durham road, birtley, gateshead, dh3 2db

CARCRAFT
DURHAM ROAD, BIRTLEY, GATESHEAD, DH3 2DB
WELL LET CAR SUPERMARKET INVESTMENT
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CARCRAFT
DURHAM ROAD, BIRTLEY, GATESHEAD, DH3 2DB
SUMMARY
LOCATION
DESCRIPTION
COVENANT
TENANCY
GALLERY
CONTACT US
INVESTMENT SUMMARY
• Well located prominent car supermarket site
• Substantial site of 9.6 acres (3.89 hectare)
• 3,580.58 sq m (38,527 sq ft) of accommodation with a surplus site area of at least 5 acres.
• Let on an overriding lease to CC Automotive Limited with a guarantee from Pennine Metals A Ltd and Pennine Metals C Ltd.
• The key summary financials for the business for the y/e 2011 are a T/O of £130.2 million, EBITDA of of £2.8 million and Shareholders Funds of £35.0 million.
• A 20 year full repairing and insuring lease (with a TOB at year 15) with 5 yearly upwards only rent reviews. The first review has the benefit of a fixed increase to
reflect 2.5% pa compound.
• Total rental income of £420,000 per annum (£5.00 psf and £30,000 per acre)
• Offers are sought in the region of £3,780,000 (Three Million Seven Hundred and Eighty Thousand Pounds) subject to contract and exclusive of VAT
• This reflects a net initial yield of 10.50% increasing to 11.88% in Year 5 after purchasers costs of 5.80%
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CARCRAFT
DURHAM ROAD, BIRTLEY, GATESHEAD, DH3 2DB
LOCATION
SUMMARY
COVENANT
DESCRIPTION
TENANCY
GALLERY
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LOCATION
SITUATION
Birtley is a suburb in the Metropolitan Borough of Gateshead, Tyne and Wear. It is situated to
the South of Gateshead town and is physically linked to Chester-le-Street across the County
boundary in County Durham.
The subject property provides a significant frontage to the A167, which links directly to the A1 to
the north and A693 to the south, which in turn provides a direct link to Junction 63 of the A1 (M).
The surrounding area is a mix of commercial and residential with occupiers including AEI Cables,
BOC, Jewson, Komatsu and Birtley Leisure Centre. The Galleries and Team Valley shopping centres
are within 2 miles of the subject property.
The principal motorway is the A1(M) which leads to the M1 and M62 at Leeds approximately
75 miles to the South. Newcastle has an urban population of circa 800,000 and is served by
an international airport and is a main stop on the East Coast main rail line. Birtley is located
approximately 6.5 miles to the South of Newcastle Upon Tyne, 8.5 miles to the west of Sunderland
and 9.75 miles north of Durham. The town and distribution location of Chester-le-Street is
approximately 3.25 miles to the South. The A1(M).
A41
A167
9
A1
6
A69
SOUTH SHIELDS
A1058
A18
3
WALLSEND
NEWCASTLE
UPON TYNE
DURHAM ROAD
A69
BLUE BARNS
INDUSTRIAL
ESTATE
OUSTON
OUSTON CP
64
BARLEY MOW
A1300
A167
A183
A19
GATESHEAD
A18
4
18
A10
A1
VIGO LANE
A194(M)
LANE
MILL
BONE
A194(M)
A1
A692
WASHINGTON
63
A19
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NORTH LODGE CP
AD
DURHAM RO
PELTON
A1018
A693
A690
A19
64
DRUM
INDUSTRIAL ESTATE
SUNDERLAND
65
HIGH FLATTS
SOUTH
\PELAW
63
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CARCRAFT
DURHAM ROAD, BIRTLEY, GATESHEAD, DH3 2DB
SUMMARY
LOCATION
DESCRIPTION
COVENANT
TENANCY
GALLERY
CONTACT US
DESCRIPTION
ACCOMMODATION
The subject property comprises a modern, very well presented warehouse built in 2005 on an
extensive site that has been fitted out for its current use as a car showroom and together with a
detached, stand alone workshop.
We have been provided with floor areas in accordance with the RICS Code of Measuring Practice
6th Edition on a GIA basis:
Floor
• 2 bay steel portal framed warehouse
• Profile cladding to the elevations and roof
Use
Sq Ft
Sq M
Ground
Showroom
25,380
2,358.74
Ground
Workshop
13,147
1,221.84
38,527
3,580.58
Total
• Part glazed elevations and customer entrance
• Concrete floors
The site extends to approximately 9.6 acres (3.89 hectares) and reflects an extremely low site
density of 9.44%
• Sodium pendant lighting
• Suspended heaters
We believe there is at least 5.00 Acres (2.0 Hectares) of surplus land.
• Full height electric roller shutter doors
• Integral office accommodation inclusive of suspended ceilings, comfort cooling and
perimeter trunking
• Customer coffee shop, crèche and ‘deal rooms’
• Male, female and disabled WC’s
• Extensive tarmacadam, floodlit car display, storage areas and car parking facilities
• Security gatehouse operating a barrier entry and exit system
• Secure metal fencing to the perimeter of the site
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CARCRAFT
DURHAM ROAD, BIRTLEY, GATESHEAD, DH3 2DB
SUMMARY
LOCATION
DESCRIPTION
COVENANT
COVENANT INFORMATION
Carcraft is the largest and most successful used car hypermarket dealer in the UK responsible for
the country’s most recognisable motoring brands including Carcraft, Van Lease Direct, U Can and
Motorstore. As well as car sales these businesses provide leasing plans, car financing, MOT’s,
servicing and motor trade spares.
Carcraft operates as a used car hypermarket with 11 large showroom sites across England
and Wales offering over 4,000 cars from over 40 manufacturers. The majority of sites cover at
least 10 acres and comprise of showrooms of circa 100,000 sq ft along with car preparation,
Autocentre and MOT facilities. Sites can stock up to 1,500 cars which provides the customer with
an unrivalled, market leading choice combined with a wide range of financing packages. The
largest competitor is Motorpoint who only operate from 5 sites.
Carcraft have excellent relationships with a number of institutional landlords including PRUPIM,
Peel and Aberdeen Asset Management.
Carcraft was founded in Rochdale in 1951 and remains 100% family owned. The current
business model was established in the early 1990’s and has proved highly successful in bringing
car ownership to the wider public. The company now employs approximately 700 people and
continues to expand and is actively seeking new sites to retail from.
Further information can be found at www.carcraft.co.uk
The Carcraft business (inc UK Car Group Ltd and CC Automotive Group Ltd) is now held within 2
holding companies, Pennine Metals A Ltd (PMAL) and Pennine Metals C Ltd (PMCL) following
a recent reorganisation of the Company. UK Car Group Ltd and CC Automotive Group Ltd are
subsidiaries of PMAL. All in One Finance Ltd is a subsidiary of PMCL. Both PMAL and PMCL are
guarantors on the lease.
Management has prepared proforma numbers for PMAL + PMCL for the year ends 09 to 12 to
show what trading would have looked like for the combined groups as they currently exist. A
summary of these key financials for the proposed guarantor are as follows:
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PMAL & PMCL
Year End
Total Turnover
EBITDA
Shareholders Funds
Sep 09
£141,052,000
£3,816,000
£28,144,000
Sep 10
£125,557,000
£1,337,000
£35,638,000
Sep 11
£130,184,000
£2,835,000
£35,025,000
Sep 12 (forecast)
£130,500,000
£2,926,000
£33,627,000
Trading to date has been very positive and we have included the forecasts for the year end 2012.
Further financial details and separate accounts will be made available to seriously interested parties.
Dun and Bradstreet give the following credit ratings:
• Pennine Metals A – 2A2 meaning a LOWER than average risk of business failure and a D&B Maximum
credit of £3,600,000.
• UK Car Group Ltd – 5A1 meaning a MINIMUM risk of business failure and a D&B Maximum Credit
of £267,000.
• CC Automotive Group Ltd – 2A2 meaning a LOWER than average risk of business failure and a D&B
Maximum credit of £3,500,000.
• Pennine Metals C – 2A2 meaning a LOWER than average risk of business failure and a D&B Maximum
Credit of £87,500.
IMPORTANTLY the site is owned by the shareholders, of PMAL & PMCL in a separate Investment Company.
There is a lease already in place and the rental liabilities have been paid by Carcraft (at the passing rent)
for in excess of 5 years. The sale will not therefore adversely affect the company’s accounts.
With the net proceeds of the sale the business plans to expand it’s very successful car finance arm and
launch a much larger consumer finance fund which they see as a huge opportunity in the current climate
where raising consumer finance is difficult.
PWC have prepared a detailed Financial Analysis Datapack which can be made available on a confidential
basis to interested parties.
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CARCRAFT
DURHAM ROAD, BIRTLEY, GATESHEAD, DH3 2DB
SUMMARY
LOCATION
DESCRIPTION
COVENANT
TENANCY
GALLERY
CONTACT US
TENANCY
Our client has agreed terms for a new lease as follows:TENANT
CC Automotive Group Ltd
REPAIR
Full repairing and insuring terms subject to a Schedule of Condition.
VAT
GUARANTOR
Pennine Metals A Ltd (PMA Ltd) and Pennine Metals C Ltd (PMC Ltd).
The property is elected for VAT.
TERM
The lease will be for a term of 20 years from the completion of legal documentation.
PLANNING
TENANT BREAK CLAUSE
The tenant will have the right to determine their Lease on the 15th anniversary of the term
subject to providing a minimum six months prior notice.
We understand the current planning permission permits for the site to be used as a car
supermarket under a Sui Generis use.
RENTAL
£420,000 per annum.
RENT REVIEW
The rent shall be reviewed on the 5th, 10th and 15th anniversaries of the commencement of the
contractual term to the higher of the passing rent or the open market value.
The rental at year 5 will be increased to a minimum of £475,191per annum (2.5% per annum
compound).
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The property lies within the jurisdiction of Gateshead Council whose planning policies are
contained within the Gateshead Unitary Development Plan. We understand that the subject
property lies in an area designated as a Primary Employment Area within the UDP.
ASSET MANAGEMENT OPPORTUNITIES
The value of the investment is underpinned by its size and prominent frontage to a major arterial
route and in our opinion offers excellent asset management angles in the long term particularly
for change of use to a higher value operator i.e. a food store.
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CARCRAFT
DURHAM ROAD, BIRTLEY, GATESHEAD, DH3 2DB
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CARCRAFT
DURHAM ROAD, BIRTLEY, GATESHEAD, DH3 2DB
SUMMARY
LOCATION
DESCRIPTION
COVENANT
TENANCY
GALLERY
CONTACT US
PROPOSAL
We are instructed to seek offers of £3,780,000 (Three Million Seven Hundred and Eighty Thousand Pounds) subject to contract, for our client’s freehold interest. A purchase at this level reflects a net
initial yield of 10.50% and a reversionary yield in Year 5 of 11.88% assuming purchasers costs of 5.80%.
CONTACT
For further information please contact:
Simon Wood
B8 Real Estate
6800 Daresbury Park
Warrington
WA4 4GE
Tel: 01925 320520
Mob: 07793 119210
Email: [email protected]
Web: www.b8re.com
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MISREPRESENTATION ACT: All Agents and for the vendors or lessors of this property whose agents they are, give notice that (i) these particulars are produced in good faith, are set out as a general guide only and do not constitute any part
of an offer or contract. They are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact but must satisfy themselves as to the correctness of each of them. (ii) no person
in the employment of all agents has any authority to make or give any representation or warranty in relation to this property. i-brochure designed & produced by 90degrees.com. November 2012. Tel 0161 833 1890.
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