QUEEN STREET SHOPPING CENTRE DARLINGTON, DL3 6SH · INVESTMENT SUMMARY • Darlington is an attractive, historic market town, situated in County Durham in the North East of England

QUEEN STREET SHOPPING CENTRE DARLINGTON, DL3 6SHPROMINENT FREEHOLD SHOPPING CENTRE INVESTMENT OPPORTUNITYOn behalf of fixed charge receivers

HOME | INVESTMENT SUMMARY | LOCATION | SITUATION | DEMOGRAPHICS | DESCRIPTION | GOAD | RETAILING | TENURE | TENANCIES | RENTAL VALUE | ASSET MANAGEMENT | CAR PARKING | SERVICE CHARGE | COVENANT | EPCS | DATA ROOM | VAT | PROPOSAL | CONTACT

http://www.jacksoncriss.co.uk/

INVESTMENT SUMMARY

• Darlington is an attractive, historic market town, situated in County Durham in the North East of England.

• Queen Street Shopping Centre is a prominent freehold centre of circa 76,648 sq ft (7,120.60 sq m)

• Major anchors are River Island, Poundworld, Iceland, Lloyds Bank, Starbucks and Thorntons.

• Opportunity to acquire off predominantly rebased rents – Zone A tone £30-£65.

• Opportunity to develop, extend and enhance the existing shopping centre, combining with the car park and land to the rear.

• WAULT of 3.92 years to expiry.

• 87.45% of current income secured against national multiple covenants.

• Property currently generates a gross rent of £1,078,195 pax, which after allowing for voids and irrecoverables, produces a net rent of £885,374 pax.

• We are instructed to seek offers in excess of £10,000,000 (Ten Million Pounds) after allowing for purchasers costs of 6.8%. A purchase at this level provides for the following yield profile:-

Net Initial Yield: 8.29% Reversionary Yield: 9.48% Equivalent Yield: 8.96% True Equivalent Yield: 9.47%

QUEEN STREET SHOPPING CENTRE DARLINGTON PROMINENT FREEHOLD SHOPPING CENTRE INVESTMENT OPPORTUNITY



LOCATION

Darlington is an attractive, historic market town situated in County Durham in the north east of England. It lies approximately 35 miles (56km) south of Newcastle-Upon-Tyne, 16 miles (26km) west of Middlesbrough, 62 miles (100km) north of Leeds and circa 242 miles (389km) north of London.

The town benefits from excellent road communications with Junction 58 of A1(M), some 2.5 miles to the north west of the town centre and Junction 57, approximately 3 miles to the south west. They provide direct access to Leeds and London in the south and Newcastle and Edinburgh in the north. Other nearby roads include the A66 and A68, which provide excellent links from Middlesbrough to the east and Cumbria to the west and north respectively.

Darlington is also well served by the National Rail Network with direct and frequent services to London Kings Cross via the East Coast Mainline. The fastest journey time is approximately 2 hours 20 mins. There are also regular direct services north to Newcastle-Upon-Tyne, with fastest journey times of 28 mins and local services operate to nearby towns such as Middlesbrough and Thornaby. The town is also served by Durham Tees Valley Airport and Newcastle International Airport.

SITUATION

The property is situated on the corner of Northgate and Prospect Place, along the prime retail pitch in Darlington. The main entrance is situated from Northgate, where retailers such as River Island, Trespass, Boots, Marks & Spencer, BHS, Hotter Shoes, Clarks and Next all have representation.

Prospect Place provides a secondary entrance to the shopping centre and is anchored by Rymans and Card Factory. To the rear of the site, accessed via Commercial Street, is a surface car park comprising approximately 160 spaces, which provides direct access into the shopping centre adjacent to Poundworld, as shown in photo.

A goad of the subject property is highlighted within the marketing brochure.

Woodland Rd

A68

A167

A167

A16

7

Par

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Nor

thga

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Ski

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gate

Com

mer

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StF

our

Rig

gs

East St

Duke St

Stanhope R

d

Tubwell Row

B6280

B6279

Coniscliffe Rd

Fee

tham

s

Crow

n St

Queens StreetShopping Centre

CornmillShopping

Centre

VictoriaMarket

Hall

M6

M6

M6

M6

M6

A69A69 A69

A68

A68

A68

A68

A1(M)

A1(M)

A1(M)

A1(M)

M1

M621

Newcastleupon Tyne

MiddlesbroughDarlington

Penrith

A66

A66

A66

A66

A66

A19

A19

A19

A64

Thirsk

Scarborough

Whitby

Durham

Richmond

Barnard Castle

SunderlandCarlisle

A61

A59

York

Newcastleupon Tyne

MiddlesbroughDarlington

Penrith

Thirsk

York

LeedsLeeds

Scarborough

Whitby

Durham

Richmond

Barnard Castle

SunderlandCarlisle




DEMOGRAPHICS

The estimated shopping population of Darlington is 170,000, ranking the town 91st of PROMIS centres. However, the total population within the Darlington primary catchment area is approximately 312,000 people, ranking the town 86th of the PROMIS centres.

The age profile of the Darlington primary catchment population includes relatively high proportion of working aged adults, aged 45-64.

Between 2000 and 2011, total employment increased at a faster rate than the retail PROMIS average and in 2011 the service sector counted for 74% of total employment in Darlington. Within this sector, financial services accounted for 26% of total employment, slightly above the retail PROMIS average.

The property is located within the Darlington Business Improvement District, which aims to give local businesses the power to raise funds locally, with the intention of attracting more shoppers, visitors and inward investment.

The largest private sector employer in the town is EE, employing some 2,500. Other major employers include Cleveland Bridge and Engineering Company, Cummings, AMEC and Infoserve Limited. Argos has the largest warehouse distribution centre located in Darlington, within the Faverdale Industrial Estate to the north west of the town centre.

DESCRIPTION

Queen Street Shopping Centre is an enclosed retail centre, originally constructed in 1968. The centre comprises 30 retail units and is anchored by River Island, Trespass, Poundworld, Iceland, Thorntons and Starbucks. The centre is arranged in an ‘L’ shape, with 6 units fronting Northgate and 3 units fronting Prospect Place.

The majority of the retail units have storage areas at first floor and, if applicable, second floor level.

The centre provides a total of 76,648 sq ft (7,120.60 sq m) of floor space.




NO

RTH




RETAILING IN DARLINGTON

Prime retailing in the town is focused on The Cornmill shopping centre, which provides approximately 247,000 sq ft of accommodation. The centre, which was opened in 1992 is anchored by Primark and Next.

Queen Street Shopping Centre, located directly opposite The Cornmill, is the smaller of the two schemes in the town, providing approximately 78,500 sq ft of accommodation. The scheme was opened in 1968 and is anchored by Iceland and Poundworld internally. The Northgate frontage includes River Island, Trespass, F. Hinds, Thorntons and Starbucks, forming part of the prime retailing.

Away from The Cornmill Shopping Centre, the prime High Street pitch is on Northgate, where further occupiers include M&S, Topman and BHS. Further prominent retailing can be found on High Row and Prebend Row, where House of Fraser, Virgin Money, Natwest, Poundland, Yorkshire Bank, Burger King and Waterstones all have representation. To the south of High Row is Market Place, which provides a covered Victorian Market,

running Monday to Saturday 8am – 5pm and a General Open Market running Monday to Saturday 9am – 5pm.

Darlington Retail Park is the main out of town retail offer, providing approximately 145,000 sq ft of accommodation, including retailers such as DFS, Homesbase, Pets At Home and Curry’s PC World.

Sports Direct and Wilkinsons are located off Northgate and to the rear of The Cornmill Shopping Centre.

In addition, there is a new leisure development, The Feethams, located to the south of the subject property, which has secured pre-lets to Vue Cinema, Premier Inn, Prezzo and Nando’s, with 3 remaining units to be let.

TENURE

The Queen Street Shopping Centre is held freehold, under two titles: DU85332 and DU55209.

TENANCIES

The property is let in accordance with the attached tenancy schedule, providing 23 occupational leases and 30 units, currently producing a gross passing rent of £1,078,195 pax per annum, which after allowing for void and irrecoverable costs gives a net passing rent of £885,374 pax.

The WAULT for the centre is 3.92 to expiry and 3.2 to break.




Lease and Rent Areas Occupational shortfall CostsTenant Name Unit Lease Start Years Months Expiry

DateNext Review Breaks Current

Rent paRental Value pa

Rental value (£/ZA)

ITZA GF FF SF Total Area (ft²)

Rates Payable

Service Charge

Insurance Total shortfalls

Comments

River Island Clothing Co Ltd Unit A- 47 Northgate

19/11/07 10 0 18/11/17 £211,500 £128,200 £65 1,694 4,906 3,832 3,454 12,363 £0

Trespass Europe Ltd Unit B- 45 Northgate

13/11/14 5 0 12/11/19 £65,000 £69,600 £65 977 2,445 2,236 652 5,333 £7,125 £7,125 Service charge capped at £5,000pax. Ground floor total area includes 404 sq ft ground floor ancillary.

Starbucks Coffee Co Uk Ltd Unit C- 43 Northgate

17/09/07 10 0 16/09/17 £77,500 £67,900 £65 650 1,140 956 2,098 £0

Thorntons plc 27 Northgate 14/12/11 5 0 13/12/21 £35,000 £30,700 £65 431 601 648 364 1,613 £0 Deal agreed on a 5 year reversionary lease at £31,150pax from expiry with no rent free

F. Hinds Limited Unit 1 05/06/00 25 0 04/06/25 05/06/20 £58,000 £60,800 £65 865 1,319 1,056 730 3,105 £0

Lloyds Bank Plc Unit 3/3a 21-25 Northgate

04/10/13 10 0 03/10/23 04/10/18 £110,000 £98,300 £65 1,344 3,791 2,516 1,725 8,948 £24,930 £24,930 Service charge cap at £25,000pax

Vacant Unit 5 £0 £20,400 £35 574 769 176 945 £18,241 £5,818 £408 £24,467

Vacant Unit 6 £0 £14,900 £35 463 463 161 624 £13,065 £3,870 £257 £17,192

Vacant Unit 7 £0 £19,800 £35 555 734 211 945 £17,871 £5,818 £276 £23,965

Iceland Foods Limited Unit 8 10/01/15 5 0 09/01/20 £53,000 £53,000 £35 1,349 2,795 2,198 2,198 7,191 £0

Vacant Unit 9 £0 £27,600 £35 779 1,076 207 1,283 £24,157 £7,888 £311 £32,356

Temple Retail Ltd t/a Perfect Home

Unit 10/12 24/04/15 10 0 23/04/25 24/04/20 23/04/20 £40,000 £50,200 £35 1,365 2,802 1,370 4,172 £15,698 £15,698 Rent free topped up untill 23/04/16. Stepped rent topped up to 23/10/18. Service charge cap at £10,000pax

Charles (Management) Ltd Unit 11 01/01/70 98 0 31/12/67 30/09/18 £0 £10,400 £35 297 297 297 £1,213 £611 £1,824 Tenant in administration. Lease not disclaimed and therfore no rates payable.

Poundworld Retail Ltd Unit 14 19/06/12 10 0 18/06/22 19/06/17 19/06/17 £65,395 £95,800 £35 2,539 5,689 3,953 9,642 £0 If the Tenant assigns the lease before 18/06/2017 the rent becomes £110,000pax. Fixed uplift to £110,00pax on Rent review. Service charge cap at £64,719.29

Porters (Darlington) Ltd Unit 15 15/05/15 10 0 14/05/25 15/05/20 14/05/20 £23,000 £24,800 £30 897 907 355 1,262 £0 Rent Free topped up to 14/05/2017. -10% for shape

Heena Khalid t/a Bollywood Brow Unit 16 01/10/13 5 0 30/09/18 £6,000 £5,000 140 156 156 £0

Taprich Ltd t/a D&H Jewellers Unit 17 01/07/02 15 0 30/06/17 £33,000 £12,800 £25 497 737 281 1,018 £0

Cex Franchising Ltd Unit 19/21 18/04/08 10 0 17/04/18 £71,000 £26,900 £25 1,040 1,593 737 2,330 £0 Occupier is Mowbray Enterprises Ltd by way of Underlease dated 7/7/14




Lease and Rent Areas Occupational shortfall CostsTenant Name Unit Lease Start Years Months Expiry

DateNext Review Breaks Current

Rent paRental Value pa

Rental value (£/ZA)

ITZA GF FF SF Total Area (ft²)

Rates Payable

Service Charge

Insurance Total shortfalls

Comments

EFF Marketing Ltd t/a Cigara Unit 20 02/04/14 5 0 01/04/19 02/04/17 £15,000 £7,200 £25 277 331 255 586 £0

Ronald Christopher Clark (Greengrocer)

Unit 22 01/10/13 3 0 30/09/16 01/10/14 £10,000 £7,500 £25 286 341 262 603 £0 MBO at anytime on 2 months notice

Vacant Unit 23 £0 £12,800 £25 497 737 263 1,000 £16,146 £6,163 £243 £22,552

Sharp & Sons (Jewellers) Ltd t/a Sharp Jewellers

Unit 24 01/01/16 5 0 31/12/20 £10,000 £7,400 £25 285 339 257 596 £0

Vacant Unit 25 £0 £12,700 £25 498 739 238 977 £16,146 £6,028 £382 £22,556

Urban Ltd Unit 26/28 TBC 5 04/03/21 04/03/18 £5,000 £15,400 £25 745 815 437 1,252 £0 Unit under offer on the basis of a 5 year ex act lease with stepped rent as follows. Yr 1 £5,000, Yr 2 & 3 £6,000 Yr 4 & 5 £15,000. MBO yr 2. 3 months rent free at the starts of each of years 1 & 2 to be topped up by vendor.

Sportswift Ltd t/a Card Factory Unit 27 26/08/15 5 0 25/08/20 £36,800 £36,800 £35 990 1,395 931 594 2,920 £155 £155 Rent free topped up untill 25/08/2017. Stepped rent topped up to 25/08/2018. Service charge capped at £17,840pax

Partners the Stationers Ltd t/a Rymans

Unit 30 01/08/07 10 0 31/07/17 £66,000 £30,900 £35 826 1,381 339 1,720 £0

TUI UK Retail Ltd Unit 40 (8 Prospect Place)

22/05/09 10 0 21/05/19 £38,500 £18,800 £35 498 693 579 422 1,694 £0

British Sky Broadcasting Ltd Mall Space 17/02/14 5 0 16/02/19 06/02/18 £12,500 £12,500 - £0

Sukhwant Singh Kiosk 14b 29/11/13 5 0 28/11/18 30/11/16 £9,500 £7,000 141 141 £0

Ihsan Rahman Kiosk 14a 24/01/14 5 0 23/01/19 £6,500 £6,500 84 84 £0

Vacant Flat 18 £0 £0 - £0

Northern Electric Plc Substation 12/08/99 25 0 11/08/24 £0 £0 - £0

Centre Management and Security Office

Management Suite

01/01/00 25 0 31/12/24 01/01/20 £0 £0 1,752 1,752 £0

Various Mall Income 29/05/15 1 0 28/05/16 £20,000 £20,000 - £0

76,648 £192,821

Gross Rent £1,078,195 £1,012,600

Occupational shortfalls

£192,821

Net rent £885,374




ESTIMATED RENTAL VALUE

We are of the opinion that the Zone A tone within the ownership is as follows:

• Northgate £65 Zone A• Main Mall £35 Zone A• Return Mall £25 Zone A

The total estimated rental value is £1,012,600 pax.

ASSET MANAGEMENT INITIATIVES

There are a number of opportunities to enhance the existing property that a potential purchaser could pursue, including the following:-

• Working alongside the local council, the shopping centre can become the entrance into a major development extension to the rear of the site enlarging the town retailing provision.

• Enhance the A3 offer, to compliment the new leisure scheme in the town.

• Buy in the long leasehold interest of Unit 11 and re-let on market terms (see Tenancy Schedule).

• Deliverable rental growth potential from current rental base.

• Potential to re-gear with River Island, Starbucks and Thorntons thereby significantly increasing the WAULT of the scheme.

• Break up and sell the Northgate units individually at a premium to the rest of the centre.

• Let current vacant units.

CAR PARKING

The centre has no parking within the demise, however there is a 160 space Council run car park, accessed via Commercial Street to the rear, which provides direct access into the shopping centre.

CURRENTOWNERSHIP

PROPOSED EXTENSION AREA




MANAGEMENT/SERVICE CHARGE

The operating costs of the shopping centre are covered by a comprehensive service charge. The service charge year runs from June to June and the current budget is £370,640 per annum. The service charge accounts of the past 3 years are as follows:-

2012/2013 £357,463.35

2013/2014 £350,979.60

2014/2015 £346,226.42

A detailed pack of information is accessible to view in the Data Room. Based upon the current budget, service charge payable by the tenant amounts to £4.84 psf.

TENANT COVENANT

Major occupiers include:-

Major Occupiers Date Net Worth(£ 000)

Turnover(£ 000)

Pre-Tax Profit(£ 000)

River Island Clothing Company Ltd 27/12/14 £279,600 £890,400 £145,800

Starbucks Coffee Co. UK Ltd 28/04/14 £35,513 £408,271 £1,056

Poundword Retail Ltd 31/03/15 £22,197 £422,304 £13,726

Iceland Foods Ltd 27/03/15 £710,000 £2,682,000 £59,000

Lloyds Bank Plc 31/12/14 £44,604,000 £1,762,000

Partners the Stationers Ltd 31/03/14 £1,808

F. Hinds Ltd 30/03/14 £25,199 £59,432 £2,727

Trespass Europe Ltd 30/06/14 £210




EPCS

All EPCs will be provided within the Data Room.

DATA ROOM

There is a secure Data Room containing legal and other useful information, including:-

• CVL File• Excel Tenancy Schedule• Service Charge Information• EPC Information• Title Documents

For access to the Data Room, please email one of the Jackson Criss team.

VAT

We understand that the property is elected for VAT and therefore the sale will be by way of TOGC.

PROPOSAL

We are instructed to seek offers in excess of £10,000,000, subject to contract and exclusive of VAT. A purchase at this level would reflect the following yield profile, assuming purchaser’s costs at 6.8%:-

Net Initial Yield: 8.29%Reversionary Yield: 9.48%Equivalent Yield: 8.96%True Equivalent Yield: 9.47%




Messrs. Jackson Criss for themselves and for the vendors or lessors of this property whose agents they are to give notice that: (i) the particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract; (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 but any intending purchasers or tenants should not rely on them as statements of representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them; (iii) no person in the employment of Messrs. Jackson Criss has any authority to make or give any representation or warranty whatever in relation to this property. JC0083. March 2016.D

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BY

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For further information, or to arrange an inspection, please contact:

John Boissier

020 7637 710007850 [email protected]

Adam Rawcliffe

020 7637 710007968 [email protected]

Brook Wannop

020 7637 710007557 [email protected]



http://www.tccommunications.co.uk/
