Prime High Street Retail Investment 6-7 Oxford Street & 1-11 Whitewalls Swansea, SA1 3AE
ixr0rctyshf1vn5nyniy Prime High Street Retail Investment 6-7 Oxford Street & 1-11 Whitewalls Swansea, SA1 3AE
Swansea
Swansea 6-7 Oxford Street & 1-11 Whitewalls
Investment Summary
· Swansea is the second largest commercial city in Wales and the dominant commercial and administrative centre for south west Wales
· 100% prime retailing location on the corner of the pedestrianised Oxford Street and Whitewalls. Topshop is arguably one of the best shops in the city centre.
· Close proximity to the entrance of The Quadrant Shopping Centre · Located in the heart of a £500m regeneration project · Secured to the strong national covenants of Topshop and Costa Coffee · WAULT of 4.9 years to expiry · Newly rebased rent · Long Leasehold providing 99 years and 11 months unexpired with a payaway of
10% of the market rent
Proposal
Net Income: Offers in excess of: Net Initial Yield:
£283,000 per annum £3,660,000 (subject to contract) 7.25%
Newtown
Birmingham
Shropshire Hills
Ludlow
Birmingham Kidderminster Airport
Coventry
A483
Builth Wells
M40
A49
M5
Leominster Worcester
A44
Stratford-upon-Avon
A483
Hereford
A429
A40 M4
A465
A470
A49 A465
Abergavenny
A449
M50
M5
Cheltenham Gloucester
A48
The Cotsworlds
A40
SWANSEA
Newport
M4
Cardiff
Cardiff Airport
Weston-super-Mare
Bristol
Bath
Swindon
M4
Location
Salisbury
Swansea is the coTamunmtoenrcial and administrative centre for south west Wales, it is also the second largest city in the country. The city is located on the south west coast, 40 miles west of Cardiff, 80 miles west of Bristol and 185 miles west of London.
SwEaxnetseera's mainline station provides a direct serviceBotournCeamroduiftfh Central in 50 minutes and London Paddington in 3 hours.
M69 M1
M6
A11
A140 A143 Lowe stoft
A11
M45
Demographics Northampton
Newmarket
A140
Cambridge
M1
Ipswic h
M40
Swansea haBseadfoprodpulation of 239,000 (Source: 2011 CA1e34nsus) which is set to increase by 12%
Milton Keynes
over the next decade, rising to 553,000 people within a 30 minutAe12drive time. The population
M11
which regard SLwuatonnsea aSstetvheenairgemain shopping destCinoalcthioesnteirs 273,000, rankFinelgixsttohweecity 36th
out of the 200 Promis Centres (Source: Promis).
Aylesbury
Stansted
Oxford
The retail market is suAp1 (Mp)orted by the 24,000 students studying at either Swansea University
M40
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number of into a new
students is set world-leading
research, innovation and educational campSuosu.thTehned-uopn-gSreaading of the Singleton Park Campus,
in September 2015, wLOithNanDinOveNstment of £75 million has already increased student and staff
ReadinngumbeM4rs by 20%. HTehatheronwext phase of the deveLolondpomn Genatte(w£a4y50 million) is set to be complete in
2020. The total deAvirepolrot pment is one of the UK's largest knowledge economy projects in the
UK and within the top five in Europe.
Ramsgate
Basingstoke
M3
TourGisumildfiosrda thriving industry in Swansea and haMsaiadsstiognneificant impact on spending. There were
4.6m visitors to the aCrreaawlieny2015 (Swansea CityRCooyaulncil) with an estimated expendDiotvuerer of around Winchester £402m. In terms of employment, the public sTeurnvbirciedgseaWreetlhlse largest sourFcoelk,eastcocnoeunting for 27%
of employment in Swansea. Other large employers include Tata Steel and The Admiral Group.
Southampton Portsmouth
Brighton
Hastings Eastbourne
Newpor t
Plymouth
TThoerqucaityy benefits from fantastic road communications with junctions 44 and 47 of the M4 approximately 4 miles to the north.
Cardiff International Airport is located 40 miles south-east of Swansea and provides daily flights to a an array of UK and mainland European destinations
Swansea 6-7 Oxford Street & 1-11 Whitewalls
Swansea 6-7 Oxford Street & 1-11 Whitewalls
Retailing in Swansea
Swansea city centre has approximately 1.65 million sq ft of retail accommodation and is considered the dominant centre in the region. The prime retail pitch focused on the pedestrianised section of Oxford Street which runs west to east between Princess Way and Union Street. Retailers located on Oxford Street include:
The Quadrant Shopping Centre comprises of 440,000 sq ft of retail floor space towards the south of Union Street. The centre's anchor tenant is Debenhams with other retailers including Boots, New Look, and Superdry also represented. Located between Oxford Street and The Quadrant Centre is Swansea Market, which is Wales's largest indoor market. The council have invested £1.9m refurbishing the market including upgrading the roof.
The City and County of Swansea are spending £500m on redeveloping the 16.8 acre former St David's Shopping Centre and Oystermouth Road sites. Their proposal includes 200,000 sq ft of retail and leisure, including a cinema offer, offices, hotel and a 3,500 seat arena.
Situation
The property is situated in a prominent position at the corner of Oxford Street and Whitewalls, which forms part of Swansea's prime retailing thoroughfare. The property is opposite Marks & Spencer on Oxford Street, Primark on Whitewalls and is close to both the entrances of the Quadrant Centre as well as Swansea's indoor market. Adjacent retailers along Oxford Street include River Island, Sports Direct, Next, Select and H&M.
Description
The property comprises a 1960's purpose built retail premises of concrete framed construction arranged over four storeys. Topshop trade from ground and first floors, with ancillary accommodation to the upper floors. Costa Coffee occupy a section of the ground floor only.
Accommodation
Tenant
Ground Sales (sq ft) ITZA
6-7 Oxford Street & 1-11 Whitewalls
3,113 1,664
First Sales (sq ft)
3,370
First Second Third Anc Anc Anc (sq ft) (sq ft) (sq ft)
Total Passing Zone A (sq ft) Rent (HL)
1,891 2,555 2,325 13,274 £250,000 £110
9-11 Whitewalls
1,191 968
1,191 £70,000 £72
Total
Rental Analysis
£320,000
In analysing the rent on the Topshop / Topman unit we have applied A/10 to the first floor sales, A/20 to the first floor ancillary, A/25 on the second Floor and A/30 on the third floor.
We have also made a 7.50% addition to the ground floor ITZA to reflect the significant return frontage.
We have devalued the rent of the Topshop / Topman unit to reflect £110 Zone A headline and £89 Zone A net, after taking into account the 12 months rent free the tenant received in agreeing their recent lease renewal.
The Costa unit reflects £72 Zone A.
Swansea 6-7 Oxford Street & 1-11 Whitewalls
100% prime retailing location on the corner of the pedestrianised Oxford Street and Whitewalls
Tenure
The property is held long leasehold with 99 years and 11 months unexpired.
The current rent payable is £37,000 per annum, which was set at the previous review on 25 December 2012. The review is to the higher of the passing rent or 10% of open market rent.
Tenancy
6-7 Oxford Street and 1-11 Whitewalls is let to Topshop / Topman Limited on a new 5 year full repairing and insuring lease from 25 December 2017 at a rebased rent of £250,000 per annum. The Guarantor for this lease is Redcastle Ltd.
9-11 Whitewalls is let to Costa Limited on a full repairing and insuring lease for a term of 10 years from 24 February 2012 at a current passing rent of £70,000 per annum.
The property therefore produces a total income of £320,000 per annum. After deduction of the head rent, the property produces a net income of £283,000 per annum. The property has a WAULT of 4.9 years to expiry.
Swansea 6-7 Oxford Street & 1-11 Whitewalls
Rental Commentary
Swansea has seen a strong re-basing trend for retail rents in the wake of the recent recession, with market rents on Oxford Street peaking at £165-£170 Zone A prior to the downturn. Recently, 810 Oxford Street was let to Costa Coffee with a Zone A of £95. Swansea has a very good retail catchment area and expanding student population. The city represents good value for retailers and investors alike, providing a strong basis for rental growth. The rent on 6-7 Oxford Street and 1-11 Whitewalls (Topshop / Topman) was recently rebased from £400,000 per annum to a passing rent of £250,000 per annum. We believe that this provides an excellent base for future rental growth prospects.
Swansea 6-7 Oxford Street & 1-11 Whitewalls
Covenant Information
Topshop Topman Properties Limited (Company No. 04464942) is a British multi national fashion retailer of clothing, shoes, make-up and accessories. It was founded in 1964 and now has around 500 shops worldwide, approximately 300 of these are in the UK with its major flagship store in Oxford Circus, London. Topshop ships to over 100 countries worldwide.
Year Ending Sales Turnover Profit Before Tax Net Worth
28/08/2016 £115,252,000 (£9,074,000) (£39,658,000)
29/08/2015 £111,092,000
£164,000 (£30,986,000)
30/08/2014 £106,505,000
(£156,000) (£32,173,000)
Topshop Topman Properties Limited has a Creditsafe rating of 39 reflecting a "moderate risk" of business failure.
Redcastle Limited (Company No. 03194733) acts as the guarantor for Topshop/Topman on the lease. A summary of their accounts can be found below:
Year Ending Sales Turnover Profit Before Tax Net Worth
27/08/2016 £124,294,000 (£14,247,000) £299,646,000
29/08/2015 £194,753,000
£4,851,000 £317,185,000
30/08/2014 £206,281,000
(£999,000) £311,008,000
Redcastle Limited has a Creditsafe rating of 87, reflecting a "very low risk" of business failure.
Costa Limited (Company No. 01270695) is a British coffee chain and is wholly owned subsidiary of Whitbread Plc. Established in 1971, it is the largest coffee house chain in the UK and the second largest in the world behind Starbucks. Costa operates from over 2,100 stores in the UK with a further 1,300 stores across 31 countries.
Year Ending Sales Turnover Profit Before Tax Net Worth
02/03/2017 £886,366,000 £103,387,000 £616,894,000
03/03/2016 £835,037,000 £117,498,000 £542,180,000
26/02/2015 £735,974,000 £127,221,000 £444,074,000
Costa Limited has a Creditsafe rating of 95 reflecting a "very low risk" of business failure.
Swansea 6-7 Oxford Street & 1-11 Whitewalls
Swansea - 6-7 Oxford Street & 1-11 Whitewalls
Swansea
(2 RHEOWTMAHEILAWTFELAORORS)
UONFDFEERR
For indicative purpose only.
Swansea
6-7 Oxford Street & 1-11 Whitewalls
EPC
An EPC for the property can be provided upon request.
VAT
The 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).
Proposal
We are instructed to seek offers for our client's long leasehold interest in excess of £3,660,000 (Three Million Six Hundred and Sixty Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level would reflect a Net Initial Yield of 7.25%, after allowing for purchasers costs of 6.51%.
Further Information
For further information or to arrange an inspection of the property, please contact:
Jonathan Heptonstall 020 7318 7843 jonathan.heptonstall@eu.jll.com
Christopher Robinson 020 7087 5624 chris.robinson@eu.jll.com
Frankie Maddox 020 7399 5744 frankie.maddox@eu.jll.com
MISREPRESENTATION ACT JLL, for themselves and for the vendors of this property, whose agents they are, give notice that (i) the particulars and any further information communicated by any means to potential purchasers of the property described in the particulars, or their advisers, in connection with the possible sale of the property are provided solely for the purpose of assisting potential purchasers in deciding whether they wish to proceed with further investigation of the property and do not constitute either the whole or any part of an invitation, offer or contract for sale of the property; (ii) 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 as at the date of the particulars (or the date of the relevant information if earlier). However, potential purchasers are not entitled to rely on them as statements or representations of fact but should satisfy themselves by searches, enquiries, surveys and inspections or otherwise with regard to the accuracy of such details. No responsibility or liability is or will be accepted by JLL, the vendor(s) of the property or any of their respective subsidiaries, affiliates, directors, officers, representatives, employees, advisors, or agents for any loss or damage suffered by any party, resulting from reliance on the particulars or any other information communicated by any means to that party, or its advisers, in connection with the possible sale of the property. No person in the employment of Jones Lang LaSalle or the vendor(s) has authority to make or give any representation or warranty, express or implied, in relation to the property. References to JLL include any joint agents acting with Jones Lang LaSalle. Designed by Graphic Outlines Ltd. 2018
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