43 CONEY STREET & 2 SPURRIERGATE | YORK TROPHY RETAIL INVESTMENT IN ONE OF THE UK’S MOST SOUGHT AFTER RETAIL CENTRES 43 CONEY STREET & 2 SPURRIERGATE | YORK

INVESTMENT SUMMARY

The City of York is the administrative and cultural capital of North Yorkshire and benefits from an affluent primary catchment of 488,000 persons. York is one of the UK’s most popular tourist destinations attracting over 6.8 million visitors a year and contributing an estimated £608 million towards the local economy. York’s 2017 retail expenditure totalled £1.643 billion and is forecast to grow at 6.3% pa over the coming five years, significantly above the national average of 2.4%. An extremely prominent and substantial retail premises situated in a 100% prime position on Coney Street, the long established prime retail thoroughfare. Exceptionally rare 39,242 sq ft store with an impressive 23.75 metre frontage. Let to the undoubted, 5A1 covenant of Boots UK Limited on a 15 year Full Repairing and Insuring Lease from 13th February 2008 (4.40 years unexpired). Freehold site totalling 0.44 acres and offering significant long-term development potential.

We have been instructed to seek offers in excess of £13,550,000 (Thirteen Million, Five Hundred & Fifty Thousand Pounds) subject to contract and exclusive of VAT. After the deduction of standard purchaser’s costs of 6.72%, this would reflect an attractive Net Initial Yield of 6.50%. NEWCASTLE UPON TYNE

LOCATION

The City of York was founded by the Romans in AD71 and is M6 the administrative and cultural capital of North Yorkshire. The A1(M) historic walled city is situated at the confluence of the River MIDDLESBROUGH Ouse and River Foss, 21 miles east of Harrogate, 25 miles northeast of Leeds and 210 miles north of London. York has long benefited from excellent transport connections, since becoming a northern hub of the UK’s railway network in the 19th Century.

SCARBOROUGH ROAD - The city’s ring road (via A64) provides a quick dual carriageway link to the A1(M) at Junction 44 and ultimately the national motorway network some 14 miles to the southwest. LANCASTER A1(M)

YORK RAIL - York Station is situated on the East M6 Coast Mainline and provides direct services to all of the major northern cities including Leeds LEEDS (23 mins), Newcastle (56 mins), Manchester BRADFORD HULL (1 hr 19 mins), Edinburgh (2 hrs 25 mins) and M65 M62 Glasgow (3 hrs 39 mins). London Kings Cross is just 1 hr 50 mins away, also via a direct service. M62

M1 M180 M18 MANCHESTER AIR - By air, York is served by Leeds Bradford International Airport some 31 miles to the west A1(M) LIVERPOOL M62 giving access to over 75 destinations. SHEFFIELD

M56

LINCOLN

M6 M1

STOKEONTRENT TROPHY RETAIL INVESTMENT NOTTINGHAM IN ONE OF THE UK’S MOST SOUGHT AFTER RETAIL CENTRES DERBY

LEICESTER WOLVERHAMPTON

BIRMINGHAM

COVENTRY 43 CONEY STREET & 2 SPURRIERGATE | YORK

DEMOGRAPHICS

York boasts a primary catchment of 488,000 persons, of which 57% are categorised within the most affluent ABC1 social groups. Total retail expenditure was estimated at £1.643 billion in 2017 and is forecast to grow at 6.3% per annum between 2017 and 2022, significantly above the Promis average of 2.4% (PMA) and ranking 5th by this measure. York has been at the centre of major political events in England for much of the past 2,000 years and boasts an exceptional history, which drives tourism. It is internationally renowned for its historic architecture and abundance of tourist attractions, such as: York Minster, The Castle Museum and the National Railway Museum. These help make York one of the UK’s most popular tourist destinations attracting over 6.8 million visitors a year and contributing an estimated £608 million towards the local economy (Visit York, 2016). The city is also home to a significant student population with University of York and York St John University accommodating over 22,000 students. The high tourism levels and additional student population are a significant boost to the retail in the city.

488,000 57% PERSONS CATEGORISED WITHIN THE WITHIN THE MOST PRIMARY AFFLUENT ABC1 CATCHMENT SOCIAL GROUPS £1.643 billion 6.3% per annum RETAIL FORECAST EXPENDITURE GROWTH OF RETAIL IN 2017 EXPENDITURE BETWEEN 2017 AND 2022 RETAILING IN YORK

York city centre offers approximately 1.49 million sq ft of retail floorspace, which is considered constrained for a city of its stature. A significant amount of this floorspace is arranged in historic and often listed buildings, creating a unique and desirable shopping environment, but restricting tenants to compromised space. Large format stores, such as the subject property, are therefore a rarity and can command premium rental levels. Nevertheless, the city ranks 16th and 17th on the PMA Fashion and Retail Score respectively, evidencing strong tenant demand despite the lack of modern retail accommodation. Retailing in York is concentrated to the east of the River Ouse, on a network of pedestrianised streets. Prime pitch is considered as the pedestrianised Coney Street and Spurriergate, home to a number of top multinational retailers, such as: Zara, H&M, Next, Ernest Jones, Mango, Office and JD Sports. The city has just one small shopping centre, the 160,000 sq ft Coppergate Centre. The scheme is anchored by Fenwicks, Primark, Topman/Topshop and the city’s main car park but does not compete with the exceptional high street offer.

SITUATION

The property is situated in a 100% prime position on the west side of pedestrianised Coney Street, at its junction with Market Street. This Coney Street frontage with views up Market Street makes it one of the most prominent stores on the street, lying adjacent to WH Smith to the North and Beaverbrooks Jewellers to the South. Nearby retailers in include: H&M, Zara, TK Maxx, Holland & Barrett and Fat Face.

TROPHY RETAIL INVESTMENT IN ONE OF THE UK’S MOST SOUGHT AFTER RETAIL CENTRES 43 CONEY STREET & 2 SPURRIERGATE | YORK DESCRIPTION

The property provides an extremely prominent and substantial retail premises, which offers an impressive 23.75 metre (77ft 11ins) frontage. The 39,242 sq ft store is principally arranged over basement and ground floor, with the first and second floors providing a small amount of office space and potential to extend (STPP). The tenant trades from the large, well-configured ground floor and we consider it to be the best large format store in the city centre. It has been extensively fitted-out in accordance with Boots’ corporate style and includes over 10 beauty concessions at the entrance, as well as an opticians and pharmacy counter to the rear. Our client’s ownership includes a passageway to the north of the property, adjoining 41 Coney Street (WH Smith). This makes the property one of the few stores on Coney Street with rear servicing, which enters the property at basement level. We have measured the property in accordance with RICS Property Measurement 2015 and conclude a Gross Internal Area (GIA) of 39,242 sq ft, arranged as follows:

FLOOR AREA (sq ft) AREA (sq m) Ground 16,575 1,539.91 Basement 16,375 1,521.27 First Floor 5,348 496.88 Second Floor 944 87.73 Gross Internal Area 39,242 3,645.79

DIMENSIONS FEET METRES Gross Frontage 77 ft 11 ins 23.75m Net Frontage 74 ft 2 ins 22.60m Shop Depth (max) 206 ft 8 ins 62.98m Internal Width (max) 92 ft 3 ins 28.10m

We understand that the property is not listed but does sit within the Central Historic Core Conservation Area.

TROPHY RETAIL INVESTMENT IN ONE OF THE UK’S MOST SOUGHT AFTER RETAIL CENTRES 43 CONEY STREET & 2 SPURRIERGATE | YORK

York is one of the UK’s most TENURE popular tourist destinations attracting over 6.8 million The property is held freehold. visitors a year TENANCY

The property is let to Boots UK Limited on a 15 year Full Repairing and Insuring Lease from 13th February 2008 (4.40 years unexpired), subject to an upwards only rent review on 13th February 2018 which remains outstanding. The rent passing is £940,000 per annum. Boots acquired the store in 2008, upsizing from 48 Coney Street opposite (now TK Maxx). Their relocation is in line with Boots’ strategy for 15,000-20,000 sq ft floorplates in regional centres and we consider the unit extremely well suited to their requirements. Furthermore, the tenant has obtained a pharmaceutical licence at the premises, which should ensure their long-term commitment to the location. Under a licence dated 10th October 1978, the owners of WH Smith, 41 Coney Street have the right to air and light from 43 Coney Street to nine of its windows and two ventilator grills, subject to an annual payment of £10. The total rental income is therefore £940,010 per annum.

COVENANT

BOOTS UK LIMITED Boots is the UK’s leading pharmacy-led health and beauty retailer, with over 2,500 stores in UK and 90% of the UK population within a 10 minute drive from one of its stores. Boots is classified in the UK as a “top ten” retailer based on data to include sales turnover, sales area, number of stores and average store size.

FYE FYE FYE D&B 31/08/2017 31/08/2016 31/08/2015 Rating (000’s) (000’s) (000’s) Turnover £6,837,000 £6,876,000 £9,198,000 Profit / Loss Before Tax £498,000 £523,000 £542,000 5A1 Tangible Net Worth £752,000 £150,000 £367,000 ESTIMATED RENTAL VALUE

The passing rent of £940,000 per annum reflects £23.95 per sq ft. As there are few stores of this size and quality in the city, we have considered rental evidence from comparable retail centres:

TOWN OCCUPIER TRANS TRANS DATE GIA NEW RENT RATE PSF COMMENTS Open Market 20,931 Leeds JD Sports Apr-18 £825,000 £39.42 15 year lease with 6 months rent free. Letting (NIA) 15 year lease with tenant break at year 10. No incentive. Brighton Boots Regear May-17 71,935 £1,300,000 £18.07 Large store and quantum needs to be considered. Southampton H&M Lease Renewal Apr-16 32,868 £1,125,000 £34.23 15 year lease with tenant break at year 7. Newcastle JD Sports Upsize Jan-16 30,041 £997,000 £33.19 JD upsized into adjoining HMV. Guildford Primark Rent Review Dec-15 30,433 £767,000 £24.00 Arbitrator’s award. 29% increase. Bluewater Boots Regear Jan-15 44,642 £2,455,310 £55.00 Milton Keynes Boots Lease Renewal Jul-14 68,129 £1,500,000 £21.50 15 year lease with tenant break at year 10. 25% increase.

DEVELOPMENT POTENTIAL

At 0.44 acres, a freehold site of this size is an extremely rare commodity in the city. We consider the site to currently be underdeveloped with the majority of the building over basement and ground floor only. We anticipate that the SECOND FLOOR purchaser could significantly increase the massing (subject to gaining the necessary consents) and build a further two levels, in line with the height of FIRST FLOOR adjoining buildings and the subject property’s existing frontage. The rear of the unit offers excellent views over the River Ouse and the additional first/second floor accommodation could suit a variety of uses, including: additional retail, residential, hotel and leisure.

Click HERE for an aerial image. GROUND FLOOR

TROPHY RETAIL INVESTMENT IN ONE OF THE UK’S MOST SOUGHT AFTER RETAIL CENTRES EPC The property has an EPC rating of D91.

VAT The property is elected for VAT and it is proposed that the sale will be treated as a Transfer of a Going Concern (TOGC).

PROPOSAL We have been instructed to seek offers in excess of £13,550,000 (Thirteen Million, Five Hundred and Fifty Thousand Pounds), subject to contract and exclusive of VAT. After the deduction of standard purchaser’s costs of 6.72%, this would reflect an attractive Net Initial Yield of 6.50%.

CONTACT For further information or to arrange an inspection of the property, please contact:

SAM WATERWORTH T 020 3909 6821 M 07810 657 744 [email protected]

CHARLIE BARKE T 020 7861 1233 M 07793 808 027 [email protected]

REBECCA FARNSWORTH T 0113 297 2420 M 07776 342 315 [email protected]

IMPORTANT NOTICE: 1. Particulars: These particulars are not an offer or contract, nor part of one. You should not rely on statements by Knight Frank LLP in the particulars or by word of mouth or in writing (“information”) as being factually accurate about the property, its condition or its value. Neither Knight Frank LLP nor any joint agent has any authority to make any representations about the property, and accordingly any information given is entirely without responsibility on the part of the agents, seller(s) or lessor(s). 2. Photos etc: The photographs show only certain parts of the property as they appeared at the time they were taken. Areas, measurements and distances given are approximate only. 3. Regulations etc: Any reference to alterations to, or use of, any part of the property does not mean that any necessary planning, building regulations or other consent has been obtained. A buyer or lessee must find out by inspection or in other ways that these matters have been properly dealt with and that all information is correct. 4. VAT: The VAT position relating to the property may change without notice. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London W1U 8AN, where you may look at a list of members’ names. September 2018. Designed and produced by Creativeworld. Tel: 01282 858200.