PRIME SOUTH-WEST RETAIL INVESTMENT

211 HIGH STREET CHELTENHAM

Affluent regency spa town on the edge of

the Cotswolds in Gloucestershire.

INVESTMENT SUMMARY

Cheltenham is an affluent regency spa town on

the edge of the Cotswolds in Gloucestershire

The opening of John Lewis in 2018 will

boost the town’s retail offering further

100% prime retail investment

Well configured retail unit

Let to the undoubted national covenant

of Nero Holdings Limited

Unexpired lease term of 7.5 years to Caffè Nero

Freehold

PROPOSAL

INCOME: £65,000 PER ANNUM

OFFERS IN EXCESS OF: £1,230,000 (subject to contract)

NET INITIAL YIELD:

5 .0%

M20M23M3

M4

M25

M11

M180M18M58

M60

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M65

M40

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M1

M62

M6

M56

M54

M53

LIVERPOOL

BLACKPOOL

SHEFFIELD

LEEDS

MANCHESTER

DERBYSTOKE-ON-TRENT NOTTINGHAM

OXFORD

CAMBRIDGE

BRISTOL

CARDIFF

PLYMOUTH

LONDON

PORTSMOUTH

SOUTHAMPTON

BIRMINGHAM

CHELTENHAM

Car

By road, junctions 10 and 11 of the M5 motorway, lie circa 3.5 miles north-west and west of the town centre, providing direct access to Birmingham, Bristol and the rest of the UK’s motorway network.

Rail

By rail, Cheltenham Spa train station provides regular services to London Paddington, with a journey time of 2hr 15mins. Regular services also operate to Bristol, Birmingham, Manchester, Newcastle and Glasgow.

THE TOWN BENEFITS FROM EXCELLENT TRANSPORT LINKS:

CHELTENHAM SERVES AN EXTENSIVE PRIMARY CATCHMENT AREA AND DOMINATES THE RETAIL PROVISION IN THE REGION

CHELTENHAMThe town is situated

approximately 100 miles north west of London, 40

miles north of Bristol and 9 miles east of Gloucester.

Location

The Regency Spa town of Cheltenham is a strong

retail and tourist destination and is home to a number

of renowned festivals including Cheltenham Horse

Racing, Literature, Jazz, Science and Music festivals.

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DEMOGRAPHICS

The total population within the Cheltenham primary

catchment area is 393,000 people and a shopping

population of 248,000 people.

The town benefits from healthy tourism numbers, with

Gloucester County Council estimating over 460,000

staying visitors and 5.6 million day trippers visiting each

year contributing over £235m to the local economy.

CHELTENHAM IS PROJECTED TO SEE CLOSE TO AVERAGE GROWTH IN POPULATION OVER THE PERIOD 2016-21

The town has a significantly above average proportion

of adults of working age categorised within the most

affluent AB social group and least affluent D and E social

groups are particularly under represented and the social

group C2 is moderately under represented.

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REGENT ARCADE located off High Street

with an entrance also from Regent Street

and consists of 185,000 sq ft of retail

space, anchored by TK Maxx and H&M.

Other tenants include River Island, Boots,

Schuh, Flying Tiger, Claire’s, Ernest Jones,

HMV and Ann Summers.

The former Beechwood Shopping Centre

situated off the eastern part of High

Street was a two level centre anchored by

Debenhams until its closure in February

2016. The centre has been demolished and

replaced with a new 115,000 sq ft John

Lewis Department Store which is due to

open in Autumn 2018.

RETAILING IN CHELTENHAM

Cheltenham’s main shopping area comprises

High Street, together with a number of streets

running perpendicular from it; Promenade

and Regent Street are the principal shopping

streets to the south, whilst Clarence Street,

Pittville Street and Winchcombe Street are

the main streets to the north. Cheltenham

town centre retail floorspace is estimated to

be 1.30m sq ft.

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RETAILING IN CHELTENHAM

THE BREWERY is a retail and leisure

development situated just north of the

subject property. The scheme opened in

2006 and is anchored by a large Cineworld

alongside a selection of restaurants including

Chiquito's, Nando's and Prezzo.

PHASE 2 OF THE BREWERY INCLUDES

THE REDEVELOPMENT OF A NUMBER OF UNITS

FRONTING THE HIGH STREET TO PROVIDE NEW RETAIL UNITS, A HOTEL & RESIDENTIAL DWELLINGS

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SITUATION

The subject property is situated on the north east side

of High Street in close proximity to the junction with

Clarence Street and Promenade.

The property lies at the northern end of High Street,

close to the prime pitch of Promenade. This section of

the High Street is pedestrianised between the hours

of 10am and 6pm with access for buses only.

There are plans that are currently being

considered by Gloucestershire County Council

to restrict traffic movement at Boots Corner

(junction between High Street, Clarence Street/

North Street and Promenade).

The proposed plans would reduce traffic flows to

only bus and cyclists between the hours of 10am

and 6pm and allow loading vehicles and taxis

only outside these hours. This would effectively

link the northern part of High Street to the

southern part of High Street and Promenade

and strengthen the flow of High Street which

is anchored by Primark and Brewery Quarter to

the north and the new John Lewis to the south.

NEARBY RETAILERS INCLUDE:

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TenureThe property is held freehold.

TenancyThe property is let in its entirety to Nero Holdings Limited on a full repairing

and insuring lease for a term of 15 years from 8 March 2010. The current

passing rent is £65,000 per annum and is subject to an upwards only rent

review in 2020.

There is a tenant only break clause on 8th March 2020.

DESCRIPTION

The property comprises an attractive mid-terraced retail asset fronting onto

High Street. The property is of concrete frame construction with a stone facade

fronting High Street below a flat roof.

The property is arranged over ground and first floors. The retail element is provided

over the ground floor with ancillary on first floor. The property is serviced from

the rear via Rose and Crown Passage off St Margaret’s Road (A4019).

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Covenant Information

Nero Holdings Limited (Company No 03288178), was founded in 1997

by Gerry Ford and is headquarters in London. Caffè Nero currently

operate more than 825 coffee houses worldwide.

The company has reported the following financial performance:

31/05/16 31/05/15 31/05/14

Turnover £278,761,000 £233,747,000 £215,496,000

Profit Before Tax £24,237,000 £23,797,000 £22,538,000

Net Worth £191,791,000 £168,194,000 £144,677,000

Nero Holdings Limited PLC has a Dun & Bradstreet rating of 5A 1

showing ‘minimum’ risk of business failure.

AccommodationThe property has been measured in accordance with the RICS Code

of Measuring practice (6th Edition) and provide the following Net

Internal Areas:

FLOOR USE SQ M SQ FT

Ground Sales 157.09 1,691

ITZA 782 units

First Ancillary 46.69 1,579

TOTAL 203.78 3,720

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Rental ValueWe have devalued the current passing rent to show £76.92 Zone A,

applying A/25 to the ancillary area at first floor. The most recent letting

of 206 High Street to David Clulow in April 2017 on a ten year FRI lease

with a tenant only break after 5 years reflected a net Zone A of £93.21.

VATThe property has been elected for VAT purposes. It is anticipated that

the investment sale will be treated as a Transfer of a Going Concern

(TOGC).

EPCEPC available upon request.

Investment Comparables

ADDRESS TENANTS WAULT DATE PRICE NIY

108-110 The Promenade

Joules & Vinegar Hill

5.78 For sale £6.03m 5.00%

124 High Street Flight Centre 10.0 Sep 2016 £2m 4.94%

162-164 High Street EE 4.5 Apr 2016 £3.95m 3.97%

201/209 High Street Primark 6.3 Nov 2015 £11.63m 4.96%

156-160 High Street Office Shoes 9.75 Jul 2015 £3.70m 4.50%

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James CogavinE: jamesc@lunson-mitchenall .co.uk

T: 020 7297 4814

Chris WattE: chrisw@lunson-mitchenall .co.uk

T: 020 7478 4967

Pete DowningE: pdowning@downingbentley.co.uk

T: 01242 222 369

DISCLAIMER: Lunson Mitchenall on its behalf and for the Vendors or Lessors of this property whose agents they are, give notice that: 1. These particulars are set out as a general outline only for guidance to intending Purchasers or Lessees and do not constitute any part of an offer or contract. 2. Details are given without any responsibility and any intending Purchasers, Lessees or Third Parties 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. 3. No person in the employment of Lunson Mitchenall has any authority to make any representation or warranty whatsoever in relation to this property. 4. Unless otherwise stated, all prices and rents are quoted exclusive of VAT 2017.

Proposal

We are instructed to seek offers for our client’s freehold interest in excess of

£1,230,000 (One Million, Two Hundred and Thirty Thousand Pounds), subject

to contract and exclusive of VAT. A purchase at this level will reflect a net initial

yield of 5.0% after allowing for purchaser’s costs of 5.95%.

FURTHER INFORMATION

For further information or to arrange an inspection of the property, please

contact:

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