165-167 Burton Stone Lane, York, YO30 6DG

Convenience Store Investment in the historic City of York

Let to:

On assignment from:

FOR SALE

• Prominent corner location fronting onto Burton Stone Lane, a predominantly residential neighbourhood to the immediate north of the city centre.

• A newly refurbished convenience store let to Heron Food Ltd upon assignment from Tesco Stores Ltd. Tesco assigned to Heron Foods prior to opening.

• The property is secured on a 20 year lease with a tenant option to break at years 10 and 15. Lease commencement date of 4th December 2014 providing c. 7 years to the nearest termination date.

• Passing rent of £50,000 per sq ft (£12.72 per sq ft) with 5 yearly, compounded annually, rent reviews to RPI (0 – 4%).

• Freehold. Strong yield compression opportunity due to the recent purchase of Heron Foods by B&M Bargains in Q2 2017.

• Seeking offers in excess of £700,000 reflecting a NIY of 6.78% assuming purchasers costs of 5.30%.

• Ideal SIPP purchase.

Investment Summary

York

Let to the strong covenants of Heron Foods, on assignment from Tesco Stores

LocationThe City of York, which has a population of approximately 206,900 (mid 2015 estimate) is a renowned heritage city and is located on the River Ouse in North Yorkshire. York is situated 21 miles from Leeds, 70 miles from Manchester, and 200 miles from London. York benefits from an orbital ring road providing access to Leeds and the A1(M) (Newcastle to London) via the A64. The Transpennine M62 motorway is 27 miles south west of York providing links to Manchester and Liverpool. York railway station is a principal stop on the East Coast Main Line to London in a fastest time of 1 hour 57 minutes. The Trans Pennine Express provides frequent services to Leeds (23 minutes), Newcastle (1 hour 7 minutes), Manchester (1 hour 18 minutes), Manchester Airport (1 hour 46 minutes) and Liverpool (1 hour 53 minutes).

A628

A623 A61

A63

A15

A1(M)

A1(M)

A1(M)M621

M66

M56

M6

M62

M180

M1

Harrogate

LeedsBradford

Halifax

Hull

Scunthorpe

Rotherham

Rochdale

Oldham

WarringtonSalford

Bolton

BlackburnBurnley

Keighley Tadcaster

Shef�ield

Barnsley

YORK

MANCHESTER

Maccles�ieldChester�ield

Wake�ieldHudders�ield

York

The property is situated c. 0.75 miles in a northerly direction from the centre of York and c. 1.5 miles to the south of the nearest perimeter to the A1237 (ring road). York Hospital and York Football Club are located 0.5 miles to the east and south respectively.

The property is situated on the corner of Burton Stone Lane and Cromer St in a predominantly residential neighbourhood called Clifton. The area is characterised by terraced and semi-detached dwellings and various other convenience led retailers which are situated along Burton Stone Lane. There is a bus stop directly outside the property.

Situation

DescriptionThe building is a two storey (plus basement) converted public house, occupying an end terrace position. The property is brick built with double glazed windows under a pitched slate roof. There is off-street parking for 2 cars to the front of the property.

TenancyLet in its entirety to Heron Foods Ltd on a 20 year lease with a tenant option to break at years 10 and 15. The lease commenced on 4th December 2014, therefore providing c. 7 years to the nearest termination date. On 6th March 2017 the property was assigned by Tesco Stores Ltd who under the terms of their lease now guarantee the rent by way of an Authorised Guarantee Agreement (AGA). Rental of £50,000 per annum (£12.72 per sq ft) with 5 yearly rent reviews to RPI (compounded annually), collared and capped at 0% and 4% respectively. The lease is drawn on a fully repairing and insuring basis.

AccommodationWe understand the property provides a net ground floor sales area of 2,491 sq ft with a gross area of 1,441 sq ft at 1st floor. There is lift access to the 1st floor which has been cleared and is used for stock storage. Please note these areas are taken from architect drawings. The basement has not been inspected.

TenureFreehold.

York

Covenant Information

Heron Foods Ltd (01392197)

Heron Foods is an English retail chain founded in 1979 and is based in Melton with 251 stores, primarily in the north of England and Midlands. The company employs c. 3,800 people. Heron primarily sell frozen food, but has a wide range of dry and chilled stock with named brands.

In Q2 2017, due to their aligned customer profiles, value giant B&M bought Heron Foods for £152m to develop a “discount convenience grocery brand”. The intention is to expand and develop the Heron business, initially through the opening of between 10 and 20 new stores per year.

Heron Foods Ltd has reported for the year end 2016 figures of £274.4m (turnover), £8.727m (pre-tax profit) and £36.9m (net assets).

Tesco Stores Ltd (00519500)

Tesco PLC is a British multinational grocery retailer headquartered in Welwyn Garden City. It is the third largest retailer in the world measured by profits. It has stores in 12 countries across Asia and Europe and employs more than 476,000 people.

Tesco Stores Ltd has reported for the year end 2016 figures of £39,843,000,000 (turnover), -£231,000,000 (pre-tax profit) and £1,077,000,000 (net worth).

York

TermsVATThe property is elected for VAT although it is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).

EPCCopies of the certificates are available upon request. ProposalWe are instructed to seek offers in excess of £700,000. Based on purchaser’s costs of 5.3%, this reflects a net initial yield of 6.78%.

ContactMatthew Cox MRICSmatt@kingstreetcommercial.com0161 850 049807788 999911

IMPORTANT NOTICE. MISREPRESENTATION ACT 1967. KING STREET COMMERCIAL, FOR ITSELF AND FOR THE VENDORS OF THIS PROPERTY, HEREBY GIVE NOTICE THAT: These particulars do not constitute, nor constitute any part of, an offer or contract. King Street Commercial Ltd and its members accept no legal responsibility for any statement or representation whether written, oral or implied or whether contained in any advertisement particulars or other matters issued or any correspondence entered into by them and whether made in any antecedent present or subsequent enquiries or negotiations. Neither King Street Commercial nor their principals, members, agents, servants or representatives have any authority whatsoever to make or give any representation or warranty whatsoever whether written or implied in relation to this property. Any intending purchaser must satisfy himself by inspection or otherwise as to the correctness of any antecedent present or subsequent statements or representations, and should not rely upon the same unless he has satisfied himself accordingly. Unless otherwise stated all prices and rents are quoted exclusive of Value Added Tax (VAT), any intending purchasers or lessees must satisfy themselves independently as to the incidence of vat in respect of any transaction. Published November 2017.

Darren Moorhouse MRICSdarren@kingstreetcommercial.com0161 850 7788 07778 159922

Ted Murray MRICSted@kingstreetcommercial.com0161 850 0497 07766 003322

King Street Commercial www.kingstreetcommercial.com

Subject to Contract - November 2017

York