Prime Retail Warehouse Investment Opportunity
TK Maxx & HomeSense Tollbar Way, Botley Road, Hedge End, Southampton, SO14 7NY TK Maxx & HomeSense Tollbar Way, Botley Road, Hedge End, Southampton, SO14 7NY
investment considerations
Easily Prime Flexible Newly location accessible planning in one of the top retail via refurbished warehouse destinations New consent unit of in the country; 15 year Junction 7 permitting lease from of the clothing sales sq ft Hedge End July 2015 45,028 Southampton with a break at M27 G.I.A. year 10
Let to the 5A1 Benefits covenant of Offers are £742,846.50 from the strong TJX UK sought in excess of critical mass the location per annum, provides, with retailers in the reflecting 5.5% net initial yield, vicinity including a relatively low assuming purchaser’s One Marks & Spencer, costs of . This reflects £16.50 of TK Maxx’s 5.8% Sainsbury’s, Currys PC per sq ft new concept £12,766,000 stores to include World Megastore and subject to contract and Next Home & TK Maxx and HomeSense exclusive of VAT. Garden
prime retail warehouse investment opportunity TK Maxx & HomeSense Tollbar Way, Botley Road, Hedge End, Southampton, SO14 7NY
M25
Location M40 SWINDON
Southampton is a major retail, leisure and commercial city in the south east of the UK, 76 miles south west of M4 M4 London, 20 miles west of Portsmouth and 30 miles north M25 east of Bournemouth. LONDON
Hedge End is a dominant regional out of town retail pitch, M3 located 4.8 miles to the east of Southampton city centre. It A338 A34 BASINGSTOKE is one of the most established retail warehouse locations in M25 the South of England. M3
The retail pitch is immediately located on the M27 A303 M3 A303 motorway at Junction 7, which links to Portsmouth, A3
A31 Southampton and the M3 motorway, 5.5 miles north west. A338 A34 As a result, it is an extremely accessible location, which is A303 A36
SALISBURY A31 A3 one of the reasons for its success as a retailing destination. WINCHESTER
A36 M3 Southampton International Airport and Parkway rail station are A272 A272 A272 located 5 miles to the north west, at Junction 5 of the M27. A3 A354 A338 The airport serves almost 50 UK and European destinations, M27 with the passenger numbers approaching 2 million. The SOUTHAMPTON A3 (M) station provides a direct service into London Waterloo with the A31 M27 A27 fastest journey time of 1 hour and 11 minutes.
CHICHESTER BRIGHTON A31 A338 PORTSMOUTH
BOURNEMOUTH
ISLE OF WIGHT
prime retail warehouse investment opportunity TK Maxx & HomeSense Tollbar Way, Botley Road, Hedge End, Southampton, SO14 7NY
catchment and DEMOGRAPHICS
Southampton has a primary catchment population of 731,000 people and a shopping population of 433,000 people, ranking the city 18th and 17th respectively out of the top 200 PMA Retail Centres. There are 136,186 people living within a 10 minute drivetime of the subject property, extending to 672,224 people within a 20 minute drivetime. Within the 10 minute drivetime, social groups AB, C1 and C2 are represented at an index figure of 99,102 and 112 of the population (with 100 being the average), with the lowest social group; DE, relatively under-represented at 89. As a result of its retail dominance, the catchment population for Hedge End extends much further than a 20 minute drivetime and draws upon areas such as Winchester, Eastleigh, Fareham, parts of Portsmouth and even as far as Salisbury to the north east.
Southampton ranks 17th for total in-store comparison retail expenditure available within the catchment area, being £2,008 million in 2015, far exceeding the PMA average of £924 million. Per capita in-store comparison expenditure is also above average at £2,749 compared to the PMA average of £2,600.
prime retail warehouse investment opportunity TK Maxx & HomeSense Tollbar Way, Botley Road, Hedge End, Southampton, SO14 7NY
Situation
The subject property is located in a prominent position on Tollbar Way, which links to the A3051 Botley Road, one of M3 the main routes leading to Southampton city centre to the A27 EASTLEIGH west. Tollbar Way links to the other retail warehousing in 14 the area to the south and to Junction 7 of the M2 via the 4 A314 Charles Watts Way. Opposite the subject property is M27 A335 Bradbeers Retail Park totalling 70,000 sq ft. Within Hedge End is a total of 750,000 sq ft of retail accommodation, as detailed further below. 4 HORTON HEATH ROWNHAMS 5 SOUTHAMPTON AIRPORT
M27
A35 TK Maxx/ HomeSense
A3057
A27
A35 A33 CITY OF SOUTHAMPTON A35
A3057 A3024 7 HEDGE END
A33
A27
M27
A3024
8
A3025 prime retail warehouse investment opportunity TK Maxx & HomeSense Tollbar Way, Botley Road, Hedge End, Southampton, SO14 7NY
M A UN SE LL W HEDGE END AY
Y retail warehousing IN HEDGE END A W
R M27 A B L L H O T T U Hedge End is an established and substantial retail O S E WH N ITE LA warehouse destination comprising approximately 750,000 S WA T Y S R TK MAXX / U H sq ft of retail accommodation. It is anchored by a 130,000 E L HOME SENSE B D M A MOORGREEN A H sq ft Marks & Spencer and a 105,000 sq ft Sainsbury’s O BRADBEERS S HOSPITAL R T Y O RETAIL PARK A situated adjacent to one another located off the A334 O W F
R L L A E B Charles Watts Way. S BO N TLE U Y A ROA D M
Y A W DR Hedge End Retail Park comprises 86,000 sq ft of bulky goods H U R MM T O A ND U B B RO O L AD TL L O E S accommodation occupied by DFS, Oak Furniture Land Y R O OA T WICKES E D N
A
L and SCS. There is a former Kiddicare unit which Ultimate
T HEDGE END S R
Y BO U Outdoors have taken a lease on and this unit totals 35,000 A T H PARK LE W Y E R O L R AD A B sq ft. Helping the critical mass of the location is a new Next B M L A L H O S
T D Home & Garden of 86,500 sq ft, which is configured across OA R E K C 3 floors and a garden centre. Other retail warehousing O L includes a 39,500 sq ft Homebase and a Currys PC World HEDGE END TRADE PARK A334 AY Megastore of 45,033 sq ft adjacent to Marks & Spencer. W TS AT W S E L R A H Opposite the subject property is Bradbeers Retail Park where C tenants include Harveys, Carpetright, Bradbeers (the owners M27 B&Q of the scheme) and Burger King. This scheme totals 70,000 WAREHOUSE sq ft and has a bulky goods planning consent. There is also A334 a 105,000 sq ft B&Q on the A334 Charles Watts Way. SAINSBURY’S AND M&S
7 NEXT
HEDGE END RETAIL PARK
prime retail warehouse investment opportunity TK Maxx & HomeSense Tollbar Way, Botley Road, Hedge End, Southampton, SO14 7NY
description
The subject property comprises a former Wickes store, which The ground floor area is of 45,028 sq ft G.I.A. with a sales Car parking is located to the front of the unit and provides has been fully refurbished by the landlord to an effective shell area of 36,893 sq ft. Internally the unit has been fitted out 249 spaces, giving a ratio of 1 : 210 sq ft. As part of the and TK Maxx have fitted it out to their specification. It is one to TK Maxx’s specification, with the clothing range making refurbishment works, the landscaping has been reduced of the first few combined TK Maxx and HomeSense stores up circa 60% of the sales area and HomeSense; 40%. TK allowing excellent visibility from Tollbar Way. selling both the clothing and home ranges, which are divided Maxx occupy the left side of the unit, with HomeSense on the The total site area is 4.88 acres, giving a low site cover of 21.5%. separately internally. The refurbishment works incorporated: right of the customer entrance. Trading across the ground floor only, but there is sufficient eaves height to install a Access to the unit is via Tollbar Way and the property benefits ■■ Overcladding of the roof and walls. For the roof, there is mezzanine, subject to planning. from separate access to the servicing area, which is located an Ashgrid system, 150 mm insulation quilt and 0.7 mm to the rear of the unit. thick outer steel panel, Plasticol coated. The external walls are clad with Kingspan Long Span KS1000LS, fully insulated to satisfy the minimum “U” valve requirement of the building regulations. ■■ New glazed shop fronts and door sets to the south and west elevations. ■■ Making good of existing floor and application of new screed. ■■ The unit is fully sprinklered, with the existing sprinkler installation tank and all apparatus repaired, serviced, adapted and tested to suit the tenant’s requirement. ■■ Car park reconfiguration, resurfacing and new car park lighting. ■■ “Ram raid” bollards to the front entrance glazed screens. ■■ New pedestrian footway to Tollbar Way. ■■ Relandscaped.
prime retail warehouse investment opportunity TK Maxx & HomeSense Tollbar Way, Botley Road, Hedge End, Southampton, SO14 7NY
Tenure Planning
The property is held freehold, as delineated below in red. The property was granted planning consent in October 2014 allowing TK Maxx to trade from the unit. The consent permits an area of 37,921 sq ft for the sale of home furnishings, household goods, furniture, carpets and floor coverings, motor and cycle goods, sports goods and equipment, electrical goods (including lighting), kitchen and bathroom goods, toys, seasonal goods, giftware, pet products, DIY and decorating, luggage, books and stationery, fashion items, garden materials and products and ancillary food and drink products. Of the 37,921 sq ft, 56% of this can be used for the sale of fashion items, including clothing, shoes, bags, jewellery, fashion accessories and beauty products. 5% of the area can be used for the sale of ancillary food and drink products (excluding sales from any café). The consent is considered similar to various consents granted Bradbeers to Next for their new Lifestyle stores. Retail Park The full planning consent is available on request.
tenancy
The property is let on a 15 year full repairing and insuring lease from 6 July 2015 to TJX UK. There is a tenant break in year 10. The current annual rent is £742,846.50, equating to £16.50 per sq ft, based on the agreed floor area of 45,028 sq ft G.I.A. The reviews are 5 yearly upwards only, subject to a cap at year 5 giving a maximum uplift of 15%.
prime retail warehouse investment opportunity TK Maxx & HomeSense Tollbar Way, Botley Road, Hedge End, Southampton, SO14 7NY
Rental Value Tenant Covenant
The property is let at a rent reflecting £16.50 per sq ft. We TJX UK is the tenant covenant for TK Maxx and HomeSense. believe this represents excellent value when compared to TK Maxx is the largest cut price retailer of apparel and home the other rents in Hedge End, and gives the potential for fashions in Europe. There are over 407 TK Maxx stores across good rental growth in the future. the Continent.
For their Lifestyle store nearby, Next are paying a rent HomeSense was launched in the UK in 2008 and now has 33 reflecting £39.58 per sq ft across a rentalised area of 36,743 stores across the UK, with plans for many more. HomeSense sq ft. This rent is subject to 5 yearly reviews to CPI, collared offers home fashions and gift wear offering the same good and capped at 1.5% and 3% per annum. value proposition as TK Maxx.
On Hedge End Retail Park, Oak Furniture Land took 10,000 Both companies are owned by TJX Companies Inc, which sq ft in July 2012 at a rent reflecting £32.40 per sq ft. More had 29.1 billion of revenues in 2014 and operates across recently, Ultimate Outdoors have taken an assignment of the 3,300 stores in 7 countries. Kiddicare lease where the rent is £18.00 per sq ft on 35,000 sq ft. Rents on Hedge End Park Phase III average £25.00 per TJX UK has a 5A1 covenant and we set out below the most sq ft, with Currys PC World paying £28.50 per sq ft on their recent company accounts: 25,844 sq ft and Homebase paying £22.00 per sq ft for their 40,839 sq ft unit, subject to more restrictive consents. Year Sales Pre-Tax Net D&B Tenant Ending Turnover Profit Worth Rating It should be appreciated that the rent was agreed over 2 (000’s) (000’s) (000’s) years ago when the unit was in a poor state and subject to a more restrictive consent. We firmly believe that the unit 01/02/2014 £1,995,000 £91,500 £501,700 now fully refurbished and trading should command a higher TJX UK 5A1 rental level than that originally agreed. 02/02/2013 £1,814,600 £80,500 £437,400
prime retail warehouse investment opportunity TK Maxx & HomeSense Tollbar Way, Botley Road, Hedge End, Southampton, SO14 7NY
EPC
The property has an EPC rating of “C”. A copy of the EPC is provided on request.
VAT
The property has been elected for VAT, however, it is anticipated that the transaction will be treated as a Transfer of Going Concern (TOGC).
Proposal
We are seeking offers in excess of £12,766,000 (Twelve Million, Seven Hundred and Sixty Six Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level reflects an attractive net initial yield of 5.5%, assuming purchaser’s costs of 5.8%. Further Information The vendor would prefer to structure the sale price deducting the value of the rent free period, as opposed Wilkinson Williams Paul Wilkinson Ellie Kirkby to making good the rent free. Heathcoat House T: 020 7317 3799 T: 020 7317 3790 20 Savile Row M: 07770 585313 M: 07764 241898 London W1S 3PR E: [email protected] E: [email protected]
www.wilkinsonwilliams.co.uk
MISREPRESENTATION NOTICE Wilkinson Williams LLP give notice to anyone who may read these particulars as follows: These particulars are prepared for the guidance only of prospective purchasers. They are intended to give a fair overall description of the property but are not intended to constitute part of an offer or contract. Any information contained herein (whether in the text, plans or photographs) is given in good faith but should not be relied upon as being a statement of representation or fact. Nothing in these particulars shall be deemed to be a statement that the property is in good condition or otherwise nor that any services or facilities are in good working order. The photographs appearing in this brochure show only certain parts of the property at the time when the photographs were taken. Certain aspects may have changed since the photographs were taken it should not be assumed that the property remains precisely as displayed in the photographs. Furthermore, no assumptions should be made in respect of parts of the property which are not shown in the photographs. Any areas, measurements or distances referred to herein are approximate only. Where there is reference in the particulars to the fact that alterations have been carried out or that a particular use is made of any part of the property. Descriptions of the property are inevitably subjective and the descriptions contained herein are given in good faith as an opinion and not by way of statement of fact. Plans are published for convenience of identification only and although believed to be correct, their accuracy is not guaranteed and they do not form part of any contract. prime retail warehouse investment opportunity