The Flamingo Industrial Portfolio - High Yielding Sale and Leaseback Portfolio with annual RPI Indexation - Cushman & Wakefield
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
The Flamingo Industrial Portfolio High Yielding Sale and Leaseback Portfolio with annual RPI Indexation
A superb opportunity to acquire
three substantial flower processing
facilities totalling 488,585 sq ft
(45,391 sq m)
All three assets are located in the
East of England, a key area for
horticultural output
On completion the properties will be
let to Flamingo Flowers Ltd, for a
term of 20 years subject to a tenant INVESTMENT SUMMARY
only break option in year 10
Flamingo Horticulture Ltd,
Initial rent of £1,259,859 pa reflecting
the newly consolidated company,
PRICING SUMMARY
£2.58 per sq ft across the three
will provide a guarantee on Offers in the region of
properties
all leases £13,000,000 reflecting a
net initial yield of 9.00%
after allowing for purchaser’s cost
of 7.70%
Subject to 5 yearly RPI linked rent Exceptionally low site cover
reviews compounded annually, of 28% providing future At a purchase price of £13,000,000,
collared at 1% pa and capped at 3% pa development potential this investment would provide
reversionary yields of:
2021: Min 9.46% Max: 10.43%
2026: Min 9.94% Max: 12.09%
Flamingo Flowers Ltd, part of 2031: Min 10.45% Max: 14.02%
Flamingo Horticulture, is
Freehold Capital Value of
a multi-national market leader within
approximately £26.60 sq ft
the flower and vegetable industry
02
PORTFOLIO SUMMARY
Great North Road, Sandy
INVERNESS A96
ABERDEEN
A90
A9
M90
M9
EDINBURGH
M8
Weston,
A1
M74 A702 Spalding
AYR A68
A76
Weston, Spalding A74M
NEWCASTLE
CARLISLE
19
A1M
A170
M6
Great North Road, Low Fulney,
Sandy LEEDS Spalding
19
LIVERPOOL
A55 SHEFFIELD LINCOLN
M6 M1
A52
NOTTINGHAM
A1 A17
A458 21A
PETERBOROUGH
BIRMINGHAM 19
A11
4A
Low Fulney, Spalding 16 A5
M1
M5 M40 FELIXSTOWE
Term Break Size Rent Rent Site Area
Property Tenant M4
(years) (years) (sq ft) (psf) (pa) (acres) LONDON
Great North Road, Sandy, M3 M20 DOVER
Flamingo 20 10 123,409 £3.25 £401,079 12.55
SG19 2AG M5
Flowers Ltd
Stone Gate, Weston, SOUTHAMPTON
(Guaranteed by 20 10 254,391 £2.20 £559,660 15.40 A30 31 PORTSMOUTH
Spalding, PE12 6HR A38
Flamingo
Rangell Gate, Low Fulney, Horticulture Ltd) 20 10 110,785 £2.70 £299,120 11.55
Spalding, PE12 6EW
Total 488,585 £2.58 £1,259,859 39.50
03
COVENANT INFORMATION
Company Overview
Since its inception, the Flamingo buisness has steadily expanded and today is Guarantor
a multinational market leader in the cut flower and premium vegetable Flamingo Horticulture Limited (company no: 09709586) will act as guarantor
industry. Today, Flamingo Flowers is one of the largest global suppliers of to all three leases. This entity was newly created for the purchase and now
fresh cut flowers, sourcing and processing a total of c.780m stems per annum acts as Group company, consolidating all of the Flamingo entities below it.
primarily for the UK and continental European markets. It has been steadily Below we present the summary financials.
increasing its market share with large UK supermarkets such as Tesco and
Flamingo Horticulture Ltd
Marks & Spencer (with whom it has had a relationship for over 20 years). 2013 2014 2015
Company No.: 09709586
The business has witnessed strong sales growth, having grown its sales from Sales £280.2m £293.8m £323.5m
£280m in 2013 to £324m in 2015 through increasing its market share with key
customers and gaining new clients (including Waitrose). In addition, Growth N/A 4.9% 10.1%
profitability has increased with EBITDA rising from £10.2m to £15.5m driven Gross Profit £36.8m £38.2m £46.7m
by higher revenue on a reduced cost base. Margin 13.1% 13.0% 14.4%
The company was acquired in 2015 by an affiliate of Sun European Partners EBITDA £10.2m £11.6m £15.5m
LLP (“Sun Capital”), a leading private equity firm with over $9bn of capital
under management. Sun Capital has changed the company’s name to Margin 3.6% 3.9% 4.8%
Flamingo Horticulture post acquisition and completed the separation with Net Assets (1) £62.0m £68.2m £31.0m
James Finlay Limited, a division of the Swire Group (the previous owners). (1) FY15 net assets include Sun Capital acquisition debt
Sun Capital sees substantial upside in growing Flamingo Horticulture’s steady
and defensible revenue stream through offering new higher margin products Tenant
to its current customers, improving agronomical practices on its farms, The tenant will be Flamingo Flowers Limited (company No: 02921420), which
reducing costs and through making investments in its UK operations to is a subsidiary of Flamingo Horticulture Limited. Further information regarding
improve efficiency and profitability. the tenant is available on request.
Business Operations at the Properties
The three subject properties comprise Flamingo’s main flower Flamingo Flowers Ltd
2015
processing sites, and are therefore critical to the operational success of Company No.: 02921420
the business. Flowers are brought to the properties from different Turnover £170.3m
locations around the world, predominantly from their global farming
operations. The sites service their core flower contracts with Tesco and Pre-tax Profit £4.5m
Marks & Spencer, in addition to some ancillary contracts such as hamper Current Assets £32.4m
arrangement and distribution. EBITDA £8.3m
Operations on-site include cutting, preparation, branding, packing and
outbound distribution to clients.
Further information on the business can be found at www.flamingo.net
04
FLAMINGO FLOWERS LTD
GREAT NORTH ROAD, SANDY SG19 2AG
Warehouse:
LOCATION AND SITUATION A428
The subject property is located in a prominent position • 16 dock level loading bays
on the A1, with London approximately 52 miles to the • 4 level access loading bays LITTLE BARFORD
60
south and Peterborough 31 miles to the north. The site
B6
• Sodium and fluorescent strip lighting
also has access to the wider motorway network with the
M25 (38 miles) to the south, the M1 (30 miles) to the Office: COLESDEN
ROAD
60
west via the A421 and the M11 (19 miles) to the east via
B6
• Perimeter trunking FLAMINGO
the A428.
• Floor to ceiling ‘buzz bars’ FLOWERS
In closer proximity, Sandy is situated 1.5 miles to the
BA R O
A1
RT A
• Air conditioning
FO D
RD
south with St. Neots approximately 6 miles to the north A421
CHURCH END
which has an established industrial market. • Wall mounted radiators RAF TEMPSFORD
RAF TEMPSFORD
WENTWORTH DRIVE
• Suspended ceilings GREAT BARFORD
DESCRIPTION
E
IV
R
D LN
• Fluorescent strip lighting B
R
IC
KH
IL
L
PU
TN
O
E
BEDFORD PARK
The site comprises one main building and several BART
FO
ROA RD
D
smaller buildings on a flat rectangular shaped site. The
main building consists of a 7 bay steel profiled clad
COMMUNICATION A4280
A421
BEDFORD
production facility, which was constructed in phases Sandy railway station is situated within a short drive of ORD
ROAD BEDFORD ROA
D
BEDF SANDY
between the 1970s - 2000s, with varying eaves heights the property and provides regular services to London ROAD
LO
CARDINGTON
N
(48 minutes) as well as throughout the region. The SANDY
D
dependent on the age of the building and the ROAD
O
A
N
B
RO
A
D
operational requirement of the occupier. The majority of subject property also boasts excellent connectivity to a MILE ROAD A513
4
SANDY
NO
RAIL STATION
the building is used as a production facility, either with number of airports, including Luton which is 30 miles to RT
RD
HIL
L
E
RO
OT
AD
NC
ambient temperature or insulated with ‘white walling’ the south west and London Stansted 48 miles to the A421 A1
OR
B65
TH
8
providing a temperature controlled environment. There south east. London Heathrow, England’s largest and BEDFORD ROAD
SO
are modern offices and canteen facilities on the first busiest airport, is situated 60 miles to the south. The
UT
HIL
L
proximity of these airports is important to the occupier
RO
floor. Specification as follows:
AD
as they rely on air freight services for the delivery of
A6
stock from Africa in particular. HILL LANE
HIG
H 05
ACCOMMODATION & TENANCY
The property has been measured in accordance with the RICS Code of Measuring Practice 6th Edition on
a Gross Internal Area basis as follows:
Demise Area (sq m) Area (sq ft)
1 Main Warehouse 9,979 107,408
2 Distribution Warehouse 611 6,574
3 Workshop 540 5,814
4 Nissen Hut 336 3,613
Total 11,466 123,409
5 Glasshouse 2,263 24,356
Total 13,729 147,765
The Glasshouse has not been included in our measurements and has not been rentalised.
The numbers in the table above correspond with the plan below.
SITE
The property is situated on a site with an area of approximately 12.55 acres (5.08
hectares). The overall site coverage ratio is approximately 23%.
The areas hatched blue on the plan are temporary structures which are leased from a third
party and therefore do not form part of the sale or measurements above.
TENANCY
Upon completion of the sale, the property will be let to Flamingo Flowers Ltd with a
guarantee from Flamingo Horticulture Ltd for a term of 20 years subject to 5 yearly RPI
linked reviews, annually compounded, collared at 1% pa and capped at 3% pa.
The initial passing rent is £401,079 per annum reflecting £3.25 per sq ft. There will be a
tenant only break option in year 10.
There are no repairing covenants within the proposed lease.
Low Site Coverage of 23%
06
06
FLAMINGO FLOWERS LTD
STONEGATE, WESTON, SPALDING PE12 6HR
RO
the weatherproof tunnel. This area is used for cold
LOCATION AND SITUATION
ET
LE
storage, packaging and distribution, which are
RF
SU
Spalding is an historic market town and expanding compartmentalised and ‘white walled’. In addition, the
commercial centre on the banks of the River Welland hamper section also provides offices at ground and first FLAMINGO
and the administrative centre for South Holland District floor level and a staff canteen, which is a recent addition FLOWERS
EET
Council. The town and the surrounding area hold to the building. Specification includes: suspended
STR
regional importance as an established location for ceiling, inset fluorescent strip lighting, wall mounted KNIGHT ST A16
RCH
specialists’ bulb and flower growing, fruit and food radiators, wall mounted a/c units and raised floors.
CHU
processing, with associated industries supporting local PINCHBECK
Building 2 located to the south-western edge of the site,
agriculture, storage and distribution.
was built in the 1990s and comprises a rectangular
The property is situated in a prominent location on the building of steel frame construction with profiled steel B1180
A151 bypass, approximately 4 miles to the north east of cladding under a pitched roof. There is a 12.31m deep WESTON
Spalding town centre. The A16 is situated 2 miles to the canopy covering the 9 loading doors and internally the
west of the site and is an arterial road in the East of building provides a mixture of cold and ambient stores.
England, with Peterborough (20 miles) to the south and
AD
In a prominent location on the western corner of the site
K RO
A151
Boston (16 miles) to the north.
HBEC
are offices (Building 3), which operated as their office MOULTON
PINC
HQ. The building was constructed in the 1980s and is of
DESCRIPTION brick block construction. The building is vacant at the ark W Elloe
Ave
moment and provides further long term asset
The subject property was built in various stages from management potential.
1960s-1990s with the site comprising 3 main buildings
numbered 1 to 3 on the map (overleaf). Dependent on
COMMUNICATION SPALDING
3
age, the buildings are built using a combination of brick TE
17
GA
B1
E R
LM
and steel frame construction, with varying eaves AD SPALDING HA
RA N
RO
Spalding railway station is located in Spalding town ER
RAIL STATION
heights. There are a total of 14 loading doors.
GEL
LOW FULNEY
centre and provides services to commercial centres
L
GAT
Building 1 comprises a number of different bays and such as Peterborough (22 mins), Lincoln (1 hour) and A16
E
internally they serve as various flower processing Doncaster (1 hour 30 mins). Peterborough is a major rail
spaces, together with workshops, small offices and interchange and provides numerous services across the
E
security gate office. To the south-west elevation there is country via Great Northern and Virgin East Coast
ROV
GD
a single storey ‘tunnel’, which provides a weatherproof services. Direct services include London (51 mins),
LDIN
link to the whole terrace, including the hamper section Birmingham (1 hour 46 mins) and Newcastle (2 hours).
3
SPA
B117
which comprises 2 bays and is located the other side of
07
ACCOMMODATION & TENANCY
The main warehouse and flower processing facility has been measured in accordance with the RICS Code of Measuring Practice 6th
Edition on a Gross Internal Area basis as follows:
Demise Area (sq m) Area (sq ft)
1 Main Warehouse 18,401 198,067
2 Flower Processing Facility 5,233 56,324
Total 23,634 254,391
3 Office (Vacant) 794 8,331
Total 24,428 262,722
We have not measured the office building and nor has it been rentalised.
The numbers in the table correspond with the plan below.
SITE
The property is situated on a site with an area of approximately 15.40 acres (6.23
hectares). The overall site coverage ratio is approximately 38%.
TENANCY
Upon completion of the sale, the property will be let to Flamingo Flowers Ltd with a
guarantee from Flamingo Horticulture Ltd for a term of 20 years subject to 5 yearly RPI
linked reviews, annually compounded, collared at 1% pa and capped at 3% pa. The initial
passing rent is £559,660 per annum reflecting £2.20 per sq ft. There will be a tenant
only break option in year 10.
There are no repairing covenants within the proposed lease.
A Site Area of Approximately
15.40 acres (6.23 hectares)
08
08
FLAMINGO FLOWERS LTD,
RANGELL GATE, LOW FULNEY, SPALDING PE12 6EW
D
Offices are provided at 1st floor level which benefits
LOCATION AND SITUATION
A
RO
T
from suspended ceilings, floor to ceiling buzz bars
E
LE
RF
Spalding is an historic market town and expanding and recently installed LED lights. To the north of
SU
commercial centre on the banks of the River Welland Building 2 there is a single storey portacabin
and the administrative centre for South Holland (Building 3), which is used as additional office
District Council. The town and the surrounding area accommodation. It benefits from double glazed
EET
STR
hold regional importance as an established location windows, ceiling mounted lights and a solid floor. KNIGHT ST A16
RCH
for specialists’ bulb and flower growing, fruit and
Building 2 provides further flower processing
CHU
food processing, with associated industries PINCHBECK
accommodation, which is part arranged as ambient
supporting local agriculture, storage and distribution.
temperature and part as cold storage. There are 4
The subject property is situated off Rangell Gate in FLAMINGO
bays which are all of the same construction. There is a B1180
close proximity to the Al6, which provides direct FLOWERS WESTON
further building to the west elevation, which serves
access to Boston (16 miles) to the north and for distribution with five dock level loading doors.
Peterborough (20 miles) to the south. Low Fulney is There are a number of ancillary buildings, which are
AD
K RO
positioned approximately 2 miles south-east from the generally small in scale around the site, as well as a A151
HBEC
MOULTON
centre of Spalding and comprises a number of temporary structure.
PINC
different plant growing and conditioning facilities.
Staff car parking is provided to the north of the site
Occupiers include: Butters Group, Opperman Plants ygate
Park
W Elloe
Ave
and provides approximately 147 spaces.
and West Nurseries Ltd.
DESCRIPTION COMMUNICATION SPALDING
3
TE
17
GA
B1
SPALDING ER
LM
Spalding railway station is located in Spalding town AD HA
RA N
RO
The site comprises two flower processing facilities OV
ER RAIL STATION
INS
GEL
centre and provides services to commercial centres LOW FULNEY
separated by an access road. The buildings are of a
L
GAT
such as Peterborough (22 mins), Lincoln (1 hour) and
mixture of steel frame and brick construction, with A16
E
Doncaster (1 hour 30 mins). Peterborough is a major
profiled metal cladding. The majority of the site was
rail interchange and provides numerous services
constructed in the 1960s-1970s with more modern
E
across the country via Great Northern and Virgin East
ROV
structures being added in the early 2000s.
GD
Coast. Direct services include London (51 mins),
Building 1 provides a mixture of cold and ambient Birmingham (1 hour 46 mins) and Newcastle (2 LDIN
3
SPA
B117
temperature storage, with three main loading doors. hours).
09
ACCOMMODATION & TENANCY
The property has been measured in accordance with the RICS Code of Measuring Practice on a Gross Internal Area and Net Internal
Area as follows:
Demise Area (sq m) Area (sq ft)
1 Building 1 (GIA) 5,876 63,252
2 Building 2 (GIA) 4,174 44,926
3 Office (NIA) 242 2,607
Total 10,292 110,785
The numbers in the table correspond with the plan below.
SITE
The property is situated on a site with an area of approximately 11.55 acres (4.67
hectares). The overall site coverage ratio is approximately 22%.
The area hatched blue on the plan is a temporary structure which is leased from a third
party and therefore does not form part of the sale or measurements above.
TENANCY
Upon completion of the sale, the property will be let to Flamingo Flowers Ltd with a
guarantee from Flamingo Horticulture Ltd for a term of 20 years subject to RPI linked
reviews, annually compounded, collared at 1% pa and capped at 3% pa. The initial
passing rent is £299,120 per annum reflecting £2.70 per sq ft. There will be a tenant
only break option in year 10.
There are no repairing covenants within the proposed lease.
A Site Area of Approximately
11.55 acres (4.67 hectares)
10
10Flower processing at Weston High bay racking at Weston
Offices at Low Fulney Flower processing at Low Fulney
11
11PROPOSAL
Offers are sought in the region of £13,000,000 (Thirteen Million
Pounds), subject to contract and exclusive of VAT. A purchase at this price
reflects a net initial yield of 9.00%, and a minimum and maximum
reversionary yield of 9.44% and 10.43%, assuming purchaser’s costs of 7.70%.
This reflects a low capital value of approximately £27 per sq ft.
EPC Rating VAT Planning
Energy Performance Certificates are as follows: The sale can not be treated as a Transfer of a Going Concern and The subject properties benefit from Use Class B2.
Sandy: therefore we have assumed purchaser’s costs to be 7.70%.
Web Access
• Offices & Distribution: C – 73 Capital Allowances www.cushmanwakefieldinvestmentsales.co.uk/cw/flamingo
• Workshop & Packaging: E – 122 We understand that all capital allowances have been claimed
Weston: C – 54 historically.
Low Fulney: C – 73
12CONTACTS
Cushman & Wakefield LLP Rory Turner Ben Sleath
43/45 Portman Square E: rory.turner@cushwake.com E: ben.sleath@cushwake.com
London W1A 3BG T: +44 (0) 207 152 5205 T: +44 (0) 207 152 5366
Andy Dickens Adam McMillan
E: andy.dickens@cushwake.com E: adam.mcmillan@cushwake.com
T: +44 (0) 207 152 5030 T: +44 (0) 207 152 5332
August 2016
MISREPRESENTATION ACT 1967
Cushman & Wakefield LLP (and their joint agents if appointed) for themselves and for vendors or lessors of this property whose agents they are, give notice that: (1) The particulars are produced in good faith, are set out as a
general guide only and do not constitute any part of a contract. (2) No person in the employment of the agent(s) has any authority to make or give any representation or warranty whatever in relation to this property. (3) This
property is offered subject to contract and, unless otherwise stated, all rents are quoted exclusive of VAT. (4) Nothing in these particulars should be deemed to be a statement that the property is in good condition or that any
services or facilities are in working order. (5) Unless otherwise stated, no investigations have been made regarding pollution or potential land, air or water contamination. Interested parties are advised to carry out their own
investigations if required.
Production & Photography by PlusArt Limited 0115 972 4000 13You can also read
