Cardiff Newport road

PriME rETaiL WarEHOUSE ParK iNVESTMENT OPPOrTUNiTY

n well located retail park, situated in Cardiff’s

established out of town retail pitch on Newport

road, in close proximity to retailers such as M&S

Simply Food, Sainsbury’s, Matalan, Homebase,

pets at Home, Carpetright, Mothercare and argos.

n the property comprises a recently refurbished

linear terrace of three main units extending

to around 5,118 sq m (55,097 sq ft) with

segregated rear servicing and forecourt parking

facilities for 213 cars (1:258 sq ft).

n the park is held Freehold and benefits from

a wide bulky goods planning consent.

initial Yield 7.75%

Estimated running Yield 2012 8.31%

Estimated reversionary Yield 2017 8.98%

Estimated True Equivalent Yield 8.33%

Estimated Nominal Equivalent Yield 7.92%

n Units 2 and 3 are let to dSG retail Ltd, trading the

Currys and pC world fascias respectively, expiring

in 2022, whilst unit 1 is let to Halfords, who have

underlet part of the unit to Multi-tile Ltd who

trade as topps tiles with a lease expiry in 2013.

n the total current income from the park

equates to £956,655 pa, reflecting passing

rents between £17.00 and £18.00 psf.

n Both dSG retail Ltd units are let with 5 yearly

reviews (2012 and 2017) geared to rpI.

Based on historic performance together with

Consensus forecast rpI figures, this should result

in significant rental growth moving forward.

ExECUTiVE SUMMarYoffers are sought in the region of £11,680,000,

subject to contract and exclusive of Vat. Based

on costs of 5.725%, a purchase at this level

would reflect the following yield profile based

on our view of current market rental value

and rpI forecast figures moving forwards:

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2

M5

M4

M4

M4

M4

A470

A4232A469

A48

A470

A470 A449A4042

A48M48(M)

Cardiff

NewportPontypridd

Llantrisant

Cwmbran

Clevedon

Cardiff

NewportPontypridd

Llantrisant

Cwmbran

Clevedon

NEWPOrT rOad

LOCaTiONCardiff is the administrative capital and main commercial centre of Wales. it lies on the south welsh coast, approximately 66 km (41 miles) east of Swansea, 72 km (45 miles) west of Bristol, 171 km (107 miles) south west of Birmingham and 242 km (151 miles) from London.

the city benefits from excellent road communications, with the M4 providing a link east to the rest of the UK via its motorway network, and west, further into wales. Junctions 29 and 32 of the M4 lie approximately 6 km (4 miles) north-west and 3 km (2 miles) north-east from the city centre respectively. the a48 runs from junction 29 through Cardiff and connects with Bridgend some 55 km (22 miles) to the west. the a470 provides a direct route north from the city centre, linking with junction 32 of the M4 and continuing further north to pontypridd (17km/11 miles) and Merthyr tydfil (38 km/24 miles).

Cardiff has a regular mainline service to London paddington, via reading, with a fastest journey time of approximately 2 hours 5 minutes.

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A48

A48

A48

A48A4232

A4232

A4232

A4160

A4160

A4160

A470A4119

A4161

A4119

A4054

A4119

A4161

A4232

B4239

A4042

A469

A469

A468

A469

A469

A467

A470

A469

A4055

A4232

A4050

A48

A48

M4

M4

M48

Drive time contours

5 minutes

10 minutes

15 minutes

CARDIFF

RUMNEY

LLANRUMNEY

ST MELLONS

RHIWDERIN

BASSALEG

MAESGLAS

DUFFRYN

PENTWYN

PONTPRENNAU

CYNCOED

LLANDEYRN

PENYLAN

ROATHTREMORFA

SPLOTT

BLACKWEIR

CANTON

LECKWITH

GRANGETOWN

LLANDOUGH

LLANDAFF

LLANDAFF NORTH

WHITCHURCH

PORSET

THORNHILL

NANTGARW

UPPER BOAT

FAIRWATER

ELY

ST FAGANS

GABALFA

NEWPORT ROAD

Cardiff has a resident population of some 320,000 people and approximately 1.4 million people live within a 45 minute drive time of the city. The 2001 Census estimated a 10 km (6 mile) radius of the city centre encapsulates around 369,000 people and this figure rises to around 682,000 people within 20 km (12 miles).

drive time figures from the property itself show a catchment of approximately 42,168 people within a 5 minute drivetime, 111,808 people within a 10 minute drive time and around 231,000 people within a 15 minute drive time.

More detailed statistics indicate extremely positive profiles for these drivetimes and we have set some of these out below:

2008 HOUSEHOLdS BY aCOrN GrOUP

Cardiff

5 MiNUTE 10 MiNUTE UK

Prosperous Professionals 7.7% 4.8% 2.1%

Educated Urbanites 11.3% 7.1% 7.0%

aspiring Singles 7.5% 14.3% 4.0%

2001 Census

PrOPErTY OWNErSHiP Cardiff

5 MiNUTE 10 MiNUTE UK

1 Car/van 44.8% 43.5% 43.8%

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SOCiO-ECONOMiC PrOfiLE

A48

A48

A48

A48A4232

A4232

A4232

A4160

A4160

A4160

A470A4119

A4161

A4119

A4054

A4119

A4161

A4232

B4239

A4042

A469

A469

A468

A469

A469

A467

A470

A469

A4055

A4232

A4050

A48

A48

M4

M4

M48

Drive time contours

5 minutes

10 minutes

15 minutes

CARDIFF

RUMNEY

LLANRUMNEY

ST MELLONS

RHIWDERIN

BASSALEG

MAESGLAS

DUFFRYN

PENTWYN

PONTPRENNAU

CYNCOED

LLANDEYRN

PENYLAN

ROATHTREMORFA

SPLOTT

BLACKWEIR

CANTON

LECKWITH

GRANGETOWN

LLANDOUGH

LLANDAFF

LLANDAFF NORTH

WHITCHURCH

PORSET

THORNHILL

NANTGARW

UPPER BOAT

FAIRWATER

ELY

ST FAGANS

GABALFA

NEWPORT ROAD

A4132

A4161

A469A470

A48

A48

CardiffCardiff

The subject property is positioned approximately 3 km (2 miles) north east of the city centre, at the south west corner of the roundabout junction of the a4161 Newport road and Norwich road. This location is close to the a4232 Southern Way, which forms part of the southern section of the ring road around Cardiff.

Newport road is one of the main arterial routes out of Cardiff City Centre to the north east, linking with the a48 eastern avenue and, further out, junctions 29 and 30 of the M4.

the area immediately surrounding the property has established itself as the dominant retail warehouse offer within the Cardiff provision, with nearby occupiers including pets at Home, Carpetright, the range, KFC, M&S Simply Food, Sainsbury’s, Homebase, Matalan and dreams.

NEWPOrT rOad

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SiTUaTiON

Cardiff rETaiL WarEHOUSE PrOViSiONNewport road is the primary retail warehouse location in Cardiff offering approximately 61,875 sq m (666,000 sq ft) of out of town floorspace. The road itself runs south west from the junction of Newport road and Southern Way and the provision in the vicinity of the subject property includes:

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NEW

PORT

RO

AD

COLCHESTER AVENUE

IPSW

ICH R

OADROVER WAY

SOUTHERN WAY (A4232)

ALBANY ROAD

WATERLO

O RO

AD

PEN-Y

-LAN R

OAD

BLENHEIM ROAD

A4232

A4161A469

A470

A48

A48

CardiffCardiff

NEWPOrT rOad 1

2

3

4

aVENUE rETaiL ParK NEWPOrT rOad, Cf23 9aE

this scheme extends to approximately 10,869 sq m (117,000 sq ft) comprising four occupational tenants namely M&S Simply Food, Homebase, Matalan and Magnet.

SEaGar rETaiL ParK NEWPOrT rOad, Cf23 9aa

this 3 unit scheme is situated adjacent to the subject property and provides around 3,112 sq m (33,500 sq ft) of floorspace with tenants including pets at Home and Carpetright.

CiTYLiNK rETaiL ParK NEWPOrT rOad, Cf24 1PQ

this is the largest retail warehouse scheme on Newport road offering around 13,192 sq m (142,000 sq ft) of retail floorspace, together with 10 occupational tenants including Carpetright, Mothercare, argos, Comet and Maplin electronics.

J SaiNSBUrY’S/WiLKiNSONS COLCHESTEr aVENUE, Cf23 9aN

this development comprises a circa 7,141 sq m (76,876 sq ft) Sainsbury’s foodstore and a circa 4,059 sq m (43,692 sq ft) wilkinsons store.

1 2 3 4

We consider that the scheme currently comprises the following accommodation:

UNiT TENaNT dESCriPTiON SQ M SQ fT

1 Halfords Ltd Ground floor 1,858.6 20,006

Mezzanine 91.5 985

2 dSG retail Ltd (t/a Currys) Ground floor 1,486 15,996

Mezzanine 374 4,026

3 dSG retail Ltd (t/a PC World) Ground floor 1,773.9 19,095

Mezzanine 107.4 1,156

TOTaL 5,118.8 55,097

aCCOMMOdaTiONThe subject property comprises a south-east facing terrace of three retail warehouse units fronting Newport road which have recently been refurbished at a cost of around £1.6m. The units which provide a total of around 5,118 sq m (55,097 sq ft) of retail floorspace were originally built in the late 1980s. The site itself extends to approximately 1.3 hectares (3.2 acres).

parking for around 213 cars (1:258 sq ft) is arranged to the front, side and rear of the property with the main customer access routes to the eastern boundary of the site. Segregated rear

servicing facilities are from Norwich road, which provides the northern boundary to the site.

the units are of steel portal frame construction with lower elevations of brickwork and cladding above, together with glazed entrance features. Internally, the units offer minimum eaves heights of 6.5m (21 ft) and have been fitted out to the respective corporate specification including mezzanines of varying sizes in all three units.

part of the Halfords unit is occupied by topps tiles and has direct frontage onto Norwich road. this space was previously occupied by the aa and so includes 9 roller doors to the side elevation. 1. Part of the Halfords unit has been underlet – totalling 525.19 sq m (5,653 sq ft).

2. Mezzanines are tenant’s improvements.

The DSG areas were agreed in 2007 as part of the leaseback negotiations.

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dESCriPTiON

PLaNNiNGOriginal Planning Consent for the scheme was granted on 12th March 1997 by the council for a 36,200 sq ft payless diY unit and a 20,000 sq ft motor vehicle servicing and parts sales/distribution unit. further applications widening user have since been approved in November 1988, November 1992 and august 2000, subject to the following conditions:

the retail warehouse shall not be used for purposes other than for the sale of home improvement and dIY products, plumbing and hardware goods, timber and building products, paint and wallpaper, garden supplies, furniture, carpets and other floor coverings, soft furnishings, homewares, electrical goods, gas appliances, computers, office equipment and supplies, pets and pet products and motor accessories.

Notwithstanding the provisions (above), 503 Newport road may additionally be used for the sale of cycles, cycle parts and cycle accessories, part of the unit may be used as a vehicle service area

including a Mot testing bay and part of the unit may be used for the sale of new and used vehicles and associated parts and accessories.

there shall be no further sub-division of the units which would result in the creation of any unit with a gross floor area of less than 850 sq m.

Copies of the respective planning consents are available on request.

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The property is let in accordance with the schedule below:

PrOPErTY addrESS

(UNiT)

TENaNT T/a GiaSQ fT

LEaSE STarT TErM LEaSE ExPirY NExT rEViEW CUrrENT rENT £ P. a.

CUrrENT rENT£ PSf

COMMENTS

1 HaLfOrdS LTd Halfords 20,006 11/07/1998 15 yrs 10/07/2013 n/a £360,108 £18.00 5,653 sq ft of the Halfords unit has been under-let to Multi-Tile Ltd (t/a Topps

Tiles) for a term expiring on 7 July 2013 at a rent of £73,977 pa.

2 dSG rETaiL LTd Currys 15,996 04/04/2007 15 yrs 03/04/2022 04/04/2012 £271,932 £17.00 Subject to reviews in 2012 and 2017. Upwards only to a multiple (1.2) x rPi

capped at 2.5% pa at the first review and 3% pa at the second review. anticipated

annual rents are therefore £303,467 p.a. (2012) and £341,515 p.a. (2017)

3 dSG rETaiL LTd PC World 19,095 04/04/2007 25 yrs 03/04/2022 04/04/2012 £324,615 £17.00 Subject to reviews in 2012 and 2017. Upwards only to a multiple (1.2) x rPi capped

at 2.5% p.a. at the first review and 3% pa at the second review. anticipated annual

rents are therefore £362,260 p.a. (2012) and £407,678 p.a. (2017)

55,097 £956,655

By way of further explanation with regard to the rent review clauses for the two units let to dSG retail Ltd, we would comment as follows: each lease (Currys and pC world) will provide for an upwards only rent review after the 5th year, based on the previous rent being increased by the total increase in the monthly all prices retail prices Index (rpI) published by the office of National Statistics over the preceding 5 years times by a multiple of 1.2, but limited to no more than the equivalent of 2.5% pa compounded. there will be a second increase in rent after the 10th year, calculated on the same basis as the 5th, save that the rental cap will be increased to the equivalent of 3% pa compounded.

TENaNCiES

TENUrEThe property is freehold.

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We have set out below dun & Bradstreet ratings for the occupational tenants, together with some key financial figures from recent accounts:

Halfords Ltd – d&B rating 5a1

KEY fiNaNCiaLS MarCH 2008 MarCH 2007 MarCH 2006

Sales Turnover £797,400,000 £744,000,000 £681,700,000

Profit (Loss) before Tax £111,300,000 £101,200,000 £77,000,000

Tangible Net Worth £194,700,000 £185,500,000 (£56,300,000)

Total Current assets £304,100,000 £292,100,000 £159,300,000

Profit (Loss) after Tax £79,200,000 £69,200,000 £53,600,000

dSG retail Ltd – d&B rating 5a1

KEY fiNaNCiaLS MaY 2008 aPriL 2007 aPriL 2006

Sales Turnover £4,567,189,000 £4,500,903,000 £4,203,295,000

Profit (Loss) before Tax £140,141,000 £219,527,000 £77,222,000

Tangible Net Worth £763,720,000 £861,108,000 £732,420,000

Total Current assets £1,581,627,000 £1,506,367,000 £1,332,478,000

Profit (Loss) after Tax £141,566,000 £218,862,000 £46,395,000

COVENaNT iNfOrMaTiON

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the approaching Halfords lease expiry in 2013 offers an excellent opportunity to re-gear to a ‘direct lease’ with topps tiles and consequently downsize the Halfords rentalised floorspace. Subject to tenant demand and planning it may be feasible to create a further floorplate allowing the introduction of another trading fascia, widening the retail offer on the scheme.

we consider that the recent refurbishment of the scheme has only strengthened its position in the local hierarchy. It has made it an attractive location for retailers with requirements in the area or indeed those who have existing representation but may also be approaching lease expiry.

aSSET MaNaGEMENT iNiTiaTiVES

ESTiMaTEd rENTaL VaLUEa significant proportion of the current income (c. 62.5%) is geared to the retail Price index and based on historic price movement since 2007, together with the Consensus forecast figures for 2009 and 2010, we consider the likely cumulative uplift in 2012 to be in the order of £69,180 pa.

YEar aNNUaL CHaNGE

2005 2.80

2006 3.20

2007 4.30

2008 4.00

2009 1.00*

2010 2.20*

Source: Office of National Statistics * denotes Consensus forecast figures

CUrrENT rENT

2012 2017

Unit 2 (Currys) £271,932 pa £303,467 pa £341,515 pa

Unit 3 (PC World) £324,615pa £362,260 pa £407,678 pa

For the purposes of the 2017 rent review we have assumed 2% as a longer term annual rpI figure. Consequently we believe the respective incomes from units 2 and 3 will move as follows:

rETaiL PriCE iNdEx (rPi) aLL iTEMS

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rPS Environmental have produced a Phase 1 Environmental risk assessment dated december 2006, the key findings of which are as follows:

rpS has not identified a significant risk of third party liability or regulatory action, which could affect the site whilst it remains in its current use and form.

the site is unlikely to be classed as ‘contaminated’ under part IIa of the epa 1990 whilst it remains in its current use and form.

the site should be considered as acceptable security from an environmental risk perspective for normal lending purposes.

a copy of this report is available on request.

ENVirONMENTaL CONSidEraTiONS

1 the particulars are produced in good faith, are set out as a general guide only and do not constitute any part of a contract.

2 No person in the employment of the agent(s) has any authority to make or give any representation or warranty whatever in relation to this property.

3 this property is offered subject to contract and, floor areas, measurements or distances given are approximate and unless otherwise stated, all rents are quoted exclusive of Vat.

4 Nothing in these particulars should be deemed to be a statement that the property is in good condition or that any services or facilities are in working order.

5 Unless otherwise stated, no investigations have been made regarding pollution or potential land, air or water contamination. Interested parties are advised to carry out their own investigations if required.

Misrepresentation act 1967 and Property Misdescriptions act

Cushman & wakefield LLp for themselves and for vendors or lessors of this property whose agents they are, give notice that :

Cardiff | Newport road | November 09 | ref: 106027

CONTaCTS

Justin HoulihanT: 020 7152 5670F: 020 7152 5381E: justin.houlihan@eur.cushwake.com

Patrick KnapmanT: 020 7152 5019F: 020 7152 5381E: patrick.knapman@eur.cushwake.com

Duncan WestbrookT: 020 7152 5826F: 020 7152 5381E: duncan.westbrook@eur.cushwake.com

For further information please contact:

www.cushmanwakefield.com 43/45 portman Square London wIa 3BG

PrOPOSaL Offers are sought in the region of £11,680,000, subject to contract and exclusive of VaT for the freehold interest in this property. Based on costs of 5.725%, a purchase at this level would reflect the following yield profile based on our view of current market rental value and rPi forecast figures moving forwards:

initial Yield 7.75%

Estimated running Yield 2012 8.31%

Estimated reversionary Yield 2017 8.98%

Estimated True Equivalent Yield 8.33%

Estimated Nominal Equivalent Yield 7.92%