Prime, Reversionary, Well Secured, Freehold Retail Investment

65/66 North Street & 23/27 Market Street GUILDFORD GU1 4AH

65/66 north street & 23/27 market street, guildford

LocationGuildford is an affluent and popular commercial and administrative

centre within Surrey located circa 50km (31 miles) south-west of

central London, 59km (37 miles) north-west of Crawley and

48km (30 miles) east of Basingstoke.

Road communications are excellent. The town is situated adjacent

to the A3 (Dual Carriageway) which provides direct access to the

M25 (J10) some 13km (8 miles) to the north-east and the M27

circa 64 km (40 miles) to the south-west near Portsmouth. The

A31 also passes through the town which links with J4 of the M3

(via A331) at Frimley 23km (14 miles) to the north-west and to

Winchester 62km (38 miles) to the south-west.

Guildford is served by regular rail services to London (Waterloo &

Victoria) with a fastest journey time of approximately 40 minutes.

Heathrow Airport is circa 43km (22 miles) to the north and

Gatwick Airport is circa 54km (33 miles) to the south-east.

Demographics Guildford has a borough population of circa 135,700 persons with

a primary catchment of approximately 472,000 and an estimated

727,000 within a 12 mile radius. The town is particularly affluent,

Investment Summary

• A prime location on the corner of North Street and

Market Street and within the immediate vicinity of The

Friary Centre and the High Street.

• Prominent corner position in close proximity to national

multiple occupiers such as House of Fraser, French

Connection, East, Laura Ashley, Reiss and Argos.

• An established retailing pitch which will improve with the

new North Street Development located directly opposite

once completed.

• Well secured to the strong covenants of Nero Holdings

Limited (Caffe Nero) and Bravissimo Limited

(Bravissimo & Pepperberry).

• Rebased rents from 2013 with excellent rental growth

prospects.

• AWULT of 8.67 years.

• Total rent of £200,000 pax with fixed minimum uplifts

in 2018.

• Freehold.

• Offers in excess of £3,600,000 (Subject to Contract &

exclusive of VAT) which reflects a Net Initial Yield of 5.25%.

• A guaranteed Reversionary Yield of 6.20%

(incorporating the fixed minimum increases in 2018),

with an ultimate Reversionary Yield (based on an ERV of

£150 Zone A) of 8% and an Equivalent (Nominal) Yield

of 7.5%.

ranked 5th in the UK on the PMA Affluence Indicator, and has a

significant over representation of the AB and C1 social groupings.

Guildford is also a popular commuter town and is synonymous with

its’ internationally renowned education offer. Statistics from the

Office of Rail Regulations revealed that over 8 million people used

the station in 2012/13 making it the busiest train station in Surrey.

Economically Guildford is a thriving commercial town and

accommodates global operations including Phillips Electronics,

Ericsson, Colgate-Palmolive, Allianz and Sanofi.

Guildford

65/66 north street & 23/27 market street, guildford

Retailing in Guildford Guildford is a dominant and popular retail destination. A recent

Experian Survey concluded that the town is the ‘fashion capital of the

UK’ (excluding Central London), based on data relating to levels of

consumer spending, household income, demographics and the

penetration of online retail. Guildford attracts an impressive annual

retail spend of circa £900m with 6,878 households on incomes of

between £100,000 and £150,000. The town has an estimated

shopping population of 244,000 persons. Footfall along the High

Street has increased year on year with the target customer profile

being between the ages of 25-50 and predominantly A, B, C1 female.

The prime retail offer is focused on the busy and popular

pedestrianised High Street where there is a high concentration of

major UK multiples including M&S, House of Fraser, Debenhams, Next, Boots, WH Smith, Gap, H&M and Superdrug. In addition,

the town has a strong representation of quality fashion retailers

including Karen Millen, Gant, Links, Hugo Boss, Reiss, Superdry, Ted Baker, LK Bennett, Whistles and Jo Malone.

The external frontages of Friary Street, which acts as a thoroughfare

from Friary Centre to the High Street, have recently been refurbished

and has further improved Guilford’s retail offer. The recent letting

to Five Guys complements earlier lettings to Wagamama, Gourmet Burger Kitchen, Nandos, Superdry, Apple, TK Maxx, Cotswold Outdoors and Jamie Oliver’s Italian Kitchen.

65/66 north street & 23/27 market street, guildford

North Street Development Guildford Borough Council in conjunction with M&G Real Estate

and their chosen developer partner Land Securities are proposing

to develop a site adjoining the Friary Centre on North Street, known

as The North Street Development. While development plans are yet

to be finalised, we understand that it will comprise circa 400,000

sq. ft. of retail, leisure and residential space to include an anchor

department store, mooted to be John Lewis Partnership. In

addition, many retailers have been targeted for the scheme and are

rumoured to be the likes of Next, H&M and Arcadia. The scheme

would enhance the town’s already extensive existing retail offer and

have a positive impact upon the subject property.

SituationThe property occupies a prime trading position on North Street at

the junction with Market Street and benefits from a return frontage.

The premises are immediately adjacent to House of Fraser on

North Street and Reiss on Market Street, with other national

retailers in close proximity including French Connection, East, Laura Ashley, Fat Face, Poundland, Argos and Mothercare.

The PropertyThe property lies within Guildford’s town centre Conservation Area and

is not listed. The property was previously let on a single tenancy to

Blacks but has since been split and re-let to the current tenants.

Caffe Nero comprises ground floor only and benefits from a return

frontage onto Market Street. Bravissimo is arranged over ground

floor and ground floor mezzanine (staff room and ancillary), first

floor, first floor mezzanine and second floor (ancillary).

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Proposed North StreetDevelopment

65/66 north street & 23/27 market street, guildford

AccommodationThe property provides an approximate total net floor area of

641.29 sq.m (6,903 sq.ft). A breakdown of the areas can be

seen in the tenancy schedule.

TenureFreehold

Tenant Covenant Tenant

D&B Rating

Date of Accounts Turnover

Pre-Tax profit/loss Net Worth

Nero Holdings Limited

5A1 31/05/2014 £215,496,000 £22,538,000 £144,676,000

Bravissimo Limited

3A1 31/08/2013 £46,463,517 £2,524,576 £7,815,669

Caffe Nero have 566 outlets

in the UK and target to open

90 stores annually over the

next five years. The

multinational company have

84 branches overseas and

the new openings will be

split between the UK and international outlets. The retailer has

the highest D&B rating of 5A1 reflecting a Tangible Net Worth of

£144,676,000 and a low risk of business failure.

Bravissimo, according to

Zolfo Cooper Growth

Retailer Report, is the 6th

fastest growing retailer in

the UK. The original online

lingerie, swimwear and

nightwear for D-L cup

women now trade from 23

stores with plans to open a further 2 stores in the next financial

year. Turnover increased by 4% in the year to August 2013, while

operating profit was up by 40% to £2,524,576.

Tenancy ScheduleUnit

Description Tenant Name

Area Analysis (sq ft) Rent (£pax) (£psf Zone A)

ERV (£pax) (£psf Zone A) Start Date Expiry Date

Next Rent Review CommentsArea ITZA Total sq ft

65/66 North Street

Nero Holdings Limited GF 1,856.00 1,269.00 1,856.00 £110,000(£87 Zone A)

£190,350(£150 Zone A)

07/10/2013 06/10/2023 07/10/2018 Minimum uplift to £120k at review.

23/27 Market Street

Bravissimo Limited GF Sales 728GFMezz 1,477 (A/10)FF Store 584 (A/20)

FF Mezz 1460 (A/30)SF Store 798 (A/40)

789.00 5,047.00 £90,000(£114 Zone A)

£118,350(£150 Zone A)

02/09/2013 01/09/2023 02/09/2018 Minimum uplift to £115k at review.

£200,000 £308,700 AWULT 8.67 years

65/66 north street & 23/27 market street, guildford

Current Income pax£200,000 per annum exclusive.

Rental ValueThe subject property is within the prime pitch on North Street, of

which the tone is established at £150 psf Zone A, and is therefore

highly reversionary. In addition, rental growth prospects are

excellent over the medium to long term with the North Street

Development being developed directly opposite. Based on £150 psf Zone A, the current ERV is £308,700 pax, (Caffe Nero -

£190,350; Bravissimo - £118,350 pax). This represents an

attractive discount to the High Street, where prime rents currently

reflect £285-£300 psf Zone A.

EPCEPC’s are available upon request.

VATThe property has been elected for VAT and any disposal will be by

way of a Transfer of a Going Concern (TOGC).

Proposal We have been instructed to seek offers in excess of £3,600,000 (Three Million and Six Hundred Thousand Pounds), Subject to

Contract & exclusive of VAT, which reflects a net initial yield of 5.25%, allowing for purchaser’s costs of 5.8%. A purchase at

this level would produce the following yield profile:

Net Initial Yield 5.25%

Guaranteed Reversionary Yield (2018) 6.20%

Ultimate Reversionary Yield (2018) 8.00%

Equivalent Yield (nominal) 7.5%

65/66 north street & 23/27 market street, guildford

MAURICE

BARBERS

THE GATE

BOUTIQUE

UNDER OFFER

Further InformationFor further information, please contact:

David Freeman James Baillie Ed Smith Patrick Over 020-7659-4830 020-7659-4839 020-7659-4831 020-7659-4832 david.freeman@greenpartners.co.uk james.baillie@greenpartners.co.uk ed.smith@greenpartners.co.uk patrick.over@greenpartners.co.ukMISREPRESENTATION These particulars do not constitute an offer or contract. They are intended as a guide to prospective purchasers. All reasonable care has been taken in the preparation of these particulars but their accuracy is not guaranteed. The purchaser should satisfy himself and as to the correctness of these details. Neither the agents nor the vendors or lessors are to be or become under any liability or claim in respect of these particulars. These particulars are supplied on the understanding that all negotiations are conducted through this office. March 2015. Adrian Gates Photography & Design 07710 316991