PRIME HIGH STREET RETAIL INVESTMENT - Fastly
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PRIME HIGH STREET RETAIL INVESTMENT
INVESTMENT CONSIDERATIONS PROPOSAL
• Located in the historic Cathedral City of Worcester Income: Sat Nav reference:
• Attractive and affluent retailing centre £565,000 per annum WR1 2QD
• 100% prime pitch on the pedestrianised section of High Street, opposite the Crowngate
Shopping Centre Offers in excess of:
• Well-configured large store with dual frontage, providing excellent sales accommodation £9,220,000 (subject to contract)
• Let to the undoubted covenant of TJX UK (TK Maxx)
• Unexpired term of approximately 8 years to expiry (3 years to break) Net Initial Yield:
• Strong prospects for future rental growth 5.75%
• Freehold
2
LOCATION
The Cathedral City of Worcester is an attractive and popular retailing centre and the administrative
centre for the County of Worcestershire. Worcester is located approximately 129 miles north west
of London, 29 miles south west of Birmingham and 28 miles north of Cheltenham.
The city benefits from excellent road communications, being situated approximately 3 miles
to the west of Junctions 6 and 7 of the M5 motorway, which in turn links with the M42, M6
and wider national motorway network.
28
Newark-on-Trent
Worcester is serviced by Worcester Foregate Street mainline railway station, with a fastest
27
A15
Stoke-on-Trent
6
journey time to London Paddington of 2 hours 20 minutes. There are also regular services
A4
A17
26
15
to local destinations with a fastest journey
Derbytime to Birmingham New Street of 43 minutes.
Nottingham A1
A52
25 Grantham
A52
Uttoxeter
In addition, Birmingham International Airport is approximately 38 miles north east of the city. A607
A15
24
14
EAST MIDLANDS
Stafford
Burton Upon Loughborough
Trent 23
Melton Mowbray
13
7
M1 A60
M6 A6
Telford Lichfield
06
A1
22
M54 12 11 A16
11 M6(T) A606
2
Sutton M42 Leicester
A6003
A44
Coldfield
2
21
A4
A47
7
10
M69 Peterborough
A43
A4
Wolverhampton
58
8 7 Nuneaton
A6
9 2
Market
Bridgnorth 1 6 5 8
1
M1 Harborough 05
2
Birmingham Corby A6
3
A61
20
3 6
16
2
M42 M6
A1
Kidderminster M5 Solihull 5 Coventry
1 19 Kettering
A50
3
4
Rugby
A4
4
8
2 18 A14
6
A45 1 3
A4
5
16 17
A4
48
A449
5 M40 Leamington Spa
Redditch M1 Northampton
A6
15 14
M5 13
16
A4
6 A422 Stratford A428
4
Upon Avon12
WORCESTER
15
A43
28
Bedford
A4
7
A429
A509
A4103 A4
4 A5
Evesham M40
Hereford M5
8 Milton Keyes
6
A4
9
M1
Gloucester Cheltenham
6
A43
3
DEMOGRAPHIC PROFILE
Let to the
The total population within the Worcester primary catchment area is 298,000, with an estimated shopping population undoubted 5A1
of 191,000 (Source: PROMIS). This is reinforced by a tourist economy of over 500,000 visitors every year. Worcester’s covenant of TJX
catchment population has a significantly above average proportion of adults of working age categorised within the
UK (TK Maxx)
Affluent Achievers social group, as shown in the graph (Source: CACI).
According to PROMIS, the Worcester area contains a high proportion of adults of working age categorised within
the most affluent AB social group (which includes those in managerial and professional occupations). In contrast,
40% Worcester
the least affluent D and E social groups (which includes those in skilled and unskilled manual employment, the UK
35%
unemployed and those on state benefits) are particularly under-represented within the Worcester area and social 30%
30%
group C1 (which includes junior non manual employees) is moderately under-represented.
27%
23%
20%
22%
18%
17%
10%
Worcester has experienced excellent population growth in recent years; the population change between 2001-2011
11%
10%
7%
was +5.65% (Source: 2011 Census). Furthermore the Office of National Statistics projects a 4.69% increase in the 0%
Affluent Rising Comfortable Financially Urban
population of the county of Worcestershire in the ten-year period from 2011-2021. Achievers Prosperity Communities Stretched Adversity
4
RETAILING IN WORCESTER SITUATION
Worcester is an attractive retailing destination that The property occupies a 100% prime trading position on High Street with a substantial dual
benefits from an affluent and loyal catchment; this is frontage to The Shambles to the rear.
due to its largely rural surrounding area and distance
from other competing retail centres. Retail spend in The property is situated adjacent to O2 and Paperchase and opposite L’Occitane, Office and Boots.
Worcester is further enhanced by a tourist economy Other major multiple retailers in the immediate vicinity include Debenhams, WH Smith, House
of over 500,000 visitors a year, who are attracted to of Fraser, Marks and Spencer, Primark, Bill’s, Phase Eight, Jo Jo Maman Bebe and Superdrug.
historic sites such as the Grey Friars, the Guildhall and
Worcester Cathedral.
DESCRIPTION
The city centre provides approximately 1.07 million
sq ft of retail floor space (Source: PROMIS) with the The property comprises a large space retail unit which is arranged over ground, first, second,
majority centred around the pedestrianised High Street third and fourth floor levels. The property benefits from well-configured and regular floorplates
and Broad Street. Retailers represented within this that offer good quality sales accommodation.
area include Boots, TK Maxx (the subject property),
H&M, River Island, W H Smith and Marks and Spencer.
Worcester’s primary shopping centre is the Crowngate
Shopping Centre, owned by The Crown Estate,
which provides approximately 300,000 sq ft of retail
accommodation. The scheme is situated either side
of Broad Street and is anchored by House of Fraser,
Primark, New Look, Boots and Debenhams. The centre
also provides a multi storey car park with 750 spaces.
5
ACCOMMODATION COVENANT
We have measured the property in accordance with the RICS Code of Measuring TJX UK (Company No 03094828), trading as TK Maxx, is an apparel and home goods
Practice (6th Edition) and provide the following Gross Internal Areas: company that operates stores throughout the United Kingdom, Ireland, Germany, Poland,
Austria and the Netherlands. In December 2014 there were a total of 407 stores in Europe.
Floor Use GIA (sq ft) GIA (sq m) The stores offer includes men’s, women’s and children’s apparel and shoes, as well as
Ground Sales 12,811 1,190 other areas such as toys, bath and beauty, accessories, and home products ranging from
furniture to kitchen utensils.
First Sales/Ancillary 12,940 1,202
Second Ancillary 13,209 1,227 The company is part of the TJX Companies, which also owns ‘off-price’ retail chains TJ
Third Ancillary 8,094 752 Maxx, Marshalls, and HomeGoods, and Sierra Trading Post in the United States, and
Fourth Ancillary 2,983* 277* Marshalls, HomeSense, and Winners in Canada. TJX Companies ranked No. 103 in the
2015 Fortune 500 listings, with $29.1 billion in revenues in 2014. Across its many brands
TOTAL 50,037 4,649
it has more than 3,300 stores in 7 countries, 3 e-commerce sites and approximately
*JLL were unable to access all parts of the fourth floor, we have therefore relied on the historic area
supplied by the vendor.
198,000 employees.
TJX UK reported the following financial performance
TENURE
The property is held freehold.
31/01/2015 01/02/2014 02/02/2013
Turnover £2,195,400,000 £1,995,000,000 £1,814,600,000
TENANCIES
The property is let to TJX UK, trading as TK Maxx, on a 15 year lease expiring Pre Tax Profit £134,300,000 £91,500,000 £80,500,000
4th May 2024. The current rent passing is £565,000 per annum. There is an Net Worth £583,400,000 £501,700,000 £437,400,000
upwards only market rent review and a tenant’s option to break on 5th May 2019.
TJX UK has a D&B score of 5A1 representing ‘minimum risk’ of business failure.
6
The property
is situated on 100%
prime pitch on the
pedestrianised section
of High Street
7
RENTAL COMMENTARY
We have devalued the current retail rent of £565,000 per annum to reflect approximately £11.29 psf. We are aware of
the following comparable evidence:
Address Occupier Transaction Transaction Date GIA sq ft Rent Rate psf
Colchester OML February 2016 55,803 £700,000 £12.54
Uxbridge OML June 2015 50,946 £631,375 £12.39
Worcester RR October 2014 61,819 £761,883 £12.32
Truro OML November 2014 50,984 £700,000 £13.73
Cheltenham RR February 2012 52,971 £610,000 £12.60
Based on this evidence we are of the opinion that property is rack rented at £565,000 per annum.
INVESTMENT EVIDENCE
The below table shows a number of recent comparable transactions:
Address Occupier Date Price NIY Expiry
£16.00m 4.50%
Worcester Current 2026
(Quoting) (Quoting)
Worcester Exchanged £9.75m 4.75% 2076
Cheltenham October 2015 £11.62m 4.96% 2021
Cardiff August 2015 £19.85m 4.75% 2025
High Wycombe September 2014 £19.70m 3.95% 2040
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Well-configured large retail
unit providing high quality
sales accommodation
VAT
The property has been elected for VAT purposes. It is
anticipated that the investment sale will be treated as
a Transfer of a Going Concern (TOGC).
EPC
HASE
PAPERC
The EPC rating for the property falls under band B.
NE
CITA
L'OC AUTY
& BE
LTH
HEA
SER
HAR
FRA ELLER
T
PROPOSAL
JEW
We are instructed to seek offers for our client’s freehold
interest in excess of £9,220,000 (Nine Million, Two
Hundred and Twenty Thousand Pounds), subject to
contract and exclusive of VAT. A purchase at this level
would reflect a Net Initial Yield of 5.75%, after allowing
for purchasers costs of 6.69%.
9
FURTHER INFORMATION
For further information or to arrange an inspection of the property, please contact:
Jonathan Heptonstall Christopher Robinson Frankie Maddox
+44 (0)20 7318 7843 +44 (0)20 7087 5624 +44 (0)20 7399 5744
jonathan.heptonstall@eu.jll.com chris.robinson@eu.jll.com frankie.maddox@eu.jll.com
MISREPRESENTATION ACT
JLL, for themselves and for the vendors of this property, whose agents they are, give notice that (i) the particulars and any further information communicated by any means to potential purchasers of the property described in the particulars, or their advisers, in connection with the possible sale of the
property are provided solely for the purpose of assisting potential purchasers in deciding whether they wish to proceed with further investigation of the property and do not constitute either the whole or any part of an invitation, offer or contract for sale of the property; (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 as at the date of the particulars (or the date of the relevant information if earlier). However, potential purchasers are not entitled to rely on them as statements
or representations of fact but should satisfy themselves by searches, enquiries, surveys and inspections or otherwise with regard to the accuracy of such details. No responsibility or liability is or will be accepted by JLL, the vendor(s) of the property or any of their respective subsidiaries, affiliates,
directors, officers, representatives, employees, advisors, or agents for any loss or damage suffered by any party, resulting from reliance on the particulars or any other information communicated by any means to that party, or its advisers, in connection with the possible sale of the property. No person
in the employment of Jones Lang LaSalle or the vendor(s) has authority to make or give any representation or warranty, express or implied, in relation to the property. References to JLL include any joint agents acting with Jones Lang LaSalle. Designed by Graphic Outlines Ltd. 2016You can also read
