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Mondi, Parkway, Deeside Industrial Park, Deeside CH5 2NS
Long Income Single Let Industrial Investment
• StrategicandexpandingNorth-WestmanufacturingandlogisticlocationwithEnterpriseZonestatus.
• Extensiveprintinganddistributionfacilityof174,129sqft(16,177sqm)GIA.Potentialforsub-division.
• Keyattractionsfortenantinclude2.5MVApowersupplywithaccesstonearbyportandairfreightfacilities.
• Freehold
• LettoawhollyownedsubsidiaryofFTSE 100 listed Mondi Plc.
• 12.25 yearstoleaseexpiry.
• LowPrincipalRentof£3.59persqftplus“Fit-outRent”of£49,680perannum.
• Totalcurrentrentalof£674,527 per annumwithanestimatedreversion to £720,000 per annuminJuly2019.
• Offers in excess of £8,700,000subjecttocontractandexclusiveofVAT.
• Net initial yield of 7.27%withreversion to 7.76%inJuly2019.
Investment Summary
Mondi, Parkway, Deeside Industrial Park, Deeside CH5 2NS
Edge Distribution
MMHVolvo
Rhino Products
Westbridge
Calbee
The Airfields
M56 & M53
NORTH WALES
NORTH WALES EXPRESSWAY
A548
A494
Magellan Aerospace
247 Acres Mixed Use
Site
Iceland Foods HQ
TNT Henrod Henrod
Prospect Park
BallPackaging
Subject Property
Dailycer
THE R
UNW
AY
HIGHCLIFFEGOLF COURSE
CHARTHAM
HORTON STREET
CHUR
CH ST
CHUR
CH ST
BERR
Y LAN
E
CHARLES STREET
MULCTURE HALL ROAD
WADE STREETWINDING ROAD
BROAD STREET
NORTHGATE
COMM
ERCIAL STREET
LISTER LANE
GIBBET STREET
PELLON LANE
FOUNTAIN STREEET
COW
GRE
EN
BURDOCK WAY ORANGE ST
A629
A629
A58
WEST GLOBE PARK
CORBY
CORBY
WELDON ROAD
A427
LLOYDS RD
GEDDINGTON ROAD
ELIZABETH ST
COTTINGHAM ROAD
STATION RD
HIGH STREET
ROCKINGHAM ROAD
OCCUPATION ROAD COURIER ROAD
COCK
EREL
L ROAD
PHOENIX PA
RKW
AY
COL
DRAKE
ROAD
TEAL ROAD
A612
COLWICK LOOP ROAD
COLWICK LOOP ROADVALE ROAD
CHAT
WOR
TH RO
AD
DOUGLAS AVENUE
NETHERFIELD
B686
CHANDOS STREET
STATION ROAD VICTORIA ROAD
CONWAY R
OAD
BURTON ROAD
SOUTHDALE ROAD
CARLTON
RIVER TRENT
VICTORIA ROAD
CHARTHAM
GREAT STOUR
CHARTHAM
STATION ROADCHURCH LANE
HATCH LANE
HOWFIELD LANE
MILT
ON M
ANOR
ROA
DCOCKERING ROAD
A28
A28
ASHFORD ROAD
MILTON MANOR
ROUNDABOUT
A28
A28
A548
A494
A494
A550
A548
WEL
SH RO
AD
SHOTWICK ROAD
GREEN LANE
BYPASS ROAD
FIRST AVENUEFIRST AVENUEPARKWAYFOURTH AVENUE
SIXTH AVE
PARK WAY
DEESIDE
J5 J12
J7
J26
J21a
J20
J19
J18
J24
J18
M58
A537
A54
LIVERPOOL
M6
M61
M66 M62
M67M60
M56
M62
M6
M53
CHESTER
M57
M56
M602
M60
A51A55
A483A41
A534
A470
A494
A41
A59 A580
A557M6
J15
J11MANCHESTER
STOCKPORT
STOKE-ON-TRENT
DEESIDE
LIVERPOOLJL AIRPORT
LIVERPOOL PORT
HAWARDENAIRPORT
MANCHESTERAIRPORT
DeesideisanimportantandstrategicindustriallocationintheNorthWest,lyingwithinFlintshireandontheEnglish/Welshborder,approximately7.6miles(12.2km)westofChesterand15.3miles(24.6km)southofLiverpool.ThepopulationofDeesideisapproximately53,568withc.154,000inFlintshire(2011census).Themajorityofemploymentresultsfromthemanufacturing,production,logisticsandconstructionindustries.
CommunicationlinksareexcellentwiththeA550ExpressWaygivingimmediateaccesstoJunction16oftheM56andthenationalmotorwaynetwork,whilstChesterStationprovidespassengerrailservicestoLondonEuston(approx.2hours).LiverpoolcatersforportrelatedusesandairportlinksareprovidedforatLiverpoolJohnLennon(25miles)andManchesterInternational(35miles)airports.AirfreightservicesareavailableatHawardenAirport(6miles),whilstrailfreightthroughouttheUKandtomainlandEuropeishandledatLiverpool,ChesterandtheWidnesEuroFreightLineTerminal.
SituationDeesideIndustrialParkissplitintofourZones,spreadoverapproximately600acresandthepropertyislocatedonParkwaywithinZone2.AccesstotheA550andM56iscurrentlyviatheA548,ShotwickRoad.TheParkformspartoftheDeesideEnterpriseZone,providingarangeofincentivestonewoccupiers,includingenhancedCapitalAllowancesanddiscretionaryBusinessRatesrelief.TheParkcomprisessome5,000,000sqftofindustrialandlogisticsproperty,actingasastrategichubforawidevarietyofdistributionandmanufacturingcompanies.MajoroccupiersatDeesideincludeToyota,Morrisons,TataSteel,TNT,Convatec,BunzlVending,Mayr-MeinhofPackaging,WestbridgeFurnitureandValspar.WheelabratorTechnologiesIncistocommencetheconstructionofa£180mEFWpowerplant,whichisduetoproduce18.8MWfrom2019.
AirbusGroup’swingmanufacturingfacilityisatnearbyHawarden.ThishasattractedanumberofsupplierstoDeesideIndustrialPark,includingMagellanAerospaceandCAVAerospace.Fundingfora£30mAdvancedManufacturingandResearchInstituteatHawardenwasannouncedinNovember2016.
Location
‘Northern Gateway’ TheNorthernGatewayProjectissituatedimmediatelytothesouthandadjacenttotheDeesideIndustrialPark.Itisoneofthelargeststrategic,mixedusedevelopmentopportunitiesintheNorthWestandextendstoapproximately420acres,beingheldintwoownerships.
PraxisHoldingsown247acresoftheformerRAFSealandbaseandhavesecuredoutlineplanningconsentforamixeduseschemeofapproximately2.5msqftoflogistics/industrial;90,000sqftofretail/roadsideon20.4acresand725residentialunits.Furtherdetailsandindicativelayoutsareavailableon www.theairfields.co.uk
AJVbetweenPochinDevelopmentsandGoodmanownsanadjoining180acresofsurplusCorusland,frontingtheRiverDee.Outlineplanningconsenthasbeenobtainedfor1.2msqftofB1,B2,B8use;600residentialunitsandleisurefacilities,includingahotel.AWelshGovernmentinvestmentof£3.1mhasfinancedtheconstructionofinitialroadinfrastructure,whichwilleventuallyopenupbothsites,providingadirectlinkbetweenParkway(oppositetheproperty);DeesideIndustrialParkandtheA550junctionwiththeA548.
Thepropertycomprisesthreeinterconnectingwarehouse/manufacturingbuildingsofsteelportalframeconstructionwithinsulatedprofiledsteelcladding.Originallybuiltinthe1990’s,themainunitwasrebuiltin2006andallunitswereadaptedtotheoccupiersspecificrequirementspost2009.Thethreemainbuildingshaveconcretefloors,LEDlightingandacomprehensivewetsprinklersystem(CO2extinguishersystemshavebeeninstalledbythetenant).Thecomplexissituatedwithinaself–containedsitewithfourvehicularaccesspointsontoParkwayandFourthAvenue.ThesitehasprominentroadfrontagesandissecuredviaagatehouseandCCTV.Thereareexternalserviceyardsforeachunitand143carparkingspaces.Oneofthekeyattractionsforthetenantisthesite’sdedicated2.5MVApowersupply.
Description
Mondi, Parkway, Deeside Industrial Park, Deeside CH5 2NS
Accommodation Our estimate of the Gross Internal Areas for the unit are summarised as follows:-Building 1– Printing Area and Offices Sq ft Sq m
Offices Ground Floor 2,035 189.06
Offices First Floor 1,978 183.76
Laboratories 1,828 169.83
Warehouse/Production* - Housing Printing Presses 73,142 6,795.09
Mezzanine 1,630 151.43
80,613 7,489.17
TOTAL 174,129 16,177.06
* Varying eaves height 5.18m to 8.23m
Connecting Tunnel 2,500 232.26
Building 2– Laminated Products
Warehouse* - laminating, cutting and product finishing 51,064 4,743.98
Mezzanine 2,551 236.99
Storage Room 1,515 140.75
55,130 5,121.72* Minimum eaves height - 5.49m
Building 3 – Offices and Warehouse
Warehouse* - Storage 24,896 2,312.91
Offices – Ground Floor 6,290 584.36
Mezzanine 4,602 427.54
35,788 3,324.81* Minimum eaves height -5.49m
Gatehouse 98 9.10
ThepropertywasmeasuredinaccordancewiththeRICSCodeofMeasuringPractice(7thEdition).TheGIAareasare:-
Mondi, Parkway, Deeside Industrial Park, Deeside CH5 2NS
Mondi, Parkway, Deeside Industrial Park, Deeside CH5 2NS
Site Thepropertyhasasiteareaof8.38acres(3.39hectares),providinga47.5%sitecover.
ThepropertyislettoMondi Consumer Goods Packaging UK Limited(formerlyExcelsiorTechnologiesLtd)foratermof20years,withoutbreak,from9thJuly2009(12.25 yrs unexpired).The‘PrincipalRent’iscurrently£624,847 p.a.,equatingtoonly£3.59 psfandissubjectto5yearlyupwardonlyrentreviewstoMarketRent.Thenextrentreviewisdueon9thJuly2019.
Inadditiontothe‘PrincipalRent’,thetenantpaysa‘Fit-outRent’of£49,680 p.a.,whichisnotsubjecttoreview.Thisrentlargelyrelatestotheinstallationofacomprehensivesprinklersystemandtank,whichanyfutureoccupierwouldbenefitfrom.
Tenancy
TheleaseiseffectivelyonFRIterms.APhotographicScheduleofCondition,recordedatleasecommencement,hasbeensignificantlysupersededbysubsequentlicensedTenant’sAlterations.
Principal Rent £624,847.15
Fit-out Rent £49,680.00
Total Passing Rent £674,527.15
Freehold
Tenure
Mondi, Parkway, Deeside Industrial Park, Deeside CH5 2NS
ClassesB1(c),B2and/orB8oftheTown&CountryPlanning(UseClasses)Order1987.
Planning
MondiGroupacquiredExcelsiorTechnologiesLimitedon7thFebruary2017for£33mand,asawhollyownedsubsidiaryoftheFTSE100listedMondiPlc,itwasrenamedasMondiConsumerGoodsPackagingUKLimited(Companynumber05188170).Itisamarketleadingcompany,developingandproducingflexiblepackagingforsomeoftheworld’sbiggestbrands,particularlyinthefoodindustry.Over60%ofproductionisexportedworldwideandthecompanyhastwicewonthe‘Queen’sAwardforExports’.
MondiGroupisaninternationalpackagingandpaperconglomerate.MondiPlchasduallistingsontheLondonandJohannesburgStockExchanges.It’sLondonMarketCapitalisationinApril2017wasc.£9.56bn.TheGroupderives70%ofitsturnoverfrompackaging,withkeyoperationsinEurope,Russia,NorthAmericaandSouthAfrica.ThepurchaseandintegrationofExcelsiorTechnologiescomplementsitsglobaloperations.
Fortheyearending31stDecember2016,MondiGroupreportedaturnoverof€6.66bn(2015-€6.82bn);Pre-TaxProfitsof€843m,post‘SpecialItems’(2015-€796m)andShareholders’Fundsof€3.7bn(2015-€2.91bn).
Fortheyearending31stDecember2015,MondiConsumerGoodsPackagingUKLtd(FormerlyExcelsiorTechnologiesLtd)reportedaturnoverof£34.49m;Pre-TaxProfitsof£883,103andNetLiabilitiesof(£624,000).Theirfull2016accountsarenotyetavailablebutincreasedrevenuesof£39mto31stDec2016werereported.
Covenant
Mondi, Parkway, Deeside Industrial Park, Deeside CH5 2NS
Letting Activity Wesetoutbelowalistofrecentlettingtransactionsinthelocalarea.
Date Location Size (sq ft) Occupier Lease Term Rent Comments
Dec 2016 Unit 3, Prospect Park, Parkway, Deedside 11,166 Chester Wool Ltd 10 years £5.82 psf New space.
Nov 2016 Excel 95, First Avenue, Deeside 96,597 Magllan Aerospace (UK) Ltd 10 years £3.75 psf Second hand. 5 year tenant only break option.
Nov 2015 Unit 90, First Avenue, Deeside 64,340 Calbee Inc 15 years £4.25 psf Second hand.
Jun 2015 Unit 2, Deeside Industrial Park, Deeside 90,000 Great Bear Distribution 10 years £4.00 psf Sale and leaseback, 5 year tenant only break option.
Jun 2014 Expressway 56, Deeside 162,116 Mayr-Melnhof Packaging UK 10 years £3.97 psf Second hand. 5 year tenant only break option.
Investment Activity Wesetoutbelowalistofrecentcomparableinvestmenttransactions.
Mondi, Parkway, Deeside Industrial Park, Deeside CH5 2NS
Date Location Size (sq ft) Occupier AWULT Price Yield (NIY)
Marketing Deeside Industrial Estate East 871,143 Multi Let 5.4 yrs (to bk.) Q. £38m Q. 7.56%
Under Offer Excel 95, Deeside Industrial Park 96,597 Magellan Aerospace 5.25 years u-o>£4.25m sub 8.0%
Jan 2017 Heywood Distribution Park, Heywood 92,340 Transpennine 200 5 years £8.266m 7.37%
Nov 2016 Venus 110, Knowsley 110,4298 Amazon UK Services 4.5 years £8.6m 6.3%
May 2016 Runcorn, Cheshire 131,960 Rehau 12.6 years £11.45m 5.7%
Jun 2015 Unit 2, Deeside Industrial Park, Deeside 90,000 Great Bear Distribution 5 yrs (to bk.) £4.25m 8.0%
Jun 2014 Expressway 56, Deeside 162,116 Mayr-Melnhof Packaging 2.5 years £7.10m 8.5%
EPC–C(69).Acopyofthecertificateisavailableuponrequest.
EPC Rating
ThepropertyhasbeenelectedforVATandthesalewillbetreatedbywayofaTransferofGoingConcern(TOGC).
VAT
Therearenocapitalallowancesavailabletoapurchaser.
Capital Allowances
Offersinexcessof£8,700,000forthefreeholdinterest,subjecttocontractandexclusiveofVAT.Apurchaseatthislevelreflectsa net initial yield of 7.27%,assumingcostsof6.68%.
AssumingarentalupliftatreviewinJuly2019to£720,000 pa(£3.85persqftasthe‘PrincipalRent’andthe‘Fit-outRent’of£49,680pa.),thiswouldreflectareversionary yield of 7.76%.
Proposal
DISCLAIMERMessrsHoddellStotesburyMorganLtdforthemselvesandforthevendorsofthispropertywhoseagentstheyaregivenoticethat:-(i)theparticularsaresetoutasageneraloutlineonlyfortheguidanceofintendingpurchasersanddonotconstitute,norconstitutepartof,anofferorcontract;(ii)alldescriptions,dimensions,referencestoconditionsandnecessarypermissionsforuseandoccupation,andotherdetailsaregiveningoodfaithandarebelievedtobecorrectbutanyintendingpurchasershouldnotrelyuponthemasstatementsorrepresentationsoffactbutshouldsatisfythemselvesbyinspectionorotherwiseastothecorrectnessofeachofthem;(iii)nopersonintheemploymentofMessrsHoddellStotesburyMorganLtdhasanyauthoritytomakeorgiveanyrepresentationorwarrantywhateverinrelationtothisproperty.(iv)unlessotherwisestatedallrentsorpricesquotedareexclusiveofVATwhichmaybepayableinaddition.(v)MessrsHoddellStotesburyMorganLtdhasnotmadeanyinvestigationsorotherwiseofanyissuesconcerningpollutionandpotentialland,building,airorwatercontamination.
Prospectivepurchasersmustundertaketheirownenquiriesandsatisfythemselvesinthisregard.Date:May2017
Forfurtherinformationortoarrangeaninspectionpleasecontact:-
Further Information
Brook Stotesbury [email protected] • DDI: 020 7318 1938
Paul Yeadon [email protected] • DDI: 020 7318 2030
SUBJECTTOCONTRACT&EXCLUSIVEOFVATwww.hsmuk.comSwitchboard • 020 7629 2030
Mondi, Parkway, Deeside Industrial Park, Deeside CH5 2NS
