UNIT 2 JUNIPER WAY FENTON WAY SOUTHFIELDS BUSINESS...

UNIT 2 JUNIPER WAY FENTON WAY SOUTHFIELDS BUSINESS PARK BASILDON SS15 6TD

PRIME INDUSTRIAL SALE AND LEASEBACK INVESTMENT OPPORTUNITY WITH INDEX-LINKED REVIEWS

BASILDON SS15 6TD PRIME INDUSTRIAL SALE AND LEASEBACK INVESTMENT OPPORTUNITY WITH INDEX-LINKED REVIEWS

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INVESTMENT SUMMARY

A single let well specified distribution warehouse investment

The property is situated on the Juniper West Estate within the established Southfields Industrial Estate approximately 1 mile from the A127 which links to Junction 29 of the M25 approximately 6 miles to the west.

The property was built in 2002 and benefits from 8m eaves, 2 dock level and 1 surface level loading doors and a self-contained secure yard area

Freehold.

Gross internal area of 34,061 sq ft (3,164 sq m)

Situated on a site of 0.62 hectares (1.53 acres)

The investment will be sold by way of a Sale and Leaseback. The property is to be let to WCM Europe Limited on a new 20 year Full Repairing and Insuring (FRI) lease from the date of completion. The lease will be drawn inside the 1954 Landlord and Tenant Act.

The initial passing rent of £300,000 per annum, equating to £8.81 per sq ft and will be subject to 5 yearly rent review provisions, which allow for the higher of the open market rent or a RPI indexation increases, capped and collared at 1.50% and 4.50% per annum

We are instructed to seek offers in excess of £5,575,000 (Five Million Five Hundred and Seventy Five Thousand Pounds), subject to contract and exclusive of VAT.

A purchase at this level reflects a net initial yield of 5.00% and a minimum reversionary yield of 5.39% in 2023 allowing for purchasers costs of 7.58%.


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Michelin

P2P

Basildon

J30 M25 / LondonA127

Hornby Square

Saffron Court

Johnson Controls

MHS

Musto

WCM

Schenker

Seax Court

Ford


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LOCATION

Basildon is located in Essex within the South East of England, and is one of the key industrial locations in the eastern M25 region.

Basildon is a major business centre in Essex, with a population of circa 175,000 and the second largest economy along the eastern section of the river Thames after Canary Wharf. The town employs some 77,000 people.

Basildon is home to internationally renowned and highly successful advanced manufacturing and engineering companies including:

• Ford Motor Company Ltd

• New Holland Agriculture

• Selex ES

• Honeywell/MK Electric

• Gardner Aerospace

• Konica Minolta

The town also attracts a number of large distribution /multinational occupiers such as:

• Argos

• Amazon

• Yodel

• NYSE

• Michelin Distribution

• DB Schenker

• Kent Foods Ltd

CONNECTIVITY

Vehicles

Distances Miles

M25 (J29) 6

Southend-On-Sea 16

Chelmsford 19

Central London 31

Sea Ports

Distances Miles

London Gateway 9

Port of Tilbury 13

Harwich 62

Felixstowe 68

Dover 76

Airports

Distances Miles

Southend 16

London City 24

Stansted 32

Gatwick 48

Heathrow 69

SITUATION

Juniper West is situated within the Southfields Industrial Area of Basildon. The immediate area is well served by the good road infrastructure with access to the A127 Southend Arterial Road being gained via Westmayne (B148). The M25 motorway Junction 29 is just six miles to the west.

Southfields is the closest suburb of Basildon to the M25 and has benefitted from superior rental levels and growth.

Occupiers at Southfields include Ford Motor Company (Research & Engineering), Michelin, Toomey Motor Company, D H Industries, DHL, MHS Radiators and DB Schenker.

LONDON

BASILDONROMFORD

ROCHESTER

MAIDSTONE

TONBRIDGE

CHELMSFORD

BRIXTON

WOOLWICH

ORPINGTON

HARLOW

A176

A13A13

A127

A130

HERTFORD

ST ALBANS

POTTERS BAR

ENFIELD

TOTTENHAM

PURLEY

J27/6

M25

M25

M11

M11M1

A1(M)

M4

M20

M26

M23

M25

J29

J30

J28

M20

M2

DARTFORD

LOW

ER

DU

NTO

N R

OA

D

29

30

A127

A218

A1235

A1014

A127

A13

A13

M25

M25

FENTON WAY

BASILDON

R I V E R T H A M E S

London Gateway

DP World LondonGateway Port

Laindon

Pitsea

Benfleet

Basildon

WE

ST

MA

Y

NE

WEST MAYNE

BROADMAYNE

HIG

H R

OA

D

HIG

H R

OA

D

STO N

EWAY


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DESCRIPTION

The property, completed in 2002, is a self-contained distribution warehouse used as mission critical premise for the UK operation. The building is of steel portal frame construction across two bays with high quality offices at first floor level.

WCM have undertaken an extensive refurbishment of the unit at a cost of in excess of £250,000 over the past 12 months, with an upgrading of the lighting within the unit and the offices content. As such, the unit provides a high specification including:-

ACCOMMODATION

The building has been measured on a Gross Internal Area basis in accordance with the RICS Code of Measuring Practice (6th Edition). The areas are as follows:

Floor sq m sq ft

Ground floor warehouse/ ancillary offices

2,714 29,217

First Floor Offices 251 2,697

Ancillary mezzanine/office 199 2,147

Total 3,164 34,061

The unit benefits from 35 designated parking spaces to the front of the unit.

Warehouse Specification

• 8m eaves height to the underside of the haunch

• 37.5 kN sq m floor loading

• Sodium Lighting

• 2 dock level loading doors

• 1 level access loading door

• External lighting to the yard

• 42m deep loading yard

Office Specification

• Raised floors

• Double glazing

• Suspended ceilings with recessed Lighting

• Gas central heating and air conditioning

• Carpet tiles


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SITE

The site extends to approximately 0.62 hectares (1.53 acres).

TENURE

Freehold.

TENANCY

The investment will be sold by way of a Sale and Leaseback. The property is to be let to WCM Europe Limited on a new 20 year Full Repairing and Insuring (FRI) lease from the date of completion. The lease will be drawn inside the 1954 Landlord and Tenant Act.

The initial passing rent of £300,000 per annum, equating to a low £8.81 per sq ft.

The lease will be subject to 5 yearly rent review provisions, which allow for the higher of the open market rent or a RPI indexation increases, capped and collared at 1.50% and 4.50% per annum.

COVENANT

WCM are one of the leading suppliers of high end metal and plastic parts to the High End and Luxury vehicles market globally.

WCM work closely alongside brands including Rolls Royce, Bentley and Jaguar Land Rover to design, prototype, manufacture and assemble parts on limited edition vehicles produced by these brands.

WCM is made up of 6 divisions across 5 operational sites globally and employs in excess of 160 employees. The subject property is used as a mission critical distribution unit for the business and sits adjacent to the company HQ and manufacturing unit within Juniper Way.

WCM Europe Limited (05551941)

FY Ending 31st Dec 2014



Turnover £8.901m £13.600m £17.490m

Pre Tax Profit £761k £959k £2.537m

Total Net Worth £2.050m £2.840m £3.128m

Further information on WCM can be found on their website, http://www.wcm.com


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BASILDON INDUSTRIAL MARKET

Basildon is one of the most important industrial centres in Essex with its links to the M25 being a major attraction to industrial and distribution occupiers and such prominence within the region has seen Basildon develop into the second largest economy in the Thames Gateway outside Canary Wharf.

Due to the strength of the Basildon Industrial market, there is still a significant supply and demand imbalance for accommodation across a range of sizes with the availability rate in Essex now standing at a lowly 3.0%. The continual lack of available space has led to substantial rental growth over the past 3 years of almost 10% per annum. Speculative development is now occurring within the town, notably Genesis, the 4 unit scheme developed by LaSalle, which provides 95,000 sq ft across various unit sizes.

Headline quoting rents in Basildon are now ranging from £8.75-£9.25 per sq ft dependent on specification, with the gap between secondary and prime rents narrowing as the availability of the Grade A space diminishes. However, when comparing Basildon to competing local markets of Chelmsford and West Thurrock, the rental levels still show value and room for further growth in the coming years.

INDUSTRIAL MARKET SNAPSHOT

• Prime rents of £9.25 per sq.ft.

• Prime land values > £1,200,000

• Majority of demand focussed on 15,000 - 50,000 sq ft

• Limited supply of second hand and new build

• Development pipeline in the town focussed on larger warehouses sized 50-100,000 sq ft.


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INVESTMENT MARKET

The industrial investment market has shown resilience to Brexit and pricing continues to harden as investors continue to acknowledge the fundamental change, where industrial is becoming one of the most robust and defensive sub sectors in the commercial market place.

As comparatively little supply is being built against the growing occupational demand, strong rental growth projections are attracting investors to locations such as Basildon, where outperformance against other sectors is forecast.

Address TownSize

(Sq Ft)Income Length

(to break)Tenant Rent (pa) Achieved Price NIY RR Basis Date Sold

Eastman Way Hemel Hempstead 41,292 9.75 66 Books Ltd £412,920 c.£7,900,000 c.4.90% OMRV Under Offer

Zenith Industrial Estate Basildon 197,476 8.19 Multi-let £1486,786 £36,500,000 3.85% OMRV Jun-18

Dukes Park Harlow 22,302 8.75 Scotch Frost £168,000 £3,500,000 4.50% OMRV May-18

Haverhill Business Park Haverhill 19,897 20.00 MKM Building Supplies £200,000 £9,260,000 4.90% RPI 1.5%-3.5% Feb-18

Sipson Road Heathrow 16,383 20.00 National Express £450,000 £11,975,000 3.50% RPI 2%-4% Dec-17

Silkwood Business Park Wakefield 80,335 15.00Prima Flow t/a F&P

Wholesale£380,000 £7,500,000 4.75% CPI 2%-4% Dec-17

3 Roy Richmond Epsom 20,874 15.00Grafton Merchanting GB

Limited£225,000 £4,640,000 4.55% OMRV Dec-17

Burnt Mills Industrial Estate Basildon 57,314 5.87 Yodel Delivery Network £356,451 £5,910,000 5.60% OMRV Oct-17

Garamonde Drive Milton Keynes 158,970 25.00 Apex Space Solutions £755,110 £15,050,000 4.66% RPI 2%-4% Oct-17

Summit Deykin Avenue Birmingham 89,129 15.00 Aston Manor £557,056 £11,000,000 4.80% CPI 1.5%-3% Aug-17

Compton Close Basildon 43,000 14.00 Selco Trade Centres £220,000 £4,200,000 4.92% OMRV Apr-17

Below is a range of investment transactions highlighting the current market tone:


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RUNNING YIELD PROFILE

Assuming the minimum uplift of 1.50% per annum, the property will deliver the following attractive running yield profile across the remainder of the lease:

Quote Price - 5.00%

2023 Increase – 5.39%

2028 Increase – 5.80%

2033 Increase – 6.25%

PROPOSAL

We are instructed to seek offers in excess of £5,575,000 (Five Million Five Hundred and Seventy Five Thousand Pounds), subject to contract and exclusive of VAT

A purchase at this level reflects a net initial yield of 5.00% and a minimum reversionary yield of 5.39% in 2023 allowing for purchasers costs of 7.58%.

VAT

The property has been elected for VAT and the purchase price is exclusive of any VAT that may be chargeable. The proposed transaction structure means the sale cannot be treated as a transfer of a going concern

EPC

The property has an Energy Performance Certificate rating of C(61). Further information is available upon request

CONTACT

For further information or to arrange an inspection please contact:

Philip Colman

[email protected]

020 3141 3520

07768 070 249

Glenny for themselves and for the vendors of this property whose agents they are give notice that: a) the particulars are set out as general outline only for the guidance of intending purchasers 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 given in good faith and are believed to be correct, but any intending purchaser should not rely on them as statements or representations of fact but should satisfy themselves by inspection or otherwise as to the correctness of each of them; c) no person in the employment of Glenny has any authority to make or give any representation or warranty whatever in relation to this property. June 2018. Design by Tayler Reid.

UNIT 2 JUNIPER WAY FENTON WAY SOUTHFIELDS BUSINESS...

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