• Freehold retail warehouse investment

• Let to Go Outdoors Retail Limited

• Wholly owned by JD Sports (Market Cap £8.2 billion)

• Low passing rent of £4.27 per sq ft in comparison to industrial rents in excess of £6.00 per sq ft

• Next rent review March 2023

• Established commercial location, surrounded by numerous uses including industrial & trade counter

• 2.16 acre site with a low site cover of 38%

• Future alternative use & redevelopment potential, should the current tenant vacate

• Underpinned by industrial use value

• £2,500,000, subject to contract

• 5.73% Net Initial Yield

• Implied Reversionary Yield based upon industrial values – 8.05%

• Capital Value £70 per sq ft

The property is situated on the popular and established Hoo Farm Industrial Estate which is directly accessed via the A449 (Worcester Road). Kidderminster town centre is approximately 3.2 km (2 miles) to the north.

The estate comprises a mixture of national and local occupiers with a variety of uses including industrial, manufacturing, trade counter and retail sales. Nearby occupiers include Travis Perkins, City Plumbing, Protektor UK, Eurocell and John Tainton.

The property’s main entrance is accessed via Frederick Road with the rear service yard accessed via Edwin Avenue.

The property comprises a stand-alone retail warehouse unit of steel portal framed construction with an overclad profile sheet roof and an approximate floor-ceiling height of 5.5 metres (18 feet) to the warehouse haunching and 5.9 metres (19.36 feet) to the warehouse eaves.

Internally, the unit has been fitted out by the tenant in their usual corporate style providing a large open plan retail area. At the front of the premises is ancillary accommodation including a staff area, office, male, female, disabled toilets and plant room.

The property benefits from 80 surfaced car parking spaces (including 8 disabled) to the front of the site together with a secure service yard to the rear of the site. The tenant has sectioned off and covered an area of this yard with synthetic grass, forming a ‘tent field’ for the display of outdoor equipment.

In June 2021 a refurbishment of the property was undertaken by the tenant at its own considerable cost. This included a brand new Naylors Equestrian concession store within it, offering a wide range of equestrian and country clothing, footwear and everyday equestrian essentials. (See here)

The building has been constructed in two bays and the configuration of the property should provide for subdivision in the future if required.

We estimate the site area to be approximately 0.88 hectares (2.16 acres), providing a low site cover of 38%.

A Site Solutions Assessment by Argyll Environmental was obtained in September 2022 which states that the site has ‘Passed’ for both Contaminated Land and Flood Risk and that “no Liabilities have been identified. No further action is required”. A copy of the report is available to download in the data room.

The property benefits from Open A1 non-food planning consent.

The Permitted Use in the occupational lease is “as a retail shop for the sale and display of tents camping caravanning and outdoor activity equipment and related accessories associated ancillary outdoor insulated/protective clothing and footwear (but provided that the retail area for such clothing and footwear does not cover more than 20% of the net floor area of the retail unit) and items ancillary thereto together with ancillary café offices and storerooms or for the retail sale of such goods (excluding food and drink) within Class A1 (a) of the Schedule to the Town and Country Planning (Use Classes) Order 1987”.

The property is let to Go Outdoors Retail Limited on effectively a full repairing and insuring lease, subject to a Schedule of Condition, for a term of 20 years from 18th March 2013, expiring on 17th March 2033 (in excess of 10 years unexpired lease term).

The current passing rent is £152,396 per annum (£46 per sq m / £4.27 per sq ft). There are five yearly upward only rent reviews with the next being on 18th March 2023, to the greater of the passing rent and the Open Market Value, capped at 3% pa compounded.

The original lease did not include any tenant break options. As a result of the Covid-19 Pandemic the tenant re-negotiated the lease terms across their store portfolio with respective landlords and insisted on break options being inserted into their leases. Therefore, in accordance with a Deed of Variation dated 4th December 2020, there is a tenant’s break option on 29th September 2025 and 29th September 2030, subject to not less than six months’ notice.

For the 33-week period ending 29th January 2022, Go Outdoors Retail Limited (Co. No. 12659342) reported the following figures:

Go Outdoors mission is to inspire and equip everyone for life outdoors. Go Outdoors is the UK’s leading outdoor specialist retailer, having the widest in-store range of outdoor clothing, footwear and equipment while serving a broad range of outdoor activities including walking, camping, caravanning, cycling, fishing, running and equestrian. For further information see www.gooutdoors.co.uk.

The company is a wholly owned subsidiary of JD Sports Fashion Plc.

Established in 1981, the JD Group is a leading global omnichannel retailer of Sports, Fashion and Outdoor brands. The Group now has approximately 3,400 stores across 32 territories, with a strong presence in the UK, Europe, North America and Asia Pacific. For the year ending 29th January 2022, JD Sports Fashion Plc reported a Revenue of £8.6 billion, Pre-Tax Profits of £654.7 million and Total Equity of £2.4 billion.

The accounts state that “our Outdoor businesses had a much improved year with an elevated demand for holidays in the UK and a general recognition of the physical and mental health benefits of spending time outdoors combining to drive a strong demand for outdoor living and cycling categories in particular”…..“we are confident that people will look to maintain a more active lifestyle and that the welcoming and engaging atmosphere in all of our stores will continue to inspire people to spend time outdoors”.

The positive progress in the Outdoor businesses is reflected in the fact that, even though the majority of stores were closed through the first quarter, there were record revenues in Outdoor in the year with total sales of £513.4 million (2021: £359.3 million). Outdoor also returned to profitability in the period with Pre-Tax Profits of £25.9 million.

Following a sharp downturn in sales due to the Covid-19 pandemic, in June 2020 Go Outdoors appointed Deloitte as its administrator to review the business and oversee a restructuring process which involved a sale of the business back to JD Sports for £56.5 million. As part of the agreement, Go Outdoors was granted a licence to occupy the 67 stores at the date of Administration for a period until October 2021 to enable the Company the opportunity to negotiate new leases with the respective landlords. As a result, many stores have been retained at rebased rental levels.

The property is elected for VAT. We anticipate that the sale should be capable of being treated as a Transfer of Going Concern (TOGC).

We are instructed to seek offers of £2,500,000 (Two Million, Five Hundred Thousand Pounds), subject to contract, reflecting a net initial yield of 5.73%, assuming standard purchaser’s costs of 6.38%.

Please note that a purchaser will be re-charged the costs of the measured survey (£695 + VAT) and searches (£2,032.07) which are provided in the data room.

Please note that a purchaser will be charged a Transaction Fee of £10,000 plus VAT.

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