• South-East Industrial Investment

• Established commercial location

• Low passing rents

• Multi-let with active management opportunities

• Offers in the region of £2,950,000, subject to contract

• 7.5% Net Initial Yield

• 12.0% Reversionary Yield

• £46 per sq ft Capital Value

The property is situated in an established commercial location on the Redhills Road Industrial Estate. The Blackall Industrial Estate is immediately to the north and South Woodham Ferrers railway station is 1.6 km (1 mile) to the west. Access to the property is via Redhills Road.

The property comprises 16 industrial/warehouse units of steel portal frame construction with brick and block work elevations supporting lined and insulated roofs with inset translucent roof panels. In addition, there is one office unit (17 Redhills Road).

Each industrial unit has a roller shutter door with forecourt loading access and estate car parking provided.

The 2017/18 Uniform Business Rate is 47.9 pence per pound for rateable values of £51,000 and above, and 46.6 pence per pound for rateable values below £51,000.

We estimate the site area to be approximately 0.97 hectares (2.4 acres).

A Phase I Environmental Risk Assessment was carried out by Delta Simons Environmental Consultants in November 2017 which concluded that “with regard to potential land contamination issues and associated environmental liabilities, in its current use, the Site represents an overall investment opportunity with a Low risk”. A copy of the report is available to download and is available for assignment to a purchaser.

The property is currently let to 10 tenants under 14 leases in accordance with the attached tenancy schedule. There is one vacant unit which is currently on the market.

The total current income is £234,726 per annum.

The tenants are required to contribute towards an estate service charge. The Service Charge Accounts and Service Charge Budget are available to download.

The supply of industrial buildings similar in size to the subject units in South Woodham Ferrers is very limited with a healthy level of demand.

Redhills Industrial Estate has a range of rents spreading from £32.20 per sq m (£2.98 per sq ft) to £66.24 per sq m (£6.13 per sq ft) with an average rent of just £49.49 per sq m (4.58 per sq ft).

In May 2017 an industrial/warehouse unit on Bancrofts Road (immediately adjacent to Redhills Road) totalling approximately 180 sq m (1,945 sq ft) was let on a new 5 year FRI lease at a rent of £13,000 per annum, equating to £72 per sq m / £6.68 per sq ft. No rent free period was granted.

In July 2016 an industrial/warehouse unit incorporating two storey air-conditioned offices on Bancrofts Road totalling approximately 224 sq m (2,417 sq ft) was let on a new 3 year FRI lease at a rent of £17,000 per annum, equating to £76 per sq m / £7.03 per sq ft. No rent free period was granted.

Therefore, we believe that the subject property offers immediate prospects for rental growth. Based upon our opinion of ERV which ranges from £54 per sq m (£5.00 per sq ft) to £70 per sq m (£6.50 per sq ft), depending on the unit sizes, we suggest the total rental income could rise to approximately £378,233 per annum.   Note: this assumes the mezzanine areas are rentalised - TBC.

The property has not been registered for VAT. Therefore, VAT will not be payable by a purchaser.

We are instructed to seek offers in the region of £2,950,000 (Two Million, Nine Hundred and Fifty Thousand Pounds), subject to contract. This reflects a net initial yield of 7.5% rising to 7.85% upon letting the vacant unit and an ultimate reversionary yield of 12.0%, assuming standard purchaser’s costs of 6.44%. The purchase price reflects a capital value of £499 per sq m / £46 per sq ft.