WELL LET SUPERMARKET INVESTMENT WITH SIGNIFICANT FIXED RENTAL UPLIFT IN 2020
129 STOKE ROAD, GOSPORTHAMPSHIRE, PO12 1SD
INVESTMENT CONSIDERATIONS
Gosport is an established Hampshire town located on the south coast with a population of approximately 82,000 people.
Prominently located on the edge of Gosport town centre serving the affluent Alverstoke suburb and wider area.
Large retail unit of 23,975 sq ft with approximately 80 car parking spaces.
Waitrose have been in continuous occupation for over 43 years. A reversionary lease was signed by Waitrose starting last year demonstrating commitment to the unit.
Freehold.
Let to the 5A1 covenant of Waitrose Limited with 8.7 years unexpired.
Low passing rent of £220,000 per annum (£9.18 psf).
Significant fixed increase to £250,000 per annum (£10.43 psf) in July 2020. This is still considered low for a supermarket rent.
We are instructed to seek offers in excess of £3,300,000 (Three Million and Three Hundred Thousand Pounds), subject to contract and exclusive of VAT.
A purchase at this level reflects a net initial yield of 6.25%, with a reversion to 7.11% in 2020 assuming purchasers costs of 6.48%.
WAITROSE 129 STOKE ROAD, GOSPORT, HAMPSHIRE, PO12 1SD
Lee-on-the-Solent
AlverstokeHayling Island
Chichester
Waterlooville
Havant
ChichesterHarbour AONB
North SolentNational
Nature Reserve
South DownsNational Park
CoshamPortchester
FarehamTitchfield
Cowes
Wickham
Hedge End
Hythe
Blackfield
Droxford
Petersfield
WINCHESTER
Eastleigh
Twyford
Cadnam
PORTSMOUTH
SOUTHAMPTON
ISLE OF WIGHT
The Solent
The Solent
M27
M275
M27
M3
M271
A3(M)
M27
A3
A32
A32
A35
A336
A337
A326
A32
A27
A27
A286
A27
B2150
B3354
A3057
A3057
A3
A272
A334
A272
GOSPORT
SOUTHAMPTONAIRPORT
WELL LET SUPERMARKET INVESTMENT WITH SIGNIFICANT FIXED RENTAL UPLIFT IN 2020
A32
FORTON ROAD A32
M UMBY ROAD
A32
B3333
SOUTH ROAD
B3333 SOUTH ROAD
BURY ROAD B3333
STOKE ROAD
SPRING GARDEN LANE
GORD
ON R
OAD
WH
ITW
ORTH
RO
AD
ANN
’S H
ILL
ROAD
ANGLESEY
ROAD
THE
AVEN
UE
PARK
RO
AD
HASLAR ROAD
HAS
LAR
BRID
GE
GUNW
HARF
RD
QUEEN ST
B2154
BROAD STREET
HIGH STREET
Gosport Marina
Royal Clarence Marina
HaslarMarina
HaslarLake
GosportPark
National Museumof the Royal Navy
The Royal NavySubmarine Museum
Royal HaslarLuxury WaterfrontResidential Village
Gosport WarMemorial Hospital
Town Centre
ALVERSTOKEALVERSTOKE
GUN WHARFQUAYS
GosportFerry Terminal
Portsmouth-Gosport
Ferry Terminal
PortsmouthIOW Car
Ferry Terminal
SUBJECT PROPERTY
LOCATIONGosport is an established Hampshire town located on the south coast approximately 3 miles (4.8 km) south west of Portsmouth, 6 miles (9.7 km) south east of Fareham and 15 miles (24.1 km) south east of Southampton.
The town is located on a peninsula with the Solent to the west and Portsmouth harbour to the east. Portsmouth is linked via a pedestrian ferry that runs throughout the day with a journey time of four minutes.
The A32 (Fareham Road) is the principal arterial route to Gosport providing good access to the M27 at junctions 10 and 11, which links to the M3 at Southampton and the A3 (M) at Havant.
Rail services to London Waterloo are via Portsmouth with a fastest journey time of 1 hour 40 minutes. Portsmouth town centre and train station are easily accessed via the harbour ferry.
Southampton International airport is located 20 miles (32.2 km) to the north west.
SITUATIONThe property is prominently situated approximately 0.5 miles to the west of Gosport town centre providing excellent access for shoppers travelling from the wider area including the affluent suburb of Alverstoke.
The building is located between Stoke Road and South Street with good frontage onto both. It is also within walking distance from the town centre and the high street retail offer as well as other out-of-town retail units including those occupied by Argos, Halfords, Asda, Morrison’s and Iceland.
The next nearest Waitrose unit by road is located 9.8 miles (15 km) north west in Locks Heath to the south east of Southampton.
CATCHMENT & DEMOGRAPHICSGosport has a catchment of 360,000 within a 10km radius and a town population of approximately 82,000. The demographic profile of the Gosport area is typically an older, affluent and skilled worker in employment (or now retired). The CACI Lifestyle groups percentage of skilled workers for the area is 36.7% as opposed to the average for Great Britain of 12.8%.
This affluent population is highlighted further by 66% of the population owning their homes outright or owning with a mortgage compared to the Great Britain average of 63.5%. Unemployment within Gosport is only 1.1% of the economically active population in comparison to the Great Britain average of 4.9%. Furthermore, 72% of the local population are aged 35 or over.
DESCRIPTIONThe property comprises a large retail unit, which has been occupied continuously by Waitrose for over 43 years since its original construction.
The unit totals 23,975 sq ft over ground and first floors and is of concrete frame construction.
The store has two main access points, to the front and rear, and is fitted out internally to the modern Waitrose format. Internally the store benefits from 5 main checkouts as well as 4 basket checkouts. The store also has deli and meat counters, a cash machine and full Waitrose services including a click & collect counter.
Loading is to the rear of the store where a main goods lift to the first floor is located. There are also two additional staff lifts to each side of the unit. The first floor comprises storage space with a large chilled area and separate freezer area, staff canteen and managers offices.
The unit benefits from approximately 80 car parking spaces providing a good ratio of 1:299 sq ft.
The property occupies a 0.88 acre (0.357 hectare) site with a low site cover of 36%.
ACCOMMODATIONThe property has been measured on a Gross Internal Area basis (GIA) in accordance with the RICS Code of Measuring Practice (6th Edition).
Description Area (sq m) Area (sq ft)
Ground Floor Retail 1,125.11 12,111
First Floor Ancillary 1,102.16 11,864
Total 2,227.27 23,975
WAITROSE 129 STOKE ROAD, GOSPORT, HAMPSHIRE, PO12 1SD
STOKE ROAD
BURY ROAD
HIGH STREET
SOUTH STREET
CLAYHALL RD
ALVERSTOKEALVERSTOKE
ISLE OF WIGHTISLE OF WIGHT
HASLAR ROAD
SUBJECT PROPERTY
Haslar Marina
Town Centre
Gosport Park
Fort Monckton
Royal HaslarLuxury WaterfrontResidential Village
Institute of Naval Medicine
Gosport & Stokes BayGolf Club
WELL LET SUPERMARKET INVESTMENT WITH SIGNIFICANT FIXED RENTAL UPLIFT IN 2020
TENUREFreehold.
TENANCYThe property is let on full repairing and insuring terms to Waitrose Limited by way of a reversionary lease to the original lease for a term of 10 years from 17th July 2015 to 16th July 2025 (total of 8.7 years unexpired). The passing rent is £220,000 per annum (£9.18 psf).
There is a fixed uplift on 17th July 2020 to £250,000 per annum (£10.43 psf).
The original lease to Waitrose dates back to 1973 and they have been in continuous occupation for over 43 years.
WAITROSE 129 STOKE ROAD, GOSPORT, HAMPSHIRE, PO12 1SD
COVENANTWaitrose is a chain of British supermarkets, which forms the food retail division of Britain’s largest employee-owned retailer, the John Lewis Partnership. Waitrose has circa 365 branches across the United Kingdom and a 5.3% share of the market, making it the sixth-largest grocery retailer in the UK.
Waitrose Limited has a Dun & Bradstreet rating of 5A1, which represents a minimum risk of business failure and their last 3 years trading figures are:
30 Jan 2016 (000’s)
31 Jan 2015 (000’s)
25 Jan 2014 (000’s)
Sales Turnover £5,966,600 £6,016,700 £5,640,900
Profit Before Tax £66,600 £80,600 £109,100
Tangible Net Worth £930,300 £853,700 £796,600
EPCThe property has an EPC rating of 82 (band D). A copy of the EPC is available in the data room.
LETTING MARKETThe passing rent of £9.18 per sq ft is considered low for a supermarket, and remains so even with the fixed increase in 2020 to £10.43 per sq ft. Other examples include:
Address Area (sq ft) Rent (£ psf) Comments
Co-Op, Southampton 13,034 £22.24 Rent review in September 2016.
Tesco, Gosport 36,522 £20.00 Open market letting in May 2013.
Waitrose, Waterlooville 42,000 £16.07 Rent set prior to 2016 rent review.
Waitrose, Dorchester 15,187 £17.692016 rent review at arbitration. Passing rent stated.
INVESTMENT MARKETSupermarket investments continue to be well sought after in the current market as they provide a defensive income stream. Comparable recent transactions are as follows:
Property DateUnexpired
Term (years)Area
(sq ft)Price
Net Initial Yield
Comments
Waitrose (85%)/Co-op (15%), Brackley
On Market
12 50,875 £5.18m 6.00% Fixed increases.
M&S Foodhall, Chepstow Oct 16 9 20,454 £4.40m 6.09% Part sublet. OMV reviews.
Waitrose, Wellington Sep 16 12.5 22,799 £7.89m 4.91%Fixed 2.5% compounded uplift in 2019. OMV reviews thereafter.
Waitrose, Bromsgrove Jul 16 15 9,000 £3.60m 5.15%Forward funding. 5 yearly CPI linked reviews with 1-3% collar and cap.
Co-Op Supermarket, Malmesbury
Feb 16 9.3 14,739 £3.78m 6.25% OMV review in 2019.
VATThe property is elected for VAT and it is proposed that the sale will be treated as a Transfer of a Going Concern (TOGC).
DATA ROOMThere is a data room for the property with key tenancy information, title documents and EPC certificates. Access can be provided on request.
WELL LET SUPERMARKET INVESTMENT WITH SIGNIFICANT FIXED RENTAL UPLIFT IN 2020
FURTHER INFORMATION Should you require further information or wish to view the property please contact either:
Matthew BrownTel: 020 7493 3330Mob: 07836 724 420Email: [email protected]
James ElkingtonTel: 020 7493 3330Mob: 07810 722 459Email: [email protected]
PROPOSALWe are instructed to seek offers in excess of £3,300,000 (Three Million and Three Hundred Thousand Pounds), subject to contract and exclusive of VAT.
A purchase at this level reflects a net initial yield of 6.25%, with a reversion to 7.11% in 2020, assuming purchasers cots of 6.48%.
Lewis Ellis LLP for themselves or nominees or lessors of this property whose agents they give notice that: (1) the particulars are set out as a general outline only for the guidance of the intending purchasers or lessees, and do not constitute part of an offer or contract; (2) 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 or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them; (3) no person in the employment of Lewis Ellis LLP has any authority to make or give any representation or warranty whatever in relation to the property.Designed and Produced by Creativeworld. Tel: 01282 858200. November 2016.
WAITROSE 129 STOKE ROAD, GOSPORT, HAMPSHIRE, PO12 1SD