EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL - Jackson ...
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EAST HAM
2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU
PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH
RESIDENTIAL DEVELOPMENT POTENTIAL
EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL
INVESTMENT SUMMARY
zz Prominent standalone food store
zz Located in a vibrant and well connected Greater London suburb, identified
within the London Plan as one of the 35 major centres
zz Situated in a prominent position on Myrtle Road adjacent to the entrance
to East Ham Market Hall (to be comprehensively redeveloped) and in close
proximity to High Street North in the heart of East Ham’s Town Centre
zz Freehold
zz Provides 30,017 sq ft of accommodation arranged over ground and first floors
zz Trading from the premises since 1994, Sainsburys have recently concluded a
new 10 year FRI lease at a rent of £400,000 pa
zz Excellent transports links with both the District and the Hammersmith and City
underground lines accessed from East Ham Underground Station, giving access
to Stratford (15 minutes) and Liverpool Street Station (20 minutes)
zz Large population living in and around East Ham with a district population of
around 76,000 and a primary catchment population of 222,000
zz Site extends to 0.44 acres (1,800m2)
zz Excellent potential for redevelopment of the site for residential (with a planning
consent already granted prior to the tenant completing a lease renewal)
zz 10 year income without break
zz Exceptional covenant strength of J Sainsbury’s Supermarkets Limited
zz Offers are sought in excess of £6,820,000 (Six Million Eight Hundred and
Twenty Thousand Pounds), subject to contract and exclusive of VAT. A
purchase at this level provides a net initial yield of 5.5%, after allowing for
acquisition costs of 6.65%
EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL
LOCATION AND
EAST HAM COMMUNICATIONS
East Ham is a continually improving, lively and popular suburb
situated within the London borough of Newham, North of the River
Thames. The district has an estimated population of approximately
76,000 alongside a primary catchment population of 222,000. The
area was identified within the London Plan as one of 35 major
centres.
East Ham is conveniently located between Barking and the City of
London with easy access to the West End, London City Airport, The
Olympic Stadium, Westfield Stratford, The O2 Arena and the Excel
Manor Park Exhibition Centre.
QUEEN ELIZABETH
Stratford
EAST HAM
OLYMPIC PARK
Barking
East Ham benefits from excellent communications by road, with the
LONDON WEST HAM East Ham
NO
STADIUM
A13 situated in close proximity to the South and the A406 (North
RT
H
Circular Road) running parallel to the East. Both the District and
CIR
Upton Park
CU
Abbey Rd
Hammersmith and City underground lines can be access via the East
LAR
A124 BARKING
Plaistow
A13
West Ham
Ham underground station offering regular services to Stratford (15
PLAISTOW
BOROUGH OF NEWHAM
minutes) and Liverpool Street Station (20 minutes). There are also
BROMLEY a number of citywide bus routes within the local vicinity.
BY BOW A124
A13
A12 London City Airport is located 2 miles to the South East and Stanstead
A13
Beckton
Airport is approximately 30 miles to the North.
Canning Town BECKTON
A13 Prince Regent
Gallions
ExCeL
Reach
London
Royal Victoria
CANARY WHARF BLACKWALL London
TUNNEL The City Airport
O2
King
George V
EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL
DEMOGRAPHICS AND
RETAIL PROVISION
East Ham is an established retail centre with a total population within
the primary catchment area of 222,000. The area benefits from a
young population which includes a particularly high proportion of adults
aged 25-44 within the primary catchment. East Ham is projected to see
an above average growth in population over the 2017-2021 period and
the area is already experiencing an above average rise in residential
values, driving the pipeline residential developments.
East Ham is a popular retailing location with the majority of the national
multiple representation located upon High Street North, the principal
retailing pitch for the town. There are a large number of multiple
occupiers along the street including Primark, Footlocker, Holland &
Barrett, Wilko, Boots, Argos, McDonalds and Costa Coffee.
The subject property is located upon Myrtle Road, immediately adjacent
to the East Ham market and joins High Street North, one block from
Primark. The subject property benefits from a strong Public Transport
Accessibility Level (PTAL) score of 6a (best score of 6b), based upon
2018 Transport for London data.
The East Ham market hall is particularly popular with it’s unique mix of
local and international market stalls. The market is part of an extensive
mixed use redevelopment application by Land Management and
Dransfield Developments (East Ham Regeneration Limited).
EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL
FOODSTORE
COMPETITION
There are only 3 competing foodstores within 5 minutes of
the subject providing a relatively low level of competition. The
main competition comes from Lidl, Tesco Express at Plaistow
and Tesco Superstore at Highbridge Road, Barking. Within 10
minutes there are several larger stores including the Asda in
Barking, Tesco Extra, Asda and Sainsbury’s at Beckton, and
Sainsbury’s in Ilford.
HI G H
NO
R TH
ST N
C I R C U LAR
RD
HIG
H ST N
NO
G RD
BARKIN
RTH
CIRC
HIG
A124
ULAR R
0.5 MILE
H ST
S
D
1 MILE
EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL
DESCRIPTION
The property comprises a 30,017 sq ft
(2,789 sq m) purpose built supermarket
constructed in 1974 with a two storey in-
situ reinforced concrete frame. The external
envelope is formed from masonry infill panels.
The sales accommodation is at ground
floor with ancillary storage accommodation
above arranged as follows:-
Ground Floor 16,160 sq ft
First Floor 13,779 sq ft
Second Floor 78 sq ft
The store is fitted out to the tenants
corporate format.
Customer access is from Myrtle Road,
with service access to the rear from
St Johns Road.
EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL
NORTH
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ITED
LIM
ION
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ENE
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(EAST
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For Identification purposes only
EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL
TENANCY
The property is leased to Sainsburys Supermarkets Ltd for
a term of 10 years from 10 August 2018 expiring 9 August
2028. The lease is contracted within the security of tenure
provisions of the Landlord and Tenant Act, 1954.
The lease is drawn on full repairing and insuring terms and
there is an upwards only rent review upon 10 August 2023.
The current passing rent is £400,000 pax, reflecting a rate of
£13.33 psf based upon a floor area of 30,017 sq ft.
EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL
TENANT COVENANT
Sainsbury’s is one of the top supermarket operators in the UK, with a market
share of 16.5% (Kantar) January 2017.
The company operated from approximately 1,374 stores in the UK and has
161,000 employees.
In September 2016, J Sainsbury’s Plc acquired Argos from the Home Retail
Group for £1.3bn, in a strategic move which boosted the groups non-food and
online retail presence.
Sainsbury’s Supermarkets Limited is the principal operating company in the
UK for the J Sainsbury Plc Groups supermarket operations.
The company provides the strongest Dun and Bradstreet rating of
5A1, representing a minimum risk of business failure. The accounts are
summarised as follows.
Year End Sales Turnover Pre-text Profit Net Worth
March 2015 £23,443,000,000 -£206,000,000 £4,224,000,000
March 2016 £23,168,000,000 £406,000,000 £4,458,000,000
March 2017 £23,234,000,000 £342,000,000 £4,353,000,000
EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL
RESIDENTIAL
DEVELOPMENT
OPPORTUNITY
The subject property is located in close
proximity to a number of sites that will be
redeveloped for mixed use/residential.
The London plan and core strategy both promote
development and encourage investment
particularly to protect and enhance the viability
and vitality of Town Centres.
The core strategy highlights the importance of
realising the early generation of parts of East Ham
Town Centre and encouraging new development
particularly in the Southern part of the centre to
provide for the renewal of existing floor space and
a better quality and mix of offer during the day
and into the evening together with complementary
high density residential development.
Prior to the recent lease renewal with Sainsbury’s
the vendor engaged architects to develop a
scheme for the redevelopment of the site.
In the first instance this was to accommodate
a downsized food store.EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL
OAD
T LE R
MYR
EAST HAM
HIG
Planning consent was ultimately obtained (17/02737/FUL) for the
REGENERATION LTD
HS
development of 36 residential units above a refurbished retail unit
TR
and some public realm improvements.
E
ET
N
This consent was for a 5 and 7 storey development, which we consider
could be significantly improved upon in due course in the form of a
whole scale redevelopment of the site given the adjacent application
upon the East Ham Market (East Ham Regeneration Ltd) with a range
D
of blocks up 15 storeys high (to include up to 277 residential units). Also, ROA AD
O H N’S R O
ST J TLE
the consented St Johns Road car park development (Helical Retail Ltd) MYR
HELICAL RETAIL LTD
with a scheme of 2-11 storeys to comprise 2 retail units, a gym and 98 EAST HAM
HIG
REGENERATION LTD DEVELOPMENT
residential units to be operated within the private rented sector.
HS
TR
EET
N
D
ROA
O HN’S
ST J
HELICAL RETAIL LTD
DEVELOPMENT
East Ham Regeneration Ltd Helical Retail Ltd
(Resolution to Grant)
East Ham Regeneration Ltd Helical Retail Ltd
(Resolution to Grant)EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL
C&W Architects were instructed to prepare a high level massing study for the EXISTING CONSENT HIGHLIGHTED
potential redevelopment of the site to provide a new multi storey residential block
with potential for retail space at ground level.
A sketch study was drawn on the assumption of being able to demolish the existing
Sainsburys store with the indicative scheme summarised as follows;
15 storeys
1. NEW RETAIL ACCOMMODATION
EAST HAM REGENERATION LTD
a. Total Ground floor Retail Space GIA 1, 275 sq m 13,700 sq ft DEVELOPMENT
b. Store frontage to Myrtle Road 22 m 72 ft
2. NEW RESIDENTIAL ACCOMMODATION 9 storeys
a. Two Lifts with two separate cores and entrances. Main entrance is on 10 storeys
St John’s Road.
b. Storey Height 7 storeys 8 storeys
c. Estimated no. of residential units 74
d. Estimated residential GIA 4,510 sq m 48,570 sq ft 5 storeys Sainsbury’s, Myrtle Road
e. Residential Flat minimum areas GIA 1 BED 2 BED 6 storeys
2 storeys
50 sq m (540 sq ft) 70 sq m (750sq ft)
f. Suggested Residential Mix 1 BED 2 BED 7 storeys
36 no. 38 no.
48% 52%
This massing and preliminary design scheme has been prepared to form an
indicative future context and potential for future development. The massing and
design study is available upon request.
St John’s Road Car park
2-11 storeys Helical Retail Ltd Development
Resolution to Grant May 2017
The London housing market remains woefully undersupplied particularly at
the more affordable price point. There is a shortage of new build residential
within central East Ham and alongside the developments adjacent and to the
rear of the subject property, we consider there will be considerable demand for
residential units in this location, particularly given the town centre setting.EAST HAM 2-10 MYRTLE ROAD & 2-6 ST JOHNS ROAD, E6 1HU PRIME FREEHOLD LONDON FOOD STORE INVESTMENT WITH RESIDENTIAL DEVELOPMENT POTENTIAL
EPC
Available upon request.
VAT
The subject property has been elected for
the purpose of VAT and it is anticipated
the sale will be treated as a Transfer of
Going Concern.
PROPOSAL
Our clients are seeking offers in excess of
£6,820,000 (Six Million, Eight Hundred
and Twenty Thousand Pounds), subject
to contract and exclusive of VAT. A
purchase at this level produces a net
initial yield of 5.5%, after allowing for
acquisition costs of 6.65%.
For further information, please contact:
JONATHAN MILBURN
020 7637 7100
jonm@jacksoncriss.co.uk
Jackson Criss, West End House, 11 Hills Place, London W1F 7SE
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. 100902. Designed by TCC 08/18.You can also read
