Go Outdoors, Dudley Road, Scunthorpe DN16

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Go Outdoors, Dudley Road, Scunthorpe DN16 Freehold Retail Warehouse Investment Go Outdoors, Dudley Road, Scunthorpe DN16 1BA On behalf of Ambassador Holdings Limited (acting by Messrs NB Kahn & PS Bowers as joint Fixed Charge Receivers) New 15 year lease term, without breaks Secure Income - expanding retailer Low passing rent - new letting in 2013 £1,600,000, subject to contract Net initial yield 9.75% Location Accommodation Scunthorpe is the administrative centre of North Lincolnshire situated The property was measured by Plowman Craven in November 2011 approximately 306 km (190 miles) north of Central London, 72 km (45 who confirmed the following Gross Internal Areas; miles) north east of Sheffield, 80 km (50 miles) south east of Leeds and 48 km (30 miles) south west of Hull. The town benefits from good road communications being situated 8 km (5 miles) north of Junction 3 of the M180 Motorway which provides a direct link to the M62 Motorway and the national motorway network. In addition, Scunthorpe is connected to the national railway network with a fastest journey time to London Kings Cross of 2 hours 21 minutes. The property benefits from approximately 126 car parking spaces. Humberside International Airport is approximately 32 km (20 miles) to The measured survey report is available for assignment to a purchaser. the east and is a key national and international gateway, connecting 320,000 passengers to over 20 destinations each year. The airport is also home to the UK’s second largest heliport, serving the offshore industry in the North Sea. Site Situation We estimate the site area to be approximately 0.97 hectares (2.39 acres). An Environmental Desk Study undertaken by WSP in November 2011 The subject property is accessed via Dudley Road with the A18 dual concludes that “the site represents a low risk with respect to carriageway immediately to the south. Scunthorpe town centre is contaminated land liability issues” and “no further contaminated land approximately 3.2 km (2 miles) to the north west. Junction 4 of the M180 assessment work is considered necessary for the on-going current retail Motorway is approximately 5.6 km (3.5 miles) to the south east. The use of the site”. A copy of the report is available to download. Lakeside Retail Park is 0.8 km (0.5 miles) to the south east with occupiers including Premier Inn, Morrisons, McDonalds, Homebase, The environmental survey report is available for assignment to a PC World, Pets at Home, Halfords, Argos, ScS and Burger King. purchaser. Description Planning The property comprises a retail warehouse of steel portal framed The property has permission for “the sale and display of: building and construction with part brick, part profile steel clad elevations. Extensive DIY products, garden products and plants, pet and pet supplies, surface car parking is provided to the front of the property. In addition, furniture, carpets, floor coverings and household furnishings, electrical there is a service yard to the side. The property is being fitted out by and gas products, vehicle accessories and parts, bicycles and cycle the tenant to their usual corporate style. accessories, boating equipment, tents, camping, caravanning and outdoor equipment, outdoor insulated/protecting clothing and footwear and items ancillary thereto together with ancillary coffee shop and no other goods of any sort. No food or drink shall be sold at any time except for refreshments sold to be consumed on site in the café”. Logo added for illustration purposes Tenure The company reported exceptional items totalling £3,824,000. On 1st Freehold April 2011 the entire share capital of Go Outdoors Limited was acquired by Go Outdoors Topco Limited which is now considered the ultimate parent undertaking. This resulted in legal and professional costs of £2.2 million. During the year the company incurred one off costs of Tenancy £1.6 million following a strategic review of the supply chain, warehousing and distribution requirements which resulted in exiting The property is entirely let to Go Outdoors Limited on a full repairing the existing arrangement, finalising a new contract for warehousing and insuring lease for a term of 15 years from14th February 2013, and distribution and moving stock between locations. expiring on 13th February 2028. The current passing rent is £165,000 per annum (£52.97 per sq m / £4.92 per sq ft overall), exclusive of GO Outdoors is the UK's largest specialist retailer of camping VAT. equipment, tents, outdoor clothing and footwear. The company was first established in 1969 and from one store in Sheffield known as ‘CCC’, the store’s founder John Graham has now built a network of The lease provides for a three month rent free period ending 13th May 44 stores throughout the United Kingdom. Since the end of the financial 2013. The vendor will “top up” the rent from completion until the rent period the company has opened three new stores in Swansea, Chester commencement date. and Penrith and exchanged lease contracts for one new store in Poole. The retailer is also creating 150 more new jobs with the opening of The lease is subject to five yearly upwards only rent reviews to the new stores in Milton Keynes and Kidderminster in addition to the greater of the passing rent and the Open Market Value, capped at subject property. The number of employees in the last financial year 2.5% per annum compounded. has increased from under 1,200 to over 1,800. In accordance with a Concession letter dated 14th February 2013 for . the benefit of the tenant only, the tenant has been permitted to pay the rent monthly in advance rather than quarterly in advance. Therefore, Go Outdoors has made several new appointments to its executive a rent of £13,750 is payable on or before the first day of each month. team. In February this year the company announced it was appointing Chris Matthews, currently at Dixons Retail, as its new CEO. In May An incentive payment of £412,500 (equivalent to 2.5 years principal 2012 Jon Asbury joined the board from Halfords as Go Outdoors’ first rent net of VAT) was paid to Go Outdoors on completion of the lease. multi channel director. And in the same month, Chris Morgan joined In addition, a payment of up to £286,728.26 (plus VAT) is payable to from Tesco as new chief finance officer. In addition, Jeff Fagan joined the tenant upon completion of works currently being carried out by Go as new retail director from Mothercare and David Quinn joined from Outdoors during the course of their fit out; this relates to works of repair Tesco as commercial director. and dilapidations required following the end of the previous tenant’s occupation. This figure is held in escrow in the vendor’s solicitors’ client In April 2011 the 3i Group plc made an investment of for a account and will only be payable to the tenant upon completion of the minority stake in Go Outdoors and are working with the founder works, in accordance with the terms of the agreement. The tenant is entrepreneurs and management in further developing the company. required to complete the works before 13th August 2013. Payment of 3i is one of the world’s leading international investors, with over £11 the figure is triggered by completion of the works however if the works billion of assets under management focusing on private equity, are not completed by 13th August the vendor is only liable to pay for infrastructure and debt management. For further information visit the works completed to that date. www.gooutdoors.co.uk. Covenant Value Added Tax Go Outdoors is one of the few retailers which have been successfully expanding in recent years. The property has been elected for VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC). Go Outdoors Limited (Co. No.3513318) has reported the following figures: Investment Considerations Proposal Our client is seeking offers in the region of (One Million, Six 1. An opportunity to acquire a freehold retail warehouse investment; Hundred Thousand Pounds), subject to contract, reflecting a net initial 2. New 15 year lease term, without break options; yield of 3. The investment is let to a secure tenant and one of the few retailers who have been successfully expanding in recent years; 4. A purchase at the asking price will provide an investor with an Contact Information attractive net initial yield. 5. Low passing rent (£4.92 per sq ft) compared to other Go Outdoors Singer Vielle and retail warehouse rents in the North. For example: 94-96 Wigmore Street [email protected] London W1U 3RF Go Outdoors, New Street, Leeds – 59,384 sq ft retail warehouse let Tel: 020 7935 7200 [email protected] to Go Outdoors Ltd for a term of 15 years from February 2009 at a Fax: 020 7486 8511 passing rent of £340,000 per annum, equating to £7.36 per sq ft. www.singerviellesales.com [email protected] The property is subject to open A1 non food consent. Wickes, Pudsey Road, Pudsey – 35,435 sq ft retail warehouse let to Wickes Building Supplies Ltd for a term of 20 years from March 2009 Jones Lang LaSalle Nick McConnell at a passing rent of £425,220 per annum, equating to £12.00 per 30 Warwick Street [email protected] sq ft. The lease benefits from a fixed increase to £461,721 per annum London W1B 5HN Philip Thorn (£13.03 per sq ft) in March 2014. The property is subject to bulky Tel: 020 7493 4933 [email protected] goods consent.
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