SOUTHAMPTON Debenhams, Queensway, Southampton, SO14 1NH - LONG INCOME FREEHOLD INVESTMENT - CWM
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SOUTHAMPTON
Debenhams, Queensway, Southampton, SO14 1NH
LONG INCOME FREEHOLD INVESTMENT
DEPARTMENT STORE FOR SALE
Southampton, SO14 1NH
INVESTMENT
SUMMARY
285,000 SQ FT DEPARTMENT STORE
FREEHOLD
17 YEARS UNEXPIRED
5A1 COVENANT
2.5% FIXED UPLIFTS
PROMINENT ISLAND SITE
PROSPEROUS SOUTH COAST CITY
OFFERS IN EXCESS OF
£1,823,860 PER ANNUM
SIGNIFICANT ASSET MANAGEMENT £31,250,000
& DEVELOPMENT OPPORTUNITIES (Thirty One Million Two Hundred and Fifty Thousand Pounds)
exclusive of VAT, subject to contract.
Reflecting an attractive Net Initial Yield of 5.47%
with a Nominal Equivalent Yield of 6.62% and a
Reversionary Yield (2029) of 7.39% assuming full
purchaser’s costs of 6.77%
M3
M25
A3
LONDON
A36
A339
FARNBOROUGH
Southampton, SO14 1NH BASINGSTOKE
A331
M25
A361 M3
LOCATION
A303 A31
GLASTONBURY M23
A39 A303
A34
A272
A303
WINCHESTER
A23
A36 A272
M3 A272
A354 A3
A303
M27
SOUTHAMPTON
M27 A3(M)
A27 A26
A37
PORTSMOUTH
A338
A35
BOURNEMOUTH
Southampton is a prosperous south coast A35
ISLE OF WIGHT
city located within the county of Hampshire, WEYMOUTH
approximately 76 miles south west of London.
It benefits from excellent communications Southampton is one of the UK’s busiest
by road, rail, air and sea. The city passenger and freight ports. It has
is situated at the junction of the M3 facilities to handle virtually all types of
SOUTHAMPTON
and M27 motorways. The M3 leads cargo and its deep-water port and 1.8 MILLION
north to London, whilst the M27 is unique double tide allow unrestricted BENEFITS FROM
on the main east/west coastal route access for the world’s largest freight TRAVEL THROUGH
to Portsmouth, Bournemouth and and passenger vessels. A PROSPEROUS,
beyond. Around 96 daily direct rail THE AIRPORT
YOUTHFUL
services run from the city’s mainline The port handles in excess of 42
EVERY YEAR
railway station (Southampton Central)
to London Waterloo with a journey
million tonnes of cargo annually,
accounting for around 7% of the
POPULATION
time from only 1 hr 15 mins. UK’s annual seaborne trade and is
the UK’s main gateway for Far East
Southampton International Airport is imports. It is a major car handling
situated 7 miles north east of the city port and is home to the UK’s second
centre, adjacent to junction 5 of the largest container terminal. The port
M27. It provides flights to more than is also widely recognised as the
40 European destinations and has capital of the UK’s expanding cruise
a throughput of around 1.8 million liner industry and now has 4 cruise SOUTHAMPTON
passengers a year. terminals.
HAS A DIVERSE
AND VIBRANT
LOCAL ECONOMY
Southampton, SO14 1NH
DEMOGRAPHICS
Southampton is one of the largest cities in
the South East and is among the UK’s top 25
towns and cities with a resident population
of some 237,000.
It is ranked 18th out of the PROMIS Whereas once the city was heavily
centres and has a primary catchment
estimated at around 720,000 people and
dependent upon its port and
manufacturing industries, today it has
SOUTHAMPTON
a shopping population of some 433,000. a diverse and vibrant local economy. IS RANKED 18TH
It is estimated that there are now
Southampton benefits from a some 7,700 businesses operating in OUT OF THE
the city, providing employment for
prosperous, youthful population.
10% of the city’s population is around 117,000 people. The most PROMIS CENTRES
aged between 20 and 24 (UK aver/ significant sectors in terms of number
age 6.6%). This youthful profile is of employees are distribution, tourism,
due to the city being home to two banking and finance related industries.
major universities. The University of
Southampton and Southampton Tourism also contributes significantly to
Solent University together have a Southampton’s economy with around SOUTHAMPTON
student population of around 40,000. 1 million passengers travelling through
The former is one of the top 10 the port and 1.8 million through the UNIVERSITY IS ONE
research-led universities in the UK. airport annually. Southampton Football
Club gained promotion to the Premier OF THE TOP 10
League in 2012 and their St Mary’s
Stadium is located in the city centre.
RESEARCH-LED
UNIVERSITIES
IN THE UK.
Southampton, SO14 1NH
THE CITY HAS TWO
SOUTHAMPTON’S MAJOR DEPARTMENT
STORES: JOHN LEWIS
SHOPPING IN WEST QUAY AND
DEBENHAMS IN THE
SUBJECT PROPERTY
Southampton is classed by PMA as a
‘Regional Centre’ providing approximately
2.18 million sq ft of retail accommodation.
This ranks it 12th in PROMIS regional centres
by this measure.
West Quay, which opened in 2000, is Street and its tenants include include
the city’s dominant shopping centre. It Poundland, Poundworld, Peackocks
comprises around 100 shops anchored and Savers.
by John Lewis and Marks & Spencer.
Southampton’s prime shopping The city has two major department
circuit centres on West Quay and the stores: John Lewis in West Quay and
pedestrianised part of Above Bar Street Debenhams in the subject property.
along which the likes of Boots, Bhs, There are over 40 car parks around the
Primark, WH Smith, TopShop and TK city centre providing around 10,000
Maxx are located. car parking spaces.
A secondary shopping centre, (The
Marlands) is located off the non
pedestrianised section of Above Bar
Southampton, SO14 1NH
NEIGHBOURING NORTH
REGENERATION
PROJECTS
Hoglands Park
The property is located in the
south eastern section of the
city’s central shopping area and
it sits between two substantial
regeneration projects. Bargate Quarter
Redevelopment
It occupies a prominent, virtual island site bounded by East
Street, Queensway and Houndwell Place, overlooking the
southern edge of Hoglands Park. The property’s considerable
size affords it ‘landmark’ status and it dominates this part of the
city centre, being highly visible from its three long road frontages. The East
Street Precinct
This is a secondary shopping location, a short walk down East
redevelopment
Street from the prime shopping circuit. East Street is a busy
secondary street where there are a good range of speciality shops
such as Warhammer, Ponden Home, Met Rx, Holland & Barrett and
sk:n located.
The now defunct Bargate Shopping Centre sits behind the East Street
frontages, directly west of the subject property. The Bargate Centre
was purchased last year by Tellon Capital. Tellon are proposing a
comprehensive redevelopment of the site.
They conducted a public exhibition earlier this year and are anticipated
to submit a full planning application by the end of the year.
They are envisaging a single level high end retail and leisure scheme that will
open up the historic city wall (currently largely hidden from view). The subject
property will effectively anchor the eastern end of this new thoroughfare.
Directly east of the subject property sits the site of the former East Street
Shopping Precinct. This site is currently being redeveloped by Kier Property into a
mixed use development comprising a food supermarket and 156 student flats.
Kier will retain and refurbish the existing 12 storey tower that sits on the site.
Indicative site
boundaries only
Southampton, SO14 1NH
DESCRIPTION
The property has been measured on a GIA basis as follows:
The property was built in 1959 and comprises Description Sq Ft Sq M
Basement Ancillary 46,424 4,312.9
a substantial purpose built department store
Ground Floors Sales and Loading 108,045 10,037.6
occupying a site of approximately 2.523 First Floor Sales 50,960 4,734.3
acres. The accommodation totals some First Floor Mezzanine 9,601 892.0
285,300sq ft which makes this the largest Second Floor Sales 50,850 4,724.1
Second Floor Mezzanine 9,735 904.4
department store on the south coast. Third Floor Mezzanine 9,689 900.1
The building is arranged over Floors are mainly insitu concrete with TOTAL 285,303 26,505.4
basement, lower ground, ground, first the exception of the upper floors on
and second floors. First and second the Queensway frontage which are of
floors provide approximately half cover; suspended timber.
the rear of the building being single TENANCY
storey. The lower ground, ground, first The main customer entrance to
and second floors of the property are the store is off the Houndwell Place The property is let in its entirety to Debenhams Assuming the minimum 2.50% uplifts at the 2024
mainly used for the purposes of retail roundabout with additional entrances Retail Plc for a term of 30 years expiring 24th and 2029 reviews, the rent will increase as follows:
sales. The third floor is used for storage provided off Queensway and March 2034 on full repairing and insuring
and staff purposes. Houndwell Place. Servicing is provided terms (approximately 17.6 years unexpired). Date Rent (£ per annum)
via a loading bay accessed off East Upon expiry, the tenant has the right to renew Current 1,823,860
The building is of a concrete encased Street on the southern side of the for another 25 years. The current rent is
March 2017 1,869,457
steel frame construction. The main roof building. A concrete canopy projects £1,823,860 per annum exclusive, reflecting
is flat with an asphalt finish. The roof over the pavement line on the main £6.39 psf GIA overall. March 2018 1,916,193
over the rear single storey section is of 3 elevations affording protection from March 2019 1,964,097
a northern light construction with profile the elements for customers. The rent is subject to annual fixed uplifts of
2.50% per annum from March 2017 until March March 2024 2,179,360
sheeting.
2019. There are then 5 yearly rent reviews which March 2029 2,465,746
are upward only to the higher of Market Rent or
2.50% fixed uplifts.
Southampton, SO14 1NH
COVENANT
Debenhams is the United Kingdom’s second
largest department store brand and a leading
international, multichannel retailer with a
proud heritage that dates back to the 18th
century.
The company currently trade from 240 stores in 27 countries and online in 67
countries. Since the last recession, they have paid off around 2/3rds of their
5A1
corporate debt. RATING
Debenhams Retail Plc has a Dun & Bradstreet rating of 5A1, reflecting the lowest
risk of business failure with a financial strength based the company’s net assets of
£1.07 billion. For the year ending August 2015 Debenhams’ sales turnover was
£2,099 million. Their operating profit over the same period was £140.2 million.
For the last three years available, Debenhams Retail Plc have reported the
following financial results:
Experian Rating: Year Ending Year Ending Year Ending
“Low Risk” 29 August 2015 30 August 2014 31 August 2013
D&B: 5A1 £000’s £000’s £000’s
Turnover 2,099,300 2,085,900 2,075,600
Profit Before Tax 140,200 165,000 228,100
Tangible Net Worth 922,800 1,015,900 895,800
Net Current Assets 537,100 424,000 339,400
ASSET
MANAGEMENT &
REDEVELOPMENT
POTENTIAL
Debenhams are understood to
trade well from the property following
their extensive re-fit in 2011.
At 285,000 sq ft, however, the store is one
of their largest in the UK and they have a
surfeit of space.
Debenhams have contacted the vendors and preliminary
discussions have taken place as to the potential opportunity
for downsizing Debenhams on the site, freeing up a significant
part of the site for development.
Schematic architects’ plans have been drawn up indicating how the rear, single storey, part of the site (0.93
acres) might be redeveloped to provide between 130,000sq ft and 220,000sq ft of new residential / student
housing / hotel accommodation overlooking Hoglands Park. Further details upon request.
OFFERS IN EXCESS OF
£31,250,000
(Thirty One Million Two Hundred and Fifty Thousand Pounds)
exclusive of VAT, subject to contract.
Reflecting an attractive Net Initial Yield of 5.47% with a Nominal
Equivalent Yield of 6.62% and a Reversionary Yield (2029) of
7.39% assuming full purchaser’s costs of 6.77%
Assuming the minimum 2.50% annual fixed uplifts, a purchase
at this level would reflect the following running yields for the
duration of the lease:
2017 2018 2019 2024 2029
5.60% 5.74% 5.89% 6.53% 7.39%
VAT Inspections are to be
The sale will be treated as a Transfer
arranged strictly by arrangement
of a Going Concern (TOGC) with the vendor’s sole selling agents.
ASSIGNABLE SURVEYS JOHN MILES
Assignable building and measured surveys
will be made available to the purchaser. DDL: 020 7494 6922
Mob: 07789 243 998
EPC jhm@cwm.co.uk
An EPC is available on request.
JULIAN NORBURY Misrepresentation Act:
CWM & Partners LLP for themselves and for the vendors/lessors of the property whose agents they are, give
PLANNING DDL: 020 7494 6924
notice that:
1. These particulars are set out as a general outline for the guidance of the intended purchasers or lessees,
and do not constitute part of, an offer or contract; 2. All descriptions, dimensions, reference to, tenure,
We understand that the property is neither Mob: 07758 578 664 tenancies, condition and necessary permissions for the use and occupation, and other details are given
without responsibility and any intending purchaser or tenant should not rely on them as statements or
listed nor sits within a conservation area.
jpn@cwm.co.uk representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each
of them; 3. No person in the employment of CWM & Partners LLP has any authority to make or give any
representations or warranty in relation to this property.You can also read
