Highly Secure, Index Linked, Long Income Convenience Store Investment
Co-op |18-20 Roundhill Road | Torquay | TQ2 6TH
offers in excess of
Highly Secure Income
Let to Co-operative Group Food Ltd – Pre-Tax Profits £208 million
11.25 years unexpired lease term
RPI-linked rent review in October 2021
Located in a densely populated residential suburb
Offers in excess of £780,000, subject to contact
Current Net Initial Yield - 6.4%
Minimum guaranteed yield next year based on current RPI - 7.01%
Torquay is a seaside town in Devon located in the district of Torbay, approximately 35 km (22 miles) south of Exeter and 53 km (33 miles) east of Plymouth.
The town benefits from good road communications, being served by the A380 which in turn links with the M5 Motorway approximately 29 km (18 miles) to the north. The town is also connected to the national railway network with a fastest journey time to London Paddington of 2 hours 45 minutes. Exeter Airport is some 42 km (21 miles) to the north-east and serves a number of UK and European destinations.
Torquay forms part of the ‘English Riviera’ and is a popular tourist resort, attracting a large number of visitors each year. Situated on the South Devon Coast, the town is famous for its sandy beaches and family attractions. The population of Torquay is boosted significantly during the summer months.
The property is situated within a popular local retail parade with other occupiers including Barnardo’s, a Post Office and newsagents, hairdressers, coffee shop and estate agents. The property is in a predominantly residential location and provides the main retail provision for the immediate area.
The subject property is located 1.6 km (1 mile) south-west of Torquay train station and approximately 2.4 km (1.5 miles) south-west of the town centre.
The property comprises a ground floor retail unit. Internally, the unit provides a modern convenience store which has been fitted out by the tenant to their usual corporate style. Loading is provided via the service yard to the rear.
The property benefits from unrestricted street parking. The Co-op lease grants rights for staff and customer parking to the rear.
The upper floor comprises a three bedroom apartment which does not form part of the sale.
The property provides the following Gross Internal Areas which were agreed between the Landlord and Tenant:
|Gross Sales Area||187.20 sq m||2,015 sq ft|
|Back of House||103.86 sq m||1,118 sq ft|
|Total||291.06 sq m||3,133 sq ft|
A floor plan is available to download.
New 999 year long leasehold at a peppercorn ground rent.
The vendor will need to retain control of the structure of the building and the upper floors, the service charge and the insurance for future residential development plans. As a result this lease will not qualify for enlargement (the legal ability to convert a long lease into a freehold).
The ground floor retail unit is let to Co-Operative Group Food Limited for a term of 15 years from 31st October 2016, expiring on 30th October 2031 (11.25 years unexpired lease term).
The current passing rent is £52,500 per annum (£16.75 per sq ft / £180.37 per sq m). The lease benefits from a rent review on 31st October 2021 and 31st October 2026 which provide for the rent to be agreed in line with the Retail Price Index (RPI), capped and collared annually at 1% and 4% respectively.
The tenant has an option to renew the lease once for a term of 15 years from 31st October 2031.
There is an inherent defects exclusion in the lease and a landlord covenant in the lease to be liable for inherent defects. However the vendor shall assume this landlord covenant rather than the purchaser.
The indicative annual service charge budget for 18-20 Roundhill Road for the year ending 24 March 2020 is £4,352.00 plus VAT. The service charge accounts and service charge budgets are available to download.
Co-operative Group Food Limited has reported the following figures:
|Year Ending||5th January 2019||6th January 2018|
Co-operative Group Food Limited is a subsidiary of the Co-operative Group Ltd, one of the largest retailers in the UK. The Co-operative operate in a range of areas including food, clothing, insurance and funeral services.
Co-operative Group Food Limited are the fifth largest food retailer in the United Kingdom with over 2,800 stores and over 69,000 employees across its local, convenience and medium sized stores.
For the year ending 6th January 2018, Co-operative Group Limited reported a turnover of £9,470,000,000, profit before tax of £72,000,000 and a total net worth of £2,191,000,000.
For further information visit www.coop.co.uk.
The property is VAT elected. It is anticipated (subject to the purchaser’s VAT status) that the sale will be treated as a Transfer of a Going Concern (TOGC).
|Jun-20||Biggin Hill, London||Co-operative Group Food Limited||10||£880,000||5.92%|
|May-20||High Wycombe||Co-operative Group Food Limited||14||£1,075,000||5.10%|
|May-20||Falmouth, Cornwall||Co-operative Group Food Limited||9||£1,520,000||5.25%|
|May-20||Snodland, Kent||Co-operative Group Food Limited||9.5||£1,550,000||5.24%|
|May-20||Bristol, Lodge Road||Co-operative Group Food Limited||4||£810,000||5.50%|
|May-20||Surbiton, London||Co-operative Group Food Limited||14.5||£2,550,000||5.16%|
|Apr-20||Ormskirk, Aughton||Co-operative Group Food Limited||12.5||£950,000||5.00%|
|Feb-20||Chesterfield||Central England Co-operative Group Ltd||15||£820,000||4.91%|
|Jan-20||Rochester||Co-operative Group Food Limited||10||£1,100,000||5.58%|
|Jan-20||Martin Way, Morden||Sainsbury’s||11||£1,375,000||5.41%|
|Jan-20||London, Lordship Lane||Sainsbury's Supermarkets Ltd||1.5||£1,400,000||5.05%|
|Jan-20||London, Stoke Newington||Iceland||12||£1,875,000||5.75%|
|Jan-20||Leighton Buzzard||Co-Operative Group Food Limited||12||£1,340,000||4.91%|
|Dec-19||Fulham Road, London||Sainsbury’s||5||£2,100,000||4.75%|
|Dec-19||Friern Barnet Road, London||Co-operative Group Food Limited||5||£1,165,000||6.08%|
We are instructed to seek offers in excess of £780,000 (Seven Hundred and Eighty Thousand Pounds), subject to contract and exclusive of VAT, equating to a net initial yield of 6.4%, assuming purchasers’ costs of 5.45%.
The yield is already guaranteed to increase to no less than 7.01% at the rent review in October 2021 and, based on the current RPI figure, the yield will increase to 7.04%.
Please note a purchaser will be charged a transaction fee of £5,000 + VAT.
An opportunity to acquire a highly secure, index linked, long income convenience store investment;
The property is let to Co-operative Group Food Limited (Pre-Tax Profits £208 million, Net Assets £1.97 billion);
Lease expires in October 2031, providing 11.25 years unexpired with no breaks;
The lease benefits from a rent review in October 2021 line with the Retail Price Index;
The property benefits from being situated in a densely populated suburb;
Attractive lot size to an investor;
A purchase at the asking price reflects an attractive yield profile.
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