the grafton centre, george street, altrincham

well secured, freehold, retail & hotel investment
with asset management opportunities
the grafton centre, george street, altrincham
well secured, freehold, retail & hotel investment with asset management opportunities
House of Fraser
Next/Debenhams
Stamford Quarter
Marks & Spencer
Altrincham Interchange
Rail/Train/Bus
Market Quarter
Ice Rink
Iceland
Superdrug
Poundland
ROA
D
AD
RO
N
Tesco Extra
EE
T
New Hospital Site
ST
R
ENT
EW
A
ST
THE
GRAFTON
CENTRE
LW
AY
REG
RD
O
MF
Total Fitness
RA
I
Altrincham Hospital
G
OR
GE
ET
RE
T
ES
Sainsburys
Apollo Cinema
Frankie & Benny’s
Chiquito
THE GRAFTON CENTRE, GEORGE STREET, ALTRINCHAM, GREATER MANCHESTER WA14 1SF
INVESTMENT SUMMARY
■ Altrincham is a strategically located, affluent, northwest retailing & business destination with per capita
spending levels well above the national average.
■ A rare opportunity to acquire a substantial 0.95 acre
freehold site within Altrincham’s main retailing core
with secure long dated income in addition to further future
redevelopment/refurbishment prospects.
■ 73% of the income secured on AWULT of 19 years (without
break) to the established covenants of Travelodge, Home
Bargains, Ladbrokes, Subway & Orange.
■ 5 yearly RPI (uncapped) rent reviews within the
Travelodge lease
■ A strong and varied blend of established national and
local tenants
■ Freehold
■ 6,079m2 (65,433 sqft) of retail and hotel floor space
including a 36 space car park.
■ A popular business destination with major town centre
regeneration projects underway including a new hospital,
transport interchange and Market Quarter revitalisation.
links directly with the M6 (Junction 20). The A56 (Manchester Road) is the
main arterial route to and from Manchester City Centre. There is also first
class rail communications with Northern Rail and the Metrolink (Altrincham
Interchange) providing regular train and tram services (every 6 to 12
minutes) to Manchester City Centre and Manchester Piccadilly rail station
with a journey time of circa 28 minutes. Manchester International Airport is
situated some 10km (6miles) east of Altrincham Town Centre.
■ £6,600,000 Subject to Contract & Exclusive of VAT
reflecting an attractive initial yield of 9% and a 12.74%
equivalent yield.
Altrincham
Altrincham is a historic market town and popular south Manchester business
hub strategically located within the Metropolitan Borough of Trafford circa
14.5km (9 miles) south-west of Manchester city centre, 18km (11 miles)
west of Warrington and 40km (25 miles) north of Stoke-on-Trent.
The town benefits from excellent transportation links and is located on
the A56 some 6.4km (4 miles) south of Junction 7 of the M60 (Orbital
Motorway) and 3.2km (2 miles) north east of Junction 7 of the M56, which
Altrincham
THE
GRAFTON
CENTRE
well secured, freehold, retail & hotel investment with asset management opportunities
THE GRAFTON CENTRE, GEORGE STREET, ALTRINCHAM, GREATER MANCHESTER WA14 1SF
Demographics & Economy
A popular expanding residential, commercial and leisure destination,
Altrincham has a indigenous population of circa 40,695 (2001 Census) but
draws on a larger catchment population of circa 112,163 persons within a
10 minute drive time and 612,575 within 20 minutes. The town is projected
to see further above average population growth in the next few years.
The Altrincham area has a particularly affluent demographic profile with a
significantly above average proportion of adults of working age categorised
within the most affluent AB social grouping. In contrast, the least affluent D
and E social groups are under-represented.
The local economy is biased towards the service sector which accounts for
71% of the total workforce of which 32% are ‘financial & business’ services;
significantly above the Promis average. Employers include Cotton Traders
Ltd, Hitachi Data Systems UK, Mott McDonald, Saltus Fund
Management, Civica Group, NES Group, and GE UK Holdings.
Altrincham Forward – Changing the Town
Altrincham Forward was established in 2011 by Trafford Council, Altrincham
& Sale Chamber of Commerce and associated local businesses to aid in the
regeneration and transformation of Altrincham Town Centre. Significant
progress has been made. A new £13m hospital development for CMFT
is to be developed at 15/41 Railway Street providing 6,823m² of new
medical facilities. Construction begins in spring 2013 with the hospital
due to open by the end of 2014. The re-location of the hospital enables
further the £15m revitalisation of the Market Quarter which will create a
refurbished marketplace, a new bespoke Altrincham library and an improved
public realm. Work is also due to start on Altrincham’s new £19m transport
interchange which will transform the existing station creating a modern
concourse and ticket office and moreover will improve links between bus,
tram and train services when it opens in 2014.
Retailing in Altrincham
Altrincham has a town centre retail floor space of circa 0.63m sq. ft, which
is below average although it has a significantly higher volume and quality of
retail provision relative to its size and affluence of the shopping population.
The per capita (in store comparison) spending is significantly above the
Promis average (2011).
Prime retailing is centred on the pedestrianised George Street and includes
the Stamford Quarter which has attracted the likes of Debenhams, H&M,
Next, Waterstones and Boots. Other national multiples represented
on George Street include, M&S, Rackhams (HOF), River Island,
Monsoon, Clarks, Wilkinson, Superdrug, Iceland and Poundland.
Situation
The Grafton Centre is prominently located at the southern end of the pedestrianised
George Street and has a triple aspect with prominent frontages onto both George
Street, Stamford New Road (A538) and Regent Road. Altrincham’s Transport
Interchange is situated approximately two minutes’ walk away along Stamford
New Road and the new CMFT hospital site is directly opposite the Regent Road
frontage in Railway Street which will enhance footfall in this locality. Retailers
located opposite and nearby include Poundland, Iceland, Yorkshire Bank,
Superdrug, Bodycare, Specsavers and Vodafone.
George Street and Regent Road. The property has recently been partially redeveloped and now provides a seven storey hotel tower leased to Travelodge
with associated parking, a newly created MSU for Home Bargains, three further
recently re-configured new units and 14 other unit retail units along with a newly
refurbished Jazz Bar/Restaurant at the junction of Regent Road and Stamford
New Road. The Graftons is an indoor retail arcade housing 5 of the units on short
term leases and a wide mall which links George Street and Stamford New Road
and provides a potential future redevelopment opportunity.
The Travelodge has a dedicated guest entrance lobby on Stamford New
Road and was comprehensively refurbished mid 2011 providing 91 rooms
along with an integral Bar/Café and 36 chargeable car parking spaces
situated adjacent to the tower at first floor level above the retailing provision.
The parking is accessed by a service road and bridge link (over George
Street) off Central Way which is located off Regent Road. The first floor area
also provides remote storage areas and three flats most of which is unused.
Accommodation
Description
The property provides a total approximate net internal floor area of 6,079m2
(65,433 sqft) as set out in the Schedule of Tenancies & Accommodation.
The Grafton Centre was built in the 1970’s and comprises a mixed use retail
and hotel scheme effectively occupying a virtual island site at the junction of
Tenure
Freehold
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DWELLINGS
N -Oto
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THE GRAFTON CENTRE, GEORGE STREET, ALTRINCHAM, GREATER MANCHESTER WA14 1SF
Tenant Covenant Status
Income Analysis
Travelodge Hotels Limited (No: 769170) – 43.3% gross income
Travelodge, launched in 1985, was the UK’s first and leading budget hotel chain
and now operates over 500 sites across the UK, Ireland and Spain. On 12/10/2012,
Travelodge’s ownership transferred to the US global investment firms, GoldenTree
Income Security Profile
Approximately 73% of the income is secured on an average weighted
unexpired lease term of circa 19 years as follows:
Asset Management, Avenue Capital Group and Goldman Sachs. As part of this
process, the current debt holders agreed to restructure the company’s debt, writing
off a substantial part of their loans (£235m) and re-structuring repayment of the
remaining debt to 2017/18. Total bank debt has been reduced from £635m to
£329m. Cash pay interest payments have been reduced significantly and £75m of
new money injected, part of which allows funding for a major £55m refurbishment
programme across the estate covering 11,000 rooms and 175 hotels and
commencing in early 2013 through to summer 2014. A condition of the lender
support was that Travelodge implement a Company Voluntary Arrangement (CVA),
resulting in the leases for 49 value dilutive hotels being terminated and rent being
reduced by 25% on a further 109 hotels. The CVA proposal was overwhelmingly
voted through by the creditors on the 04/09/2012 and implemented immediately.
Under the new corporate structure, Travelodge’s balance sheet has improved
significantly and a sustainable, long-term future has been secured.
We understand that the company is trading well since the restructuring although
new accounts have yet to be released. The last reported accounts in December
2010 confirmed a turnover of £331,700,000, pre-tax profits of £14,600,000 and
a net worth of £882,500,000.
TJ Morris Ltd (N0: 01505036) – 15.88% gross income
TJ Morris (t/a Home Bargains) has been established for over 30 years and
have a 5A 1 D&B Rating. The company has over 280 stores and employs
more than 8,000 staff. It is widely regarded as one of the largest businesses
in Merseyside and is the third largest independent UK grocer. The company
has an ambitious expansion strategy and in the next 5 years TJ Morris plan
to grow to 500 stores employing over 12,000 staff. For the year ending
30/06/2012 the company reported a turnover of £914,821,413, Pre-tax
profits of £84,192,684 and a tangible net worth of £272,902,273. Further
tenant covenant information available on request.
Income
£692,352 pax (Gross) and an estimated net income of £627,860 pax.
•
•
•
•
•
Travelodge Home Bargains Ladbrokes Subway Orange 47.26%
17.33%
2.51%
3.61%
1.91%
Lease Expiry Profile
75% of the current income
is secured in excess of 10 years.
Lease Expiry Profile of Gross Income
Gross Income by Tenant Profile
Core Income
73%
8-10 years
5-8
years 5%
11%
3-5 years 6%
0-3 years
13%
Lease Expiry Profile by Covenant Strength
National National
Multiples Multiples
Local
<5 years 5-10 years
7%
Covenants
4%
10 years +
0%
Local
Covenants
5-10 years 12%
National
Multiples
Local
10 years +
Covenants
64%
< 5 years 16%
10 years +
65%
Supplementary
Income 27%
Fixed Rental Increases
Service Charge & Vendor’s Shortfall Guarantee
The Grafton Centre is subject to a service charge which is calculated on a
gross floor area basis with individual tenant percentage apportionments.
The total service charge for the year ending 31/12/2012 was £116,407.
The service charge budget for the year ending 31/12/2013 is £102,912.
Further information is available on request.The current service charge, rates
and insurance shortfall amounts to an estimated £64,492.40 pax as set out
There are three occupational leases which are subject to fixed rental
increases. These are as follows:
•
•
•
•
Ladbrokes - £17,375pax increases to £34,750pax on 02/2014
Charlton Venture Hldgs - £25,000pax increases to £50,000pax on 07/2017
Franja Ltd (Regis) – £20,000pax increases to £27,500pax on 12/2013
Alterbridge (BAP) - £18,000pax increases to £21,000 pax on 04/2017
The vendor is not proposing to top these up.
in the tenancy schedule.
Asset Management Opportunities
■ The property presents an excellent opportunity to acquire a
substantial 0.95 acre freehold site in Altrincham town centre
which has a large proportion of the income secured for 19 years
(AWULT) but with future re-development refurbishment prospects.
■ The Grafton Centre Mall and the 5 integral units can be
reconfigured to provide a further MSU.
■ The asset provides an investor with flexibility allowing sub-division
and sale of part.
■ There is the opportunity to enhance the current rental income with
the letting of the vacant units and a vacant flat.
Further Information
For further information please contact:
David Freeman
020 7659 4830
[email protected]
VAT
The property has been elected for VAT.
EPCs
EPC’s have been commissioned and are available on
request. The ratings for the individual units are included on
the Schedule of Tenancies & Accommodation
James Baillie
020 7659 4839
[email protected]
Ed Smith
020 7659 4831
[email protected]
Proposal
£6,600,000 (Subject to Contract & Exclusive of VAT)
reflecting an attractive initial yield of 9% and a 12.74%
equivalent yield. The vendors’ preference is to dispose of
the entire holding however they may consider offers for the
Travelodge in isolation on a long leasehold basis.
MISREPRESENTATION These particulars do not constitute an offer or contract. They are intended as a guide to prospective purchasers. All reasonable care has been taken in the preparation of these particulars but their accuracy is not guaranteed. The purchaser should satisfy himself and as
to the correctness of these details. Neither the agents nor the vendors or lessors are to be or become under any liability or claim in respect of these particulars. These particulars are supplied on the understanding that all negotiations are conducted through this office. July 2013.
Adrian Gates Photography & Design 07710 316991
ALTRINCHAM: THE GRAFTON CENTRE
Tenancy and Accommodation Schedule
Address & Occupier
Description
Core Income
Lease Dates
Tenant Name
Trading As
Lease Start
Date
Lease Expiry
Next Review
Date
Break Date
Current Rent
(£pax)
ITZA
Anc.
1st
2nd
Ground
Floor NIA
TOTAL NIA
EPC Rating
(sq ft)
2010 RV
Rates Payable
(UBR@ 0.471
2013/2014)
Service Charge
Budget 2013
Insurance
Shortfalls
Comments
Travelodge Hotels Ltd
Travelodge
07/03/2012
06/03/2037
07/03/2017
None
£327,236
0
0
0
0
0
23,598
C - 54
£
115,000
£29,042.31
£5,169.62
91 bed hotel with 36 car parking spaces. Rent subject to 5 yearly,
upward only reviews linked to movements in the Retail Prices Index.
Tenant option to renew for 25 years at lease expiry.
111-117 George Street (Unit A)
TJ Morris Ltd
Home Bargains
10/01/2012
09/01/2027
10/01/2017
None
£120,000
3,610
0
0
0
11,177
11,177
A - 22
£
132,000
£15,445.40
£2,650.36
Service charge cap at £15,446.50pa increased in line with RPI.
Devalued on an overall basis. To be reviewed 5 yearly to the lower of
2%pa and Open Market.
92/94 Stamford New Road
Subway Realty Ltd
Ladbrokes Betting & Gaming
Ltd
Orange Personal
Communications Ltd
Subway
26/10/2010
25/10/2015
n/a
None
£25,000
838
0
552
550
969
2,071
D - 82
£
38,250
£2,102.35
£480.69
Ladbrokes
16/02/2012
15/02/2022
16/02/2017
None
£17,375
1,101
0
401
0
1,491
1,892
C - 63
£
34,750
£1,798.53
£403.47
Orange
18/07/2001
17/07/2021
18/07/2013
None
£13,241
0
0
0
0
0
0
n/a
£
12,250
£0.00
£15.96
£4,969.84
£1,117.18
£2,431.57
£497.62
Comms Dish
SUB TOTAL
Fixed uplift from £17,375pa to £34,750pa on 16.02.2014.
Annual rolling tenant break option.
£502,852
Fixed uplift from £25,000pa to £50,000pa on 11.07.2017. Devalued
on an overall basis. Christopher Thomas Tunnicliffe acts as a
guarantor.
104 Stamford New Road
Charlton Venture Holdings Ltd
Bloom Live
(Bar/Restaurant)
11/07/2012
10/07/2022
11/07/2017
None
£25,000
0
0
1,805
0
3,053
4,891
C - 71
£
42,750
108 George Street
Timeforbed Ltd
Timeforbed Ltd
14/06/2013
13/06/2014
n/a
3mth rolling
£5,000
826
677
0
0
1,763
2,440
B - 32
£
40,250
109 George Street
DJS Retail Ltd
Smiths
27/04/2007
26/04/2017
n/a
None
£40,000
789
0
824 (sales)
536
956
1,492
D - 78
£
40,750
£7,038.17
£471.48
127 George Street
Alterbridge Ltd
BAP
05/04/2012
04/04/2022
05/04/2017
05/04/17 (T)
£18,000
715
0
301
0
715
1,016
E - 117
£
30,500
£949.06
£229.84
90 Stamford New Road
City Gent Franchising Limited City Gent
19/04/2006
18/04/2016
n/a
None
£23,000
547
0
259
288
809
1,356
D - 96
£
25,500
£4,552.67
£325.40
4 Regent Road and
102 Stamford New Road
Headway - The Brain Injury
Association
Headway Brain Injury
Association
19/07/2010
18/07/2015
n/a
None
£15,000
510
0
261
0
697
958
D - 80
£
16,250
£1,284.38
£292.25
7 The Dome
Sally Vu
Sally Vu
23/10/2009
22/10/2019
23/10/2014
None
£15,000
498
0
227
206
659
1,092
C - 74
£
17,000
£3,625.41
£247.26
£625.41
9 The Dome
Mr Kanwal P Banga and Mrs
Asha Banga
Urban Edge
31/03/2013
30/03/2014
n/a
None
£6,000
536
0
211
253
704
1,168
C - 63
£
18,250
£3,573.12
£232.22
£3,805.34
11/13 The Dome
Franja Ltd
Regis
15/06/2000
14/06/2015
n/a
None
£20,000
884
0
0
0
1,048
1,048
C - 53
£
31,000
£4,061.15
£303.35
125 George Street
Eddie Phillips News Ltd
Eddie Phillips
29/11/2011
28/11/2018
29/11/2016
None
£22,500
458
0
447
0
569
1,255
D - 84
£
22,250
£1,275.23
£283.17
104 George Street
Vacant
Vacant
n/a
n/a
n/a
None
£0
755
0
56
1,372
1,428
B - 41
£
43,250
£19,756.84
£2,158.24
£441.96
£22,357.04
Unit B
Unit C
Unit D
5 The Dome
Flat 106A Central Way
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
Vacant
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
None
None
None
None
None
£0
£0
£0
£0
£0
382
1,537
720
459
0
0
0
69
522
4,535
1,373
1,371
750
£
£
£
£
15,500
Not yet rated
Not yet rated
Not yet rated
£7,300.50
£874.80
£1,221.50
£3,740.44
£762.09
£146.69
£336.45
£872.22
£242.05
£155.81
£1,368.19
0
522
4,535
1,373
623
0
B - 30
B - 30
B - 30
B - 46
0
0
0
0
495
0
£46,889.89
£98,016.33
£14,915.05
SUB TOTAL
Vacant
Occupational Costs
Grafton Tower
2a and 4 Regent Road
Supplementary
Income
Area (sq ft)
Rent
£18,957.75
£2,929.19
Fixed increase from £18,000 to £21,000 at 5th anniversary.
TOTAL
Gross Current Income
Net Current Income
£692,352
£627,860
65,433
1st /2nd Floor (unused space) shortfall (s/c & empty rates) = £11,138
There is a rates charge payable of £1,362.90 attributed to the Management suite which is recoverable through the service charge
£7,984.87
£9,193.54
£11,282.99
£1,792.70
£53,354.40
£11,138.00
£64,492.40
MISREPRESENTATION: These particulars do not constitute an offer or contract. They are intended as a guide to prospective purchasers.
All reasonable care has been taken in the preparation of these particulars but their accuracy is not guaranteed.
The purchaser should satisfy himself and as to the correctness of these details, neither the agents nor the vendor or lessors are to be or become under any liability or claim in respect of these particulars.
These particulars are supplied on the understanding that all negotiations are conducted through this office. June 2013.
1
Tenant has a service charge cap of £3,000 (incl. VAT) but pays the
rates and insurance.
Inclusive rent following grant of new lease in March 2013. Tenant
responsible for rates.
Stepped increase from £20,000 to £27,500 on 25/12/2013.
£189,500
767 (sales)
56 (anc)
0
0
0
184
0
Rent inclusive of service charge and insurance but tenant responsible
for rates.