SAINSBURY’S LOCAL INVESTMENT

Former Red Lion Public House Lawnswood Road, Wordsley, Stourbridge DY8 5PH.

Artist’s impression only. Actual details may vary.

INVESTMENT SUMMARY

• New Sainsbury’s Local store.

• 407.69 sq.m (4,388 sqft) unit on ground and basement .

• New 15 year FRI lease to Sainsbury’s Supermarkets Limited (tenant break at year 10).

• Rent to be £61,000 per annum (£13.90 per sq.ft overall).

• 5 yearly rent reviews to annually compunded RPI (collared at 1.5% and capped at 3.5%)

• Undoubted 5A1 covenant.

• Proposal - £960,000 representing a net initial yield of 6%, after purchaser’s costs of 5.80%.

CONTACTSFor further information or to arrange an inspection please contact:

Andrew PriceDD: 0121 513 0892M: 07798 656 360andrew.price@fspproperty.co.uk

Andrew Franck-SteierDD: 0121 513 0891M: 07798 647 640andrew.franck-steier@fspproperty.co.uk

LOCATION Stourbridge is a busy and affluent West Midlands town lying within the Black Country region. The town lies approximately 12 miles to the west of Birmingham, 11 miles south of Wolverhampton and 9 miles north east of Kidderminster. Stourbridge is located approximately 7 miles from junctions 3 & 4 of the M5 motorway via the A456 and A491 respectively.

SITUATIONThe subject property lies approximately one mile north of Stourbridge town centre in Wordsley.

The property is extremely prominent benefitting from a dual frontage to Lawnswood Road and The Green. Adjoining the site is Wordsley Green Shopping Centre, Library and Health Clinic. Wordsley Green Shopping Centre comprises 11 retail units, including a Post Office, pet shop, butchers and charity shops. The surrounding area comprises predominantly high density residential.

DEVELOPMENTThe property will comprise a comprehensively refurbished former public house which will provide a Sainsbury’s Local unit totalling 407.69 sq.m (4,388 sqft) over ground and basement. The ground floor retail area will be approximately 309.27 sq.m (3,329 sqft). The first floor is to be “mothballed”. The entire property is to be demised to Sainsbury’s.

The site extends to 0.36 acres (0.15 hectares) and provide a large car park with approximately 21 spaces including two disabled spaces. Planning for the development was granted on 31st January 2011 and Practical Completion of the development is anticipated to be in mid August 2012.

TENANCYSainsbury’s Supermarkets Limited has signed an Agreement for Lease and on Practical Completion of the unit they will commit to a new 15 year FRI lease. There is a tenant only break option on expiry of the 10th year of the lease, subject to six months notice.

The initial rent will be £61,000 per annum (£13.90 per sqft overall). The rent will be increased 5 yearly on a compounded RPI basis. There will be a minimum collar to the reviews of 1.5% and a cap of 3.5% per annum. The vendor will cover any outstanding rent free on completion of the sale, the tenant has been granted three months at the outset.

Based on conservative assumed annual 3% RPI growth over the term of the lease the rent would increase to:

Year 6-10 - £70,716Year 11-15 - £81,979

TENUREFreehold.

COVENANTFor the year ended March 2011, Sainsbury’s Supermarkets Ltd reported a turnover of £21.1 billion, pre-tax profits of £775 million and a net worth of £3.92 billion. Over a third of Sainsbury’s retail outlets are now convenience style stores.

PROPOSALWe are instructed to seek offers in excess of £960,000 (Nine Hundred and Sixty Thousand Pounds) which reflects a net initial yield of 6%, based on purchaser’s costs of 5.80%.Assuming RPI growth of 3.0% per annum the return to an investor during the lease could increase to:Years 6-10 – 6.96% Years 11-15 – 8.07%

VATThe property will be elected for VAT and therefore VAT will be payable on the purchase price. The intention though is to sell by way of a TOGC.

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.

Indicative photo montage of front elevation