CITY CENTRE FREEHOLD RETAIL INVESTMENT WITH ASSET MANAGEMENT OPPORTUNITIES 33-39 GALLOWTREE GATE & 63 MARKET PLACE LEICESTER LE1 5GD 33-39 GALLOWTREE GATE & 63 MARKET PLACE LEICESTER INVESTMENT SUMMARY Leicester has the 9th largest primary catchment population in the UK (PMA) Leicester was ranked 3rd in the Hot 100 Retail locations (CACI) Prime position fronting pedestrianised Gallowtree Gate opposite M&S and Boots with rear access onto Market Place Attractive unbroken retail parade providing 5 retail units over basement, ground and 2 upper floors The property totals 37,620 sq ft 82% of the total income secured against the strong covenants of WH Smith and O2 Freehold WH Smith recently committed to a new 10 year lease Long WAULT of approximately 7.58 years to expiry (6.55 years to break) 32% of floor space vacant or let on a temporary basis providing excellent asset management opportunities Majority of upper parts un-occupied whilst benefiting from shared access Offers are sought in excess of £4,850,000, after purchasers costs reflecting: • 7.00% NIY • 8.22% EY • 8.81% RY 33-39 GALLOWTREE GATE & 63 MARKET PLACE LEICESTER Manseld Matlock Newark-on-Trent STOKE-ON-TRENT M1 Ashbourne LOCATION NOTTINGHAM DERBY Grantham Leicester is the second largest city in the East Midlands, located approximately 43 miles north-east Stone Uttoxeter M1 of Birmingham, 31 miles south of Nottingham and 100 miles north-west of London. EAST Leicester benefits from excellent communications being adjacent to the M1 motorway (Junction 21 Stafford MIDLANDS Spalding & 22) which in turn provides access to the M69, M6 and M42 motorways. The A6 runs though the Loughborough Melton Mowbray city centre providing access to Loughborough immediately to the north and Market Harborough M6 to the south. Leicester’s ring road, the A563, connects to towns and cities to the east, such as Cannock 22 Peterborough, Grantham, Melton Mowbray and Uppingham via the A607 and A47. Stamford The City’s mainline railway station provides regular high speed train services to London St Pancras M6(T) M42 LEICESTER 21 with a journey time of approximately 1 hour 10 minutes. There are also frequent rail services to WOLVERHAMPTON Wigston Uppingham M69 Birmingham, Sheffield and Nottingham and the catchment population is supported by an extensive M6 bus network and a park and ride service into Leicester city centre. BIRMINGHAM Market Corby East Midlands airport lies approximately 20 miles to the northwest of the City and provides BIRMINGHAM Harborough frequent domestic and international flights. M5 M6 M42 COVENTRY Kettering DEMOGRAPHICS M42 Redditch Leamington Spa Wellingborough Rushden Over one third of the population living within a 20 minute drive of the property are categorised by Warwick Droitwich CACI as being ‘Comfortably Off’, whilst the number of ‘Secure Families’ in this catchment is 69% Daventry M1 NORTHAMPTON higher than the national average. Stratford upon Avon M40 The East Midlands currently contains approximately 10% of all households in England, and as a region the ‘population is projected to grow faster than any other English region over the next 25 Bedford Great years (ONS). Malvern Evesham Banbury The city also forms part of an area which has been ranked the largest economic sub-region of the MILTON KEYNES East Midlands; with Gross Value Added (GVA) totalling £15.3 billion for Leicester. Letchworth 33-39 GALLOWTREE GATE & 63 MARKET PLACE CURVE THEATRE CITY HALL TOWN HALL LEICESTER SQUARE G R A N B Y S T RETAILING IN LEICESTER The city is classified as a Regional Centre with a substantial primary G SUBJECT catchment population of approximately 962,000 ranked 9th (PMA) A PROPERTY CORN EXCHANGE L L and an estimated shopping population of 495,000 ranking 12th L O (PMA) in the UK. O W HAYMARKET W TOWERS T T LEICESTER R R E Leicester has over 2.5 million sq ft of retail accommodation ranking E MARKET E E 7th (PMA) and a retail comparison spend of c. £871 million (CACI). G G A H A T U M T E Leicester’s retail offer strengthened in 2008 by the opening of B E E RS the 1.15m sq ft, Hammerson owned, Highcross Shopping Centre T TO E N E E G (former Shires), which is anchored by John Lewis. Highcross was R AT L T E E S re-opened following a £350m refurbishment, and provides a E HAYMARKET S predominantly fashion led tenant mix, supported by the city’sS main E SHOPPING L T SILVER ARCADE R CENTRE Cinema De Lux anchored leisure destination. R A E E H E E C T The city’s core shopping is focused on the pedestrianised T section of Humberstone Gate and Gallowtree Gate, where the subject E AST HAYMARKET G ATES property is located, along with Highcross Centre and Haymarket BUS STATION Centre which is anchored by H&M, Sports Direct and Primark. C H HIGHCROSS Prime rents in Leicester reached £245 ZA when Highcross opened U in 2008 whilst rents on Gallowtree Gate were in the order of £200 T R K E C ZA in 2008. Today rents along Gallowtree are now considered to A R H M G Y G be rebased at £90-£100 ZA providing an excellent opportunity for H A A A T growth. T E E The historic 700 year old Leicester Market is situated on Market Place adjacent to the subject property. As part of a wider £9.2 million redevelopment of Leicester Market, in 2014 Leicester City Council unveiled a new market food hall which has regenerated the market area. Further information can be found at: www.leicestermarket.co.uk/market-development 33-39 GALLOWTREE GATE & 63 MARKET PLACE LEICESTER SITUATION The property is situated in a prime position on the pedestrianised section of Gallowtree Gate, adjacent to Poundland and opposite Marks & Spencer and Boots. Other retailers in the immediate vicinity include HSBC, Dorothy Perkins, H Samuel, Pret a Manger and Card Factory. The subject units are situated in close proximity to the main entrance of the extended Highcross Shopping Centre at the northern end of Gallowtree Gate. The units are well placed to benefit from the significant footfall generated by all of the city’s retail areas. The majority of the holding fronts on to the prime Gallowtree Gate area, although to the rear of the property WH Smith, Damson Trading Corp Ltd, O2, and vacant Unit 63 all have accessible KENSINGTON INTER LTD frontages onto Market Place. LEICESTER MARKET DAMSON & CORN EXCHANGE TRADING CORP LTD REGENERATION 33-39 GALLOWTREE GATE & 63 MARKET PLACE LEICESTER DESCRIPTION The retail parade consists of 5 retail units comprising sales accommodation at ground floor with ancillary storage on first and second floors (the only exception is WH Smith which uses first floor and basement for sales and Post Office). The property is in part of late 19th century construction, with the rear of Unit 37 partially Grade II listed. The upper floors of the entire property have shared access and there is a notable amount of upper floor space that is unused and which could, subject to planning and negotiation, be used for alternative purposes. 33-39 GALLOWTREE GATE & 63 MARKET PLACE LEICESTER TENURE Freehold. TENANCY SCHEDULE The asset comprises a multi-let retail block of five units which are leased to four tenants and one vacant unit as set out in the table below: Address Tenant Accommodation Lease Expiry Next Rent Break Current Current Rent ERV ERV ITZA Comments Name Start Date Review Option Rent (£ pa) ITZA (£ psf) (£ pa) (£ psf) Date 33 Gallowtree Gate Kensington Inter Ground Floor Sales 795 21/03/2016 20/03/2017 £24,000 £34 ZA £44,000 £70 ZA Temporary deal. Contracted Ltd t/a Edge ITZA 557 outside the 1954 Act. Mutual First Floor 937 rolling break on one months Second Floor 1,006 notice. £2,000 rent deposit. Total 2,738 35 Gallowtree Gate Telefonica UK Ground Floor Sales 2,445 05/09/2014 04/09/2024 05/09/2019 04/09/2019 £71,000 £77 ZA £71,000 £77 ZA Ltd t/a O2 ITZA 1,308 First Floor 2,112 Second Floor 1,900 Total 6,457 37 Gallowtree Gate Damson Trading Ground Floor Sales 2,959 14/09/2016 13/09/2017 £42,000 £26 ZA £93,500 £70 ZA Part Grade II listed - no empty Corp Ltd ITZA 1,406 rates payable. Temporary deal. First Floor 2,866 Contracted outside the 1954 Second Floor 471 Act. 3 months term certain Total 6,296 followed by monthly rolling breaks. 39 Gallowtree Gate WH Smith Retail Ground Floor Sales 2,846 25/03/2016 24/03/2026 25/03/2021 £225,000 £101 ZA £225,000 £101 ZA Holdings Ltd ITZA 1,196 Basement 7,464 First Floor Sales 3,091 Second Floor Sales 2,854 Total 16,255 63 Market Place Vacant Ground Floor Sales 802 £22,000 £35 ZA Vendor to provide 12 months’ ITZA 638 empty rates guarantee. Benefits First Floor 986 from A3 planning consent. Second Floor 616 Total 2,404 TOTAL 34,150 £362,000 £455,500 33-39 GALLOWTREE GATE & 63 MARKET PLACE LEICESTER ESTIMATED RENTAL VALUE We are aware of the following recent market lettings evidence within the vicinity of the subject property: Address Tenant Transaction Date Net Effective Zone A Rent 39 Gallowtree Gate WH Smith Lease Regear March 2016 £85 ZA 36 Gallowtree Gate O2 Lease Renewal September 2014 £75 ZA 41 - 43 Gallowtree Gate Poundland OML June 2014 £90 ZA 8 Humberstone Gate Select OML May 2013 £100 ZA 25-27 Gallowtree Gate Pret a Manger OML April 2013 £95 ZA 29 Gallowtree Gate Sk:n Beauty Salon OML September 2011 £116 ZA 3 Gallowtree Gate Great Northern OML August 2011 £136 ZA COVENANT 82% of total income is derived from lettings to the undoubted covenants of WH Smith and O2.