Waitrose Cheadle Page 1 A rare opportunity to acquire a prime UK foodstore investment Page 2 Waitrose Cheadle Hulme

Investment Summary

■■ A rare opportunity to acquire a prime UK foodstore investment.

■■ Cheadle Hulme is an extremely affluent suburban area, located just to the south of Central .

■■ The property comprises a modern purpose built foodstore for Waitrose, part of the , and extends to approximately 3,850 sq m (41,443 sq ft) with parking for 202 cars.

■■ The property is held Freehold.

■■ Let to Waitrose Ltd for a term of 25 years from 19 July 2007, the lease provides an unexpired term of around 22.75 years.

■■ The current rent passing of £759,050 pa equates to approximately £18.32 psf which in our opinion offers a significant reversion in 2012, in the order of £953,200 pa (£23.00 psf).

■■ Offers are sought in excess of£13,300,000 subject to contract and exclusive of VAT. A purchase at this level would show the following yield profile based upon our estimate of current rental value and costs at 5.725%.

Initial Yield 5.40% Reversionary Yield 6.78% Nominal Equivalent Yield 6.54% True Equivalent Yield 6.81% Waitrose Cheadle Hulme Page 3

Location

A673 Ainsworth A579 Breightmet A56 Shaw Hey Nook Cheadle Hulme is located in the Lostock M62 A676 conurbation, approximately 8.4 km (5.2 miles) A58 Hollins M66 Delph to the south of the city centre. is Radclie situated approximately 3.7 km (2.3 miles) to M61 Middleton A6 White eld the north east, approximately 8.4 km A663 A41 M60 (5.2 miles) to the south west and around 13.5 km (8.4 miles) to the north west. M60 A663 Lees A666 A62 Green eld M61 The town benefits from extremely strong communication links to both Atherton A6104 Drive time contoures and the surrounding area. The A34 is situated 5 minutes A579 just to the west of the town and acts as one of the main arterial routes Swinton A627 M60 A665 10 minutes connecting with junction 3 of the M60 and Manchester to the north and Higher Folds A580 15 minutes Wilmslow, Congleton, Newcastle-under-Lyme and the M6 to the south. A580 Leigh A6 A56 A664 Astley Crowden Cheadle Hulme Train Station provides a direct link with Manchester M60 A6042 Green M602 Ashton-under-Lyne City Centre with a fastest journey time of 19 minutes, as well as an Eccles A6010 Common Manchester Torside indirect service to via Wilmslow, which runs every hour. A576 A5063 Dukin eld Landside A635 A6018 Traord A5103 Traord A57 A57 Kenyon M67 Culcheth Mosside Denton A57 M62 A34 A6 Hyde M6 A6017 A560 Gamesley Fallow eld Croft M62 Charlesworth Houghton A56 Green M60 Green Sale Chunal Heaton Compstall Mersey Romiley Feamhead Stockport Dunham A5103 Little Northenden M60 Hay eld A49 Massey Rowarth M56 Woolston Heatley Cheadle Marple Altrincham A50 Lymm Birch Vale Hawel Grove A56 Little Heald Broomedge A6 Broomedge Bollington Green A34Cheadle High Lane New Mills M56 M6 Hulme Disley M56 Poyton A556 Higher Appleton A538 Poyton Hill A49 M56 Chinley Morley Green Lyme Lower A6 Mere Dean Row A523 Handley Stretton Tatton Whaley Bridge Arley Newton Chapel-en-le-Frith Wilmslow

A49 Mobberley Page 4 Waitrose Cheadle Hulme

Socio – Economic Profile

1 Cheadle Hulme has established itself as one of Manchester’s most affluent commuter . It has Northenden B5095 an excellent provision of some of Manchester’s better M60 M60 Royal Oark 2 B5465 Industrial Estate 4 schools and the average house price is well above the 3 A560 B5465 City’s average. 1 M56 3A B6171 According to CACI approximately 18,664 people live within a 5 minute 2 Cheadle 3 Demmings drivetime of the property and this figure increases significantly to A560 3 Gatley Industrial Estate A6 106,463 within a 10 minute drivetime. More detailed figures reveal exceptionally positive profiles for both catchments: M6 A34

2008 Households 5 Minute 10 Minute UK Benchill B5102 by ACORN Group Cheadle Hulme Cheadle Hulme B5149 4 Wealthy Executives 22.5 19.1 7.8 Cheadle Flourishing families 19.3 11.9 8.0 Hulme 5 Prosperous Professionals 5.3 3.7 2.1 B5166

CHEADLE HULME Secure Families 15.9 24.4 14.0 RAILWAY STATION Struggling Families 1.2 7.0 12.3 1 Burdened Singles 0.0 2.2 4.9 Heald B5102 M6 Green B5358 B5143 A34 MANCHESTER AIRPORT Furthermore, car/van and property ownership statistics are significantlyRAILWAY STATION above the UK average:

Car/Van Ownership 5 Minute 10 Minute UK Cheadle6 Hulme Cheadle Hulme B5094 B5094 2 cars or vans 35.8 31.9 23.1 A555

MANCHESTER 3 cars or vans 6.6 5.7 AIRPORT 4.4 B5358 B5166 A555 Property Ownership 5 Minute 10 Minute UK Handforth B5102 B5149 Cheadle Hulme Cheadle Hulme Styal 2 A523 Owner occupied 88.3 82.3 68.3

Owned outright 41.3 35.5 28.9

More detailed demographic information is available on request. Woodford Drive time contours A34 B5358 5 minutes 10 minutes A538 B5102 Wilmslow B5166

Dean Row B5358

A34 Waitrose Cheadle Hulme Page 5

Situation

The property is well located on the western side of Station Road (A5149), which acts as the town’s main A5149 A5149 Other Foodstore thoroughfare, just to the north of Cheadle Hulme CHEADLE HULME B5095 RAILWAY STATION Station. As a consequence the store benefits from good B5358 S TA Provision T IO A34 N

visibility and frontage to the road and passing traffic. RO AD There are some larger foodstores in the surrounding conurbations of The predominant surrounding land uses are commercial Cheadle, Hazel Grove, Stockport and Wilmslow. However only three fall and residential, with the site bounded to the south by within a 10 minute drivetime of the subject property. We have provided the railway line, to the west by residential properties, to further information on these below, through would emphasise that these B5095 BIRMINGHAM the north by a small area of parkland and to the east by AIRPORT A5149 stores draw upon a different core catchment to the subject property, with Station Road. A34 B5095 the customer base predominantly more local.

B5358 1 Cheadle – SK8 3BB J Sainsbury (c. 72,500 sq ft) situated around 2 km (1.3 miles) Description A5149 to the west of the subject property. The property comprises a modern purpose built food store, together 2 Wilmslow – Kiln Croft Lane SK9 3PA with decked car parking and rear servicing facilities, completed in (c. 70,000 sq ft) situated c. 5.8 km (3.6 miles) from the 2007. The site comprises around 1 hectare (2.39 acres) whilst the store subject property. itself extends to approximately 3,850 sq m (41,443 sq ft), comprising 2,438 sq m (26,238 sq ft) of ground floor space, together with 1,412 sq m 3 – Edgley Road SK3 0RJ (15,205 sq ft) of office and storage space at first floor level. The decked WM Morrisons (c. 79,750 sq ft) situated c. 3.8 km (2.4 miles) car park provides 202 spaces (1:205 sq ft) and offers easy pedestrian from the subject property. Built in 1997. access to the store from both the ground and first floor levels.

Primary customer access is directly from Station Road whilst separate access to the segregated rear servicing area is also from Station Road, just to the north of the main customer entrance.

Internally, the store is fitted out in the tenant’s standard corporate format whilst lifts provide access for customers entering from the car park at first floor level. Page 6 Waitrose Cheadle Hulme

Planning

Planning consent was granted by Stockport Metropolitan Council on the 27th July 2006 for the:

‘Demolition of office building and erection of single/two storey foodstore with decked car park and new vehicular accesses to Station Road.’

Further documents are available on request. Tenure The property is held Freehold. Tenancy The entire property is let on a full repairing and insuring lease to Waitrose Ltd for a term of 25 years from 19th July 2007, at a current passing rent of £759,050 pa which reflects £18.32 psf based on a GIA of 41,443 sq ft (3,850 sq m). Covenant Dun & Bradstreet consider that Waitrose Ltd has a D&B Rating of 5A1 which represents a ‘minimal risk of business failure.’ We have set out summary account information below:

27 January 2008 27 January 2007 27 January 2006

Sales Turnover £3,737,200,000 £3,497,300,000 £3,158,900,000

Profit/(Loss) Before Taxes £120,300,000 £87,800,000 £96,100,000

Equity Shareholders Funds £722,500,000 £690,000,000 £598,900,000

Total Assets £1,939,300,000 £1,892,800,000 £1,707,100,000

More detailed account information is available on request. This plan is published for convenience of identification only. Any site boundaries are indicative only and should be checked against Title Deeds only and should be checked against indicative boundaries are site Any only. of identification convenience plan is published for This Waitrose Cheadle Hulme Page 7

Estimated Rental Value

The lease terms were agreed with Waitrose in early 2005 with the development agreement signed on the 3rd Foodstore Market August 2005. In our view the current rental value of the store (£18.32 psf) offers a significant reversion having Commentary been set over 4 years ago. The appetite for foodstore investments has remained exceptionally We believe the current rental is in the region of £23.00 psf and could buoyant through the last 24 months, as a consequence of covenant potentially be higher taking into consideration the competition between strength, growth prospects and the typically long unexpired lease terms. food operators for floor space which we expect to result in steady rental At the peak of the market in 2007, prime foodstore yields stood growth moving forwards. This should lead to further rental enhancement around 4.00% as evidenced by the sale of the in Hulme, up until the next review in 2.75 years. Manchester. The most recent similar transaction was the sale of In our opinion there is sufficient evidence to support this estimated value, the Waitrose in West Byfleet at a price of £10.4m (5.15% IY, 5.75% drawn from a variety of transactions and we have identified these below. EY) for an 18 year unexpired term, off a similar rent profile. These stores are in similarly affluent areas and are likely to demonstrate comparable levels of turnover density to Cheadle Hulme.

Location Tenant Store Size (sq ft) Transaction/Date Rent (£ psf) Environmental Bristol Queens Road Waitrose 10,927 OML Mar 2009 £22.50 W. A. Fairhurst & Partners undertook a Geo-Environmental Barnet Spires Shop Centre Waitrose 33,344 Regear Nov 2008 £22.34 Site Investigation in January 2006 and concluded:

Gerrards Cross Station Road Waitrose 28,017 Agr for L. June 2008 £22.50 ‘It is considered that there is a low risk of contamination which could Colchester Waitrose 35,815 OML May 2008 £21.00 psf* cause harm to humans, property and or pollution to controlled waters’. £25.00 psf > 5 years Copies of the respective reports are available on request. Maidstone Grove Green Centre Tesco 41,303 RR April 2008 £25.00

Winchester Stoney Lane Waitrose 32,640 OML Mar 2008 £20.04

Hulme Princess Parkway Asda 69,994*** RR Feb 2008 £19.50

Manchester Centre Asda 101,697 Mar 2007 £26.00 Capital Allowances

Chester Sealand Road Waitrose 39,500 Pre-let Jan 2007 £21.50 The vendor is willing to pass on the benefit of any capital allowances and further information is available on request. Urmston Sainsburys 50,000 Pre-let Dec 2006 £23.00**

* This letting is at £21 psf in yr 1, £23 psf yrs 2-4 and £25 psf in yr 5. ** This letting has rising rents £20-£25 psf over the first 5 years *** This is the sales area only Page 8 Waitrose Cheadle Hulme Proposal Offers are sought in excess of £13,300,000 for the Freehold interest in this property, subject to contract and exclusive of VAT. Based on our opinion of estimated rental value and costs of 5.725% this reflects the following yield profile.

Initial Yield 5.40% Reversionary Yield 6.78% Nominal Equivalent Yield 6.54% True Equivalent Yield 6.81%

Contacts

For further information please contact:

Patrick Knapman T: 020 7152 5019 F: 020 7152 5382 E: [email protected]

Justin Houlihan T: 020 7152 5670 F: 020 7152 5382 E: [email protected]

www.cushmanwakefield.com 43/45 Portman Square London WIA 3BG

Misrepresentation Act 1967 and Property Misdescriptions Act 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 agent(s) 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, Floor areas, measurements or distances given are approximate and unless otherwise stated, all rents are On the instructions of Wilky Fund Management Ltd on behalf of MNOPF Trustees Ltd quoted exclusive of VAT. 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.

MN OPF Cheadle Hulme | Waitrose | September 09 | Ref: 105975