HIGH WYCOMBE CRESSEX ISLAND - PRIME SOUTH EAST RETAIL INVESTMENT - Fastly
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WELL SECURED 25 YEAR, INDEXED-LINKED INCOME STREAM
HIGH
WYCOMBE
PRIME SOUTH EAST RETAIL INVESTMENT
NEXT PLC, JOHN HALL WAY, HIGH WYCOMBE HP11 1UA
CRESSEX ISLAND
MONTAGU
EVANS
INVESTMENT SUMMARY
High Wycombe is an affluent south east town located approximately Commencing rent of £830,000 per annum, reflecting a low rental of
28 miles west of central London. The town has a primary £11.56 per sq ft overall.
catchment population of 223,000 (Promis).
5 yearly upwards only rent reviews to RPI, with a 1-4% pa compound
Excellent location adjacent to Junction 4 of the M40 Motorway with collar and cap.
an extensive frontage onto the A4010 John Hall Way, in close
proximity to a John Lewis Department store and Asda foodstore. Next plc is an investment grade covenant and a constituent of the
FTSE 100. In the financial year to January 2014, the company
A high specification development comprising a destination NEXT reported turnover of £3.74 billion and pre-tax profits of £695.2
Fashion, Home and Garden superstore, totalling 71,819 sq ft gross million.
floor space arranged over three levels together with 6,296 sq ft of
external sales space and parking for 159 vehicles. Our client is seeking offers on a forward commitment basis in
excess of £15,550,000 (Fifteen Million, Five Hundred and Fifty
Freehold. Thousand Pounds), subject to contract and exclusive of VAT.
Unbroken 25 year FRI lease from practical completion let to Next A purchase at this level would provide a 5.00% NIY, assuming 6.60%
Group plc with a surety from Next plc. purchase costs.
NEXT GROUP PLC, JOHN HALL WAY, HIGH WYCOMBE HP11 1UA 2
LOCATION CATCHMENT & DEMOGRAPHICS
High Wycombe is an affluent South East town lying approximately 28 miles High Wycombe has a large and affluent population, with the primary
west of Central London, 23 miles south east of Oxford and 15 miles north- catchment estimated at 223,000 by Promis.
west of Heathrow Airport.
30.3% of the district population are classified within the most affluent AB
The town benefits from excellent communications being situated just north social groups, compared to the UK average of 21.7% (Focus).
of junctions 3 and 4 of the M40 motorway, which provides rapid links to
central London, the M25 London orbital motorway and the Midlands. Car ownership is significantly above average at 85.9% (UK average:
Additionally, the town is a popular London commuter satellite with fast train 72.6%), with a particularly high representation of multiple car owners.
services to London Marylebone station offering a journey time of only 30
minutes. 75.5% of the population are homeowners, compared to the UK average of
68.3%.
The subject property, together with the nearby John Lewis department store,
Asda superstore and adjacent leisure park, will comprise a
significant retail and leisure destination and the highly accessible location
just off the M40 will be able to draw customers from a much larger
catchment beyond High Wycombe.
CACI estimate the 20 minute drive time population to be 369,112 and 39%
of the 20 minute catchment are classified within the most affluent AB social
groups.
HIGH
WY COMBE
© Collins Bartholomew Limited 2013. All rights reserved. Plotted Scale - 1:208894
NEXT GROUP PLC, JOHN HALL WAY, HIGH WYCOMBE HP11 1UA 3
SITUATION DESCRIPTION
The property is located proximity to the west of the property. The subject property will comprise a purpose-built, destination NEXT
approximately 2 miles to the south High Wycombe Leisure Park, Fashion, Home and Garden superstore.
of High Wycombe town centre, anchored by Empire Cinema, is
adjacent to junction 4 of the M40 also situated directly adjacent. The specification and finishes will be to a very high standard with the
with extensive frontage onto the elevations comprising a Corium brick cladding system on insulated
A4010 John Hall Way. The NEXT unit will be highly cladding panels. The shop fronts will comprise a structural glazing system
prominent and accessible, with with solar control.
The property is situated in an all traffic from the M40 visiting
established retail and leisure area, the nearby Asda or John Lewis The building will be constructed to BREEAM Very Good.
with a 97,087 sq ft Asda foodstore going directly past the subject
and 173,500 sq ft John Lewis property. Internally the store will be fitted out to an extremely high standard
Department Store located in close incorporating NEXT’s full home and fashion lines.
10
A40
all Way
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Conservatory
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Ordnance Survey © Crown Copyright 2013. All rights reserved. Licence number 100022432. Plotted Scale - 1:19128
NEXT GROUP PLC, JOHN HALL WAY, HIGH WYCOMBE HP11 1UA 4
ACCOMODATION PLANNING
The unit will incorporate the following accommodation: Planning consent was granted in b) home and garden furniture,
July 2013 (ref: 12/05827/FUL) for lighting, electrical goods,
the “Erection of 7,261 sq.m. retail DIY products, furnishings,
store (Class A1) with associated flooring, garden products
GIA (Sq Ft) GIA (Sq M)
Ground Floor - Sales 26,846 2,494
parking spaces, creation of one and kitchen items on no
1st Floor - Sales & Cafe 23,229 2,158 vehicle and three pedestrian more than 2,746 sq.m of
2nd Floor - Storage & Ancillary 21,744 2,020 accesses, service yard and floorspace.
landscaping.”
SUB-TOTAL 71,819 6,672 As such the retail trading
External Conservatory 2,045 190 Condition 3 states that floorspace of the building
“Notwithstanding the shall be 4,635 sq.m. For
External Garden Centre 4,251 395
provision of Class A1 of the the avoidance of doubt, the
Town and Country Planning premises shall not be used
(Use Classes) Order 2005… for the sale of food and
TOTAL 78,115 7,257
The eaves height will be 13.49 metres to the higher parapet and 11.33 the premises hereby drink to be consumed off
metres to the lower parapet along the shopfront. permitted shall sell / display : the premises.”
The property will provide a total of 159 parking spaces. The unit occupies a a) clothing, shoes and fashion
sloping site and 58 of the spaces are to be provided at an upper parking on no more than 1,767 sq.m
level, which will benefit from a customer entrance directly into the first floor of the floorspace
level of the retail store.
The overall site area is approximately 3.4 acres (1.38 hectares).
TENURE
The property will be held Freehold.
ENVIRONMENTAL
A ground investigation report is available upon request.
NEXT GROUP PLC, JOHN HALL WAY, HIGH WYCOMBE HP11 1UA 5
TENANCY
The entire property is to be let on full repairing and insuring terms to Next In the current financial year to 26th April 2014, NEXT reported sales were
Group plc with a surety from Next plc for a period of 25 years without break up 10.8% and raised their full year profits guidance to between £750 million
from practical completion. - £790 million.
The commencing rent will be £830,000 per annum, reflecting £11.56 per sq ft Next plc is an investment grade covenant and benefits from the following
overall with five yearly upwards only rent reviews in line with the Retail ratings:
Prices Index, subject to a 1 – 4% per annum compound collar and cap. The
rent will be payable monthly in advance.
TENANT COVENANT
Rating Agency Rating Outlook
Standard & Poor BBB Stable
Moody’s BAA2 Stable
NEXT is a UK based multi-channel retailer offering quality clothing,
footwear, accessories and home products. NEXT distributes through three
main channels: NEXT Retail, a chain of more than 500 stores in the UK and
Eire; NEXT Directory, an online and catalogue shopping business with
almost 4 million active customers and international websites serving
approximately 70 countries; and NEXT International Retail, with almost 200
mainly franchised stores around the world.
The tenant company Next Group plc has reported the following financial
results.
26/01/2013 28/01/2012 29/01/2011
Sales Turnover £212,300,000 £195,000,000 £188,400,000
Pre-Tax Profits £322,500,000 £530,600,000 £590,300,000
Tangible Net Worth £1,747,900,000 £1,951,000,000 £1,667,000,000
The company is rated 5A1 by Dun & Bradstreet, reflecting minimal risk.
The surety Next plc is a constituent of the FTSE 100 and in total employs
52,533 people. NEXT plc has reported the following financial results:
25/01/2014 26/01/2013 28/01/2012
Sales Turnover £3,740,000,000 £3,562,800,000 £3,441,100,000
Pre-Tax Profits £695,200,000 £666,500,000 £579,500,000
Tangible Net Worth £241,800,000 £240,900,000 £177,100,000
NEXT GROUP PLC, JOHN HALL WAY, HIGH WYCOMBE HP11 1UA 6
RETAIL WAREHOUSING IN CAPITAL
HIGH WYCOMBE ALLOWANCES
In close proximity to the west of the subject property, Asda occupy a 97,087 Our client intends to retain the benefit of any Capital Allowances.
sq ft foodstore and John Lewis occupy a 173,500 sq ft department store.
Elsewhere in High Wycombe, London Road comprises the majority of other NEXT Fashion, Home and Garden Store, Shoreham-by-Sea
retail warehousing provision.
Wycombe Retail Park totals 107,630 sq ft with retailers including Wickes,
Hobbycraft, Pets at Home, Argos, Furniture Village, M&S and Currys/PC
World. Top rents are currently £33 per sq ft.
There are a number of solus units located along London Road. These
include a 28,200 sq ft Homebase, which has a bulky goods consent and is
let off £24.00 per sq ft.
DFS occupy a 17,250 sq ft unit, having taken an assignment from Currys in
September 2011. The passing rent is £27.00 per sq ft and the unit has a
bulky goods consent.
B&Q occupies a 49,906 sq ft unit and have sub-let 9,900 sq ft to Halfords.
B&Q are currently paying £24.50 per sq ft and the unit has a bulky goods
consent.
Adjacent to the town centre on Bellfield Road, Matalan occupy a 36,125 sq
ft unit let off £17.50 per sq ft, which was a new letting in August 2010.
Jollye’s and Carpetright also occupy units here.
VAT
VAT will be payable in addition to the purchase price.
NEXT GROUP PLC, JOHN HALL WAY, HIGH WYCOMBE HP11 1UA 7
DEVELOPMENT TEAM
AND TIMETABLE
The development has been designed by architects Pick Everard and
Stanton Williams.
Construction is due to start in June 2014 with a 9 month build period.
NEXT are intending to be open and trading for Spring 2015.
Full details of the construction programme and the professional team are
available upon request.
PROPOSAL
Our client is seeking a forward commitment in excess of £15,550,000
(Fifteen Million, Five Hundred and Fifty Thousand Pounds) subject to
contract and exclusive of VAT.
A purchase at this level would show a Net Initial Yield of 5.00%, assuming
full purchase costs of 6.60%.
The running yield that can be expected, assuming a range of RPI growth
rates, is as follows:
RPI at 1% pa Running Yield RPI at 2% pa Running Yield RPI at 3% pa Running Yield RPI at 4% pa Running Yield
Lease Start £830,000 5.00% £830,000 5.00% £830,000 5.00% £830,000 5.00%
Year 5 £872,338 5.26% £916,387 5.53% £962,197 5.80% £1,009,822 6.09%
Year 10 £916,836 5.53% £1,011,765 6.10% £1,115,451 6.73% £1,228,603 7.41%
Year 15 £963,604 5.81% £1,117,071 6.74% £1,293,113 7.80% £1,494,783 9.02%
Year 20 £1,012,758 6.11% £1,233,336 7.44% £1,499,072 9.04% £1,818,632 10.97%
NEXT GROUP PLC, JOHN HALL WAY, HIGH WYCOMBE HP11 1UA 8
FURTHER INFORMATION MONTAGU
EVANS
www.montagu-evans.co.uk
Nick Richardson Mark Girling Edward George
t: 020 7312 7420 t: 020 7312 7460 t: 020 7312 7489
e: nick.richardson@montagu-evans.co.uk e: mark.girling@montagu-evans.co.uk e: edward.george@montagu-evans.co.uk
Subject to contract May 2014
Misrepresentation Act 1967
Montagu Evans LLP for themselves and for the vendors or lessors of this property whose agents they are, give notice that :
(i) The particulars are set out as a general guideline only for the guidance of intending purchasers or lessees and do not constitute the whole or any part of an offer or contract.
(ii) All descriptions, dimensions, references to condition and necessary permissions of the use and occupation, and other details are given in good faith without responsibility whatsoever
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.
(iii) Neither Montagu Evans LLP nor their employees has any authority to make or give any representation or warranties whatsoever in relation to the property.
(iv) Unless otherwise stated, all prices and rents are quoted exclusive of VAT and intending purchasers or lessees must satisfy themselves independently as to the applicable VAT position.
(v) All the plans and maps provided within the particulars are for identification purposes only.
NEXT GROUP PLC, JOHN HALL WAY, HIGH WYCOMBE HP11 1UA 9
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