modern single let industrial investment opportunity · the main industry in grangemouth and the...

MODERN SINGLE LET INDUSTRIAL INVESTMENT OPPORTUNITY

4-6 SOUTH LUMLEY STREET GRANGEMOUTHFK3 8BT

2 4-6 SOUTH LUMLEY STREET GRANGEMOUTH

INVESTMENT SUMMARY

• Modern single let industrial investment opportunity;

• Located in Grangemouth, approximately 24 miles west of Edinburgh and 27 miles east of Glasgow;

• Grangemouth is one of Scotland’s most strategic industrial, manufacturing and distribution locations;

• The property comprises a modern warehouse, extending to 43,256 sq.ft (4,018.6 sq.m), that has been comprehensively refurbished;

• Let in its entirety to Epiroc UK & Ireland Ltd with a guarantee in place from Epiroc AB (D&B Failure Score of 83/100);

• The property is let until 10th June 2023, incorporating a tenant break option on 10th June 2021, providing an unexpired term of 4.68 years to expiry and 2.68 years to break;

• Current rent is £194,652 per annum, reflecting a low passing rent of £4.50 psf;

• Heritable interest (Scottish equivalent of English Freehold);

• The site area extends to 1.83 acres (0.74 hectares), providing a low site coverage of 54%.

Offers in excess of £2,165,000 (Two Million, One Hundred and Sixty Five Thousand Pounds Sterling), exclusive of VAT, are sought for our clients Heritable interest in the property.

This reflects an attractive net initial yield of 8.50% and a capital

rate of £50psf, assuming purchaser’s costs of 5.85%.


M74

M9

M77

A1M8M8

M90

M80M73

M74

M9

M80 EDINBURGH

GLASGOWLIVINGSTON

STIRLING

ST ANDREWSPERTH

ABERDEEN

DUNDEE

AYR

STRANRAERDUMFRIES

INVERNESS

GRANGEMOUTH

LOCATION

Grangemouth is a strategically located town in East Stirlingshire forming part of the Falkirk Council area within Scotland’s Central Belt. It is located approximately 24 miles to the west of Edinburgh and 27 miles to the east of Glasgow. It is well connected to Scotland’s motorway network, with the M9 motorway running along the southern side of the town, with two junctions providing links to the motorway. The excellent access makes Grangemouth one of central Scotland’s most strategic industrial, manufacturing and distribution locations.

The main industry in Grangemouth and the wider Falkirk area is petrochemicals, with the Grangemouth refinery Scotland’s main petrochemical complex, one of the largest of its kind in Europe. INEOS operate the complex, which employs 1,300 people, and have recently announced

they will depend on the expertise based at Grangemouth when developing their new propane dehydrogenation unit in Europe, in a move set to benefit the local economy. A further £0.5 billion is set to be invested in Grangemouth within the next two years, with the construction of a new power plant and doubling the size of the cracking facility.

Grangemouth also houses Scotland’s largest container port, with approximately 9 million tonnes of cargo passing through the dock each year. The success of the port is due to the town’s

location in the heart of Scotland which makes is readily accessible for distribution to all parts of the country. Grangemouth is also one of Scotland's main rail freight terminals, that has benefitted from major investment in the last decade, making it an integral part of transporting cargo to Aberdeen and the English Midlands.


M9

M9

Grangemouth

Freight Terminal

WH Malcolm

ASDA

Syngenta

H.W Coates

Whyte & Mackay

Jarvie Plant

Jewson

Grangemouth Port

4-6 South Lumley Street

6

CalaChem


J4

J5

J6

J7M9

M876

M9

M9 M876

M9

M9

M9

FALKIRK

GRANGEMOUTHBAINSFORD

CAMELON

SOUTHBROOMAGE

GLEN VILLAGE REDDING

WESTQUARTER

LAURIESTON

STENHOUSEMUIRNORTHBROOMAGE

CARRONSHORE

CARRON

RIVER FORTH

A904

A904

A904

A905

INCH

YRA

ROAD

A905

A904

A9

A904

A9

CALLENDAR ROAD

A9

A803

TOWARDSENDINBURGH

TOWARDSGLASGOW

B9 13

2

SOUTH LUMLE Y ST

REET

4-6 SOUTH LUMLEY STREET

SITUATION

The site sits within central Grangemouth, in a prominent position

at the junction between South Lumley Street, Wallace Street and

Dundas Street.

The property is well placed to benefit from the M9 motorway, with Junctions 5 and 6 both located less than 1.5 miles from the property. The M9 connects to Edinburgh in the east and to Glasgow in the west, via the M876. It also provides direct access to the north of Scotland, creating comprehensive motorway access throughout Scotland.

The surrounding area is a mixture of residential and industrial usage. Grangemouth Port is located approximately 0.3 miles north of the property, making it an ideal position for Epiroc, who service and supply component parts to the oil and gas industries.

Surrounding occupiers include Jewson, Whyte & Mackay Distillers, Malcolm Group, Asda Distribution Depot and INEOS.

Drive Times:

Destination Miles Drive Time

Falkirk 3 9 minutes

Stirling 13 19 minutes

Edinburgh 24 35 minutes

Glasgow 27 33 minutes

Perth 41 50 minutes

Dundee 60 1 hour 10 minutes


DESCRIPTION

The property comprises a modern industrial unit, with

associated office and workshop accommodation. It extends

to 43,256 sq.ft (4,018.6 sq.m) and has been comprehensively

refurbished.

The building is constructed predominantly of brick, with a

steel and timber roof structure. The roof has been re-clad with

insulated polyester coated steel panels and incorporates twin-

skinned translucent panels to provide natural daylight into

the unit. The eaves height in the warehouse is approximately

4.11m.

The main warehouse is accessed via 3 roller shutter doors,

with 11 further doors providing access to the workshops that

run along the western elevation of the property. Electronically

operated roller and sectional overhead doors have been

installed throughout the property. The existing floor slab

within the warehouse has been overlaid with a new 150mm

reinforced concrete slab.

The building has been fitted with an entirely new electrical

installation with all new switch gear and distribution cabling.

The building is lit via LED lighting panels.

The property has the benefit of a 0.55 acre (0.22 hectare) yard

area accessed from Dundas Street.


ACCOMMODATION

The property has been measured in accordance with the RICS

Code of Measuring Practice (6th Edition) and extends to the

following approximate Gross Internal Areas (GIA):

Destination Sq.ft Sq.m

Warehouse 2,789.3 30,024

Front Office 185.2 1,993

Workshops 481.9 5,187

Garage 245.2 2,639

Ancillary Office 317.0 3,412

Total 4,018.6 43,256

The total site area extends to 1.83 acres ( 0.74 hectares), providing a low site coverage of approximately 54%.

TENANCY INFORMATION

The property is let in its entirety to Epiroc UK & Ireland Ltd with a guarantee in place from Epiroc AB. It is let

on Full Repairing and Insuring terms, subject to a general specification schedule of condition, from 11th June 2018 until 10th June 2023, incorporating a tenant break option on 10th June 2021, subject to 6 months notice.

The current rent is £194,652 per annum, equating to a low passing rent of £4.50 per sq.ft.

The tenant was previously based across 11 units in Stirling and consolidated into the subject property this year. South Lumley Street is ideally positioned for Epiroc for access to the port and motorway network and they have invested over £250,000 fitting out the unit for their occupation.


COVENANT

Epiroc is a Swedish engineering company formed in 2017 by Atlas Copco, a

multinational manufacturing and engineering business which was founded in 1873

and employs in excess of 45,000 staff. Epiroc is headquartered in Stockholm and

manufactures equipment for the mining and construction industries, employing

approximately 13,000 people.

Epiroc UK & Ireland UK Ltd is a newly incorporated business entity and therefore do not have historical financial performance figures. The lease is guaranteed by Epiroc AB, D&B Failure Score of 83/100. A summary of their most recent financial performance is follows:

DEC 2017

Total Assets* £4,253,166,000

Tangible Net Worth* £3,783,836,000

*All figures are based on the currency exchange rate as at 26th September 2018 (OECD)


SCOTTISH INDUSTRIAL PROPERTY MARKET

The Scottish industrial market is currently experiencing under-supply in prime areas, that has been compounded by a limited amount of development activity in the last 10 years. Current supply

across Scotland has fallen by approximately 49% since 2010 to the present 14.9m sq.ft. The vacancy rate has dropped from 14.6% to 7.5%, with only 6% of available stock being new or refurbished.

Minimal development is expected in the coming years and it is forecasted that industrial supply will continue to fall throughout 2018 and into 2019. As a result, this will create a landlord friendly

market with the potential for rental growth and the reduction in incentives going forward.

The industrial investment market in Scotland continues to be favoured by investors due to the strong occupational story and low capital values per sq.ft. The opportunities offered in Scotland provide a relative yield discount to the rest of the UK, that income focussed investors can benefit from.

Recent investment transactions are highlighted below:

Date Address Area

(Sq.ft)

AWULT Price NIY Capital Rate

(psf)

Comments

Sep-18 Fullarton Drive, Cambuslang 61,199 5 years £5.03m 5.90% £82 Single let to Speedy Asset Services Ltd

Sep-18 Laurieston Road, Grangemouth 88,017 10 years £4.90m 7.50% £56 Single let to Thornbridge Sawmills Ltd

Aug-18 Wardpark, Cumbernauld 20,258 7.5 years £1.63m 7.00% £80 Single let to Briggs Equipment UK

Dec-17 Units 1, 2 & 3 Starlaw Park, Livingston 138,474 10.3 years £8.65m 7.75% £62Sale comprised three distribution units let to Alcatel-Lucent Uk Ltd,

CFH Docmail, Young’s Seafood Ltd

Oct-17 Unit 1, Oakbank Park, Livingston 32,1508 years

(2.5 years to break)£1.60m 9.79% £50 Single let to Vow Europe Ltd

Oct-17 Righead Industrial Estate, Bellshill 27,07715 years

(12 years to break)£2.35m 7.25% £87 Single let to Nationwide Platforms Ltd

Oct-17 Excelsior Park, Wishaw 112,127 9.5 years £8.76m 5.75% £78 Single let to the Royal Mail Group

Sep-17 Houston Industrial Estate, Livingston 43,370 5 years £2.59m 7.50% £60 Single let to SCS

Sep-17 2 James Street, Bellshill 52,857 9.5 years £4.125m 6.04% £78 Single let to HSS Hire Service Group and recently refurbished

Aug-17 6 Brittain Way, Eurocentral 39,893 10.50 years £3.315 6.40% £83 Single let to DX Networks who recently extended

The availability of industrial stock in Grangemouth specifically, is at critical levels. There is approximately 20,000 sq.ft of stock under offer, leaving less than 19,000 sq.ft of accomodation available, non of which was constructed post 2000.


FURTHER INFORMATION

TENURE

Heritable interest (Scottish equivalent of English Freehold)

CAPITAL ALLOWANCES

All available capital allowances will be transferred to the purchaser.

VAT

The property has been elected for VAT and therefore the sale will be treated by way of

TOGC.

ENERGY PERFORMANCE

The property has an EPC Rating of ‘C’ and a copy of the certificate can be provided on

request.

INVESTMENT PROPOSAL

Offers in excess of £2,165,000 (Two Million, One Hundred and Sixty Five Thousand Pounds Sterling), exclusive of VAT, are sought for our clients Heritable interest in the property.

This reflects an attractive net initial yield of 8.50% and a capital

rate of £50psf, assuming purchaser’s costs of 5.85%.

CONTACT

Ross Burns Charlie McNaught

+44 (0) 141 567 6625 +44 (0) 141 567 6612

+44 (0) 7887 653 360 +44 (0) 7525 824 607

[email protected] [email protected]

© Crown Copyright 2018. All rights reserved. Promap licence number 100020449. Jones Lang LaSalle licence number 100017659.

This plan is published for the convenience of identification only and although believed to be correct is not guaranteed and it does

not form any part of any contract.

Disclaimer - JLL for themselves and for the vendors or lessors of this property whose agents they are, give notice that:-a. the

particulars are set out as a general outline only for guidance and do not constitute, nor constitute part of, an offer or contract; b. all

descriptions, dimensions, references to condition and necessary permissions for use and occupation, and other details are believed

to be correct, but any intending purchasers, tenants or third parties should not rely on them as statements or representations of

fact but satisfy themselves that they are correct by inspection or otherwise; c. no person in the employment of JLL has any authority

to make or give any representation or warranty whatever in relation to the property; d. Any images may be computer generated.

Any photographs show only certain parts of the property as they appeared at the time they were taken. For properties in Scotland:

e. This correspondence is expressly subject to completion of formal legal missives in accordance with Scots Law Copyright

© Jones Lang LaSalle IP Inc. September 2018. All rights reserved.

modern single let industrial investment opportunity · the main industry in grangemouth and the...

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