BromsgroveDistrict Council

AND

Prime Waitrose Supermarket & Council Car Park Funding OpportunityMarket Place, Bromsgrove, Worcestershire B61 7AB

INVESTMENT SUMMARY

n Located in Bromsgrove town centre in close proximity to the prime retail pitch

n A new build supermarket extending to 837 sq.m (9,009 sq.ft) let to Waitrose Ltd

n Adjoining 86 space car park let to Bromsgrove District Council

n Both units are pre-let for 15 years with 5 yearly reviews to compounded CPI collared at 1% and capped at 3% per annum

n Total income £190,240 per annum

n Practical completion 1st March 2017

n Offers are sought for the forward funding of the investment in excess of £3,530,000

n Net initial yield 5.25%, assuming costs of purchase on the site of 5.80% and 1.80% on the balancing payment

LOCATION

Bromsgrove is situated approximately 15 miles south west of Birmingham and 14 miles to the north east of Worcester. The town benefits from excellent road communications being 2 miles from Junction 1 of the M42 motorway. Junction 4 of the M5 motorway is 3 miles to the north and Junction 5 of the M5 lies 4 miles to the south both via the A38 dual carriage way.

Bromsgrove is a prosperous and busy market town with a resident population of approximately 29,237 and a district population of 91,500 which is forecast to increase to over 100,000 by 2021. The catchment population within six miles of the town is 150,000. In terms of social economic profile, 11.7% are described as affluent executives compared to a national average of 4.3%.

Bromsgrove railway station is operated by London Midland and provides regular services to Birmingham, Worcester, Hereford, Malvern and Cheltenham.

SITUATION

The property is prominently situated on the corner of St John Street and Hanover Street with access from both roads. Bromsgrove’s pedestrianised High Street and prime retail pitch is within short walking distance. High Street is well represented by national retailers including Boots, New Look, M&Co, Burton, Dorothy Perkins, Costa Coffee, Poundland, Greggs, Iceland and Argos. Bromsgrove School, one of the region’s top private schools, is opposite the Hanover Street entrance

High Street underwent a major regeneration in 2014 which was part of a £100m Town Centre Regeneration Project including a new health centre, library and police and fire stations. In addition, Bromsgrove’s railway station has been upgraded to provide a new interchange. Further information is available at www.betterbromsgrove.com.

The subject site is currently operated as a council car park.

DESCRIPTION SQM SQFT

Ground floor 635.00 6,835

First floor 202.00 2,174

TOTAL 837.00 9,009

SITE AREA

The site extends to 0.49 hectares (1.21 acres), a low site density of 13%.

ACCOMMODATION

The unit will be constructed to the following target gross internal areas:

DESCRIPTION

The property will comprise a supermarket constructed to Waitrose’s latest specification with a sales area on ground floor and storage and ancillary staff accommodation at first floor level. A detailed specification together with floor plans is available on request.

Externally there will be an 86 space car park.

TENURE

The property is held freehold.

TENANCIES

The supermarket is pre-let to Waitrose Limited for a term of 15 years from practical completion. The lease is to be held on full repairing and insuring terms subject to 5 yearly upward only reviews to CPI, collared at 1% and capped at 3% per annum compounded. The commencing rent will be £165,240 per annum (£18.34 per sq.ft). Waitrose has the right to renew the lease for a further 15 on expiry on the same terms.

The car park is pre-let to Bromsgrove District Council for a term of 15 years from completion. The lease is to be held on full repairing and insuring terms subject to 5 yearly upward only reviews to CPI, collared at 1% and capped at 3% per annum compounded. The commencing rent will be £25,000 per annum.

The total income will therefore be £190,240 per annum.

Bromsgrove District Council and Waitrose have agreed to provide a concessionary one hour’s free parking to Waitrose customers, subject to a minimum £5 in store spend.

Waitrose is one of the UK’s highest profile and most prestigious supermarket chains. The company is the supermarket arm of the John Lewis Partnership, one of the UK’s top ten retailers, with a Dun & Bradstreet rating of 5A1 representing a minimum risk of business failure. Waitrose has approximately 280 branches across the UK, including 30 “Little Waitrose” convenience stores.

Waitrose reported an increase in like for like sales of 1.1% for H1 2015 and 1.4% in 2014. The company continues to expand with 14 new stores in 2015. The company recently won the Verdict customer satisfaction award for Best Food Retailer ahead of Aldi and Marks & Spencer.

A summary of the last three years’ accounts is set out below:

SUPERMARKET INVESTMENT MARKET

Waitrose Limited 31/01/2015(£’000s)

25/01/2014(£’000s)

26/01/2013(£’000s)

Turnover 6,016,700 5,640,900 5,416,100

Pre Tax Profit 80,600 109,100 147,500

Net Worth 853,700 796,600 1,202,500

Address Tenant AreaSq.ft

TermCertain

TransactionDate

Price£

Yield

South Street, Crewkerne

Waitrose 31,694 12.5 years SoldDec 2015

£13,160,000 5.00%

Great North Road, Gosforth

Marks & Spencer

17,222 19.5 years SoldSep 2015

£5,028,000 4.70%

Eastwood Road, Rayleigh

Marks & Spencer

38,502 20 years SoldAug 2015

£10,000,000 4.50%

Pinfold Street, Uttoxeter

Waitrose 36,500 20 years from PC

FundedFeb 2015

£12,560,000 4.75%

London Road, Worcester

Waitrose 52,614 20 years from PC

Fundeddec 2014

£20,00,000 4.40%

Pentwyn Road, Cardiff

Waitrose 37,956 14 years SoldJun 2014

£20,00,000 4.73%

BromsgroveDistrict Council

Bromsgrove District Council is an undoubted covenant.

BEN BLACKWALL0121 513 0893ben.blackwall@fspproperty.co.uk

Misrepresentation Clause : The accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and other details contained herein are not guaranteed and are for general guidance only and prospective purchasers or tenants must not rely on them as statements of fact or representations and must satisfy themselves of their accuracy. Neither Franck-Steier Price Ltd, nor any of their employees or representatives has any authority to make or give any representation or warranty or enter into any contract whatever in relation to the property. Prices and rents quoted in these particulars may be subject to VAT in addition. The reference to any mechanical or electrical equipment or other facilities at the property shall not constitute a representation (unless otherwise stated) as to its state or condition or that it is capable of fulfilling its intended function. Prospective tenants/purchasers should satisfy themselves as to the condition of such equipment for their requirements.

Franck Steier Price Ltd

Third Floor, Victoria House

114-116 Colmore Row, Birmingham, B3 3BD

PLANNINGA planning application was submitted on 20 November 2015 to Bromsgrove District Council (reference 15/0994) for the erection of a food store (use A1) with associated parking and landscaping works. Planning consent is expected prior to 29 April 2016.

DEVELOPER

The property will be developed by Hinton Group, who is one of the leading developers in the region. Hinton Group is a privately owned company specializing in land acquisition, development, architectural design and construction, principally for the retail and leisure sectors.

Hinton has been delivering innovative development solutions for over two decades and to date Hinton has developed over 1,000,000 sq ft of commercial, retail, leisure and office space. Recent projects include:

n 18,500 sq.ft Aldi supermarket, Leicester

n 2,700 sq.ft KFC Drive-Thru and 16,000 sq.ft Aldi supermarket, Telford

n 83 bed Travelodge Hotel, Oxford

n 67 bed Premier Inn Hotel, Birkenhead

n 50,000 sq.ft Wickes, 6,000 sq.ft Ford car showroom, 4,000 sq.ft Halfords and 60 bed Travelodge Hotel, Birmingham

Further information can be found on the company website www.hintongroup.co.uk.

DEVELOPMENT PROGRAMMEA contract has been exchanged with Bromsgrove District Council to acquire the site following approval of the planning application which is expected prior to 29 April 2016. Hinton has also exchanged contracts with the Council on the adjacent development plot (Phase 2) which is intended for retail/leisure development.

Following receipt of the planning consent development will commence with Practical Completion scheduled for 1 March 2017.

A full suite of contractor warranties will be provided to the purchaser upon Practical Completion of the development.

VATThe property is elected for VAT and therefore VAT will be payable on the purchase price. It is anticipated that the sale will be dealt with as a TOGC.

PROPOSALWe are instructed to seek offers for the forward funding of the property in excess of £3,530,000 (Three Million Five Hundred and Fifty Thousand Pounds) subject to contract and exclusive of VAT.

A purchase at this level would reflect a net initial yield of 5.25%, assuming costs of purchase on the site of 5.80% and 1.80% on the balancing payment.

FUNDING STRUCTUREThe purchaser will acquire the site for £750,000 with Hinton Group simultaneously entering into a development agreement with the purchaser to develop the supermarket and car park in accordance with the agreed specifications.

The purchaser with make stage payments throughout the development period to Hinton following key development milestones with a final balancing payment on Practical Completion of the development and completion of the leases to Waitrose Limited and Bromsgrove District Council.

CONTACTS

ANDREW PRICE0121 513 0892andrew.price@fspproperty.co.uk