ASTRA ENGINEERING PRODUCTS LTD...ASTRA ENGINEERING PRODUCTS LTD LOCATION The Advanced Manufacturing...

ASTRA ENGINEERING PRODUCTS LTD

LONG LE T INDUSTRIAL OPPORT UNIT Y

ASTRA ENGINEERING PRODUCTS LTDQUEENS ROAD, ADVANCED MANUFACTURING HUB, BIRMINGHAM, B6 7NH

LONG LET URBAN INDUSTRIAL OPPORTUNITY



INVESTMENT SUMMARY Long income single-let industrial facility.

Prime ‘Golden Triangle’ location approximately 0.5 miles south-west of Junction 6 of the M6 Motorway and 2.5 miles north of Birmingham City Centre.

Situated within Birmingham’s Advanced Manufacturing Hub (“AMH”) – a joint initiative between Birmingham City Council and Homes England aimed at promoting the manufacturing sector.

AMH occupiers include Rolls Royce, Guhring, Salts Healthcare, Hydraforce and Mayflex.

Total floor area of 54,682 sq ft (5,080 sq m) including 4,969 sq ft (461 sq m) of accommodation across a gatehouse, canopy and mezzanine, set on a 2.6 acre site with 48% coverage.

Fully let to Astra Engineering Products Limited, which has been in occupation since the 1980s.

Recently extended lease (no breaks) expiring September 2039 (19 years unexpired).

A low passing rent of £227,500 p.a. from a fixed rent review in September 2020, reflecting £4.16 psf.

The property is predominantly held freehold (1.84 acres), incorporating all built accommodation, with a proportion of the ancillary yard (0.72 acres equating to 28% of the site) beneath the A38(M) held long leasehold from Birmingham City Council at a peppercorn rent.

We are instructed to seek offers in excess of £3,500,000 (three million, five hundred thousand pounds), subject to contract and exclusive of VAT reflecting a low capital value of £64 psf which is underpinned by vacant possession sales nearby.

A purchase at this level reflects a Net Initial Yield of 6.10%, based on the passing rent of £227,500 p.a. and assuming normal purchaser’s costs of 6.50%.


LOCATIONThe Advanced Manufacturing Hub is situated to the north-east of Birmingham city centre and immediately adjacent to Junction 6 of the M6, with direct links to the A34, A38(M) and A5127.

Birmingham is the UK’s second city with a GDP of £121 billion, the UK’s largest regional economy outside of London and the 10th largest city economy in Europe. The city has one of the largest regional labour pools in the UK with an available workforce of 4.3 million people within an hour’s drive of the city centre.

Birmingham is an important manufacturing and engineering centre, employing over 100,000 people in the industry. Manufacturing in the West Midlands region has been re-energised by significant investment within the automotive industry by companies including JLR, BMW, The London Taxi Company and Rolls Royce - many of whom have direct links with the AMH.

BY ROAD

DISTANCE TIME

Birmingham City Centre 2.5 miles 10 mins

Solihull 10 miles 25 mins

Birmingham Int. Airport 12 miles 18 mins

Lichfield 17 miles 30 mins

Redditch 18 miles 46 mins

Manchester 85 miles 1 hr 49 mins

London 117 miles 2 hrs 18 mins

BY RAIL

Aston Station lies a 7-minute walk away (0.3 miles) with direct links to Birmingham New Street Station in 6 minutes.

M62

M42

M40

M6

M6

M6TOLL

M1

M1

M11

M2

M20M25

M25

M3

M4

M5

A1

PORTSMOUTH

LEEDS

MANCHESTER

SHEFFIELD

HULL

FELIXSTOWE

SOUTHAMPTON

BRISTOL

LIVERPOOL

DOVER

LONDON

OXFORD

BIRMINGHAM

STAFFORD

CREWE

LEICESTER

NOTTINGHAM

SWANSEA

CARDIFF

CAMBRIDGE



LONG LE T INDUSTRIAL OPPORT UNIT YLONG LE T INDUSTRIAL OPPORT UNIT Y

SITUATIONThe property occupies a prominent position on the junction of Queens Road and Aston Hall Road, accessible via Lichfield Road and the A38(M) dual carriageway – the principal arterial routes connecting Junction 6 of the M6 Motorway (0.5 miles) and Birmingham City Centre (2.5 miles).

The surrounding area comprises a mixture of manufacturing facilities, many of which have recently been developed, with a number of logisitics and ‘last mile’ distribution units outside the AMH.

ADVANCED MANUFACTURING HUB

Birmingham’s AMH is a joint initiative between Homes England and Birmingham City Council aimed at growing the advanced manufacturing sector. Birmingham already has the greatest number of firms within the advanced manufacturing sector in the UK. The 20 hectare (49 acre) site is a designated regional investment zone and can facilitate individual units ranging from 15,000 sq ft up to 155,000 sq ft.

The area has seen an increasing level of development activity and many nearby sites have been cleared to allow for new industrial developments. A private developer has recently acquired plots 3 & 4 of the AMH for speculative development following a competitive bidding process, with achieved land values in excess of £900,000 per acre.

ASTON

WITTON

DUDDESTON

ADDERLEY PARK

BORDERSLEY

MOOR ST

SNOW HILL

JEWELLERYQUARTER

NEW STREET

FIVE WAYS

RO CKY LAN E

6 M6

ASTO

N E

XPRE

SSW

AY

A38(M)

LICH

FIEL

D ROAD

A4540

A41

A456

A34

A45

ASTON UNIVERSITY

EXPRESSWAY INDUSTRIAL ESTATE | BIRMINGHAM

BIRMINGHAM

AMH KEY STATISTICS:

• The region has approximately 25% of the UK’s skilled advanced engineering workforce.

• There are 18 universities inside a one-hour travel time of Birmingham with c. 320,000 students.

• 23,000 engineering and technology students are within an hour of Birmingham.

• Approximately 30% of the UK’s automotive production and employment is within one hour of Birmingham.

• Advanced Engineering generates c. £8 billion for the Greater Birmingham economy.

• Greater Birmingham is home to over 4,200 advanced engineering firms.

• The wider West Midlands region benefits from nearly 270,000 people employed in manufacturing.

For further information please visit: www.amh-birmingham.com



SALTS HEALTHCARE

GUHRING

VILLA PARK STADIUMMAYFLEX

SERTEC THERMOTEC

ASTON RAILWAY STATION

ROYAL MAIL

ATS

MERCEDES BENZ

HOWDENS

PTS

M6 JUNCTION 6

BIRMINGHAM CITY CENTRE


ACCOMMODATIONDESCRIPTION AREA (SQ FT) AREA (SQ M)

Warehouse 39,231 3,645

Stores Building 4,760 442

Offices 5,722 532

SUB TOTAL 49,713 4,619

Rear Gatehouse 178 16

Mezzanine 4,048 376

Canopy 743 69

OVERALL TOTAL 54,682 5,080

Ordnance Survey © Crown Copyright 2020. All Rights Reserved.Licence number 100022432Plotted Scale - 1:1250. Paper Size - A4


THE PROPERTYThe property comprises a three-bay industrial unit and ancillary storage building with two storey offices, a gatehouse, parking to the front and yard to the rear.

The industrial unit is of steel portal frame construction with profile metal cladding beneath a pitched roof. The offices are brick built with flat roofs, located to the front of the property and are two storeys in part.

The central bay has two-storey offices to the front and two loading doors to the rear with an eaves height of 10m, while the left and right hand bays each have a loading door to the rear, 4.7m eaves and single storey offices to the front. The separate stores building is elevated slightly on the site and benefits from a separate loading door.

The property has recently undergone an external refurbishment programme including the upgrade or replacement of all cladding and new perimeter steel fencing. Full details available upon request.

TENUREThe industrial facility, office accommodation and primary yard space are wholly situated on the freehold element of the property (shaded red), while a small proportion of the property is held long leasehold from Birmingham City Council (shaded blue) which is used for open storage and parking.

The long leasehold element has been retained by the council due to the presence of the A38(M) which runs at a high level over this portion of the site. The interest is for a term of 99 years from April 1977 at a peppercorn and prohibits development directly beneath the dual carriageway on this element of the title, although development on the freehold element is unrestricted.

NOTE:- Reproduced from the Ordnance Survey Map with the permission of the Controller of H.M. Stationery Office. © Crown copyright licence number 100024244 Savills (UK) Ltd. NOTE:- Published for the purposes of identification only and although believed to be correct accuracy is not guaranteed.



TENANCYThe property is let in its entirety to Astra Engineering Products Limited.

The occupational lease has recently been extended to provide a 19 year unbroken term expiring September 2039. The passing rent is £227,500 p.a, from a fixed rental uplift in September 2020. The lease is drawn on full repairing and insuring terms and is subject to 5-yearly upward only OMRV reviews with the next review in September 2025.

The tenant has been in occupation of the property for over 30 years and the recent lease extension demonstrates its long-term commitment to the building.

COVENANTAstra Engineering Products Limited has been operating for in excess of 30 years and is an established engineering firm specialising in presswork and welding projects.

The company has developed its pressing and welding assembly lines in conjunction with the requirements of its clients. As a result it has developed a strong market position, particularly in the automotive sector. Key clients include Jaguar Land Rover, DURA, G-TEKT and UNIPRES.

The company has experienced continued year-on-year sales growth over the last 5 years prior to lockdown. The company’s latest accounts show the following financial summary:

2018 2017 2016

Net Current Assets (Liabilities) £540,695 £314,673 £119,357

Tangible Net Worth £1,011,643 £893,631 £759,699


OCCUPATIONAL MARKETThe Midlands industrial and distribution market continues to show resilience, with rents and demand improving year-on-year. This has been through ongoing growth of the ecommerce sector, which in turn has been accelerated by the recent lockdown due to COVID-19, along with the subsequent demand from 3PLs and parcel operators that service this market. There is also further demand from other sectors including automotive and manufacturing firms with the likes of JLR and Rolls Royce making large commitments to the Midlands market. This is predominantly driven by its strong position within the area known as the ‘Golden Triangle’, the area from which 90% of the UK’s population are within a four-hour drive and is therefore the UK’s most valuable and strategic manufacturing, distribution and logistics location.

The vacancy level across the UK’s industrial market is estimated at 6.6%, however there is a marked undersupply of available space in Birmingham with a vacancy rate of 2.9% in Q2 2020. As a result, it is anticipated that this asset class will continue to experience strong rental growth.

URBAN INDUSTRIAL LOCATION WITHIN THE GOLDEN TRIANGLE

MARKED UNDERSUPPLY OF AVAILABLE SPACE IN BIRMINGHAM

ADDRESS SIZE (SQ FT) DATE TENANT RENT (PSF) TERM

Unit 14-15, Erdington Industrial Park, Birmingham

34,552 Dec-19 Leacy MG Ltd £5.25 10 years

Unit 10-11, Erdington Industrial Park, Birmingham

57,240 May-19 FGF Ltd £5.70 10 years

Unit 1, Hay Hall Business Park, Birmingham

45,790 Mar-19 Jeavons Eurotir Ltd £6.00 10 years

The following are letting comparables from more modern buildings close to the subject property which demonstrate clear room for rental growth to current headline levels:

ADDRESS SIZE (SQ FT) DATE TENANT RENT (PSF) TERM

Birmingham 100, Walsall Road, Birmingham

100,511 Jun-19 PrimaFlow Ltd (trading as F&P Wholesale)

£6.25 10

Barberry 65, AMH, Birmingham 82,932 Feb-19 Mayflex £6.82 10

Apollo, AMH, Birmingham

95,013 Sep-17 Salts Healthcare £6.50 15


DEMAND FROM JLR & ROLLS ROYCE MAKING LARGE COMMITMENTS TO

THE MIDLANDS MARKET


INVESTMENT MARKETGiven the recent market turbulence across all sectors, industrial and logistics investment has still reached £1.12bn for H1 2020 and is proving a desirable asset class for investors looking to deploy capital into a sector with a positive occupational market.

The sector has continued to outperform other investment markets, buoyed by a scarcity of good quality investment opportunities and demand-led upward pressure on rental levels - a trend which is expected to continue for the foreseeable future, especially for those properties located in key urban and distribution locations. This has acted as a catalyst for occupiers competing for units alongside investors. Furthermore, even after the recent lockdown from COVID-19, non-prime assets are achieving yields well in excess of historic trends for the sector.

The following table sets out a number of relevant transactions concluded within the last 18 months in the wider Midlands area with similar attributes, along with a number of vacant possession sales.

TOTAL INDUSTRIAL INVESTMENT VOLUMES REACHED £1.12BN IN

H1 2020

SHORTAGE OF INDUSTRIAL INVESTMENT OPPORTUNITIES

3-YEAR ROLLING AVERAGE TO THE HIGHEST LEVEL EVER

RECORDED AT £3.71BN

ADDRESS SIZE (SQFT)

TENANT/ PURCHASER

UNX TERM CERTAIN (YRS)

PRICE NIY CAP VAL (PSF)

Quayside Drive, Walsall 30,292 Carrier Rental Systems 9.80 £2.35M 5.80% £78

Unit 1-5, Cherwell Enterprise Park 53,916 H J Heinz Manufacturing UK Ltd 7.00 £4.10M 6.30% £76

Al-Ko Kober Ltd, South Warwickshire BP, Southam

88,061 AL-KO Kober Ltd 11.30 £6.50M 6.00% £74

Units A-E, 36a Vanguard Way, Shrewsbury

43,058 Manbat 10.00 £4.53M 6.00% £105

80 Park Road, Aston 68,362 West Midlands Accesible Transport Ltd

Vacant £4.80M N/A £70

Sams Lane, West Bromwich 21,171 Safe Fence Ltd Vacant £1.50M N/A £71

16 Highlands Road, Solihull 23,384 Sure Store Vacant £1.94M N/A £81

Birmingham’s AMH is a proven location for investment, with a number of buildings being sold at record yields within the past couple of years, this includes:

ADDRESS SIZE (SQFT)

TENANT (PURCHASER)

UNX TERM CERTAIN (YRS)

PRICE NIY CAP VAL (PSF)

Barberry 65, AMH 65,710 Mayflex UK 10 £8.85M 4.75% £138

Apollo, AMH 95,013 Salts Healthcare 10 £12.31M 4.70% £130





PROPOSALWe are seeking offers in excess of £3,500,000 (Three Million, Five Hundred Thousand Pounds), subject to contract and exclusive of VAT. Based on an annual rent of £227,500, a purchase at this level will reflect an attractive net initial yield of 6.10% after purchaser’s costs of 6.50%.

This reflects a low capital value of £64 per sq ft.

FURTHER INFORMATIONVAT

The property is elected for VAT. It is intended that the sale will be treated as a Transfer of a Going Concern (TOGC).

Energy Performance Certificates

E (114)

CONTACTSFor further information on viewings, please contact the selling agents:

NICK WOOD +44 (0) 121 200 4574 +44 (0) 7866 177 811 [email protected]

RICHARD FLETCHER BREWER +44(0) 203 428 2945 +44(0) 782 534 3420 [email protected]

MAX HULSE +44 (0) 121 634 8492 +44 (0) 787 099 9287 [email protected]

CHARLIE BURT +44(0) 203 320 8227 +44(0) 7870 999 124 [email protected]

Important Notice

Savills, their clients and any joint agents give notice that:

1. They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact.

2. Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Savills have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise.

Designed and Produced by Savills Marketing: 020 7499 8644

September 2020

ASTRA ENGINEERING PRODUCTS LTD...ASTRA ENGINEERING PRODUCTS LTD LOCATION The Advanced Manufacturing...

Documents

Transcript of ASTRA ENGINEERING PRODUCTS LTD...ASTRA ENGINEERING PRODUCTS LTD LOCATION The Advanced Manufacturing...