BECKTON TRIANGLE RETAIL PARK - Amazon S3

BECKTON TRIANGLE RETAIL PARK – CLAPS GATE LANE, BECKTON, LONDON E6 6LH

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BECKTON TRIANGLERETAIL PARK

CLAPS GATE LANE, BECKTON LONDON E6 6LH

PRIME EAST LONDON RETAIL PARK INVESTMENT

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Beckton is a major suburban district located in east London within the London Borough of Newham, approximately 8 miles east of central London.

Extensive catchment population within a 15 minute drive-time of 1,072,300 people, with population growth forecast to be significantly above the national average.

Beckton DLR station is located under 1 mile to the south-west with journey times to Custom House in 11 minutes and into the City of London in 28 minutes. The opening of the Elizabeth Line (Crossrail) at Custom House will provide up to 12 trains an hour with journey times to Canary Wharf in 3 minutes and Liverpool Street in 10 minutes.

The £480m London City Airport expansion is underway and will provide a further economic boost to the catchment area.

Prominently positioned at the major junction of the A13 and the A1020, the scheme forms part of a significant out of town shopping destination including the regionally dominant Gallions Reach Shopping Park and a Sainsbury’s superstore.

The property comprises a modern cluster of nine retail warehouse units plus two restaurant pod units totalling 138,082 sq ft at ground floor. There are a total of 457 car parking spaces with a further 21 staff car parking spaces accessed via the service yard.

Let to a secure retailer line-up including Currys PC World, Dunelm, B&M, DFS, Harveys, ScS, Costa and Pizza Hut.

Over 80% of gross passing rent secured by 5A1-rated covenants (D&B).

Gross passing rent of £4,218,878 pa, with a WAULT to expiry of 4.65 years.

Open A1 planning consent with restrictions.

Part freehold and part long leasehold with in excess of 228 years unexpired at £1 pa.

Unique opportunity to acquire a strategic 13 acre site in east London.

INVESTMENT SUMMARY

PROPOSAL

£46,000,000Our client is seeking offers in excess of

(Forty Six Million Pounds) subject to contract and exclusive of VAT. A purchase at this level would provide an attractive 8.55% Net Initial Yield, based on purchaser’s costs of 6.78% and the net income of £4,202,808.


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LOCATIONBeckton is a major suburban district in east London within the London Borough of Newham, which is strategically located 5 miles south-east of Stratford, 3.7 miles east of Canary Wharf and 7 miles to the east of the City of London. The A13 travels through the Borough, offering direct access to the City of London.

The Docklands Light Railway (DLR) transportation network facilitates trains from Newham into the City of London. Beckton DLR Station is located just 0.7 miles south-west of Beckton Triangle Retail Park, providing services to Custom House in 11 minutes and the City of London in 28 minutes.

Custom House DLR Station is located 2 miles to the south-east and is currently undergoing significant improvements prior to the introduction of Crossrail (Elizabeth Line). Once opened, Crossrail will provide up to 12 trains an hour with journey times to Canary Wharf in 3 minutes and Liverpool Street in 10 minutes.

London City Airport is situated circa 1.5 miles to the south of the retail park and is recognised as a major international airport in the UK, servicing regular flights to major European destinations such as Berlin, Milan and Rome. It is the fifth-busiest airport in terms of passengers and aircraft movements serving the London area, handling over 4 million passengers per year. The airport is currently undergoing a £480m development programme to quadruple the terminal’s size and to create the UK’s first Digital Air Traffic Control Tower.

A12

A13

A2

A228

A26A21

A25

A21

A23

A217

A3

A3

A24

A316

A30

A4

A40

A41 A10

A10

A12

A102

A205A2

A12

A1

A20

A406

A406

A22

A232

A127

A413

A406

M25

M11M1

M25

M25

M3

M25

M20

BECKTON TRIANGLERETAIL PARKBECKTON TRIANGLERETAIL PARK

CaterhamCaterham

CobhamCobham

LONDONLONDON

RomfordRomford

EnfieldEnfield

StratfordStratford

EdgwareEdgware

HarrowHarrow

HayesHayes

TwickenhamTwickenham

KingstonKingston

EpsomEpsom

BromleyBromley

DartfordDartford

BrentwoodBrentwood

GravesendGravesend

StainesStaines

WatfordWatford

Crossrail will provide services from Custom House to Canary Wharf (3 mins) and Liverpool Street (10 mins).

Crossrail

CUSTOM HOUSE

WHITECHAPELFARRINGDONBOND STREET

PADDINGTON

HEATHROW TERMINAL 5

STRATFORD

TOTTENHAM COURT ROAD

10 mins

DLR

3 minsCANARY WHARF

DLR

Jubilee

Circle

LUTON

GATWICK

Metropolitan

Hammersmith & City

Hammersmith & City

Bakerloo

Circle

District

District

Hammersmith & City

Overground

LIVERPOOL STREET

STANSTED

Metropolitan

Circle

Hammersmith & City

Northern

Central

DLR

Jubilee

Overground

Central

Northern

Central

Jubilee

Central


5

ExCel London

Royal Albert Dock

A13

A13

A1020

Canary Wharf

Beckton Retail Park

Beckton Gateway Retail Park

Alpine Way, London Industrial Park

London City AirportUniversity of East London

Gallions Reach

Custom House

Beckton

Gallions Reach Shopping Park



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CATCHMENT AND DEMOGRAPHICS

SITUATIONThe subject property occupies a highly prominent position at the major junction of the A13 (Newham Way) and the A1020 (Royal Docks Road), forming part of one of the largest critical masses of retail warehousing in the UK.

The immediate area has over 730,000 sq ft of open A1 food and non-food retail warehousing including Gateway Retail Park, Beckton Retail Park, a dominant Sainsbury’s foodstore and Gallions Reach Shopping Park.

Other uses in the immediate area include Alpine Way Industrial Park and London Industrial park, which includes multinational businesses such as Britvic, Reiss and Booker wholesale.

The imminent arrival of Crossrail has been a catalyst for significant residential development in the wider catchment.

Beckton draws upon an extensive catchment population of 384,437 within a 10 minute drive-time of the subject property and 1,072,326 within a 15 minute drive-time. The Newham population stands at 324,000 and is forecast to reach 381,000 by 2024, showing a 15% population increase.

The Local Plan (2018) reports major new housing and infrastructure provision within Beckton for at least 5,278 new homes. The recent decommissioning of the gasworks site has provided a regeneration opportunity to redevelop the site to include a re-modelling of Gallions Reach as part of a new town centre, which will provide a catalyst for growth in the local area.

A12

A13

A2

A228

A26

A21

A25

A21

A23

A217

A3

A3

A24

A316

A30

A4

A40

A41 A10

A10

A12

A102

A205

A2

A12

A1

A20

A406

A406

A22

A232

A127

A413

A406

M25

M11

M1

M25

M25

M3

M25

M20

CaterhamCaterham

CobhamCobham

LONDONLONDON

RomfordRomford

EnfieldEnfield

EdgwareEdgware

HayesHayes

KingstonKingston

EpsomEpsom

DartfordDartford GravesendGravesend

StainesStaines

WatfordWatford

BECKTON TRIANGLERETAIL PARKBECKTON TRIANGLERETAIL PARK

384,437population 10 min

Drive-time

1,072,326population 15 min

Drive-time

Beckton forecast to have a population increase of 15% by 2024.

20 mins 15 mins 10 mins


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RETAIL WAREHOUSE PROVISIONThe subject property forms part of a significant retailing destination comprising 730,000 sq ft of out of town provision in the immediate area. An overview of the key schemes is provided below.

Gallions Reach Shopping Park (Aberdeen Standard Investments)

Size – 318,399 sq ft.

Tenants – Tesco Extra (109,000 sq ft), Footlocker, River Island, Clarks, Boots, TK Maxx, H Samuel, Decathlon, Sports Direct, JD Sports, H&M, Superdrug, Next, Bella Italia, McDonald’s, Nando’s.

Planning – Open A1 part food.

Rental Tone – £20.00 - £40.00 per sq ft.

Comment – Dominant shopping park, drawing on a large catchment. The scheme is allocated for a major town centre regeneration with the former gasworks.

Beckton Gateway Retail Park (Aberdeen Standard Investments)

Size – 157,000 sq ft.

Tenants – B&Q (102,368 sq ft), Pets At Home, Halfords, Wren, Tapi, McDonald’s, KFC, Starbucks, Domino’s, Subway, Creams.

Planning – Open A1 non-food.

Rental Tone – £17.50 - £30.00 per sq ft.

Comment – A strong bulky goods tenant line up with no vacancies.

Sainsbury’s, Beckton (J Sainsbury Plc)

139,318 sq ft Sainsbury’s superstore.

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Beckton Retail Park, Alpine Way (CCLA Investment Management)

Size – 192,860 sq ft

Tenants – Iceland, Topps Tiles, Poundstretcher, Selco, Home Bargains, Dreams, Matalan.

Planning – Open A1 part-food.

Rental Tone – broadly £10.00 - £20.00 per sq ft.

Comment – Discount led scheme with phased redevelopment potential for residential use.

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East Beckton District Centre (Asda stores)

90,728 sq ft Asda superstore.

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A1020A13



Barking

Beckton

Barking

13

5

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DESCRIPTION AND SITE

TENURE

The subject property comprises a modern retail warehouse park arranged to provide a cluster of nine retail warehouse units plus two restaurant pod units totalling 138,082 sq ft at ground floor. Adjacent to the units are a total of 457 car parking spaces with a further 21 staff car parking spaces accessed via the service yard, providing a ratio of 1:289 sq ft.

Customer access to the property is from A1020 (Royal Docks Road) and the units are serviced from the rear via the shared customer access road. The property is also served by a dedicated bus stop on a slip road from the A13, which provides direct pedestrian access onto the site.

The total site area extends to approximately 13.1 acres with very low site coverage of 29%. The freehold site comprises 2.3 acres and the land held on a long lease comprises approximately 10.8 acres.

The park is held majority long leasehold on a 250 year long leasehold from 21 November 1997 (in excess of 228 years unexpired) from the London Borough of Newham at an annual rent of £1. The western end of the site comprising Unit 2-3 is held freehold.

There is a restrictive covenant in favour of Sainsbury’s preventing the sale of food on the site.

ROYAL D

OC

KS RD

CLAPS

GAT

E LAN

E

P.F.S.

A1020

NEWHAM WAY

457

CAR PARKING

SPACES

A13

Freehold Long Leasehold

CLAPS GATE

LANE

PROPOSED DEVELOPMENT


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TENANCY

Unit Name Lease (Tenant) GIA (sq ft) Mezz (sq ft) Lease Start Lease Expiry Tenant Break Rent review Rent (pa) Rent (psf) Comments EPC

Unit 1 Dunelm (Soft Furnishings) Ltd (Dunelm)

25,062 22,533 25/03/1998 25/03/2023 - - £1,013,000 £40.52 Former PC World. Fixed 5 yearly uplifts. Assigned to Dunelm in 04/2017. Under a side Deed, Dunelm paid £572,000 pa, which increased to £600,000 pa from 25/03/2018, with DSG reimbursing the differential. Tenant installed mezzanine. Assumed area at review of no more than 25,000 sq ft.

B-42

Unit 1a Vacant (Vendor Guarantee)

2,532 1,915 - - - - £76,000 £30.02 Former Maplin - occupational costs are with administrator. Interest from regional operator and for sub-division of the unit. Vendor to provide 2 year rent, rates and s/c guarantee at £76,000 pa.

B-43

Unit 2&3 B&M Retail Ltd (B&M)

20,169 873 03/02/2016 02/02/2031 - 03/02/2021 £405,780 £20.12 Rent review cap of £454,473.60. 2019/20 s/c cap of £22,186.19 grown annually at RPI. Landlord shortfall of £16,069. Landlord covenant to retain car parking spaces across Estate.

A-25

Unit 4a Steinhoff UK Group Properties Ltd (Harveys/Bensons)

9,924 6,640 24/06/1998 23/06/2023 - 24/06/2018 £288,300 £29.05 Assigned to tenant in 06/2012. Deed of variation to allow sharing the occupation with subsidiary companies.

C-59

Unit 4b Carpetright plc (Carpetright)

10,013 8,367 25/03/1998 24/03/2023 - - £0 £0.00 Carpetright in occupation at nil rent as part of CVA (Cat C) but are covering occupational costs. Rolling landlord breaks on 3 months' notice.

C-52

Unit 5 A Share & Sons Ltd (ScS)

9,678 7,847 04/09/2000 23/06/2023 - 24/06/2020 £283,000 £29.24 C-58

Unit 6 Argos Ltd (Argos) 15,202 15,095 24/06/1998 23/06/2023 - 24/06/2018 £424,500 £27.92 No build zone. D-79

Unit 7a DSG Retail Ltd (Currys PC World)

25,036 4,239 25/03/1998 24/03/2023 - - £1,013,000 £40.52 Lease varied in 06/2005 to provide fixed 5 yearly uplifts. Assumed area of 25,000 sq ft at review.

B-41

Unit 7b DFS Furniture Company Ltd (DFS)

15,182 464 25/12/1998 24/12/2023 - - £537,635 £35.41 Lease varied in 12/2005 to provide fixed 5 yearly uplifts.

C-71

Pod Costa Ltd (Costa) 1,744 - 26/10/2015 25/10/2030 - 26/10/2020 £73,663 £42.24 Tenant option to break lease in first 6.5 years of the term on 6 months’ notice if lease is granted to Starbucks or Caffe Nero in first 6 years of term.

C-58

Restaurant Pizza Hut (UK) Ltd (Pizza Hut)

3,540 - 24/06/1998 23/06/2023 - - £104,000 £29.38 No build zone. Rents paid monthly by side letter. Uplift at last review from £101,500 pa.

D-59

Total / Average 138,082 67,973 £4,218,878 £30.55

Adopting a rental guarantee for Unit 1A, the gross passing rent is £4,218,878 pa with a WAULT to expiry of 4.65 years and a net operating income of £4,202,808 pa after the deduction of landlord shortfalls deriving from B&M’s service charge cap and the long leasehold headrent payment of £1 pa.


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TENANT COVENANTS

Latest Accounts Turnover Pre-Tax Profits Net Worth D&B Rating

2018 £1,050,100,000 £91,500,000 £121,100,000 5A1


2018 £2,629,145,000 £236,006,000 £600,542,000 5A1


2017 £76,966,000 £2,120,000 £33,632,000 4A4


2017 £443,800,000 (£70,500,000) (£7,700,000) N4


2018 £337,313,000 £13,985,000 £43,873,000 5A1


2018 £4,162,557,000 (£145,305,000) £374,264,000 5A2


2018 £2,200,000 (£7,800,000) £36,900,000 5A1


2018 £4,344,000,000 £142,900,000 £655,700,000 5A1


2018 £951,684,000 £105,215,000 £521,738,000 5A1


2017 £225,210,000 (£7,512,000) £52,376,000 5A1

of the current gross income is secured by covenants rated 5A1 (minimum risk) by Dun & Bradstreet, offering excellent income security.

81%


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Mark GirlingT: 020 7312 7460

M: 07770 851 123

E: [email protected]

Nick RichardsonT: 020 7312 7420

M: 07818 012 420


Will CollinsT: 020 7312 7405

M: 07972 148 262


Misrepresentation Act 1967

Montagu Evans LLP for themselves and for the vendors or lessors of this property whose agents they are, give notice that : (i) The particulars are set out as a general guideline only for the guidance of intending purchasers or lessees and do not constitute the whole or any part of an offer or contract.(ii) All descriptions, dimensions, references to condition and necessary permissions of the use and occupation, and other details are given in good faith without responsibility whatsoever and any intending purchasers or tenants should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise as to the correctness of each of them. (iii) Neither Montagu Evans LLP nor their employees has any authority to make or give any representation or warranties whatsoever in relation to the property. (iv) Unless otherwise stated, all prices and rents are quoted exclusive of VAT and intending purchasers or lessees must satisfy themselves independently as to the applicable VAT position. (v) All the plans and maps provided within the particulars are for identification purposes only. August 2019

16790.001 | August 2019 Designed and produced by THE GROUP www.completelygroup.com

FURTHER INFORMATION

Edward GeorgeT: 020 7312 7489

M: 07818 012 489


ASSET MANAGEMENTThe scheme presents a number of asset management opportunities, outlined below:

Opportunity to re-let Unit 4b, where there is interest from a national retailer.

Re-let Unit 1a as a whole or a sub-division to enhance the retail offer.

Re-gear and extend leases throughout the park to extend the WAULT.

Explore potential for longer term redevelopment to residential or logistic uses.

PLANNINGOpen A1 planning consent with restrictions. Further details are available upon request.

ENVIRONMENTALAn environmental and ground conditions report is available upon request, which concludes a low risk rating.

EPCsAvailable upon request.

VATThe property is elected for VAT.

PROPOSAL

£46,000,000Our client is seeking offers in excess of

(Forty Six Million Pounds) subject to contract and exclusive of VAT. A purchase at this level would provide an attractive 8.55% Net Initial Yield, based on purchaser’s costs of 6.78% and the net income of £4,202,808.

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