st andrews retail park

Open A1 non food retail warehouse investmentcoventry road, birmingham

Open A1 non food retail warehouse investment

investment summary

Birmingham is the UK’s second largest city located approximately 48 miles south east of Stoke-on-Trent and 118 miles north west of London.

The city benefits from an extensive resident urban area catchment population of 970,892, rising to 2,383,081 within 12 miles of the city centre. Birmingham’s population is expected to increase by 12.2% between 2003-2028. This compares with a projected growth rate of 11.04% nationally.

Situated in a prominent, established retail warehouse location, just off Birmingham’s inner ring road (A4540).

Modern, purpose built retail park comprising a Woolworths unit of 80,000 sq ft, together with an 88,185 sq ft adjacent Wm. Morrison foodstore.

Open A1 non-food planning consent on the Woolworths unit, with potential to install mezzanine accommodation, subject to planning.

Freehold.

Asset management initiatives available to downsize Woolworths and create further open A1 non-food accommodation.

Well let to the substantial national covenant of Woolworths plc for a term of 20 yearsfrom 19/10/2001 at a passing rent of £14.50 per sq ft. The foodstore element has been sold off to Wm. Morrison Supermarkets plc on a 250 year long leasehold at a peppercorn rent under a lease dated 28/07/00.

Woolworths unit reversionary to an assumed ERV of £15.00 per sq ft.

Offers are invited at a price in excess of £21,940,000 (Twenty One Million, Nine Hundred and Forty Thousand Pounds), subject to contract and exclusive of VAT. This price reflects the following yield profile, assuming purchaser’s costs at 5.7625%:-

Initial 5.00%

Reversionary 5.17%

Nominal Equivalent 5.14%

True Equivalent 5.31%

Birmingham City FC

SUTTONCOLDFIELD

WEST BROMWICH

Birmingham International Airport

St AndrewsRetail Park

Castle ValeRetail Park

M6

A435

A41

B4145

B4102

B4145

B4114

A47

A34A38

A34

A5127

A41

A45

A4540

A4123

A456

M6

M42

M6 Toll

M6

M5

M5

The FortShopping Park

Stechford Retail Park

BirminghamCity Centre

BatteryRetail Park

Solihull Retail Park

Sears Retail Park

M42

J6

1.0 location

n The city of Birmingham is located at the centre of the West Midlands conurbation, approximately 48 miles south east of Stoke on Trent, 44 miles west of Leicester and 118 miles north west of London.

n Birmingham is the UK’s second largest city and benefits from excellent road communications, being situated at the centre of the national motorway network. The city is bordered by the M5, M6 and M42 motorways, which in turn connect directly to the M1, M40, M54 and M69 motorways. Birmingham is served by three mainline rail stations providing an extensive nationwide rail service and a direct link to London Euston, with a fastest journey time of approximately 1 hour 30 minutes.

n Birmingham has a substantial resident urban area population of 970,892 (2001 Census), extending to 2,383,081 within 12 miles of the city centre (1994 estimate). The population of Birmingham is projected to increase by 4,000-5,500 persons per year until 2028, representing a 12.2% increase overall between 2003-2028. This compares with a projected growth of 11.04% nationally (Source: Office for National Statistics).

n The subject property is located within the district of Hodge Hill and the ward of Bordesley Green. Hodge Hill has a population of 107,826 (2001 Census) and Bordesley Green 31,343 persons (2001 Census).

n The city has a regionally dominant retail provision and in recent years has undergone significant regeneration. This includes the UK’s second largest retail centre, the redeveloped Bullring Shopping Centre (Source: CACI), providing 1.2 million sq ft of prime retail space, anchored by Debenhams and Selfridges department store. Although traditionally a manufacturing and engineering city, today Birmingham has broadened its economy to include more service based industries, with a strong focus towards the conference and exhibition sectors.

SUTTONCOLDFIELD

WEST BROMWICH

Birmingham International Airport

St AndrewsRetail Park

Castle ValeRetail Park

M6

A435

A41

B4145

B4102

B4145

B4114

A47

A34A38

A34

A5127

A41

A45

A4540

A4123

A456

M6

M42

M6 Toll

M6

M5

M5

The FortShopping Park

Stechford Retail Park

BirminghamCity Centre

BatteryRetail Park

Solihull Retail Park

Sears Retail Park

M42

J6

2.0 situation

St Andrew’s Retail Park is situated 2.5 miles east of Birmingham city centre, in a prominent location at the junction of Coventry Road and Cattell Road (B4128), just off the city’s inner ring road (A4540).

n The B4128 is a busy arterial route connecting to the A45, A34 (forming the start of the A38(M) Aston Expressway) and the inner ring road (A4540) and Birmingham city centre to the west.

n As detailed on the attached map, the property forms part of an established retail warehouse pitch, with approximately 135,000 sq ft of cluster developments located off the inner ring road. Retailers represented include Currys, PC World, DFS, Carpetright, MFI, Dunelm, Brantano and Halfords. Birmingham City Football Club is also located opposite the property on Cattell Road.

B4145

B4128

A4145A4130A4132

A4100

A4132

A4540

A4114

A45

A41

A38

A45

A4540

A4540

A4540

A47

A41

HIG

HG

ATE M

IDD

LEW

AY

COVENTRY RD

CATTELL ROAD

HILLO

CK

RO

AD

SMALL HEATH HIGHWAY

VICTO

RIA

ST

BO

RD

ES

LEY

GR

EE

N R

OA

D

AdderleyPark

Bordesley Green

Little Bromwich

Bordesley

Highgate

Digbeth

Deritend

LeeBank

NationalIndoorArena

FiveWays

BirminghamCity FC

Saltley

Vauxhall

Small Heath

NewStreetStation

BirminghamCity Centre

COVENTRY RD

JENKIN

S ST

HIG

HGAT

E M

IDDLEWAY

St AndrewsRetail Park

The Fort Shopping Park (Co-ownership)

Situated just off the M6 motorway, approximately 4 miles north east of the subject property, this scheme extends to 256,000 sq ft of open A1 non food accommodation. Major occupiers include Bhs, Next, Arcadia and Marks & Spencer, with the highest rent currently achieved being £50.00 per sq ft to New Look in March 2006. Castle Vale Retail Park (PRuPiM)

Comprising 182,000 sq ft of open A1 accommodation, this park consists of a single retail terrace anchored by a Sainsbury’s foodstore. The scheme is situated 0.5 miles east of the Fort Shopping Park with tenants including Comet, TK Maxx and Argos. The most recent evidence is a letting to SCS at £25.00 per sq ft from July 2005. Stechford Retail Park (Morley Fund Management)

Stechford Retail Park comprises 107,000 sq ft of open A1 non food accommodation, situated 2.5 miles north east of the subject property. Occupiers include Matalan, Argos and Currys, with a highest letting to Dreams at £16.50 per sq ft from September 2004. Solihull Retail Park (Standard Life investments)

Located approximately 5 miles south east of the subject property, this park comprises 180,000 sq ft of open A1 non food accommodation. The scheme is, however, occupied by predominantly bulky goods occupiers including B&Q, MFI, Currys and Mothercare World. The most recent evidence on the park is a rent review of the SCS unit at £36.00 per sq ft from March 2007.

Birmingham is served by a strong retail warehouse provision with important schemes including The Fort Shopping Park, Solihull Retail Park and Castle Vale Retail Park. However, as detailed on the attached street map, only limited developments serve the substantial population of south east Birmingham between the city centre and Solihull, providing the potential to create a dominant scheme serving this catchment.

3.0 retail warehousing in birmingham

St Andrews Retail Park is a modern, purpose built retail park developed in 2000, comprising Woolworths and Wm. Morrison.

Both units are of steel portal frame construction with half height brick elevations under profile metal cladding, complete with extensive entrance lobby features. The Woolworths unit has a clear eaves height of approximately 6.0 metres, therefore providing the ability to install a mezzanine, subject to planning.

Customer vehicle access to both units is provided directly via Coventry Road, leading from the inner ring road and Cattell Road. Service vehicles may access the Woolworths unit via Cattell Road and Wm. Morrison via Greenway Street, leading from Coventry Road.

Customer car parking is situated to the front of both units providing approximately 670 spaces, equating to a ratio of 1:251 sq ft. The car parking area has been demised to each of the occupiers, although there is a specific provision that customers have the right to use the whole car park. In practicality, customers use either section of the car park freely. We estimate the site area is approximately 10.13 acres (4.10 hectares).

The subject property provides the following measured gross internal areas:-

5.0 accomodation

Woolworths 80,000 7,432

Wm. Morrison 88,185 8,192

Total 168,185 15,624

unit sq ft sq m

4.0 description

Planning consent for the Woolworths unit was originally granted in February 2001 to provide:

Condition C14 of the consent sets out the following restriction:

“ Construction of non food retail unit, car parking and associated works.”

“ The unit indicated…should not be further subdivided without the prior consent of the Local Planning Authority.”

The site, as outlined in red, is held freehold.

7.0 tenure

The Woolworths unit is let to Woolworths plc for a term of 20 years from 19/10/2001 (expiring 18/10/2021), with a passing rental of £1,160,000 per annum, equating to £14.50 per sq ft. The lease is drafted on a full repairing and insuring basis, subject to upwards only rent reviews every 5 years. At present, the 19/10/2006 rent review remains outstanding.

The Wm. Morrison unit was sold to the occupier on a 250 year long leasehold at a peppercorn rent under a lease dated 28/07/2000.

8.0 tenancies

6.0 planning

Coventry Road

Little G

reen

Lane

Cattell Road (B4128)

car park

car park

sold off to WM. Morrison long leasehold

9.0 estimated rental value

Coventry Road

Little G

reen

Lane

Cattell Road (B4128)

The Woolworths unit is located in a prominent position within a busy retail

warehouse pitch, adjacent to a large foodstore and benefits from an open

A1 non food planning consent.

We consider the unit to be reversionary with the rent low both in a regional context and

compared to open A1 rents within Birmingham. At present, the 19/10/2006 rent review

remains outstanding. The table below illustrates a number of comparable transactions

and rent reviews that in our opinion, demonstrate that the subject property has an ERV

of £1,200,000 per annum, equating to £15.00 per sq ft.

Birmingham Dunlop Way B&Q Warehouse 106,245 Rent Review 01/12/2005 £1,809,225 £17.03

Milton Keynes Cairngorn Drive Homebase 81,675 Open Market Letting 15/10/2005 £1,420,000 £17.40

Milton Keynes Grafton Gate Toys R Us 47,544 Rent Review 15/07/2005 £832,195 £17.50

Kidderminster Crossley Retail Park B&Q Warehouse 126,556 Rent Review 24/06/2005 £1,578,970 £15.50 Unit has now been subdivided

Halesowen Mucklow Hill B&Q Warehouse 92,400 Rent Review 16/11/2004 £1,560,000 £16.88

Birmingham Dartmouth Circus Matalan 43,382 Rent Review 25/03/2001 £555,900 £12.81 2006 rent review outstanding

Town Address Tenant Area (sq ft) Transaction Effective Date Passing Rent (p.a.) Passing Rent (p.s.f) Comments

Woolworths plc is one of the UK’s leading general merchandise businesses, successfully operating 5 subsidiary companies. These include Woolworths, Entertainment UK (UK’s leading distributor of entertainment products with an annual turnover in excess of £1.1 billion), 2 Entertain (joint venture audio and video business), the Bertram Group (book wholesaler, distributor and library services) and Total Home Entertainment (combined wholesalers and distributors of books, audio, video, multimedia and computer games). Woolworths was established in 1909 and as at March 2007 traded from 818 stores both in and out of town.

11.0 tenant covenant

Woolworths plc is the main operating company and therefore as expected provides

a strong covenant. Their latest available 3 year accounts are summarised as follows:-

We are of the opinion that the subject property provides a number of attractive asset management options. These are set out below:-

n Downsize part of the existing Woolworths unit to provide valuable open A1 space to let. Given the excellent configuration and eaves height of the subject property, this could either be let as a whole or in part complete with mezzanine accommodation (subject to planning).

n Seek to agree a regear of the Woolworths plc lease in conjunction with creating new space to let.

n Construct either a restaurant or retail pod unit in the car park. This could be let to a restaurant operator such as Pizza Hut or KFC, both of whom have requirements for Birmingham. Alternatively, a unit could be let to a series of small unit occupiers such as Starbucks, Subway or Game. Given the draw of the Wm. Morrison foodstore and the proximity of Birmingham City Football Club, this should provide an attractive location.

10.0 asset management opportunities

Accounts Turnover Pre-Tax Net Worth D&B Tenant Year End £ (000’s) Profit £ (000’s) Rating

£ (000’s)

28/01/06 1,868,940 15,438 18,312

Woolworths plc 29/01/05 2,058,431 (44,584) 95,501 4A1

31/01/04 2,120,078 22,421 130,220

12.0 vat

The property has been elected for VAT, and therefore VAT

will be payable on the purchase price.

13.0 proposal

Offers are invited at a price in excess of £21,940,000

(Twenty One Million, Nine Hundred and Forty

Thousand Pounds), subject to contract and exclusive of

VAT. This price reflects the following yield profile, assuming

purchaser’s costs at 5.7625%:-

Initial 5.00%

Reversionary 5.17%

Nominal Equivalent 5.14%

True Equivalent 5.31%

Woolworths plc is the main operating company and therefore as expected provides

a strong covenant. Their latest available 3 year accounts are summarised as follows:-

MISREPRESENTATION NOTICE Wilkinson Williams LLP give notice to anyone who may read these particulars as follows: 1. These particulars are prepared for the guidance only of prospective purchasers. They are intended to give a fair overall description of the property but are not intended to constitute part of an offer or contract. 2. Any information contained herein (whether in the text, plans, artist impressions, photographs or digitally enhanced imagery) is given in good faith but should not be relied upon as being a statement of representation or fact. 3. Nothing in these particulars shall be deemed to be a statement that the property is in good condition or otherwise nor that any services or facilities are in good working order. 4. The plans, artist impressions, photographs or digitally enhanced imagery appearing in this brochure show only certain parts of the property and certain aspects may have changed since they were produced and it should not be assumed that the property remains precisely as displayed within these particulars. Furthermore, no assumptions should be made in respect of parts of the property which are not shown. 5. Any areas, measurements or distances referred to herein are approximate only. 6. Where there is reference in the particulars to the fact that alterations have been carried out, or are proposed, or that a particular use is made of any part of the property this is not intended to be a statement that any necessary planning, building regulations or other consents have been obtained and these matters must be verified by an intending purchaser. 7. Descriptions of the property are inevitably subjective and the descriptions contained herein are given in good faith as an opinion and not by way of statement of fact. 8. Plans are published for convenience of identification only and although believed to be correct, their accuracy is not guaranteed and they do not form part of any contract.

www.wilkinsonwilliams.co.uk

James Honeyman Tel: 020 7317 3790 Fax: 020 7495 5432 E-mail: j.honeyman@wilkinsonwilliams.co.uk

Paul Wilkinson Tel: 020 7317 3799 Fax: 020 7495 5432 E-mail: p.wilkinson@wilkinsonwilliams.co.uk

Contacts for further information:

Wilkinson Williams Mellier House 26a Albemarle Street London W1S 4HY

st andrews retail park

Open A1 non food retail warehouse investment

coventry road, birmingham