188-191 WESTERN ROAD & 1-8 REGENT HILL BRIGHTON PRIME RETAIL HOLDING FOR SALE WITH REDEVELOPMENT POTENTIAL 188-191 Western Road and 1-8 Regent Hill | BRIGHTON INVESTMENT SUMMARY z Brighton is one of the largest and most affluent commercial centres in the south east, located 53 miles south of London, with a catchment in excess of 500,000. z The city benefits from a strong tourism economy with approximately 11 million visitors per annum, which boosts expenditure by nearly £900 million a year. z Brighton ranks 8 on the basis of its PMA Non-Food Retail Score and 7 on the PMA Fashion Score (PROMIS BRIGHTON). z Brighton was voted “Happiest City in the UK” in June 2017. z Freehold. z Site area of c.0.29 acres. z Situated in a prime trading location on Western Road opposite Churchill Square Shopping Centre. z Prime corner store comprising c.28,500 sq ft of accommodation with significant development potential. z Single let to New Look Retailers Ltd. expiring 23rd July 2025 at a current passing rent of £617,500 pa. z We are instructed to seek offers in excess of £8,575,000 (Eight Million Five Hundred and Seventy Five Thousand Pounds), subject to contract and exclusive of VAT, which reflects a net initial yield of 6.75%, net of normal purchaser’s costs. 188-191 Western Road and 1-8 Regent Hill | BRIGHTON DEMOGRAPHICS Brighton has a catchment population in excess of 507,000 and the city dominates its catchment area. The estimated shopping population of Brighton is 354,000, ranking the city 16 of the PROMIS centres. The city benefits from a strong tourists economy with approximately 11 million visitors per year and boosting expenditure by nearly £900 million per annum. An estimated 21,000 jobs are tourism related (www.visitbrighton.com). Brighton attracts c.36,000 students from throughout the UK and worldwide, who study at the University of Brighton and University of Sussex. Many students opt to remain in the city after graduating, attracted by the strong jobs market. The age profile of Brighton’s primary catchment population includes a high proportion of adults aged 25-44 and Brighton’s population is set to grow by 4.9% by 2021. In 2011 the service sector accounted for 82% of total employment in Brighton. Within this sector, financial and business services account for 27% of total employment. BRIGHTON The ICT and digital sector has grown by more than 40% over 5 years. 354,000 HOSTS OVER ESTIMATED FESTIVALS Worth over half a billion pounds, Brighton is recognised as having the 11 60A YEAR highest level of specialism in immersive technology in the UK. SHOPPING MILLION INCLUDING THE LARGEST ANNUAL ARTS FESTIVAL POPULATION OF BRIGHTON VISITORS THROUGH TOURISM IN ENGLAND Major employers include Lloyds, Legal & General and American Express, which has its European headquarters in the city. Other major employers include Domestic and General, Bupa, University of Brighton, University of ESTIMATED SHOPPING POPULATION PRIME CATCHMENT Sussex, EDF Energy and Hospitals NHS Trust. POPULATION RANKS IN EXCESS OF £886m 16 of the PROMIS TOURIST 507,000 CENTRES EXPENDITURE 188-191 Western Road and 1-8 Regent Hill | BRIGHTON M40 1 1 11 LOCATION Brighton is one of the largest commercial centres in the south east of England, located 53 miles M5 (85km) south of London, 25 miles (40km) west of Eastbourne and 62 miles (100km) east M25 of Southampton. RING M4 NDN M2 GIOR M20 The city benefits from good road Rail links are excellent, with regular train M3 ISTON communications with the A23 dual services to London Bridge and London M23 carriageway linking north and joining Victoria, with a fastest journey time WINHSTR GATWI IRORT the M23 motorway and in turn, the M25 of approximately 50 minutes. London motorway at Junction 7. The A27 dual Gatwick Airport is located only 22 miles (35 OTHTON IRORT A23 carriageway acts as a ring road around kilometres) north of Brighton, via the A23 SOTHPTON the city and links Brighton with Eastbourne dual carriageway and the M23 motorway. HSTINGS in the east and Southampton to the west. ORTOTH Brighton is popular with London commuters A27 A27 boasting one of the busiest train stations in BRIGHTON the South East outside Greater London. 188-191 Western Road and 1-8 Regent Hill | BRIGHTON CHURCHILL SQUARE SHOPPING CENTRE Western Road Upper North Street For Identification purposes only 188-191 Western Road and 1-8 Regent Hill | BRIGHTON RETAILING IN BRIGHTON Brighton’s retail core is predominantly linear in nature, running along Western Road and North Street, which along with Churchill Square Shopping Centre forms the primary focus for national multiple retailers in the city. The prime pitch is supported by additional concentrations along East Street, Duke Street, The Lanes and the North Lanes areas, which accommodate a variety of aspirational retailers, independents and boutiques. The retail offer in Brighton city centre is excellent with the city ranking 8 on the basis of its PMA Non-Food Retail Score and 7 on the PMA Fashion Score. As an important regional city with a buoyant office population, occupational demand in the city has remained robust in recent years. Brighton remains one of the first locations where retailers seek to establish representation, outside of London. SITUATION The subject property is situated in a prime trading location on the north side of Western Road, at its junction with Regent Hill, and virtually opposite the Churchill Square Shopping Centre. Nearby retailers include Gap, Marks & Spencer, H&M and Primark, in addition to a variety of other national High Street retailers. A goad plan extract highlighting the unit in blue is provided. 188-191 Western Road and 1-8 Regent Hill | BRIGHTON NORTH For Identification purposes only 188-191 Western Road and 1-8 Regent Hill | BRIGHTON DESCRIPTION The property comprises a retail store arranged over basement, ground and three upper floors. The tenant trades from basement, ground and first floor which are all connected by escalators, whilst the second floor and third floor are used for storage and staff accommodation respectively. The store also benefits from a dedicated service yard area at the rear. TENURE Freehold. 188-191 Western Road and 1-8 Regent Hill | BRIGHTON ACCOMMODATION We have been informed by the vendor that the property provides the following approximate floor areas on a Gross Internal Basis (GIA). Floor Imperial Metric Ground Floor Sales 11,676 sq ft 1,084.72 sq m Basement Sales 4,040 sq ft 375.32 sq m First Floor Sales 6,044 sq ft 561.50 sq m Second Floor Store 5,811 sq ft 539.85 sq m Third Floor (Staff Accom) 970 sq ft 90.11 sq m Total 28,541 sq ft 2,651.50 sq m TENANCY COVENANT The property is let in its entirety to New Look New Look is a British global fashion retailer with a chain of high street Retailers Limited on a reversionary 15 year shops. It was founded in 1969 and has been owned since May 2015 full repairing and insuring lease from 23rd July by the investment company Brait SA, controlled by Christo Wiese. 2010, at a current rent passing of £617,500 The chain sells womenswear, menswear and clothing for teens. pa exclusive, subject to an upwards only rent review on the 23rd July 2020. Having entered into a CVA in March 2018, New Look has showed a positive turn-around. In its third quarter results New Look reported New Look was subject to a CVA, which a statutory loss before tax in the year to date to £1.2m, versus a loss was approved on the 21st March 2018. of £63.2m in the comparable previous period, reflecting a robust The subject store was placed as Category performance. The adjusted EBITDA in the last quarter was flat at £36m. A. This has not affected the rent or insurance payable under the lease and the rent is paid The balance sheet restructuring following the CVA cut debt from £1.35bn on a monthly basis. to £350m and will significantly lower the group’s financing costs. 188-191Option Western 1a Road - Office and 1-8 Regent- New Hill Build | BRIGHTON DEVELOPMENT POTENTIAL There is the opportunity to reposition the asset to create a modern flagship store arranged over ground and basement with either office, hotel or residential uses on the upper floors, subject to planning. Max Architects have prepared a feasibility study for the subject property along with drawings of a number of indicative schemes, both on a re-development basis and Option 2b - Hotel - Retained a comprehensive refurbishment. Option 1a - Office - New Build Option 1a - Office - New Build With residential values in excess of £600 CV psf, prime office rents in excess of £35 psf and vast demand from a range of hoteliers, there is an opportunity to further enhance the property’s value. Further information is available on request. 20 Option 2b - Hotel - Retained Option 2b - Hotel - Retained 23 188-191 Western Road and 1-8 Regent Hill | BRIGHTON VAT The property is elected for VAT and it is proposed that the sale will be treated as a Transfer of a Going Concern (TOGC). EPC Copies of the EPC rating and report are available on request. PROPOSAL Our clients are seeking offers in excess of £8,575,000 (Eight Million Five Hundred and Seventy Five Thousand Pounds), subject to contract and exclusive of VAT, which reflects a net initial yield of 6.75% after allowing for standard purchasers costs of 6.68%. The asking price reflects a capital value of £300 per sq ft applying the GIA floor area.