PRIME LONG LET LONDON RETAIL INVESTMENT OPPORTUNITY€¦ · transportation links and is...

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126/130 HIGH STREET, WATFORD PRIME LONG LET LONDON RETAIL INVESTMENT OPPORTUNITY | home | investment summary | location | demographics | retailing | situation | goad | description | accommodation | tenure | tenancy | covenant | rental value | vat | epc | proposal | contact

Transcript of PRIME LONG LET LONDON RETAIL INVESTMENT OPPORTUNITY€¦ · transportation links and is...

126/130 HIGH STREET, WATFORD

PRIME LONG LET LONDON RETAIL INVESTMENT OPPORTUNITY

| home | investment summary | location | demographics | retailing | situation | goad | description

| accommodation | tenure | tenancy | covenant | rental value | vat | epc | proposal | contact

INVESTMENT SUMMARY

• Watford is a dominant retail centre situated 19 miles north west of central London, within the M25.

• Significant over-representation of the AB and C1 social groupings.

• 100% prime freehold High Street retail investment.

• Directly opposite the entrance to the JLP anchored INTU Watford Shopping centre. INTU’s retail and leisure extension will be anchored by Debenhams and IMAX Cineworld and will make Watford a top 20 retail and leisure destination.

• Let to undoubted covenant of McDonalds with just under 9 years remaining on the lease. The tenant has an Experian credit score of 100/100.

• Passing rent of £197,000 per annum recently settled at rent review reflecting an increase of approximately 9.45%.

• Excellent rental prospects moving forward.

• Potential to convert upper floors to residential use subject to planning.

• We are instructed to seek offers in excess of £3,100,000 (Three Million, One Hundred Thousand Pounds), subject to contract and exclusive of VAT which reflects a net initial yield of 5.96%, after allowing for purchaser’s costs of 6.46%.

| home | investment summary | location | demographics | retailing | situation | goad | description

| accommodation | tenure | tenancy | covenant | rental value | vat | epc | proposal | contact

WATFORD - 126/130 HIGH STREET PRIME LONG LET LONDON RETAIL INVESTMENT OPPORTUNITY

LOCATION

Watford is an affluent and popular retail and commercial centre in the borough of Hertfordshire situated 17 miles (11.3km) northwest of central London and inside the M25 motorway.

Watford benefits from excellent motorway transportation links and is strategically located with Junction 19 of the M25, 4 miles (6.4km) to the north west and Junction 5 of the M1 2 miles (3.2km) to the north east.

Watford is also serviced by three mainline stations and benefits from regular train services into London Euston with a fastest time of just

16 minutes. London underground services are provided from Watford tube station on the Metropolitan line. There are proposals to re-route and extend the Metropolitan line to Watford Junction.

Watford offers an excellent choice for air travel with Luton Airport 17 miles (27.4km) to the north, and a 25 minute drive from the town centre. Heathrow Airport is located 22 miles (35.4km) to the south, Gatwick Airport 60 miles (96.6km) to the south and Stansted Airport is 45 miles (72.4km) to the north east.

DEMOGRAPHIC PROFILE

The total population within the Watford primary catchment area is 635,000, similar to the Regional Centre average and ranking the town 24 out of the PROMIS Centres. The town is projected to see above average growth in population over the period 2016-21.

The estimated shopping population of Watford is 336,000, ranking the town 27 of the PROMIS centres, which reflects Watford’s dominance and retail status since the development of Intu Watford in the late 1980s. The Watford catchment population is moderately affluent and contains a significant over

representation of the AB and C1 social groupings. As a result the per capita retail spending levels are higher than the national average. (CACI)

Watford has a strong economic profile and is a major employment hub especially for retail, finance and professional/business services. The service sector as a whole accounts for 81% of total employment, significantly above the Retail PROMIS average. Employers include Watford Borough Council, Watford NHS, Hilton Worldwide, JD Wetherspoon, Camelot Group, Iveco, TK Maxx, Costco, Total Oil, Sanya and Beko.

WATFORD

RICKMANSWORTH

CHORLEYWOOD

MAPLECROSS

GERRARDSCROSS

POTTERSBAR

BOREHAMWOOD BARNET

EAST BARNET

EDGEWARE

HARROWRUISLIP

STANMORE

WATFORD

RICKMANSWORTH

CHORLEYWOOD

MAPLECROSS

GERRARDSCROSS

POTTERSBAR

BOREHAMWOOD BARNET

EAST BARNET

EDGEWARE

HARROWRUISLIP

STANMORE

M25

M25

M25

M25

M25

M1

M1

M1

M1A1(M)

A41

A41

A1

A1

A413

“ Per capita retail spending levels higher than the national average”

| home | investment summary | location | demographics | retailing | situation | goad | description

| accommodation | tenure | tenancy | covenant | rental value | vat | epc | proposal | contact

WATFORD - 126/130 HIGH STREET PRIME LONG LET LONDON RETAIL INVESTMENT OPPORTUNITY

RETAILING IN WATFORD

Watford is one of the premier regional retail centres in the UK. The prime retailing in Watford is centred on the John Lewis and Marks & Spencer anchored INTU Watford shopping centre. The Prime pitch extends onto the pedestrianised High Street, where a number of national multiple retailers are represented including Superdrug, Wilkos and GAP. Sports Direct/Flannels will be occupying the former BHS store.

The town centre retail floor space in Watford is estimated at 1.37 million sq ft, ranking the town 46 of the PROMIS Centres on this measure. Watford ranks 38 on the basis of its PMA Non-Food Retail Score, 42 on the PMA Fashion Score and ranks 38 on the PMA Anchor Score. Watford has a significantly below average volume and quality of retail provision relative to the size and affluence of the shopping population (PROMIS, 2017).

Intu Properties and the Watford B.C are currently redeveloping the former Charter Place Shopping centre which will be integrated with Intu Watford. The extension is set to create a single 1.4 million sq ft retail and leisure destination, placing Watford in CACI’s top 20 national retail destinations ranking, alongside Edinburgh and Bristol. This extension to Intu Watford is expected to provide a major boost to the town and help retain spending on its completion in autumn 2018. Debenhams has agreed to anchor the scheme, along with a nine screen IMAX Cineworld cinema.

SITUATION

The subject property is situated in a highly prominent prime corner trading location on the pedestrianised High Street, adjacent to Waterstones, opposite Primark and the main entrance to the INTU Watford Shopping centre.

“ Significant over representation of the ABC1 social groupings”

| home | investment summary | location | demographics | retailing | situation | goad | description

| accommodation | tenure | tenancy | covenant | rental value | vat | epc | proposal | contact

WATFORD - 126/130 HIGH STREET PRIME LONG LET LONDON RETAIL INVESTMENT OPPORTUNITY

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For Identification purposes only

| home | investment summary | location | demographics | retailing | situation | goad | description

| accommodation | tenure | tenancy | covenant | rental value | vat | epc | proposal | contact

WATFORD - 126/130 HIGH STREET PRIME LONG LET LONDON RETAIL INVESTMENT OPPORTUNITY

DESCRIPTION

The premises comprise a substantial corner property arranged over ground and two upper floors, with significant frontages along both the High Street and King Street

McDonalds currently trade from ground and first floor, with additional ancillary accommodation on first and second floor. The unit benefits from rear servicing via King Street.

ACCOMMODATION

The property comprises the following approximate floor areas:

Accommodation Area (sq ft) Area (sq m)

Ground Floor Sales 3,600 332.44

Ground Floor Storage 84 7.80

Ground Floor ITZA 1,552 units 144.18

First Floor Sales 2,232 207.35

First Floor Ancillary 1,196 111.11

Second Floor Ancillary 365 33.91

Total Floor Area 7,477 694.61

TENURE

The property is held freehold.

TENANCY

The property is let to McDonalds Real Estate LLP, on a 15 year Full Repairing and Insuring lease from 24th June 2011, at a current rent of £197,000 per annum exclusive.

| home | investment summary | location | demographics | retailing | situation | goad | description

| accommodation | tenure | tenancy | covenant | rental value | vat | epc | proposal | contact

WATFORD - 126/130 HIGH STREET PRIME LONG LET LONDON RETAIL INVESTMENT OPPORTUNITY

COVENANT

McDonald’s is an American fast food restaurant chain established in 1940. Today, McDonald’s is the world’s largest restaurant chain, serving approximately 68 million customers daily in 120 countries across approximately 36,900 outlets.

The summary accounts information can be set out as follows, demonstrating the financial strength of the tenant and their credit score of 100/100.

McDonalds Real Estate LLP

31/12/2015

GBP

31/12/2014

GBP

31/12/2013

GBP

Experian Credit Score – out of 100

Turnover £ 89,566,000 £ 87,383,000 £ 87,333,000

100Pre-Tax Profit £ 304,122,000 £ 48,958,000 £ 37,871,000

Net Worth £ 109,269,000 £ 302,087,000 £ 253,129,000

RENTAL VALUE

The rent passing of £197,000 p.a, has recently been settled with effect from 24th June 2016 reflecting a Zone A rent of £105.60 per sq ft and a rental increase since 2011 of approximately 9.45%. This is also in line with the adjacent unit (122 High Street) which was let to Waterstones in July 2016 for £75,000 p.a reflecting a Zone A rent of £105 per sq ft.

VAT

The property has been elected for VAT purposes and it is anticipated that the investment sale will be treated as a Transfer of a Going Concern (TOGC).

| home | investment summary | location | demographics | retailing | situation | goad | description

| accommodation | tenure | tenancy | covenant | rental value | vat | epc | proposal | contact

WATFORD - 126/130 HIGH STREET PRIME LONG LET LONDON RETAIL INVESTMENT OPPORTUNITY

EPC

An EPC for the property can be provided upon request.

PROPOSAL

We are instructed to seek offers in excess of £3,100,000 (Three Million, One Hundred Thousand Pounds), subject to contract and exclusive of VAT, which reflects a net initial yield of 5.96% after allowing for purchaser’s cost of 6.46%.

The most salient comparable investment evidence is as follows:

107 High Street, Watford (Bills)

Freehold investment is held on the remainder of a 22 year lease, subject to 5 yearly compounded RPI rent reviews, based on a cap and collar of 1% and 4%. The property has exchanged at a price of £2.45m, reflecting a net initial yield of 4.60%.

103/105 High Street, Bromley

Freehold retail investment let to the Gap on a lease to expire December 2023 with a tenant break clause in December 2019, sold in May 2017 for £2.775m, which reflected a net initial yield of 5.76%.

82/84 St Ann’s Road, Harrow

Freehold block of two shops with offices above, let to Carphone Warehouse and Mothercare with an AWULT of 2.62 years to break and 4.03 years to expiry. The property was sold in April 2016 for £4.66m, reflecting a net initial yield of 5.75%.

| home | investment summary | location | demographics | retailing | situation | goad | description

| accommodation | tenure | tenancy | covenant | rental value | vat | epc | proposal | contact

WATFORD - 126/130 HIGH STREET PRIME LONG LET LONDON RETAIL INVESTMENT OPPORTUNITY

Messrs. Jackson Criss for themselves and for the vendors or lessors of this property whose agents they are to give notice that: (i) the particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract; (ii) all descriptions, dimensions, references to condition and necessary permissions for use and occupation, and other details are given in good faith and are believed to be correct but any intending purchasers or tenants should not rely on them as statements of representations of fact

but satisfy themselves by inspection or otherwise as to the correctness of each of them; (iii) no person in the employment of Messrs. Jackson Criss has any authority to make or give any representation or warranty whatever in relation to this property. JC0109. July 2017.DE

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For further information, please contact the sale agents, Jackson Criss:

Philip Hay

020 7637 [email protected]

Brook Wannop

020 7637 [email protected]

| home | investment summary | location | demographics | retailing | situation | goad | description

| accommodation | tenure | tenancy | covenant | rental value | vat | epc | proposal | contact

WATFORD - 126/130 HIGH STREET PRIME LONG LET LONDON RETAIL INVESTMENT OPPORTUNITY