London Road Retail Park Brochure

LONDON ROAD RETAIL PARK NEWBURY, RG14 2BP

SOUTH EAST SUPERMARKET ANCHORED RETAIL WAREHOUSE PARK FOR SALE SIGNIFICANT ASSET MANAGEMENT AND DEVELOPMENT OPPORTUNITIES LONDON ROAD RETAIL PARK, NEWBURY, RG14 2BP

INVESTMENT SUMMARY

• Newbury is a strong South East commuter town. • Significant opportunities to enhance value in the short term. • Newbury has an exceptionally affluent catchment population ranked seventh by • Value underpinned by potential alternative uses in the long term. PMA’s UK Affluence Indicator. • Our client is seeking offers in excess of £28,060,000 (TWENTY EIGHT MILLION • Open A1 planning consent, including food in part. AND SIXTY THOUSAND POUNDS), subject to contract and exclusive of VAT, for their freehold interest in the property. A purchase at this level would show an attractive • Modern retail warehouse park which is let to Tesco, B&Q, Dunelm, Carpetright initial yield of 7.27% net of purchaser’s costs of 6.8%. and Poundstretcher. This price can be broken down for the various elements of income as follows; • 69% of the income is secured against Tesco Stores Ltd and B&Q Plc. • Tesco Supermarket; £14.64 million 5.75% IY off a topped-up income of £900,000 pa. • Tesco income is subject to upward-only reviews linked to RPI capped at 3.5% pac. • Retail Warehouses; £13.17 million 9% IY. • Freehold. • Redevelopment site; £250,000.

2 OX G F AY OR WO OD DR D AD IVE R RO D DON LON OL D OXFORD S BAT T H ROAD A4

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A N DO R N LONDON ROAD RETAIL PARK, NEWBURY, RG14 2BP K R OA D W NDON ROAD A LO Y A A4 6 18 Enﬁeld 4 5 M1 W 17 4 TU E R S NPIKE M40 E ROAD T V 4 2 RN A G NO S E T 3 4 WEST A R A339 Didcot T R 2 A339 Y H Riv C E er W R K

E enne LOCATION O T 1 9 FT LAN t 0 O E 1 0 4 O B D Swindon Uxbridge D 16 Maidenhead Slough R LANE R IV NE iver 15 E BO Kenne Newbury is a strong commuter town located in the South East of England in the county 7 LONDON t 6 4 1 3 2 ALDI AD B Reading N RO ILL LANE 3 BO of West Berkshire. It is located in the Thames Valley 60 miles west of Central London, NDO M 4 NE LANE 14 HEATHROW LO NE 2

M4 R LA 1 A 14 13 Kingston BE 13

20 miles west of Reading, 26 miles south of Oxford and 16 miles north of Basingstoke. 12 10 upon Thames

1 A Staines Lidl 4 ROAD 11 Bracknell B3421 HAMBRIDGE

NEWBURY B D KINGS 342 E ROA A E T ROAD 1 AMBRIDG Pets at Home RAVEN RO D ET STRE H The town benefits from excellent communications. M3 11 Croydon L C MARK Sutton P ON A D 3 O R N K R

Devizes OA B Camberley Epsom D B NEWBURY RACECOURSE W

A 10 O

M25 9 A R A339 4 Woking A4 U

By road: The town is connected to the M4 (4 miles north) and M3 (12 miles south) T Y NEWBURY N 9 H D 7 A4 O RD A Farnborough N L O R motorways by the A339 and the A4 London Road runs east/west through the town. Victoria ND O A339 5 6 LO Y 8 M

Basingstoke Park L E A34 6 A Aldershot EET W STR N Redhill OUND ’S ROAD P QUEEN E Reigate S 7 Farnham Guildford T By rail: Newbury is a 40 minute journey to London Paddington station. It is also M23 A339 Andover 8 Riv Godalming er Ke connected to the national railway network via Reading station to which there are also nnet GATWICK 9 A343

G regular local services. M3 10 E R AN E Crawley West L Rive E E r Ken N ON B Berkshire B H O ne A 11 Museum N M Haslemere N R By air: Heathrow and Southampton airports are 40 miles from Newbury and both are 9 E O L E A W Corn B3 A D Salisbury Winchester Horsham NE N 10 Exchange LL LA E 3 T I 4 B 4 O M O 3 easily accessible by road. 2 N 11 A W 1 E N

Petersﬁeld L

A Wickes R

O 12 N A Haywards E D Newbury is also famous for its racecourse. 13

Heath B3421 14 Eastleigh B3 4 AD 4 KING 2 RO S 1 E 4 ROAD MBRIDG 2 3 5 HA

1 Southampton 1 3 G

4 R 8 3 E Sainsbury’s A E

BO NEWBURY RACECOURSE N 9 3 M27 10 H A339 A 11 Chichester U M Ringwood 5 N R 12 Hove Brighton D 12 Littlehampton NEWBURY O AR A Newbury Racecourse D A339 Y Worthing N Gosport L Portsmouth A E

W N Bognor Regis E T Cowes N’S ROAD O QUEE W

R O

A D

G R E E N H A M

R O A D K R BAN OAD RYS ANE BU NKS L MO

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3 LONDON ROAD RETAIL PARK, NEWBURY, RG14 2BP

SITUATION NEWBURY FOOD STORE PROVISION

OX London Road Retail Park is situated on a very prominent site on the southern side of the G F AY OR WO OD DR D AD IVE R RO A4 London Road approximately half a mile west of its junction with the A339 and the D DON LON OL D OXFORD S BAT T H ROAD A4 town centre.

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A N DO R N K R NEWBURY BUSINESS PARK Immediately opposite the scheme on the northern side of London Road is a BP petrol OA D W NDON ROAD A LO filling station and an M&S Simply Food unit. These units are surrounded by Newbury Y A A4 6 18 Enﬁeld 4 5 M1 W 17 4 Business Park which is a large office development. TU E R S NPIKE M40 E ROAD T V 4 2 RN A G NO S E T 3 4 WEST A R A339 Didcot T R 2 A339 Y H R C E W R K

E O T 1 Further retail warehousing and car showroom9 units are located to the west of the FT LAN 0 O E 1 0 4 O B D Swindon Uxbridge D 16 Maidenhead Slough R LANE LONDON ROAD RETAIL PARKR property. IV NE 15 E BO K 7 LONDON 6 4 1 3 2 ALDI AD B Reading N RO ILL LANE 3 BO NDO M 4 NE LANE 14 HEATHROW LO NE 2

M4 R LA 1 A 14 13 Kingston BE 13

12 10 upon Thames

1 A Staines L 4 ROAD 11 Bracknell B3421 HAMBRIDGE

B D KING 342 E ROA DEMOGRAPHICS T S ROAD 1 MBRIDG A E A P H RAVEN RO D ET STRE H M3 11 Croydon L C MARK Sutton P ON A D 3 O R N K R

Devizes OA B Camberley Epsom D B NEWBURY RACECOURSE W

10 O Newbury has a captive, relatively young and extremely affluent population. R M25 9 A A339 4 Woking A4 U

Y T NEWBURY N 9 H D 7 A4 O RD A Farnborough N L O R ND O A339 5 6 LO Y 8 M

Basingstoke Oxford ResearchP Consultants calculate that there are 76,274 people within a 15-minute L E A34 6 A Aldershot EET W STR N Redhill OUND ’S ROAD P QUEEN E Reigate S 7 Farnham Guildford drive of London Road Retail Park. Newbury is also located within the District of West T Andover M23 A339 8 Riv GREENHAM ROAD RETAIL PARK Godalming Berkshire which has a population of 156,000. This is forecast to riseer Ke to 166,355 by 2036. nnet GATWICK 9 A343

G M3 10 E R AN E Crawley According toW PROMIS, Newbury’s catchment Lpopulation is ranked 7th in terms of their Rive E E r Ken N ON B B B H O ne A 11 M N M Haslemere Affluence Indicator. This is confirmed by the fact thatE the number of people in the N R 9 O L E A W B3 A D Salisbury Winchester Horsham NE N 10 E LL LA E 3 T I 4 B 4 O highest Social Grade AB withinM a 15-minute drive of London RoadO Retail Park is 44% 3 2 N 11 A W 1 E N

Petersﬁeld L

A W higher than the Great Britain average. R O 12 N A Haywards E D 13

Heath B3421 14 Eastleigh B3 4 AD 4 KING 2 RO S 1 E 4 Levels of home and car ownership RO AwithinD a 15-minute driveMBRIDG of London Road Retail Park 2 3 5 HA

1 Southampton 1 are significantly higher than the Great Britain average. G 3

4 R 8 3 E S A E

BO NEWBURY RACECOURSE N 9 3 M27 10 H A339 A 11 Chichester U M Ringwood 5 The proportion of the population that is economicallyN active within a 15-minute drive of R 12 Hove Brighton D 12 Littlehampton NEWBURY O AR A N R D London Road RetailA339 Park is also significantlyY higher than the Great Britain average. Worthing N Gosport L Portsmouth A E

W N Bognor Regis E T Cowes EN’S ROAD O The 15-minute drive time populationQUE has a total annual spend on comparison goods W N

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of £294 million. This annual spend is very significantly overweight in every category A D of goods. The minimum over-spend is 10% above average for Sports and Camping G R E E N Equipment and 90% above average for Leisure Activities and overall is 22% above H A NEWBURY RETAIL PARK M

R average. O A D K R BAN OAD RYS ANE BU c NKS L MO

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4 LONDON ROAD RETAIL PARK, NEWBURY, RG14 2BP

DESCRIPTION

London Road Retail Park is an attractive purpose-built retail warehouse park originally developed by Chartwell Land Plc. As currently developed it comprises three distinct elements;

• At the western end of the site is a 34,302 sq ft Tesco supermarket and a 5,975 sq ft retail warehouse unit let to Poundstretcher who are currently trading as Bargain Buys. These units are accessed from both directions off London Road. Car parking is regularly laid out to the front of these units and both have dedicated secure service yards. This has a site area of 3.1 acres.

• At the eastern end of the site are three further retail warehouse units. B&Q occupy a solus unit of 36,936 sq ft which has an external garden y Retail Warehouses y Tesco and Bargain Buys y Redevelopment Site centre. Dunelm and Carpetright occupy units of 24,311 sq ft and 10,635 sq ft respectively which are laid out as a two-unit terrace opposite the B&Q. The Dunelm unit has a ¾ cover mezzanine floor installed which has consent for retail sales. All of these units can be accessed from both directions of London Road from a roundabout junction which also connects with Newbury Business Park. Car parking is regularly laid out to the front of these units and all are serviced from dedicated yards. This has a site area of 5.95 acres. Customer Service Centres • In the middle of the site, in between the two retail warehouse elements Redevelopment is a public house of 5,398 sq ft, which is closed. This site offers a Site redevelopment opportunity subject to the relevant planning consents being achieved. This has a site area of 0.75 acres. The existing retail warehousing and supermarket units, which total 112,159 sq ft, have customer parking for 419 cars showing a good overall ratio of 1:268 sq ft. A new cycle path has been built along London Road to the bell-mouth of the Tesco access road and past the B&Q unit. A section along the centre of the property has not been constructed as the Local Authority require a small parcel of land from the current freehold ownership to be transferred to them in order for them to be able to do so. This does not materially affect the value of the site. A transfer of a small parcel of land along the site boundary could be agreed with the Local Authority as part of any successful application to redevelop the former pub site. SITE

The overall site comprises an area of 9.8 acres (3.97 hectares).

6 LONDON ROAD RETAIL PARK, NEWBURY, RG14 2BP

TENANCIES TENURE

The property currently produces an income of £2,178,374 per annum (subject to a 6 Freehold. month vendor top-up of the supermarket income) and is let in accordance with the tenancy schedule below;

Area Break Unit Tenant Rent (£ PA) Rent (£ PSF) Least Start Next Rent Review Lease Expiry Comment (Sq Ft) Option Rent Review: 5-Yearly in line with RPI, capped at 3.5% pac. Based on current RPI projections we estimate the rent to be going to c.£900,000 at the RR in Supermarket 34,302 Tesco Stores Ltd £900,000 £26.24 25/12/2009 25/12/2019 24/12/2034 n/a December 2019. Lease includes the right for Tesco customers to park in the Poundstretcher carpark. Vendor to top-up the rent to the Dec 19 review. Unit 1 36,936 B&Q Plc £611,736 £16.56 11/06/2012 n/a 10/06/2022 n/a Rent paid monthly Rent Review: To the lower of OMRV or passing rent multiplied by 1.13141. Rent Review: Upwards / Downwards. Dunelm (Soft Unit 2 A/B 24,311 £360,000 £15.00 10/10/2011 10/10/2021 09/10/2026 n/a S/C cap: £19,200pa until 09-Oct-16, increasing thereafter annually in line Furnishings) Limited with RPI. Area at review is 24000 Sq Ft. Unit 2C 10,635 Carpetright Plc £184,623 £17.36 30/11/2013 n/a 29/11/2023 n/a Rent paid monthly Catherin Freemantle Rent paid monthly Burger Van 0 £12,500 N/A 14/11/2015 n/a 13/11/2020 Mutual t/a Alfresco Cuisine Break Option: Rolling, subject to provision of 3 months' notice

Tenant holding over. Unit 5 5,975 Poundstretcher Ltd £109,515 £18.33 30/11/1998 - 29/11/2018 n/a Refitted and trading as Bargain Buys. Lease includes rights for customers to park in the Tesco carpark.

Development 0 Vacant £0 N/A - - - - Offer has been received from a tenant for a drive-thru unit. Site

Total 112,159 £2,178,374

Overall the property has a current WAULT of 9 years. and the level of rent remained unchanged. The only change as a consequence of the CVA was a shift to monthly rent payment. The Tesco lease is reviewed five yearly upwards-only in line with RPI capped at 3.5% per annum compound. Our client will top-up the rent of the Tesco unit until the rent review The 2016 Dunelm rent review was documented as nil increase as was the 2018 due on 25th December 2019 to a rent reflecting £900,000 per annum. The lease will then Carpetright rent review. have the benefit of two further RPI linked increases. Poundstretcher are currently holding over on their lease of Unit 5, however, they The Carpetright unit was ranked in the highest Category A in their CVA in 2018 meaning comprehensively refitted the store at the end of 2018 and rebranded it as Bargain Buys. that the store trades very well for them and that they intend to continue trading from it They have recently confirmed their wish to take a new lease.

7 LONDON ROAD RETAIL PARK, NEWBURY, RG14 2BP

COVENANT

The scheme is currently let to five national multiple retailers and as such the income is well secured. Currently 69% of the income is secured against B&Q Plc and Tesco Stores Ltd. and 86% of the income is secured against covenants with a 5A1 DB rating.

Sales Profit/Loss Latest Tenant Turnover Before Taxes D&B Rating Accounts (000’s) (000’s)

Tesco Stores Limited 24/02/18 £41,367,000 £1,660,000 5A1

B&Q Plc 31/01/18 £3,386,000 £205,000 5A1

Dunelm (Soft 30/06/18 £1,050,100 £91,500 5 1 Furnishings) Limited

Carpetright Plc 29/04/17 £443,800 (£70,500) N4

Poundstretcher Ltd 31/03/18 £387,000 £2,000 4A1

“86% of the income is secured against 5A1 covenants”

8 LONDON ROAD RETAIL PARK, NEWBURY, RG14 2BP

PLANNING ASSET MANAGEMENT AND The retail park benefits from an excellent flexible planning consent as follows; REDEVELOPMENT OPPORTUNITIES

• The existing retail warehouse development benefits from Open A1 retail consent, The investment offers significant opportunities to enhance value which include; with food consent for the Tesco and Poundstretcher units. • Re-gearing the lease of Unit 1 with B&Q. B&Q trade well from this store and in 2018 • There is no restriction against the sub division of the existing retail warehouse units achieved a board approval to regear their lease, however, a regear was not concluded and there is unutilised consent for further mezzanine flooring. at that time.

• The Tesco supermarket and Poundstretcher benefit from an A1 retail consent which • A competitive offer has been received for the development of a drive-thru fast food includes the sale of food. unit on the former pub site. Achieve a consent to allow the development, complete a • The development site currently has consent for use as a public house. pre-letting and then develop out the site to generate a significant profit. A pre-application advice letter from West Berkshire Council is generally supportive • As part of a redevelopment of the pub site it could be possible, subject to achieving of the redevelopment of this site for A1, A3 and A5 Drive Thru uses, subject to the relevant consents, to connect all elements of the park to both enhance flow planning and confirms that these uses would be in accordance with the various through the scheme and improve tenant trading. Development Plan Policies. • Achieve a lease renewal with Poundstretcher for Unit 5. A report has been prepared by NJL Consulting summarising the current planning position of the retail park and their view of achieving a satisfactory consent for the development • Alternatively, an offer has been received from a gym operator for Unit 5 at a site. significantly higher rent than that currently passing. Achieve a planning consent for a change of use to D2 and complete this letting.

• In the longer term the scheme’s value is underpinned by it’s potential for alternative use which in our opinion include conversion to residential, care home, hotel and leisure. For example, an office on Newbury Business Park is currently the subject of a conversion to residential use under Permitted Development rights. PURCHASE PRICE

Our client is seeking offers in excess of £28,060,000 (TWENTY EIGHT MILLION AND SIXTY THOUSAND POUNDS), subject to contract and exclusive of VAT, for their freehold interest in the property. A purchase at this level would show an attractive initial yield of 7.27% net of purchaser’s costs of 6.8%. This price can be broken down for the various elements of income as follows; • Tesco Supermarket; £14.64 million 5.75% IY off a topped-up income of £900,000 pa. • Retail Warehouses; £13.17 million 9% IY. • Redevelopment site; £250,000.

9 FURTHER INFORMATION

Should you require any further information on the property, access to the data site or wish to arrange an inspection, please do not hesitate to contact:

Hamish Whiteman Nick Staunton [email protected] [email protected]

Staunton Whiteman LLP 9-10 Savile Row London W1S 3PF

020 7287 2228

MISREPRESENTATION ACT 1967 AND DECLARATION Messrs Staunton Whiteman LLP for themselves and for the vendors of this property whose agents they are, give notice that: i) the particulars are set out as a general outline only for the guidance of intending purchasers, and do not constitute, nor constitute part of, an offer or contract: ii) all descriptions, dimensions, references to condition and necessary permission for use and occupation and other details are given in good faith and are believed to be correct, but any intending purchasers should not rely on them as statements or representations of fact and must satisfy themselves by inspection or otherwise as to the correctness of each of them: iii) no person in the employment of Staunton Whiteman LLP has any authority to make or give any representation or warranty in relation to this property.

Brochure by: Adrian Gates Design 07710 316 991