INTERCHANGE - Montagu Evans Bedford.pdf · 1 3 2 4 5 8 7 6 20 minutes £223m £145m £203m ... INTERCHANGE SHOPPING PARK PHASE 1 PHASE 2 B 5 3 0 A M P T H ... unit frontages foster

PRIME SOUTH EAST, OPEN A1 SHOPPING PARK INVESTMENT OPPORTUNITY

AMPTHILL ROAD • BEDFORD • MK42 7AZ

INTERCHANGE

PRIME SOUTH EAST, OPEN A1 SHOPPING PARK INVESTMENT OPPORTUNITY 01

INTERCHANGE SHOPPING PARK

INVESTMENT SUMMARY

= Bedfordisanaffluentsoutheasttown,withaprimarycatchmentpopulationof318,000(Promis).Majorresidentialdevelopmentisplannedthatwillfurtherexpandthecatchment.ThereisadirecttrainserviceintocentralLondonin35minutes.

= Thesubjectpropertyissituatedinahighlyaccessiblelocationjustofftheintersectionofthe A6andA421tothesouthofBedford.

= Prime,regionallydominantshoppingparktotalling178,547sqft,plus80,000sqftofmezzaninespace,togetherwith710carspaces(1:250sqft).

= HighqualityretailerlineupincludingNext,Boots,TKMaxx,Outfit,Argos,PetsatHome,Clarks,SportsDirectandanewlettingtoWilko.

= Strongtradingprofile.

= OpenA1(nonfood)planningconsentsaveforPetsatHome(bulky).

= Freehold.

= Totalincomeof£6,592,538perannum,reflectinganaveragerentof£36.90persqftwithanewlettingtoWilkoat£40persqft,risingto£42.50persqftatyear5.

= Secureincome.100%ofthecoreincomeissecuredtotenantswithaD&Bratingof 5A1or5A2.

= WAULTtoexpiryof6yearsand5.4yearstobreaks.

= Theschemeoffersanumberofassetmanagementandadditional developmentopportunities.

= Ourclientisseekingoffersintheregionof£102,900,000 (One Hundred and Two Million, Nine Hundred Thousand Pounds), subjecttocontractandexclusiveofVAT.

= Apurchaseatthislevelwouldprovideanattractive6.00% NIY,assuming6.79% purchasecosts.




LOCATION

BedfordisanaffluentSouthEasttownandisthecountytownandadministrativecentreofBedfordshire. Itislocated60milesnorthofcentralLondon,withCambridge30mileseast,MiltonKeynes15milessouth westandNorthampton22milesnorthwest.

The“draw”ofthetownisimproving,withthe£36millionBedfordRiversideNorthmixed-usedevelopment,providinganewcinemaandrestaurantquarteradjacenttotheRiverGreatOuse.Theschemeisduetoopen inearly2017,withoccupiersincludingVue,PremierInn,Wagamama,ZiZi,Chimichanga,BellaItaliaand CoalGrill&Bar.

Bedfordbenefitsfromexcellentroadcommunications,withtheA6runningnorth-souththroughthetown.Therehasbeenmajorinvestmentintheroadinfrastructure,withtheA421SouthernBypassupgradedtodualcarriagewayandprovidingrapidaccesstojunction13oftheM1motorwayabout6milestothesouthwestofthetown.

Phase1oftheWesternBypassA428upgradehasalsobeencompleted,withplanningpermissiontocompletethenorthernsectionlinkingtotheA6tothenorthofthetownnowgranted.

Theroadinfrastructureimprovementsandsubjectproperty’slocationjustoffthejunctionoftheA421SouthernBypassandA6meanthereisnowrapidaccesstothesubjectpropertyfromallpartsofthewiderBedfordcatchment.

ThetownisalsoanincreasinglyimportantcommuterlocationforLondon,withafastestjourneytimedirect intoLondonStPancrasof35minutes.

LutonInternationalAirportislocatedabout25milestothesouthofthetownandcanbereachedinunder 30minutesviatheM1.Heathrowliesapproximately52milessouth,involvingajourneytimeofcirca50minutes.

M11A1(M)

A1(M)

M1

M25M25M40

M40A421

A428

A421

A5

A5 A428A428

A6

A6

A1

A1 A14M1

M6

J13

J21 J21A

NorthamptonNorthampton

Oxford

CambridgeCambridge

LutonLuton

Milton KeynesMilton Keynes

BEDFORDBEDFORD

LONDONLONDON

Oxford

CoventryCoventry

HarlowHarlow

Cardington Rd

High St

Bedford Rd

Kempsto

n Rd

Elstow Rd

Wob

urn

Rd

London Rd

Mile Rd

Am

pthi

ll Rd

Clapham Rd

Hig

h St

Bromham Rd Goldington Rd

Am

pthi

ll Rd

Box End Rd

A421

A428

A428

A4280

A4280

A6

A6

A421

Bedford St Johns

Bedford

INTERCHANGE

INTERCHANGE



"THERE IS MINIMAL OVERLAP ON THE 20 MINUTE CATCHMENTS WITH

RUSHDEN AND BIGGLESWADE"Source:fsp2016

BEDFORDBEDFORD

Milton KeynesMilton Keynes

LetchworthGarden CityLetchworthGarden City

St NeotsSt Neots

FlitwickFlitwick

BiggleswadeBiggleswade

WellingboroughWellingborough

RushdenRushden

Sharnbrook

OlneyOlney

Sharnbrook

A6

A5

A1

A1

A6

A421

A421A428

A428A428

A509

A509

M1

M1

A1(M)

CATCHMENT & DEMOGRAPHICS

BedfordisanaffluentSouthEasttownwithaprimarycatchmentpopulationof318,000(Promis).Thereareanumberofmajorresidentialdevelopmentsunderwayandplannedcomprisingnearly10,000newhomesthatwillbewithineasyreachofthesubjectproperty,significantlyboostingthespendingpotential.

FSPhavecalculatedthe20minutedrivetimepopulationtobe199,000andpredictedgrowthwithintheBedfordcatchmentbetween2015and2025is6.9%,abovetheUKaverageof6.5%.

TheBedfordcatchmentisahighlycaptiveone,withminimalcompetition.FSPconcludethatthereisminimalcatchmentoverlapwithnewout-of-townschemesinBiggleswadeandRushden.

The20minutecatchmentcontainsaparticularlyhighrepresentationof‘AffluentAchievers’(26%v22%UKaverage)and‘ComfortableCommunities’(30%v28%UKaverage).49%ofhouseholdsarePre-FamilyorFamilyLifestage,2%abovetheUKaverage.

ThetotalNon-GroceryMarketSizeisestimatedtobe£896millionandspendperhouseholdat£11,000is 9%abovetheUKaverage.

INTERCHANGE

BEDFORD MAJOR RESIDENTIAL DEVELOPMENT SITES

1 LAND NORTH OF BROMHAM ROAD 1200Residentialunits

2 RIVERSIDE NORTH 58Residentialunits

3 GREAT DENHAM 1760Totalresidentialunits c.317unitsalreadycompleted

4 WEST OF KEMPSTON 1000Totalresidentialunits c.80unitsalreadycompleted

5 FIELDS ROAD, WOOTTON 325Residentialunits

6 RAF CARDINGTON / SHORTSTOWN 1100Residentialunits

7 WIXAMS NEW SETTLEMENT 3770Residentialunits

8 BROADMEAD ROAD, STEWARTBY 730Residentialunits

NON-GROCERY SPEND KEY FACTS

1

23

4

5

8

7

6

20minutes

£223m

£145m

£203m

£137m

£188m

Clothing&Footwear-£223m PersonalGoods-£145m HouseholdGoods-£203m LeisureGoods-£137 Food&Beverage-£188m

£896 MILLION NON-GROCERY SPEND WITHIN 20 MINUTES

54% OF HOUSEHOLDS ARE ABC1s, 2% ABOVE UK AVERAGE

£11,000 NON-GROCERY SPEND PER HOUSEHOLD IS 9% ABOVE UK AVERAGE



INTERCHANGE SHOPPING PARKPHASE 1 PHASE 2

B530 A

MPTHILL ROAD

MOT

ORVO

GUE

SITUATION

InterchangeShoppingParkislocatedinahighlyaccessiblelocation,justofftheintersectionoftheA6andA421,accessedviatheB530AmpthillRoad.Thisisaregionallydominantshoppingdestination,withotheroccupiersincloseproximity,includingB&QandM&SSimplyFood.


DESCRIPTION

Thesubjectpropertycomprisesaregionallydominant,openA1non-foodshoppingparktotalling178,547sqft,plus80,000sqftofmezzanineprovision.

Theparkbenefitsfromextensivelyglazedretailunits,withdramaticporticoentrancefeaturescommensuratewithamodernshoppingpark.ItisarrangedasanL-shapedterraceof12retailwarehouseunits.ThecarparkhousesastandaloneCostacoffeepodandMcDonaldsdrivethru.

Ascanbeseenfromtheimagesintheseparticulars,theunitfrontagesfosterheavypedestrianfootfall,similartoatraditionalHighStreet.Ourtenantauditconfirmstheattractionsofthistotheshoppingpublicasasafe,convenientandattractivecomparisonshoppingenvironment,whichunderpinsitsdominanceinthecatchment.

Thereareatotalof710carspaces(660customer,50staff)providinganoverallratioof1:250sqft.

Theschemebenefitsfromaverygenerousserviceyardthatprovidesadditionaldevelopmentpotentialtoextendunitstotherear,aswellasextensivelandscapingaroundthecarpark.

Thetotalsiteareais9.06hectares(22.4acres).Thesitecoverisapproximately20%,furtherunderliningthepotentialtointensifytheusageanddrivevaluefromtheundevelopedportionsofthesite.



ACCOMMODATION

UNIT SIZE (SQ FT) COMMENTS

A ToysRUs 24,455Areaincludes1,287sqftlobbyand1,175 sqft1stflooramenityaccommodation.Storagemezzanine3,267sqft.

B Wilko 8,286Areaincludes256sqftentrancelobby. Tradingmezzanine6,130sqft.

C Matalan 25,324Areaincludes255sqftentrancelobby. Storagemezzanine6,872sqft.

D Boots 15,698Areaincludes207sqftlobby.Storagemezzanine2,615sqft.

E SportsDirect 10,459Areaincludes256sqftlobby.Tradingmezzanine8,945sqft.

F Outfit 11,850Areaincludes181sqftlobby.Tradingmezzanine9,632sqft.

G Clarks 7,905 Areaincludes257sqftlobby.

H Poundstretcher 12,265 Areaincludes257sqftlobby.

J PetsatHome 10,675 Areaincludes253sqftlobby.

K Argos 11,239Areaincludes266sqftlobby.Storagemezzanine10,104sqft.

L Next 15,100Areaincludes207sqftlobby.Tradingmezzanine13,044sqft.

M TKMaxx 21,097Areaincludes203sqftlobby.Tradingmezzanine19,414sqft.

N Costa 1,659

DriveThru McDonalds 2,535Tenantimprovementshaveincreasedtotal GIAto3,747sqft.

TOTAL 178,547

A50%ratehasbeenappliedtolobbyspaceincalculatingrentspersqft.



TENURE

Freehold.

ENVIRONMENTAL

Anenvironmentalreportisavailableuponrequest.

PLANNING

TheretailwarehouseunitsbenefitfromanopenA1nonfoodplanningconsentsaveforthePetsatHomeunit,whichisbulky.Subdivisionoftheunitsrequirestheconsentofthelocalauthority.

TheMcDonaldsunithasanA3consent.

TheCostaCoffeeunithasan“A1/A3coffeeshop”consentandwasgrantedconsentinOctober2013.

Copiesofallrelevantplanningpermissionsareavailableuponrequest,togetherwithasummarynoteonthepotentialforfurthersubdivisionoftheunits.



TENANCIES

Theschemeisfullylet,producingtotalincomeof£6,592,538pa,reflectinganaveragerentof£36.90persqft.ThisaveragerenthasbeenunderpinnedearlierthisyearbyWilkotakingtheformerBrantanounitatacommencingheadlinerentof£40.00persqft,withaminimumupliftatthefirstreviewto£42.50persqft,reflectingthedemandforspaceatthepark.

TheWAULTtoexpiryisapproximately6yearsand5.4yearstobreaks.

UNIT NAME TENANT AREA (SQ. FT.)

LEASE START

LEASE EXPIRY

NEXT REVIEW

BREAK RENT (PA) RENT (PSF)*

COMMENTS EPC

A Toys "R" Us Ltd 24,455 24/08/95 28/09/20 - - £740,000 £31.08 C61B Wilko Retail Ltd 8,286 18/07/16 17/07/26 18/07/21 - £326,400 £40.01 Minimum uplift to £346,800 (£42.50 psf) at 1st review. 12 months rent free. Monthly rents side letter. C63C Matalan Retail Limited 25,324 24/06/95 23/06/20 - - £768,800 £30.51 D84D Boots UK Limited 15,698 14/07/08 13/07/18 - - £699,390 £44.85 C58

ESportsdirect.com Retail Ltd

10,459 14/02/05 28/09/21 14/02/20 - £432,638 £41.88 C60

F Redcastle Ltd t/a Outfit 11,850 08/10/12 07/10/22 08/10/17 - £412,200 £35.05 Base rent plus turnover. £412,200 is the base rent. Base rent reviewed to 84.7% of market rent. C57

GC. & J. Clark International Ltd t/a Clarks

7,905 03/10/05 28/09/21 03/10/20 - £348,570 £44.82 Tenant did not operate a 2015 break clause. C66

H Poundstretcher Limited 12,265 29/09/95 28/09/20 - £527,459 £43.46 On assignment from Staples in Q4 2013. Surety from Crown Crest Group Ltd. C55J Pets At Home Ltd 10,675 01/11/04 28/09/21 01/11/19 - £263,337 £24.96 Bulky goods consent and specific bulky goods rent review assumption whilst Pets at Home are tenant, hence discounted rent. C64K Argos Limited 11,239 24/05/02 24/06/17 - £497,088 £44.76 C61L Next Holdings Ltd 15,100 11/06/12 10/06/27 11/06/17 - £589,240 £39.29 Relocated and upsized from unit F in 2012. Reviews to OMV with 1-3% pa collar and cap. Monthly rents side letter. C62

M TJX UK t/a TK Maxx 21,097 17/09/14 16/09/29 17/09/19 17/09/24 £755,500 £35.982014 lease regear for new 15 year term with 10 year break with £566,625 incentive (9 months) paid for shop refit works. Surety from TJX Europe Ltd. Reviews capped at 115%.

C67

N Costa Limited 1,659 24/06/14 23/06/24 24/06/19 - £66,666 £40.18 B27

Drive ThruMcDonalds Restaurants Ltd

2,535 29/09/95 28/09/40 29/09/20 - £90,000 £35.50 Reversionary 20 year lease from 29/09/2020 agreed in 2014. C75

CORE INCOME SUBTOTAL 178,547 £6,517,288 £36.90

KioskRoy Testa t/a Coffee Square

- 12/03/14 11/03/17 Rolling £11,500 - Mutual break on 1 month's notice

Kiosk Kiosk Barbers Limited - 01/08/15 31/07/18 Rolling £10,000 - Mutual break on 1 month's notice

Mobile unitMessrs Kuar & Singh t/a Carnival Time Ice Cream

- 25/03/16 30/09/16 - Rolling £6,250 - Mutual break on 7 day's notice.

Cabin We Buy Any Car Limited - 21/07/14 20/07/17 Rolling £13,500 - Mutual break on 3 month's notice. Occupies 7 car parking spacesCabin Pre Loved Ltd - 24/09/15 23/09/18 Rolling £12,000 - Mutual break on 1 month's notice

Kiosk

Brian Samuel Service & Lennox Obrien Barker t/a Fresh Caribbean Cuisine

- 08/02/16 07/02/19 Rolling £10,000 - Mutual break on 1 month's notice

Kiosk Ilovevapour Ltd - 29/01/16 28/01/19 Rolling £12,000 - Mutual break on 1 month's noticeSub Station East

EDF Energy Networks (EPN) plc

- 16/08/96 15/08/96 £0 -

Sub Station West

EDF Energy Networks (EPN) plc

- 16/08/96 15/08/96 £0 -

ANCILLARY INCOME SUBTOTAL £75,250TOTAL 178,547 £6,592,538

*A50%ratehasbeenappliedtolobbyspacetoarriveattherentpersqftfigures.



TENANT COVENANTS

100%ofthecoreincomeissecuredtoDun&Bradstreetrated5A1or5A2covenants,reflectingminimalorbelowaveragerisk.

TENANT YEAR TURNOVER PRE TAX PROFIT TANGIBLE NET WORTH D&B RATING

Toys“R”UsLtd 31/01/2015 £437,966,000 £928,000 £301,713,000 5A2

WilkoRetailLtd 30/01/2016 £1,464,475,000 £25,955,000 £182,398,000 5A1

MatalanRetailLtd 28/02/2015 £1,094,000,000 £20,300,000 £300,100,000 5A1

BootsUKLtd 31/08/2015 £9,198,000,000 £542,000,000 £367,000,000 5A1

Sportsdirect.comRetailLtd 26/04/2015 £2,074,126,000 £262,929,000 £872,400,000 5A1

RedcastleLtdt/aOutfit 29/08/2015 £191,045,000 £4,851,000 £317,185,000 5A2

C.&J.ClarkInternationalLtd 31/01/2015 £893,000,000 £110,600,000 £261,700,000 5A1

PoundstretcherLtd 31/03/2015 £438,325,000 £2,835,000 £16,829,000 4A2

CrownCrestGroupLtd 31/03/2015 £470,863,350 £4,751,861 £113,313,277 5A1

PetsatHomeLtd 26/03/2015 £689,697,000 £79,920,000 £517,138,000 5A1

ArgosLtd 28/02/2015 £3,919,176,000 £97,146,000 £1,202,554,000 5A1

NextHoldingsLtd 30/01/2016 £204,200,000 £992,200,000 £1,062,700,000 5A1

TJXUK 31/01/2015 £2,195,400,000 £134,300,000 £583,400,000 5A1

TJXEuropeLtd 31/01/2015 - (£332,000) £84,128,000 5A1

CostaLtd 26/02/2015 £735,974,000 £127,221,000 £444,814,000 5A1

McDonaldsRestaurantsLtd 31/12/2014 £1,432,592,000 £225,428,000 £931,302,000 5A1



PHASE 1 PHASE 2

B530 A

MPTHILL ROAD

MOT

ORVO

GUE


ASSET MANAGEMENT Thetradingprofileofretailersatthisschemeisexcellentandthereareanumberoftenantengineeringandpotentialdevelopmentopportunities.

NEXT UPSIZE Nexttradestronglyandupsizedin2012andhaveindicatedadesiretoupsizefurther.Theiridealgroundfloorfootprintiscirca26,000sqft. ExploreexpandingintoArgosorrelocatingintoToysRUsunit. Bothoptionsprovidescopetoextendtotherear(shadedpurpleabove).

TOYS R US & MATALAN SUBDIVISION TheToysRUsandMatalanunitsareletoff£30.50-£31.00persqftwith2020leaseexpiries.Ifvacantpossessioncouldbesecured,theseunitscouldbesubdivided,subjecttoplanning,intosmallerunitstodriverentalvalueandimprovetenantmix.Bothtenantshaveexpressedaninterestindownsizing.Proposedsubdivisionplansareavailableuponrequest.

POD DEVELOPMENT Weconsiderthattheparkcouldaccommodateadditionalpodunits,subjecttocomplyingwithcertainminimumcarparkingandnon-competeclausesinexistingleases.Furtherdetailavailableuponrequest.

LEASE REGEARS Anumberoftenantshaveleaseexpiriesoverthenext1-5yearsandprovideanopportunitytoregearandimprovetheWAULT.ItisworthnotingthatTKMaxxregearedin2014on21,097sqftattheirpreviouspassingrentof£36.00psfwithonlya9monthincentivecontributiontoastorere-fit.Furthermore,PoundstretchertookanassignmentoftheStaplesunitin2013,atapassingrentof£43.46psfandClarksdidnotoperatea2015breakclause,withapassingrentof£44.82psf.ThenewlettingtoWilkoreflects£40.00psfheadlinewithaminimumupliftto£42.50psfat firstreview.

ADDITIONAL DEVELOPMENT Thereisanextremelygenerousserviceyardareathatprovidesscopetoextendtheunitstotherear.SubdivisionoftheToysRUsandMatalanunitscouldbecombinedwithrearextensionstoprovideadditionalspace,whilsttheserviceareatotherearofOutfitunitisanobvioustargetforfuture infilldevelopment.Generally,thesiteareaofover22acresand20%sitecoverareconsideredtobeattractivefeatures.

CLARKS DOWNSIZE Clarkshaveindicatedadesiretodownsizetocirca5,000sqft,whichcouldperhapsbeaccommodatedinacarveupofToysRUsorMatalan,leavingtheirunittore-lettoanewoccupier.

RELAX PETS AT HOME PLANNING ThePetsatHomeunitissubjecttoabulkygoodsconditionandthepassingrentissignificantlydiscounted.Thereissignificantrentalupsideifthisconditioncouldberelaxed.

ADDITIONAL LAND Thereisasubstantialareaoflandadjacenttothewesternboundary,partownedbyBedfordBoroughCouncilandArqivaTelecommunications.Thisareaiscurrentlylandlockedandthecouncilhasindicatedtheymaylooktoreopenandupgradeadisusedaccessroadadjacenttothesouthernboundaryofthescheme,whilstArqivahaveindicatedtheirlandwillbecomesurplustotheirrequirementsinduecourse.Thiscouldgiverisetoadditionaldevelopmentopportunitiesandalsotofurtherimprovetheaccess/egressarrangementsatthewesternendofthepark,aswellasfurtherpoddevelopmentopportunities.Furtherinformationuponrequest.

ASSET MANAGEMENT PLAN

PotentialDevelopmentOpportunites




PROPOSAL

Ourclientisseekingoffersintheregionof£102,900,000 (One Hundred and Two Million, Nine Hundred Thousand Pounds), subjecttocontractandexclusiveofVAT.

Apurchaseatthislevelwouldprovideanattractive6.00% NIY, assuming6.79%purchasecosts.

VAT

ThepropertyiselectedforVAT.

FURTHER INFORMATION

MARK GIRLING

T: 02073127460M:[email protected]

NICK RICHARDSON


EDWARD GEORGE


MisrepresentationAct1967MontaguEvansLLPforthemselvesandforthevendorsorlessorsofthispropertywhoseagentstheyare,givenoticethat:(i)Theparticularsaresetoutasageneralguidelineonlyfortheguidanceofintendingpurchasersorlesseesanddonotconstitutethewholeoranypartofanofferorcontract.(ii)Alldescriptions,dimensions,referencestoconditionandnecessarypermissionsoftheuseandoccupation,andotherdetailsaregiveningoodfaithwithoutresponsibilitywhatsoeverandanyintendingpurchasersortenantsshouldnotrelyonthemasstatementsorrepresentationsoffact,butmustsatisfythemselvesbyinspectionorotherwiseastothecorrectnessofeachofthem.(iii)NeitherMontaguEvansLLPnortheiremployeeshasanyauthoritytomakeorgiveanyrepresentationorwarrantieswhatsoeverinrelationtotheproperty.(iv)Unlessotherwisestated,allpricesandrentsarequotedexclusiveofVATandintendingpurchasersorlesseesmustsatisfythemselvesindependentlyastotheapplicableVATposition.(v)Alltheplansandmapsprovidedwithintheparticularsareforidentificationpurposesonly.September2016.


Documents

INTERCHANGE - Montagu Evans Bedford.pdf · 1 3 2 4 5 8 7 6 20 minutes £223m £145m £203m ... INTERCHANGE SHOPPING PARK PHASE 1 PHASE 2 B 5 3 0 A M P T H ... unit frontages foster