F r e e h o l d r e T A I l W A r e h o U S e I n v e S T m e n T

Freehold retail warehouse investmentT h e R o u n d h o u s e , 1 9 G l o u c e s T e R R o a d , c h e l T e n h a m G l 5 1 8 n e

Located in the affluent Regency Spa town of Cheltenham

Comprises 19,200ft2 retail warehouse with 70 parking spaces

Prominent freehold site of 1.25 acres with medium term development potential

Sits adjacent to 85,000ft2 Tesco Superstore

Let to two strong covenants; Homebase Ltd until 24th March 2019 and sublet to Dave Whelan Sports Ltd

Passing rent £245,000pa

Asset management opportunities

Offers are sought in excess of £2,570,000 reflecting a net initial yield of 9%, assuming normal purchaser’s costs of 5.8%

Investment Summary

Investment Summary

Freehold retail warehouse investmentT h e R o u n d h o u s e , 1 9 G l o u c e s T e R R o a d , c h e l T e n h a m G l 5 1 8 n e

Location The Regency Spa town of Cheltenham is located in the county of Gloucestershire. The town benefits from excellent communications, situated 3 miles from Junction 11 of the M5 motorway which provides a link to Bristol and the West Midlands. The principal arterial roads linking Cheltenham to the M5 are the A40 (Gloucester Road) and A4019 (Tewkesbury Road).

Cheltenham lies 110 miles west of London, 48 miles west of Oxford and 42 miles north of Bristol.

Cheltenham Spa station has direct services to London Paddington with a fastest journey time of 1 hour 50 minutes. There are direct services to Swindon (1 hour), Bristol (45 minutes) and Birmingham (40 minutes).

SituationSituated just under a mile north west of Cheltenham town centre adjacent to an 85,000ft2 Tesco Superstore. The property is conveniently situated close the junction of Tewkesbury Road and Gloucester Road and walking distance from Cheltenham Spa station, which is 0.5 miles south on Gloucester Road.

Nearby occupiers on Tewkesbury Road include Halfords, Carphone Warehouse, Wickes, Staples and The Range. Tewkesbury Road is considered the principal retail warehouse location in the town.

The property is situated opposite a substantial residential development on the land bound by Market Street and Honeybourne Lane. This Belmont Homes development is divided into three blocks, in total providing 246 residential units.

location, Situation & demographics

Catchment and DemographicsCheltenham is an affluent and prosperous town with a primary catchment of 382,000 persons. The population of Cheltenham has an above average proportion in the most affluent A and B social groups. The unemployment rate in the town currently stands at 3.1%, below the UK average of 6.5%. Major employers in the area include Government Communications Headquarters (GCHQ), Dowty Aerospace, Zurich Financial Services and UCAS.

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Freehold retail warehouse investmentT h e R o u n d h o u s e , 1 9 G l o u c e s T e R R o a d , c h e l T e n h a m G l 5 1 8 n e

DescriptionThe property was converted into a retail warehouse in the 1980s. The circular building is of steel portal frame construction with part brick and part clad elevations and a pitched roof with profiled metal cladding incorporating translucent panels.

There is a mezzanine floor providing ancillary accommodation, comprising 2,290ft2.

There are 70 customer car parking spaces on the site which comprises 0.5Ha (1.25 acres) in total.

AccommodationThe property has been measured in accordance with the RICS Code of Measuring Practice and comprises 19,200ft2 gross internal floor area.

PlanningThe property has wide Bulky planning consent specific to certain uses; ‘sport, recreation and leisure goods; building and roofing materials; timber and wood products; plumbing equipment; paints; wall tiles and floor coverings; kitchen furniture; double glazing materials; garden tools; domestic light fittings; window blinds; tool and equipment hire.’ A copy of the planning permission is available on request.

TenureFreehold.

description, Planning, Accomodation, & Tenure

Freehold retail warehouse investmentT h e R o u n d h o u s e , 1 9 G l o u c e s T e R R o a d , c h e l T e n h a m G l 5 1 8 n e

TenancyThe property is let to Homebase Ltd on a 35 year FRI lease from 25th March 1984 and expiring 24th March 2019. The rent passing is £245,000pa (£12.75 per ft2).

The property is under let to Dave Whelan Sports Ltd, trading as DW Sports Store, on a lease from 26th March 2013 and expiring 20th March 2019 at a passing rent of £175,000pa. The sub lease is subject to a schedule of condition.

Market CommentaryThe total retail warehouse provision in Cheltenham is estimated at 1.16 million ft2. The majority of retail warehousing in the town is located either along or close to Tewkesbury Road and the Western side of the town. Retail warehouse parks includes Gallagher Retail Park, Kingsditch Retail Park and Centrum Retail Park.

Headline rents for retail warehouses in Cheltenham peaked at 30 per ft2 in 2008 at Gallagher Retail Park. Rents have fallen from these levels and in the three dominant retail warehouse parks are now between £22-£25 per ft2. The Roundhouse rent reflects £12.75 per ft2 which represents a significant discount from other retail warehouse provision in the town.

Asset Management Negotiation of a surrender with Homebase Ltd and renegotiation of sub

lease with Dave Whelan Sports Ltd

Medium term development opportunity for change of use

02/03/2013 £’000

03/03/2012 £’000

26/02/2011 £’000

Turnover 1,355,013 1,447,859 1,457,093

Pre Tax Profit -6,702 N/A 62,094

Net Worth 423,231 445,210 396,948

Tenancy & Covenant Information

CovenantHomebase Ltd is one of the UK’s leading home improvement and DIY retailers. A summary of the company’s most recent financial results are provided below:

Dave Whelan Sports Ltd is a sports retailing business with 60 stores across the UK. The most recent financial results are provided below:

31/03/2013 £’000

01/04/2012 £’000

27/03/2011 £’000

Turnover 145,499 143,110 139,437

Pre Tax Profit 5,665 - 3,857

Net Worth 13,747 9,025 3,277

Freehold retail warehouse investmentT h e R o u n d h o u s e , 1 9 G l o u c e s T e R R o a d , c h e l T e n h a m G l 5 1 8 n e

Important: Alder King for themselves and for the vendors of this property, whose agents they are, give notice that: 1. The particulars contained herein are for guidance purposes only and do not constitute either part or whole of an offer or contract. 2. All descriptions, dimensions, references to condition and necessary permissions for use and occupation are given in good faith and are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact, and must satisfy themselves as to their correctness. 3. No person in the employment of Alder King has any authority to make or give any representations or warranties whatsoever in relation to these properties. 4. No responsibility can be accepted for expenses incurred by intending purchasers in inspecting and considering the properties which are offered. Under the Control of Asbestos Regulations 2006 (CAR 2006), the owner or tenant of the property, and anyone else who has control over it and/or responsibility for maintaining or repairing it, may be under a statutory obligation to detect and manage any asbestos or asbestos related compounds contained within the property. Failure to comply with the CAR 2006 is an offence and could adversely affect the value of the property. The detection and management of asbestos and asbestos related compounds is beyond the scope of our expertise and does not form part of the services that we have agreed to provide in respect of the property. Accordingly: 1. Alder King do not accept any responsibility for, and you should not place any reliance on us in respect of, the detection and/or management of any asbestos and/or asbestos related compounds contained in the property. 2. We strongly recommend that you obtain advice from specialist environmental consultants in respect of asbestos related issues.

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ProposalWe are instructed to seek offers in excess of £2,570,000 (Two Million Five Hundred and Seventy Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level would reflect a net initial yield of 9% assuming purchaser’s cost at 5.8%.

VATWe understand the property is elected for VAT, however, it is anticipated the sale will be treated as a Transfer of a Going Concern (TOGC).

EPCThe property has an EPC rating of C. A copy of the EPC is available on request.

Further InformationFor further information or to arrange an inspection please contact:

Ian Lambert0117 946 452507774 468265

Gemma-Jane Ogden0117 946 452907884 865263

Subject to contract and Exclusive of VAT / September 2014

Hartnell Taylor Cook LLPSomerset House, 18 Canynge RoadCliftonBristolBS8 3JX

Proposal, vAT, ePC & Contact