PRIME SINGLE LET DISTRIBUTION WAREHOUSE ......PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT...

STAKEHILL INDUSTRIAL ESTATE MIDDLETON, MANCHESTER, M24 2RP

PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY

INVESTMENT SUMMARY• One of the premier distribution

locations in the North West

• Strategic location immediately adjacent to Junction 20 of the M62

• A secure detached industrial unit providing 104,345 sq ft with 11.10 metre eaves

• Let to Royal Mail Group Limited on a 10 year lease from June 2018 (expiry May 2028)

• Rental income of £500,870.40 per annum (only £4.80 per sq ft), subject to an upwards only rent review to OMRV in year 5

• ERV of circa £573,898 (£5.50 per sq ft)

• Royal Mail Group - D&B rating 5A1

• Freehold

Offers are sought in excess of £8,310,000 subject to contract and exclusive of VAT. A purchase at this level reflects an attractive initial yield of 5.65% and a low capital value of only £79.64 per sq ft (assuming purchasers costs of 6.69%).

PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY 2

TESCO

TRELLEBORGNFT LOGISTICS

YODEL

PROSEAT

BOOKER

HOWARD TENENS

ANOVO

JLG

COMFY QUILTS

TS UKTS UK

FOOTASYLUM

MANCHESTER

COMFY QUILTS

M62

M627M

J20M62

LEEDS TO MANCHESTERRAILWAY LINE

TOUCHET HALL ROADWHITHAM MILLS

TOOLSTATION

PSV GLASS

SAINSBURYS


1021A

291

121

41

M6

M61

M65

M66

M62

M67

M60

11

11

10

4

4

5

5

6

6

8

9

9

1011

14

1617

19

19

20

20

21

21

22

20

21

22

23

24

25

28

30

29

19

8 6

65

54

3 3

3

3

2

3

3

3

2

1

22

27 2625

24

23

M56

M6122

3

A627 (M)2

1

A533

A58

A6

A6

A6

A56

A58

A58

A666

A646

A6010

A627

A523

A56

A56

A57

A556 A537

A34

A34

A646

23

BOLTONBURY

SALFORD

ROCHDALE

PRESTON

MANCHESTER

OLDHAM

WARRINGTON

ManchesterAirport (MAN)


LOCATIONManchester is the premier regional centre in the UK and part of a thriving city region. It is the largest economic area outside London with a gross value added of £59.6bn. Over 51% of the North West’s total economic output is produced by the Greater Manchester region.

The city region is home to 80 of the FTSE 100 as well as the UK’s largest university, world-class research and over 100,000 students, Europe’s largest student population. Greater Manchester’s highly skilled workforce of over 7m people is within 1 hour’s drive making it an ideal business location.

Greater Manchester is set apart from competing regions as it has a large quantity and quality of potential employees across a wide range of different industries including ICT, bio science, advanced materials, media and digital, aviation, food, logistics, financial and professional services. No other city region in Europe has invested as much in its media and digital scene as Manchester.

Manchester is at the centre of the UK with direct connection to the national motorway network to the North, South, East and West. 20 million people and over 500 million sq ft of retail floor space can be reached within a 2.5-hour drive time.

Manchester is on the West Coast Mainline and benefits from rapid and frequent services from Manchester Piccadilly to Liverpool, Leeds, Birmingham and London.

Manchester Airport is situated 5 miles to the south of the city centre and remains the UK’s third airport and largest outside of London. It is a global gateway to the North of England. Not only does it serve 22m passengers annually, it also currently handles 120,000 tonnes of freight and mail annually connecting the North of England to 160 destinations around the world. Its largest markets are the Far East, North America and the Middle East.

SECOND LARGEST ECONOMY IN THE

UK - £59 BN.

DIRECT CONNECTION TO THE NATIONAL

MOTORWAY NETWORK

7M PEOPLE WITHIN A ONE-

HOUR DRIVE

SERVICES FROM MANCHESTER TO

LIVERPOOL, LEEDS, BIRMINGHAM AND

LONDON

GLOBAL GATEWAY TO THE REGION

HANDLING 120,000 TONNES OF FREIGHT

AND MAIL

MOST COMPETITIVE BUSINESS LOCATION

IN EUROPE

HOME TO 80 OF THE TOP 100 FTSE

COMPANIES

ONE OF THE TOP TEN WORLD’S

CITIES

4

20

19

M62

M62

M62

A627(M)

A627(M)

A627(M)

MAN

CHES

TER

ROAD

A6046 MIDDLET O

N R

OAD

A664 M

ANC

HESTER

RO

AD

A6046 MID

DLETO

N R

OAD

A604 6 HOLLIN LANE

A66

4 ROCHDALE

ROAD

BOARSHAW ROAD

BOARSHAW LANE

OOZEWOOD ROAD

B619

5

M

IDDLETON ROAD

STAKEHILL LANE

THORNHAM LANE

THORNHAM OLD ROAD

LANGLEY LANE

2

LEEDS

MANCHESTER

SITUATIONStakehill Industrial Estate has long been established as one of the premier industrial and distribution locations in the North West of England. It is located approximately 8 miles to the North of Manchester City Centre in between the M60 orbital and the M62 trans-Pennine motorways. It is particularly well located to serve the North, East and West regions of Greater Manchester, Yorkshire and Lancashire.

The estate has unrivalled motorway access through being located immediately adjacent to the A627 (M) which provides direct access to Junction 20 of the M62 within 1.5 miles, and Junction 21 of the M60 orbital motorway approximately 2.5 miles to the South.

Manchester International Airport is located 22 miles to the South . Over 60 airlines use the airport offering direct flights to over 225 destinations worldwide and handling 120,000 tonnes of freight and mail annually.

The estate was originally established in the 1970’s and since this time has developed into a prime

distribution location extending to approximately 2.5 million sq ft in total with a site boundary of approximately 210 acres (85 hectares). The estate has a range of institutional ownerships, property companies and owner occupiers.

As well as seeing considerable investment over recent years the estate caters for a wide range of occupiers including Footasylum (140,000 sq ft), Tool Station (150,000 sq ft), Royal Mail (100,000 sq ft), Yodel (100,000 sq ft), Howard Tenens (170,000 sq ft) as well as existing long-term occupiers including Comfy Quilts (350,000 sq ft), Booker (100,000 sq ft), Scania (140,000 sq ft), UK Cables (55,000 sq ft), Tontarelli (250,000 sq ft), Proseat, NFT (90,000 sq ft) and Woodbridge Foam (82,000 sq ft) amongst others.

The property is situated to the South of the wider estate occupying a secure site fronting Touchet Hall Road.


M6

A1(M)

A1(M)

M1

M1

M6A1(M)

A1(M)

M1

M6

M55 M62

A14

A14

M25

M26M25

M23M3

M4M4

M5

M5

M40M50

M74

M8

M77

M90

CHESTERFIELD

HATFIELDCHEPSTOW

M67LIVERPOOL

BIRMINGHAM

BRISTOL

SOUTHAMPTON

LONDON

LEEDS

CARLISLE

NEWCASTLEUPON TYNE

EDINBURGH

GLASGOW

MANCHESTER

ROAD A627(M) 0.5 mileM62 (Jct 20) 1.5 milesM60 Orbital (Jct 21) 3 milesM66 6.5 milesM61 11 miles

AIRPORTSManchester International 22 milesLeeds Bradford 37 miles

TOWNSRochdale 4 milesOldham 5 miles Bury 8 milesManchester 8 milesBolton 10 milesLeeds 30 miles

PORTSLiverpool 60 minsHull 90 minsBirmingham 100 minsGrimsby 105 mins

RAILMills Hill Station 1 mileManchester 11 minsLeeds 80 mins


DESCRIPTION The property comprises a modern refurbished self-contained warehouse of steel portal frame construction within 4 bays. The property has the following specifications:

• Pitched metal clad roof with approximately 10% roof lights

• Profile metal clad elevations• 11.10 metre eaves to the

underside of haunch• 8 dock level and 6 drive in

loading doors• High quality ground floor office

accommodation• Extensive concrete service yard

with parking for 30 trailers • Separate delineated car parking

area for 35 cars• Secure fenced perimeter with 2

gated access points

The property was extensively refurbished at a cost of circa £1 million in 2017/2018 including a new overclad roof, providing a 25 year guarantee.


ACCOMMODATIONThe property has been measured in accordance with the RICS Code of Measuring Practice (7th Edition) on a gross internal basis as follows: -

Description Area (sq ft) Area (sq m)Warehouse 101,076 9,390Office 3,272 304TOTAL 104,345 9,694

THE PROPERTY HAS A TOTAL SITE AREA OF 4.97 ACRES (2.01 HECTARES) AND A SITE COVERAGE OF 48%.


WAREHOUSE

TOUCHET HALL ROAD

3 LEVEL LOADING DOORS

OFFICES

8 DOCK LEVELLOADING DOORS

3 LEVEL LOADING DOORS

FOR IDENTIFICATION PURPOSES

8

TENUREThe property is held freehold.

TENANCYThe property is let to Royal Mail Group Limited for a term of 10 years from 01 June 2018 (expiring 31 May 2028).

The passing rent is only £500,870.40 per annum (£4.80 per sq ft) subject to an upwards only rent review to the open market value at the end of the 5th year.

The property is held on full repairing and insuring terms subject to a schedule of condition.

The tenant benefits from a rent free period totalling 16 months, made up of an initial 6 months rent free and 20 months at half rent. Any rent free will be topped up.

COVENANTRoyal Mail is one of the UK’s most recognised brands with a history stretching back 500 years and currently delivering more letters in the UK than all of its competitors combined. It currently employs circa 159,000 people across the group.

Royal Mail Group would be considered an undoubted covenant and have a D&B rating of 5A1 reporting the following accounts: -

25.03.2018 (000’s) 26.03.2017 (000’s) 27.03.2016 (000’s) 26.03.2015 (000’s)Turnover £7,608,000 £7,651,000 £7,675,000 £7,772,000Pre-Tax Profit £6,000 £146,000 £99,000 £415,000Tangible Net Worth £3,300,000 £4,870,000 £3,686,000 £3,400,000


OCCUPATIONAL MARKET COMMENTARYStakehill Industrial Estate is seen as one of the premier distribution locations within the North West with direct access to the regional motorway network via the A627(M). The estate was originally developed in the 1970’s and totals approximately 2.5 million sq ft of self-contained distribution and multi-let units on 210 acres (85 hectares).

The North West industrial market is well positioned when compared with other regions and sectors due to continued investment in infrastructure. Key examples of this include the opening of Peel Ports £400 million deep water container terminal Liverpool2 in 2016, the £600 million New Mersey Gateway Bridge in 2017, the completion of the £190m A556 trunk road between the M56 and M6 motorways in 2017 and continued expansion/development of Manchester Airport as a major global hub.

The distribution market in the North West is experiencing consistent and significant levels of demand for good quality ‘big box’ accommodation with an average take up of 4.3 million sq ft per annum making it the most active region outside of the South East over the last 24 months. Units between 90,000 – to 150,000 sq ft have seen consistent strong demand representing over 65% of overall ‘big box’ take-up.

The current shortage of deliverable sites across Greater Manchester has seen the majority of recent speculative development concentrated toward the M6 Corridor. As such there is limited new build supply across North Manchester and we expect good quality 2nd hand accommodation to be the focus of occupier demand for the near future.

The lack of Grade A/B supply, together with consistent occupier demand in the North West, has resulted in vacancy levels decreasing both in prime and secondary industrial accommodation by over 7% on 2017 levels. As such rental growth in the North West has out-performed most parts of the UK and remains a key performance driver with North West industrial rental growth forecast to be over 2% per annum (source: B8RE).

Prime distribution rents are now established in excess of £6.50 per sq ft with good quality 2nd hand rents achieving in excess of £5.50 per sq ft.

ESTIMATED RENTAL VALUEWe are of the opinion that the ERV for this building is circa £573,898 (£5.50 per sq ft). Key recent lettings in the North West are as follows: -

Date Tenant Address Size (sq ft) Rent per sq ft GradeQ2 2019 Green Group Unit 1 Merlin Park,

Trafford Park62,107 £6.50 B

Q3 2018 McCormick Link 95, Hareshill Business Park, Heywood

95,000 £6.35 A

Q3 2018 Arnord Madrix Unit 365 Four Oaks Road, Preston

84,051 £5.26 A

Q2 2018 Countryside Properties

Zodiac, Europa Boulevard, Warrington

128,944 £5.95 B

Q2 2018 IFCO Systems Kingsland 85, Kingsland Grange, Warrington

85,000 £5.85 B

Q2 2018 Globus T2, Trafford Point, Manchester

98,000 £6.50 A

Q1 2018 Toolstation Target M62, Stakehill

148,748 £5.15 B

Q1 2018 Mardix Group Sigma 100, Blackburn

110,000 £6.25 A

Q4 2017 Green Group Barton Dock Road, Trafford Park

133,636 £5.35 B

Q2 2017 R J Edwards Warrington South, Warrington

105,100 £5.50 B

Q1 2017 TS (UK) Ltd G2 Stakehill Industrial Estate, Middleton

44,612 £5.75 B


INVESTMENT MARKETSales volumes in the North West are currently well ahead of the 10 year average as investor demand for the region continues to surge.

There remains a significant weight of capital chasing the industrial sector with investors buoyed by strong occupational fundamentals including record levels of take up, historically low availability rates and a constrained development pipeline.

On average, 260 acres per annum of industrial land has been lost to residential development as local authorities seek to address the housing crisis. The combination of diminishing stock levels and robust occupational demand, driven by e-commerce requirements has created a positive demand/supply imbalance, and a strong rental growth dynamic.

Current investor demand is being driven by sectors offering strong occupational growth and the potential to enhance income returns.

The continued structural shift provided by the evolution of online retailing, the consolidation of retailers and the automotive push on occupational demand, all set against a backdrop of historically low availability and lack of alternative investment opportunities has resulted in the industrial and logistics market attracting strong potential from a wide range of investors.

By way of comparable evidence, we believe these examples are the most relevant to support our pricing and are indicative of the type of typical buyers for this type of product and lot size.


Date Tenant Property Area(Sq Ft)

AWULTC Rent Pa (£PSF) Price (£) NIY (%) Capital Value (Per Sq Ft)

Purchaser

Dec 2018 GA Pet Foods Revolution Park, Chorley

181,191 10.00 1,008,729 (£5.45)

20,365,000 4.64 £110 Staffordshire CC

Aug 2018 Sicame London Medway Commercial Park, Medway, Kent

64,055 10.00 £464,399 (£7.25)

8,534,000 5.1 £133 NFU

Aug 2018 Royal Mail Royal Mail, MK95 Michigan Drive, Tongwell, Milton Keynes

112,000 10.10 £357,280 (£3.19)

9,900,000 3.38 £88 London Metric

April 2018 Crown Packaging Manufacturing UK Limited

Metalbox, Radar Road, Leicester

185,494 10.00 £940,000 (£5.07)

17,100,000 5.15 £92 FWHRE

April 2018 Swan Commercial Services Ltd

Honywood Road, Basildon,

134,183 9.50 £958,522 (£7.25)

20,750,000 4.33 £155 Aberdeen Standard Investments

Jan 2018 AO.com Crossflow 380, Weston Road, Crewe

386,750 8.80 £1,972,440 (£5.10)

35,188,000 5.25 £91 Tritax

Dec 2017 PrimaFlow F&P Wholesale, Silkwood Business Park, Wakefield

80,335 15.0 £380,000 (£4.73)

7,500,000 4.75 £93 Watford Council

Nov 2017 Amazon Logistics North, M61 junction 4, Bolton

358,822 15.00 £2,134,991 (£5.95)

47,605,000 4.20 £133 AVIVA

Oct 2017 Tesco Wingates Ind Estate, Bolton

275,155 4.30 £1,395,036 (£5.07)

25,100,000 5.20 £91 CCLA

Aug 2017 Royal Mail Team Valley Trading Estate, Gateshead

207,812 13.50 £899,161 (£4.32)

16,190,000 5.20 £78 Merseyside LA

12


EPCThe EPC rating is C64. A copy of the Energy Performance Certificate is available upon request.

VATThe property has been elected for VAT and it is the intention to treat this transaction as a Transfer of a Going Concern (TOGC).

PROPOSALWe are instructed to seek offers in excess of £8,310,000 (Eight Million, Three Hundred and Ten Thousand Pounds) subject to contract and exclusive of VAT.

A purchase at this level reflects a net initial yield of 5.65% assuming purchasers costs of 6.69% and a low capital value of £79.64 per sq ft.

FURTHER INFORMATIONData site access is available upon request.

CONTACTTo discuss the opportunity or to arrange an inspection please contact: -

MISREPRESENTATION ACT 1967B8RE for themselves and for vendors or lessors of this property whose agents they are give notice that:-The particulars are set out as a general outline for the guidance of intended purchasers or lessees and do not constitute, nor constitute part of, an offer or contract.• All descriptions, dimensions, reference to condition and necessary permissions for use and occupation and other details, are given

without responsibility and any intending purchasers or tenants should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them.

• No person in the employment of B8RE has any authority to make or give any representation or warranty whatever in relation to this property.

Finance Act 1989. Unless otherwise stated, all prices and rents are quoted exclusive of VAT. Property Misdescriptions Act 1991. These details are believed to be correct at the time of completion but may be subject to subsequent amendment. May 2019.

SIMON WOOD JOHN BURROWS B8RE [email protected] [email protected] 01925 320520 01925 320520

CLICK TO PLAY VIDEO

14

https://vimeo.com/337739345

PRIME SINGLE LET DISTRIBUTION WAREHOUSE ......PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT...

Documents

Transcript of PRIME SINGLE LET DISTRIBUTION WAREHOUSE ......PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT...