carmel house – h&m, hsbc, foot locker & 3 store sheffield · reputation for excellence in...
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CARMEL HOUSE – H&M, HSBC, FOOT LOCKER & 3 STORESHEFFIELD
P R I M E L O N G I N C O M E R E T A I L I N V E S T M E N T
a
PRIME LONG INCOME RETAIL INVESTMENT
CARMEL HOUSE – H&M, HSBC, FOOT LOCKER AND 3 STORE
100% prime flagship freehold retail parade;
Best trading position in Sheffield;
Modern, recently developed, well configured retail
units behind a listed facade;
12 years average weighted unexpired;
Let to the excellent retailers of; H&M, HSBC,
Foot Locker and 3 Store;
Sheffield is the 5th largest city in the UK and boasts a
Catchment Population of 8.2m;
Sheffield’s shopping population is forecast to grow
by 8% by 2018;
We are instructed to seek offers for the Freehold
investment of the subject property in excess of
£22,600,000 (Twenty Two Million, Six Hundred
Thousand Pounds), Subject to Contract and exclusive of
VAT, which reflects a Net Initial Yield of 5.75%, assuming
purchaser’s costs of 5.8%;
Investment Considerations
DemographicsSheffield central has a catchment population of 8.2 million and as such, is
ranked as the 9th largest shopping catchment out of more than 2,000 UK
retail centres (NSLSP).
Sheffield’s shopping population is forecast to increase due to development
activity and inward population migration by 7.8% over the 2008 – 2018 period
(NSLSP). PMA project that the city will see above average growth in population up
to 2015.
Sheffield’s catchment population is significantly enhanced by the presence of two
major universities; Sheffield and Sheffield Hallam, which provide approximately an
additional 52,000 residents to the total population.
Over the past decade, total employment in Sheffield has increased in line with
the retail PROMIS average. Sheffield’s economy has become more diversified over
this period, with less reliance on traditional industry and greater emphasis on the
service sectors. The City is home to large banking employers including; HSBC,
Norwich Union, Abbey National and Nationwide. Sheffield has also developed a
reputation for excellence in call centre operations, employers include; Freemans,
DSGi, Telewest and William Hill. BSkyB is planning to set up a new SKY TV call
centre in Sheffield, creating an additional 500 jobs. Voice Marketing, another
call centre, has recently moved to Sheffield and is planning an extension to the
workforce from 270 to 750 throughout 2011.
In addition to the growth in the service sectors, the 2011 budget introduced
the Sheffield Enterprise Zone, which will focus on advance engineering and
technology sectors; a modern manufacturing and technology growth area will
be made up of several key sites linked by the M1 corridor. Whilst this is still
subject to discussion, it is expected that 12,600 jobs will be created by 2015.
Sheffield RetailingSheffield has an estimated 1.5 million square feet of retail accommodation.
The city’s total retail provision is considered to be disproportionally low given
the extensive catchment population that it boasts.
The pedestrianised Fargate provides the prime retail pitch and links with;
High Street to the north and Pinstone Street, The Moor and Barkers Pool,
all to the south.
PRIME LONG INCOME RETAIL INVESTMENT
Lincoln
Mansfield
Manchester
Stockport
Rochdale
Doncaster
Worksop
Nottingham
Rotherham
Sheffield
York
LeedsBradford
Im
Ollerton
Barnsley
Gainsborough
Retford
60
M1
SheffieldSheffield is the fifth largest city in the UK, with a Resident Population of 512,000,
and is the principal administrative centre in South Yorkshire. The City borders
Derbyshire, The Peak District and The Pennines.
Sheffield is strategically located close to the geographical centre of the UK, being 175
miles north of London, 40 miles east of Manchester and 30 miles south of Leeds.
The City benefits from excellent communications infrastructure. By road; the M1
motorway (Junctions 33 and 34) connects Sheffield with the national motorway
network. By rail; Sheffield is served by a mainline railway station with links to
London St Pancreas Station with a journey time of approximately 2 hours, 30
minutes. By air; Sheffield Airport is located approximately 12 miles to the north
east of the City, whilst to the north Leeds/Bradford International Airport is located
within a 1 hour drive time, as is Manchester International Airport to the west.
Sheffield has also seen significant inward investment with the development of
the light rail tram service (Super Tram) which serves the City Centre.
CARMEL HOUSE – H&M, HSBC, FOOT LOCKER AND 3 STORE
Retailers in Fargate Street include; Boots the Chemist, Marks & Spencer, Dorothy
Perkins, Topshop, Next, Game, WH Smith, New Look, River Island and Republic; as
well as retailers in the subject block: Footlocker, HSBC, H&M Hennes and 3 Store.
Rents in prime Fargate historically reached £255 Zone A. However, in recent years
these have fallen back to around £210 Zone A as evidenced by a number of
recent transactions on prime Fargate:
• 34-36 Fargate, February 2010, lease regear to Abbey Bank at £220 Zone A.
• 33-35 Fargate, March 2010, Arcadia lease renewal at £235 Zone A.
• 58 Fargate was let at the bottom of the market in April 2009 to Republic
at £208 Zone A.
• 2 Fargate, September 2008, HSBC rent review at £237 Zone A.
Hammerson’s Sevenstone development, is situated on a site immediately adjacent
to the southern end of Fargate and north of The Moor. The proposed scheme has
recently been revised; the existing 250,000 sq ft John Lewis store will be
remodelled and there will be an additional 500,000 sq ft of new accommodation
comprising retail units, 4 MSUs and a multiplex cinema with leisure and restaurant
operators. Work is not planned to begin until 2013 at the earliest. In our opinion
the subject property, being at the southern end of Fargate, is well placed to
benefit from an improved retail offer should the scheme be delivered.
Rental Growth ProspectsIn our opinion, prime Fargate has excellent rental growth prospects, given the
significant catchment population of over 8.2 million (NSLSP). Other comparable
major regional centres support significantly higher rental tones:
We also note that Meadow Hall, Sheffield City Centre’s primary competition,
reached a rental tone of approximately £400 Zone A.
In our opinion, Sheffield’s status as a regional retail destination can only improve
as the retail and leisure offer in the city improves. We anticipate the rental tone
will therefore increase in the medium term.
CityCatchmentPopulation(million)
RetailProvision
Sq ft (million)
Prime TownCentre Zone ARate (PMA)
Liverpool 5.9 3.0 £280
Newcastle-upon-Tyne 5.5 2.6 £310
Glasgow City Centre 2.8 2.9 £260
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SMITH & JONES
(PEDESTRIANS EXCEPT ACCESS 6.00PM - 10.00AM)
ENTRANCE
CARMEL HOUSE – H&M, HSBC, FOOT LOCKER AND 3 STORE
SituationCarmel House occupies a 100% prime location at the southern end of Fargate.
Occupiers immediately adjacent to the property include Republic, River Island, New
Look, Next and WH Smith.
Prime Fargate benefits from significant footfall; the month of July 2011 had
1,234,000 shoppers (Sheffield City Council).
DescriptionThe property is an attractive and prominent multi-let retail parade behind a listed
façade. The parade was developed approximately 5 years ago and provides
excellent modern, well configured, retail accommodation.
Unit 2 provides excellent large retail floor plates with sales accommodation over
ground, first and second floors linked by escalators and sales lift.
Unit 3 provides a flagship retail unit with sales lift and escalator providing access
to basement sales accommodation.
Units 1 and 4 provide well configured ground floor retail units.
The property provides the approximate areas below:
Address Tenant ITZAGroundsq ft
Basement (assumed ancillary)
sq ft
Firstsq ft
Second(assumed ancillary)
sq ft
Totalsq ft
Unit 1 3 Store 637 1,050 - - - 1,050
Unit 2 H&M Hennes 1,772 4,318 - 9,1954,008(4,008)
21,530
Unit 3 HSBC 1,174 2,7145,000(2,686)
- - 10,400
Unit 4 Foot Locker 544 704 899 - - 1,603
PRIME LONG INCOME RETAIL INVESTMENT
TenureFreehold.
Pepper Alley (outlined in blue on the Goad plan) which runs to the rear of the
property is held on a leasehold basis for a term of 150 years from 13/12/2006 at a
peppercorn rent. An electricity substation in Pepper Alley is held on a leasehold
basis for a term of 125 years from 13/12/2006 at £1000 per annum.
TenanciesThe property is let on FRI leases on the following basis:
Unit TenantStartDate
New RentReview ToB Expiry
UXTyears
%Income
Passingrent pa
PassingZone £ psf Comments
Unit 1Hutchinson 3G (UK)t/a 3 Store
24/06/2006 24/06/2011 24/06/2016 23/06/2021 9.8 12% £160,000 £240Devaluation assumes 5% forreturn frontage.
Unit 2 H&M Hennes Ltd 24/06/2006 24/06/2011 - 23/06/2026 14.8 44% £607,500 £211Devaluation assumes -5%discount for quantum.
Unit 3 HSBC Bank Plc 24/06/2006 24/06/2011 – 23/06/2021 9.8 34% £470,000 £255Devaluation assumes 5%premium for A2 user.
Unit 4Freedom Sportslinet/a Foot Locker
24/06/2006 24/06/2011 23/06/2016 23/06/2021 9.8 10% £137,500 £238 .
TOTAL 12.0 100% £1,375.000
CARMEL HOUSE – H&M, HSBC, FOOT LOCKER AND 3 STORE
CovenantsH&M Hennes Limited H&M Hennes & Mauritz AB is a Swedish retail clothing company. Established in
1947, H&M has grown into a truly global fashion brand with more than 2,200
stores in 40 different countries throughout 4 continents. In the UK, H&M has
192 stores. Today, H&M is recognised as one of the most successful global
retail fashion brands.
The last 3 reported annual accounts for H&M Hennes Limited are below:
Freedom Sportsline Limited
Freedom Sportsline Ltd’s parent company is Foot Locker UK Ltd with the ultimate
parent company being the American retailer Foot Locker Inc. Foot Locker is one
the world’s leading retailers in sports footwear and has been established since
1974. They operate out of over 3,400 retail stores in 21 countries throughout
North America, Europe and Australia. In the UK there are 70 Footlocker shops.
The last 3 reported annual accounts for Freedom Sportline Limited are below:
HSBC Bank Plc
HSBC is one of the largest banking and financial services in the world. With
their headquarters in London, HSBC’s international network has around 7,500
offices in 87 countries across Europe, the Asian pacific region, North, Central and
South America, the Middle East and Africa. The business dates back to 1836.
The last 3 reported annual accounts for HSBC Bank Plc are below:
Hutchinson 3G UK Ltd
3 Store is part of the Three brand which is owned by Hutchinson Whampoa
(HWL). HWL is one of the largest companies listed on the Hong Kong Stock
Exchange and a Fortune 500 Company, with a turnover of approximately HKD 326
billion. It is an international corporate employing 240,000 people and operating a
diverse array of holdings including telecommunications operations branded Three.
Three own 9 3G licences globally including the UK. In the UK Three has the
largest 3G network.
The last 3 reported accounts for Hutchinson 3G UK Ltd are below:
30/11/2009(£,000s)
30/11/2008(£,000s)
30/11/2007(£,000s)
Turnover £565,888 £524,530 £527,534
Pre-Tax Profit £9,866 £10,564 £58,936
Net Worth £122,300 £104,220 £53,506
31/12/2009(£,000s)
31/12/2008(£,000s)
31/12/2007(£,000s)
Turnover £76,083 £78,752 £78,686
Pre-Tax Profit £2,076 -£1,067 £3,423
Net Worth £17,928 £16,682 £30,086
31/12/2010(£,000s)
31/12/2009(£,000s)
31/12/2008(£,000s)
Turnover £4,011,000 £4,014,000 £4,366,000
Pre-Tax Profit £32,357,000 £28,428,000 £20,661,000
Net Worth £21,214,000 £16,588,000 £8,143,000
31/12/2009(£,000s)
31/12/2008(£,000s)
31/12/2007(£,000s)
Turnover £1,504,129 £1,493,218 £1,268,284
Net Profit (loss) (£361,979) (£151,892) (£790,913)
Total Assets £6,137,000 £6,731,628 £6,702,693
Hugo PrinceT: 020 7182 2794F: 020 7491 [email protected]
Holly RichardsonT: 020 7182 2426F: 020 7491 [email protected]
CB Richard EllisHenrietta HouseHenrietta PlaceLondon W1G 0NB
T: 020 7182 2000F: 020 7182 2001
For further information or to arrange viewings please contact:
DISCLAIMER: CB RICHARD ELLISImportant notice relating to the Misrepresentation Act 1967 and the Property Misdescriptions Act 1991:
CB Richard Ellis Limited for itself and the vendor as agents for the vendor give notice that:1. We provide the information contained in these particulars for guidance to intending purchasers, licensees or any other third parties and they are for your general information only and will be used at your own risk. 2. We will use all reasonable endeavours to ensure the accuracy of information, however, we do not guarantee orwarrant the accuracy or completeness, factual correctness or reliability of any information in the particulars (especially as the information may have been obtained from third parties) and do not accept any liability for any errors or omission including any inaccuracies or typographical errors. 3. Any interested purchasers, licenseesor any third parties should not view the information in the particulars as statements or representations of fact and should satisfy themselves that the facts and specific details in the particulars are correct and accurate especially in relation to floor areas and other measurements through inspection or other means, as appropriate,and will be responsible for taking independent surveys or valuations before entering into any legally binding transaction in respect of the property or premises that is the subject matter of these particulars. 4. We have not made any investigations or otherwise of any issues concerning pollution and potential land, building, air orwater contamination. Prospective purchasers, licensees or any third parties must undertake their own enquiries and satisfy themselves in this regard. 5. Unless otherwise stated, all prices and rents are quoted exclusive of VAT.
SUBJECT TO CONTRACT CB Richard Ellis, September 2011
a© Design & Print: Barbican Studio 020 7796 2121
VATIt is anticipated that the sale be treated as the transfer of a going concern (TOGC).
ProposalWe are instructed to seek offers for the Freehold investment in excess of
£22,600,000 (Twenty Two Million, Six Hundred Thousand Pounds), Subject
to Contract and exclusive of VAT, which reflects a Net Initial Yield of 5.75%,
assuming purchaser’s costs of 5.8%.