Prime Investment Opportunity
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PRIME INVESTMENT OPPORTUNITY BAE SYSTEMS SMALL ARMS AMMUNITIONS FACILITY RADWAY GREEN, CREWE, CHESHIRE, CW2 5PJ gva.co.uk/7914 PRIME INVESTMENT OPPORTUNITY BAE SYSTEMS SMALL ARMS AMMUNITIONS FACILITY RADWAY GREEN, CREWE, CHESHIRE, CW2 5PJ BAE SYSTEMS SMALL ARMS AMMUNITIONS FACILITY PRIME INVESTMENT OPPORTUNITY EXECUTIVE SUMMARY • Crewe is a major logistics and industrial location within Cheshire. • Radway Green is situated within 1.5 miles of junction 16 of the M6 motorway, 3 miles east of Crewe. • The site has been used as a small arms ammunition facility for over 75 years. • BAE have operated the site since 1987 and still own over 100 acres of additional land surrounding the subject property used for a variety of uses including a firing range. • The subject property is a state of the art manufacturing and distribution facility built by BAE in consultation with the Ministry of Defence, completed in 2011 at a total cost in the order of £83,000,000. • Let to BAE Systems plc on a lease expiring 1 October 2036 (over 22 years unexpired). • Current rent is £2,892,853 per annum (October 2014) which rises annually based upon 2% fixed increases throughout the lease. • BAE Systems plc are a FTSE 100 company with a market capitalisation of £13.4bn. • BAE Systems plc are a world leader in small arms ammunition. They supply over 80% of general munitions to UK armed forces, having a long term agreement under the MASS partnership with the MoD. • Offers in excess of £49,700,000 (Forty Nine Million Seven Hundred Thousand Pounds) which reflects a net initial yield of 5.5% after purchasers costs of 5.8%. BAE SYSTEMS SMALL ARMS AMMUNITIONS FACILITY BACKGROUND IMPORTANCE OF RADWAY GREEN HISTORY Radway Green has been synonymous with small arms production for almost 75 years. Developed in 1940 to create a Royal Ordnance Factory, where at its height it employed on site over 15,000 people producing during war time 13,000,000 rounds of ammunition per week. BAE Systems plc bought Royal Ordnance in 1987 acquiring most of the factories that made is wide ranging from small arms and medium calibre ammunition, mortar bombs, tank explosives and ammunition for the British Armed Forces. There are three sites in the UK at ammunition, artillery and naval gun shells. Glascoed, South Wales, Birtley in County Durham and the subject property, Radway Green, Crewe in Cheshire. BAE Systems have teamed up with the Ministry of Defence to be a world leader in producing this type of product. The MASS partnering agreement is seen as a major benefit In 2008 the UK Ministry of Defence entered “a Munitions Acquisition Supply Solution to both providing certainty on costs and revenues, but also enabling the parties to work (MASS)” with BAE Systems initially for 15 years to supply over 80% of “general munitions” together creating better performing and safer munitions going forwards. used by UK armed forces for both training and frontline operations. The set of munitions RADWAY GREEN TIMELINE 1940 1940-1945 1945-1948 1948-1955 1955-1960 In January, construction work Further expansion gave Radway After the war, the workforce was In 1948, Radway Green switched By the mid 1950s, the old 20mm began on the four main workshops Green the capacity for complete reduced to around 1,500 people back to the manufacture of Hispano ammunition for the of Radway Green, one of the 44 manufacture of Small Arms and a period of diversification took ammunition for the Korean War RAF was being replaced by the Royal Ordinance Factories in Ammunition. 15,000 people were place. Brass strip was produced effort. In 1953, the combined new 30mm ADEN ammunition. operation during the employed, working 7 days/weeks for industry and manufacture production rate averaged 4.5 Production built up to an average Second World. on 3 shifts. of electric and gas cookers million rounds per week. of around 30,000 per week and commenced. continued at that level through to the late 1980s. PRIME INVESTMENT OPPORTUNITY THE FUTURE As part of the MASS Agreement, BAE Systems have created the new facility at Radway Green which our clients are looking to dispose of, being a state of the art facility developed at a total cost in the order of £83,000,000. The new facility has improved production growth by over 300% with the facility supplying 1,000,000 rounds of ammunition a day. Whilst the initial agreement was for 15 years we believe this is a long term partnership which will see the use of Radway Green as a munitions facility for the foreseeable future; it has already been in this use for almost 75 years. 1960’s 1970’s 1980’s 1990’s 2000’s In addition to Small Arms In the mid 1970s, another new product family Introduction of 5.56mm Closure of RO Nottingham, The 2000s brought great change, starting Ammunition, a number of was introduced, namely 30mm RARDEN into service brought RO Blackburn and the in 2002 with the closure of the foundry other components were Ammunition, used on the Warrior Infantry another calibre to Radway foundry at RO Birtley and rolling mill. The signing of the MASS manufactured. These Fighting Vehicle. Green. LAW spotting brought missile and fuze contract with UK MoD in 2008 signalled included explosively formed ammunition was produced components, brass discs a new beginning for Radway Green as parts for the 105mm Light The cat ridge case was the largest case to match the LAW and more Medium Calibre a Centre of Excellence for Small Arms Gun, coin banks for the that the factory had ever produced. The weapon system. case and projectiles. Ammunition. Ground-breaking for the Royal Mint in preparation new facility was opened by HRH The Duke new facility took place on 22nd March for decimalisation, jerrycans, of Edinburgh on 30th March 1979. On 2010. 2011 marked the handover of links and ammunition boxes. completion, the facility was the largest and the new Radway Green facility to BAE At the peak of production, most modern of its kind in Europe. Systems. The facility ensures continued 15,000 81mm Bomb Tails per supply of Small Arms Ammunition to the week were manufactured. front line troops, with a total capacity of 320 million rounds per year. 14 13 A587 A59 12 M55 A583 32 A671 3 1 4 M6 11 A59 10 A6 M65 9 A583 A666 8 Blackpool 31 7 A584 Preston 6 Blackburn A646 30 5 A53 A59 29 A646 29 4 Halifax 1 3 A56 A582 28 M65 A565 A644 8 Southport A58 Huddersfield M6 A666 1 M66 M61 M62 A629 BAE SYSTEMS SMALL ARMS AMMUNITIONS FACILITY Bolton A58 21 27 2 20 3 Ormskirk 6 A58 19 M58 Wigan 5 Oldham 4 3 4 19 5 26 3 17 20 16 21 A576 22 1 25 A627 7 M6 A580 24 12 M57 1 3 A6010 23 A628 6 11 23 CREWE 4 St Helens 10 M62 Manchester 24 3 3 22 102 11 A6 10 6 25 A5058 M62 21A A34 1 9 5 27 5 6 7 1 A56 4 2 MACRO LOCATION & OVERVIEW 2 21 3 1 Liverpool A5300 M60 3 Warrington M56 5 20 8 A561 A56 7 6 A6 9 LLANDUDNO 4 Liverpool Manchester John Lennon 10 Airport Crewe is the major town in the Borough of Crewe and Nantwich in the countyRhyl of Cheshire. The A557 11 M53 Airport A34 A523 COLWYN BAY River Mersey 12 19 5 6 M6 town’s historical roots lie with the railway industry and latterly automotive manufacturing.Rhuddlan 7 8 A533 A623 A55 A55 A55 Hollywell 9 A537 M56 A556 Crewe is both a mainline railway junction and formerly the home of aA548 major railway works, The 14 A537 St. Asaph A548 10 A49 11 A537 Grand Junction Railway Company. Today’s major Crewe A4occupiers73 include Bombardier Transport,A5026 Flint A548 15 Northwich Macclesfield A6 A525 A41 A548 A5117 1 A5119 A556 Bentley Motors Limited (which is now part of Volkswagen AG) and Europe’s largest oat mill,A54 A54 A34 12 A533 Mornflake Oats. 18 A544 A494 Chester A51 A54 Denbigh A49 A513 Middlewich A523 A53 Despite the demise of heavy industry across the economy as a whole, Crewe has successfullyA525 A55 Congleton maintained a balance of industrial and service occupiers. The successful development of Crewe A541 17 A494 A41 A50 A51 A34 Business Park has attracted a mix of occupiers such as Phones 4U, Tesco, Fujitsu and DEFRA. A530 A534 M6 Crewe A527 A534 Crewe has also become home to a satellite campus of Manchester Metropolitan University A525which A534 A53 16 A494 Nantwich A500 has significantly increased the skills base in the town. The South Cheshire College has also moved A500 Wrexham A41 A49 its entire campus to Crewe creating extensive new facilities. A520 A51 A34 Stoke A525 on-Trent S 15 A Whitchurch N D A51 B A C H A34 A50 R A520 D A53 S TH ALSAGER TRAIN STATION D A Stone O A519 R ALS AGER E A50 W A5013 E A518 R A51 C A BAE SYSTEMS U Oswetry A34 D L A41 A519 E Y 14 Stafford B5 A518 R 077 O B B5405 A515 Burton Upon Trent U T A T Stafford E RT D O N LANE Newport 8 A513 A518 7 0 5 M6 B Shrewsbury 8 7 0 M 5 A5 B < ??15 MINS 6 A449 A M54 D D U TO CREWE TO CREWE A A D O O L R R E M42 N N Y Y E E M6 (Toll) R R E E A41 R R O O G G A A Y Y A442 D D A A W W D D Wolverhampton M6 A A A R 500 R A458 A49 A454 A41 A500 J16 A458 Birmingham M6 A442 A456 M42 M5 A38 Coventry Kidderminster A435 A4177 PRIME INVESTMENT OPPORTUNITY A46 A456 M40 A435 A449 DEMOGRAPHICS The Borough of Crewe and Nantwich has a local population in excess of 115,000 persons with the local economy underpinned by manufacturing and distribution sector employment, which together account for in excess of 45% of employment, in comparison to 38.29% averaged throughout the UK.