - 18/10/2017 - 31/12/2026 - £4,000.00 lease ends. 8 car spaces. Outside of the act.
Reversionary lease commences on 28/10/2020 and rent will increase to £591,854.40 pa from current passing rent of £525,425 pa (vendor to top B, C, D, E up to £591,854.40 pa).The 28/10/2025 Incorporating E-Leather Ltd 128,664 11,953.28 28/10/2005 30/03/2036 31/03/2029 £591,854.40 £4.60 lease is subject to a Schedule 28/10/2030 Offices 3 & 4 of Condition. Tenant granted rent free period between 28/10/2020 to 14/05/2021. Rent reviews linked to RPI C&C 1.5%-4% (compounded). Inside the act.
Total 160,510 14,911.87 £740,854.40
SERVICE CHARGE ENERGY PERFORMANCE CERTIFICATE The service charge budget for the year ending 31st March 2020 is estimated at The property has an EPC rating ranging between 45 (Band B) and 68 (Band C) £237,010 per annum equating to £1.48 per sq ft. Further details are available upon however new ones are being procured. A copy of the EPC’s are available on the request. Lewis Ellis website.
VAT DATA ROOM The property is elected for VAT and it is proposed that the sale will be treated as a There is a dataroom for the property with key tenancy information, title documents Transfer of Going Concern (TOGC). and the EPC. Access to it can be obtained via the current sales page on the Lewis Ellis website: www.lewisellis.co.uk
LONG LET INDEX LINKED INDUSTRIAL INVESTMENT OPPORTUNITY E-LEATHER LTD E-Leather was established in the UK in 1995 and is now a globally recognised, award winning environmentally friendly materials technology company, specialising in high performance engineered leather, exporting products to over 40 countries with an established blue chip global customer base. Their materials are used across a broad range of industries including rail, airline, automotive, marine, interiors and footwear. Partnerships with leading global brands include Nike, American Airlines, Emirates, Singapore Airlines, KLM and Arriva.
E-Leather continues to receive widespread recognition with recent awards such as: • The Sunday Times International Track 200 for mid-size private British companies with the fastest growing international sales. • The Global Cleantech 100 for private clean technology innovation companies. • Winner of the Made in Central and East England Manufacturer of the Year award. • The Tech Tour Growth 50, a group of Europe’s most promising tech scale-up companies.
The company’s strong market position has continued to grow, although revenue of £22.4m was lower than in 2017 due to the timing of certain large projects, with new customers and markets being developed. The pre tax loss in 2018 reflects the company’s increased levels of investment in developing new technologies, products FINNING (UK) LTD and markets. Finning was established in 1933 and is the world’s largest distributor of Caterpillar products and support services. Finning employs over 12,000 people world-wide and During the year E-Leather successfully secured further equity investment of £40m operates in three geographies, with the head office in Vancouver, Canada. from new and existing investors, in addition to a long term debt facility of £25m. The funding will be used to invest in a state of the art 230,000 sq ft facility (also Finning have recently removed their break option and closed other warehouses in in Peterborough) to meet demand from a broad base of international industries, Peterborough to bring everything under one roof, therefore committing them to the providing both increased manufacturing capacity along with the new process and subject property in the medium-long term. technology capabilities. This second warehouse will service a new contract with Nike to introduce an innovative super material to the sporting footwear brand. Finning (UK) Ltd has a Dun & Bradstreet rating of 5A1 representing a ‘minimum risk’ of business failure. The company recorded the following accounts over the last 3 E-Leather Ltd has a Dun & Bradstreet rating of 5A1 representing a ‘minimum risk’ of years: business failure. The company recorded the following accounts over the last 3 years:
Finning (UK) Ltd 31 Dec 2017 31 Dec 2016 31 Dec 2015 E-Leather Ltd 30 Apr 2018 30 Apr 2017 30 Apr 2016 (000’s) (000’s) (000’s) Sales Turnover 22,431,674 29,434,657 18,739,484 Sales Turnover 563,182 489,496 543,282 Profit/(Loss) before Taxes (4,672,991) 2,324,148 (288,127) Profit/(Loss) before Taxes 18,154 (7,856) (5,582) Tangible Net Worth 46,604,313 12,398,144 9,542,612 Tangible Net Worth 126,211 105,921 138,271 Net Current Assets 32,399,250 9,816,225 9,416,322 Net Current Assets (Liabilities) 83,886 90,348 116,856 (Liabilities)
KINGSBRIDGE CENTRE | STURROCK WAY | PETERBOROUGH | PE3 8TZ PETERBOROUGH OCCUPATIONAL MARKET Recent industrial occupational evidence of note includes:
Location Date Tenant Area (sq ft) Rent (psf) Unit B, Finmere Park, Orton Southgate Under Offer Confidential 81,591 £5.50 Cygnet Park, Peterborough April 2019 Stapleton’s Tyre Services 181,875 £4.95 Orton 130, Orton Southgate Feb 2019 Perkins Engines 129,099 £5.25 2 The Links, Orton Southgate June 2018 Sweet Ideas 18,592 £6.19 225K Roxhill Gateway Dec 2017 E-Leather 225,000 £6.00 135K Roxhill Gateway Dec 2017 Coloplast 135,000 £5.50 Barnark House Aug 2017 Ideal Shopping Direct 48,818 (9,300 sq ft mezz) £5.90 Kingston 189 June 2017 Solocup 189,000 £5.25 Midas Centre, Orton Southgate March 2017 Advanced Handling 47,050 £4.85
INVESTMENT MARKET COMMENTARY Demand for industrial assets remains very strong with investors attracted to the core property fundamentals of location, quality of stock, length of income and covenant. Currently, the supply/demand imbalance favours landlords and provides excellent future rental growth prospects, particularly with the lack of development experienced in recent years. Prime and good quality secondary stock remains in short supply which has led to competitive bidding, a trend which is expected to continue. Furthermore, long income index linked properties are highly sought after as institutional investors target defensive stock. Listed below are some recent transactions showing evidence of current pricing levels:
Location Date Tenant Area (sq ft) Term Certain Price Yield (NIY) Cap Val (psf) Cygnet Park, Peterborough April 2019 Stapleton’s Tyre Services 181,975 20.0 £15.90m 5.25% £87 Kingston Gateway, Milton Keynes Jan 2019 Culina & Macfarlane 178,773 9.0 £25.3m 4.53% £142 Chalker Way, Banbury Dec 2018 Hello Fresh 235,580 7.5 £26.65m 4.99% £112 Revolution Park, Chorley Dec 2018 GA Pet Foods 185,191 10.0 £20.35m 4.65% £110 Brackmills Industrial Estate, Northampton Sept 2018 Uniserve 192,288 5.0 £19.4m 5.25% £101 London Medway Commercial Park, Rochester Aug 2018 Sicame UK 64,055 10.0 £8.35m 5.25% £130 Eastman Way, Hemel Hempstead Jun 2018 66 Books 41,292 10.0 £17.1m 5.15% £92 Crown Packaging, Leicester Mar 2018 Crown Packaging 185,494 10.0 £17.1m 5.20% £92
LONG LET INDEX LINKED INDUSTRIAL INVESTMENT OPPORTUNITY PROPOSAL FURTHER INFORMATION We are seeking offers in excess of £11,575,000 (Eleven Million Five Should you require further information or wish to view the property, please contact either: Hundred and Seventy Five Thousand Pounds) subject to contract and exclusive of VAT. Simon Lewis David Kos Fred Daeche-Marshall Tel: 020 7493 3330 Tel: 020 7493 3330 Tel: 020 7493 3330 This reflects anattractive net initial yield of 6.00%, after deduction Mob: 07831 527 960 Mob: 07709 813 267 Mob: 07785 741 700 of the usual purchaser’s costs of 6.71%, equating to a low capital Email: [email protected] Email: [email protected] Email: [email protected] value of £72 per sq ft.
Guaranteed reversionary yield rising to a minimum of 6.37% and a maximum of 7.04% in Oct 2025 based on 1.5% collar and 4.0% cap (compounded) at next E-Leather review.
Lewis Ellis LLP for themselves or nominees or lessors of this property whose agents they give notice that: (1) the particulars are set out as a general outline only for the guidance of the intending purchasers or lessees, and do not constitute part of an offer or contract; (2) all descriptions, dimensions, references to condition and necessary permissions for use and occupation, and other details are given in good faith and are believed to be correct, but any intending purchasers or tenants should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them; (3) no person in the employment of Lewis Ellis LLP has any authority to make or give any representation or warranty whatever in relation to the property. Designed and Produced by Creativeworld. Tel: 01282 858200. May 2019.