prime west midlands industrial investment

starley way, b irmingham b37 7hb

PRIME WEST MIDLANDS INDUSTRIAL INVESTMENT

2. SCHUMACHER PACKAGING PRIME WEST MIDLANDS INDUSTRIAL INVESTMENT

100% Prime West Midlands

Industrial Investment


INVESTMENT SUMMARY

� 100% Prime West Midlands Industrial Investment

� Strategically located 2 miles North West of Junction 6 of the M42 Motorway and 2.1 miles South West of

Junction 4 of the M6 motorway

� Situated adjacent to Birmingham International Airport, Birmingham International Railway Station and

within close proximity to JLR’s Solihull plant. Surrounding occupiers include DHL, Palletline and XPO

Logistics

� Freehold site extending to 5.04 acres (2.04 hectares)

� Gross Internal Floor Area extending to 125,404 sq ft (11,650 sq m)

� Let in its entirety to Schumacher Packaging Limited, a leading European manufacturer and innovator

of cardboard packaging. The lease benefits from a guarantee from German based parent company

Schumacher Packaging GmbH, a 5A1 covenant

� The tenant has made substantial investment in plant and machinery at the building over the past

12 months

� FRI lease with a contractual term expiring 4 November 2026, providing an unexpired term of

approximately 5.5 years, at a passing rent of £673,000 p.a. which reflects a low rent of £5.37 per sq ft

� The rent is subject to an upward only RPI-linked rent review on 5th November 2024 with a collar and

cap of 2.0% & 4.0%, compounded annually

PROPOSALSavills is instructed to seek offers in excess of £12,000,000 (Twelve Million Pounds)

for the freehold interest, subject to contract and exclusive of VAT.

A purchase at this level would reflect a low capital value of £96 per sq ft, a Net

Initial Yield of 5.26%, and a guaranteed minimum Reversionary Yield of 5.80%

following review in November 2024, allowing for standard purchaser’s costs of 6.71%.


Adjacent to Birmingham Airport with surrounding

occupiers including DHL and Palletline


LOCATION & CONNECTIVITY

The property is located in the borough of Solihull in the West Midlands, a thriving business destination in the

centre of the UK just 8 miles east of Birmingham, 93 miles south of Manchester and 96 miles north west of

London.

Solihull has a large and established prime industrial market which spans from Hams Hall at Junction 9 of the

M42 to the north of the town and to Blythe Valley Park at Junction 4 of the M42 to the south. Solihull is ideally

positioned to serve a wide range of distribution and manufacturing occupiers.

The property itself sits in an area identified as ‘UK Central Hub’ which is at the heart of the Solihull industrial

market. Located at Junction 6 of the M42, it is the most high profile development growth project in Europe.

UK Central Hub is nationally and internationally connected via Birmingham International Airport and

Birmingham International Railway Station. This will be further enhanced with the arrival of Birmingham HS2

Interchange Station later this decade.

The location’s unparalleled access to the UK’s road network means that 75% of the population can be reached

within a 3 hour drive of the property making this a prime industrial and distribution location.

Motorway Miles Time

M42 (J6) 2 5 mins

M6 (J4) 2 4 mins

M6 Toll 8 10 mins

M40 (J3A) 11 13 mins

M5 (J4A) 22 23 mins

M1 (J19) 26 26 mins

City Miles Time

Birmingham 8 18 mins

Coventry 11 16 mins

Leicester 31 30 mins

Nottingham 46 47 mins

Manchester 93 1 hr 43 mins

Bristol 95 1 hr 31 mins

London (M25) 96 1 hr 27 mins

Rail Freight Terminal Miles Time

Hams Hall Rail Freight Terminal 7 14 mins

Birmingham Lawley Street 8 22 mins

Birmingham Intermodal Freight Terminal 14 25 mins

Daventry International Rail Freight Terminal 29 34 mins

Cargo Airport Miles Time

Birmingham 1 3 mins

East Midlands International 35 37 mins

3 ho

ur d

rive

rad

ius

M6

M6

M5

M5

M4M4

M3

M50

M55

M74

M77

M90

M54

M40

A14

A14

M42

M62

M62

M62

M60

M42

M25

M25

M23

M26

M1

M11

A1(M)

A1(M)

A1(M)

A1(M)

M1

M1

M6

M8

BIRMINGHAM

LONDON

Wolverhampton

MANCHESTER

LEEDS

GLASGOW

NEWCASTLEUPON TYNE

LIVERPOOL

BRISTOL

SOUTHAMPTON

CARDIFF

Gloucester

Swansea Swindon

MiltonKeynes

Norwich

Exeter

Plymouth

Leicester

Stoke-on-Trent

Preston

Edinburgh

Dundee

Aberdeen

Hull

Cambridge

Ipswich

Nottingham

GATWICKAIRPORT

COVENTRYAIRPORT

NEWCASTLEAIRPORT

EDINBURGHAIRPORT

GLASGOWAIRPORT

MANCHESTERAIRPORT

LUTONAIRPORT

EAST MIDLANDSAIRPORT

HEATHROWAIRPORT

BIRMINGHAMAIRPORT

GATWICKAIRPORT

COVENTRYAIRPORT

NEWCASTLEAIRPORT

EDINBURGHAIRPORT

GLASGOWAIRPORT

MANCHESTERAIRPORT

LUTONAIRPORT

EAST MIDLANDSAIRPORT

HEATHROWAIRPORT

BIRMINGHAMAIRPORT


SITUATION

The property is situated on Starley Way to the north of Birmingham Airport and is accessed via the Bickenhill

Way dual carriageway which leads to both Junction 6 of the M42 Motorway (2 miles south east) via the

Coventry Road and Junction 4 of the M6 Motorway (2.1 miles north east) via the A446.

Starley Way is an established commercial location which is home to other high profile tenants including DHL,

Palletline and Porcelanosa. There are a wide range of other industrial occupiers situated in the immediate area

including at Elmdon Trading Estate and Prologis Park Birmingham Interchange.

The presence of the automotive sector continues to fuel economic activity in the region, including Jaguar

Land Rover’s £1bn investment to convert both the Castle Bromwich and Solihull factories into specialist EV

production centres. Other investment includes the construction of the new logistics operations centres and its

new logistics hub under construction in Solihull.

The property’s situation is ideally suited to the tenant, whose employees and clients utilise the air and rail

travel connections which are situated within 1 mile to the south of the property.

Coleshill

Heath R

oad

Bic

ken

hill

La

ne

Bickenhill Lane

Bickenhill Road

Col

esh

ill H

eath

Roa

d

Moor

end

Avenu

e

Starley Way

A450

A450

A446

M6

M42

M42

M6

Birmingham International

National Exhibition Centre

Resorts World

Birmingham Airport

MarstonGreen

Starley Way is

an established

commercial location

which is home to other

high profile tenants

including DHL and

Palletline


The property is

situated on Starley

Way to the north of

Birmingham Airport and

is accessed via the

Bickenhill Way dual

carriageway

BIRMINGHAM AIRPORT

M6 MOTORWAY

BIRMINGHAM INTERNATIONAL RAILWAY STATION

SITE OF HS2 BIRMINGHAM INTERCHANGE STATION

SITE OF JLR’S LOGISTICS OPERATIONS CENTRE

A446

M42

NEC

M42

BIKENHILL LANE

MARSTON GREEN RAILWAY STATION

LEA HALL RAILWAY STATION


DESCRIPTION

The property comprises a high quality industrial warehouse which was purpose built for the tenant

in the early 2000’s and further extended approximately 8 years ago. The total site area is 5.04 acres

(2.04 hectares) and the site coverage is 57%.

Extending to a Gross Internal Area of 125,404 sq ft (11,650 sq m), the property incorporates production,

assembly, loading and storage space together with offices and ancillary staff accommodation.

The majority of the building benefits from an eaves height of 5.5m plus, measured to the underside of

the haunch, with some production areas of the building having lower clear working height.

The property is subject to the following specification:

� Steel-framed construction;

� Profile clad elevations under metal-sheet

roofs;

� 6 roller shutter doors;

� Mix of sodium box and suspended strip

lighting;

� Solid concrete floors;

� Secure gated yard;

� Dual access

The property

incorporates

production, assembly,

loading and storage space

together with offices

and ancillary staff

accommodation.


ACCOMMODATION

The property has been measured in accordance with the RICS Code of Measuring Practice (6th Edition).

The Gross Internal Areas are as follows:

Unit Name Sq Ft Sq M

Warehouse 117,692 10,933

Covered and enclosed loading / storage area 4,108 382

Office 3,604 335

Total 125,404 11,650

The building benefits from 49 parking spaces and the site extends to approximately 5.04 acres (2.04 hectares).

TENURE

The property is held freehold, under title number WM691314.

TENANCY

The property is let in its entirety to Schumacher Packaging Limited for a term of 7 years from 5th November 2019

to and including 4th November 2026, providing a lease term of approximately 5.5 years to expiry. The lease is

guaranteed by the tenant’s German parent company, Schumacher Packaging GmbH.

The lease is drawn on full repairing and insuring terms at a passing rent of £673,000 per annum, equating to

£5.37 per sq ft.

The lease has an upward only RPI linked rent review on 5th November 2024, subject to a collar and cap of 2% and

4%, compounded annually. This will provide a minimum increase to £743,046 p.a. (£5.93 per sq ft)

at review based off the collar of 2% compounded.

The lease is excluded from security of tenure provisions of the 1954 Act but the tenant has an option to renew the

lease for a further 7 years upon the same terms granted under this tenancy. The tenant can exercise this extension

at any point up until 6 months prior to the lease expiry i.e. 4th May 2026.


COVENANT INFORMATION

TENANT PROFILE

D&B Rating: 3A2

Schumacher Packaging Limited is a leading cardboard packaging manufacturer and innovator of packaging

solutions to a variety of industries. Services include packaging development, production, design, just-in-time

logistics packaging and strategic advice.

Formerly known as Jaffabox Limited, the business was acquired by German headquartered business

Schumacher in November 2019 and subsequently renamed and rebranded. The business has since been

subject to a multi-million pound investment program by Schumacher, including the installation of a state-

of-the-art BHS corrugator that can manufacture over 50,000 plain and printed boxes per hour on a fully

automated basis.

The business has experienced a significant surge in demand over the past 12 months and has successfully

secured relationships with a range of new clients, including Amazon. Further investment in machinery is

planned as the business continues to grow to meet increased demand from new and existing clients for its

products and services.

Existing clients include:

GUARANTOR PROFILE

D&B Rating: 5A1

The lease is subject to a full parent company guarantee from Schumacher Packaging GmbH.

Formed in 1948, Schumacher is a substantial German business with over 30 sites across Europe, including Germany,

Poland, the Czech Republic, Austria, Netherlands and the UK.

A summary of their latest consolidated financial accounts are as follows:

Following the acquisition of the company, the accounting period was changed to 31st December to fall in

line with the parent group accounting period. This part year and the previous 3 years of financial accounts

are as follows:

Part Year

For the 5 months end

31 December 2019

For the year end

31 July 2019

For the year end

31 July 2018

For the year end

31 July 2017

Sales Turnover £5,210,283 £13,121,747 £12,041,750 £10,004,204

Profit Before Tax £734,059 £2,164,798 £1,626,978 £1,365,651

Tangible Net Worth £7,165,637 £11,111,411 £8,895,398 £7,698,770

For the year end

31 December 2018

For the year end

31 December 2017

For the year end

31 December 2016

Sales Turnover € 430,803,425 € 402,877,915 € 369,290,066

Profit After Tax € 14,222,654 € 9,354,410 € 7,976,737

Total Equity €180,504,403 €169,912,339 €158,888,690


OCCUPATIONAL MARKET

The West Midlands region witnessed record-breaking take-up in 2020 with a 65% year-on-year increase. The

surge in demand, led from a macro shift in e-commerce coupled with an under-supply of stock, has led to

rising rents across all grades of industrial property.

With just 0.54 years’ worth of Grade A supply in the region and supply of grade B and C accommodation

also significantly diminished, it is expected that the market will continue to see further rental growth going

forward.

The presence of the automotive sector in the West Midlands continues to fuel economic activity, including

Jaguar Land Rover’s £1bn investment to convert both the Castle Bromwich and Solihull factories into

specialist EV production centres. Other investment includes the construction of the new logistics operations

centre, being developed for JLR in Solihull.

Supply chains associated with JLR and other major manufacturers based in the region will continue to

remain an active part of the industrial occupational market in the West Midlands together with substantial

demand from Logistics occupiers and SMEs.

The supply of industrial development land within the Solihull market is severely restricted, and as such

there are very few new units in the development pipeline. The most recent speculative development was of

2 units (77,484 sq ft and 234,718 sq ft) at Prologis Park Birmingham Interchange, completed in 2020 where

both units were pre-let ahead of completion.

Land values equal to £1.3 million per acre (gross), amongst the highest in the Midlands, have recently

been achieved within close proximity to the property, representing the strength of this area as an

industrial location.

Comparable lettings for the subject property include:

Date Address Size (sq ft) Tenant Term (Break)Rent p.a.

(£ per sq ft)

Oct-20 Unit 500, Solar Park, Solihull 67,802 Norton Motorcycles 5 (3) years £7.15

Jul-20 Highlands Road, Solihull 262,114 Farm Foods 20 years £6.75

Jul-20 Unit 1, Ravensbank, Redditch 91,465 DCS 17 (10) years £6.50

Aug-18 Midpoint 105, Minworth 105,506 Parts Alliance Group 10 (5) years £6.25


INVESTMENT MARKET

The Industrial sector has continued to outperform other real estate sectors over

the past 12 months. Transactional volumes in 2020 totalled £4.7bn, a 25% increase

on 2019.

Adapting to consumer demands, the market performed strongly in H2 2020 with

76% of capital deployed occurring in the second half of the year.

The industrial sector has continued to outperform other investment markets,

buoyed by a scarcity of good quality investment opportunities and demand-led

upward pressure on rental levels - a trend which is expected to continue for the

foreseeable future, especially for those properties in key locations.

The sustained demand seen from a broad spectrum of investors recognises

the resilience of the industrial sector, alongside an occupational market which

continues to strengthen due to changing consumer habits and an increase in ‘on

shoring’.

The following table highlights a number of relevant investment transactions:

Property Size (Sq Ft) Date IncomeUXT (Earliest

determination)Vendor Purchaser Price NIY

1 Bickenhill Lane, Solihull 42,604 Mar-21 £570,000 4.33 Birmingham City Council Goodman International £13,250,000 4.03%

2 101 Stonebridge Cross, Droitwich 57,491 Feb-21 £313,898 5.1 BHL Investments Urban Logistics REIT Plc £5,400,000 4.95%

3 5100 Cross Point Business Park, Coventry 146,701 Jan-21 £862,235 3.47 BMO Real Estate Hines Global REIT £17,100,000 4.72%

4 Prologis Park, Central Boulevard, Coventry 61,191 Dec-20 £379,000 3.4 Curtis Banks Copeley £7,000,000 5.05%

5 Langley Mill, Derby Road, Nottingham 255,680 Sep-20 £1,214,480 3.92 Tritax Big Box REIT Plc Exeter Property Group £23,000,000 4.94%

6 Heathcote Way, Leamington Spa 213,397 Oct-20 649,653 10 Nuveen Real Estate Colliers Global Investors £12,200,000 4.99%

7 Vespa Point, Prologis Park, Coventry 60,246 Jun-20 £418,030 5 Chesterhouse Properties Leftfield Capital £7,395,000 5.30%

8 Middlemarch Business Park, Coventry 227,199 Dec-19 £1,312,095 11 Merseyside Pension Fund Private Investor £25,000,000 4.92%

Transactional volumes in 2020 totaled £4.7bn, a 25% increase

on 2019


IMPORTANT NOTICE

Savills and their client 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 Core. core-marketing.co.uk 0121 232 5000. May 2021.

CONTACT

MATT JENNS

T: +44 (0)121 634 8447

M: +44 (0)7968 550 351

E: [email protected]

MAX HULSE

T: +44 (0) 121 634 8492

M: +44 (0) 7870 999 287

E: [email protected]

PROPOSAL

DATA ROOMAccess to the data site can be provided upon request.

EPCThe property has an EPC rating of C69.

VATThe property is elected for VAT.

ANTI MONEY LAUNDERINGA successful bidder will be required to provide anti-money laundering information in accordance with HMRC

regulations when heads of terms are agreed.

Savills is instructed to seek offers in excess of £12,000,000 (Twelve Million Pounds)

for the freehold interest, subject to contract and exclusive of VAT.

A purchase at this level reflects a low capital value of £96 per sq ft, a Net Initial Yield

of 5.26%, and a guaranteed minimum Reversionary Yield of 5.80% following a review

in November 2024, allowing for standard purchaser’s costs of 6.71%.

starley way, b irmingham b37 7hb

prime west midlands industrial investment

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