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Riverway Retail Park Irvine | Ka12 8Ag

Riverway Retail Park Irvine | Ka12 8Ag

RIVERWAY PARK IRVINE | KA12 8AG

DOMINANT RETAIL WAREHOUSE PARK INVESTMENT RIVERWAY // IRVINE 2

CONTENTS

INVESTMENT SUMMARY 03

LOCATION 04

SOCIO-ECONOMIC PROFILE 05

SITUATION 06

RETAIL PROVISION 07

DESCRIPTION & SCHEME MANAGEMENT 08

TENANCIES 09

COVENANT INFORMATION 10

TENURE & ASSET MANAGEMENT 11

PLANNING, SERVICE CHARGE & ENVIRONMENTAL 12

EPC’S & VAT 13

PROPOSAL & CONTACTS 14

RIVERWAY RETAIL PARK REPRESENTS THE DOMINANT OUT OF OFFER IN IRVINE BY VIRTUE OF ITS POSITIONING, CRITICAL MASS AND TENANT LINE UP RIVERWAY RETAIL PARK // IRVINE 3

INVESTMENT SUMMARY POST CODE KA12 8AG GRID REFERENCE NS 31754 38414

• Irvine is located in North , , approximately 52 km (32 miles) south west of , 14 km (9 miles) west of and 24 km (15 miles) north of .

• Riverway Retail Park is situated to the south west of Irvine town centre, adjacent to the Rivergate Shopping Centre and the town’s train station.

• The subject property comprises a purpose built retail warehouse park, extending to 12,814 sq m (137,930 sq ft), configured in a west facing linear terrace with four Class 3 stand alone units arranged around forecourt parking for approximately 630 vehicles.

• The park provides well specified and configured floorspace with eaves heights comfortably able to accommodate mezzanine floors as demonstrated by those in a number of the units. Additionally the park has seen significant external works recently with a number of fascia rebrands, the phased resurfacing of the car park and improved landscaping.

• Let to 12 occupational tenants including M&S Foodhall, Sports Direct, Homebase, Currys, , Costa Coffee, KFC and Frankie & Benny’s. The scheme has a contracted current income of £1,759,369 per annum.

• The scheme provides an average weighted unexpired term of approximately 7 years. PROPOSAL • Riverway Retail Park benefits from a Retail Class 1 planning consent OFFERS ARE SOUGHT IN THE REGION OF £25,105,000 (TWENTY FIVE including food sales up to a maximum of 735 sq ft. MILLION ONE HUNDRED AND FIVE THOUSAND POUNDS) SUBJECT TO • Recent activity on the scheme includes lettings to Tapi and Costa Coffee, FORMAL MISSIVES AND EXCLUSIVE OF VAT, FOR THE FREEHOLD however there remains significant asset management opportunities providing the ability to drive short term and long term performance. INTEREST IN THIS PROPERTY. A PURCHASE AT THIS LEVEL WOULD REFLECT A NET INITIAL YIELD OF 7.50%, BASED ON PURCHASER’S • Multiple offers have been received for both vacant units and further COSTS OF 6.25% AND A DAY 1 INCOME OF £2,000,605 PA. information in relation to this interest is available on request. RIVERWAY RETAIL PARK // IRVINE 4

A9 A92 LOCATION A91 Buckhaven Irvine is a new town on the coast of the of Clyde in , M9 A82 A811 Alloa Stirling Scotland, approximately 52 km (32 miles) south west of Glasgow, 14 km (9 miles) west of Kilmarnock and 24 km (15 miles) north of Ayr. Grangemouth North Ayrshire boasts a population in the order of 134,000 people Alexandria Falkirk M9 of which it is estimated 75% live in Urban areas or ‘accessible small Dumbarton ’ (North Ayrshire CC 2014). Kirkintilloch EINR Located towards the southern boundary of North Ayrshire, Irvine M8 Airdrie M8 Bonnyrigg is well served by several arterial roads, namely the A78 which Livingston Johnstone LAW A71 effectively functions as the main orbital road around the east side Hamilton A78 Barrhead of Irvine providing access to , , and A737 Motherwell A702 Greenock in the north and Monkton, and Ayr in the south. East A7 M77 Carluke The A71 provides a direct link to the scheme from the west, access Kilbride A703 Larkhall A70 to Kilmarnock to the east, along with the A77 and M77 which then M74 connects to Glasgow further north, as well as the M74 and ultimately Kilmarnock A71 to the north east. IRVINE A72

Irvine Train Station is situated at the junction of New Street and A77 KM Riverway, opposite the subject property, and located on the main line A76 52 Prestwick between Stranraer and Glasgow. Fastest journey times into Glasgow Ayr SOUTH WEST OF GLASGOW Central station are around 30 minutes. A70

LOCAL INVESTMENT The Irvine Bay Regeneration Company was set up in 2006, one of the second generation of Scottish URCs. Irvine is one of the five KM towns in the area, along with Ardrossan, Saltcoats, and 24 Kilwinning. Major development projects in the Irvine area include the NORTH OF AYR redevelopment of , creating a residential area with the atmosphere of a Scottish village. Planning for a new golf course with a hotel and holiday resort is also well under way in the Marine Drive area, and the Riverside Business Park will be revitalised to attract new business into the area. The Bridgegate renovation project is now nearing completion (only the old Trinity church is left to complete). KM Additionally North Ayrshire Council renewed the main bridge over 14 the between 2007 and 2010 at a total cost in the WEST OF KILMARNOCK region of £2m. RIVERWAY RETAIL PARK // IRVINE 5

Dalry Dunlop

Kingsford SOCI0-ECONOMIC PROFILE WestWest Killbride Killbride Irvine boasts a residential population of around 33,698 people A737 (2011 Census) and a wider borough population in excess of 136,020 people. Drivetime catchment figures provided by CACI Ltd show a population of approximately 43,730 people within a 10 minute contour of the subject property and this rises to around 89,593 people with 15 minutes. M77 Whilst Kilmarnock and Ayr represent reasonably sized towns in their own A78 Kilwinning right, Irvine unquestionably draws on the smaller towns and villages in the surrounds, as a result of the critical mass of retail offer it provides. Ardrossan Stevenston Cunninghamheam Saltcoats A78 A77

IRVINE Springside KILARNK A71 A71 A71 Gatehead Gailes A76

Dundonald

A77 A78 Craigie Bogend Symington Loans

Troon

Fail This plan is published for convenience of identification only. Any site boundaries are indicative only and should be checked against title deeds. DRIVETIMES Monkton Tarbolton 10 MINUTE A77 IRVINE UNQUESTIONABLY DRAWS ON THE SMALLER 15 MINUTE TOWNS AND VILLAGES IN THE SURROUNDS RIVERWAY RETAIL PARK // IRVINE 6

SITUATION SAINSBURY’S Riverway Retail Park is situated immediately to the south of the Rivergate Shopping Centre, just to the west of Irvine High Street and the River Irvine, and opposite Irvine Train Station.

Riverway is the established retail pitch and is a branch road from the A737 which acts as the main north-south route on the western side of the town, linking from the roundabout junction with the STREET A78, around 0.5 km (0.3 miles) in the south, to the main road junction with the A78 close to in the north.

A13 Low Green Rd

Boyle St Jail Cl High St

West Rd Hill St RIVERWAY ROAD

New St

River Irvine

RIVERATE

River Irvine PPIN ENTRE

New St

IRVINE Victoria Cres RIVERGATE RIVERWAY SHOPPING CENTRE Riverway

RETAIL PARK Mckinlay Cres

LLARTN T Harbour St

Gottries Rd NEW STREET Harbour Rd Merryvale Rd

Scott Rd A71

This plan is published for convenience of identification only. Any site boundaries are indicative only and should be checked against title deeds. RIVERWAY RETAIL PARK // IRVINE 4 7 A737

A736

9

Low Green Rd Ballot Rd

Boyle St High St East Rd RETAIL PROVISION River Irvine West Rd

Irvine’s retail provision is centred around the subject property, Mill Rd the Rivergate Shopping Centre and large foodstores in Tesco, B7081 Asda and J Sainsbury’s, between the River Irvine and the towns railway station. We have summarised these assets below and they 2 Dr are identified on the adjacent aerial photo and provision map. River Irvine 7

New St NON FOOD L Victoria CresLA R T TOTAL GIA Whyte Ave ASSET POSTCODE TENANTS (INCL.) N (SQ FT) 1 Riverway T Home Bargains, M&S, Mckinlay Cres Riverway 1 KA12 8AG 137,930 Currys, Homebase, Harbour St Retail Park Sports Direct

Gottries Rd Rivergate Primark, , A737 2 KA12 8EJ 235,000 Shopping Centre Wilkos, New Look Harbour Rd A71 Scott Rd , Brantano, 3 Riverway Dev. KA12 8AY 26,000 Pets at Home 3 5 East Road Halfords, Argos, 4 KA12 0AF 15,000 Retail Park Domino’s Pizza 6 5 Lamont Drive KA12 8HD 21,954 Bed Shed 8 Lamont Dr

TOTAL 435,884 10

FOOD

TOTAL GIA ASSET POSTCODE COMMENTS (SQ FT)

6 Tesco Extra KA12 8AY 84,000 700 parking spaces

Shopping centre store. 7 Asda KA12 8EJ 66,000 1,100 parking spaces

8 Sainsbury’s KA12 8BH 60,000 Opened 2011 includes PFS

9 KA12 0AF 16,000

10 KA12 8EH 8,000

TOTAL 234,000 RIVERWAY RETAIL PARK // IRVINE 8

DESCRIPTION The subject property comprises a purpose built retail warehouse available from the northern boundary onto New Street. park, built in 1990, totalling approximately 12,814 sq m Segregated rear servicing facilities for the main terrace are (137,930 sq ft), arranged around forecourt parking for c. 630 vehicles, giving a ratio of 1:20.2 sq m (1:218 sq ft) available and accessed from New Street. within a 2.1 hectare (5.3 acre) site. The main west facing The units of the main terrace are of steel portal frame terrace comprises 10 units including the recently constructed with front elevations of brickwork and profiled infill unit (5C) for Costa Coffee. Additionally there are four metal cladding above. Internally the eaves heights stand alone Class 3 units (two of which offer drive-thru comfortably accommodate mezzanine floors as demonstrated facilities), three positioned along the western boundary of the site and one to the north. by that in the Homebase unit.

Main customer access is available from the roundabout The standalone Class 3 units on site are of single storey junction at the north western corner of the site and further on construction with elevations of brickwork and glazing and the western boundary from Riverway. There is also egress offer independently identified parking areas. SCHEME MANAGEMENT We would note the following management initiatives which have been implemented under the Service Charge Regime in the last 12-18 months;

• Phased Car Park Resurfacing (Phase 1 complete – RIVERWAY S/C budget in place for remaining elements).

• Landscape Improvements throughout the park.

• Complete replacement of CCTV system and increased site coverage.

IRVINE RIVERWAY

Site boundaries are indicative only and should be checked against title deeds. RIVERWAY RETAIL PARK // IRVINE 9

TENANCIES

The scheme is let in accordance with the tenancy schedule TRADING GIA TERM LEASE NEXT RR PASSING PASSING UNIT TENANT LEASE START COMMENTS FASCIA (SQ FT) (YEARS) EXPIRY REVIEW RENT (£PA) RENT (£PSF) adjacent and we have set out a brief summary of recent activity below. Marks & Spencer Fixed increase in September 2016 to £288,019 pa. 1 M&S Foodhall 15,000 15 18/09/06 17/09/21 18/09/16 £254,567 £16.97 Simply Foods Limited Guarantor: Marks and Spencer Plc. UNIT 1A (NEXT CLEARANCE) Next have exercised their break option as at 1A Next Group Plc Next Clearance 10,000 15 11/05/05 10/05/21 11/05/16 £150,000 £15.00 10/05/2016. Vendor will provide 2 year rent, rates The tenant has exercised their break option and the lease will and service charge guarantee from break date. terminate on the 11/05/2016. The vendor will provide a Vendor Vendor will provide 2 year rent, rates and service 2 year rent, rates and service charge guarantee from this date. 2 Vacant 10,046 2 - - - £160,736 £16.00 Guarantee charge guarantee.

Sportsdirect.com SportsDirect. 3 10,071 10 17/07/08 16/07/18 N/A £171,000 £16.98 Stated floor area in the lease of 10,071 sq ft at review. UNIT 2 (FORMER HARVEYS) Retail Limited com A number of offers have been received for this unit on the Tapi Carpets and 4 Tapi Carpets 10,051 10 15/10/15 14/10/25 15/10/20 £150,765 £15.00 Stated floor area in the lease of 10,051 sq ft at review. basis of the floor plate being split to create two units of Floors Limited c.5,000 sq ft each. Further information is available on Lease was extended (in 2013) from original 2015 request. The vendor will provide a two year rent, rates and 5 Carpetright Plc Carpetright 10,028 33 25/09/90 23/06/23 24/06/20 £150,420 £15.00 expiry to 2023. service charge guarantee.

5C Costa Limited Costa Coffee 1,732 10 02/11/15 01/11/25 02/11/20 £40,000 £23.09 Stated floor area in the lease of 1,732 sq ft at review. UNIT 4 (TAPI CARPETS) Includes Argos concession. Tenant has an option to The unit has recently been let and is now occupied by Tapi 6 Homebase Limited Homebase 37,375 25 23/10/98 22/10/23 23/10/18 £420,468 £11.25 extend the lease for a further 5 years upon giving 12 months written notice. Carpets on a new 10 year lease. To facilitate this letting the vendor undertook works to glaze the front of the unit and

7 DSG Retail Limited Currys 10,056 25 30/07/99 29/07/24 30/07/19 £135,675 £13.49 Tapi received 3 months rent free and 12 months at half rent as an incentive package. The vendor will make up any Home income shortfalls arising from the agreed rent free periods. 8 T J Morris Limited 10,081 24 29/11/99 22/10/23 29/11/19 £136,000 £13.49 Bargains

Planning achieved to change use from Class 1 to UNIT 5C (COSTA COFFEE) Vendor 9 Vacant 3,500 2 - - - £80,500 £23.00 Class 3 and extend to 4,000 sq ft. Vendor to offer Guarantee 2 year rent, rates and service charge guarantee. This unit was recently constructed for Costa Coffee who are now in occupation and trading. They received 12 months rent Kentucky Fried Chicken Five yearly reviews to 82.5% of OMV of the R1 KFC 3,290 31 10/10/99 11/10/30 21/11/19 £74,473 £22.63 free as their incentive package and the vendor will make up (Great Britain Limited) unit based on a floor area of 3,290 sq ft. any income shortfalls arising from the agreed rent free period. McDonald's Real R2 McDonald's 3,500 123 11/10/93 10/10/16 N/A £1 - Estate LLP UNIT R1 – KFC The Restaurant Frankie & TOB in 25/06/2023. Stated floor area in the lease R3 3,200 25 25/06/08 24/06/33 25/06/18 £76,000 £23.75 Group (UK) Limited Benny's of 3,200 sq ft at review. In October 2015, following settlement of the November 2014 rent review with an increase of £6,400 pa, a reversionary lease Substation Scottish Power UK Plc N/A N/A 60 16/05/90 16/05/60 - - - was put in place extending the term to October 2030. In conjunction with the lease variation the tenant undertook 137,930 £2,000,605 works to increase the unit floor plate from 2,561 sq ft to 3,290 sq ft at their own cost. RIVERWAY RETAIL PARK // IRVINE 10

TENANT YEAR TO DATE TURNOVER (000’S) PRE TAX PROFIT (000’S) NET WORTH (000’S) CREDITSAFE RATING COVENANT INFORMATION 30/03/13 £10,026,800,000 £564,300,000 £4,375,300,000 The table opposite sets out recent account information together with Marks & Spencer Plc 29/03/14 £10,309,700,000 £580,400,000 £4,383,400,000 100 Creditsafe ratings for the tenants and guarantors (where applicable). 28/03/15 £10,311,400,000 £600,000,000 £4,791,600,000

80% of the income is secured against covenants ranked with a ‘Very Good 31/03/12 £482,902,000 £54,585,000 £111,791,000 Marks & Spencer rating’, on an average weighted unexpired term of approximately 7 years. 30/03/13 £562,031,000 £67,508,000 £163,168,000 100 Simply Foods Ltd 29/03/14 £653,471,000 £75,101,000 £221,776,000

26/01/13 £212,300,000 £322,500,000 £1,747,900,000

Next Group Plc 25/01/14 £197,700,000 £53,000,000 £1,296,600,000 100

24/01/15 £202,200,000 £139,400,000 £772,700,000

28/04/13 £1,677,368,000 £178,631,000 £489,515,000 Sports.direct. 27/04/14 £1,864,930,000 £202,660,000 £665,649,000 100 com Retail Ltd 26/04/15 £2,074,126,000 £262,929,000 £872,400,000

27/04/13 £457,600,000 -£5,100,000 £4,500,000

Carpetright Plc 26/04/14 £447,700,000 -£7,200,000 £2,500,000 95

02/05/15 £469,800,000 £6,600,000 £3,400,000

02/03/13 £1,355,013,000 -£6,702,000 £423,231,000

Homebase Ltd 01/03/14 £1,415,829,000 -£20,221,000 £377,402,000 100

28/02/15 £1,408,807,000 £7,551,000 £379,666,000

30/04/13 £3,997,900,000 £62,300,000 £301,800,000

DSG Retail Ltd 30/04/14 £4,078,300,000 £94,100,000 £377,500,000 100

02/05/15 £4,314,000,000 £116,800,000 £395,900,000

30/06/13 £1,058,398,000 £110,856,000 £848,928,000

TJ Morris Ltd 30/06/14 £1,277,323,000 £124,759,000 £439,875,000 100

30/05/15 £1,472,432,000 £147,121,000 £547,987,000

02/12/12 £423,345,000 £39,137,000 £91,470,000 Kentucky Fried Chicken 01/12/13 £446,400,000 £40,112,000 £120,739,000 97 (Great Britain Limited) 30/11/14 £478,123,000 £47,323,000 £162,889,000

30/12/12 £416,107,000 £58,701,000 £73,097,000 The Restaurants 29/12/13 £446,787,000 £64,724,000 £85,813,000 98 Group (UK) Ltd 28/12/14 £483,722,000 £73,487,000 £98,199,000

01/03/12 £458,596,000 £62,624,000 £173,052,000

Costa Coffee Ltd 28/02/13 £552,959,000 £93,927,000 £243,951,000 100

27/02/14 £633,427,000 £100,449,000 £318,767,000

Tapi Carpets and Floors is a new specialist floor covering retailer aiming to attract a more affluent customer. The company is owned and founded by the son of Baron Harris of Peckham who founded Carpetright. There is no financial information available at this stage. RIVERWAY RETAIL PARK // IRVINE 11

TENURE The property is held heritable interest. This is the Scottish equivalent to English Freehold. ASSET MANAGEMENT OPPORTUNITIES UNIT 1A – NEXT CLEARANCE Re-letting of unit which benefits from immediate adjacency to M&S Simply Food.

UNIT 2 – FORMER HARVEYS Re-letting of unit with multiple offers on the basis of splitting the existing floor plate to create two smaller footprints of 5,000 sq ft each. Further information available on request.

UNIT 3 – SPORTS DIRECT Short to medium term regear discussion with the tenant in advance of the 2018 lease expiry, following introduction of other new occupiers to the park.

UNIT 6 – HOMEBASE Medium term discussion with occupier, following the current company acquisition being undertaken, to secure the store beyond the 2023 expiry. It now represents the sole DIY offer in the Ayrshire region following the recent assignment of the Kilmarnock store.

UNIT 7 – CURRYS DSG Retail have recently submitted an application for a Certificate of Lawfulness to allow an extension to their existing mezzanine. We understand this is in conjunction with a rebrand of their store to accommodate their new ‘3in1’ fascias concept for Currys, PC World and Carphone Warehouse in 2017. As such we believe there are very good prospects for a short to medium term lease regear in conjunction with this store investment.

UNIT 9 – FORMER BLOCKBUSTER Letting of this unit, either in its current format or following extension and implementation of change of planning use to allow Class 3. A number of offers have been received for the space and further information is available on request. RIVERWAY RETAIL PARK // IRVINE 12

BOTH M&S AND CARPETRIGHT HAVE PLANNING RECENTLY REBRANDED THEIR FASCIA’S The property has been developed in phases over time but principally benefits from a retail Class 1 planning consent with a restriction on food sales to approximately 735 sq ft. Units 5C, R1, R2 and R3 have Class 3 planning consents and unit 9 has recently been granted consent to allow a change of use from Class 1 to Class 3 and increase the floor area to 4,000 sq ft.

There are no restrictions regarding minimum unit sizes, except for units 7 and 8 which are subject to a minimum of 9,687 sq ft (900 sq m) as per the 1997 planning consent (N/01/97/0133).

Copies of the planning consents are available on request. SERVICE CHARGE The Service Charge budget for 2015/16 reflects £2.40 psf. This shows a c. 18% decrease on the 2014/2015 figure of £2.93 psf primarily due to a reduced allowance for the planned car park resurfacing works.

Full Service Charge information is available on request but we have set out below the historic cost psf figures.

2015/2016 2014/2015 2013/2014

£2.40 £2.93 £1.30 ENVIRONMENTAL Ramboll Environ undertook a Phase 1 Environmental Review in February 2016 and confirmed they consider the site to represent a low to moderate risk in relation to the potential for ground contamination. Whilst historical use of the site includes that as a rail yard, remedial actions were undertaken as part of the planning conditions on development and the Local Authority has identified the site as a low priority for further contaminated land assessment. As such, Ramboll Environ consider this would only be required were the site to be redeveloped from its current use.

A full copy of this report is available on request. RIVERWAY RETAIL PARK // IRVINE 13

EPC’S EPC’s have been produced for all units, with values ranging between C and G. Copies are available on request. VAT The property has been elected for VAT so will be payable. However it is anticipated the transaction will be treated as a TOGC.

HOMEBASE HAVE RECENTLY ASSIGNED THEIR STORE IN KILMARNOCK SO THEIR OUTLET AT IRVINE IS TODAY THEIR SOLE OFFER IN THE AYRSHIRE REGION PROPOSAL CONTACTS OFFERS ARE SOUGHT IN THE REGION OF £25,105,000 (TWENTY FIVE MILLION ONE HUNDRED AND FIVE THOUSAND POUNDS) SUBJECT TO JUSTIN HOULIHAN T: 020 7152 5670 FORMAL MISSIVES AND EXCLUSIVE OF VAT, FOR THE FREEHOLD E: [email protected] INTEREST IN THIS PROPERTY. A PURCHASE AT THIS LEVEL WOULD REFLECT A NET INITIAL YIELD OF 7.50%, BASED ON PURCHASER’S TAMSIN LAYTON COSTS OF 6.25% AND A DAY 1 INCOME OF £2,000,605 PA. T: 020 7152 5158 E: [email protected]

STEPHEN BIBBY T: 0131 226 8738 E: [email protected]

43/45 Portman Square , WIA 3BG WWW.CUSHMANWAKEFIELD.COM

Cushman & Wakefield LLP for themselves and for vendors or lessors of this property whose agents they are, give notice that: (1) The particulars are produced in good faith, are set out as a general guide only and do not constitute any part of a contract. (2) No person in the employment of the agents has any authority to make or give any representation or warranty whatever in relation to this property. (3) This property is offered subject to contract and, unless otherwise stated, all rents are quoted exclusive of VAT/GST. (4) Nothing in these particulars should be deemed to be a statement that the property is in good condition or that any services or facilities are in working order. (5) Unless otherwise stated, no investigations have been made regarding pollution or potential land, air or water contamination. Interested parties are advised to carry out their own investigations if required.

Designed and produced by THE GROUP www.completelygroup.com

Irvine // Riverway Retail Park // JN 13894.001 March 2016

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