WELL LOCATED RETAIL WAREHOUSE INVESTMENT

FOR SALE UNITS 1, 2 AND 3 LUSTRUM RETAIL PARK HAVERTON HILL ROAD, STOCKTON ON TEES TS18 2RB INVESTMENT SUMMARY

• Stockton on Tees is a major commercial centre situated 2 miles west of , 38 miles south of Newcastle and 250 miles north east of . • The town has a primary catchment population of 194,000 people and 660,000 people within a 20 minute drive time. • The property comprises a detached and two semi-detached modern, highly prominent retail warehouse units fronting on to Haverton Hill Road (A1046) totalling 41,980 sq ft (3,900 sq m) including mezzanine trading floors on a site of 2.42 acres (0.98 Ha). • A low site ratio by footprint of 25%. • The units are located in Teesside’s prime bulky goods and trade park location serving the Teesside conurbation and wider catchment area. • WAULT of 6.5 years to established national and regional tenants. • Recent letting and offer to extent lease of unit 1 demonstrating good tenant demand. • Rents ranging from £12.68 per sq ft excluding mezzanine trading floors up to £13.20 per sq ft achieved on a recent letting. • Low capital value of £86 per sq ft including mezzanine levels. • Asset management initiatives and inherent value from tenants’ improvements (mezzanine). • Total reserved income of £344,700 p.a. • Offers invited of £3.60M (Three million, six hundred thousand pounds) Subject to Contract and exclusive of VAT. A purchase at this level reflects a high, attractive net initial yield of 9% after deduction of purchasers’ costs at 6.51%.

UNITS 1, 2 AND 3 LUSTRUM RETAIL PARK HAVERTON HILL ROAD, STOCKTON ON TEES TS18 2RB LOCATION

Stockton on Tees is a major commercial centre situated 2 miles There are regular domesticB1275 and international passenger and freight services west of Middlesbrough with the two towns merging together along operating from Tees Airport some 8.5 miles to the south of the town. Teesport is with Hartlepool and to form the Teesside conurbation. positioned 4 miles to the east. The town lies 250 miles north east of London, 58 miles north of Leeds and 38 miles south of Newcastle upon Tyne. Stockton has a district population of 178,408 persons (2001 Census) with 1.12 Scotland A106 million people living within a 30 minute drive time and 660,000 people within a Stockton benefits from good road infrastructure being situated on 20 minute drive time (Source: Eurodirect 2003). Primary catchment is estimated Glasgow the intersection of the A19 north/south highway and the A66 east/ Edinburgh at 194,000 (PROMIS) with the town drawing upon neighbouring centres of west dual carriageway, the latter providing direct access to the Middlesbrough, Darlington, Billingham and Hartlepool. A18 A1(M). Newcastle Riverside Park Rd Sunderland Carlisle Middlesbrough

ASHINTON Leeds MORPETH Manchester Liverpool A106 A1(M) Nottingham A696 Newcastle Birmingham A19 North Rd Airort North A18 A68 Middlesrouh A19 TYNEMOUTH Wales T e A66 Port o Tyne e s Hartington Rd Cardiff London A69 SOUTH B NEWCASTLE Bristol r SHIELDS id HEHAM UPON TYNE g e A A68 A19 SUNDERLAND p ATESHEAD p ro A106 ac A1(M) h Rd MIDDLESBROUH Newport Rd B61 CHESTERLESTREET SEAHAM A1032 Borough Rd A690 A19

DURHAM Heywood St Portrack Lane LUSTRUM Teesside A167 A181 A130 Uniersity A689 A106 RETAIL PARK A690 HARTLEPOOL B61

A66 A688 A689 Teesort B122 A130 River Tees A68 B1032 Alert Par

A688 STOCKTON MIDDLESBROUH ueens Stockton Rd DARLINTON ampus A12 B61 A66 A66 A171 est Lane STOKTON Hospital A66 Durham Tees Princeton Dr Valley Airort Thornay A66 SCOTCH CORNER A19 A1130 A1(M) B1032 A13 Teesside Shoppin Par

A684 A19 South

A1130

UNITS 1, 2 AND 3 LUSTRUM RETAIL PARK A19 HAVERTON HILL ROAD, STOCKTON ON TEES TS18 2RB SITUATION

Haverton Hill and immediately adjoining Portrack Lane, form the prime and dominant bulky goods retail warehouse and trade park location serving the Teesside conurbation and wider catchment area. This area is ideally located with prominent and highly accessible access from the A19 immediately adjacent and a 1/4 mile west of the A19 and A66 intersection, 2 miles west of Middlesbrough town centre. Darlington is situated 8 miles to the south west and Hartlepool 6 miles to the north east.

The subject location is home to a number of estates including Lustrum Retail Park, Portrack Retail Park, Interchange Retail Park and other trade park and retail warehouse clusters along with North Tees Industrial Estate. The units are located immediately off Haverton Hill Road approximately 300 yards west at the junction of Haverton Hill Road and the A19 in a prominent position. Access to the units is from Lustrum Avenue which connects with Haverton Hill road and runs parallel to it.

The property is situated adjacent to a Wickes unit and immediately opposite SCS, Furniture Village and Go Outdoors. Within 200 yards there is a B & Q depot extending to 122,000 sq ft. Other national tenants within the immediate facility include Dunelm, The Range, Carpetright, Magnet, Tile Giant, McDonalds, Greggs, Yes Electricals, Screwfix, Electrical Base, Topps Tiles, Toolstation, Halfords, The Plumb Centre, Booker, BOC and an ASDA supermarket.

The subject units are positioned at one of the most prominent locations on Haverton Hill Road being one of the first set of retail warehouses visible when approaching from the A19.

REGIONAL ECONOMY

There is significant development taking place in Stockton-on-Tees and the surrounding area. 2.5 miles south west of the subject property, a scheme is underway to bring 117 new homes to the city centre. Working in partnership with the Stockton Borough Council and the Homes and Community Agency, Tees Valley Housing is engaging with the local community to provide skills, employment and education opportunities to stimulate the on-going development of a sustainable and vibrant community in the area.

Additionally, on the northern bank of the River Tees, Dunelm Homes have planning consent to develop 60 houses and 114 riverside apartments, increasing critical mass and adding further vibrancy to the location. Such types of development are transforming the town centre with new and exciting places for people to live in the heart of Stockton, whilst expanding on the local talent pool for the surrounding business parks.

Also on the sublect side of the River Tees on North Shore, Muse Developments in conjunction with Stockton Borough Council are currently developing a £300M mixed use scheme including commercial and residential accommodation. GVA are involved in advising Muse and we are aware that the scheme is targeting rents of £17 - £18 per sq ft for Grade A office space on a pre-let basis. The first office building extending to an area of 43,000 sq ft, has been pre-sold to Thirteen Group Housing Association for a price exceeding £165 per sq ft, with the ‘Fusion Hive’, a new innovation centre, also nearing completion.

Portrack Lane has a further 33 acres identified for expansion on the estate, adjacent to the A19 truck Road. Planning consent for a mix of B1, B2/B8 and A3 development totalling 240,000 sq ft has recently been granted.

UNITS 1, 2 AND 3 LUSTRUM RETAIL PARK HAVERTON HILL ROAD, STOCKTON ON TEES TS18 2RB MORRISONS DISTRIBUTION CENTRE A1046 NORTH SHORE To Stockton Town Centre DAVID LOYD LOGISTIC CENTRE

HARVEYS TRAVIS PERKINS FURNITURE

THE RANGE

ASDA SMYTHS TOYS DOVE PLUMBING

TOOL STATION DUNELM A1046 B&Q SCREW FIX

GREGGS A19 North PORTRACK INDUSTRIAL ESTATE MCDONALDS BENSONS FOR BEDS SCS

TOPPS TILES UNITS 1, 2 AND 3 FURNITURE VILLAGE FRANKS FLOORING

GO OUTDOORS

YESS ELECTRICAL WICKES HIRE IT A19 ARMADILLO STORAGE BOC GASSES

BOOKER WHOLESALE

NORTH TEES INDUSTRIAL ESTATE RINUS PIPE CENTRE

A19 SOUTH UNITS 1, 2 AND 3 LUSTRUM RETAIL PARK HAVERTON HILL ROAD, STOCKTON ON TEES TS18 2RB DESCRIPTION

The property comprises three retail warehouse units built in approximately 2001 with 135 car parking spaces to the front and a shared service yard to the rear. The site extends to 2.42 acres (0.98 Ha) and has a coverage by footprint of 25%.

All of the units are of steel single span, portal frame construction clad to the lower elevations in brick or internal breeze blocks surmounted by composite panelling. Roofs are pitched and covered in metal profile sheeting incorporating plastic skylights offering good natural light.

Units 1 and 2 have exposed metal sheet roofs and walls where Unit 3 is fully fitted out with tenants panelling to walls and suspended ceilings with integral strip lighting. All three units have roller shutter service doors opening to the service yard which itself is accessed from Tees Way connecting with Haverton Hill Road. Each unit has a partially glazed frontage and signage to the front elevations.

UNITS 2 & 3

UNIT 1

UNITS 1, 2 AND 3 LUSTRUM RETAIL PARK HAVERTON HILL ROAD, STOCKTON ON TEES TS18 2RB ACCOMMODATION

The property provides the following GIA’s:-

Ground Floor Mezzanine Total Unit No sq ft sq ft sq ft Comments

Unit 1 12,000 5,954 17,954 Tenant’s mezzanine installed in 2004

Unit 2 4,931 - 4,931 No mezzanine

Unit 3 10,000 9,094 19,094 Mezzanine owned by the Landlord

Total Gross Internal Area 26,931 15,048 41,979

UNITS 1, 2 AND 3 LUSTRUM RETAIL PARK HAVERTON HILL ROAD, STOCKTON ON TEES TS18 2RB TENURE

The property is held by way of a long ground lease for a term of 150 years from the 15 November 2001 at a peppercorn rent without review. The lease permits uses falling within Class A1, A2, B2 or warehousing within Class B8 Part B of the Town & Country Planning (Use Classes) Order 1987 as amended. There are 134 years unexpired on the lease.

TENANCIES

All units are let on full repairing and insuring terms with 5 yearly upward only reviews to open market value. There is currently a service charge in respect of common parts. For the year ending 23 June 2017 the service charge budget is £21,215 p.a. equating to £0.50 per sq ft which is fully recovered. A summary of lease terms is provided below.

Total Floor Area Unit No Tenant Lease Term Break Option Rent PA Rent Sq Ft (GIA’s)

£12.73 15 years Unit 1 17,954 Mono Market Ltd None £152,860 ignoring tenant’s expiring 28/9/2018*1 mezzanine of 5,954 sq ft

20 years Unit 2 4,931 Floors 4 You Ltd None £65,000 £13.20 expiring 23/6/2036

Rolling landlord only break on Michael O’Connor 7 years 11 months Unit 3 19,094 or after 24 July 2017 on three £126,840*3 £12.68*4 Portrack Ltd expiring 31/5/2023*2 months’ notice

Rent reserved All 41,979 £344,700 p.a.

1*Tenant offered to extend the lease to Sept 2023 at the passing rent in return for a rent free period 2*The lease is excluded from the Landlord and Tenant Act 1954 3*The tenant is currently paying a personal concessionary rent of £85,000 per annum payable up to an including 23 July 2017. The Landlord will top up this rent to the reserved level 4*The rent is £6.64 per sq ft if you also rentalise the mezzanine

UNITS 1, 2 AND 3 LUSTRUM RETAIL PARK HAVERTON HILL ROAD, STOCKTON ON TEES TS18 2RB TENANT COVENANTS

We summarise below company information obtained from Creditsafe.

Tenant (Company No) Year End Turnover Pre tax Profit Shareholder’s Funds

Mono Market Ltd 30/11/2015 £7,012,746 £88,901 £397,040 (No) Mono Market Ltd 30/11/2014 £6,992,099 £145,532 £446,649

Floors 4 You Ltd 30/8/2015 £1,408,092 - £104,208 (07748128) Floors 4 You Ltd 30/8/2014 £810,867 - £75,564

Michael O’Connor Portrack Ltd (09577107) 31/12/2016 - - -

Mono Market Ltd has traded from this unit since September 2003 and have an established business which we are informed trades well from this location. The tenant has three other units at Northgate Darlington, Newbridge Street, Newcastle and Olive Street, Sunderland which the company own. Floors 4 You Ltd trade from 18 units nationwide and have a Head Office in Dudley. We are advised on site that the Lustrum Avenue unit trades very well since opening in June 2016 and this is one of the company’s best trading units. Michael O’Connor Portrack Lane Ltd is an established local tenant. The company sell a full range of furniture and household goods from the ground and fully utilised full cover mezzanine trading floor.

PLANNING CONSENT

All three units have planning consent for non-food bulky goods use restricted to DIY and garden goods, furniture carpets, floor coverings, camping, boating and caravanning goods, motor vehicle and cycle goods and bulky electrical goods.

Copies of Planning Consents are available on request.

UNITS 1, 2 AND 3 LUSTRUM RETAIL PARK HAVERTON HILL ROAD, STOCKTON ON TEES TS18 2RB OCCUPIER MARKET

Haverton Hill Road, Lustrum Avenue and Portrack Lane are collectively regarded as Teesside’s premier bulky goods and trade park destination with high levels of occupancy. These locations are regarded as the most desirable positions due to their prominence and accessibility.

The most recent letting we are aware of in this location involved Unit 2 Lustrum Avenue forming part of the subject property. This unit was let on a 20 year unbroken lease from June 2016 at a rent of £65,000 p.a. devaluing to a rate of £13.20 per sq ft. Other units occupied by SCS and Furniture Village immediately opposite are at £12.75 to £13.25 per sq ft.

UNITS 1, 2 AND 3 LUSTRUM RETAIL PARK HAVERTON HILL ROAD, STOCKTON ON TEES TS18 2RB INVESTMENT MARKET

There have been a limited number of retail warehouse investments sold in the North East region in the last 18 months with many investors wishing to hold on to their properties in this sector. A summary of recent transactions taking place between June 2015 and October 2016 is provided below.

Property Description Tenancy Date/Price & Yield

13.6 years WAULT to expiry and 10.9 years to break options. Tenants; October 2016 Tyne Valley Retail Park New build scheme of 4 units totalling 38,103 sq ft Homebase, Pets at Home, Poundstretcher and Majestic Wine £7.4M Hexham £521,145 pax (Ave £13.65/sq ft) 6.7%

June 2016 Whessoe Road (off North Lease to B & Q Plc to 6/2026. RPI rent review (cap 2.5% pax) and break Mid 1980’s detached 30,854 sq ft unit £5.3M Road Darlington) option 6/2021 £320,000 (£10.80/sq ft). Tenant not in occupation 9%

September 2015 Portrack Retail Park Late 1990’s 6 unit scheme in two terraces – totalling WAULT of 4.9 years to expiry and 4 years to break. Harveys, Pet City £3M Stockton on Tees 80,085 sq ft with 290 CPS on a site extending to 6.4 acres and Dean Plc £306,658 pax (1 x 20,000 vacant unit) 9.6%

September 2015 Trimdon Retail Park Early 2000’s 3 unit scheme extending WAULT of 5.5 years to expiry (no breaks) to DSG Retail Ltd (2 units) £8.4M Trimdon Street, Sunderland to 42,831 sq ft with 175 CPS and Halfords 7.5%

New Drive-thru and older refurbished industrial unit June 2015 WAULT of 12.4 years to McDonalds and B & M Bargains. De-value Meynell Road Darlington occupied by B & M. Total 29,062 sq ft in established trade £4M McDonalds £18/sq ft and B&M £9/sq ft park and bulky goods location 7%

Portrack Retail Park, Stockton on Tees was sold by GVA on behalf of the Administrators in September 2015 in an off-market transaction for £3M reflecting a net initial yield of 9.6%. This property was located in an inferior, less prominent position with some site issues. Other transactions show a yield range of between 6.7% and 9%, the latter involving a B & Q unit where the occupier had vacated.

UNITS 1, 2 AND 3 LUSTRUM RETAIL PARK HAVERTON HILL ROAD, STOCKTON ON TEES TS18 2RB ASSET MANAGEMENT

The following initiatives could be used to increase value:- • Document lease extension proposed by Mono Market. • Activate landlord only break option and relet unit 3 to another company at a higher rent. • Improve unit entrances by enlargement of glazed areas and signage. • Buy in land between and to the front of the units, or look into development joint venture with adjoining land owner.

VAT

The property is elected for VAT.

FURTHER INFORMATION

PROPOSAL Offers are sought of £3.6M (Three Million, Six Hundred Thousand Pounds), Subject to Contract and exclusive of VAT. gva.co.uk/10325 A purchase at this level will show a highly attractive net initial yield of 9% assuming purchasers’ costs at 6.51%. Simon Beanland Direct Dial: 0191 269 0512 Email: [email protected] UNITS 1, 2 AND 3 Luke Symonds LUSTRUM RETAIL PARK Direct Dial: 0191 269 0095 HAVERTON HILL ROAD, STOCKTON ON TEES TS18 2RB Email: [email protected]

GVA Grimley Limited Conditions under which Particulars are issued GVA Grimley Limited for themselves, for any joint agents and for the vendors or lessors of this property whose agents they are, give notice that: 1.) The particulars are set out as a general outline only for the guidance of intending purchases or lessors and do not constitute, nor constitute part of, an offer or contract. 2.) All descriptions, dimensions, references to condition and necessary Lynsey Underwood permission for use and occupation, and other details, are given in good faith and are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them. 3.) No person in the employment of GVA Grimley Limited or any joint agents has any authority to make or give any representation or warranty whatever in relation to this property. Direct Dial: 0191 269 0093 4.) All rentals and prices are quoted exclusive of VAT. Reproduced by courtesy of the Controller of HMSO. Crown Copyright reserved. Licence No 774359. If applicable, with consent of Chas E Goad, Cartographers, Old Hatfield, Geographers A-Z Map Co Ltd and/or The Automobile Association. For identification purposes only. April 2017 Email: [email protected] Designed & produced by www.creativestreakdesign.co.uk Ref-1058