Spar | Wolverhampton Road West | Willenhall | WV13 2RN

PRIME LONG INCOME PETROL FILLING STATION & CONVENIENCE STORE INVESTMENTWITH INDEX LINKED UPLIFTS

INVESTMENT SUMMARY

► New build prime petrol filling station investment located under 1 mile from J10 of M6 motorway and 1 mile east of Willenhall town centre.

► Occupies an unopposed trading position on Wolverhampton Road West with 9,500 vehicle movements per day.

► New build, 8 pump fuel forecourt with large convenience store incorporating Greggs and Subway concessions.

► Both the petrol filling station and convenience store open 24 hours a day.

► Let to A.F. Blakemore & Son Ltd (Dun & Bradstreet rating of 5A1) one of the UK’s largest family owned wholesale distributor and retailer of food produce and the operation of grocery based convenience stores.

► New 25 year lease without break.

► Passing rent of £200,000 per annum.

► The rent is subject to index linked 5 yearly uplifts to RPI collared at 2% and capped at 4% per annum compounded.

► Freehold.

We are instructed to seek offers in excess of £3,575,000 (Three Million Five Hundred And Seventy Five Thousand Pounds) which reflects a net initial yield of 5.25%, after purchaser’s costs of 6.52%.

Based on RPI of 3.0% per annum, a purchase at this price would represent an attractive reversionary yield of:

► 6.09% at year 5► 7.06% at year 10► 8.18% at year 15► 9.49% at year 20

WILLENHALLTOWN CENTRE

KEYWAYRETAIL PARK

HQ

HQ

HQ

J10

LOCATION

Willenhall is an established town in the West Midlands and is located approximately 3.5 miles west of Walsall, 4.1 miles east of Wolverhampton and 14 miles north-west of Birmingham.

The town benefits from an excellent transport infrastructure due to its proximity to the A454 Black Country Route, which is one of the main arterial routes in the West Midlands and provides direct access to Junction 10 of the M6 motorway, approximately 2 miles to the east and onwards to Walsall and provides direct access to Wolverhampton City Centre to the west.

Willenhall has a population of 38,480 (2015 census) but has a larger catchment population of 269,323 within the Borough of Walsall and a further 2.4million people within a 10 mile radius.

Due to the town’s excellent road connections to the central M6 corridor and proximity to Birmingham city centre, Willenhall has become an established commercial centre of the West Midlands with a number of national retailers, manufacturing & distribution such

as Yodel, Wiggle, B&M and Robert Wiseman Dairies all having significant operations in the town, whilst AF Blakemore and Poundland have their national HQs in the town.

SITUATION

The property is prominently situated on Wolverhampton Road West in Willenhall under a mile west from J10 of M6 motorway and 1 mile east of Willenhall town centre.

The immediately surrounding area is dense residential but adjacent to the property is Volkswagen car dealership operated by Johnsons Motor Group, a used car dealership operated by Bripark Cars and a public house operated by Hungry Horse pub group. The road has a traffic count of approximately 9,500 vehicles daily, many of which are commuting between the M6 at Junction 10 and the residential area of Willenhall.

Further along the Wolverhampton Road West where it meets the A454 Black Country Route, 1 mile south of the subject property, Keyway Retail Park can be found with occupiers including Home Bargains, Poundland, B&M Bargains, Tesco and Burger King.

DESCRIPTION

The property has recently been fitted out by the tenant and comprises a new steel portal framed, large format convenience store with food concessions (Greggs & Subway) together with an 8-pump petrol filling station forecourt under canopy.

There are 14 parking spaces (including 1 disabled) on site as well as a cash point and Air/Water station. The filling station also benefits from a separate HGV lane that features 2 HGV pumps, capitalising on the property’s proximity to Junction 10 of the M6 and regular passing traffic.

The property operates 24 hours.

SITE

The site area is (0.71 hectares) 1.73 acres offering a low site density of 25%.

ACCOMMODATION

The property has been measured in accordance with the RICS code of measuring practice 6th Edition and comprises the following gross internal floor areas:

TENURE

The property is held freehold.

FLOOR USE AREA SQ.M AREA SQ.FT

Ground Convenience Store 377.46 4,063

Spaces Customer Parking 13

Disabled 1

Air/Water Service 1

TOTAL 377.46 4,063

TENANCY

The property is let to A.F. Blakemore & Son Ltd on a full repairing and insuring basis for a term of 25 years from 2 August 2019.

There are 5 yearly upward only rent reviews to RPI with a collar of 2% and a cap of 4% per annum compounded from the initial base rent.

The commencing rent is £200,000 per annum. Based on forecasted RPI of 3% per annum compounded the passing rent will increase to:

► Year 5: £231,855 per annum► Year 10: £268,783 per annum► Year 15: £311,593 per annum► Year 20: £361,222 per annum

COVENANT

A.F Blakemore & Son is one of the UK’s largest family owned wholesale distributor and retailer of food produce and the operation of grocery-based convenience stores. The company owns and operates 280 SPAR convenience stores in the UK and distributes to over 1,000 stores. The company employs over 7,800 people. The company is headquartered in Willenhall 1.5 miles from the subject property.

Further information on the company can be found on its websitewww.afblakemore.com

A summary of the company’s, accounts is set out below:

The 2018 pre-tax loss of £20 million was due to exceptional costs arising from the sale of its Cash and Carry Business.

The company has a Dun & Bradstreet rating of 5A1.

31/04/2018(£000)

31/04/2017(£000)

31/04/2016(£000)

Turnover 1,256,891 1,299,653 1,306,165

Pre Tax Profit (Loss) (20,658) 7,354 7,603

Net Assets 42,085 57,328 80,807

UK Petrol Filling Station Investment Market

Petrol filling stations are the fastest growing subsector in the £43 billion UK convenience retail sector. The convenience retail sector has now grown to a market share of 24.5% of the overall grocery market making petrol filling stations a key component of the sector.

Investors are attracted to the sector due to the modern real estate, long leases with indexation, strong covenants and the strength of the vacant possession values in the sector which underpins many investment values. £60million of petrol filling station investments were transacted in 2018 with prime yields compressing to 3.75%.

Set out below are recent comparable transactions:

Location Tenant WAULTTransaction

DatePrice £ Yield % Comments

Bilston College Service Station, Bilston

Rontec (No.4) Ltd

19.0 Under Offer £2.030m 5.18%Lease guaranteed by Rontect Roadside Retail Ltd. Annual reviews to 2% fixed uplifts.

213 Epson Road, Guildford

BP Oil UK Ltd 10.0 Oct 2019 £3.13m 4.20% Open market rent reviews.

Portsbridge Service Station, Portsmouth Road, Cosham

Rontec Service Station A1 Ltd

15.0 Sept 2019 £2.7m 5.22% Annual rental increases to 2%.

Bonehurst Road, Horley

Sainsbury’s Supermarkets Ltd

14.5 Nov 2018 £4.876m 4.39% 5 yearly reviews to RPI c/c 1-4%.

Ashgate Road, Chesterfield

A.F Blakemore & Son Ltd

20.0 Sept 2018 £1.53m 5.24% 5 yearly reviews to RPI c/c 1-3%.

Solstice Park, Amesbury

Co-operative Foodtores Ltd

17.5 July 2018 £3.5m 5.25% 5 yearly reviews to CPI c/c 1-3%.

Laceby Lodge, A18 Barton Street, Laceby

A.F Blakemore & Son Ltd

20.0 July 2018 £3.15m 5.06% 5 yearly reviews to RPI c/c 1-3%.

A23, Crawley Applegreen Plc 15.0 Feb 2018 £3.75m 5.35%3 yearly reviews to CPI c/c 2-3.5%.

Andover Road, Newbury

Sainsbury’s Supermarkets Ltd

11.3 Jan 2018 £3.325m 4.94% 5 yearly reviews to RPI c/c 2-4%.

Esso/Morrisons, Hengrove Way, Bristol

Rontec Roadside Services Ltd

25.0 Nov 2017 £3.91m 4.85% Annual rental increases to 2%.

VATThe property is elected for VAT and VAT will be chargeable on the purchase price. It is anticipated that the sale will be treated as a TOGC.

PROPOSALWe are instructed to seek offers in excess of £3,575,000 (Three Million Five Hundred And Seventy Five Thousand Pounds) which reflects a net initial yield of 5.25%, after purchaser’s costs of 6.52%.

Based on RPI of 3.0% per annum, a purchase at this price would represent an attractive reversionary yield of:

► 6.09% at year 5► 7.06% at year 10► 8.18% at year 15► 9.49% at year 20

FURTHER INFORMATION

For further information or if you wish to arrange a viewing please do not hesitate to contact:

Franck Steier Price LtdThird Floor, Victoria House,114-116 Colmore Row,Birmingham, B3 3BD

JAMES HEMSTOCK0121 513 0894james.hemstock@fspproperty.co.uk

BEN BLACKWALL0121 513 0893ben.blackwall@fspproperty.co.uk

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.