LET TO FOR ANOTHER 52 YEARS - LoopNet
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PRIME GROUND RENT INVESTMENT
LET TO FOR ANOTHER 52 YEARS
ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN
INVESTMENT
SUMMARY
• An opportunity to purchase a foodstore investment situated within Doncaster,
South Yorkshire of circa 57,000 sq ft together with a car park for 340 vehicles.
• Dominant strong trading store.
• Let to Asda Stores Limited on a FRI lease for a term of 99 years from 29
September 1974 by way of a ground lease.
• Let on a lease with ‘privity of contract’.
• Offering secure income for another 52 years with the rent calculated at 35% of
the market rent at the previous review.
• Virtual freehold (element held 999 year lease).
• Current rent of £265,000 pa equating to only £4.62 per sq ft.
• Upward only 10 yearly rent reviews with the next review September 2024.
• Included in the sale is an adjoining development site of 0.4 acres which has
planning for a petrol filling station.
• Asset management opportunities including unlocking ‘massive marriage value’.
We are instructed to request offers in excess of £7,650,000
(Seven Million, Six Hundred and Fifty Thousand Pounds)
which reflects a net initial yield of 3.5% rising in 2024 to 3.95%,
net of costs at 6.66%.
The above assumes £550,000 for the development site and the
rent rises to £299,250 pa in 2024.
ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN
TO T H E A1
OPPORTUNITY
TO PURCHASE A
GROUND RENT
LET TO ASDA
FOR ANOTHER
52 YEARS.
HIGH STREET
B1 2 20 S KE LLOW ROAD
QU E E N’S ROAD
OWSTO N ROAD
TO DO N CAST E R
ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN
A661 YORK
46 A1237 A64 POCKLINGTON
A629 A614
A65 A658
A1(M) A1079
45
A629 A64 WHELDRAKE
A61 A58 TADCASTER
LOCATION AND
LEEDS BRADFORD
KEIGHLEY AIRPORT A660 MARKET
A19 A1079
44 WEIGHTON A1035
A6120
A64
A650 HORSFORTH BEVERLEY
DEMOGRAPHICS
A658 A61
A6120 CAWOOD
A58
LEEDS 47 A614
A64 A6120
A6110
A629
BRADFORD 46
BURSEA
• Doncaster is the second largest town within South Yorkshire and A6177 2 3 4
A63 A63
A1(M) SELBY
1 45 A164
one of its principle commercial centres. It is located 27 miles, south 3 M621 6
44
M1 A63 A63 38 NORTH FERRIBY
A6036 A650
7
42
2 A6110
east of Leeds, 25 miles north east of Sheffield and 175 miles north
43
HOWDEN NEWPORT
M606 27
M62
HILLAM A1041 HULL
of London. A58
A58
26 28 42
29 30 A19
37 M62 A63
HALIFAX CASTLEFORD A63
M62 41 M62
31 32 32a KNOTTINGLEY
• The A1(M) (via either junction 37 or junction 36) provides quick and 25
M1 A650 33
CARLTON 36 HUMBER
A629 A638 34
easy access to the wider motorway network. At J35 it interchanges DEWSBURY 40
PONTEFRACT
M62 35
with the M18 (J2) which provides direct access to M1 (J32) 23
24 WAKEFIELD A628
motorway approximately 16 miles south west of the town. M62 A640 A638 A19
HUDDERSFIELD
A642 39 M18 A15
ROXBY
22 A637 A1
• Doncaster has a district population of 289,000 persons with a
M90
EDINBURGH ASKERN 6
AIRPORT
M1 HEMSWORTH
catchment of 600,000 persons within 10 miles of the town centre.
GLASGOW EDINBURGH
36 A638 THORNE CROWLE
M8 A628 CARCROFT
GLASGOW
AIRPORT
SCUNTHORPE
M77
DENSHAW B1220 5
1
A19
5
• Rail access to Doncaster is provided by the East Coast Mainline, M74 A629
A628
38
HOLMFIRTH ADWICK 2
enabling a journey time of less than 1 hour and 40 minutes from
A637 A6195
LE STREET M180 3
A159 M180
37 BARNSLEY
NEWCASTLE UPON TYNE
London King’s Cross. This high-speed rail link also connects A628 A635
A635 37
A630
4
4 BRIGG
Doncaster with Leeds, York and Edinburgh to the north, providing a GOLDTHORPE DONCASTER
M6
PENISTONE M18 EPWORTH
strategic advantage to the location. A1(M)
A629
A6195 A638
DONCASTER SHEFFIELD HIBALDSTOW
A628 36 A6182
36 AIRPORT SCOTTER
A616
3
• Robin Hood airport which opened in 2005 is to the south of
LEEDS
AIRPORT
A6018 A628 35a
35
2
A616
LEEDS
M62 HULL FINNINGLEY A159 A15
Doncaster town centre whilst East Midland, Birmingham and M18
4 MANCHESTER
M62
M180 35 M18 A638
Manchester airports are all within easy reach. LIVERPOOL
MANCHESTER
SHEFFIELD
DONCASTER
A61 A1(M) MISTERTON
WADDINGHAM
GLOSSOP
AIRPORT
LIVERPOOL
AIRPORT
M6
M1 M1 ROTHERHAM
1 A631
BAWTRY
A1
34
EAST MIDLANDS
PEAK DISTRICT
AIRPORT
A631 A631
LEICESTER NORWICH LOXLEY A631
33 GAINSBOROUGH
BIRMINGHAMNATIONAL
M6
PARK
A1
BIRMINGHAM
AIRPORT
A631
A630
32 34
HEMSWELL CLIFF
SHEFFIELD
A60
DONCASTER IS THE
M42 M1
HAYFIELD BLYTH
M40
M5
A1(M) M11 31
LUTON
AIRPORT
A61 A57 NORTH ANSTON
STANSTED
A6102
SECOND LARGEST TOWN
CASTLETON
AIRPORT
A57 A15
M4 M25 A1 A156
A6 LONDON
M4 A46
M1
CARDIFF
BRISTOL HEATHROW
AIRPORT M25
M20 RETFORD
M3 M23
WORKSOP
WITHIN SOUTH YORKSHIRE
GATWICK
A623 AIRPORT
M5 SOUTHAMPTON
30
A619
AND ONE OF ITS PRINCIPLE Plymouth
COMMERCIAL CENTRES”
ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN
A1
A19
OWSTON HALL & ROBIN HOOD
ROBIN HOOD GOLF CLUB GOLF CLUB
DO
NC
LO
DG
E
AS
RO
AD
TER
ANE
ON L
OWST
RO
HAMPOLE BAN
K L AN
AD
B1 2 2 0 E
A1
S T ON ROAD
ROUTE TO A1(M)
B1 2
20
SK
OW
A19
AD
EL L
OW RO
RO
AD ST K ER
N
SITUATION
QU
DONCASTER ROAD
H I GH AS
EE
N’S
38 20
B1 2
RD
A1(M) CARCRAFT
ENTERPRISE PARK The property is situated in the residential suburb of Carcroft which is 7 miles
north west of Doncaster town centre. Carcroft is 1 mile to the east of J38 of
A6 the A1(M) (Redhouse Interchange) and 1.2 miles west of the A19.
38
The premises have extensive frontage to the High Street and Skellow Road
AN E
B EN (B1220) from which the main vehicle access is to the store.
HL
RE TLEY
DH
OUS M
RC
E LA OO Immediate to the rear of the store also fronting the High Street is a DFS retail
NE
HU
RL
AN warehouse of circa 30,000 sq ft and an Iceland store of 6,000 sq ft.
C
E
0
22
B1
A6
38
Carcroft also serves the adjoining rural towns and villages of Adwick-le-Street,
Askern, Skellow and Sutton.
Adwick
ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN
DESCRIPTION
The property comprises a plot of land of 1.92 acres on
which a purpose built supermarket was developed in the
early 1970’s for ASDA.
The store trades under ASDA’s ‘Superstore’ concept,
providing retailing and ancillary accommodation of circa
57,000 sq ft.
In addition there is a tarmacked customer car park
adjoining the superstore providing parking for 340
vehicles on a site of 2.83 acres.
There is also, at the junction of High Street and Skellow
Road, a development site of 0.4 acres with planning
consent for a petrol filling station of six pumps plus a
retail unit of 1,110 sq ft.
An indicative plan of the layout for the petrol filling
station is shown to the left.
THE PROPERTY
COMPRISES A PLOT OF
LAND OF 1.92 ACRES
ON WHICH A PURPOSE
BUILT SUPERMARKET
WAS DEVELOPED IN THE
EARLY 1970’S FOR ASDA.”
ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN
FLOOR AREAS At the last rent review the floor areas were agreed between the landlord and tenant and have been documented in a ‘Statement of Agreed Facts’ dated February 2015. This document confirms the agreed gross internal areas to be as follows: AREA SQ FT SQ M Ground Floor 49,796 4,627.9 First Floor 3,926 364.9 Covered Loading Bay 2,715 252.3 Roof Plant 829 77 TOTAL 57,266 5,322.1 ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN
TENURE AND
TENANCY INFORMATION
TENURE
The area of land edged red and the green hatched line on the ordnance survey plan
is freehold.
The area edged blue is held on a 999 year lease from 25 March 2007 at a
peppercorn (freeholder is Doncaster Council).
TENANCY
The area edged red on the plan is let to Asda Stores Limited on an FRI lease for a
term of 99 years from 29 September 1974 at a current rent of £265,000 pa. There are
10 yearly upward only rent reviews based upon a ‘reasonable ground rent’.
The rent is assessed for an area of land of 1.92 acres together with the buildings
erected on the site.
In 2004 and 2014 the review as awarded by an independent expert who adopted
the ground rent should reflect 35% of the market rent which in 2014 was agreed
between parties to be £13.75 sq ft.
The tenant has a right to use the car park although it is outside their demise.
The area within the hatched green line is a vacant site of approximately 0.4 acres.
KEY
FREEHOLD (DEMISED TO ASDA) 1.92 ACRES
LONG LEASEHOLD (UNDEMISED) 2.83 ACRES
ASDA’S OWN FREEHOLD
UNDEMISED DEVELOPMNENT SITE OF 0.4 ACRES
ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN
TENANT
INFORMATION
ASDA was founded in 1949 and are one of the UK’s ‘Big 4’ supermarket chains
which dominate the UK grocery market. Trading from over 260 stores, they employ
over 145,000 staff members and serve over 18 million customers every week.
The company trade over different store formats from supercentres to small
convenience.
Asda Stores Limited is the main trading company of Asda, being a wholly owned
subsidiary of the ASDA Group. The latest financial figures available for the tenant
are shown below.
31/12/2019 31/12/2018 31/12/2017
YEAR ENDING
(000’S) (000’S) (000’S)
Turnover £22,874,700 £22,842,800 £21,951,800
Profit before tax £108,300 £484,800 £379,000
Tangible net worth £5,498,800 £5,471,500 £5,007,300
The company currently have a D&B rating of 5A2 with a tangible net worth of
£5.4 billion.
In February 2020 the Asda business was bought by the Issa Brother and TDR
Capital from Walmart who have retained an equity interest in the business. Under
the new ownership the business is looking to expand, especially its ‘Asda on the
Move’ convenience format.
ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN
MAJOR FOOD SUPERMARKET
COMPETITION WITHIN DONCASTER
A638
Asda Carcroft has a dominant trading position for the north Doncaster catchment. The city
has representation from all the major occupiers but the majority are located south of the city.
A1 A19
G
HEMSWORTH ASKERN
A638
THERE IS ONLY ONE
A628
CARCROFT 5
5 mins 10 mins 15 mins
COMPETING STORE
drive time drive time drive time
38
M180
WHICH FALLS WITHIN THE A638
M18
10 MINUTE ISOCHROME, A635 37 A A630 F
A630
4
BEING THE MORRISONS
A18
A1(M) B DONCASTER
ON YORK ROAD” E
A6182
A MORRISONS, YORK ROAD 36
C D
B SAINSBURY’S, FRENCHGATE SHOPPING CENTRE A630 3
2/35
C ASDA, BALBY M18
D TESCO EXTRA, WOODFIELD WAY
A638
E ASDA, BAWSTRY ROAD
A1
F SAINSBURY’S EDEN THORPE
G ASDA MOOR THORPE
ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BNFOODSTORE OCCUPATIONAL MARKET OCCUPATIONAL MARKET & RENTAL VALUE
AND RENTAL VALUE Over the last five years there has been limited new development by the ‘Big 4’ supermarkets and therefore
limited land deals reported. The likes of Aldi and Lidl have been expanding the paying between £850,000 –
£1,500,000 per acre for sites in the north of England.
In addition, whilst there has been limited ‘new build’ evidence, a number of stores have had their rents
RENTAL HISTORY reviewed or re-geared. We set out below some comparable evidence:
The store is reviewed to a ‘reasonable ground rent’ for the site which is 1.92 acres together with a supermarket of circa
57,000 sq ft. At the last review the rent increased from £168,000 pa to its current level of £265,000 pa which is subject to a
review on 29 September 2024 and 10 yearly thereafter. PROPERTY DATE SIZE (SQ FT) RENT (£ SQ FT) TRANSACTION
The independent expert adopted the ground rent should equate to 35% of the market rent which reflected £13.75 per sq ft Sainsbury’s 67,032 + 9,760 New build extensions
Jun 20 £21.75
at the 2014 settlement and the same principle was adopted at the 2004 settlement. Colton Leeds New build & Re-gear
Morrisons
Dec 19 71,096 £17.00 Re-gear
Blaydon, Gateshead
Sainsbury’s
Oct 19 75,723 £19.25 Re-gear
Ripley, Derbyshire
Asda
Apr 19 87,549 £21.95 Re-gear
Hulme, Gtr Manchester
Sainsbury’s £17.50
May 18 56,462 Re-gear
Kimberley, Nottinghamshire + 10% fittings
Based on the above evidence, and taking a cautious approach, a rent of £15.00 per sq ft. (£855,000 pa) we
believe will be achievable at the 2024 review.
ADOPTING THE INDEPENDENT EXPERT’S
PREVIOUS METHOD OF CALCULATING THE
RENT UNDER THE GROUND LEASES, WE
BELIEVE THE PASSING RENT IN 2024 SHOULD
INCREASE TO A MINIMUM OF £299,250 PA.”
ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BNASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN
ASSET MANANGEMENT
OPPORTUNITIES
In addition to driving returns through future rental growth we believe there are a number of
asset management opportunities available to a buyer to generate additional value.
1. DEVELOPMENT SITE 3. CAR PARK
The sale includes a site of 0.4 acres which This is currently not demised under
has planning consent for a petrol filling the lease but Asda have a right to park
station. Our client marketed the site in cars only on the site. We feel there is a
2020 obtaining various offers the highest negotiation to be had with the tenant
being £550,000, Due to the imminent sale allowing them greater use of the car
of the Asda business to the Issa Brothers park for signage, trolley stores and other
and their previous experience in the petrol ancillary operations which could be
forecourt business through Euro Garages negotiated as part of a wider lease re-
the sale was put on hold as we believe structuring discussion. 4 3
Asda may now show interest in running a
site as a branded Asda petrol filling station.
4. A
SDA FREEHOLD
OWNERSHIP 2
2. UNLOCKING
MARRIAGE VALUE Asda own part of the store freehold which
is shown on the plan attached and which
We feel there is massive marriage we understand is circa 10,000 sq ft. This
value to be unlocked between the two we feel has limited value to Asda but
interests. Taking into account the new offers an opportunity to unlocked latent
ownership structure of Asda we believe value if any lease restructure can be
there will be opportunity to explore ways agreed.
of share upside. The new owners have
demonstrated recently their intentions
of driving value within the business with
the sale and leaseback of their logistics 1
operation for £1.4 billion.
ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BNAML PROPOSAL
A successful bidder will be required to
satisfy all AML requirements when Heads of
Terms are agreed. We are instructed to request offers in excess of
£7,650,000 (Seven Million, Six Hundred and Fifty
VAT Thousand Pounds) which reflects a net initial yield
of 3.5% rising in 2024 to 3.95%, net of costs at 6.66%.
We are advised that the property is elected
for VAT purposes and therefore the sale of The above assumes £550,000 for the development
the property will attract VAT. It is anticipated
that the sale will be treated as a transfer of site and the rent rises to £299,250 pa in 2024.
a going concern.
FURTHER INFORMATION
If you wish to view of require any further information please contact:
DAVID WINTERBOTTOM JAMES YATES
T 0161 956 4103 T 0113 280 8090
M 07836 225552 M 07983 586654
E david.winterbottom@avisonyoung.com E james.yates@avisonyoung.com
A Avison Young A Avison Young
Norfolk House Avenue HQ
7 Norfolk Street 10-12 East Parade
Manchester Leeds
M2 1DW LS1 2AJ
Misrepresentation Act 1967. Unfair Contract Terms Act 1977 The Property Misdescriptions Act 1991. These particulars are issued without
any responsibility on the part of the agent and are not to be construed as containing any representation or fact upon which any person
is entitled to rely. Neither the agent nor any person in their employ has any authority to make or give any representation or warranty
ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN whatsoever in relation to the property. October 2021. RB&Co 0161 833 0555. www.richardbarber.co.ukYou can also read
