High Yielding, Well Secured Retail Investment
Unit 1 | 24 Adare Street | Bridgend | CF31 1EJ
£400,000
subject to contract
GALLERY
Coronavirus Act 2020
The property is sold with the benefit of a rent guarantee from the vendor to ensure an investor has no issues receiving income in light of the Coronavirus Act 2020 Part 1 Section 82. This is no reflection upon the tenants’ ability to meet their rental obligations but an understandable protection for a purchaser. The guarantee is to end the earlier of the end of the rent moratorium, or a period of 6 months, whichever is the sooner.
Summary
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Let to Superdrug Stores PLC
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Highly secure income - Shareholders’ Funds £317 million
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Prime town centre retailing pitch
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Tenant classified as an ‘Essential Retailer’ and has remained open during the COVID-19 pandemic
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Tenant has been in occupation for 33 years
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Freehold
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£400,000, subject to contract
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10.56% Net Initial Yield
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The property is sold with the benefit of a rent guarantee from the vendor to ensure an investor has no issues receiving income in light of the Coronavirus Act 2020 Part 1 Section 82
Location
Bridgend is located in Wales, approximately 37 km (23 miles) west of Cardiff and 37 km (23 miles) south-east of Swansea.
The town benefits from good road communications, being served by the A4061 which links directly with Junction 36 of the M4 Motorway, approximately 4 km (2.5 miles) to the north. The A473 connects with Junction 35 to the east and the A48 with Junction 37 to the west.
Bridgend is also connected to the national railway network with a fastest journey time to London Paddington of 2 hours and 13 minutes. There are also regular services to Cardiff with a journey time of only 20 minutes. Cardiff International Airport is approximately 27 km (17 miles) to the south-east.
Bridgend College offers courses in building and construction, engineering and business. The University of South Wales, Swansea and Cardiff Universities are easily accessible, giving employers the potential to source skilled employees and apprentices.
Situation
The property is located in the heart of the town centre, occupying a prime and prominent position on the pedestrianised Adare Street.
Surrounding occupiers include NatWest, The Works, Greggs, Vodafone, Superdrug, Specsavers, Holland & Barrett, H Samuel, 02, Lloyds Bank and Poundland.
A public car park is situated to the rear of the subject property, on Derwen Road.
The Rhiw Shopping Centre is immediately to the south. Comprising over 20 shops plus the historical Indoor Market, occupiers include Boots, WH Smith, Game, Card Factory and Warren James.
Description
The property comprises a ground floor retail unit with ancillary accommodation on first floor. Internally, the retail floor area has been fitted out by the tenant to their usual corporate style and is predominantly open plan with ancillary areas.
There is access to a service yard area to the rear of the property.
Accommodation
The property has been measured by BKR Floor Plans and provides the following Net Internal floor areas:
| Net Frontage | 8.08 m | 26’6” |
| Gross Frontage | 8.69 m | 28’6” |
| Zone A | 47.94 sq m | 516 sq ft |
| Zone B | 48.59 sq m | 523 sq ft |
| Zone C | 48.59 sq m | 523 sq ft |
| Remainder | 94.29 sq m | 1,015 sq ft |
| ITZA | 1,035 | |
| Total Ground Floor | 239.40 sq m | 2,577 sq ft |
| First Floor Ancillary | 120.96 sq m | 1,302 sq ft |
| Total | 360.36 sq m | 3,879 sq ft |
A set of floor plans is available to download and the measured survey report will be re-addressed to a purchaser at a cost of £535 + VAT.
Tenure
Freehold.
Tenancy
The entire property is let to Superdrug Stores Plc on a full repairing and insuring lease for a term of 5 years from 29th September 2017, expiring on 28th September 2022.
The current passing rent is £44,000 per annum. The tenant is fully up to date with rent payments.
We understand the tenant has been in occupation since 1987 (33 years).
Covenant
Superdrug Stores Plc (Co. No. 00807043), has reported the following figures;
| 28th December 2019 | 29th December 2018 | |
|---|---|---|
| Revenue | £1,303,797,000 | £1,283,161,000 |
| Pre-Tax Profits | £89,398,000 | £88,339,000 |
| Shareholders’ Funds | £316,911,000 | £319,052,000 |
The tenant has been classified as an “essential retailer” during the COVID-19 pandemic.
Founded in 1964, Superdrug is the second largest beauty and health retailer in the UK, with over 830 stores across the UK and Republic of Ireland – including 200 in-store pharmacies.
With 30 new stores opening in the latest financial period, the Company’s market share continued to grow in 2019, including its core categories of cosmetics, fragrance and skincare. Healthcare also grew strongly, supported by a strong performance in Healthcare Services where new services, and nurse clinics, were launched in the year. The Company saw sustained growth in its online channel with sales driven by both the core website and the Online Doctor offering, which dispenses products to customers’ doors or nearby stores. The Company’s pharmacy is an important part of the customer offering, with 198 NHS pharmacies across the UK. For further information see www.superdrug.com.
Superdrug is part of the A.S. Watson Group, the world’s largest international health and beauty retailer with over 15,800 stores in 27 markets.
VAT
The property has been registered for VAT. It is anticipated that the sale of this property will be treated as a Transfer of a Going Concern (TOGC).
Investment Evidence
12-14 Adare Street was sold in November 2020 for £272,000 reflecting a net initial yield of 8.93%. Arranged over ground and first floor and totalling 222.40 sq m (2,394 sq ft), the property is let to Vodafone Limited from 25th March 2020, expiring on 30th August 2025 at a passing rent of £25,000 per annum.
Proposal
We are instructed to seek a figure of £400,000 (Four Hundred Thousand Pounds), subject to contract, reflecting a net initial yield of 10.56%, assuming standard purchaser’s costs of 4.18%.
Please note that a purchaser will be re-charged the costs of surveys and searches which are provided in the data room.
Please note that a purchaser will be charged a Transaction Fee of £5,000 plus VAT.
Investment Considerations
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The property occupies a prime position in the town centre;
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Freehold;
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Securely let to Superdrug Stores Plc (Pre-Tax Profits £89.4 million, Shareholders’ Funds £317 million);
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The tenant has been in occupation for 33 years;
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Superdrug is classified as an ‘Essential Retailer’ and has remained open during the COVID-19 pandemic;
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A purchase at the asking price reflects an attractive net initial yield;
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Attractive lot size to an investor.
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The property is sold with the benefit of a rent guarantee from the vendor to ensure an investor has no issues receiving income in light of the Coronavirus Act 2020 Part 1 Section 82.
Data Room and clicktopurchase®
Access to the data room and for the ability to purchase online with speed and ease, please click the clicktopurchase® “C” icon or the clicktopurchase® side bar. Purchasers will be able to access the complete legal package, clear verification and submit legally-binding offers to acquire the property.
Purchasers benefit from the trust, security and transparency provided by the platform. All activities, including the online contract execution, will form part of the electronic audit trail which is anchored in the clicktopurchase® Blockchain.
clicktopurchase® provides the opportunity for any investor, whether located UK or abroad, to uniquely purchase online with ease and certainty. To learn more about clicktopurchase®, click here.
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Contact Us
| Singer Vielle | +44 (0) 207 935 7200 | |
|---|---|---|
| Dale Henry | dale@singervielle.co.uk | +44 (0) 203 701 1356 |
| Neil Singer | neil@singervielle.co.uk | +44 (0) 203 478 9120 |
Vendors Solicitor
| W Legal Limited | +44 (0) 161 214 4001 |
|---|---|
| Michael Lopian | michael.lopian@wlegal.co.uk |