• High quality retail investment opportunity

• Prime town centre retail location

• Secure Income - Let to Lush Retail Limited

• Rent re-based in July 2016

• Tenant’s 2017 break option removed, demonstrating their commitment to the property

• Freehold

• Offers in the region of £985,000, subject to contract

• 7.0% net initial yield

Ipswich’s retail offer is focussed around a central core, bounded by the pedestrianized thoroughfares of Westgate Street, Tavern Street, Princes Street and Buttermarket which accommodate the United Kingdom’s major retailers including Debenhams, H&M, Marks & Spencer, Next, Primark and River Island.

The subject property is situated in an extremely prominent position within the very heart of Ipswich town centre on Tavern Street equidistant between Northgate Street and Tower Street. McDonald’s and O2 are on either side of the property and other national high street brands along Tavern Street include H&M, Jack Wills, Cotswold Outdoor, River Island, Virgin Media, EE and Starbucks. Pedestrian footfall in the vicinity of the property is continuously high, being one of the principal pedestrianised thoroughfares within the town centre.

Ipswich also benefits from two major shopping centres: Sailmakers (formerly Tower Ramparts) which has its main entrance from Tavern Street and comprises approximately 12,077 sq m (130,000 sq ft) and Buttermarket which comprises approximately 21,368 sq m (230,000 sq ft).

Both of the main shopping centres within Ipswich town centre have changed hands over the past two years. Tower Ramparts Centre in Tavern Street which is owned by LaSalle Investment Management has been transformed and rebranded Sailmakers Shopping Centre. Comprising 12,077 sq m / 130,000 sq ft providing 38 retail units there have been new lettings including Blue Inc., BB’s, Pandora and Subway. In addition, Topshop / Topman committed itself to the scheme by completing a major refit to their store in 2015. The main entrance to the scheme links directly onto Tavern Street and the scheme also acts as a thoroughfare between Tavern Street and the town centre bus station.

In addition, The Buttermarket shopping centre was acquired in March 2015 in a joint venture between Capital & Regional and Drum Property Group. Buttermarket is undergoing is a major redevelopment / refurbishment programme and the multi-million pound project has attracted a 12 screen Empire cinema, Byron Burgers, Coast to Coast, Prezzo, Pure Gym and Wagamama. 

An attractive brick built building, the property comprises ground floor sales together with ancillary accommodation at first floor. In addition, there is accommodation in the basement and on the second floor which are demised to the tenant but are not accessible and have been closed off.

Internally, the property has been fitted out to a high standard in the tenant’s corporate image.

The building is Grade II Listed. 

Freehold

Tenancy

The property is let to Lush Retail Limited on a Full Repairing and Insuring lease for a term of 10 years from the 14th November 2012 expiring on the 13th November 2022.

In accordance with a Deed of Variation dated 21st July 2016 the tenant has agreed to remove a tenant only break option in November 2017 therefore providing in excess of 6 years unexpired lease term.

The Deed of Variation reduced the rent from £80,000 per annum to £73,000 per annum which came into effect on 24th June 2016. There will be an upwards only rent review on 13th November 2017 which will be capped at £80,000 per annum. Based on our analysis the current passing rent equates to £104 Zone A.

As part of the Deed of Variation the tenant received a rent free period from 1st August 2016 to 31st October 2016 (inclusive). A purchaser will not suffer an income shortfall as the vendor will top up any rent free period remaining.

The tenant, Lush Retail Limited (Co. No. 03084750), has reported the following figures;

Established in Poole, Dorset in 1994 Lush is a manufacturer and retailer of beauty products with an emphasis on ethically sourced ingredients. The ultimate parent undertaking is Lush Cosmetics Limited which reported in its most recent financial results the company is present in 49 countries and manufacturing products in 6 of those. For further information visit www.lush.com.

The property has been elected for VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).

Our client is seeking offers in the region of £985,000 (Niine Hundred and Eighty Five Thousand Pounds), subject to contract, reflecting a net initial yield of 7.0%.

Investment Considerations

1. An opportunity to acquire a prime freehold retail investment on one of the principal pedestrianised shopping streets within the heart of Ipswich town centre;

2. The tenant has recently demonstrated their commitment to this property by removing their break option in 2017.

3. Rent re-based in July 2016;

4. The investment provides secure income;

5. In excess of 6 years unexpired lease term;

6. A purchase at the asking price reflects an attractive net initial yield.