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Prime Long Let Petrol Station InvestmentBP Oil UK Ltd, Pippin Service Station, Oxford Road, Calne, Wiltshire SN11 8AA
INVESTMENT SUMMARY
n Prominent location in the town centre
n Recently refurbished and extended petrol filling station
with convenience store
n Let to the substantial covenant of BP Oil UK Ltd (D&B 5A1)
for a further 18.25 years (without break)
n Sub-let to the strong covenant of Malthurst Ltd (UK’s
largest independent forecourt retailer - D&B 5A1)
n Rent £160,000 per annum
n 5 yearly upward only reviews with fixed increases in 2020
and 2025 to 2.5% per annum compounded
n Freehold
n Offers sought in excess of £2,860,000 which reflects a
net initial yield of 5.25%, rising to 5.95% in 2020 and
6.73% in 2025, assuming costs of purchase of 6.56%
LOCATION
Calne is an attractive town in Wiltshire located 6 miles east of Chippenham, 13 miles west of Marlborough, 16 miles south west of Swindon and 20 miles east of Bath.
The town is bisected by A3102 Oxford Road and A4 London Road which provides access to Swindon and J16 M4 to the north east and Chippenham and J17 of M4 to the west.
The town has a resident population of 17,500 and is a popular commuting town to Bath, Bristol and Swindon.
SITUATION
The property is situated in the town centre on the roundabout junction of A3103 Oxford Road and The Pippin. The High Street and town centre’s main car park are within 150 metres to the south of the property. Surrounding uses within the immediate vicinity include residential, a Sainsbury’s supermarket and a Dominos Pizza unit.
The property is the principal petrol filling station serving the town, both in terms of location and quality of development. The only other petrol filling station is a very small Texaco branded site 0.5 miles from the property.
SITE
The site extends to 0.16 hectares (0.40 acres).
ACCOMMODATION
The property has been measured on a gross internal area basis in accordance with the RICS Code of Measuring Practice 6th Edition and extends to the following areas:
Description Area Sq.m Area Sq.ft
Retail Sales 165.08 1,776
Ancillary 55.54 598
Total 220.62 2,374
DESCRIPTION
The property comprises a recently upgraded and extended petrol filling station providing a comprehensive range of facilities including a forecourt, convenience store unit, valeting facilities as well as eight customer parking spaces.
The forecourt is situated at the front of the site and comprises 4x6 nozzle multi-product dispensers arranged in a square formation. The retail unit is positioned immediately to the rear of the forecourt and comprises a single storey unit fitted out as a Spar convenience store with two Costa coffee express machines, baking facilities, a customer WC and ancillary accommodation. There is an ATM machine positioned in the front elevation.
Valeting facilities comprise a rollover car wash situated to the side of the retail unit and a vacuum machine and air/water tower to the rear of the site.
TENURE
The property is held freehold.
TENANCY
The property is let to BP Oil UK Ltd for a term of 20 years from 13 January 2015. The lease is held on fully repairing and insuring terms subject to 5 yearly upward only rent reviews. The 1st and 2nd reviews are fixed increases to £181,025 per annum in 2020 and £204,813 per annum in 2025 (equivalent to 2.5% per annum compounded). The 3rd review is to the higher of passing rent or open market value. The current rent is £160,000 per annum.
The property has been sublet to Malthurst Ltd for a term of years from 15 July 2016 expiring on 6 January 2035. The sublease is held on the same terms and review structure as the headlease at a rent of £160,000 per annum. The sub-tenant has options to break the lease on 15 July 2026 and 15 July 2031, subject to 6 months prior written notice.
Malthurst Ltd (t/a MRH) is a 5A1 D&B rated covenant and is the UK’s largest independent forecourt retailer, owning and operating circa 450 sites. The company has rebranded the property as a Spar convenience store and has a fuel supply agreement with Esso. Malthurst has further plans to incorporate a fast-food concession within the retail unit.
A summary of Malthurst Ltd’s accounts is set out below:
MRH
Malthurst Limited(co. no. 3445529)
27/09/2015(£000’s)
27/09/2014(£000’s)
27/09/2013(£000’s)
Turnover 717,525 633,868 558,997
Pre Tax Profit / (Loss) 17,054 10,439 8,854
Shareholders’ Funds 58,205 48,171 45,562
PETROL FILLING STATION OCCUPATIONAL AND INVESTMENT MARKET
Occupier demand for petrol filling stations remains strong, driven by a lack of available sites and opportunities to extract value by extending forecourt shops to incorporate fast food and coffee outlets. Retailers actively taking sites include; BP/M&S, Sainsbury’s, Euro Garages and Applegreen, amongst other major independent retailers.
Prime forecourt investment yields are now at 5% NIY and evidence has been recorded below this level (see below).
Investors have been attracted to the high quality assets, long term leases, guaranteed rental growth and strong tenant covenants, as well as vacant possession values that significantly underpin investment values. Investors into the sector include a large number of the major institutional funds, as well as property companies and private investors.
Date of Transaction
Prperty Address
Tenant Lease Terms Net Initial Yield
August 2016 Co-Op, East
Peckham Bypass,
Tonbridge, Kent
Co-Operative
Foodstores
Limited
13 years unexpired. Rent £240,000 per annum,
market review in 2019 and fixed increase to
£271,536 per annum in 2024.
5.5%
July 2016 Co-Op Portfolio
(x4 sites)
Co-Operative
Foodstores
Limited
18.5 years unexpired with 2% annual increases. 5.00%
April 2016 Euro Garages,
Stevenage
Euro Garages
Limited
New 15 year lease with 5yrly open market reviews
(upwards only).
5.50%
March 2016 MRH BP/
Spar, Ely Road,
Waterbeach,
Cambridgeshire
Malthurst
Petroleum
Limited
9.75 year unexpired term, rent review in 2020 –
2.5% per annum compounded growth.
5.58%
November 2015
BP/M&S,
Linlithgow,
Scotland
BP Oil UK
Limited
25 year lease with tenant option to break at year
20. Annual rent increases of 2%.
5.00%
October 2015
Shell, Milton
Keynes
Shell 22.5 year unexpired FRI lease with fixed increase
at end of yr2. All reviews thereafter on 5yrly basis
to RPI, collar of 1% and cap of 3% per annum.
4.66%
COVENANTS
BP Oil UK Ltd is a 5A1 D&B rated covenant and is the 7th biggest forecourt retailer in the UK with circa 330 sites. The company has been based in the UK for over 100 years and currently employs over 15,000 people. Globally BP is one of the world’s leading international oil and gas companies operating in 80 counties and employing in excess of 83,900 people.
A summary of BP Oil UK Ltd’s accounts is set out below:
BP Oil UK Limited(co. no. 446915)
31/12/2014(£000’s)
31/12/2013(£000’s)
31/12/2012(£000’s)
Turnover 3,876,000 4,430,000 5,260,000
Pre Tax Profit / (Loss) 6,000 (17,000) (13,000)
Shareholders’ Funds 490,000 472,000 488,000
CONTACTSFor further information or if you wish to arrange a viewing please contact:-
Misrepresentation Clause : The accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and other details contained herein are not guaranteed and are for general guidance only and prospective purchasers or tenants must not rely on them as statements of fact or representations and must satisfy themselves of their accuracy. Neither Franck-Steier Price Ltd, Barber Wadlow nor any of their employees or representatives has any authority to make or give any representation or warranty or enter into any contract whatever in relation to the property. Prices and rents quoted in these particulars may be subject to VAT in addition. The reference to any mechanical or electrical equipment or other facilities at the property shall not constitute a representation (unless otherwise stated) as to its state or condition or that it is capable of fulfilling its intended function. Prospective tenants/purchasers should satisfy themselves as to the condition of such equipment for their requirements.
ADAM WADLOW07814 [email protected]
BEN BLACKWALL0121 513 [email protected]
EPC
The property has an EPC rating of C51. The report is available on request.
VAT
The property is elected for VAT and therefore VAT will be payable on the purchase price. It is anticipated that the sale will be dealt with as a TOGC.
PROPOSAL
We are instructed to seek offers in excess of £2,860,000 (Two Million Eight Hundred and Sixty Thousand Pounds) subject to contract and exclusive of VAT.
A purchase at this level would reflect a net initial yield of 5.25%, rising to 5.95% in 2020 and 6.73% in 2025, assuming costs of purchase of 6.56%.
