BIFFA POLYMERS

WES BUILDING, PLASTICS ROAD, WILTON, REDCAR, TS10 4RG

FOR SALE Secure long income industrial investment opportunity with annual RPI linked rent review BIFFA POLYMERS

WES BUILDING, PLASTICS ROAD, WILTON, REDCAR, TS10 4RG

INVESTMENT SUMMARY

• Let to Biffa Waste Services on a 15-year unbroken lease expiring 31 July 2035. (14.25 years unexpired).

• Biffa Waste Services have a D&B rating of 5A 1 with shareholder’s funds in excess of £500m.

• The lease is subject to annual rent reviews in accordance with RPI with a collar and cap of 2 & 4%.

• 109,688 sq ft industrial facility.

• Located on the Wilton International site on Teesside, one of the largest key manufacturing locations in the UK at circa 2,000 acres and home to a number of international companies.

• Teesside is set to benefit from freeport status.

• Current rent passing of £300,000 per annum reflecting a low overall rent of £2.74 per sq ft.

• Seeking offers in excess of £4,650,000.

• Virtual Freehold.

• A purchase at this level will reflect a 6.00% Net Initial Yield assuming standard purchasers’ costs of 7.54%.

• Low overall capital value of £42.40 per sq ft. A 8 D

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A PROPERTY R T C C The subject property is located at Wilton International, Teesside, a L N A O R T G E A 2 4 N E R C S 0 conurbation surrounding Middlesbrough and the River Tees in North East E 1 4 E R W O D A 7 A A 1 D G O A R England. Wilton is situated to the north east of Middlesbrough some R A K F S N I S U S H L two miles from Teesport, the national trade hub. R A T P N O E A N ORTH RD 66 D N N 4 S 7 AD 66 O 6 1 R Access is served via the A174, which links directly to the A19, A1 and RO A 6 O 66 CKSIDE R A A A DO M A D A G

N Y M1 (north-south). With Newcastle upon Tyne to the north and York to A R B DW E M Y A Y BO O ROUG A 6 R BR S the south. The A66 dual carriageway provides direct access to the A1(M) H R A6 D T D R C O T A N O R T E D N G 1085 RU LN linking Middlesbrough to the national motorway network. A N R A K K D 4 C R O R A O O 7 E O 1 B D A G R 5 F A N 08 D O 1 N L A L E WILTON O P E

E R R T O M Teesside International Airport lies 16 miles to the west offering flights to L Y O A T R A A E RE INTERNATIONAL E H 1 M T N N S A T H 7 E B IG E R N H 2 Y B seven domestic and five European destinations. I S BY L R Y

R D B O RD 4 A A Y 7 N D B 1 MILESBROU AN A K Darlington Train Station is located 21 miles to the west which provides a RM F L M O E N A U T N A E T V R S shortest journey time of 2 hours 22 mins to London Kings Cross. A S KEI TH T U L O N N

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A S TEESSIDE W T D O WILTON 57 Whitby A A66 N RO B E

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A172 Located on the Wilton International site on Teesside, one of the largest key manufacturing locations in the UK

SABIC LDPE Alpek SABIC BIFFA WILTON REDCAR Plant Huntsman Plant Olefins 6 POLYMERS W11 EfW Ensus UK Enva INTERNATIONAL

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To Middlesbrough FREEPORT STATUS

Teesside has been selected as one of eight Freeports in England. Areas given Freeport status will benefit from a wide package of tax reliefs, simplified customs procedures, streamlined planning processes to boost redevelopment and government support to promote regeneration and innovation.

The Teesside freeport will be the largest in the UK covering some 4,500 acres. It is estimated the new status will have boosted the local economy by £3.2bn by 2026.

As well as Wilton International the status covers Teesworks, Teesside International Airport, the Port of Middlesbrough, the Port of Hartlepool, Liberty Steel and LV Shipping.

WILTON INTERNATIONAL

Wilton International is one of the UK’s leading manufacturing Alpek Polyester UK, CropEnergies Ensus, Nippon Gas, Anglo sites. At almost 2,000 acres, the site in the North East England Woodsmith and UK Wood Recycling. Over the years, these is one of the largest industrial locations in the UK. High quality companies have invested over £2 billion in moving to and products made at Wilton are of national importance and expanding their operations in the area. generate hundreds of millions of pounds in export revenues for the UK economy each year. The region contributes more than £10 billion to the national economy every year. The Tees Valley is also a major centre Due to substantial historic investment in onsite utilities for the offshore wind supply chain and home to a nationally infrastructure Wilton is able to offer manufacturing and important logistics hub to support international trade moving industrial occupiers some of the lowest cost power and heat in goods in and out of the UK. the UK. An increasingly green multi-company manufacturing site, Wilton boasts a number of major international companies Wilton International is a leader in sustainable power production such as: Biffa Polymers, Sembcorp Utilities UK, SABIC UK featuring biomass and energy from waste assets as well as Petrochemicals, Huntsman Polyurethanes, bioethanol for greener road fuel. DESCRIPTION

The property comprises a large manufacturing and production unit extending to 109,688 sq ft over ground floor only. The building was built in the 1960’s of steel frame with part brick and part metal sheet cladding beneath a mainly metal clad roof.

The main warehouse area provides two distinct open plan areas. Both areas are of a pitched roof with a maximum eaves height of 8.8m and 12.7m respectively. The property benefits from a total of six loading doors.

There are two secure yards either side of the building with ample car parking to the front. The office accommodation forms approximately 5% of the total space and comprises a number of partitioned meeting rooms, as well as a board room and staff break out area.

SITE

The subject facility occupies a site of 4.97 acres (2.01 hectares).

ACCOMMODATION

The property provides the following Gross Internal Area (GIA):

Demise sq m sq ft

Front Office 5.7 56.75 323 3,482

6 34.5 207 2,228

Lower Eaves Warehouse 75.09 56.75 4,261 45,869

Higher Eaves Warehouse 67.9 61 4,142 44,583

Side Loading Area 18.4 5 92 990

Rear Labs/Ancillary 17.32 3.6 62 671

Total 10,190.34 109,688 TENURE

The investment is available by way of a new long leasehold interest with the vendor granting a new 999 year headlease to the purchaser at a peppercorn rent.

TENURE STRUCTURE

The vendor has got some minor management obligations with the tenant, which are personal to the vender (Sembcorp). Sembcorp will continue to provide these, post transaction, and in order to mitigate the new purchaser’s management obligation we will create a new lease to sit above Biffa and below the purchaser.

All tenant rent payments will be directed straight to the purchaser. The structure is set out below:

SEMBCORP UTILITIES (UK) LIMITED (FH)

PURCHASER (999 YEAR FH)

SEMBCORP UTILITIES TENANCY RENT (UK) LIMITED (TENANT) The property is let to Biffa Waste Services Limited on a 15 year MANAGEMENT lease from 1st August 2020 expiring 31 July 2035. (14.25 years OBLIGATIONS unexpired) at a passing rent of £300,000 pa. BIFFA WASTE SERVICES The rent is reviewed annually in accordance to RPI with a collar LIMITED (SUB-TENANT) and cap of 2 & 4%.

The lease is drafted outside of Sections 24-28 of the Landlord and Tenant 1954 act on full repairing terms, subject to a Upon expiry of the Biffa lease, the management obligations will fall schedule of condition. away and the purchaser will be left with an unencumbered title. The tenant insures the building. COVENANT INFORMATION

Biffa are the leading integrated waste management company in the UK. They provide collection, landfill, recycling and special waste services to local authorities and industrial and commercial clients in the UK. Biffa have over 30 facilities and 70 industrial and commercial depots nationwide. On average they collect 15,000 tonnes of rubbish every day from 76,000 businesses and around 2.2 million households. Biffa employ in excess of 8,000 people. A summary of their last three years of accounts is set out below:

Year to Date Turnover Pre Tax Profit Shareholder’s Funds

29/03/2019 £701,200,000 £19,100,000 £502,000,000

30/03/2018 £683,600,000 £32,500,000 £477,100,000

24/03/2017 £651,400,000 £10,600,000 £427,800,000

They have a Credit Safe Rating of 100 A – Very Low Risk. A Credit Safe report can be provided upon request.

Sembcorp Utilities (UK) Limited

Sembcorp Utilities (UK) Ltd are part of the Singapore-based Sembcorp Industries Group. Sembcorp Industries is a leading energy and urban development player with more than 4,500 employees. Operating across multiple markets worldwide, the group has a balanced thermal and renewable energy BIFFA POLYMERS – REDCAR portfolio of more than 12,700MW which includes over 3,200MW of renewable energy capacity globally. Sembcorp Utilities (UK) Ltd generates and supplies energy to major industrial firms at the Wilton Biffa constructed the world’s first commercially International manufacturing site on Teesside. They deliver secure and reliable supplies of electrical available Recycled High Density Polyethylene (rHDPE) power, steam, water and other services to customers. They are responsible for the management of the food grade production plant in 2008 in Redcar. The site and will also retain the Freehold interest. facility has been designed to process 50k tonnes of material through its three business processes. This A summary of their last three years of accounts is set out below: ground-breaking plant creates rHDPE from recycled milk bottles. Year to Date Turnover Pre Tax Profit Shareholder’s Funds

Following on from this, in 2011, Biffa Polymers 31/12/2019 £194,971,000 £26,502,000 £80,589,000 achieved another world first by opening a mixed plastics plant producing 31/12/2018 £217,082,000 £19,114,000 £94,711,000 polymer grades from rigid post-consumer packaging. To date, their polymers facility has reprocessed over 3 billion plastic bottles. 31/12/2017 £175,436,000 £16,151,000 £81,172,000

To find out more about the processes at the facility in Redcar, watch the video They have a Credit Safe Rating of 100 A – Very Low Risk. A Credit Safe report can be provided below: upon request. https://www.biffa.co.uk/about-us/waste-journeys/plastic-recycling VAT DEBT FINANCE FURTHER INFORMATION

The sale can’t be treated as a TOGC and therefore VAT will be Colliers International Debt Advisory team optimise clients’ Should you require any further information or you would payable on the purchase price. debt solutions for their real estate strategies. We have a deep like to arrange an inspection please contact: knowledge of the fragmented credit markets and an extensive network of over 250 participants; this allows us to efficiently Colliers International shortlist lenders and create competitive tension amongst a Ben Hall EPC small number on each deal to extract the very best market T: 07855 814516 terms, optimise the geared equity return profile and carefully E: [email protected] The property has an EPC rating of D (90). A copy of the EPC managing the downside risk for borrowers. certificate is available on request. Carys Allen Given the long-dated income profile and grade of covenant we T: 07720 070492 expect a range of lenders to be comfortable lending 60% loan E: [email protected] to value on an interest only/shallow amortisation basis. ANTI-MONEY LAUNDERING We anticipate margins will be circa LIBOR + 2.00-2.25% for a 5-year term. REGULATIONS For further information on the availability of debt and debt In accordance with Anti-Money Laundering Regulations, solutions please contact: evidence of identity and source of funding will be required from Laurence Richardson the successful purchaser prior to instructing solicitors. T: 07829 880140 E: [email protected]

PROPOSAL

We are seeking offers in excess of £4,650,000 subject to contract and exclusive of VAT. A purchase at this level would reflect a 6.00% Net Initial Yield assuming purchasers costs of 7.54%. This equates to a low capital value of £42.40 per sq ft. Assuming 2.5% pa RPI increase over the hold period we set out below the anticipated rental and reversionary yield profile:

Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Rent £300,000 £307,500 £315,188 £323,067 £331,144 £339,422 £347,908 £356,908 £365,521 £374,659 £384,025 £393,626 £403,467 £413,553 £423,892

Running Yield 6.00% 6.15% 6.30% 6.46% 6.62% 6.79% 6.96% 7.13% 7.31% 7.49% 7.68% 7.87% 8.07% 8.27% 8.48%

MISREPRESENTATION ACT DISCLAIMER Colliers International gives notice that these particulars are set out as a general outline only for the guidance of intending Purchasers or Lessees and do not constitute any part of an offer or contract. Details are given without any responsibility and any intending Purchasers, Lessees or Third Party should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise as to the correctness of each of them. No person employed or engaged by Colliers International has any authority to make any representation or warranty whatsoever in relation to this property. Colliers International is the licensed trading name of Colliers International Capital Markets UK LLP which is a limited liability partnership registered in England and Wales with registered number OC392075. Our registered office is at 50 George Street, London W1U 7GA. March 2021. Designed and produced by Creativeworld Tel:01282 858200