315-317 PURLEY WAY, CROYDON, SURREY CR0 4NU

PRIME LONDON TRADE COUNTER INVESTMENT

OPPORTUNITY

CROYDON

INVESTMENT CONSIDERATIONS• The London Borough of Croydon, the second largest London

borough in terms of population, is the focus of a £5.25bn regeneration programme making it one of London’s largest growth areas.

• The property benefits from a highly prominent frontage on the renowned Purley Way (A23), the principal route from Central London to the M23, M25 and Gatwick Airport and Croydon’s prime commercial Out of Town district.

• Two trade counter units totalling 10,068 sq ft (935.35 sq m).

• Multi let to two tenants including National Tyre Service Ltd (D&B 3A1) and Wolseley UK Ltd (D&B 5A1) generating a rental income of £140,825 per annum (average passing rent of £13.99 per sq ft).

• The property benefits from an attractive AWULT of 9.6 years to expiry and 6.6 years to break.

• Both tenants have recently signed reversionary leases demonstrating their commitment to the building and location.

• The site extends to 0.54 acres providing a low site coverage of 43%.

• Freehold.

• Strong income profile with both tenants defined by Dun & Bradstreet as ‘low risk’.

• The shortage of trade counter stock in Greater London continues to see upwards pressure on rents and reducing incentives.

• Longer term potential for future residential or commercial redevelopment of the site, subject to planning.

• Offers sought in excess of £2,940,000 (Two Million, Nine Hundred and Forty Thousand pounds) subject to contract and exclusive of VAT. This reflects an attractive net initial yield 4.50%, after deduction of purchase costs of 6.44%, equating to a capital value of £292 per sq ft.

CROYDON | 315-317 PURLEY WAY | CROYDON | SURREY | CR0 4NU

A127

A102

A503

A312

A232

A217A243

A240

A228

A13

A12

A40

A23

A40

A20

A21

A22A24

A24

A23

A26

A2

A2

A1

A4

A3

A3

M25

M25

M25

M25

M25

M25

M3

M3

M4M4

M23

M26

M20

LONDON

Romford

DagenhamWembley

Harrow

HayesSlough

Windsor

Egham

Ascot

Woking

Weybridge

Leatherhead

Epsom

Guildford Redhill

Oxted

Sevenoaks

Tonbridge

Bromley

DartfordTwickenham

CROYDON

CROYDON ROAD A 2 32

C R OYDO N R OAD

BARCLAY RO A D A 23 2

A232

DUPPAS HILL R O A D

A

232

PU

RLEY W

AY

A23

PUR

LEY WAY

A23

PU

RLEY W

AY

B272

BED

DIN

GTO

N LA

NE

B272

PLO

UG

H LAN

E

STA F F O R D R OAD

A236

MITCHAM ROAD

RO

MA

N W

AY O

LD TOW

N

A213

A222 ST JAMES’S ROAD A222

A212

WELLESLEY RO

AD

CH

ERR

Y

ORCHARD ROAD

LOWER COOMBE R D COOM BE ROAD

PA

RK

LAN

E ST PETER

’S RD

A236

A235

SUBJECT PROPERTY

DENNING A V E N U E W ARHAM ROAD

SELSDON

RD

CROYDONCROYDON

CENTRALESHOPPING

CENTRE

JOHN LEWIS

IKEA

B&Q

VUE CINEMA

CURRYSPC WORLD

DECATHLON

ASDATK MAXX

MORRISONS

PRIME LONDON TRADE COUNTER INVESTMENT OPPORTUNITY

LOCATIONCroydon is the largest commercial centre in South London due to its strong transport connections and close proximity to Central London. The town is strategically located approximately 10 miles (16 km) south of Central London and 6 miles (10 km) north of Junction 7 of the M25 motorway.

The town is located adjacent to the A23 Purley Way which is the principal route south from Central London to the M25/M23 motorways and Gatwick airport. Another key route, the A232 Croydon Road provides direct access to Junction 4 of the M25 motorway approximately 12 miles (19 km) to the east and the Surrey towns of Kingston and Sutton to the west.

Gatwick Airport, the UK’s second largest airport, is located approximately 18 miles (29 km) to the south via the A23 and M23.

Croydon boasts a primary catchment of 866,000 and is projected to see significantly above average population growth in the period 2016-2021. 51% of the population are classed as being in the most affluent ABC1 social groups (PMA) which comprises a healthy mix of affluent families, London commuters and young working professionals. Croydon is becoming an increasingly desirable place to live highlighted by the growth in residential values over the last 5 years of approximately 35% (Land Registry House Price Index).

Croydon is currently undergoing one of the most significant commercial regeneration projects in Greater London thanks to a £5.25bn regeneration programme. This includes a multi-million pound upgrade to Croydon train station and the £1.4bn redevelopment of the Whitgift and Centrale shopping centre sites by Westfield and Hammerson. The new scheme, which will transform the centre of Croydon, will be anchored by John Lewis and Waitrose and will comprise 1.5m sq ft of retail and leisure (over 300 shops), seven new hotels, 2.8m sq ft of Grade A office space and 10,500 new homes.

SITUATION The subject property is situated in a highly prominent position on the A23 Purley Way, close to the intersection with the A232. Purley Way is a primary commercial area offering a range of mixed uses including foodstores, retail parks, car dealerships, trade counter and industrial properties.

Waddon train station is situated less than 0.5 miles (0.8 km) from the subject property and provides a direct rail service to London Bridge and London Victoria with a fastest journey time of under 30 minutes.

Given the exceptional road and rail connections and high population density in the area, Purley Way is a sought after location for retail warehouse and trade counter occupiers and there is nearby representation from Sainsbury’s, John Lewis At Home, Next, Decathlon, Ikea and Morrisons.

A23 Purley Way

Tesco DistributionCentre

Sainsbury’s

Decathlon

IkeaB&Q

Vue Cinema

Makro

John Lewis

Wandle Park

Next Home

CentralLondon

SUBJECT PROPERTY

CROYDON | 315-317 PURLEY WAY | CROYDON | SURREY | CR0 4NU

DESCRIPTIONThe property comprises a highly prominent terrace of two trade counter units totalling 10,068 sq ft (935.35 sq m) (GIA). The buildings are of steel portal frame construction with part profile metal clad/part brick elevations.

The units benefit from the following specification:

• 3 level access operated loading doors

• Eaves height of 4.9 metres

• Reinforced concrete floor

The site extends to 0.54 acres providing a low site coverage of 43%.

ACCOMMODATION The property has been measured in accordance with the RICS Code of Measuring Practice (6th Edition) comprising the following gross internal floor areas:

Address Tenant Sq ft Sq m

317 Purley Way National Tyre Service 4,043 375.61

315 Purley Way Wolseley UK 6,025 559.74

Total 10,068 935.35

TENUREThe property is held freehold.

PRIME LONDON TRADE COUNTER INVESTMENT OPPORTUNITY

TENANCY DETAILSThe property is fully let to two tenants in accordance with the tenancy schedule below generating a total rental income of £140,825 per annum. The property benefits from an AWULT of 9.6 years to expiry and 6.6 years to break.

Unit TenantArea

Lease Start Next Rent Review

Lease Expiry Break

Rent Service Charge Comments

Sq ft Sq m £ p.a. £ psf

Unit 1 (317 Purley Way)

National Tyre

Service Ltd 4,043 375.61 09/09/2012 09/09/2022 28/09/2028 - £56,000 £13.85

Reversionary lease signed on 08/04/2019 at £56k pa (uplift from £44,000 pa) which commences on 08/09/2022.

Unit 2 (315 Purley Way)

Wolseley UK Ltd 6,025 559.74 08/04/2019 08/04/2024 07/04/2029 07/04/2024 £84,825 £14.08

Renewal. Tenant granted 4 months rent free if TBO not exercised and penalty payable by tenant of £42,412.50 if TBO is exercised. Uplift from £58,301 pa.

Total 10,068 935.35 £140,825

CROYDON | 315-317 PURLEY WAY | CROYDON | SURREY | CR0 4NU

VATThe property is elected for VAT and it is proposed that the sale will be treated as a Transfer of Going Concern (TOGC).

ENERGY PERFORMANCE CERTIFICATEThe property has EPC ratings of B (band 48) and D (band 90). Copies of the EPCs are available on the Lewis Ellis website.

DATA ROOMThere is a dataroom for the property with key tenancy information, title documents and the EPC. Access to it can be obtained via the current sales page on the Lewis Ellis website: www.lewisellis.co.uk

PRIME LONDON TRADE COUNTER INVESTMENT OPPORTUNITY

Wolseley UK Ltd Wolseley is the operating subsidiary of Ferguson plc, the worlds largest trade distributor of plumbing and heating products and a leading supplier of building materials. Wolseley UK has 567 branches across the UK which provide same day and next day product availability served by six distribution centres. The brand is a market leader with an outstanding reputation for supplying the building trade.

Wolseley UK Ltd has a Dun & Bradstreet rating of 5A1 representing a ‘minimum risk’ of business failure. The company recorded the following accounts over the last 3 years:

Wolseley UK Ltd 31 Jul 2018 (£000’s)

31 Jul 2017 (£000’s)

31 Jul 2016 (£000’s)

Sales Turnover 1,768,178 1,886,999 1,865,856

Profit/(Loss) before Taxes 65,197 29,909 (4,559)

Tangible Net Worth 577,460 461,660 630,415

Net Current Assets (Liabilities) 204,101 226,228 511,973

COVENANT INFORMATION National Tyre Service Limited National Tyres are the UK’s largest independent tyre and autocare specialist operating from 235 sites across the UK. The company provides automotive repair services including tyres, exhausts, brakes, batteries, MOT testing and vehicle safety inspections.

National Tyre Service Limited has a Dun & Bradstreet rating of 3A1 representing a ‘minimum risk’ of business failure. The company recorded the following accounts over the last 3 years:

National Tyre Service Limited 31 Dec 2018 (£000’s)

31 Dec 2017 (£000’s)

31 Dec 2016 (£000’s)

Sales Turnover 140,758 131,166 127,422

Profit/(Loss) before Taxes 4,217 2,916 5,774

Tangible Net Worth 13,400 12,520 11,576

Net Current Assets (Liabilities) 4,040 3,058 1,257

CROYDON | 315-317 PURLEY WAY | CROYDON | SURREY | CR0 4NU

INVESTMENT MARKET COMMENTARY Investor demand for greater London trade counter/industrial assets remains very strong and buying opportunities are hotly contested. The supply/demand imbalance currently favours landlords and provides excellent future rental growth prospects which investors are looking to take advantage of. This has led to yields of sub 4% being achieved in Greater London and the South East.

London multi-let industrial estates were the best performing sub-sector in 2018 with total returns of 21.22%. The sector is set to continue to perform, with forecasts predicting a total return of 7.80% across the next 5 years, compared to an All Industrial total return of 6.50% (RealFor Forecasting).

Listed below are some recent transactions showing evidence of current pricing levels:

Location Date Area (sq ft) AWULT Average

Rent (psf) Price Yield (NIY)

Cap Val (psf)

Halfords Autocentre / National Tyres, Hendon

Mar 2019 8,424 7.2 £13.65 £3.65m 2.96% £433

Forest Trading Estate, Walthamstow Dec 2018 27,215 5.07 £14.88 £11m 3.45% £404

St Margaret’s Business Centre, Twickenham

Dec 2018 33,479 0.86 £7.05 £7.9m 2.80% £236

Units 1-5, Purley Way, Croydon July 2018 36,460 4.4 £7.49 £7.85m 3.26% £215

Wolseley, Felstead Road, Epsom Mar 2018 22,751 9.1 £10.32 £6.0m 3.68% £264

PRIME LONDON TRADE COUNTER INVESTMENT OPPORTUNITY

CROYDON | 315-317 PURLEY WAY | CROYDON | SURREY | CR0 4NU

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. June 2019.

David KosTel: 020 7493 3330Mob: 07709 813 267E: dkos@lewisellis.co.uk

Fred Daeche-MarshallTel: 020 7493 3330Mob: 07785 741 700E: fdmarshall@lewisellis.co.uk

Simon LewisTel: 020 7493 3330Mob: 07831 527 960E: slewis@lewisellis.co.uk

PROPOSALWe are seeking offers in excess of £2,940,000 (Two Million, Nine Hundred and Forty Thousand Pounds) subject to contract and exclusive of VAT.

This reflects an attractive net initial yield of 4.50%, after deduction of the usual purchaser’s costs of 6.44%, equating to a capital value of £292 per sq ft.

FURTHER INFORMATION Should you require further information or wish to view the property, please contact either: