RETAIL WAREHOUSING & FOODSTORES TRACK RECORD
DETAILED KNOWLEDGE. WEALTH OF EXPERIENCE. ALL RETAIL. 1
Malvern Shopping Park - 135,658 sq ft
INTRODUCTION
Formally established five years ago, Knight Frank’s Out of Town Retail Capital Markets team is led by Andrew McGregor & Dominic Walton.
Both individuals have more than 30 years’ experience in the sector, both in investment and crucially, occupational expertise. They oversee the team’s execution of one shared goal: to provide the best advice possible.
DOM WALTON ANDREW MCGREGOR T +44 20 7861 5191 T +44 20 7861 1531
“AT LONDON METRIC OUR CUSTOMER FOCUS HELPS CREATE VALUE FOR ALL. THIS IS AN APPROACH THAT KNIGHT FRANK SHARE WITH US AND IT CREATES A REAL POINT OF DIFFERENCE!”
Andrew Jones London Metric 3
OUR EXPERTISE
The Out of Town Retail Capital Markets team provides the following services:
• Purchase advice – backed up by full tenant audit, pricing and cash flow analysis, legal due diligence and a comprehensive purchase report.
• Competitive sales advice – a well-researched view on price, before embarking on the most effective and aggressive method of achieving best value.
• Asset review - our in-depth knowledge of the occupational market enables us to provide comprehensive and often speculative asset reviews. Unlike most investment teams, we have direct relationships with tenants, which enables us to fully understand their trade motives and requirements. Our advice is therefore able to give a true insight into the opportunities and/or threats posed by the occupational market and its likely impact on the scheme.
• Debt advisory - our dedicated debt advisory team enables us to provide best-in-class advice on matters around the cost and suitability of debt; from assessing the impact and suitability of leverage during the purchasing process to the merit of stapling a debt proposal as part of the sales process.
• Research - Stephen Springham leads our dedicated retail research capability. With 15 years’ experience in the sector, Stephen offers a unique insight into the macro and micro economic, demographic and consumer issues affecting tenants, and the overall impact on the investment market.
• Professional - our Out of Town Retail Valuation team is one of the most active and professional in the sector. Headed by Graham Spoor, the team counts UK Institutions, REITS and Propcos as core portfolio clients. Critically, the team works closely with the OOT Retail Capital Markets team to stay fully informed of market conditions while remaining within the confidential remits of its work.
• Lease advisory - as part of our role as comprehensive advisers to owners of Out of Town retail assets, we will always consider the value and merit of lease re-gear / re-structure. We are also able to advise and negotiate lease renewal / re-gear for the occupier and have undertaken several transactions for major clients, including the likes of Wickes.
Whilst the detailed knowledge and advice is predominately London based, we recognise the local expertise offered by our regional offices and also the increasing need to access new sources of global money. We therefore have a strong relationship with our Global Desk in London and the key investment hubs in the US, Europe, the Middle East and Asia. 5
INVESTMENT TRANSACTIONS “WE WORKED WITH KNIGHT FRANK ON OUR ACQUISITION OF MALVERN SHOPPING PARK. WE WERE IMPRESSED WITH THEIR EXCELLENT SERVICE - THEIR EXPERIENCE, KNOWLEDGE AND DOGMATIC OUT OF TOWN RETAIL PARKS APPROACH ENSURED THAT ALL PARTIES WERE HAPPY WITH THE POSITIVE RESULT”
Peter Hall Halsey Garton Property Investments
MALVERN SHOPPING PARK, HOUGH RETAIL PARK, MALVERN STAFFORD
DATE :: Purchased October 2017 DATE :: Sold March 2016
TENURE :: Freehold TENURE :: Freehold
CLIENT :: Halsey Garton Property Investments CLIENT :: Albemarle Stafford LLP
SIZE :: 135,658 sq ft SIZE :: 101,799 sq ft
PRICE :: £75,000,000 PRICE :: £21,050,000
NET INITIAL YIELD :: 5.46% NET INITIAL YIELD :: 6.77% 7
INVESTMENT TRANSACTIONS OUT OF TOWN RETAIL PARKS
TYNE VALLEY RETAIL PARK, LADYBAY RETAIL PARK, CENTRAL DRIVE, HEXHAM NOTTINGHAM MORECOMBE
DATE :: Sold October 2016 DATE :: Sold March 2017 DATE :: Sold January 2017
TENURE :: Freehold TENURE :: Freehold TENURE :: Freehold
CLIENT :: Network Rail CLIENT :: Columbia Threadneedle CLIENT :: Wm Morrison plc
SIZE :: 38,103 sq ft SIZE :: 105,524 sq ft SIZE :: 82,629 sq ft
PRICE :: £7,387,50 0 PRICE :: £24,200,200 PRICE :: £12,000,000
NET INITIAL YIELD :: 6.61% NET INITIAL YIELD :: 6.25% NET INITIAL YIELD :: 7 . 3 7 % 9
INVESTMENT TRANSACTIONS FOODSTORES
TESCO, WELLING AND SAINSBURY’S, ASDA, WAITROSE, BISHOP AUCKLAND LEWISHAM MENAI BRIDGE
DATE :: Sold July 2016 DATE :: Sold December 2016 DATE :: Sold January 2017
TENURE :: Freehold TENURE :: Long leasehold TENURE :: Freehold
CLIENT :: Aviva CLIENT :: Ashford Developments CLIENT :: Blackrock Investment Management
TESCO, WELLING NET INITIAL YIELD :: 6.00% PRICE :: £13,711,000 PRICE :: £4,740,000
SAINSBURY'S, BISHOP AUCKLAND NET INITIAL YIELD :: 6.50% NET INITIAL YIELD :: 4 . 6 5 %
PRICE :: £57,500,000 11
INVESTMENT TRANSACTIONS STANDALONE RETAIL
ALDI, HOMEBASE, THE RANGE, B&M, BEDFORD BEDFORD HALIFAX LEEK
DATE :: Purchased May 2017 DATE :: Sold December 2015 DATE :: Sold August 2016 DATE :: Sold July 2017
TENURE :: Freehold TENURE :: Freehold TENURE :: Freehold TENURE :: Freehold
CLIENT :: AXA IM CLIENT :: Knight Frank Investment Management CLIENT :: M&G Real Estate CLIENT :: DVS Property Limited
PRICE :: £7,500,000 PRICE :: £6,400,000 PRICE :: £4,620,000 PRICE :: £5,050,000
NET INITIAL YIELD :: 4.30% NET INITIAL YIELD :: 6 . 8 1 % NET INITIAL YIELD :: 8.50% NET INITIAL YIELD :: 6 . 2 5 % 13
INVESTMENT TRANSACTIONS STANDALONE RETAIL
PC WORLD & CURRYS, INTERCHANGE RETAIL PARK, HOVE IPSWICH
DATE :: Purchased April 2016 DATE :: Purchased August 2015
TENURE :: Freehold TENURE :: Freehold
CLIENT :: Aberdeen Asset Management CLIENT :: Teeside Pension Fund
PRICE :: £13,600,000 SIZE:: 62,165 sq ft
NET INITIAL YIELD :: 5.40% PRICE :: £15,050,000
NET INITIAL YIELD :: 6.25% 15
INVESTMENT TRANSACTIONS STANDALONE RETAIL
BOUNDARY MILL, MATALAN, MATALAN, SHEFFIELD LEEDS BURY ST EDMUNDS
DATE :: Sold April 2016 DATE :: Purchased April 2016 DATE :: Sold June 2017
TENURE :: Freehold TENURE :: Freehold TENURE :: Freehold
CLIENT :: Boundary Mill Stores CLIENT :: SAKD Properties Limited CLIENT :: CBRE Global Investors
WAULT :: 25 years PRICE :: £3,900,000 PRICE :: £4,360,000
SIZE :: 130,000 sq ft NET INITIAL YIELD :: 7.70% NET INITIAL YIELD :: 6.56%
PRICE :: £14,500,000
NET INITIAL YIELD :: 6.00% 17
INVESTMENT TRANSACTIONS “I AM DELIGHTED WITH THE SERVICE I HAVE RECEIVED FROM KNIGHT FRANK OVER THE LAST 3 YEARS. THE TEAM ARE EXTREMELY PROACTIVE AND HAVE CONCLUDED SOME EXCELLENT TRANSACTIONS SOLUS DIY ON BEHALF OF THE TRAVIS PERKINS PROPERTY TEAM IN CHALLENGING SITUATIONS”
Jo Lord Property Director, Wickes
WICKES, WICKES & KFC, WICKES, WICKES, HUDDERSFIELD SHIPLEY DARTFORD CHATHAM
DATE :: Sold October 2016 DATE :: Purchased April 2015 DATE :: Purchased December 2016 DATE :: Sold April 2016
TENURE :: Freehold TENURE :: Freehold TENURE :: Freehold TENURE :: Freehold
CLIENT :: M&G Real Estate CLIENT :: Columbia Threadneedle CLIENT :: London Metric CLIENT :: London Metric
PRICE :: £4,716,000 PRICE :: £4,750,000 PRICE :: £8,500,000 PRICE :: £6,900,000
NET INITIAL YIELD :: 6.50% NET INITIAL YIELD :: 6 . 7 4 % NET INITIAL YIELD :: 4.79% NET INITIAL YIELD :: 5.60% 19
INVESTMENT TRANSACTIONS SOLUS DIY
WICKES, B&Q, B&Q, B&Q, SHREWSBURY SUNDERLAND DERBY HULL
DATE :: Purchased February 2015 DATE :: Purchased August 2017 DATE :: Sold June 2015 DATE :: Purchased December 2016
TENURE :: Freehold TENURE :: Freehold TENURE :: Freehold TENURE :: Freehold
CLIENT :: M&G Real Estate CLIENT :: The Hanro Group CLIENT :: Ares Management, L.P CLIENT :: London Metric Plc
PRICE :: £4,050,000 PRICE :: £8,676,000 PRICE :: £20,600,000 PRICE :: £9,373,000
NET INITIAL YIELD :: 8.56% NET INITIAL YIELD :: 6 . 7 5 % NET INITIAL YIELD :: 6.65% NET INITIAL YIELD :: 7 . 4 5 % 21
DEVELOPMENT
We are able to advise on the complex nature of development, including scheme appraisals, pre-let negotiations & lease structure, land purchase and development agreements, leading ultimately to the funding and delivery of the project.
ALEX MUNRO DOM WALTON T: +44 20 7861 1116 T +44 20 7861 1591
“KNIGHT FRANK SOURCED AND DELIVERED AN OFF MARKET TRANSACTION FOR US SHOWING A KEEN UNDERSTANDING OF OUR REQUIREMENTS AND A STRONG ABILITY TO ADVISE ON AND DELIVER THE ASSET.”
James Dunne Aberdeen Asset Management 23 DEVELOPMENT TRACK RECORD
ASDA, SOUTH QUAY, WEALDSTONE, THE CRESCENT, HOWARD ROAD, HAYLE LONDON HINCKLEY ST NEOTS
CLIENT :: Peveril Securities Ltd CLIENT :: Ashford Developments / Pears Property CLIENT :: Osprey Equity Partners CLIENT :: Quora Developments Ltd
OUTLINE :: Site acquisition of a harbour, the OUTLINE :: New Asda foodstore comprising 16,000 sq ft OUTLINE :: Forward funding of a 100,000 sq ft OUTLINE :: 50,000 sq ft of retail plus 10,000 sq ft pre-letting of the supermarket to ASDA and The Gym Group of 17,000 sq ft Sainsbury superstore as part of a industrial starter units. Primary tenants stores and then the forward funding of the redevelopment of Hinckley town centre by include Aldi, B&M and Pets at Home development ACTIVITY :: Purchased on behalf of the client and agreed the Tin Hat Partnership, which completed a new lease term to Asda and The Gym Group, in October 2015 ACTIVITY :: Site identification, site acquisition, ACTIVITY :: Sold to LSIM for NILGOSC for £23.7m and advised the JV on the sale to leasing agreements and development reflecting a NIY of 4.4%. Aberdeen Asset Management. ACTIVITY :: Purchased by Osprey Equity Partners for consultancy. £39.5 million, representing a net initial yield of 5.025%. 25
PROFESSIONAL
The valuation team have a dedicated Out of Town Retail capability run by Graham Spoor. They currently value across a broad spectrum of institutional / REIT & Propco portfolios, approximately £4.5 billion Out of Town assets equating to 18 million sq ft.
Service Lead & Signatory Partner, Valuations, RICS Registered Valuer
Graham has over 30 years’ professional valuation experience across all sectors. He is a shopping centre specialist. He was, for many years, sole signatory to British Land, latterly joint signatory to Land Securities (retail & leisure assets) and, until 2014, signatory to MEPC, covering their portfolio of Business Parks across the UK. GRAHAM SPOOR MRICS Other ‘mixed’ funds include work for TIAA, Lothbury and Ellandi. He is also involved with a wide number of bank instructions for a T: +44 20 7861 1539 range of lenders and borrowers.
Principal Supporting Partner Partner, Valuations, RICS Registered Valuer
Gavin joined as a Partner at Knight Frank in 2016 and has over 20 years’ valuation experience and over 30 years' of property expertise. Prior to joining, Gavin was primarily responsible for the valuation of a number of institutional and property company clients that included the Standard Life Shopping Centre Jersey Property Unit Trust, Aberdeen Investors, the Coal Pension Funds, GAVIN SPREYER MRICS the Grosvenor Estate, the Crown Estate and Hansteen plc. Gavin T +44 20 7861 1585 also has a number of relationships within the banking community including Barclays, Barings, JP Morgan, RBS and Aviva Finance.
Associate Retail Warehouse, Valuations, RICS Registered Valuer
Tom provides portfolio valuation advice to investors on a monthly, quarterly and annual reporting basis. His leisure specialism includes advising Legal & General’s Leisure Fund and he also values the iconic Madame Tussauds, London on behalf of Fubon Life. His extensive knowledge of the Out of Town Retail sector ranges from valuing prime TOM WITHEY MRICS and secondary retail warehouse schemes across the UK primarily T: +44 20 7861 1585 for institutional investors, UK REITs and banks. His most recent Out of Town Retail instruction undertaken for secured lending purposes included the re-finance of a leading REIT’s Out of Town portfolio on behalf of a major lender. Tom would focus on retail warehouse valuations in respect of this mandate. 27
PROFESSIONAL TRACK RECORD VALUATION
THE FORT SHOPPING PARK, ST ANDREW'S QUAY RETAIL PARK, PARC TROSTRE, BIRMINGHAM HULL LLANELLI
CLIENT :: 261,569 sq ft SIZE :: 326,913 sq ft CLIENT :: 264,734 sq ft
OUTLINE :: Open A1 (food and non-food) retail park. It is regarded as the leading out of town retailing OUTLINE :: A bulky goods park comprising two retail OUTLINE :: A prime Open A1 (including food) location in the West Midlands and it is one of the top five shopping parks in the UK. warehouse terraces together with two uncovered retail park arranged in three solus restaurant units and a pod unit. main terraces providing 34 units. INSTRUCTION :: West Midlands MAPF (12.5% stake) Tenants include B&Q, Next, Wren Living, Occupiers include Marks and Spencer, DSG, Pets at Home, Pizza Hut and Arcadia, Debenhams, Next, Boots, H&M The Restaurant Group. and WH Smith.
INSTRUCTION :: Orchard Street Investment Management INSTRUCTION :: M&G Real Estate 29
PROFESSIONAL TRACK RECORD VALUATION
THE BREWERY, SPRINGVALE RETAIL PARK, ROMFORD ORPINGTON
SIZE :: 514,386 sq ft SIZE :: 100,223 sq ft
OUTLINE :: Open A1 (food and non-food) retail park OUTLINE :: Comprising nine Open A1 retail units including leisure. It is regarded as over two terraces, constructed in the Britain’s 7th largest retail park. late 1990’s. The tenant line up is Argos, Occupiers include Sainsbury’s, Harveys, Paul Simon, Currys, Halfords TK Maxx, Gap, Virgin Active and and Furniture Village. Vue Cinema. INSTRUCTION :: BlackRock UK Property Fund INSTRUCTION :: M&G Real Estate (25% stake)
LOMBARDY RETAIL PARK, NEXT, CHARLES WAY, HAYES HEDGE END, SOUTHAMPTON
SIZE :: 201,921 sq ft SIZE :: 29,321 sq ft
OUTLINE :: A retail warehouse park consisting OUTLINE :: Comprising an open A1 Solus unit let to of two opposing terraces, four pod Next for 20 years from June 2013, with units, a petrol filling station and a 5 yearly minimum fixed uplifts. fast food unit. Open A1 and part bulky goods planning consent. Occupiers INSTRUCTION :: ReAssure include Next, JD Sports, Mothercare, TJX UK and Costa Coffee.
INSTRUCTION :: Aviva Investors
STOCKTON TEESIDE RETAIL PARK, STOCKTON-ON-TEES
SIZE :: 342,931 sq ft
OUTLINE :: Open A1 retail park constructed in the 1980’s. Comprises three phases and provides supermarkets, home improvement, lifestyle and entertainment stores, a fitness centre and restaurants.
INSTRUCTION :: British Land 31
Stephen has been involved in many key projects over the past few years, a selection of which are listed below:
RESEARCH CAPABILITY Morrisons Independent advisor to the Competition Commission (now Competition and Markets Authority) on the Wm. Morrison Supermarkets plc acquisition of Safeway.
Waitrose Advised Waitrose on initial roll-out of Little Waitrose convenience store business, providing extensive geo-demographic analysis. Knight Frank benefit from a He joined Knight Frank as Head of tremendous retail research capability Retail Research in 2015. headed by Stephen Springham who works within the foodstore team. A significant proportion of his Stephen has also contributed to numerous retail publications: Stephen has nearly 25 years’ career has been dedicated to the experience specifically within the UK foodstore sector and he has retail sector, gained across an array a deep understanding of macro of high profile research, analysis issues that drive the grocery industry and consultancy roles. He was generally, as well as micro-level GIS- initially employed as a retail analyst based factors (e.g. demographics) within two of the UK’s leading retail that influence individual store consultancies, Management Horizons performance. Europe and Verdict Research. This retail knowledge was developed Stephen regularly writes articles further at the leading accounting and thought leadership pieces on practice PricewaterhouseCoopers, these issues and presents to key which proved a bridgehead into both stakeholders within the foodstore in-depth financial analysis and client- industry. He is often quoted in the facing consulting. media on both retail and foodstore- specific matters. For the last 15 years, he has specialised in retail property, initially working as a retail consultant for Experian and subsequently as Head of Retail Research for the property advisor King Sturge (transferring to the role of Director of Retail Research at Jones Lang LaSalle following the two companies’ merger in 2011). STEPHEN SPRINGHAM T +44 20 7861 1236 “THE RETAIL INVESTMENT TEAM AT KNIGHT FRANK WAS HIGHLY PROFESSIONAL AND MADE THE SALE OF OUR ASSET IN PUTNEY AS SEAMLESS AS POSSIBLE FROM INITIAL REPORTING RIGHT THROUGH TO COMPLETION. THE DEPTH OF EXPERIENCE AND BREADTH OF CONTACTS WITHIN THE TEAM WAS IMPRESSIVE AND WAS KEY TO ACHIEVING A SALES PRICE SIGNIFICANTLY AHEAD OF QUOTING”
Emma Johnstone Retail Investment Executive, British Land 33 12 COMMERCIAL OFFICES OUR TEAM
Aberdeen ANDREW MCGREGOR STEPHANIE BAIGENT T: +44 20 7861 1531 T: +44 20 7861 1209 E: [email protected] E: [email protected]
DOMINIC WALTON OLIVER PETCH T: +44 20 7861 1591 T: +44 20 7861 1107 Edinburgh E: [email protected] E: [email protected] Glasgow
Newcastle ALEX MUNRO DANIEL SERFONTEIN T: +44 20 7861 1116 T: +44 20 3640 7037 E: [email protected] E: [email protected]
Leeds Manchester STEPHEN SPRINGHAM SOPHIE TIERNEY T: +44 20 7861 1236 T: +44 20 7861 1525 E: [email protected] E: [email protected]
Sheffield DAVID LEGAT LISA ATTENBOROUGH T: +44 20 7861 5119 Debt Advisory Cardiff E: [email protected] T: +44 20 3909 6846 E: [email protected] Birmingham
Bristol Central London & West End 35
RETAIL CLIENTS 37 418 OFFICES United Kingdom Continental Europe
60 COUNTRIES 16 Countries The Americas Austria / Belgium / Cyprus 15,020 PEOPLE Czech Republic / France Germany / Ireland / Italy / Monaco 15 Countries The Netherlands / Poland / Portugal Argentina / Brazil Romania / Russia / Spain Canada / Chile / Colombia Switzerland Costa Rica / Dominican Republic Mexico / Peru Puerto Rico / The Caribbean (4) Usa
85 OFFICES 2,145 PEOPLE 80 OFFICES 1,035 PEOPLE 169 OFFICES 3 OFFICES 5,475 PEOPLE 50 PEOPLE
23 58 OFFICES OFFICES 700 5,615 PEOPLE PEOPLE UK GLOBAL DESK PROVIDING ACCESS TO GLOBAL CAPITAL
DEBORAH WATT T: +44 20 7861 1678 Asia Pacific E: [email protected] Africa 14 Countries Australia / Cambodia 10 Countries The Middle East China / Hong Kong Botswana / Kenya / Malawi India / Indonesia Nigeria / Rwanda / South Africa Japan / Malaysia QUENNIE HO Tanzania / Uganda / Zambia 2 Countries New Zealand / Philippines T: +44 20 3826 0612 E: [email protected] Zimbabwe The Kingdom of Saudi Arabia Singapore / South Korea The United Arab Emirates Taiwan / Thailand @KFRetail KnightFrank.co.uk/commercial/retail
© Knight Frank LLP 2017 – This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content within which it appears. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names.