High Yielding Investment & Asset Management Opportunity - Valley Retail Park - CBRE
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High Yielding Investment
& Asset Management
Opportunity
Valley Retail Park
VALLEY RETAIL PARK, CHURCH ROAD,
NEWTOWNABBEY, BELFAST BT36 7LP
02
Executive
Summary
Newtownabbey is a densely populated
borough of Greater Belfast
Situated adjacent to the largest agglomeration
of institutional owned retail parks in NI
High quality modern retail park comprising
7 units constructed in 2003
Extends to some 100,413 sq ft in total
Strong short term income
5 out of 7 units (80%) currently let, all on FR&I lease terms
Tenants include Halfords and Harvey Norman
Numerous asset management opportunities
AWULT to breaks of 3.6 years
Net income after irrecoverable shortfalls of £926,301 per annum
Held freehold and long leasehold
We are instructed to seek offer in excess of £6,500,000
subject to contract, for our client’s interest.
A purchase at this level would provide an attractive net initial
yield (based on current net income after landlord’s shortfalls)
of 13.5% and a low capital value of £65 per sq ft.
Valley Retail Park, Church Road,
Newtownabbey, Belfast BT36 7LP
03
Location Situation
Newtownabbey is a densely populated borough of Belfast, located some The property is prominently situated on Church Road
6 miles north of the city centre. At the 2001 Census, Newtownabbey Urban and benefits from extensive road frontage and is
Area had a population of 62,056, making it the fourth largest settlement in accessible from both the M2 Motorway and Shore Road.
Northern Ireland.
The surrounding area comprises high density housing and the Valley
The area forms part of Newtownabbey Borough Council and is largely residential, but Leisure Centre is also in close proximity. Abbey Retail Park is situated
also hosts a number of business occupiers including Capita, Abbey Business Park and approximately 250m to the south and Abbey Shopping Centre and
Longwood Retail Park are approximately 500m to the south along
Bombardier. Newtownabbey benefits from excellent road links to the city centre via the
Church Road.
M2 motorway and Shore Road.
CH
M2
UR
Templepatrick
CH
Greenisland
RO
AD
D
Newtownabbey
OA
ER
M2
DO
OR
AG
SH
Helens Bay
HR
Newtownabbey M5
OA
D
M5
CH
Holywood
UR
CH
RO
DA
M2
Cairn
Wood
Dundrod M2
Sydenham LO
NG
M5
W
Belfast A6 W
HI
O
TE
Dundonald O
AD
D
W
RO
RO
EL
AD
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E
RO
OR
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SH
Gilnahirk
Straid
Valley Retail Park, Church Road,
Newtownabbey, Belfast BT36 7LP
04
Description
Valley Retail Park comprises a modern purpose built retail ware house
scheme constructed in 2003, on a site extending to some 7 acres.
The scheme provides approximately 100,413 sq ft arranged
over 7 units.
SERVICE
AREA
SERVICE
The property has been constructed to a very high AREA
standard and presents well. It is of standard steel
portal frame construction, with part brick and part
clad elevations. The units benefit from a rear service
yard and there are approximately 518 spaces within Unit 5
a landscaped car park.
Unit 6 Unit 4 Unit 3
Unit 2
Unit 7
Unit 1
Valley Retail Park, Church Road,
Newtownabbey, Belfast BT36 7LP
For indicative purposes only
05
Retailing in
Newtownabbey
Newtownabbey is a strong retail centre,
particularly for retail warehousing. The area
attracts shoppers from all over Belfast and
also has a strong draw from Carrickfergus,
Larne, Ballyclare, Ballymena and beyond.
The scheme benefits from a catchment population of
775,000 persons situated within a 30 minute drive time
of which some 420,000 persons are situated within a
15 minute drive time (Source CACI).
The area also has one of the highest concentrations
of institutional ownerships in Northern Ireland, with the ABBEY RETAIL PARK
areas main schemes all being under institutional control. (HAMMERSON)
Longwood Retail Park, owned by Aberdeen AM.
ABBEY CENTRE
Tenants include Homebase, Mothercare, TK Maxx (NEW RIVER)
and Matalan.
Abbey Retail Park, owned by Hammerson. Tenants
include Tesco, B&Q and Currys.
Abbey Centre, owned by New River. Tenants include
LONGWOOD
BHS, Next and Argos. (ABERDEEN ASSET
MANAGEMENT)
Shore Retail Park, owned by CBRE Global Investors. Ten-
ants include Dunelm and Pure Gym.
The surrounding retail parks are all at or near 100%
occupancy. Standalone occupiers in the area include M&S,
Lidl and Toys R Us. SHORE RETAIL PARK
(CBRE GLOBAL INVESTORS)
Valley Retail Park, Church Road,
Newtownabbey, Belfast BT36 7LP
06
Tenancy &
Planning Accommodation Schedule
The property has planning consent for Bulky The property is let and provides accommodation as follows:
Goods under the Northern Ireland Use Class Order.
In Northern Ireland most Bulky Goods Parks are able to secure
UNIT TENANT FLOOR AREA RENT RENT PER LEASE LEASE BREAK COMMENT
‘softer’ occupiers such as Morthercare, Argos and Pet At Home (SQ FT) GIA P.A SQ FT START END OPTION
with relative planning ease. Prospective purchasers should
make their own enquiries. Break option
1&2 Harvey Norman Leasing (NI) Ltd* 46,513 £590,000 £12.68 05/05/2008 04/05/2023 04/05/2018
5/5/2018 exercised
We believe there is scope to open up planning consents to
include more leisure uses. Prospective purchasers are advised 3 Harry Corry Limited 10,780 £134,550 £12.48 13/08/2003 12/08/2018 -
to make their own enquiries in this regard.
4 Halfords Limited 10,780 £134,575 £12.48 01/11/2003 31/10/2023 20/11/2019 Break option in 2014
The scheme provides for a car parking ratio of 1:194 sq ft. was not exercised
5 Vacant 10,780 - - - - -
6 Vacant 10,780 - - - - -
7 Homestyle Group Operations 10,780 £134,550 £12.48 11/11/2005 11/11/2020 -
Limited (t/a Harveys)
Totals 100,413 £993,675
*Lease guaranteed by Harvey Norman Holdings Ltd
Average Weighted Unexpired Lease Term To Break Options – 3.6 years
Valley Retail Park, Church Road,
Newtownabbey, Belfast BT36 7LP
07
Service Rateable Income &
Charge Value Shortfall Analysis
Based on the May 2015 to April 2016 budget The scheme has benefited from the recent The property is generating significant short
the service charge is £74,690 per annum, reflecting Northern Ireland Rates Revaluation, which term income. The rents are derived from long
circa £0.74 per sq ft overall with approximately came into effect in April 2015. established multiple tenants, most of whom
£16,037 per annum currently paid by the landlord have been in occupation since 2003.
in respect of the vacant units (5 and 6). The Rates have been reduced by approximately 6% overall.
This will be of benefit to both occupiers and landlord. In The property is almost 80% let and has a weighted average
All other service charge is recoverable from the tenants. neighbouring Longwood Retail Park and Abbey Retail Park, unexpired lease term (to break options) of 3.6 years.
The Insurance shortfall in respect of the vacant units is Rates payable have increased significantly, generally a rise
currently £4,282 per annum. of 30%-60%. The current total vacant rates, insurance and service
Vacant rates payable in respect of units 5 and 6 are charge shortfalls paid by the landlord are £67,374 per annum
estimated to be £47,055 per annum combined. (this is incurred entirely in respect of the two vacant units).
For more information see www.draftvalues.dfpni.gov.uk. The current net income is therefore £926,301 per annum.
Valley Retail Park, Church Road,
Newtownabbey, Belfast BT36 7LP
08
Covenant Status
and Tenant Information
Halfords Harvey Norman Holdings Ltd reported the following in their Annual Report 2014**
Founded in 1909, Halfords is a retailer of car parts, car enhancement, (figures reported in Australian Dollars).
camping, touring and bicycles operating in the UK and Ireland.
Franchise Sales Revenues $4,770,000,000 Up 1.14% on previous year
Harry Corry
Harry Corry is a Northern Irish home decor store. They have a total of 50 stores
Company Operated Sales, Other $2,547,290,000 Up 8.0% on previous year
located throughout Northern Ireland, the Republic of Ireland and Scotland. Harry Revenues & Other Income
Corry Interiors is a family run business which was established by Harry Corry in 1968.
Profit Before Tax Excluding Net $312,710,000 up 26.6% on previous year
Harveys furniture Property Revaluation Adjustments
Harveys is a British retailer founded in 1966, specialising in living room and
Earnings Before Interest & Tax (“EBIT”) $337,500,000 Up 44.4% on previous year
dining room furniture, with over 150 stores throughout the United Kingdom.
The tenants are all long established, multiple operators.
**Information obtained from Harvey Norman Holdings website www.harveynormanholdings.com.au
The following information was obtained from Experian. All Reports are available in the Data Room.
PRE TAX DELPHI NET
TENANT YEAR END TURNOVER PROFIT SCORE WORTH Harry Corry – Proposal for Company Voluntary Agreement (CVA)
Harry Corry Ltd sent CVA proposals to stakeholders in April 2015. The company
Harry Corry Ltd 28/02/2014 £38,497,508 -£364,395 91/100 £5,717,695
is seeking to close 8 of its 50 stores. The stores to be closed are designated as
Halfords Ltd 28/03/2014 £803,100,000 £86,000,000 100/100 £548,000,000 Category C Leases. Valley Retail Park is designated as a Category B Lease.
Category B, along with Category A leases are stores which the company
Homestyle Group 28/06/2014 £28,869,000 £25,000 89/100 £253,122,000 wishes to retain, but are seeking to vary the terms of the existing leases.
Operations Limited
(t/a Harveys)
As part of this CVA Proposal, Harry Corry Ltd has requested a 20% rent
reduction at Valley Retail Park for a period of 24 months. This would reduce
Harvey Norman the rent from the current £134,550 per annum to £107,640 per annum
Harvey Norman is a large Australian-based retailer of electrical, computer, furniture, (£26,910 per annum reduction).
entertainment and bedding goods. It is a franchise and the main brand is owned It is understood the outcome of the CVA Proposal (whether it will be
by Harvey Norman Holdings Limited. accepted or not) will be known by the beginning of May 2015.
Prospective purchasers will be updated during the marketing period
and are advised to make their own enquiries. Details of the CVA
Proposal are contained in the Purchasers’ Pack.
Valley Retail Park, Church Road,
Newtownabbey, Belfast BT36 7LP
09
Asset
Management
The property presents numerous asset There may be recreational and leisure synergies with the
management opportunities. Valley Leisure Centre, situated diagonally opposite the park.
The property may also be suitable for business type uses
Rents in neighbouring Abbey and Longwood retail including a call centre or trade counter occupiers (subject
parks generally range between £15 - £20 per sq ft. to planning).
(mixed planning consents). Under the April 2015
Rates Revaluation, the Rates payable in these Harvey Norman are currently marketing their lease.
other schemes are due to increase (in the region We understand there is an opportunity to take a
surrender premium for early release (break option
of 30% - 60%), whilst simultaneously decreasing
in May 2018). Alternatively there may be prospect
overall at Valley Retail Park. to revise terms for a smaller floor plate, at a
reduced rent.
This presents a strong opportunity to entice tenants from
these other schemes to Valley Retail Park with significantly
lower overall occupational costs.
We believe that the scheme would benefit from partly taking
on a more leisure orientated direction (subject to planning).
The scheme is located within a densely populated residential
suburb, where families make up a large proportion of the
demographic. There is also the considerable draw to the
area engendered by the strong surrounding retail offer.
Potential leisure type occupiers that could be targeted include:
Cinema Indoor Play
Bowling Alley Indoor Adventure Centre
Bingo Gym
Family Restaurants Drive Thru / Pod
Valley Retail Park, Church Road,
Newtownabbey, Belfast BT36 7LP
For indicative purposes only
10
EPC’s Purchasers Pack VAT
UNIT TENANT EPC RATING
A Purchasers’ Pack has been compiled for The property is registered for VAT and therefore
prospective purchasers to review due diligence VAT will be payable on the purchase price. It is
1 Harvey Norman B-32
relating to the property and is available envisaged the sale will be treated as a transfer
2 Harvey Norman B-44 upon request. of a going concern (TOGC).
3 Harry Corry B-47
All information provided subject to contract and
4
5
Halfords
To Let
B-43
B-58
is given without warranty, liability and reliance.
Tenure
6 To Let B-80 Held on both freehold and long leasehold titles.
Further information is in the Purchaser’s Pack
7 Harveys B-82
Full Energy Performance Certificates are available
in the data room.
Valley Retail Park, Church Road,
Newtownabbey, Belfast BT36 7LP11
Proposal
We are instructed to seek offers in excess of £6,500,000 subject
to contract and exclusive of VAT, for our client’s freehold
interest. A purchase at this level would provide an attractive
net initial yield (based on current net income after landlord’s
shortfalls) of 13.5% and a low capital value of £65 per sq ft.
Further Information
For further information or to arrange access please contact:
Tim Reid Colin Mathewson Gavin Elliott
Capital Markets Retail Agency Capital Markets
028 9042 6752 028 9043 6919 028 9043 6750
tim.reid@cbre.com colin.mathewson@cbre.com gavin.elliott@cbre.com
CBRE
DISCLAIMER: CBRE Imperial House, Donegall Square East, Belfast, BT1 5HD
www.cbre.co.uk/ni
These particulars are issued by CBRE on
the understanding that any negotiations relating
to the property are conducted through them.
Whilst every care is taken in preparing them,
CBRE for themselves and for the vendor/lessor
whose agents they are, give notice that:- (i) the
particulars are set out as a general outline for guiding
potential purchasers/tenants and do not constitute any
part of an offer or contract, (ii) any representation including
descriptions, dimensions, references to condition,
permissions or licenses for uses or occupation, access
or any other details are given in good faith and are believed
to be correct, but any intending purchaser or tenant should not
rely on them as statements or representations of fact but must
satisfy themselves (at their own expense) as to their correctness,
(iii) neither CBRE, nor any of their employees have any authority to
make any or give any representation or warranty in relation to the
property. April 2015.
Valley Retail Park, Church Road,
Newtownabbey, Belfast BT36 7LPYou can also read
