PC World Megastore

PC WORLD, Gallagher Retail Park | 1
PC World Megastore
Junction 9, m6, GALLAGHER RETAIL PARK, WEDNESBURY WS10 9QY
PRIME WELL LET RETAIL WAREHOUSE INVESTMENT
2 | PC WORLD, Gallagher Retail Park
PC WORLD, Gallagher Retail Park | 3
INVESTMENT SUMMARY
ƒƒ Junction 9 at Wednesbury is one of the
principal retail warehouse locations in the
country.
ƒƒ Excellent communication links and extensive
catchment of 1,113,691 within a 20 minute
drivetime and 5,019,256 within 1 hour.
ƒƒ The property comprises a solus retail
warehouse unit let to DSG Retail Limited
totalling 30,500 sq ft (2,834 sq m).
ƒƒ Prominently situated in a concentration of
retail warehousing totalling 535,000 sq ft
anchored by a 185,000 sq ft IKEA Superstore
and a 102,000 sq ft B&Q warehouse.
ƒƒ Immediately opposite the 165,000 sq ft
phases 1 & 2 of Gallagher Retail Park and
adjacent to a 52,000 sq ft Decathlon store.
ƒƒ Bulky Goods planning consent.
ƒƒ 135,000 vehicles pass the site on the M6
everyday.
ƒƒ 138 car parking spaces providing a ratio of
1:221 sq ft.
ƒƒ Let to the 5A1 rated covenant DSG Retail
Limited.
ƒƒ Site area of 2.5 acres (1 ha).
ƒƒ Long unexpired term certain in excess of 16
years.
ƒƒ Total passing rent of £1,308,241 per annum.
ƒƒ Fixed increase in 2016 to £1,516,610 per
annum.
ƒƒ Freehold
ƒƒ Our client is seeking offers in excess of
£22,500,000 (Twenty Two Million, Five
Hundred Thousand Pounds), subject to
contract and exclusive of VAT, which reflects a
Net Initial Yield of 5.50%, rising to 6.37% in
2016, assuming acquisition costs of 5.80%.
4 | PC WORLD, Gallagher Retail Park
LOCATION
The M6 Motorway provides a direct link to Stoke-onTrent, Manchester, Liverpool and the north west up
to Carlisle. It also provides a link to the M54 which
provides access to Shrewsbury and
038northern Wales.
A4
The M6 connects with the M1 Motorway approximately
37 miles to the east of J9. The M1 provides the UK’s
main arterial north-south route linking the M25, London
and South East with Birmingham, Nottingham, Leeds,
the A1(M), the North and North East.
A38 ( M )
6
OLDBURY
M6
BIRMINGHAM
A3
8
34
A
A435
M5
A
41
SOLIHULL
M
KIDDERMINSTER
A441
M42
t Rd
Be
sc o
B420
0
M69
42
WEDNESBURYThe unit has excellent accessibility, with dedicated slip roads on Wood Green Road
to the south providing access from the M6 and the local area, whilst Park Lane and
Axletree Way offer access from the north.
M1
The unit has excellent frontage to and visibility from the motorway, and is adjacent to
a 185,000 sq ft IKEA Superstore and 102,000 sq ft B&Q Warehouse. Also nearby is
the 52,000 sq ft Decathlon store which opened in 2010.
Phases 1 and 2 of Gallagher Retail Park, opposite the subject unit, provide
approximately 164,000 sq ft of retail warehouse accommodation, with tenants
including: Harveys, Furniture Village, ScS, Currys, Pizza Hut, KFC, Burger King, Next,
TK Maxx, Outfit, Mamas & Papas and Boots.
BROMSGROVE
REDDITCH
A47
Phase 3 of Gallagher
Retail Park is situated within a major concentration of retail
1
warehousing, totalling approximately 535,000 sq ft. It is immediately adjacent
to Junction 9 of the M6 Motorway and approximately 1.6 miles to the east of
Wednesbury town centre.
M6
A4 5
M6
Leicester
Ho
nor
Ma
A4
6
M
WALSALL
M1
SITUATION
N
42
ou
ntr
y
SUTTON ew Rd
COLDFIELD
DUDLEY
J9
us
62
A4
kC
WEDNESBURY
d
eR
d
M42
The M5 also connects to the M42 approximately 14
miles south of the property. The M42 links to the M40,
Bla
providing
access to Banbury and Oxford.
c
Broa
dway
W
M6
The M6 Motorway also connects to the M5
approximately 2 miles south of the property providing
access to Worcester, West Bromwich and Bromsgrove
to the south of Birmingham.
Telford
M54
M
A xle
tre
er
Rd
ton
las
Junction 9 is located 11 miles to the north of
Birmingham, 6.5 miles east of Wolverhampton, 36 miles
south of Stoke-on-Trent, 51 miles to the west of Leicester
and 125 miles north west of London. Bescot Stadium
Station, located approximately 1 mile to the east of the
property, provides a fastest journey time to London
Euston of approximately 2 hours.
WOLVERHAMPTON
M6
Da r
Junction 9 of the M6 at Wednesbury is strategically
situated 4 miles to the north of the intersection with the
M5 Motorway and 7.5 miles south of the intersection
with the M54, between Walsall to the north and
West Bromwich to the south. This part of the national
motorway network, north of Birmingham, forms a
crucial transport corridor due to its central positioning
within the UK.
M45
PHASE 3
M6
PHASE 2
PHASE 1
J9
PC WORLD, Gallagher Retail Park | 7
DESCRIPTION
CATCHMENT AND
DEMOGRAPHICS
The PC World store comprises a western facing stand
alone retail warehouse unit extending to 30,500 sq ft,
situated immediately opposite, and sharing an access
road with, Phases 1 and 2 of Gallagher Retail Park.
There is a Burger King restaurant pod immediately to
the south.
The unit is of steel portal frame construction with
brickwork and profiled metal cladding to the elevations,
together with a glazed entrance lobby. The unit has
been fitted out to the tenant’s specification. An eaves
height of 6.5 m can accommodate a mezzanine level
though one has not been installed.
The car park to the front of the unit comprises 138
spaces (including 7 designated disabled spaces),
providing a ratio of 1: 221 sq ft.
The servicing area is adjacent to the northern elevation
of the unit. It is accessed from Axeltree Way to the rear,
which also forms the eastern boundary to the entire
site and provides a link with the B&Q Warehouse and
IKEA Superstore to the north.
The subject property serves a surrounding catchment of
165,934 people within a ten minute drive time and 1,113,691
within a 20 minute drive time. (Source: Pitney Bowes
Business Insight and ONS).
GALLAGHER RETAIL PARK
Demographic analysis of this population shows that the
households of ‘Stable Income’ are above the national
average. The percentage of those in full time employment
is in line with the national average.
Drivetime (minutes)
10 Minutes
Population
Number of
Households
165,934
65,618
20 Minutes
1,113,691
451,277
60 Minutes
5,019,256
2,134,100
The neighbouring Ikea store draws from a larger
catchment of up to an hour drive time, encompassing
towns such as Stafford, Stoke-on-Trent, Coventry and
Wolverhampton.
The level of car ownership is above average with 42.60%
of households within a 20 minute drive time owning 1 or
more vehicles.
135,000 vehicles pass the site on the M6 everyday.
(Source: Department for Transport)
A detailed Catchment demographic report is available
upon request.
SITE
The site extends to an area of approximately 2.5 acres (1
hectare).
8 | PC WORLD, Gallagher Retail Park
OUT OF TOWN PROVISION AT JUNCTION 9
TENURE
There is a significant retail offer in the Junction 9 vicinity including:
The property is Freehold
Gallagher Retail Park
This is the largest retail park in the area and is situated opposite the subject property. It provides 165,000 sq ft of
retail warehouse accommodation in two phases. It is owned by KKR and comprises 9 units and 3 pod units. Phase 1
has Open A1 (non food) planning consent, and tenants include: Boots, TK Maxx, Mamas & Papas, Next and Outfit.
Planning consent on Phase 2 has recently been widened, with units 1-3 (Furniture Village, ScS and Harveys) being
wide Bulky and unit 4 (Currys) being Open A1 non food.
As well as the main park there are also three solus units:
B&Q
The nearby B&Q unit provides approximately 102,00 sq ft of retail warehouse accommodation and is owned by
B&Q Properties.
Decathlon
The Decathlon unit adjacent to the subject property provides approximately 52,000 sq ft of retail warehouse
accommodation and is owned by Decathlon.
IKEA
The Ikea unit provides approximately 185,000 sq ft of accommodation and is owned by Ikea Properties
Investments.
ESTIMATED RENTAL VALUE
We outline below a schedule of rents for comparable accommodation:
Scheme
Town
Tenant
Brent South
Brent Cross
Betta Living
Headline Rent
£59.00
Ladymead
Guilford
Oak Furnitureland
£52.50
Fosse (South)
Leicester
Oak Furnitureland
£45.00
Junction 27 Retail Park
Leeds
Betta Living
£45.00
Junction 27 Retail Park
Leeds
Multi York
£45.00
Fosse (South)
Leicester
Sofaworks
£42.50
Purley Way
Croydon
Furniture Village
Orbital
Swindon
Outfit
£40.00
£39.75
Springvale
Orpington
Wren Kitchens
Giltbrook
Nottingham
Homestyle
£38.00
£37.50
Great Cambridge Road
Enfield
Sofaworks
£37.50
TENANCY AND ACCOMODATION
The unit is let in its entirety to DSG Retail Limited, trading as PC World, for a term of
25 years from 6th February 2006. The current passing rent is £1,308,241, equating
to £42.89 per sq ft on the area of 30,500 sq ft as stated in the lease.
There is a fixed uplift in February 2016 to £1,516,610 per annum, equating to £49.72
per sq ft.
Further reviews will be upwards only to open market value.
PC WORLD, Gallagher Retail Park | 9
R OAD
17
66
27
Lodge
31
39
SITE PLAN
13
S LAN E Y
T rack
FB
MP 0.5
43
49
51
57
59
3
2
1
C ourt
41
6
4
5
9
7
8
S aldavian
12
10
11
13
14
15
17
18
16
76
SP
Tennis
Cou rts
Bd
y
Ca r P a rk
B owling G reen
18
20
10
14
Ta
me
in
er
ra
R iv
D
CR
Tank
78
2
P utting G reen
W
ard
MO NTFO R T R OAD
P os ts
38
7
1
E l S ub
S ta
Frede ric B ull
Memorial Hall
47
P a vilion
(Son s of R e st)
37
26
Und
39
39a
41
P a vilion
35
P leck P ark
29
P layground
191
FF
SP
14
DR I
The C hes tnut Tree
(P H)
SC
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Drain
EW
AY
De f
19
10
4
TR E
BE
179
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10 0
B oro Cons t & Met Dis t B dy
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Und
Def
R iver Tame
P os ts
167
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Tra ck
2
M6
P os ts
13
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161
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159 a
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1 62
P AR K LA N E
159
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154
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Ta
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Tank
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23
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147
120 . 1m
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J9
Tank
143
145
30
SL
42
LB
136
13
TCB
S helter
33
2
132
20
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25
3
130
S urgery
21
14
1
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124
13
139
Un
d
43
119 .5m
118
RO
2
39
R
40
DE
2
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Allotment G ardens
AD
B or
PO
Ri ve
r Ta
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RO
AD
1
12
37
8
Axle
34
129
P LA
13
32
121
25
& Me
t
AX L
22
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E TR
D ING LE Y R OAD
Way
N R OAD
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tree
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106
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S ub S ta
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1
32
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S ta
122. 5 m
32
P os ts
105
45
96
47
42
Allotment Gardens
20
E R OAD
35
30
W OOD GR EEN
Def
Dist
B
dy
10 | PC WORLD, Gallagher Retail Park
PLANNING
The property can be used for the sale of all goods within Class A1 provided that at least 51% of the floorspace is
used primarily for the sale of bulky goods (e.g. electrical goods, furniture and furnishings, motor accessories, etc).
The floorspace can be sub-divided to create up to two units (minimum floor area of 929 sq m) and there are no
limitations on hours of operation or servicing. A full planning summary is available on request.
ASSET MANAGEMENT
ƒƒ Potential for subdivision and installation of mezzanine
ƒƒ Consent has been widened on Phase 2 and the Currys unit now has Open A1 (non-food) consent. When this is
asset managed it will increase the Open A1 offer and reduce the available bulky goods space, to the benfit of
the PC World unit.
ƒƒ Securing a widening of the planning use following the relaxation of other consents nearby.
TENANT COVENANT
DSG Retail Limited
PC World is the UK’s largest retailer of computers and laptops, and is the sister company of Currys. Both companies
are subsidiaries of Dixons Carphone plc, which was formed following the merger on 7th August 2014 of Dixons Retail
plc and Carphone Warehouse Group plc. The new company is to joint the FTSE 100 on 22nd September with a
market capitalisation of approximately £4.23 billion.
Currys and PC World currently trade from over 1,200 stores throughout the UK and Carphone Warehouse trades
from 1,700 stores across Europe.
In the year ending 30th April 2013 DSG Retail Ltd had net worth of £302 million, pre-tax profit of £62 million and
turnover of £3,998 million. DSG Retail Ltd has a Dun and Bradstreet rating of 5A1 indicating a minimum risk of
business failure.
ENVIRONMENTAL
ENVIRON’s Phase 1 Environmental Review, dated June 2010, concluded:
“It is considered that there is a low risk of the site currently attracting attention of the Regulatory Authorities, or
being identified as representing a significant risk to site users, or other environmental receptors, whilst in its
current use.” A copy of this report is available on request.
EPC Rating
The unit has an EPC rating of B.
PC WORLD, Gallagher Retail Park | 11
VAT
This property has been elected for VAT purposes and therefore it is expected
that the investment sale will be considered as a Transfer of a Going Concern
(TOGC).
PROPOSAL
Our client is seeking offers in excess of £22,500,000 (Twenty Two Million,
Five Hundred Thousand Pounds), subject to contract and exclusive of VAT,
which reflects a Net Initial Yield of 5.50%, rising to 6.37% in 2016, assuming
acquisition costs of 5.80%.
CONTACTS
For further information or to arrange an inspection please contact
Jaime Dunster
[email protected]
020 7409 9929
Jonnie Ray
[email protected]
020 7534 0994
Rachael Watson
[email protected]
020 7409 8012
Tim Cuzens
[email protected]
020 7534 0992
CHARTERED SURVEYORS
33 Margaret Street
London W1G 0JG
7 Cork Street
London W1S 3LH
Important Notice
Savills and Cortex Partners LLP and their clients and any joint agents give notice that:
1. They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on
behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any
offer or contract and must not be relied upon as statements or representations of fact.
2. Any areas, measurements or distances are approximate. The text, images and plans are for guidance only and are not necessarily comprehensive. It should not
be assumed that the property has all necessary planning, building regulation or other consents and Savills have not tested any services, equipment or facilities.
Purchasers must satisfy themselves by inspection or otherwise.
Designed and Produced by Savills Marketing: 020 7499 8644 | September 2014