convenience and community retail investment

Sainsburys

University Square

South Essex CollegeUniversity of Essex, Southend

Odeon

Southend Victoria Train Station

Queensway Development Site

Investment Considerations• The Victoria Shopping Centre is a community and convenience shopping centre

offering a unique opportunity to purchase a dominant town centre scheme, located in Southend, Essex.

• A renowned and popular seaside resort, Southend attracts over 6.4 million tourists per year and is located approximately 45 miles (72km) east of London, 20 miles (32km) south east of Chelmsford.

• Southend has excellent road communications served by the A127 (Southend Arterial Road) and A13, both of which afford direct access to the M25 (30 minutes’ drive time), which in turn provides access to the national motorway network.

• The Victoria Shopping Centre extends to 338,538 sq ft (31,451 sq m) and is anchored by a 38,142 sq ft (3,544 sq m) Wilko store, held on a lease expiring November 2022.

• Heavily community and convenience focused tenant line-up with occupiers including Next, Deichmann-Shoes, Metro Bank & Poundland.

• Significant Freehold title extending to a total site area of 3.64 acres (1.47 hectares).

• 66% of gross income is secured against top tenants by income in the scheme.

• Robust income profile with WAULTs of 5.95 years to lease expiries and 4.54 years to breaks.

• The Victoria Shopping Centre is 80% let by floor area and 89% let by ERV.

• 58% of income is secured against multiple national retail covenants.

• 500 income producing customer car parking spaces, accessible via Chichester Road.

• The ownership includes Chartwell House. The long leasehold was recently sold to Victoria Estates for a term of 150 years at a ground rent of £50 per unit, (£3,550 pax).

• Total gross income of £2,323,527 per annum.

• Net operating income, after deductions of Landlord shortfalls and non-recoverable contribution to marketing, of £1,396,974 per annum.

LocationSouthend-on-Sea is strategically located on the Thames Estuary and is one of Essex’s principal commercial centres as well as being an important commuter town. A renowned and popular seaside resort, Southend attracts over 6.4 million tourists per year and is located approximately 45 miles (72km) east of London, 20 miles (32km) south east of Chelmsford, 41 miles (66km) south of Colchester and 15 miles (24km) east of Billericay.

STANSTEADAIRPORT

CHANNELTUNNEL

LIVERPOOLSTREET

STATION

COLCHESTER

BRENTWOOD

HARLOW

SOUTHEND

CENTRALLONDON

CHELMSFORDA1(M)

A2

M2

M26 M20

A20

A13

M25

M25

M25

M25

A12

M11

A120

A10

A127

A414

GATWICKAIRPORT

HEATHROWAIRPORT

LONDONCITY AIRPORT

SHENFIELD

Southend has excellent road communications served by the A127 (Southend Arterial Road) and A13, both of which afford direct access to the M25 (30 minutes’ drive time), which in turn provides access to the national motorway network.

Southend benefits from two national Rail Stations, Southend (Victoria) and Southend (Central). The former provides regular services to London (Liverpool Street) and the latter frequent services to London (Fenchurch Street) both with journey times of approximately 55–60 minutes.

London Southend Airport is a successful expanding commercial passenger airport with increased scheduled flights to many European destinations.

SituationVictoria Shopping Centre occupies a prominent sloping site at the northern end of the High Street opposite Southend’s only cinema, the 8 screen Odeon and the town’s restaurant conglomeration where the likes of Nando’s, Bella Italia and Ask are represented. The property is bounded by Southchurch Street to the south, Chichester Road to the east, the station to the north and the High Street to the south.

Victoria Rail Station is also adjacent which is reached via escalator access and a covered foot bridge spanning the busy A13 (Queensway) which forms a link through the Centre to the High Street.

VICTO

RIA AVENU

E

PRITTLEWELL

WESTCLIFF SOUTHENDCENTRAL

SOUTHENDEAST

SOUTHENDVICTORIA

Demographics

Southend benefits from an estimated population of 126,511 within a 10 minute drivetime catchment, increasing to 299,307 within a 20

minute drivetime catchment.

Total annual retail expenditure capacity equates to £731 million in the 10 minute drivetime catchment, increasing to £1.78 billion in the 20

minute drivetime catchment.

Household retail spend per capita is £13,383 per annum, 6% lower than

the UK average.

The comparison retail spend in the 20 minute drivetime catchment is predicted to increase by 25% over

the next 10 years.

Comfortable Communities are the most prevalent ACORN Affluence Category households in the immediate area, equating to 40% of those in the 20-minute drivetime catchment, above both the UK average of 27% and the

regional average of 32%.

Description• The Victoria Shopping Centre was originally constructed in 1967 by Hammerson.

The property consists of a covered schemed comprising circa 80 retail units, arranged over ground, lower ground and first floors. There are entrances from High Street, Southchurch Road, Chichester Road and Southend Victoria Station via an escalator and footbridge. There is also access from the car park via 2 lifts and a staircase.

• The High Street entrance is considered the principal entry point but there is also significant pedestrian flow from the station and the car park. Public toilets and centre management are provided on the first floor accessed via lift, escalator or stairs. The scheme underwent a substantial £25m refurbishment in 2007. This principally comprised covering what was an open-air scheme but also included new entrance features, additional retail space, relocation of WC’s and replacing the lifts and escalators, as well as improving the accessibility from the car park and the train station.

•

CHARTWELL HOUSE

• Chartwell House is a (circa 63,000 sq ft), residential led, previously occupied by HSBC. The long leasehold was recently sold to Victoria Estates for a term of 150 years at a ground rent of £50 per unit, (£3,550 pax). The residential scheme will comprise of 108 units. Under the terms of the sale, the developer has committed to paying the service charge, as stated in the tenancy schedule.

• More details are available upon request.

Income Analysis

INCOME EXPIRY PROFILE (TO LEASE EXPIRIES) INCOME EXPIRY PROFILE (BREAKS)

4.09%

17.84%1.12%

15.59%

45.94%

4.09%

27.84%

8.85%

15.62%

43.60%

Holding Over

0 yrs to 2 yrs

2 yrs to 5 yrs

5 yrs to 10 yrs

10 yrs to 15 yrs

15 yrs+

Holding Over

0 yrs to 2 yrs

2 yrs to 5 yrs

5 yrs to 10 yrs

10 yrs to 15 yrs (0%)

15 yrs+

INCOME PROFILE BY COVENANT

National Local

58.33%41.67%

15.42%

500INCOME PRODUCING

CUSTOMER CAR PARKING SPACES

38,142 SQ FT WILKO STORE

ON A LEASE EXPIRING NOVEMBER 2022

3.64ACRES SITE AREA, HELD FREEHOLD

338,538 SQ FT (31,451 SQ M) ACROSS THE

VICTORIA SHOPPING CENTRE & CHARTWELL HOUSE

Significant REGENERATION OPPORTUNITY*

5,600,000 ANNUAL FOOTFALL

58% OF THE GROSS INCOME

IS SECURED AGAINST NATIONAL COVENANTS

80% let BY FLOOR AREA

20,703 SQ FT NEXT STORE

ON A LEASE EXPIRING NOVEMBER 2028

5.95YEARS WAULT TO

EXPIRIES, 4.54 YEARS TO BREAKS

*subject to planning permission

TenureThe property is held mainly on a freehold basis with two parts (Chartwell North link to Southend Victoria station and the New Look unit adjacent to the Odeon Cinema entrance) held on 150 year leases from Southend-on-Sea Borough Council.

As mentioned, Chartwell House was recently sold to Victoria Estates for a term of 150 years at a ground rent of £50 per unit, (£3,550 pax).

Held under long leasehold ownership Chartwell House recently sold to Victoria Estates for a term of 150 years

*Plan is indicative only and not to be relied upon

snappysnaps

LOWER GROUND FLOOR

FIRST FLOOR

GROUND FLOOR

Southend RegenerationThe recently adopted Southend Central Area Action Plan (SCAAP 2018), seeks to provide a much more flexible approach to the type of uses that should be permitted in the High Street, relaxed previous policy provisions to allow a greater mix of uses in the centre such as cafes and restaurants. It also encourages further residential development in the town centre and the expansion of the University campus and associated student accommodation.

The proactive local council have been developing 500 residential units a year for the last few years. This target will increase significantly under a new Local Plan to between 900-1000 units a year. The new Plan is due to be adopted in 2022.

An agreement has also been reached between Southend-on-Sea Borough Council, Citizen Housing LLP and Southend United Football Club, enabling the redevelopment of Roots Hall for new homes, and the delivery of a new stadium at Fossetts Farm - with new homes replacing the proposed out-of-town retail development.

The stadium at Fossetts Farm will be enabled by around 800 homes through the agreement with the council, and potentially hundreds more homes through a separate joint venture between Citizen Housing LLP and a third party. There will also be other facilities such as a health centre, convenience store and a community hub at Fossetts Farm. The revised plans will remove the threat of major out-of-town competition to the town centre. This exciting change will provide a confidence boost for businesses, landlords and investors in the town centre and on the High Street in particular.

THE BETTER QUEENSWAY PROJECT

The Victoria Shopping Centre is situated within the boundary of the town centre secondary shopping frontages, adjacent to the site PA4.1 (Queensway Estate) which has been earmarked for development.

The £500 million regeneration of the Queensway Estate in Southend will be carried out by Southend-on-Sea Borough Council and its joint venture partner Swan Housing Association. The project will transform the Queensway area into a vibrant new place providing high quality housing for residents, together with commercial units and high quality and attractive public realm, as well as better integrating the town centre into its residential hinterland to the north and east. This development will include new public green spaces and a revitalised entrance to Southend-on-Sea from Southend Victoria station, and is set to be one of the biggest ever attempted in the town, as the council bids for Southend to become Essex’s new city.

The regeneration site is directly adjacent to The Victoria Shopping Centre.

THE VICTORIA SHOPPING CENTRE

Asset ManagementALTERNATIVE USESThe vacant units offer the possibility of bringing alternative uses into the scheme, this could be through the introduction of offices, leisure, civic or healthcare elements.

REGENERATION The scheme occupies a significant site of 3.64 acres in the heart of the town centre. It is our belief that the council would work favourably with any prospective purchaser as it would aid the delivery of their recently adopted Southend Central Area Action Plan (SCAAP 2018).

The scheme stands to benefit from the significant investment in the new public realm and housing that the Queensway project will deliver, this will drive occupier demand for the scheme, which in turn will improve the rental tone as a result of the increased footfall and lower vacancy rates.

LET VACANT UNITSThe core shopping centre has a number of vacant units, the letting of which will present the opportunity to improve the income stream.

LEASE RE-GEARS AND RENEWALSA proactive approach should be adopted to secure the future of key tenants in the scheme. With recent lettings and lease renewals completed with tenants including The Cultural Assembly Limited, Zara Unique Hoop & Pole Fitness Ltd and Barber-on-Sea, this momentum can be capitalised upon to engage with other tenants that are either holding over or with forthcoming lease events. Targets would include Roy P Gill Opticians Ltd, Cong Ngo Van t/a Beautiful Nailbar and Lyn Frazer t/a Mixtures.

Further Information SURVEYSEnergy Performance Certificates (EPCs) are on the marketing data room. A warranted measured survey and vendor’s building survey pack, prepared by Lane and Frankham and Savills respectively, will be made available and it is anticipated that the Purchaser will take full reliance on these surveys.

VATThe property is registered for VAT and it is proposed that the sale will be treated as a ‘Transfer of a Going Concern’.

DATA ROOMFurther information on the asset and the opportunity is held on the secure marketing data room. Parties are invited to register for access at the following address:

www.savills.com/TheVictoriaCentre

PROPOSALWe are instructed to seek offer in excess of £10,475,000 (Ten Million Four Hundred and Seventy Five Thousand Pounds) exclusive of VAT and subject to contract.

Assuming standard purchaser’s costs are applicable, this reflects the following metrics:

• Net Initial Yield: 12.50%• Net Reversionary Yield: 18.52%• Capital Value (£ per sq ft): £31.00

KEY CONTACTS For further information, or to arrange a site inspection, please contact:

TOBY OGILVIE SMALS

tosmals@savills.com

+44 (0) 20 7409 8162

+44 (0) 7972 000 045

LOTTIE THOMAS

charlotte.thomas@savills.com

+44 (0) 203 810 9886

+44 (0) 7866 203 386

On the instruction of Arron Kendall and Simon Thomas Joint Fixed Charge Receivers IMPORTANT NOTICE

Savills, their clients and any joint agents give notice that:

1. They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact.

2. Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Savills have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise.

Designed and Produced by Savills Marketing: 020 7499 8644