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STAKEHILL INDUSTRIAL ESTATE MIDDLETON, MANCHESTER, M24 2RP
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY
INVESTMENT SUMMARY• One of the premier distribution
locations in the North West
• Strategic location immediately adjacent to Junction 20 of the M62
• A secure detached industrial unit providing 104,345 sq ft with 11.10 metre eaves
• Let to Royal Mail Group Limited on a 10 year lease from June 2018 (expiry May 2028)
• Rental income of £500,870.40 per annum (only £4.80 per sq ft), subject to an upwards only rent review to OMRV in year 5
• ERV of circa £573,898 (£5.50 per sq ft)
• Royal Mail Group - D&B rating 5A1
• Freehold
Offers are sought in excess of £8,310,000 subject to contract and exclusive of VAT. A purchase at this level reflects an attractive initial yield of 5.65% and a low capital value of only £79.64 per sq ft (assuming purchasers costs of 6.69%).
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY 2
TESCO
TRELLEBORGNFT LOGISTICS
YODEL
PROSEAT
BOOKER
HOWARD TENENS
ANOVO
JLG
COMFY QUILTS
TS UKTS UK
FOOTASYLUM
MANCHESTER
COMFY QUILTS
M62
M627M
J20M62
LEEDS TO MANCHESTERRAILWAY LINE
TOUCHET HALL ROADWHITHAM MILLS
TOOLSTATION
PSV GLASS
SAINSBURYS
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY 3
1021A
291
121
41
M6
M61
M65
M66
M62
M67
M60
11
11
10
4
4
5
5
6
6
8
9
9
1011
14
1617
19
19
20
20
21
21
22
20
21
22
23
24
25
28
30
29
19
8 6
65
54
3 3
3
3
2
3
3
3
2
1
22
27 2625
24
23
M56
M6122
3
A627 (M)2
1
A533
A58
A6
A6
A6
A56
A58
A58
A666
A646
A6010
A627
A523
A56
A56
A57
A556 A537
A34
A34
A646
23
BOLTONBURY
SALFORD
ROCHDALE
PRESTON
MANCHESTER
OLDHAM
WARRINGTON
ManchesterAirport (MAN)
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY
LOCATIONManchester is the premier regional centre in the UK and part of a thriving city region. It is the largest economic area outside London with a gross value added of £59.6bn. Over 51% of the North West’s total economic output is produced by the Greater Manchester region.
The city region is home to 80 of the FTSE 100 as well as the UK’s largest university, world-class research and over 100,000 students, Europe’s largest student population. Greater Manchester’s highly skilled workforce of over 7m people is within 1 hour’s drive making it an ideal business location.
Greater Manchester is set apart from competing regions as it has a large quantity and quality of potential employees across a wide range of different industries including ICT, bio science, advanced materials, media and digital, aviation, food, logistics, financial and professional services. No other city region in Europe has invested as much in its media and digital scene as Manchester.
Manchester is at the centre of the UK with direct connection to the national motorway network to the North, South, East and West. 20 million people and over 500 million sq ft of retail floor space can be reached within a 2.5-hour drive time.
Manchester is on the West Coast Mainline and benefits from rapid and frequent services from Manchester Piccadilly to Liverpool, Leeds, Birmingham and London.
Manchester Airport is situated 5 miles to the south of the city centre and remains the UK’s third airport and largest outside of London. It is a global gateway to the North of England. Not only does it serve 22m passengers annually, it also currently handles 120,000 tonnes of freight and mail annually connecting the North of England to 160 destinations around the world. Its largest markets are the Far East, North America and the Middle East.
SECOND LARGEST ECONOMY IN THE
UK - £59 BN.
DIRECT CONNECTION TO THE NATIONAL
MOTORWAY NETWORK
7M PEOPLE WITHIN A ONE-
HOUR DRIVE
SERVICES FROM MANCHESTER TO
LIVERPOOL, LEEDS, BIRMINGHAM AND
LONDON
GLOBAL GATEWAY TO THE REGION
HANDLING 120,000 TONNES OF FREIGHT
AND MAIL
MOST COMPETITIVE BUSINESS LOCATION
IN EUROPE
HOME TO 80 OF THE TOP 100 FTSE
COMPANIES
ONE OF THE TOP TEN WORLD’S
CITIES
4
20
19
M62
M62
M62
A627(M)
A627(M)
A627(M)
MAN
CHES
TER
ROAD
A6046 MIDDLET O
N R
OAD
A664 M
ANC
HESTER
RO
AD
A6046 MID
DLETO
N R
OAD
A604 6 HOLLIN LANE
A66
4 ROCHDALE
ROAD
BOARSHAW ROAD
BOARSHAW LANE
OOZEWOOD ROAD
B619
5
M
IDDLETON ROAD
STAKEHILL LANE
THORNHAM LANE
THORNHAM OLD ROAD
LANGLEY LANE
2
LEEDS
MANCHESTER
SITUATIONStakehill Industrial Estate has long been established as one of the premier industrial and distribution locations in the North West of England. It is located approximately 8 miles to the North of Manchester City Centre in between the M60 orbital and the M62 trans-Pennine motorways. It is particularly well located to serve the North, East and West regions of Greater Manchester, Yorkshire and Lancashire.
The estate has unrivalled motorway access through being located immediately adjacent to the A627 (M) which provides direct access to Junction 20 of the M62 within 1.5 miles, and Junction 21 of the M60 orbital motorway approximately 2.5 miles to the South.
Manchester International Airport is located 22 miles to the South . Over 60 airlines use the airport offering direct flights to over 225 destinations worldwide and handling 120,000 tonnes of freight and mail annually.
The estate was originally established in the 1970’s and since this time has developed into a prime
distribution location extending to approximately 2.5 million sq ft in total with a site boundary of approximately 210 acres (85 hectares). The estate has a range of institutional ownerships, property companies and owner occupiers.
As well as seeing considerable investment over recent years the estate caters for a wide range of occupiers including Footasylum (140,000 sq ft), Tool Station (150,000 sq ft), Royal Mail (100,000 sq ft), Yodel (100,000 sq ft), Howard Tenens (170,000 sq ft) as well as existing long-term occupiers including Comfy Quilts (350,000 sq ft), Booker (100,000 sq ft), Scania (140,000 sq ft), UK Cables (55,000 sq ft), Tontarelli (250,000 sq ft), Proseat, NFT (90,000 sq ft) and Woodbridge Foam (82,000 sq ft) amongst others.
The property is situated to the South of the wider estate occupying a secure site fronting Touchet Hall Road.
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY 5
M6
A1(M)
A1(M)
M1
M1
M6A1(M)
A1(M)
M1
M6
M55 M62
A14
A14
M25
M26M25
M23M3
M4M4
M5
M5
M40M50
M74
M8
M77
M90
CHESTERFIELD
HATFIELDCHEPSTOW
M67LIVERPOOL
BIRMINGHAM
BRISTOL
SOUTHAMPTON
LONDON
LEEDS
CARLISLE
NEWCASTLEUPON TYNE
EDINBURGH
GLASGOW
MANCHESTER
ROAD A627(M) 0.5 mileM62 (Jct 20) 1.5 milesM60 Orbital (Jct 21) 3 milesM66 6.5 milesM61 11 miles
AIRPORTSManchester International 22 milesLeeds Bradford 37 miles
TOWNSRochdale 4 milesOldham 5 miles Bury 8 milesManchester 8 milesBolton 10 milesLeeds 30 miles
PORTSLiverpool 60 minsHull 90 minsBirmingham 100 minsGrimsby 105 mins
RAILMills Hill Station 1 mileManchester 11 minsLeeds 80 mins
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY 6
DESCRIPTION The property comprises a modern refurbished self-contained warehouse of steel portal frame construction within 4 bays. The property has the following specifications:
• Pitched metal clad roof with approximately 10% roof lights
• Profile metal clad elevations• 11.10 metre eaves to the
underside of haunch• 8 dock level and 6 drive in
loading doors• High quality ground floor office
accommodation• Extensive concrete service yard
with parking for 30 trailers • Separate delineated car parking
area for 35 cars• Secure fenced perimeter with 2
gated access points
The property was extensively refurbished at a cost of circa £1 million in 2017/2018 including a new overclad roof, providing a 25 year guarantee.
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY 7
ACCOMMODATIONThe property has been measured in accordance with the RICS Code of Measuring Practice (7th Edition) on a gross internal basis as follows: -
Description Area (sq ft) Area (sq m)Warehouse 101,076 9,390Office 3,272 304TOTAL 104,345 9,694
THE PROPERTY HAS A TOTAL SITE AREA OF 4.97 ACRES (2.01 HECTARES) AND A SITE COVERAGE OF 48%.
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY
WAREHOUSE
TOUCHET HALL ROAD
3 LEVEL LOADING DOORS
OFFICES
8 DOCK LEVELLOADING DOORS
3 LEVEL LOADING DOORS
FOR IDENTIFICATION PURPOSES
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TENUREThe property is held freehold.
TENANCYThe property is let to Royal Mail Group Limited for a term of 10 years from 01 June 2018 (expiring 31 May 2028).
The passing rent is only £500,870.40 per annum (£4.80 per sq ft) subject to an upwards only rent review to the open market value at the end of the 5th year.
The property is held on full repairing and insuring terms subject to a schedule of condition.
The tenant benefits from a rent free period totalling 16 months, made up of an initial 6 months rent free and 20 months at half rent. Any rent free will be topped up.
COVENANTRoyal Mail is one of the UK’s most recognised brands with a history stretching back 500 years and currently delivering more letters in the UK than all of its competitors combined. It currently employs circa 159,000 people across the group.
Royal Mail Group would be considered an undoubted covenant and have a D&B rating of 5A1 reporting the following accounts: -
25.03.2018 (000’s) 26.03.2017 (000’s) 27.03.2016 (000’s) 26.03.2015 (000’s)Turnover £7,608,000 £7,651,000 £7,675,000 £7,772,000Pre-Tax Profit £6,000 £146,000 £99,000 £415,000Tangible Net Worth £3,300,000 £4,870,000 £3,686,000 £3,400,000
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY 9
OCCUPATIONAL MARKET COMMENTARYStakehill Industrial Estate is seen as one of the premier distribution locations within the North West with direct access to the regional motorway network via the A627(M). The estate was originally developed in the 1970’s and totals approximately 2.5 million sq ft of self-contained distribution and multi-let units on 210 acres (85 hectares).
The North West industrial market is well positioned when compared with other regions and sectors due to continued investment in infrastructure. Key examples of this include the opening of Peel Ports £400 million deep water container terminal Liverpool2 in 2016, the £600 million New Mersey Gateway Bridge in 2017, the completion of the £190m A556 trunk road between the M56 and M6 motorways in 2017 and continued expansion/development of Manchester Airport as a major global hub.
The distribution market in the North West is experiencing consistent and significant levels of demand for good quality ‘big box’ accommodation with an average take up of 4.3 million sq ft per annum making it the most active region outside of the South East over the last 24 months. Units between 90,000 – to 150,000 sq ft have seen consistent strong demand representing over 65% of overall ‘big box’ take-up.
The current shortage of deliverable sites across Greater Manchester has seen the majority of recent speculative development concentrated toward the M6 Corridor. As such there is limited new build supply across North Manchester and we expect good quality 2nd hand accommodation to be the focus of occupier demand for the near future.
The lack of Grade A/B supply, together with consistent occupier demand in the North West, has resulted in vacancy levels decreasing both in prime and secondary industrial accommodation by over 7% on 2017 levels. As such rental growth in the North West has out-performed most parts of the UK and remains a key performance driver with North West industrial rental growth forecast to be over 2% per annum (source: B8RE).
Prime distribution rents are now established in excess of £6.50 per sq ft with good quality 2nd hand rents achieving in excess of £5.50 per sq ft.
ESTIMATED RENTAL VALUEWe are of the opinion that the ERV for this building is circa £573,898 (£5.50 per sq ft). Key recent lettings in the North West are as follows: -
Date Tenant Address Size (sq ft) Rent per sq ft GradeQ2 2019 Green Group Unit 1 Merlin Park,
Trafford Park62,107 £6.50 B
Q3 2018 McCormick Link 95, Hareshill Business Park, Heywood
95,000 £6.35 A
Q3 2018 Arnord Madrix Unit 365 Four Oaks Road, Preston
84,051 £5.26 A
Q2 2018 Countryside Properties
Zodiac, Europa Boulevard, Warrington
128,944 £5.95 B
Q2 2018 IFCO Systems Kingsland 85, Kingsland Grange, Warrington
85,000 £5.85 B
Q2 2018 Globus T2, Trafford Point, Manchester
98,000 £6.50 A
Q1 2018 Toolstation Target M62, Stakehill
148,748 £5.15 B
Q1 2018 Mardix Group Sigma 100, Blackburn
110,000 £6.25 A
Q4 2017 Green Group Barton Dock Road, Trafford Park
133,636 £5.35 B
Q2 2017 R J Edwards Warrington South, Warrington
105,100 £5.50 B
Q1 2017 TS (UK) Ltd G2 Stakehill Industrial Estate, Middleton
44,612 £5.75 B
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY 10
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY 11
INVESTMENT MARKETSales volumes in the North West are currently well ahead of the 10 year average as investor demand for the region continues to surge.
There remains a significant weight of capital chasing the industrial sector with investors buoyed by strong occupational fundamentals including record levels of take up, historically low availability rates and a constrained development pipeline.
On average, 260 acres per annum of industrial land has been lost to residential development as local authorities seek to address the housing crisis. The combination of diminishing stock levels and robust occupational demand, driven by e-commerce requirements has created a positive demand/supply imbalance, and a strong rental growth dynamic.
Current investor demand is being driven by sectors offering strong occupational growth and the potential to enhance income returns.
The continued structural shift provided by the evolution of online retailing, the consolidation of retailers and the automotive push on occupational demand, all set against a backdrop of historically low availability and lack of alternative investment opportunities has resulted in the industrial and logistics market attracting strong potential from a wide range of investors.
By way of comparable evidence, we believe these examples are the most relevant to support our pricing and are indicative of the type of typical buyers for this type of product and lot size.
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY
Date Tenant Property Area(Sq Ft)
AWULTC Rent Pa (£PSF) Price (£) NIY (%) Capital Value (Per Sq Ft)
Purchaser
Dec 2018 GA Pet Foods Revolution Park, Chorley
181,191 10.00 1,008,729 (£5.45)
20,365,000 4.64 £110 Staffordshire CC
Aug 2018 Sicame London Medway Commercial Park, Medway, Kent
64,055 10.00 £464,399 (£7.25)
8,534,000 5.1 £133 NFU
Aug 2018 Royal Mail Royal Mail, MK95 Michigan Drive, Tongwell, Milton Keynes
112,000 10.10 £357,280 (£3.19)
9,900,000 3.38 £88 London Metric
April 2018 Crown Packaging Manufacturing UK Limited
Metalbox, Radar Road, Leicester
185,494 10.00 £940,000 (£5.07)
17,100,000 5.15 £92 FWHRE
April 2018 Swan Commercial Services Ltd
Honywood Road, Basildon,
134,183 9.50 £958,522 (£7.25)
20,750,000 4.33 £155 Aberdeen Standard Investments
Jan 2018 AO.com Crossflow 380, Weston Road, Crewe
386,750 8.80 £1,972,440 (£5.10)
35,188,000 5.25 £91 Tritax
Dec 2017 PrimaFlow F&P Wholesale, Silkwood Business Park, Wakefield
80,335 15.0 £380,000 (£4.73)
7,500,000 4.75 £93 Watford Council
Nov 2017 Amazon Logistics North, M61 junction 4, Bolton
358,822 15.00 £2,134,991 (£5.95)
47,605,000 4.20 £133 AVIVA
Oct 2017 Tesco Wingates Ind Estate, Bolton
275,155 4.30 £1,395,036 (£5.07)
25,100,000 5.20 £91 CCLA
Aug 2017 Royal Mail Team Valley Trading Estate, Gateshead
207,812 13.50 £899,161 (£4.32)
16,190,000 5.20 £78 Merseyside LA
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PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY 13
PRIME SINGLE LET DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY
EPCThe EPC rating is C64. A copy of the Energy Performance Certificate is available upon request.
VATThe property has been elected for VAT and it is the intention to treat this transaction as a Transfer of a Going Concern (TOGC).
PROPOSALWe are instructed to seek offers in excess of £8,310,000 (Eight Million, Three Hundred and Ten Thousand Pounds) subject to contract and exclusive of VAT.
A purchase at this level reflects a net initial yield of 5.65% assuming purchasers costs of 6.69% and a low capital value of £79.64 per sq ft.
FURTHER INFORMATIONData site access is available upon request.
CONTACTTo discuss the opportunity or to arrange an inspection please contact: -
MISREPRESENTATION ACT 1967B8RE for themselves and for vendors or lessors of this property whose agents they are give notice that:-The particulars are set out as a general outline for the guidance of intended purchasers or lessees and do not constitute, nor constitute part of, an offer or contract.• All descriptions, dimensions, reference to condition and necessary permissions for use and occupation and other details, are given
without responsibility and any intending purchasers or tenants should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them.
• No person in the employment of B8RE has any authority to make or give any representation or warranty whatever in relation to this property.
Finance Act 1989. Unless otherwise stated, all prices and rents are quoted exclusive of VAT. Property Misdescriptions Act 1991. These details are believed to be correct at the time of completion but may be subject to subsequent amendment. May 2019.
SIMON WOOD JOHN BURROWS B8RE [email protected] [email protected] 01925 320520 01925 320520
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