F RMAL INDUSTRIAL PARK
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PRIME DISTRIBUTION AND MULTI-LET WAREHOUSING INVESTMENT OPPORTUNITY F RMAL INDUSTRIAL PARK NORTHWAY LANE, TEWKESBURY, GL20 8YG
Transcript of F RMAL INDUSTRIAL PARK
PRIME DISTRIBUTION AND MULTI-LET WAREHOUSING INVESTMENT OPPORTUNITY
F RMAL INDUSTRIAL PARKNORTHWAY LANE, TEWKESBURY, GL20 8YG
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Situated only 0.7 miles (2 mins) from Junction 9 of M5 Motorway providing immediate access to the national motorway network and beyond.
Located in an established industrial location in Tewkesbury.
The accommodation totals 285,735 sq ft (26,545.7 sq m) GIA.
13 units arranged in four modern terraces together with a single distribution warehouse of 206,845 sq ft.
Freehold.
AWULT of 4.96 years to expiry and 4.32 years to break.
Fully let to 9 tenants providing a diverse income profile.
Current contracted rent of £1,343,946 per annum equating to a low £4.70 per sq ft overall.
Considerable reversionary potential with recent lettings on estate at £8.47 sq ft overall.
We are instructed to seek offers in excess of £21,000,000 (Twenty One Million Pounds) subject to contract and exclusive of VAT for the UK Limited Company within which the property is held.
A purchase at this price would reflect a Net Initial Yield of 6.26% and a reversionary yield of 7.20% assuming purchaser’s costs of 2.30%.
The price also reflects a low capital value of only £73.49 per sq ft.
A high quality, multi let industrial estate situated within an
established industrial location
INVESTMENT SUMMARY
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LOCATION
Tewkesbury is located in the county of Gloucestershire, 7 miles north of Cheltenham and 15 miles south of Worcester.
M5
M6
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M3 M25 M20
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M42M54
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• NEWCASTLE-UPON-TYNE
• HULL
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• MANCHESTER LIVERPOOL •SHEFFIELD •
• STOKE
• NOTTINGHAM
WOLVERHAMPTON •BIRMINGHAM •
EXETER •
CARDIFF •• BRISTOL
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HGV DRIVE TIMES0 - 60 mins60 - 100 mins100 - 240 mins
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The town benefits from excellent road communications being positioned at Junction 9 of the M5 with the key road links being:
M5: Northbound connections to Worcester, Birmingham and the M50/M42/M6
M5: Southbound connections to Cheltenham, Gloucester Bristol and the M4
A46: North East to Coventry and the M40
A40: South East to Oxford and the M40
Tewkesbury is equidistant between Bristol and Birmingham Airports whilst Ashchurch Railway Station is in close proximity to the east and provides rail services to Oxford, Cheltenham, Gloucester and Birmingham. There is a direct train service from Tewkesbury railway station to Worcester, Gloucester, Cheltenham and Birmingham and an indirect service to London Paddington.
MOTORWAYM5 Junction 9 2 mins 0.7 milesM50 Junction Interchange 7 mins 4.6 milesM4/M5 Interchange 37 mins 38.8 miles M5/ M42 Interchange 38 mins 33.2 milesM4 Junction 15 46mins 44 milesM5/M6 Interchange 47 mins 46 miles
AIRPORTSBristol Airport 1 hr 7 mins 49.7 milesBirmingham International 51 mins 35.3 milesEast Midlands Airport 1 hr 24mins 66.5 milesLondon Heathrow 1hr 50 mins 78.8 miles
CITY / TOWN BY CARCheltenham 19 mins 7.2 milesGloucester 25 mins 10.8 milesBristol 51 mins 43milesSwindon 52 mins 34.2 milesBirmingham 55 mins 35 milesCoventry 1 hr 38 milesOxford 1hr 16 mins 40.7 milesCardiff 1 hr 20 mins 58.3 milesManchester 2hr 17 mins 103.1 milesLondon 2hr 25 mins 92.2 miles
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Nearby occupiers to Formal Industrial Park include such as;
The Tewkesbury area is seeing considerable development with a number of significant schemes underway which will boost the local economy;
Aerospace engineers MOOG have taken a prelet of a
184,000ft HQ office and production facility immediately to the south of Formal Industrial Park. The building is currently being developed by Barberry Developments and will PC in April 2022.
Robert Hitchins are developing a new
195,000 sq ft Cotswold Designer Outlet Village just to the south of the A46. The scheme will provide a 90 unit retail scheme with 2,100 car parking spaces, with completion due in 2023.
Dobbies Garden Centres have
prelet a 74,000 sq ft garden centre adjoining Junction 9 of the M5. This will be their flagship store for the South West.
Robert Hitchins are also
developing 850 homes, a school and local centre nearby, just to the south of the A46.
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SITUATION
The Property is situated within the established Ashchurch industrial area, which together with Tewkesbury Business Park (to the west of the M5 junction), forms the principle industrial areas for the town. Formal Industrial Park lies only 500 metres from Junction 9 of M5 and is easily accessed via the A46 and Northway Lane.
Situated 1 mile to the east is the Ministry of Defence (Defence Equipment and Support) Ashchurch site which is used for as a vehicle storage and distribution centre and has over 600 employees. In 2020 it was announced that there is to be a £270m revamp of this facility to includes part of the site being sold for future housing development.
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Newtown Trading Estate
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Tewkesbury
Mitton
Newtown
Walton Cardiff
Priors Park
Northway
The Mythe
Claydon
Worcester
Cheltenham & Gloucester
The Vinyards
Tewkesbury Abbey
Newtown Trading Estate
Green LaneBusiness Park
Ashchurch TradingEstate
Northway TradingEstate
Aston on Carrant
Aston Cross
Pamington
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Gloucester Road
Tewkesbury Road
Ministry of Defence
Ashchurch for Tewkesbury
TewkesburyBusiness
Park
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F RMAL INDUSTRIAL PARK
FORMAL HOUSE / BENSONS FOR BEDS
Formal House is the main national distribution unit for Bensons for Beds.
The main distribution warehouse comprises a single warehouse building, comprising three main interconnected warehouse sections together with a loading bay, all constructed with steel frame and profiled clad elevations under part lattice and part portal frame roofs. The warehouse was extended in the early 2000’s to the south east elevation with a steel portal frame and steel profile clad elevations.
Two-storey office accommodation is interlinked to the warehouse and extension and offers a combination of open plan office and storage accommodation. The specification is as follows:
Original building
Steel truss frame construction
6m clear internal height
Steel profile metal sheet clad elevations
8 ground level loading doors with loading access on 4 elevations
Two storey office accommodation
Canteen
Extension
Steel portal frame construction
7.8m clear internal height
Steel profile metal sheet clad elevations
7 dock level loading doors
2 ground level loading doors
DESCRIPTION
Formal Industrial Park comprises a mix of units comprising a single main distribution warehouse facility along with 4 modern multi let industrial terraces, and a further self-contained industrial unit at the entrance of the estate.
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MULTI-LET ACCOMMODATION
The multi-let buildings within the estate have been developed over three phases over a period of approximately 10 years and provide, modern, well specified industrial accommodation in 4 blocks together with the standalone unit F.
The first phase comprises Units A1 – A3 albeit units A1 & A2 have been combined.
Units D1 – D4 and Unit F were developed in the second phase and are the ‘starter units’ within the estate. Units D3 & D4 have been combined. Unit F is self-contained and is situated near the entrance of the estate offering extensive car parking.
Terraces B and C have each been combined into single units to provide self-contained warehouse accommodation for individual tenants although offer the scope to be returned to multiple occupancy if required.
The specification of the units is as follows:
Steel portal frame construction
6.5m - 7.4m clear internal height
Part brick part steel clad elevations / Plastic-coated steel-clad elevations
Office accommodation
Electric roller shutter doors
Translucent rooflights
Extensive car parking and loading
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Ordnance Survey © Crown Copyright 2021. All Rights Reserved.Licence number 100022432Plotted Scale - 1:1850. Paper Size - A4
SITE LAYOUTThe site extends to approximately 14.05 acres (5.69 hectares) providing an overall low site density of 42.2%.
TENUREThe property is held freehold.
A1-A2A3
B
C
D1 D2 D3 D4
BENSONS FOR BEDS
BENSONS FOR BEDSA1-A2
A3
B
C
D1D2
D3D4
F
F
PLANNINGAll units currently have planning consent for B1, B2 or B8 use.
There are no restrictions on hours for deliveries for Formal House.
There are the following restrictions on hours for deliveries for the following:
Units Mon - Fri Sat
A1 - A3 7.30am - 6.00pm 8.00am - 2.00pm
Unit B - D 7.30am - 8.30 pm 7.30am - 6.00pm
Unit F 8.00am- 6.00pm 8.00am - 4.00pm
DEVELOPMENT LANDPlanning consent for a further ‘Terrace E’ to include 3 terrace units comprising 6,965 sq ft (647.1 sq m)
Application No: 09/00039/FUL
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TENANCY SCHEDULE
The property is fully let to 9 tenants providing a passing rent of £1,343,946 per annum which equates to a low base rental of only £4.70 per sq ft overall.
Unit Tenant GIA (sq ft)
Lease Start
Lease Expiry
Break Rent Review
Rent p.a. Rent per sq ft
E.R.V. p.a. ERV Per Sq Ft
Exc L&T 1954 Act
Comments EPC
Formal House BensonsForBeds-Retail Ltd
206,845 21/07/2021 20/07/2026 - - £825,700 £3.99 £930,803 £4.50 No 12 months at half rent as incentive. Landlord to top up.3 months rent free to be granted start of year 4 if profits test passed for 2 consecutive years.Schedule of Condition.Part of the first floor offices have been sublet to JB Towers Limited.
C62
Unit A3 Oregon Tool U.K. Limited
13,416 01/01/2006 31/12/2026 31/12/2023 01/01/2024 £104,000 £7.75 £103,974 £7.75 Yes Lease extended on 25th August 2021.Rent reduces to £97,500 pa, 01/01/2024 subject to same day OMR review. Tenant only break option subject to 6 months notice. 1 month rent free if break is not exercised.
C69
Units A1 & A2 Pavillion Broadway Ltd
23,911 01/04/2019 31/03/2024 - - £156,000 £6.52 £179,333 £7.50 Yes Schedule of Condition. C68
Unit B Horizon Mobility Ltd
13,369 25/07/2019 24/07/2025 - - £80,660 £6.03 £103,610 £7.75 Yes Initial rent of £73,265 per annum until 25 July 2022 then increases to £80,660. Landlord to top up.
C58
Unit C Ari-Armaturen UK Ltd
14,447 08/02/2017 07/02/2032 08/02/2027 08/02/2022 £76,320 £5.28 £111,964 £7.75 Yes Tenant only break subject to 6 months notice.Schedule of Condition.
C60
Unit D1 SEP (Site Engineering Personnel) Limited
3,382 03/09/2021 02/09/2031 03/09/2025 02/09/2025 £28,000 £8.28 £28,747 £8.50 Yes Tenant only break subject to 6 months notice.Schedule of Condition.
C67
Unit D2 Harris Waste Management UK
2,185 06/09/2021 05/09/2026 - - £18,500 £8.47 £18,573 £8.50 Yes 6 months at half rent incentive. Landlord to top up.
C75
Units D3 & D4 P R Hall Ltd 5,564 28/11/2016 27/11/2026 - 28/11/2021 £33,066 £5.94 £47,294 £8.50 Yes Unit D3 - C58 Unit D4 - B47
Unit F1 A. & B. Glass Company Limited
2,616 01/10/2015 30/09/2023 - - £21,700 £8.30 £22,890 £8.75 Yes D78
TOTAL 285,735 £1,343,946 £4.70 £1,547,187 £5.41
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Unit Unit D3 & D4 Unit C Unit F1 Unit A1 & A2 Unit B
Upside
Event Rent review
Rent review
Leaserenewal
Lease renewal
Lease renewal
Date November 2021
February 2022
September 2023
March 2024
July 2025
Passing rent £5.94 psf £5.28 psf £8.30 psf £6.52 psf £6.03 psf
ERV £8.50 psf £7.75 psf £8.75 psf £7.50 psf £7.75 psf
43% 47% 5% 15% 29%
ASSET MANAGEMENT OPPORTUNITIES
There are multiple asset management initiatives that can be implemented within the estate to drive value and improve returns, underwritten by the most recent leasing transactions on the estate.
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COVENANT
Tenant
In November 2019 the combined trading entity of Harveys Furniture and Bensons for Beds, was sold by the Steinhoff Group to the retail specialist private equity firm Alteri Investors.
During the Covid-19 pandemic, Harveys Furniture in particular had severe strains on cash flow due to a significant impact on their supply chain and a fall in customer demand. This led to the combined Group falling into administration in June 2020. Following PwC’s appointment as administrators, Alteri Investors immediately took the opportunity to reacquire the Bensons for Beds business as part of a restructuring plan. At the time of the administration, Bensons for Beds operated from 243 outlets and the restructure has allowed for approximately 50 of their underperforming stores to be closed.
Alteri Investors have invested a further £25m into Bensons for Beds with specific focus on new locations and technology. This has included a new website, reshaping the store portfolio and further investment into product innovation.
One year on from the re-acquisition deal, the nationwide retailer has seen a significant increase in demand with suggestions of ‘like for like growth’ in double digits compared to an undisrupted 2019. Further to this, the business has recently announced an additional 45 jobs at its Huntingdon manufacturing facility and is taking a new lease of a 37,000 sq ft distribution warehouse in Huntingdon to compliment this. The company now employs in excess of 1,900 people nationwide.
Following the restructure, BensonsForBedsRetail Limited was incorporated in March 2020.
Further information on Bensons for Beds is available upon request.
% of in-come
Company Number
Creditsafe Rating
61.46% 12528962 29Turnover Pre-Tax
ProfitShareholder
N/A N/A N/A Pavillion Broadway is a family run, designer furniture retailer which was founded in the Cotswolds in 2008. The business specialises in complete interior solutions for the home, offering a wide selection of furniture, designer lighting and home décor. The business has a showroom situated within 50m of Formal Industrial Park as well as a retail warehouse on Tewkesbury Retail Park in Ashchurch close by. This facility within Formal Industrial Park is used for storage and distribution and is evidence of their commitment to this location.
% of income
Company Number
Creditsafe Rating
Year Turnover Pre-Tax Profit
Shareholder Funds
11.61% 09791464 5830/09/202030/09/201930/09/2018
N/A N/AN/A
N/A N/AN/A
£649,988 £501,321 £393,422
Previously known as Blount International, Oregon Tool is a pioneer in sales, manufacturing and distribution within the chainsaw, agriculture, forestry, and construction industries. Oregon Tool was founded in 1947 in Portland, US and now has an established global distribution network and exports to over 110 countries.
% of income
Company Number
Creditsafe Rating
Year Turnover Pre-Tax Profit
Shareholder Funds
7.74% 1734794 7731/12/201931/12/201831/12/2017
£8,162,464£7,204,372£6,815,941
£205,475£244,580£239,810
£1,650,020 £1,487,742 £1,276,041
Horizon Mobility was founded in 1992 and specialises in the design, manufacturing and distribution of mobility scooters. The Formal Industrial Park facility offers a showroom, sales and service area, as well as a ‘scooter hire’ offering. Customers include; private customers, NHS and Private hospitals, residential / care homes and schools, colleges and councils.
% of income
Company Number
Creditsafe Rating
Year Turnover Pre-Tax Profit
Shareholder Funds
6.00% 05928981 6731/12/202031/12/201931/12/2018
N/A N/AN/A
N/A N/AN/A
£375,265 £403,187 £260,725
ARI-Armaturen are a specialist valve company who were founded over 60 years ago. They specialise in the control, isolation, safety and steam trapping of liquid and gaseous media providing tailored product solutions for industry. Currently, the business supplies over 20,000 products for industry, HVAC systems, plant engineering and ship building.
% of income
Company Number
Creditsafe Rating
Year Turnover Pre-Tax Profit
Shareholder Funds
5.68% 04411301 8031/12/2020 31/12/2019 31/12/2018
n/a£5,093,927£4,160,589
£-----£487,073-£9,865
£1,191,438 £994,068 £596,089
M5 INDUSTRIAL MARKET
The M5 corridor has seen record levels of take up and demand over the last 12 months.
The wider West Midlands Industrial market also benefitted from record levels of demand with over 2.5m sq ft of take up in Q1 2021. Grade A supply for that period has also reduced to only 3m sq ft which is the lowest it has been in the last 5 years. Within the last 12 months, Worcester has specifically benefited from an increase in demand, with over 375,000 sq ft taken up across 5 transactions.
The Gloucester, Cheltenham and Tewkesbury markets have also continued to see strong performance over the last 12 months. Occupational demand has remained strong with limited vacancy rates within these local areas. This strong take up is evidenced by St Modwen’s 58-acre scheme at Gloucester where the first phase of 3 mid box units all pre-let.
The Bristol Industrial market saw a record 2020 in terms of demand, and Q1 21 saw a further 708,000 sq ft of take up, 51% up on the corresponding period in 2020 further evidencing the strength of the occupational market along the M5 corridors.
Supply continues to deplete across the M5 for logistics warehousing, and this has led investors such as Tristan, St Modwen and BentallGreenoak to all speculatively build schemes along the M5 corridor.
Below is a list of comparable leasing transactions for ‘mid-box’ to ‘big-box’units:
Property Date Tenant Area (sq ft)
Rent(PSF)
Worcester 163, Worcester Q3 21 Supersmart Services Ltd 163,000 £6.15
Unit 1 Sixways Park, Worcester Q3 21 Supersmart Services Ltd 116,777 £6.25
Unit 3, St Modwen Park, Gloucester Q4 20 Swantex Paper 74,000 £6.75
MOOG, Ashchurch, Tewkesbury Q3 20 MOOG 184,034 £8.25
Unit 2, Gateway 12 Business Park, Gloucester Q3 20 ProCook 56,000 £6.95
Turning to the smaller multi-let units, there has been less development, which coupled with high levels of demand has added to rental pressures, providing excellent short / medium term rental growth. This is evidenced by Northwood’s Furlong Park in Cheltenham where new units are now achieving £9.00 sq ft. With construction costs for new schemes increasing considerably, this will add pressure to quoting rents.
Below is a list of comparable leasing transaction for smaller units:
Property Date Tenant Area (sq ft)
Rent(PSF)
Comments
Unit 7C Delta Drive, Tewkesbury N/a Available 5,802 Quoting £8.00 Older estate,
Unit refurbished
12 Shannon Way, Tewkesbury Q3 21 Confidential 16,159 u/o Q£7.50 Hybrid Unit
C 60% office accommodation
Unit 7 Furlong Park, Cheltenham Q4 20 TVL Euro Engineering 5,485 £9.00 New unit
Unit 8 Furlong Park, Cheltenham Q4 20 TVL Euro Engineering 7,036 £9.00 New unit
Unit 7, Eastern Avenue Trading Estate, Gloucester Q4 20 Hermes 6,425 £7.50 Older estate, small yard
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INVESTMENT MARKET
The industrial and logistics sector within the UK has continued to be the most defensive sector of all the UK’s commercial property sectors since the Covid-19 pandemic. Prime yields continue to compress to record breaking levels and this is expected to continue in the medium term.
This has been largely due to increased demand and lack of supply for occupiers resulting in excellent rental growth projections. Furthermore, the reduction in appetite across other commercial property sectors has led to a substantial weight of capital seeking warehousing / logistics investment opportunities.
The following table illustrates the most recent comparable investment evidence:
Address Date of completion
Area(sq ft)
WAULT expiry (break) NIY Purchase Price Capital Value
(£ psf)
Orbit House, Ashchurch Industrial Estate, Tewkesbury Q3 21 55,398 10.00 (5.00) 5.20% £5.7m £102
Yodel, Ashbridge Road, Bristol Q1 21 55,680 3.8 4.50% £10.44m £188
Rockingham Gate, Avonmouth Q2 21 104,000 4.7 (3.7) 4.12% £15.9m £153
MOOG Controls, Ashchurch, Tewkesbury Q1 21 184,034 35 4.34% £35m £190
Dunbeath Court, Elgin Industrial Estate, Swindon Q1 21 56,332 4.9 (2.3) 5.69% £6.1m £108
Taper Portfolio - estates in Redruth, Plymouth and Exeter Q4 20 144,677 Portfolio 5.28% £18m £124
CONTACT
SUBJECT TO CONTRACT | EXCLUSIVE OF VAT© Crown Copyright 2021. All rights reserved. Promap licence number 100020449. Jones Lang LaSalle licence number 100017659. This plan is published for the convenience of identification only and although believed to be correct is not guaranteed and it does not form any part of any contract. Disclaimer - JLL for themselves and for the vendors or lessors of this property whose agents they are, give notice that:- a. the particulars are set out as a general outline only for guidance and do not constitute, nor constitute part of, an offer or contract; b. all descriptions, dimensions, references to condition and necessary permissions for use and occupation, and other details are believed to be correct, but any intending purchasers, tenants or third parties should not rely on them as statements or representations of fact but satisfy themselves that they are correct by inspection or otherwise; c. no person in the employment of JLL has any authority to make or give any representation or warranty whatever in relation to the property; d. Any images may be computer generated. Any photographs show only certain parts of the property as they appeared at the time they were taken. Copyright © Jones Lang LaSalle IP Inc. September 2021. All rights reserved.
ALLAN WILSON
+44 (0) 121 214 9941
+44(0) 7971 573462
BEN VOSS-WOOD
+44 (0) 121 632 6577
+44(0) 7733 302908
SIMON BENNETT
+44 (0) 117 930 5717
+44(0) 7808 290869
PROPOSAL
We are instructed to seek offers in excess of £21,000,000 (Twenty One Million Pounds) subject to contract and exclusive of
VAT for the SPV within which the property is held.
A purchase at this price would reflect a Net Initial Yield of 6.26% and a reversionary yield of 7.20% assuming purchaser’s
costs of 2.30%. The price also reflects a low capital value of only £73.49 per sq ft
ESTATE CHARGE
There is an estate charge within the estate for the recovery of landlord’s expenditure for the maintenance of common areas. The budget for March 2021 - March 2022 is £63,335 which equates to £0.15 psf for Formal House and £0.40 psf for the remaining units on the estate.
SPVFurther information on the UK Limited Company is available in the data room.
VAT
The property is elected for VAT. It is anticipated that the sale is by way of a TOGC.
DATA ROOM
Access to the data room is available upon request.
ENERGY PERFORMANCE CERTIFICATES
EPCs for the individual units are available to be viewed in the data room.
SURVEYS
The vendor sales pack includes a measured survey and building survey (Formal House only) which will be assigned to the purchaser. Copies of these surveys can be viewed in the data room.
F RMAL INDUSTRIAL PARKNORTHWAY LANE, TEWKESBURY, GL20 8YG
SHANNON JOHNS
+44 (0) 1179 305 659
+44(0) 7849 636665
