Prime retail investment For sale

Prime Retail Investment For Sale
Newcastle-upon-Tyne - 26/34 Northumberland Street
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100% prime retail location on
Northumberland Street
Investment Considerations
•
The University City of Newcastle is the dominant retail location and
principal focus of economic activity in North East England. The city is
one of the most sought after retailing locations in the UK.
•
Newcastle has a primary catchment population of 1,462,000 and includes
much of Tyneside and rural Northumberland, ranking the city 4th out
of the PROMIS centres.
•
The property occupies a prominent retailing location right in the heart
of the pedestrianised Northumberland Street, directly opposite the
Fenwick department store and close to Marks & Spencers. Other nearby
occupiers include Primark, Superdrug and WH Smith.
•
Excellent opportunity to acquire two good covenants trading as Greggs
and Burger King with a total rental income of £603,250 per annum
•
Freehold
•
Offers are sought of £9,000,000 (nine million pounds), subject to
contract and VAT. This represents an attractive Net Initial Yield of
6.33% allowing for purchasers costs of 5.80%
St James’ Park
M&S
Subject Property
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Monument Mall
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Newcastle Railway Station
© 2012 Microsoft Corporation , Bing maps
Location
The University City of Newcastle Upon Tyne is the
economic capital and dominant retailing location for the
North East of England and sits approximately 280 miles
north of London and 106 miles south of Edinburgh.
Newcastle benefits from strong communication links
with its own airport and metro systems and a fast train
service to London with travel time under three hours.
Newcastle also benefits from good Road connections
with Junction 65 of the A1(M) being approximately 9
miles to the south and providing onward connections
to the national motorway network.
Situation
The subject property occupiers a 100% prime retail location on fully pedestrianised Northumberland
Street, benefitting from an extremely high footfall. Northumberland Street is the firmly established prime
pitch within Newcastle and along with Eldon Square Shopping Centre act as Newcastle’s retail core.
The subject property sits right in heart of Northumberland Street, directly opposite the Fenwick department
store and close to Marks & Spencer. Other nearby occupiers include Primark, Superdrug and WH Smith.
Description
Newcastle
Upon Tyne
The subject property is an attractive five storey building of masonry construction with wooden single
glazed sash windows. The ground floor comprises of two retail units each fitted out in the tenants own
corporate style. The second to fifth floors comprises office accommodation.
Demographics
Newcastle’s total population within the primary catchment area is 1,462,000 ranking the city 4th out of
the PROMIS centres and 4th in terms of comparison retail spend available.
Newcastle is ranked 171st of the PROMIS centres in terms of affluence with a significant amount of the
population categorised in social groups D and E. The AB social group is partially unrepresented and
social group C1 is moderately unrepresented.
© Google maps 2012
Retailing in Newcastle
Newcastle has a total of 2.6 million sq ft of city centre
retail floor space ranking it 6th on the PROMIS scale.
While traditionally the Newcastle retail market
was centred around the Grainger Town core which
included Grainger Street and Grey Street, as the
city developed this emphasis shifted towards
Northumberland Street and Eldon Square shopping
centre. Eldon Square is one of the largest shopping
destinations in the UK providing approximately 1.4
million sq ft of retail space after a large extension
and refurbishment in 2010. Tenants include Apple,
Superdry, Guess and Hollister and is anchored by
John Lewis and an 180,000 sq ft Debenhams store.
Northumberland Street meanwhile has become
known as one of the country’s leading high streets,
with rental values having reached a peak at £330
per sq ft Zone A. Other notable retailers on
Northumberland Street include Marks & Spencer
(one of their largest outside of London), Primark,
BHS and Fenwick Department Store.
Monument Mall which is located opposite the subject
property has frontages on Northumberland Street
and Blackwell Street and is arranged over four levels.
The centre comprises 16 retails units and a large
basement unit let to TK Maxx. In December 2011
planning permission was granted to reconfigure the
space to provide an additional 3,000 sq m of retail
floor space, which includes a 3,500 sq m retail unit
trading on first and second floors, accessed from
Northumberland St.
Tenure
Freehold
Accommodation
Ground sqft
Basement sqft
First sqft
ITZA
Total sqft
(sqm)
(sqm) (sqm) (sqm)
28/32 Northumberland Street
Burger King*
34 Northumberland Street
Greggs
2,523 (234.4)
939 (87.2)
2,275 (211.4)
1,318
5,737 (532.0)
1,261 (117.1)
2,325 (216.0)
-
739
3,586 (333.1)
*We have not placed any allowance for the benefit of the A3 planning at rent review.
Tenancy
Tenant
Lease Start
Term
Lease Passing
Expiry
Rent pa
Next
Review
Date
Greggs Plc
26 Northumberland Street
11/04/2009
10/04/2019
10
£180,000
11/04/2014
Burger King Limited
28 Northumberland Street
25/12/2000
24/12/2025
25
£418,250
25/12/2010
Markbourn Limited
2nd-5th Floors
24/06/2005
23/06/2132
127
£5,000
£603,250
Rental Analysis
Covenant
Northumberland has become known as
one of the Country’s leading High Streets
with rental values reaching a peak at
£330psf Zone A.
Greggs Plc
We have analysed the rent as follows:
28/32 Northumberland Street
£265 Zone A
34 Northumberland Street
£229 Zone A
Greggs plc was established in 1939 and are the leading bakery retailer in the UK with over 1,500 shops throughout
the UK. Greggs currently employs approximately 20,000 people and are looking to open 500 new stores in the
next few years providing 6,000 new jobs.
The last three reported abbreviated accounts for Greggs plc are shown below:
01/01/2011 (£’000)
Turnover
Pre-tax profits
Net worth
02/01/2010 (£’000)
27/12/2008 (£’000)
662,326658,186 628,198
52,523
48,770
49,470
175,794
163,658
147,261
VAT
We understand the property has been
elected for VAT. It is anticipated that
the sale will be treated as the transfer
as a going concern (TOGC).
Proposal
We are instructed to seek offers in excess
of £9,000,000 (nine million pounds). A
purchase at this level will reflect a net
initial yield of 6.33% assuming purchaser
costs of 5.80%.
Burger King Limited
Burger King is a global chain of fast food restaurants established in 1953 with over 12,000 stores in 73 counties
worldwide. Like many of Burger King’s this property has been sublet to a franchise and we understand has
recently been assigned for a significant premium.
The last three reported abbreviated accounts for Burger King Limited are shown below:
30/06/2010 (£’000)
Turnover
30/06/2009 (£’000)
30/06/2008 (£’000)
59,04858,691 60,843
Pre-tax profits
-6,253
-7,486
-10,530
Net worth
-9,510
-17,141
-8,703
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Newcastle-upon-Tyne
26/34 Northumberland Street
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