Sale Of InveStmentPeterlee Glass Company Limited Mill Hill, North West Industrial Estate, Peterlee County Durham SR8 2HR

Major North East iNdustrial aNd MaNufacturiNg locatioN

INVESTMENT SUMMARY

Major North East industrial and manufacturing location.

Prominent industrial unit located on a popular and well-established industrial estate situated close to the A19.

Multimillion-pound investment by the landlord and tenant.

Securely let with an unexpired term of 20 Years toPeterlee Glass Company Limited & Guaranteed byBrownhills Investments Limited.

Significant Initial passing rent of £155,000 per annumequating to £2.70 per sq ft with fixed increases of 7%every 5th anniversary offering guaranteed reversion.

We are instructed to seek offers in excess £2,000,000 (Two Million Pounds), subject to contact and exclusiveof VAT.

A purchase at this level reflects an attractive Net InitialYield of 7.29% assuming standard Purchaser’s costs of6.27%, and a low capital value of £34.80 per sq ft. Theproperty is elected for VAT which will therefore be payableon the purchase price. It is envisaged that the sale willbe treated as a Transfer of a Going Concern (TOGC).

Sale Of InveStmentPeterlee Glass Company Limited Mill Hill, North West Industrial Estate, Peterlee, County Durham SR8 2HR

LocationPeterlee is located in County Durham, approximately 11 milesEast of Durham, 11 miles South of Sunderland and 23 milesSouth East of Newcastle. The Estate has excellent roadcommunications being situated immediately adjacent to theA19 Trunk Road which provides direct access to the Tyne &Wear conurbation to the North and Teesside and NorthYorkshire to the South.

The town benefits from good bus provisions, connectingPeterlee to Durham, Sunderland, Newcastle andMiddlesbrough. Rail services are provided by the East Coastmainline from Darlington and Durham stations, with Durhamhaving a fastest journey time to London Kings Cross ofapproximately 2 hours 30 minutes.

Newcastle International airport and Durham Tees Valleyairport are situated approximately 30 miles to the North andSouth respectively. Both airports provide regular flights to keynational, European and international destinations.

SituationThe property is situated close to the entrance to the NorthWest industrial estate adjacent to the A19, on one of theprincipal North/South arterial routes in the North East. Theproperty is situated on Mill Hill which provides direct accessto the A19 leading northbound and southbound. The NorthWest Industrial Estate is a well-regarded commercial location,comprising approximately 4 million sq ft of accommodation.The estate attracts many national and international occupierswho seek out predominantly manufacturing and industrialspace, with ancillary office accommodation.

Sale Of InveStmentPeterlee Glass Company Limited Mill Hill, North West Industrial Estate, Peterlee, County Durham SR8 2HR

Major occupiers on the estate include:

- Caterpillar UK Ltd, the world’s largest manufacturer ofconstruction equipment, who occupy 11 buildings with amix of logistic and manufacturing uses, with circa 1,000employees.

- NSK, a global bearings manufacturer, also occupy severalbuildings, employing over 400 people in this location.

- TRW Automotive have been in occupation on the estatesince 1989 and have plans to increase their Peterleeworkforce to in excess of 1,000 employees by 2018.

- Other major occupiers include GT Group, BHK (Germany),Gliderol (Australia), Atrix (UK), Sotech, Npower, Optilon(UK), Soltranlentz (France), Ferschil (Netherlands) andReckitt Benckiser (UK).

Description The property comprises a manufacturing unit with officessituated in a secure compound of appropriately 1.075 ha(2.656 acres). The building forms a four-bay manufacturingunit of steel frame construction with brick and block workelevations and profile steel metal cladding surmounted by anew pitched profile steel insulated roof.

The building has undergone substantial refurbishment by theVendor and the tenant has also committed to a multimillionpound fit out. Internally the main manufacturing unitcomprises a large open area, with all bays extending to aneaves height of 7m (23'00").

Externally the property benefits from a secure tarmacadamhardstanding, gravelled landscaping areas and 66 car parking spaces.

LocationThe property is prominently situated fronting the A647,Stanningley Road, approximately 2 miles West of Leeds CityCentre. The A647 is very well served by public transport withfrequent bus services to the City Centre, Bradford and otherareas to the West of Leeds. The property is accessed fromStanningley Road by turning into Ledgard Way, at the adjacenttraffic lights, thereafter immediate left into Salisbury Road andbearing left until reaching the site entrance gates. Theproperty is immediately opposite a recently opened retailscheme comprising a Tesco Express supermarket, WilkinsonHardware store and Yorkshire Linen outlet.

DescriptionThe property, a Grade II listed former school, comprises anumber of refurbished offices from single rooms to suites.Each unit is fitted out to a good basic standard and most areaccessed from a communal entrance, which has the benefit ofswipe card/intercom entry system. There are shared toilet andkitchen facilities. The building is situated within a siteextending to 0.9 acres (0.38 hectares). The external area isfully tarmacked and marked out for car parking purposesproviding approximately 75 spaces

Tenancy ScheduleThe property is fully let in accordance to the schedule opposite.

Tenure Freehold

fOR Sale Armley Park CourtLS12 2AE

AccommodationFrom our measured inspection, the propertyprovides the following Gross Internal Areas asdetailed in the table below:

sq ft sq m

Manufacturing 48,827 4,536.0

External Store 861 80.0

FF Offices 4,675 434.3

SF Offices 3,104 288.3

total 57,467 5,338.6

The demise is shown red line on the attachedplan. The tenant shares access over the accessroad shaded blue with the rear site. Bothparties contribute equally to the repair and upkeep of this estate road.

TenancyThe property is let to Peterlee Glass CompanyLimited for a term of 20 years from 30 June2017, subject to a tenant only break on the15th anniversary with 6 months’ prior notice.The lease is Guaranteed by BrownhillsInvestments Limited (Company number:07995246).

An FRI lease subject to a schedule of conditionproduced after all extensive landlord andtenant works have been completed.

The current passing rent is £155,000 perannum, equating to £2.70 per sq ft. The leasecontains fixed increases at the 5th, 10th and15th anniversaries as below:

The tenant has been granted 6 months rentfree from completion of Landlords works andthen 1 month rent free for the following 6years at the start of each year. The vendor willtop up the balance of any rent free remaining.

rent rent rent Net initial* date PaX Psf and

reversionary Yields

2017 £155,000 £2.70 7.29%*

2021 £165,850 £2.89 7.80%

2026 £177,460 £3.09 8.35%

2031 £189,880 £3.30 8.93%

*based on purchase at £2,000,000 exclusive

Sale Of InveStmentPeterlee Glass Company Limited Mill Hill, North West Industrial Estate, Peterlee, County Durham SR8 2HR

Summary Of New Works Under TakenWarehouse:- New insulated Roof to warehouse and external Cladding

and Glazing- New Electric Roller Shutter Doors- New 2,000 Kw Electricity Supply and switch gear- New Benson factory heaters with eave mounted

destratification fans for reduced energy- 4 x Gas Heaters- 1 x 5 Tonne Crane (tenant’s fittings)- 2 x 3 Tonne Cranes (tenant’s fittings)- Kosnic LED high bay lighting throughout - New fire alarm and LED emergency lighting plus full

electrical rewire

Offices:- New UPVC Window and external doors- Fully refurbed office with Cat 6 data & LED Lighting in new

suspended ceiling- New WC and Kitchen provision- Heating powered by 2x platinum 40kW combination boilers

External:- Kosnic LED car park and periphery lighting

TenureFreehold.

CovenantPeterlee Glass Company Limited have a Creditsafe InternationalRating of “Very Low Risk” A 79.

Year turnover Pre-tax shareholdersEnding Profits funds

30/11/2015 - - £1,540,166

28/02/2015 - - £1,050,309

31/03/2014 - - £912,189

31/03/2013 - - £792,187

Peterlee Glass Company Limited was establish in 1977 and hascelebrated its 40 year anniversary which coincides with a £2.3mrelocation and refurbishment at the property. By scaling up thebusiness it is able to create efficiencies, reduce lead-times andsupport glass requirements across the country.

The business was acquired in 2015 by Brownhills InvestmentsLimited and has since grown rapidly outgrowing their previouspremises. The relocation alongside major capital investmentsecures the companies continued expansion, adding evenbigger contracts to their already significant portfolio of nationaland international clients.

The company has invested circa £1.3m on new state of the artequipment and machinery including a new toughening furnaceand processing machinery capable of producing safety glass upto 6,000mm x 2,800mm.

The company has built a reputation for quality and servicehaving worked on heritage projects including Fenwicks ofNewcastle, The Sage Gateshead and The British Museum.

The guarantor Brownhills Investments Limited have aCreditsafe International Rating of “Very Low Risk” A 73.

Year turnover Pre-tax shareholdersEnding Profits funds

30/11/2015 £8,297,218 £313,621 £1,213,636

31/11/2014 £6,095,565 £327,672 £395,870

31/11/2013 - - £211,721

Brownhills Investments Limited secured £2.9m funding fromthe Business Growth Fund (BGF) to support the growthambitions of its principal subsidiary Brownhills Glass – with theacquisition of Durham-based Peterlee Glass Company Limited.

Formed in 2012 following the buyout of Brownhills GlassLimited, the Walsall-based company specialises in processingbespoke glass for architects, builders, interior designers andprivate home owners – as well as providing independent doubleglazing manufacturers with glass merchanting services.

The business started Wiltshire-based Corsham Glass Centre inMay 2013, and teamed up with Chelverton Asset Managementin April 2014 to buy Crawley-based Tufwell Glass, who recentlyworked on the Shard and the Olympic Park.

In total, Brownhills and subsidiaries employ 120 peopleincluding glass technicians, designers, surveyors and installerswho use state-of-the-art technology to process glass toregulatory standards. Thanks to the growing trend for its use ininterior design and buildings, the glass market is estimated tohave increased by 4-6% cent in the last year.

Sale Of InveStmentPeterlee Glass Company Limited Mill Hill, North West Industrial Estate, Peterlee, County Durham SR8 2HR

Occupational MarketThe North East occupational market is experiencing a severeshortage of industrial stock, prevalent across all size ranges, asmore and more occupiers are relocating or expanding in theregion and seeking inexpensive space with low labour costsand a large local employment pool.

Despite uncertainty surrounding the UK’s withdrawal fromthe EU there remains demand for good quality industrial,storage and distribution units within the North East. As aresult of the North East region being a net exporter, a numberof companies are experiencing benefits from the reducedvalue of sterling post referendum.

The region continues to perform well particularly in theengineering and manufacturing sectors with Nissancontinuing to grow, building over half a million cars per annumin each of the last 3 years. In addition, Hitachi have recentlydeveloped a 480,000 sq ft train manufacturing facility basedat Merchant Park in Newton Aycliffe. Both have an associatedsupply chain which will grow regionally over time and likely toincrease occupier demand for buildings suitable for industrial,warehouse or distribution uses.

Prime industrial estates are seeing recording record levels ofoccupancy, which has resulted in prime rents growing by circa14% over the last 6 months, with strong take up and demandfor units of 50,000 sq ft – 100,000 sq ft.

We have summarised the recent lettings in the region:

location sq ft Price per date commentssq ft

cherry Blossom Way 100,000 £5.00 May Modern distribution depot let to AmazonWashington 2015

unit 1 durham road 74,137 £3.84 December Let to Jacques Vert Group on 10-year FR&I lease with a rent durham 2015 review and break option in year 5

unit a hall dene Way 75,299 £3.05 June Tenant: International Cookware lettingseaham grange 2015

cathedral Park, Belmont 50,345 £5.25 May New lease to Geopostdurham 2015

unit a, Mill hill distribution 27,785 £3.25 April New 10-year lease, 5 year break, 3 months’ rent free, let toPark, Peterlee 2016 Gliderol Garage and Industrial Doors Limited

unit 1, fiennes road 97,778 £3.00 September New FRI lease let to British LabsPeterlee 2016

grindon Way 70,636 £3.25 March New 5-year lease, 3-year break to Stiller WarehousingNewton aycliffe 2017

unit 4 Wellington house 70,738 £3.75 May Currently under offer with a headline rent of £3.50 psf. Wynyard 2017 Substantial landlords works required. Legals instructed.

EPCThe property has a new EPCrating of C (51) following theextensive works. Furtherinformation and a copy of theEPC is available upon request.

ProposalWe are instructed to seek offers in excess of £2,000,000 (Two Million Pounds), subject tocontact and exclusive of VAT. A purchase at this level reflects an attractive Net Initial Yield of7.29% assuming standard Purchaser’s costs of 6.27%, and a low capital value of £34.80 per sq ft.

The property is elected for VAT which will therefore be payable on the purchase price. It isenvisaged that the sale will be treated as a Transfer of a Going Concern (TOGC).

Sale Of InveStmentPeterlee Glass Company Limited Mill Hill, North West Industrial Estate, Peterlee, County Durham SR8 2HR

andrew Wilkinson t: 01642 704932 E: andrew@cpne.co.uk

jonathan simpson t: 01642 704931 E: jonathan@cpne.co.uk www.cpne.co.uk

IMPORTANT NOTICE whilst every reasonable effort has been made by Connect Property North East to ensure accuracy, interested parties are strongly advised to take appropriate steps to verify by independent inspection or enquiry all informationfor themselves and to take appropriate professional advice. (i) No description or information given about the property or its value, whether written or verbal or whether or not in these particulars (‘information’) may be relied upon as a statement ofrepresentation or fact. Connect Property North East nor its employees have any authority to make any representation and accordingly any information given is entirely without responsibility on the part of Connect Property North East or the seller /lessor. (ii) Any photographs show only certain parts of the property at the time they were taken. Any areas, measurements or distances given are approximate only. (iii) Any reference to alterations to, or use of any part of the property is not a statementthat any necessary planning, building regulations or other consent has been obtained. These matters must be verified by any intending buyer / lessee. (iv) Any buyer/lessee must satisfy himself by inspection or otherwise as to the correctness of anyinformation given. (v) VAT is applicable unless expressly stated otherwise. June 2017. Bowmans design & Print 0113 272 0088.

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