Centrum 260 Centrum West Logistics Park, Burton-Upon-Trent, DE14 2SY

Transcription

1 Centrum 260 Centrum West Logistics Park, Burton-Upon-Trent, DE14 2SY Prime Midlands Logistics Forward Commitment Opportunity 15 Year RPI-linked Lease Computer Generated Images

2 // 2 DHL DHL Clipper B&Q Unipart Holland & Barrett Johnson Controls Marston s Brewery Coors/DHL Boots Hobbycraft Kongsberg Automotive Existing Palletforce facility Derby, A50 & M1 (J24) Centrum 260 Pre-let to Palletforce Remaining 5 acre plot Callister Way Birmingham & M6 Toll (JT4) Indicative purpose only

3 // 3 Investment Summary Computer Generated Image + Prime Midlands logistics forward commitment + Situated adjacent to the, providing easy access to M6 Toll, M1 and M6 Motorways, in addition to key transport hubs at Hams Hall and East Midlands Airport + New distribution warehouse facility, which will extend to approximately 258,370 sq ft (GIA) on a site area of 13.2 acres (44% site cover), targeting practical completion in June Freehold + Pre-Let to Palletforce Ltd (D&B 3A1 covenant), and will operate in conjunction with the existing adjacent 380,000 sq ft facility as a Super Hub for the tenant. The combined facility will be the largest of its kind in Europe year FRI lease subject to five yearly upwards only RPI linked rent reviews, capped and collared at 1% - 3% p.a. compounded + Total initial rent is 1,441,704 per annum ( 5.58 per sq ft), consisting of a base rent of 1,374,528 per annum ( 5.32 per sq ft), and an enhanced specification rent of 67,176 per annum ( 0.26 per sq ft) on the proposed GIA + We are instructed to seek offers, on a forward commitment basis, in excess of 23,000,000 (Twenty Three Million Pounds), subject to contract and exclusive of VAT + A purchase at this level reflects a Net Initial Yield of 5.87%, assuming full purchaser s costs, and a capital value of 89 per sq ft

4 // 4 Location & Situation A511 Derby A50 / M1 Location Burton-Upon-Trent is strategically located in the heart of the Midlands approximately 27 miles (43 km) south west of Nottingham, 28 miles (45 km) north west of Leicester and 30 miles (48 km) north of Birmingham. Approximately 87% of the UK population is accessible within a 4.5 hour HGV drive time. The town benefits from excellent road communications via the which provides direct access to the M6 Toll (Junction T4) 15 miles (24 km) to the south. The also provides access to the A50 (Junction 4) 6 miles (9.6 km) to the north, which links to the M1 Motorway at Junction 24 and the M6 Motorway at Junction 15. Hams Hall International Rail Freight Terminal is located 25 miles (40 km) to the south, connecting with the ports of Southampton, Felixstowe and Ipswich and the Channel Tunnel. The Property is 21 miles (34 km) from East Midlands Airport, the largest cargo airport in the UK outside of London. Situation The Property is situated on Callister Road and is accessed via the A5121. Centrum West Business Park forms Phase II of Centrum 100 which is an established 200 acre (81 ha) mixed-use commercial business park, located adjacent to the Dual Carriageway to the south of Burton-Upon-Trent. Centrum 100 has been successful in attracting a range of national occupiers including DHL, Coors, Holland & Barratt, Unipart Logistics, Kongsberg, Hobbycraft and Marston s. Palletforce Ltd occupy the adjacent unit built in 2009, totalling 380,000 sq ft (35,303 sq m). The Tenant uses the building as its national pallet sorting facility. The site accommodates approximately 300 vehicle movements a day. Airport Freight Interchange Port Distance (miles) Drive Time East Midlands mins Birmingham mins Manchester 70 1 hr 20 mins Liverpool 87 1 hr 40 mins Heathrow hrs 5 mins Distance (miles) Drive Time Birch Coppice mins Hams Hall mins DIRFT mins Distance (miles) Distance (miles) Drive Time A50 (J4) mins M6 Toll (J4) mins M1 (J24) mins M40 (J5) mins M42 (J15) mins Drive Time Liverpool 90 1 hr 40 mins Grimsby & Immingham hrs 15 mins Southampton hrs Felixstowe hrs 30 mins Dover hrs 45 mins Birmingham M6 Toll M6 M54 Birmingham Stoke-on-Trent M5 A50 LICHFIELD ROAD CALLISTER WAY M6 Toll Derby Burton-Upon-Trent Hams Hall PARKWAY A5121 Birmingham Airport Postcode: DE14 2SY SHOBNALL ROAD BURTON ROAD A5 A42 M1 M40 CLAYS M6 WELLINGTON ROAD LANE Nottingham East Midlands Airport DIRFT B5018 Burton-Upon-Trent station Leicester A43 A511 A444 A1 A14 A47 A5121 M1 STAPENHILL ROAD A15 Peterborough A1(M) A1 Luton C

5 // 5 Description Upon Practical Completion, the property will provide a highly specified new cross docked distribution warehouse extending to approximately 258,370 sq ft (24,003 sq m) GIA. The floor area will be confirmed upon Practical Completion, which is estimated for June Planning consent was granted 23rd September The Property will include ancillary offices, extending to approximately 12,300 sq ft (1,143 sq m) over three floors (4.8% office content) and a 270 sq ft (25 sq m) gatehouse. Centrum 260 Specification + Steel portal frame with profiled metal cladding to roof and elevations m clear eaves height + 50 kn/m 2 floor loading (8 tonne rack leg load) + Two dock level loading doors (with steels dropped to enable retrofitting of a further 22 docks on the east elevation, and 24 docks on the west elevation) + Six level access loading doors HGV trailer parking spaces + Security gatehouse + 30 car parking spaces + Minimum BREEAM rating Very Good Adjacent Palletforce, Burton-Upon-Trent facility Centrum 100 Occupiers

6 // 6 Site Derby, A50 & M1 (J24) Description Sq Ft Sq M Warehouse 245,800 22,835 Office 12,300 1,143 Gatehouse Total 258,370 24,003 The Freehold demised site area extends to approximately 13.2 acres (5.34 ha). Site density equates to approximately 44%. Callister Way Birmingham & M6 Toll (JT4) Remaining 5 acre plot Centrum 260 (258,370 sq ft pre-let to Palletforce) Existing 380,000 sq ft Palletforce Unit Indicative purpose only, not to scale

7 // 7 Tenancy and Covenant Tenant Covenant Tenancy The Property is to be let to Palletforce Ltd on a new 15 year lease on full repairing and insuring terms, to commence upon practical completion, which is estimated for June The base rent is to be 1,374,528 per annum equating to 5.32 per sq ft and will be confirmed by measurement of the Property upon practical completion. The lease provides for 16 months rent free from practical completion for the base rent only (to be topped up by the Vendor). There is a further estimated 67,176 per annum ( 0.26 per sq ft), as an enhanced specification rent. The total passing rent will therefore equate to 1,441,704 per annum, which reflects 5.58 per sq ft. The total rent will be reviewed five yearly, on an upwards only basis, in line with RPI, capped and collared at 3% and 1% respectively. Palletforce is a UK based logistics company which provides network infrastructure for the distribution of palletised goods. Through its 88 member companies and Palletforce operated central hubs, Palletforce offers economies of scale to independent transport companies. As a single interface to customers Palletforce offers a UK distribution network with over 100 depots, improved customer support and access to a European wide distribution network. Launched in 2001, Palletforce was a public limited company prior to being acquired by EmergeVest in October The acquisition brings Palletforce under the same ownership as NFT Distribution, a leading UK distributer of chilled foods and drinks to retailers including Sainsbury s, Tesco, Asda, Waitrose, Morrisons, and M&S. Under EmergeVest ownership NFT has significantly increased the scale of its UK operations through investment in additional warehouse capacity and third party acquisitions. Less than a year into EmergeVest ownership, the new Burton hub represents a similar first step towards substantially increasing Palletforce s operating capacity and revenue generation. Palletforce Ltd has a Dun & Bradstreet credit rating of 3A1, representing a Minimum Risk of Business Failure: Palletforce Limited ( ) 06/10/ /08/ /08/2013* Sales Turnover 100,694,852 77,658,801 14,691,676 Profit Before Taxes 3,312,562 3,071,334 2,578,785 Tangible Net Worth 7,814,829 5,351,894 7,813,703 Net Current Assets 7,071,980 10,045,740 11,701,556 * Results prior to EmergeVest s acquisition Palletforce changed its financial year end following the EmergeVest acquisition, and consequently the results for the period ending October 2015 cover a period of approximately 13 months. After adjusting for the longer reporting period in 2015, turnover increased by approximately 20% on an annualised basis relative to the previous year reflecting continued growth in pallet volumes. Gross profit similarly increased by approximately 17%, net profit increased by approximately 10% reflecting one off costs associated with the acquisition. The balance sheet position remains strong with a significant cash balance and no third party indebtedness. Operating cash flow remained strong in both periods, falling slightly in 2015 reflecting working capital requirements associated with the significant growth in the business. Adjacent facility The executive management team remains largely as per prior to the acquisition. The new Chairman is Heath Zarin, MD of EmergeVest and also Chairman of NFT and Allport Cargo Services.

8 // 8 Occupational Market Commentary The Midlands stands out as one of the most active regions over Approximately 8.75 million sq ft of logistics space has been transacted across the region, accounting for 42% of the total UK take-up for the year to date. Occupier sentiment is steady and showing strength despite the result of the EU referendum. The fundamentals that underpin the Midlands industrial and logistics market remain constant, with a severe lack of supply. The need for warehouse space to meet business plans and objectives remains of such significance that deals are continuing to transact. Burton-Upon-Trent has experienced high levels of take-up with notable transactions including the letting of 210,000 sq ft to Hobbycraft in a relocation from the south of England and the letting of the speculatively built Duke unit of 300,000 sq ft to Clipper Logistics to serve the Superdry contract. These deals coincided with the initial pre-letting of Palletforce s Phase 1 at Centrum, strongly endorsing the location as a distribution hub, particularly given fast access to the M6 Toll and M42 to the south and the east-west links to the M1 and M6 provided by the A50. The Corridor has become increasingly desirable amongst occupiers in recent years given the low cost and plentiful labour supply. This is evidenced by the extent of active requirements in the area for 100,000 sq ft buildings and the range of high profile occupiers in the vicinity including Argos, B&Q, Marston s and Clipper. As the Midlands market becomes increasingly restricted in terms of supply, rents have increased and incentive packages have compressed considerably. Prime rents in the West Midlands and Corridor have reached 6.50 per sq ft as illustrated by the recent letting to DHL at Minworth, Birmingham. More relevant to Burton-Upon-Trent are the transactions at Hams Hall where 172,000 sq ft and 144,996 sq ft units were let at 6.30 per sq ft to The Works and Sertec respectively. For units under 100,000 sq ft, a record rent has been set nearby at Birch Coppice in Tamworth, achieving 6.75 per sq ft for the 80,000 sq ft pre-let to HIB, demonstrating that prime warehouse units across all sizes are in high demand. Location Date Size (Sq Ft) Rent (Psf) Tenant Term (Break) Northampton Commercial Park Sep , Confidential 10 years Birch Coppice, Tamworth Jun , HIB 15 years Ryton, Coventry Jun , JLR 10 years Hams Hall, Birmingham Jun , Sertec 15 years Grange Park, Northampton May , Clipper Logistics (Zara) 10 years Magna Park, Lutterworth Mar , Wayfair Furniture 15 years (10 years) Minworth, Birmingham Mar , DHL 15 years (10 years) Hams Hall, Birmingham Jan , The Works 20 years

9 // 9 Investment Market Commentary Following the result of the UK referendum in June 2016, there has been a significant level of demand from investors for prime logistics assets, despite the macro-economic impacts of the decision to leave. Post-referendum logistics investment examples include Amazon, Trafford Park (10 years unexpired), which achieved 5.10% NIY, and DHL, Minworth (10 year unexpired) which achieved 5.05% NIY, indicating limited impact, if any, on appetite for the sector. The distribution investment market continues to outperform alternative sectors from a forecast total returns perspective. The occupational market supply/demand imbalance continues to fuel rental growth with a host of deals in nearby towns creating benchmark evidence at record levels in excess of 6.00 per sq ft. Whilst the market is awash with diverse capital from all corners of the world, stock selection remains key, with modern buildings and prime Midlands locations achieving ever increasing levels of demand. Adjacent facility Address Area (sq ft) Rent Review AWULT (years) Passing Rent pa (per sq ft) Date Purchase Price / NIY Capital Value (per sq ft) Amazon Flaxley Road, Peterborough 545,004 5 yearly OMR ,002,463 ( 4.75 psf) Aug ,788,500 / 5.50% 79 DHL Minworth, Birmingham 103,341 5 yearly OMR ,554,000 ( 5.19 psf) Jul ,390,000 / 5.05% 120 Amazon Trafford Park, Manchester 176,080 5 yearly 1% - 3% RPI ,320,850 ( 5.23 psf) Jul ,245,000 / 5.10% 109 AAH Pharmaceuticals Woburn Road, Warrington 150,498 5 yearly 2% - 4% RPI ,557,750 ( 4.65 psf) Jun ,950,000 / 5.31% 93 Amazon Manchester Airport City, Manchester 277,089 5 yearly 2% - 4% CPI ,421,560 ( 4.60 psf) Jun ,140,000 / 4.50% 123 Argos Burton-upon-Trent 653,670 Fixed 3% minimum increases ,421,560 ( 4.60 psf) Mar ,650,000 / 5.55% 114

10 // 10 Proposal & Contacts Computer generated image Sustainability BREEAM Very Good. EPC The building will be constructed with the aim of achieving an EPC A Rating. Contact Proposal Based on the total rent 1,441,704 per annum, reflecting 5.58 per sq ft, we are instructed to seek offers in excess of 23,000,000 (Twenty Three Million Pounds), on a forward commitment basis. A purchase at this level reflects a Net Initial Yield of 5.87%, assuming full purchasers costs and a capital value of 89 per sq ft, subject to contract and exclusive of VAT. Roddy Mackay ddi e roderick.mackay@cbre.com Nick Woodward ddi e nick.woodward@cbre.com Robert Rae ddi e robert.rae@avisonyoung.com Tom Kimbell ddi e tom.kimbell@avisonyoung.com DISCLAIMER: CBRE LIMITED CBRE Limited and Avison Young on its behalf and for the Vendors or Lessors of this Property whose Agents they are, give notice that: 1. These particulars are set out as a general outline only for guidance to intending Purchasers or Lessees, and do not constitute any part of an offer or contract. 2. Whilst CBRE Limited uses reasonable endeavours to ensure that the information in these particulars is materially correct, any intending Purchasers, Lessees or Third Parties should not rely on them as statements or representations of fact, but must satisfy themselves by inspection, searches, enquiries, surveys or otherwise as to their accuracy. CBRE Limited and Avison Young as such cannot be held responsible for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss of profits resulting from direct or indirect actions based upon the content of these particulars. 3. No person in the employment of CBRE Limited and Avison Young has any authority to make any representation or warranty whatsoever in relation to this Property. 4. Unless otherwise stated, all purchase prices and rents are correct at the date of publication and, unless otherwise stated, are quoted exclusive of VAT. Lease details and service ground rent (where applicable) are given as a guide only and should be checked and confirmed by your solicitor prior to exchange of contracts. Subject To Contract. October 2016.