Prime Retail Investment Opportunity THE FIRST PURPOSE BUILT NEXT FASHION, HOME & GARDEN STORE NEXT GROUP PLC CHARLES WATTS WAY HEDGE END SOUTHAMPTON SO30 4RT enter uuu Prime Retail Investment Opportunity NEXT GROUP PLC t previous next u Investment Summary • A “Trophy” Retail Superstore opportunity located in Hedge End, Southampton. • An affluent catchment with 745,237 persons living within a 20 minute drive time. • Prominent position at the entrance/exit to Junction 7, M27, immediately adjacent to Hedge End Retail Park and opposite to the large M&S and Sainsbury’s superstores. • Benefits from excellent critical mass being located at the heart of one of the South’s largest Retail Warehouse Shopping destinations (735,000 sq ft). u investment summary • Freehold. u location • A new 86,523 sq ft (GIA) quality retail development built and warranted by Next to an extremely high specification. u demographics • Open A1 non-food planning consent. u situation & • The UK’s first purpose built Next “Fashion, Home and retail warehousing Garden” format store. M27 • A New 21 year 3 month lease, (20 years unexpired) to the u description A334 Charles Watts Way undoubted covenant of Next Group Plc. u accommodation, • A commencing rent of £1,454,313 pax with a fixed uplift tenure & planning at Year 5, measured by CPI with 1.5% and 3% collar Junction 7 and cap. u tenancy • Offers are invited in excess of £28,940,000 (Twenty-Eight Million, Nine Hundred and Forty Thousand Pounds), u income & x which reflects a Net Initial Yield of 4.75%, assuming purchasers costs of 5.8%. Assuming an average CPI rate of 2.5%, there is a guaranteed Reversionary Yield (2019) u tenant covenant of 5.37% and an Equivalent (Nominal) Yield of 5.23%. u development, epc & vat u investment rationale proposal & contacts t previous next u CHARLES WATTS WAY HEDGE END SOUTHAMPTON SO30 4RT 12 10 A5 M5 A44 8 Stow-on- the-Wold M1 M40 A1(M) Location Luton Stevenage STANSTED 7 Cheltenham 11 A602 8 A41 9 A120 10 A10 A34 LUTON A130 A131 Hedge End, 4.8 miles to the east of Southampton City Centre, is a A436 6 9 A12 A40 A417 5 M11 major regional trading location on the South Coast and one of the most A429 4 A40 A41 Harlow Oxford 8 established retail warehousing locations in the South of England. A413 M10 3 A40 7 7 1 2 8 A418 A414 A419 7 A4010 22 Amersham 20 24 M25 25 26 A12 A130 19 5 It is immediately located on the M27 Motorway at Junction 7, linking A420 High Watford 6 18 5 the area to Southampton, Portsmouth and the M3 motorway (5.5 miles 5 Wycombe 4 17 A10 A419 M40 M11 28 4 A12 Brentwood 3 M1 2 A406 4 A127 north west). Hedge End services both the Southampton and Portsmouth 2 29 A127 Basildon 1 A41 1 A40 catchments, as well as extending into Hampshire. Swindon M25 A13 A406 CITY 16 A13 A429 M4 15 Slough LONDON 17 7 30 A346 6 4 1 A34 3 2 31 Southampton International Airport and Parkway railway station LYNEHAM A4 14 M4 Reading A329(M) A205 Gravesend are located 5 miles to the north west of the property at Junction 5 14 13 13 HEATHROW A20 A2 2 A350 12 A2 Rochester 10 Staines 1 11 1 of the M27. 2 Gillingham 11 A232 Chatham 4 4 u investment Camberley 3 M20 3 A34 M25 M25 2 10 A22 3 4 A249 The Airport serves 48 European destinations with annual passenger A338 A33 4 Woking 9 5 6 summary A339 A24 A23 M26 7 9 5 7 numbers approaching 2 million and the station provides a direct service A228 8 A3 M25 5 6 Maidstone Basingstoke 8 A21 6 M3 to London Waterloo with a fastest journey time of 1 hour 11 minutes. A26 u location 7 Guildford A22 A31 A229 8 A24 A36 GATWICK A303 A303 9 Tunbridge Wells 10 A264 A34 Crawley A21 u demographics A338 M3 A264 A31 11 M23 A3 A26 9 A22 10 11 u situation & A36 A354 A272 12 A23 13 retail warehousing Eastleigh 14 A21 4 SOUTHAMPTON A338 3 4 2 5 A24 A22 A26 1 7 1 SOUTHAMPTON A283 u description 8 A3(M) A27 Hastings A259 A31 9 3 M27 10 Havant A27 11 A27 5 12 Hove A31 Fareham 12 Brighton A22 u Gosport Worthing accommodation, A338 Bognor Eastbourne A348 Regis tenure & planning Portsmouth Poole Bournemouth u tenancy u income & cpi u tenant covenant u development, epc & vat u investment rationale proposal & contacts CHARLES WATTS WAY HEDGE END SOUTHAMPTON SO30 4RT t previous next u Demographics The retail catchment for Hedge End is extensive with 186,391 people A303 living within a 10 minute drive time. Allowing for a drive time of 20 Alton minutes, this catchment increases to 745,237 and draws from most The Property A34 of Southampton and key centres such as Winchester, Eastleigh, A338 20 minute drive time M3 Romsey and Fareham, as well as parts of Portsmouth. A31 The Hedge End catchment population is affluent, with the two most represented social groups of AB and C1 accounting for circa 48% 9 of adults of working age. The city of Southampton is the principal Salisbury Winchester catchment for the scheme. Southampton ranks 19 in the UK in terms 10 of the volume of comparison retail spend available in the catchment 11 area and is forecast to see above average percentage growth in the available pool of comparison spending over the forecast period u investment M3 2013–18. summary 12 NEXT PLC A36 Romsey CHARLES WATTS WAY The below table compares the demographics of other Next “Fashion, 13 A3 u location HEDGE END Home and Garden” stores in the South East and illustrates the 14 Eastleigh dominance of Hedge End. 4 A338 4 2 3 5 u demographics 20 minutes Drive Time Social Groups AB/C1 7 1 1 u situation & Hedge End 745,237 285,443 Southampton 8 retail warehousing Camberley 610,902 279,173 A3 (M) Maidstone 524,194 200,482 A31 u description 9 3 Shoreham 504,191 210,660 Ringwood Hythe 10 Chichester 11 M3 5 A27 u accommodation, High Wycombe 369,112 213,749 Fareham 12 12 tenure & planning A31 Fawley u tenancy Gosport A338 Portsmouth u income & cpi New Milton Lymington Cowes u tenant covenant Christchurch Ryde u development, Bournemouth Newport epc & vat u investment rationale proposal & contacts Prime Retail Investment Opportunity t previous next u NEXT GROUP PLC Situation The subject property is situated in a prominent position on Charles Watts Way (A334), which directly links the Hedge End retail area onto Junction 7 of the M27 motorway, approximately 250m to the west of the egress to the site. Access to the scheme is shared with the entrance and exits of Hedge End Retail Park onto the westbound dual carriageway of Charles Watts Way. Hedge End Retail Park is directly adjacent to the development. Occupiers on the park include DFS, Oak Furnitureland, ScS, Carphone Warehouse, Starbucks and Kiddicare. The M&S and Sainsbury’s stores are located directly opposite on the north side of Charles Watts Way. u investment summary u location BRADBEERS RETAIL PARK Y ALLIED CARPETS, PONDEN HOMES A W BENSONS/HARVEYS, CARPETRIGHT R BRADBEERS, BURGER KING A B L L O T u 2 demographics 4 3 3 B M27 B303 5 BO Retail Warehousing in Hedge End u TLEY situation & RO 2 AD 4 3 3 B&M (UNDER OFFER) B retail warehousing HEDGE END PARK CURRYS, PC WORLD WICKES Hedge End is an established and substantial retail warehouse destination area comprising approximately 735,000 sq ft B30 35 B OTL Y EY A ROA of retail space. It is anchored by the Marks and Spencer (137,000 sq ft) and Sainsbury’s (105,000 sq ft) superstores, opposite u description W D GRANG the subject property. R E R A O B Y A L A D L S W O TT T A W B&Q WAREHOUSE ES RL u accommodation, A Hedge End Retail Park, owned by M&G Real Estate, comprises 86,000 sq ft and benefits from a bulky goods planning consent, H C MARKS & SPENCER / SAINSBURY’S A with the exception of the Kiddicare and Carphone Warehouse units which have Open A1 non-food consent. Kiddicare tenure & planning W 3 3 I L 4 D G E R Y N A took the former Best Buy unit as part of a package of other former Best Buy stores. The other tenants include DFS, Oak A L N W A G S N E T SUBJECT PROPERTY E R T O A A Furnitureland, ScS, Carphone Warehouse and Starbucks. The tone of the park is circa £35 psf, the most recent letting being to W D u tenancy S LE AR H HEDGE END RETAIL PARK Oak Furnitureland at a headline rent of £32.50 psf in 2012. The DFS 2013 review is currently at arbitration. 4 C S WAY 33 DFS, OAK FURNITURELAND, SCS ATT A S W 7 KIDDICARE, CARPHONE WAREHOUSE LE AR STARBUCKS CH 4 33 U A P Other retail warehousing includes a Homebase (39,500 sq ft) and a PC World/Curry’s Megastore (45,336 sq ft) adjacent to u income & cpi P D E HEDGE END ROA R Y AM A TH N R W O N O E ER the M&S. The scheme has a bulky goods consent and is let at circa £22 psf. There is also the more secondary Bradbeers Retail IK W R P LO T N R H U T A Park, where tenants include Harveys, Carpetright, Bradbeers and Burger King.