Download Report

Prime Convenience Store Investment
M Local, Upton Rocks District Centre, Queensbury Way, Upton Rocks,
Widnes WA8 9DT
INVESTMENT SUMMARY
n The property is located in Upton Rocks, an affluent suburb of Widnes
n Situated in a prominent position on the Upton Rocks District Centre
n New build convenience store of 425.46 sq.m (4,580 sq.ft)
n The store ranks 3rd out of Morrison’s entire 158 convenience store estate
n Morrison’s paid a premium of £150,000 to secure the store
n Let to W M Morrison Supermarkets Plc for a further 12.5 years
n 5 yearly upward only reviews to RPI, capped at 10% per review period
n Current rent £69,056 per annum
nFreehold
n Offers sought in excess of £1,090,000
n Net initial yield 6.00%, and a reversionary yield based off the forecasted rent at review in 2017 of 6.52% (assuming costs of purchase of 5.8%).
LOCATION
Widnes is an established commuter town situated on the north bank of the River Mersey,
approximately 11 miles east of Liverpool and five miles west of Warrington.
The town has an urban area population of approximately 57,600 people and is served
by excellent road communications. The A561 dual carriageway to the south links to
Liverpool to the west and junction 12 of the M62 motorway to the south. The A5300 and
the A557 link to junction 6 and 7 of the M62 motorway to the north.
Liverpool John Lennon and Manchester Airport are situated 6 miles to the west and 25
miles to the east respectively.
SITUATION
The property is situated on the Upton Rocks District Centre which also includes
a Greene King public house. A new development of four retail units is currently
being constructed in the centre, adjacent to the subject property which will
include Barnardos, Subway, Whitecross Vets and Stanley Bet. To the rear of the
property Morris Homes are constructing 48 new homes.
Upton Rocks is a large modern housing estate two miles to the north of Widnes
town centre and three miles from junction 7 of the M62. The estate extends to over
2,500 homes and in the immediate vicinity of the subject property a substantial
residential development has been completed in the last five years principally
providing high value four and five bedroom homes.
DESCRIPTION
The property forms the anchor unit for the district centre and comprises a single
storey purpose built convenience store. The store includes a large sales area with
stores and a bakery to the side elevation.
To the front of the property is a 35 space car park including seven disabled spaces
and four parent and child spaces.
Access is off Lanark Gardens which leads directly to Queensbury Way. There is
a yard, including seven staff car parking spaces, to the rear of the property with
separate access off Queensbury Way.
TENURE
The property is held freehold and includes the Greene King demise and the
demise for the retail units.
The Greene King demise, edged blue on the site plan, is let long leasehold for
a term of 999 years from 24 October 2011 to Greene King Developments Ltd
at a peppercorn rent per annum. The tenant is to pay a third of the costs of the
maintenance of the common parts of the estate.
The retail units’ demise, edged green on the site plan, is let long leasehold for a
term of 999 years from 24 October 2011 to Hale Village Ltd at a peppercorn rent
per annum. The tenant is to pay a third of the reasonable costs of the maintenance
of the common parts of the estate and has a right to park in the car park to the
front of the subject property.
TENANCY
The property is let to W M Morrison Supermarkets Plc for a term of 15
years from 27 September 2012. The current rent is £69,056 per annum.
The lease is held on full repairing and insuring terms subject to 5 yearly
upward only reviews to RPI, capped at 10% per review period. The next
review is on 27 September 2017.
The tenant paid a £150,0000 premium to secure the unit.
COVENANTS
WM Morrison Supermarkets Plc is the UK’s fourth largest food retailer
by sales, with an annual turnover in excess of £16.8bn as of February
2015.
The company has over 525 stores (158 convenience stores) across the
UK, employing approximately 125,000 people across the portfolio,
and benefits from over 12 million customers visiting the company’s
stores each week.
The subject property ranks 3rd out of Morrison’s entire 158 convenience
store estate.
A summary of W M Morrison Supermarkets Plc’s accounts is set out
below.
W M Morrison
Supermarkets Plc
Turnover
Pre-tax Profit (Loss)
Net Assets
01/02/2015
£,000s
01/02/2014
£,000s
01/02/2013
£,000s
16,816,000
17,680,000
18,116,000
(792,000)
(176,000)
879,000
3,594,000
4,692,000
5,230,000
The company has a Dun and Bradstreet rating of 5A1.
EPC
The property has an EPC rating of A24. The report can be provided upon request.
VAT
The property is elected for VAT and therefore VAT will be payable on the purchase
price. It is anticipated that the sale will be dealt with as a TOGC.
PROPOSAL
We are instructed to seek offers in excess of £1,090,000 (One Million and Fifty
Thousand Pounds) subject to contract and exclusive of VAT.
A purchase at this level would reflect a net initial yield of 6.00%, assuming usual
costs of purchase of 5.80%.
Assuming published RPI growth since the commencement of the term and
forecasted growth of 1% per annum up to the rent review date in 2017 the
reversionary yield could be 6.52%.
CONTACTS
For further information or if you wish to arrange a viewing, please contact :BEN BLACKWALL
0121 513 0893
ben.blackwall@fspproperty.co.uk
ANDREW FRANCK-STEIER
0121 513 0891
andrew.franck-steier@fspproperty.co.uk
Franck Steier Price Ltd
Third Floor, Victoria House
114-116 Colmore Row, Birmingham, B3 3BD
Misrepresentation Clause : The accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and other
details contained herein are not guaranteed and are for general guidance only and prospective purchasers or tenants must not rely on them as statements
of fact or representations and must satisfy themselves of their accuracy. Neither Franck-Steier Price Ltd, nor any of their employees or representatives has
any authority to make or give any representation or warranty or enter into any contract whatever in relation to the property. Prices and rents quoted in
these particulars may be subject to VAT in addition. The reference to any mechanical or electrical equipment or other facilities at the property shall not
constitute a representation (unless otherwise stated) as to its state or condition or that it is capable of fulfilling its intended function. Prospective tenants/
purchasers should satisfy themselves as to the condition of such equipment for their requirements.