10.24% Prime Retail Investment Let to Wilko’s - 9.25 Years Unexpired
17-21 Penny Street | Lancaster | LA1 1UA
£3,200,000
subject to contract
GALLERY
Summary
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100% prime retail location – see video
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Let to Wilko Retail Ltd (Net Assets £110 million)
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9.25 years unexpired lease term
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Freehold
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£3,200,000, subject to contract
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10.24% net initial yield
Location
Lancaster is one of England’s Heritage Cities, located approximately 143 km (230 miles) north west of Central London, 80 km (50 miles) north west of Manchester, 97 km (60 miles) north west of Leeds and 32km (20 miles) north of Preston.
The city benefits from good road communications being situated approximately 3.2 km (2 miles) south east of Junction 34 of the M6 Motorway, accessed via the A683. The M6/M65 Interchange is approximately 48 km (30 miles) to the south.
The city is connected to the national railway network with a fastest journey time to London Euston of 2 hour 25 minutes. Manchester International Airport is situated approximately 96 km (60 miles) to the south-east and Liverpool John Lennon Airport is approximately 96 km (60 miles) to the south-west.
Lancaster is a major destination in the strategically important M6 Corridor. With over 2,000 years of history behind it, the City is situated between two Areas of Outstanding Natural Beauty and within minutes of spectacular coastline, the open countryside of North Yorkshire and the Lake District. Lancaster University ranks in the top 10 of all three major national league tables and was named University of the Year 2018 by The Times and The Sunday Times Good University Guide.
Situation
Penny Street is Lancaster’s principal retail thoroughfare. The subject property occupies a 100% prime retailing pitch and is highly visible on the eastern side of Penny Street. Other nearby occupiers include Vision Express (adjacent), Monsoon (opposite), Next, Clarks, Accessorize, Marks & Spencer, Top Shop, River Island, JD Sports and Holland & Barrett.
Description
The property provides retail use on ground and first floor, together with ancillary, storage and staff accommodation on first floor. The property benefits from an escalator link between ground and first floors, plus a goods lift to the rear. The unit has been fitted out by the tenant to their usual corporate style.
In addition to the main frontage to Penny Street, the property also has a return frontage to Frances Passage which is a pedestrian walkway connecting Penny Street with Mary Street to the rear. Therefore, the property benefits from a strong pedestrian flow.
Accommodation
The property has been measured by BKR Floor Plans and provides the following floor areas:
| Net Frontage | 12.3 metres | 40 ft 3 in |
| Gross Frontage | 12.9 metres | 42 ft 6 in |
| Net Internal Area | ||
|---|---|---|
| Ground Floor | 673.25 sq m | 7,247 sq ft |
| First Floor | 714.22 sq m | 7,688 sq ft |
| Total | 1,387.46 sq m | 14,935 sq ft |
| Gross Internal Area | ||
| Ground Floor | 893.42 sq m | 9,617 sq ft |
| First Floor | 898.71 sq m | 9,674 sq ft |
| Total | 1,792.13 sq m | 19,291 sq ft |
The measured survey report is available to download and will be re-addressed to a purchaser at a cost of £895 + VAT.
Tenure
Freehold.
Tenancy
The property is entirely let to Wilko Retail Limited on a full repairing and insuring lease for a term of 20 years from 16th January 2009, expiring on 15th January 2029 (9.25 years unexpired).
The current passing rent is £348,941.50 per annum. The lease benefits from five yearly upward only rent reviews on 16th January 2019 (currently outstanding) and 16th January 2024.
Covenant
Wilko Retail Limited (Co. No. 00365335, formerly Wilkinson Hardware Stores Limited) has reported the following figures;
| 2nd February 2019 | 3rd February 2018 | |
|---|---|---|
| Revenue | £1,508,690,000 | £1,619,577,147 |
| Pre-Tax Profit | £25,049,000 | (£62,646,000)* |
| Net Assets | £109,922,000 | £101,669,000 |
*Exceptional costs of £36.5 million relating to a store management restructure and an unrealised loss of £39.9m on future purchases through forward contracts and currency options were responsible for the pre-tax loss.
Wilko is a family owned private limited company which has been trading for over 85 years. Established from a single shop in Leicester in 1930, today the company trades from more than 400 stores throughout the United Kingdom. In 2013 the company changed its name from Wilkinson to Wilko and according to its website 6 out of 10 shoppers in the United Kingdom shop with Wilko. For further information visit www.wilko.com.
VAT
The vendor has elected the property for VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).
Investment Evidence
Parties are invited to refer to the following investment transactions:
| Address | Tenant | Term Certain | Price | Yield | Date |
|---|---|---|---|---|---|
| 13/15 Northbrook Street, Newbury | Wilko Retail Limited | 6.75 yrs | £4.25m | 6.5% | Oct 2018 |
| 78/80 High Street, Epsom | Wilko Retail Limited | 7 yrs | £5.4m | 5.9% | May 2018 |
Proposal
We are instructed to seek offers in the region of £3,200,000 (Three Million, Two Hundred Thousand Pounds), subject to contract, reflecting a net initial yield of 10.24%, assuming standard purchaser’s costs of 6.47%.
Investment Considerations
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An opportunity to acquire a prime freehold retail investment;
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The property occupies a prominent position within the city’s prime retailing pitch;
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The investment provides secure income;
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9.25 years unexpired lease term;
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A purchase at the asking price reflects an attractive net initial yield.
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BROCHURE
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 |
| Daniel Elia | daniel@singervielle.co.uk | +44 (0) 203 701 1353 |
Vendors Solicitor
| Hampshire County Council | +44 (0) 196 284 7378 | |
|---|---|---|
| Julia Keitley | julia.keitley@hants.gov.uk | |
| Joanna Gook | joanna.gook@hants.gov.uk | |