B&Q WarehouseCoatbridge

Tennent Street ML5 4ANFor Sale Well Let Retail Warehouse Investment

B&Q Warehouse Coatbridge | Tennent Street | ML5 4AN

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Executive Summary » Coatbridge is situated east of Glasgow approximately

11.5 miles from the city centre.

» The town has a resident population of 43,841 and a wider District population of 326,680.

» The property is situated in a prominent position adjacent to Faraday Retail Park on the edge of the town centre.

» The subjects comprise a modern purpose built retail warehouse unit extending to 102,757 sq ft and flanked by builders yard and garden centre.

» The development incorporates surface parking for 600 cars (1 space per 171 sq ft).

» DIY consent.

» Let to B&Q plc (D&B Rating 5A1) until 10 December 2022.

» Rental of £1,331,200 per annum exclusive (£12.95 per sq ft).

» Offers in excess of £17.5M invited representing a net initial yield of 7.19%.

» The proposition offers secure income with longer term

development potential.

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LocationCoatbridge is situated in North Lanarkshire in Scotland’s central belt. The town is in the eastern market area of the large conurbation which is centred upon Glasgow. More than one-third of Scotland’s population lives within a 30-minute drive of the town.

DemographicsThe population of the North Lanarkshire local authority area is 326,680 (2011 Census). This population is projected to rise by 4.3% to 340,680 by 2022. North Lanarkshire includes the main settlements of Coatbridge, Cumbernauld, Airdrie, Motherwell and Wishaw. The resident population of Coatbridge is 43,841 (2011 Census).

TransportCoatbridge is strategically located adjacent to the north side of the A8(T)/M8 motorway, the principal road link between Glasgow and Edinburgh. In addition, the town lies only a few miles to the east of the M73/M74 interchange, the M74 comprising the principal route from west central Scotland to the South. The Eurocentral railfreight terminal is within 2 miles drive. Coatbridge is served by a good rail network connecting it with both Glasgow and Edinburgh and Glasgow Airport lies only some 30 minutes’ drive to the west.

M80

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Dalgety Bay

Kirkcaldy

Glenrothes

Galashiels

Carluke

Ayr

Prestwick

Irvine

Ardrossan

Falkirk

Livingston

Dumbarton

Dunfermline

St Andrews

Perth

North Berwick

Troon

Cumnock

Dumfries

Wigtown

Newton Stewart

Stranraer

Siloth

LockerbieLangholm

Gretna

Carlisle

Alnwick

Hawick

Jedburgh

Melrose

Haddington

Lanark

Biggar

Peebles

AirdrieCoatbridge

Wishaw

Greenock

Paisley

Kilmarnock

East Kilbride

Hamilton

Stirling

Largs

Dunoon

Campbeltown

GLASGOW

NEWCASTLE

EDINBURGH

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Scotland GB

2011 2012 2013 2014

Retail Market Overview Retail sales in Scotland increased by 0.8% during quarter two 2014 and by 2.9% over 12 months (Scottish Government). The recovery in sales volumes in Scotland since 2012 matches the overall performance across Great Britain. Retail expenditure is recovering as employment rises and price inflation abates.

North Lanarkshire is polycentric and does not have a dominant shopping centre. Retailing therefore has a significant local role in each town, including in Coatbridge. The 7,800 sq m Quadrant Centre in the town centre was built in the 1990s and includes national multiples such as Argos, Iceland and New Look. Additionally a range of traditional high street retail units supports a mix of independent and retailers including Superdrug, Specsavers, Boots and Asda. Faraday Retail Park is adjacent to the town centre and opposite B & Q. Town centre improvement works have recently been undertaken and included improved links from Main Street to the Retail Park.

Index of Retail Sales Volume at basic prices, 2008-2014 Q2 (2011 = 100)

DIY SectorSales in the DIY retail sector grew by 5% in 2013, with predictions for 2014 showing healthy growth (MINTEL). The sector is gaining from the increase in residential property market activity; with the market for home improvements closely linked to the number of house moves. Verdict also expects that the DIY market in the UK will return to growth in 2014, for the first time since 2007.

B&Q Warehouse Coatbridge | Tennent Street | ML5 4AN

4

A725

A89Faraday

Retail Park

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A725

Caldeen road

B&Q Warehouse Coatbridge | Tennent Street | ML5 4AN

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SituationThe subject property is situated in a prominent position on the edge of Coatbridge town centre and benefits from frontage to the A725 (Whifflet Street). The A725 links Coatbridge town centre to the A8 and in turn the M8 (Glasgow – Edinburgh motorway).

Faraday Retail Park which extends to 28,892 sq m (311,000 sq ft) is situated adjacent to the subject property. The Park has the benefit of an unrestricted retail planning consent and is anchored by Tesco Extra, Next, Argos and Matalan.

Access to the site is via Caldeen Road and Tennent Street.

Description and AccommodationThe subject property trades as a B&Q Extra and comprises a modern retail warehouse development constructed in 2002 in accordance with the standard B&Q specification.

The development incorporates a retail warehouse unit (GIA: 9,546 sq m (102,757 sq ft), adjacent to garden centre 2,787 sq m (30,000 sq ft) and a bulk goods yard 1,860 sq m (20,000 sq ft) on a site of approximately 4.27 ha (10.544 acres). The development is served by 600 dedicated car spaces which represents a ratio of 1 space per 171 sq ft.

The retail warehouse unit is of steel portal frame construction with part brick/block and composite panel cladding. Internally the unit is fitted out to the standard B&Q format incorporating the usual facilities and a small customer café. There is a designated service yard incorporating a 27 metre diameter turning circle to the rear of the unit with access from Tennent Street.

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AlbionRovers FC

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B&Q

B804

B753

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A725

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WHIFFLET

Whi�et Public Park

COATBRIDGE

Faraday Retail Park

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Tenancy and Rental AnalysisThe property is leased to B&Q plc (Registered No 973387) for a period of 20 years from 9 December 2002 until 10 December 2022. The current rent passing under the lease is £1,331,200 per annum and this is subject to an open market (upwards only) rent review on 9 December 2017. As at the date of these particulars the lease has a remaining term certain of just over 8 years.

The entire site incorporating surface car park and landscaped areas is leased to the tenant on full repairing and insuring terms.

The annual rental of £1,331,200 per annum based upon the measured area of 102,757 sq ft equates to a rental of £12.95 per sq ft.

For the purposes of rent review the existence of the garden centre, bulky goods area etc should be assumed but no rental value should be attributed to these areas.

Tenant InformationB&Q plc is the largest home improvement and garden centre retailer in the UK, employing more than 30,000 people nationwide. The company currently operates from 350 stores in the UK, 8 stores in Ireland and over 60 stores internationally.

B&Q plc is part of Kingfisher plc, Europe’s leading home improvement retail group and the third largest in the world.

For the financial year ending 1 February 2014, sales turnover was £3.6bn with profit of £138.6m. The company has a tangible net worth of £4.4bn and a Dun & Bradstreet rating of 5A1 indicating minimum risk of business failure. The covenant is institutionally acceptable. A summary of the most recent accounts for the company is set out below.

B&Q plc 1/2/2014 (000’s)

2/2/2013 (000’s)

28/1/2012 (000’s)

Turnover 3,589,500 3,637,900 3,710,400

Profit before Tax 138,600 (44,100) 203,300

Tangible Net Worth 4,385,900 4,305,500 4,368,500

Net Current Assets 3,836,900 3,714,500 3,585,900

B&Q Warehouse Coatbridge | Tennent Street | ML5 4AN

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9

M80

M9

M9

M90

M8M80 M73

M74

M8

M74

A697

A68

A77

A77

A8

A811

A71A7

1

A702

A7

A1

A68

A92

A91A9

A91

A84

A702

A703

A72

A697

A721

A68

A76

A701A7

7

A78

A71 A71

A76

A70

A82

A82

A78

A737

A73

A7

A91

A90

A85A85

A92

A985

A720

A73

A726

A725

Dalgety Bay

Kirkcaldy

Glenrothes

Galashiels

Carluke

Ayr

Prestwick

Irvine

Ardrossan

Falkirk

Livingston

Dumbarton

Dunfermline

St Andrews

Perth

North Berwick

Troon

Cumnock

Dumfries

Wigtown

Newton Stewart

Stranraer

Siloth

LockerbieLangholm

Gretna

Carlisle

Alnwick

Hawick

Jedburgh

Melrose

Haddington

Lanark

Biggar

Peebles

AirdrieCoatbridge

Wishaw

Greenock

Paisley

Kilmarnock

East Kilbride

Hamilton

Stirling

Largs

Dunoon

Campbeltown

GLASGOW

NEWCASTLE

EDINBURGH

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The below map shows B&Q stores within a 10 mile radius of the subjects.

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1: B&Q Warehouse Tennent Street, Coatbridge (Subject Site)

2: B&Q Mini Warehouse Westway Retail Park, Cumbernauld

3: B&Q Supercentre Braidhurst Industrial Estate, Motherwell

4: B&Q Warehouse Forge Retail Park, Parkhead

5: B&Q Warehouse Nerston Industrial Estate, East Kilbride

6: B&Q Warehouse Strathkelvin Retail Park, Bishopbriggs

Radius

2.5 miles

5 miles

10 miles

B&Q Warehouse Coatbridge | Tennent Street | ML5 4AN

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TenureOutright Ownership/Heritable Interest (Scottish legal equivalent of freehold in England).

Planning

The B&Q site has a restricted Class 1 (Retail) planning consent, granted in outline in 2001 by North Lanarkshire Council. This consent states that “notwithstanding the provision of Class 1 of the Town & Country Planning (Use Classes) (Scotland) Order 1997, the proposed building and ancillary garden centre and bulk goods yard shall be used solely as a DIY store selling goods, services and materials for constructing, maintaining, improving and furnishing houses and gardens, in particular shall not be used for the sale of food, clothes, footwear and sports goods.”

Detailed planning consent was granted in May 2002. This included a condition stating that “the proposed building should be maintained as a single retail unit and shall not be split or sub-divided in any way at any time in the future.”

The current Development Plan comprises the Glasgow & Clyde Valley Strategic Development Plan (approved 2012) and the North Lanarkshire Local Development Plan (approved 2012).

Within the Local Development Plan (LDP), the main retail policy is RTC 1 Protecting the North Lanarkshire Network. This states that the Council will protect the network of centres as the continuing focus of retail, leisure, civic and community uses. With a view to doing so, the plan states what uses are appropriate for the various retail centres in North Lanarkshire. The B&Q site is covered by policy RTC 1B, wherein it states that the appropriate use for this site is for the sale of Class 1 Bulky Goods only. This is a slightly wider definition than that contained in the retail planning consent for the site, which restricts its use to DIY and a garden centre.

We are unaware of any major development proposals in the vicinity that would have an impact on the property.

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Capital AllowancesFurther information is available upon request.

VATThe property has been elected for VAT and therefore VAT will be payable on the purchase price. It is anticipated that the sale can be treated as a Transfer of a Going Concern (TOGC).

EPCThe property has an Energy Performance Rating of D+. A copy of the EPC can be provided upon request.

ProposalWe are instructed to seek offers in excess of £17,500,000 (Seventeen Million Five Hundred Thousand Pounds) exclusive of VAT for the benefit of our client’s heritable interest in the property. A purchase at this level would offer a net initial yield of 7.19% after deduction of purchaser’s costs at 5.8%.

Viewing and Further Information

Ryden LLP 46 Castle Street

Edinburgh EH2 3BN

Ford Swanson Tel: 0131 473 3236

Email: ford.swanson@ryden.co.uk

Nick Armstrong Tel: 0131 473 3223

Email: nick.armstrong@ryden.co.uk

Ryden is a limited liability partnership registered in Scotland. Messrs Ryden for themselves and for vendors or lessors of this property whose agents they are give notice that: (i) the particulars are set out as a general outline only for the guidance of intended purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract; (ii) all descriptions, dimensions, reference to condition and necessary permissions for use and occupation, and other details are given without responsibility 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) no person in the employment of Messrs Ryden has any authority to make or give any representation or warranty whatever in relation to this property. October 2014.