Highly Secure Retail/Office Investment with Unused Upper Parts – 8.0%
7-9 Cornfield Road | Eastbourne | BN21 4QA
subject to contract
To be sold by clicktopurchase® Best Offers by 1:00pm Friday 4th June 2021, unless sold prior.
Let to A-Plan Holdings
Highly secure income - Shareholders’ Funds £86.5 million
Newly refurbished street scene on Cornfield Road and Terminus Road
Attractive frontage with self-contained first and second floors currently unused by the tenant
Eastbourne is the 2nd fastest growing seaside Town in the UK
£595,000, subject to contract
8.0% Net Initial Yield
Implied asking price in relation to the upper floors of only £76 per sq ft / £818 per sq m
Eastbourne is a thriving tourist destination located on the south coast in East Sussex, approximately 21 miles (34 km) east of Brighton and 70 miles (113 km) south of London.
The town is a major commercial centre which benefits from good road communications, being linked to London via the A22 and the east to west arterial route of the A27 to Hastings, Brighton, Hove and Southampton. Gatwick Airport is also located approximately 43 miles (69 km) to the north west and can be accessed via the A27 and A23 in 1 hour.
Eastbourne Station provides regular services to London Victoria, Gatwick Airport and Ashford International, as well as a commuter service to Brighton. London Victoria can be reached with a fastest journey time of 1 hour 27 minutes and Gatwick within 55 minutes.
Eastbourne has a resident population of 102,465 (2015), is the 2nd fastest growing seaside town in the UK and is the economic driver of one of the fastest growing counties in the UK. The town enjoys some 4.9 million visitors per year with a visitor spend of approximately £287 million. The town’s modern marina, providing 3,000 homes, at Sovereign Harbour has 24-hour access to the sea and is an excellent base from which to reach France, Belgium, Holland, Germany and even Scandinavia by sailboat or motor cruiser.
The property is located within Eastbourne Town Centre at the north end of the recently refurbished (2019) Cornfield Road and just 50 metres (55 yards) south of the pedestrianised Terminus Road, considered to be the prime pitch of Eastbourne. The property is directly opposite the Eastbourne Information Centre with other nearby occupiers including NatWest, Barclays, Metro Bank and J.D. Wetherspoon.
Both East Sussex County Council and Eastbourne Borough Council have invested more than £8m into The Eastbourne Town Centre Improvement scheme, which aims to transform and modernise the area which includes Terminus Road and Cornfield Road in order to attract more visitors to the town, improve conditions for pedestrians and cyclists and reduce congestion. Changes have included creating wider walkways for pedestrians, cutting routes down to one bus lane, relaying the roads and pavements with granite blocks, installing new bus shelters in Gildredge Road and Cornfield Road, and a new taxi rank in Cornfield Road.
The Beacon Shopping Centre, owned by Legal & General, is some 80 metres (90 yards) to the north of the property and provides over 350,000 sq ft of retail and leisure floorspace having been extended by 175,000 sq ft in 2018. The shopping centre benefits from an annual footfall of approximately 15 million people. (Source: www.thebeaconeastbourne.com).
Eastbourne Borough Market occurs every Sunday and Wednesday and is located some 100 metres to the north of the property on Terminus Road.
The property comprises a ground floor retail unit with office and ancillary accommodation on first and second floors. Internally, the retail floor area has been fitted out by the tenant to their usual corporate style and is predominantly open plan with ancillary areas. The property benefits from a large glass frontage onto Cornfield Road.
The tenant does not currently occupy the self-contained first and second floors. Access to the upper parts is through a stairwell accessed externally via the access road to the south of the property. This would enable the upper floors to be separately demised from the ground floor premises.
The property has been measured by BKR Floor Plans and provides the following Net Internal floor areas:
|Net Frontage||13.51 m||44’4”|
|Gross Frontage||14.48 m||47’6”|
|Zone A||79.99 sq m||861 sq ft|
|Zone B||42.46 sq m||457 sq ft|
|Zone C||2.69 sq m||29 sq ft|
|ITZA||1,097 sq ft|
|Total Ground Floor||125.14 sq m||1,347 sq ft|
|First Floor Office||97.73 sq m||1,052 sq ft|
|Second Floor Office||78.22 sq m||842 sq ft|
|Total||301.09 sq m||3,241 sq ft|
A set of floor plans is available to download, and the measured survey report will be re-addressed to a purchaser at a cost of £375 + VAT.
The entire property is let to A-Plan Holdings on a full repairing and insuring lease for a term of 10 years from 22nd December 2015, expiring on 21st December 2025.
The current passing rent is £50,000 per annum which, based on our analysis, equates to a Zone A rate of £30.20 per sq ft. This applies £10.00 per sq ft / £107 per sq metre to the first and £7.50 per sq ft / £80.70 per sq metre to the second-floor accommodation which is currently fitted out as offices. We understand the tenant hasn’t utilised this self-contained portion of the property since 2018 .
Given the current use of the property as offices, we have also analysed the rent of £50,000 per annum on this basis. The rent equates to £15.40 per sq ft / £165.80 per sq metre on an overall net internal area basis.
The tenant has an excellent payment record with no rent payment delays during lockdown. All rents are paid and up to date, with no arrears. A copy of the rental payment history is available within the legal pack.
The passing rent on the office element, or indeed overall compares favourably with office rents within Eastbourne which are currently in the order of £16.50 per sq ft.
Within Terminus Road and the Beacon Shopping Centre, Zone A rents have historically reached in the region of £100 per sq ft ITZA. At only £30 per sq ft Zone A, the property offers an investment at a low rental level.
By assessing the retail accommodation at a sensible yield of 7.00% with an apportioned rent on these ground floor premises of £33,165, the implied retail value is in the order of £450,000. Therefore, a purchase at the asking price reflects only £145,000 in relation to the upper floors, equating to £76 per sq ft / £818 per sq metre. Residential values for upper parts in Eastbourne are in the order of £175 per sq ft / £1,880 per sq ft, thereby providing significant potential to enhance value where this element of converted to residential accommodation. Alternatively, there is also value enhancement available by creating attractive self-contained office accommodation on the upper floors.
A-Plan Holdings (Co. No. 00750484), incorporated in February 1963, has reported the following figures:
|29th February 2020||28th February 2019|
|Revenue||£108.2 million||£101.6 million|
|Pre-Tax Profits||£31.4 million||£31.1 million|
|Shareholders’ Funds||£86.5 million||£56.4 million|
As advised in the company accounts, the company’s network roll-out continued with 4 new openings in the year (2020) and a further three since year end. The total number of centres is now 97, with a good pipeline of future opportunities. They are continuing to invest in new centres as there remains a growing demand for good quality service and advice delivered locally.
The main measure of the Company’s profit performance is operating profit before depreciation, amortisation and loss on hive up of subsidiary (“EBITDA”), which rose 1.5% to £34.7m (2019: £34.2m). This was net of £1.5m (2019: £0.9m) investment in the deployment of Applied Epic (a new policy IT administration system). Turnover increased to £108.3m (2019: £101.7m), reflecting a strong trading performance against a backdrop of ongoing competition from online channels where very aggressive new business pricing remains a strong feature. (Source: A-Plan Holdings Financial Statements for the year ended 29 February 2020).
The property has not been registered for VAT and therefore VAT is not applicable on the purchase price.
We are instructed to seek a figure of £595,000 (Five Hundred and Ninety-Five Thousand Pounds), subject to contract, reflecting a net initial yield of 8.00%, assuming standard purchaser’s costs of 5.04%.
When considering the value of the existing office upper parts in the region of £145,000 which reflects £76 per sq ft / £818 per sq m and its current under-utilisation, the investment presents an immediate opportunity. The upper floors provide self-contained separate access from the ground floor which is a major benefit to any future conversion or refurbishment works.
Please note that a purchaser will be re-charged the costs of the measured survey £375 + VAT) and searches (£836.68)which are provided in the data room .
Please note that a purchaser will be charged a Transaction Fee of £5,000 plus VAT.
The property occupies a prominent position in the town centre, locally known as “Bankers Corner”;
Distinctive property in the main retailing pitch of Eastbourne;
Under-utilised self-contained first and second floors providing an opportunity for residential conversion or office refurbishment to enhance value;
Securely let to A-Plan Holdings (Shareholders’ Funds £86.5 million);
A purchase at the asking price reflects an attractive net initial yield and low capital value in relation to the upper parts;
Appealing lot size to an investor.
The property is sold with the benefit of a rent guarantee from the vendor to ensure
Data Room and clicktopurchase®
Access to the data room and for the ability to purchase online with speed and ease, please click the clicktopurchase® “C” icon or the clicktopurchase® side bar. Purchasers will be able to access the complete legal package, clear verification and submit legally-binding offers to acquire the property.
Purchasers benefit from the trust, security and transparency provided by the platform. All activities, including the online contract execution, will form part of the electronic audit trail which is anchored in the clicktopurchase® Blockchain.
clicktopurchase® provides the opportunity for any investor, whether located UK or abroad, to uniquely purchase online with ease and certainty. To learn more about clicktopurchase®, click here.