9
REVERSIONARY DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY Muller UK & Ireland Group, Brickyard Road, Aldridge, West Midlands WS9 8SR
REVERSIONARY DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY Muller UK & Ireland Group, Brickyard Road, Aldridge, West Midlands WS9 8SR
REVERSIONARY DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY // Muller UK & Ireland Group, Brickyard Road, Aldridge, West Midlands WS9 8SR www.mk2.co.uk
INVESTMENT SUMMARY
> Aldridge is an established industrial location within the West Midlands conurbation. The area has good motorway access with the M6 toll 6 miles to the north of the town and junction 7 of the M6 approximately 5.5 miles to the south.
> Prominent position on Brickyard Road 0.5 miles from the Town Centre and in the vicinity of a number of industrial estates including Haywood Industrial Park, Beecham Business Park and Empire Industrial Park.
> Freehold, two bay steel portal frame unit, originally constructed in the 1980’s and extensively refurbished and re-roofed in 2002 with a clear height of 9 metres. Benefitting from 1 level access door, 6 dock doors with levellers, a canopy and a large secure concrete yard.
> £3,025,000NIY 7.76% | CAP VAL £48.84 psf
> Gross Internal Area of circa 61,931 sq ft together with canopy area of 3,012 sq. ft.
> Let to Muller UK & Ireland Group LLP for 15 years from 8th July 2008 with a tenant break clause on 8th July 2018 subject to 9 months notice. The passing rent is £250,024 which equates to £4.00 per sq ft, the next open market rent review is on 8th July 2018.
> Highly reversionary to an estimated £297,749 per annum equating to £4.75 per sq ft.
> Formerly operating as Dairy Crest the unit is used as a milk distribution depot for a number of large supermarket contracts. The tenant upgraded the unit to provide a substantial chilled storage facility which is subject to full reinstatement provisions.
> For the year ending 2015 Muller UK & Ireland Group LLP had a turnover of £1.337billion and a net worth of £326million.
We are instructed to seek offers in excess of £3,025,000 (Three Million and Twenty Five Thousand Pounds) subject to contract, which reflects a net initial yield of 7.76% and a reversionary yield of 9.25% after allowing for purchasers costs of 6.46%. A purchase at this level would show a low capital value of £48.84 per sq. ft.
LOCATIONAldridge is an established industrial town on the edge of the West Midlands conurbation. It is strategically located in the centre of the Country and the logistics communications network, approximately 4 miles to the north-east of Walsall town centre, 7 miles north-west of Sutton Coldfield, 11 miles east of Wolverhampton and 12 miles north of Birmingham city centre. The area has good access to the motorway network with Junction 10 of the M6 approximately 5.5 miles to the south-west providing access to the M5, M40, M42, M54, M1 and M69 and Junction T6 of the M6 Toll 6 miles north. The majority of the industrial premises in Aldridge are concentrated in the area to the north and west of the town centre along Middlemore Lane, Westgate, Stubbers Green Road and Brickyard Road.
REVERSIONARY DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY // Muller UK & Ireland Group, Brickyard Road, Aldridge, West Midlands WS9 8SR www.mk2.co.uk
ALDRIDGE
MANCHESTER81 MILES
LEEDS105 MILES
LONDON134 MILES
LIVERPOOL92 MILES
NOTTINGHAM49 MILES
LEICESTER50 MILES
NORTHAMPTON61 MILES
BRISTOL96 MILES
SHREWSBURY42 MILES
BIRMINGHAM12 MILES
WALSALL
BIRMINGHAM
WOLVERHAMPTON
COVENTRY
BLOXWICH
SUTTONCOLDFIELD
ALDRIDGEM6
M6
M6
M6 TOLL
M6 TOLL
M5
M5M42
M42
M54
M6
A452
A34
A5
A5LICHFIELD RD
A4041
10
LOCATION DISTANCE (MILES)
Walsall Town Centre 4
Sutton Coldfield 7
Wolverhampton 11
Birmingham City Centre 12
M6 J10 5.5
M6 Toll JT6 6.0
REVERSIONARY DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY // Muller UK & Ireland Group, Brickyard Road, Aldridge, West Midlands WS9 8SR www.mk2.co.uk
SITUATIONThe property is situated on the eastern side of Brickyard Road between Empire Close and Vigo Place, approximately 0.5 miles to the north-west of Aldridge Town Centre.
The property is situated in an established industrial area with a number of industrial estates in the locality including Hayward Industrial Park, Beecham Business Park, Empire Industrial Park and Anchorbrook Industrial Park. Major occupiers in the vicinity include RMD Kwikform, Brownhills Glass, Wienerberger, Ibstock and Interserve.
LEIGHSWO
OD RD
STUBBERS GREEN RD
STUBBERS GREEN RD
A454 LITTLE ASTON RD
B4152
B4152
B4152
NORTHGATE WAY
BRIC
KYA
RD R
D
BOATM
AN
’S LN
BRICKYARD RD
WESTG
ATE
WHARF APPRO
AC
H
DUM
BLEDERRY LN
MIDDLEMORE LN
BYP
ASS
ALDR
IDG
E
LAZY
HIL
L RD
WA
LSALL W
OO
D R
D
WA
LSA
LL W
OO
D R
DW
ALSALL WO
OD RD
GREENWOOD RD
COPPICE LN
BIRC
H L
N
STONNALL RDA
461
WALS
ALL R
D
LICHFIELD RD
A461
A45
2 C
HES
TER
RD
A452 C
HESTER RD
MULLER UK
ALDRIDGE
HIGH HEATH
TO M
6J1
0
TO M
6 TOLL
JT6
REVERSIONARY DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY // Muller UK & Ireland Group, Brickyard Road, Aldridge, West Midlands WS9 8SR www.mk2.co.uk
DESCRIPTIONThe property comprises a detached two bay single storey warehouse constructed in the late 80s/early 90s and refurbished around 2002. The property is of steel portal frame construction with single storey offices to the front, battery charging room and works offices to the side. The warehouse has an approximate clear eaves height of 9 metres. The external envelope is finished in a combination of brick and profile clad steel elevations under a profile metal sheet roof incorporating translucent rooflights.
The property was originally served by 4 canopied raised level loading bay doors with 5 dock levellers and a single level access loading door.
The Tenant has made numerous alterations to the property under a licence dated 8 July 2008 including:
> Installation of a chilled store with a clear ceiling height of 6.5m and despatch loading bay area spanning across one bay and accounting for circa 50% of the warehouse.
> Removal of the 4 original loading bays to provide 6 dock doors with dock levellers and shelters under the original canopy.*
> Provision of male and female changing rooms, disabled WC and cellular offices within the main open plan office.*
> A new compound at the end of the car park for the storage of refrigeration plant
> New automatic entrance barrier with “Portacabin” style gatehouse.*
> External wash and valet bay. (water supply and drainage).*
> Upgrade to power supply from 70 kVA to 1000 kVA including installation of new substation (Landlord made a contribution of circa £100k towards this work which may be taken into account at rent review).*
The licence also permitted the tenant to construct a further level access loading door adjacent to the existing door but this has not been installed.
The single storey offices have painted walls, suspended ceilings, recessed Cat 2 lighting, carpeted floors, perimeter trunking, electric storage heating and uPVC double glazed windows.
Externally the concrete yard to the side of property has a depth of approximately 40 metres with 22 lorry spaces. A tarmacadam surfaced car park with 38 spaces is situated at the front of the property. The yard and car park share a single access point off Brickyard Road. The site is fully secured by metal palisade fencing and security gates.
* The tenant is not required to reinstate these items at lease expiry.
REVERSIONARY DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY // Muller UK & Ireland Group, Brickyard Road, Aldridge, West Midlands WS9 8SR www.mk2.co.uk
ACCOMMODATION
The property has been measured in accordance with the RICS Code of Measuring Practice (6TH Edition) and provides the following approximate gross internal floor areas.
The site extends to a total area of approximately 2.95 acres providing for a low site cover of 48%.
SQ M SQ FT
Warehouse 5,404.64 58,175
Battery Charge 82.94 893
Offices 265.94 2,863
TOTAL 5,753.52 61,931
Loading Canopy 279.87 3,012
TENUREFreehold.
REVERSIONARY DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY // Muller UK & Ireland Group, Brickyard Road, Aldridge, West Midlands WS9 8SR www.mk2.co.uk
TENANCY DETAILS
The property is let on full repairing and insuring terms, subject to a Schedule of Condition*, to Muller UK & Ireland Group LLP (assigned from Dairy Crest Ltd on 11th March 2016) for 15 years expiring on 7 July 2023 with a tenant only break option on 8 July 2018 subject to 9 months notice. The current passing rent is £250,024 per annum which equates to £4.00 per sq ft valuing the loading canopy at £1.00 psf and is subject to upward only rent review on 8 July 2018.
* The Schedule of Condition was agreed following completion of the works contained within the Licence for Alterations dated 8 July 2008.
A copy of the lease, licence and schedule of condition is available upon request.
Muller UK & Ireland LLP is 100% owned by Unternehmensgruppe Theo Muller and employs over 12,000 people within two distinct business units of Muller Milk & Ingredients and Muller Yogurt & Desserts. In December 2015 the company acquired Diary
Crest in an £80million transaction making it the largest milk supplier and distributor in Great Britain.
Their most recent accounts are summarised below;
TENANT COVENANT
31ST DEC Y/E TURNOVER PRE-TAx PROFIT NET WORTh £000’S £000’S £000’S
2015 1,337,087 (106,026) 326,062
2014 1,395,593 (97,813) 213,541
2013 684,879 (55,251) 133,962
The company has an Experian credit rating score of 60 which is described as below average risk together with a credit limit of £5million and credit rating £2.5million.
REVERSIONARY DISTRIBUTION WAREHOUSE INVESTMENT OPPORTUNITY // Muller UK & Ireland Group, Brickyard Road, Aldridge, West Midlands WS9 8SR www.mk2.co.uk
OCCUPATIONAL MARKET
Demand for well located, good quality distribution warehouse space has increased significantly over the previous 2-3 years with a noticeable reduction in available units. Take up of logistics space in 2016 was the largest on record with the logistics availability rate now at its lowest level on record. Retailers in particular continue to position themselves to best adapt to the changing nature of consumer shopping patterns and the continuing growth of online sales and developers have responded to the shortage by undertaking some albeit limited speculative development particularly in the core West Midlands market. The lack of supply has resulted in a marked increase in rental values, longer leases and a reduction in incentives on new lettings. Furthermore tenants have increasingly turned to build to suit options due to the lack of supply, which is having further positive impact on rental growth. Recent transactions include the following:
The warehouse and distribution sector continues to provide strong returns and is a leading investment sector and thus is competitively sought after. Relevant investment transactions are set out below:
INVESTMENT MARKET
Nov 2016 Unit E2 Coombs Wood Reversionary lease to Toolbank for 10 years Halesowen with a 6 year tenant break at £5.50 psf on 55,393 sq ft.
Oct 2016 Unit 2 Bullesye, Bull Lane let to DFS for 10 years at £6.00 psf on Wednesbury 42,200 sq ft.
Oct 2016 Unit 3 Wednesbury One Let to Exova for 15 years with tenant breaks at Wednesbury year 5 & 10 at £5.50 per sq ft on 50,539 sq ft.
Aug 2016 Unit 501 Axcess 10 Let to Komfort for 10 years at £5.50 psf Darlaston on 49,843 sq ft.
Apr 2016 Heath Road Let to Yoko International for 10 years with a 5 Darlaston year tenant break at £4.95 psf on 42,173 sq ft.
Apr 2016 Unit 4 Delta Point Let to Ricor for 10 years with 5 year tenant Oldbury break at £5.45 psf on 36,676 sq ft.
Jan 2017 Well Lane 50,514 sq. ft. let to Air Space at £6.14 per sq Wednesfield ft until August 2025 was sold for £4,000,000 (£79.18 per sq. ft.) reflecting a net initial yield of 7.27%.
Dec 2016 2300 Coventry Business Park 60,095 sq. ft. let Canute UK Ltd at £5.99 per Dolomite Business Park sq. ft. until April 2021 was sold for £5,250,000 (£87.36 per sq. ft.) reflecting a net initial yield of 6.43%.
Oct 2016 Centrum 100 92,666 sq ft let to Kings Road Tyres and Burton Upon Trent Repairs Limited at £5.50 per sq ft with tenants break in 2021 was sold for £7,060,000 (£76.18 per sq ft ) reflecting a net initial yield of 6.77%.
June 2016 Unit 302 Relay Park 55,236 sq ft let to Schenker Ltd at £5.07 per Relay Drive sq ft until September 2017 was sold for Tamworth £4,650,000 (£84.18 per sq ft) reflecting a net initial yield of 5.65%.
Based on the above evidence we conservatively estimate that the property is reversionary to £297,749 adopting £4.75 per sq ft on the main warehouse and ¼ rate on the canopy.
We are instructed to seek offers in excess of £3,025,000 (Three Million and Twenty Five Thousand Pounds) subject to contract and exclusive of VAT, which reflects a net initial yield of 7.76% and a reversionary yield of 9.25% after allowing for purchasers costs of 6.46%. A purchase at this level would show a low capital value of £48.84 per sq. ft.
PROPOSAL
Warehouse & Offices C-66
A copy of the EPC is available upon request.EPC
The property is elected for VAT however it is anticipated that the transaction will be treated as a transfer of going concern (TOGC).
VAT
MK2 Real Estate LtdMaddox House, 117 Edmund Street, Birmingham B3 2HJTel: 0121 214 1970 Email: [email protected]
Mark Rooke0121 214197207985 877578 [email protected]
Mark Johnson0121 214197707748 [email protected]
For further information or to arrange an inspection please contact;
IMPORTANT INFORMATION 1. No description or information given by MK2 Real Estate Ltd whether or not in these Particulars and whether written or verbal (“information”) about the property or its condition or its value may be relied upon as a statement or representation of fact. MK2 Real Estate Ltd do not have any authority to make any representations and accordingly any information given is entirely without responsibility on the part of the agent or the seller. 2.These particulars do not constitute, nor constitute part of, an offer or contract, nor shall they merge in any offer or contract which may hereafter be made between the sellers or lessors and the recipient of the information. 3.The photographs show only certain parts of the property at the time they were taken. Any areas measurements or distances given are approximate only. 4. Any reference to alterations to or use of any part of the property is not a statement that any necessary planning, building regulations or other consent has been obtained.These matters must be verified by any intending buyer. 5. Any buyer must satisfy themselves by inspection or otherwise as to the correctness of any information given.
Designed and produced by Diablo: www.diablodesign.co.uk FEBRUARY 2017
Paul Rixon0121 214197907768 [email protected]
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