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INVESTMENT 4 Parsonage Drive
Longbridge
Birmingham B45 8AS
12 Year + Secure Income
Trade Counter Investment
EXECUTIVE
SUMMARY
Freehold £1.015M
Attractive net initial yield of
6.75%
Rental income £72,500 pax
14,533 sq ft modern
industrial/showroom
accommodation
Let to Howden Joinery
Properties Limited
Guarantor of Howden
Joinery Limited
Unexpired term of 12 years
Situation
Longbridge is circa nine miles southwest of Birmingham and 15 miles northeast of Worcester. Junction 4 of the M5 motorway is approximately two miles to the west, with
Junction 2 of the M42 around two miles to the southeast. A railway station in Longbridge serves the local area and connects to Birmingham New Street Station.
The property is located to the south of the newly developed Longbridge North area, which has seen major regeneration and development in recent years. Situated on
Parsonage Drive at its junction with Groveley Lane within an area of mixed residential and retail properties, the property can be approached from the A38 via Lickey Road.
The A38 is the main arterial road linking Birmingham with Bromsgrove.
Longbridge has a worldwide reputation as the historical home to the Austin Mini and has latterly retained a 60 acre research and production facility for MG Motors.
In 2011 plans were conceived for a new £70 million town centre at Longbridge, incorporating shops, restaurants and offices. The year also saw the completion of a new
£66 million purpose built facility for Bournville College. Construction completed on phase one of the town centre redevelopment in 2013. Tenants include Sainsbury's,
Premier Inn, Costa Coffee, Greggs, The Cambridge and Beefeater Grill. A 150,000 sq ft Marks and Spencer store will be opening in late 2015. St Mowden & Persimmon
were granted planning for the development of 229 homes in May 2012 which are under construction. The site is directly to the rear of the subject property. The overall plan
is for up to 725 new homes on the Longbridge East site
Description
The detached building was constructed in the mid-1990s and subsequently fully refurbished in 2012.
The building is of steel portal frame construction with part metal profile, part brickwork cladding to
the elevations with a profile metal roof that has 10% translucent roof panels. The property has an
eaves height of 6m and two roller shutter doors.
Internally there is a warehouse area with a painted concrete floor plus showroom, offices, kitchen
and WCs.
Generous parking is provided to the front of the building with approximately 34 spaces.
Accommodation
We have measured the property in accordance with the RICS Code of
Measuring Practice (6th Edition). We calculate that the property comprises the
gross internal areas as illustrated in the table.
Site Coverage
The site area is approximately 0.829 acres (0.336 hectares).
The built site coverage is approximately 42%.
Tenancy
The property is let to Howden Joinery Properties Limited on a 15 year full
repairing and insuring lease from 26 October 2012 and due to expire on 25
October 2027. The passing rent is £72,500 per annum exclusive (£4.98 per sq ft).
The lease is guaranteed by Howden Joinery Limited.
Rent reviews are 5 yearly to open market rental value.
Tenure
The property is held freehold.
Covenant
Howden Joinery Properties Limited are a subsidiary of Howden Joinery Limited
who are one of the UK’s leading manufacturers and suppliers of kitchens and
joinery products. They have been operating since 1995 and have over 580
outlets nationwide A breakdown of the last three years accounts for both tenant
and guarantor is shown below.
Howden Joinery Properties
Limited
28/12/2013 29/12/2012 24/12/2011
Turnover £36,248,000 £35,728,000 £33,235,000
Pre-tax Profit £721,000 £858,000 £1,624,000
Shareholders Funds £1,355,000 £2,917,000 £2,209,000
Howden Joinery Limited
(Guarantor)
28/12/2013 29/12/2012 24/12/2011
Turnover £943,835,000 £876,149,000 £842,403,000
Pre-tax Profit £148,541,000 £109,939,000 £102,430,000
Shareholders Funds £408,536,000 £383,568,000 £304,126,000
Area Sq M Sq Ft
Warehouse 1,166.23 12,553
Showroom/Offices 137.51 1,480
WCs/Kitchen 48.76 524
Total 1,352.50 14,553
EPC
The property has an EPC rating of B and the certificate is available upon
request.
Market Commentary
The current rent reflects under £5.00 per sq ft which we believe is significantly
revisionary. There is a distinct lack of available industrial/trade units around
Birmingham and its suburbs. New build industrial/trade units around the
Midlands are £6.00+ per sq ft, Redditch Trade Park to the south has achieved
well over £9.00 per sg ft for modern trade units. We believe an investor will see
significant growth at the October 2017 rent review.
If the unit was to become vacant we believe there would be strong demand from
other trade users for the site which has historically been a DIY destination, being
a former Focus DIY. The unit would also split easily into two smaller units
offering future flexibility.
Planning
We understand that the property has B8/Trade Counter use under the Planning
Act (1987 Use Classes Order) and subsequent amendments.
VAT
The property has been elected for VAT.
Legal Costs
Each party to be responsible for their own legal costs incurred.
Viewing
By appointment only with the joint agents:
ANDREW PRICE
Telephone: 0121 513 0892
Mobile: 07798 656 360
Email: [email protected]
MATTHEW EDWARDS
Telephone: 0113 386 8823
Mobile: 07778 131872
Email: [email protected]
JAKE PYGALL
Telephone: 0113 386 8802
Mobile: 07703 281 242
Email: [email protected]
Proposal
We are instructed to seek offers in excess of £1,015,000 reflecting a net initial
yield of 6.75% based on purchaser’s costs of 5.8%.
