• City centre multi-let retail investment opportunity

• Prominently located within the city’s prime retailing pitch

• Freehold

• Add-value opportunity

• £400,000, subject to contract

• 15.12% Net Initial Yield

Commercial Road is Portsmouth’s principal retail thoroughfare. The subject property occupies a prominent retailing pitch on the northern end of the pedestrianised section of Commercial Road, opposite its junction with Charlotte Street. Nearby occupiers include KFC, Savers, Sports Direct, McDonald’s, Specsavers and Subway.

The property benefits from being in close proximity to the entrance to the Cascades Shopping Centre which provides 60 stores with a wide range of high street and independent boutique style shops. The scheme is anchored by Marks & Spencer, Primark and H&M with other retailers including Next, Lush, Starbucks, Thorntons and TK Maxx.

248 Commercial Road comprises two separate self-contained retail units at ground floor, each with ancillary/storage space on first floor. Each unit has been fitted out by the tenant in their usual corporate style. Pedestrian access is provided at the front of each premises from Commercial Road and vehicular access from the rear via Commercial Place.

Freehold

Unit C is occupied by TUI UK Retail Limited (t/a TUI) by way of an expired lease which was on a Full Repairing and Insuring lease for a term of 5 years from 24th July 2015.The current passing rent under the expired lease is £37,500 per annum (£57.50 Zone A). The tenant is holding over. Rent is being paid monthly although without formal agreement of the landlord.

Unit D is let to Cleardale Limited (t/a The Gold Centre) on a Full Repairing and Insuring lease for a term from 26 November 2018 until 11th November 2029. There is a tenant only option to break on 11th November 2024 and an upwards only rent review on 12th November 2024. The previous rent paid for the unit was £35,000 per annum but the rent was re-based to £25,500 per annum (£52 Zone A) with effect from February 2020. Rent is being paid monthly although without formal agreement of the landlord.

The total income is, therefore, £63,000 per annum.

Payment History 2020

The position in respect of the rent payments by the tenants during 2020 is as follows:

Cleardale:
Quarterly rent payments have been due under the lease on 25th March 2020, 24th June 2020, 29th September 2020 and December 25th 2020. Quarterly rents are £6,375 + VAT (£7,650), plus Service charge of £535.63 + VAT (£642.7), hence £8,292.76. The tenant has been paying monthly during 2020. Current arrears are £9,485.14 (£7,904.28 plus VAT). These arrears are made up of a small residual rent amount for the September quarter, amounting to £192.38 along with December rent and service charge, which Cleardale have continued to pay monthly.

There is also an annual insurance charge, the current year premium is £194.51 plus VAT

TUI:
Information in relation to Tui's payment history is available on request.

TUI UK Retail Limited (Co No. 1456086) has reported the following figures:

TUI UK Retail Limited is a wholly owned subsidiary of the larger TUI Group. As reported on their website, TUI Group is the world’s leading tourism provider. They employ approximately 67,000 employees worldwide, operate 1,600 travel agencies, 6 airlines (with over 150 aircraft), over 380 hotels and 16 cruise liners across the globe.

TUI Group has been built up of many of Europe’s leading tourism companies including Preussag AG, Hapag-Lloyd, Thomson Holidays, Nouvelle Frontieres and First Choice Holidays PLC.

TUI Group has reported the following figures:

As at 25th November 2020, Tui AG has a market capitalisation of €3.41bn.

Cleardale Limited (Co No. 03209955) is a private company based in Solihull. For the year ending 31 January 2020 they reported a Total Equity of £299,471.

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

1. An opportunity to acquire a freehold high yielding city centre multi-let retail investment;

2. Passing rents at a significant discount to the prime rents within Portsmouth;

3. The property occupies a prominent trading position on Portsmouth’s principal retailing thoroughfare;

4. A purchase at the asking price will provide an investor with an attractive net initial yield;