let to for another 52 years

PRIME GROUND RENT INVESTMENT

ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN

FOR ANOTHER 52 YEARSLET TO


INVESTMENT SUMMARY• An opportunity to purchase a foodstore investment situated within Doncaster,

South Yorkshire of circa 57,000 sq ft together with a car park for 340 vehicles.

• Dominant strong trading store.

• Let to Asda Stores Limited on a FRI lease for a term of 99 years from 29 September 1974 by way of a ground lease.

• Let on a lease with ‘privity of contract’.

• Offering secure income for another 52 years with the rent calculated at 35% of the market rent at the previous review.

• Virtual freehold (element held 999 year lease).

• Current rent of £265,000 pa equating to only £4.62 per sq ft.

• Upward only 10 yearly rent reviews with the next review September 2024.

• Included in the sale is an adjoining development site of 0.4 acres which has planning for a petrol filling station.

• Asset management opportunities including unlocking ‘massive marriage value’.

We are instructed to request offers in excess of £7,650,000 (Seven Million, Six Hundred and Fifty Thousand Pounds) which reflects a net initial yield of 3.5% rising in 2024 to 3.95%, net of costs at 6.66%.

The above assumes £550,000 for the development site and the rent rises to £299,250 pa in 2024.


OPPORTUNITY TO PURCHASE A GROUND RENT LET TO ASDA FOR ANOTHER 52 YEARS.

H I G H S T R E E T

B 1 2 2 0 S K E L LO W R OA D

Q U E E N ’S R OA D

O W S TO N R OA D

TO D O N CAS T E R

TO T H E A1

ASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BNASDA SUPERSTORE HIGH STREET, CARCROFT, DONCASTER DN6 8BN

743

4229

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M62

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M62

M621A1(M)

A1(M)

A1

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M62

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M18

M180 M180

M18

M18

M62M606

A65A1237

A64

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A58

A661

A614

A164

A63

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A614

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A660

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A64

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A63 A63

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A159

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A156

A15

A180

A46

A15

A15

A631A631A631

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A60

A57 A1

A638

A630

A638A6182

A1041

A1079

A1079A1035

A1035

A58

A629A650

A642

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A61

A616

A6195

A6195A628

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A635A635

A640

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A629

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A6036 A650

A650

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A6177

A61A6102

A630A631

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A57

A623

A6018 A628

A628

A628

A6

B1220DENSHAW

LOXLEY

HUDDERSFIELD

BARNSLEY

PENISTONE

HOLMFIRTH

DEWSBURY

CASTLETON

HAYFIELD

GLOSSOP

KEIGHLEY

HORSFORTH

HALIFAX

HEMSWELL CLIFFGAINSBOROUGH

MISTERTON

EPWORTH

THORNE CROWLE

SCOTTERHIBALDSTOW

BRIGG

SCUNTHORPE

ROXBY

ULCEBY

WADDINGHAM

WORKSOP

NORTH ANSTON

BLYTH

BAWTRY

FINNINGLEY

DONCASTER

ASKERN

CARCROFT

ROTHERHAM

GOLDTHORPE

ADWICKLE STREET

HEMSWORTH

PONTEFRACT

CASTLEFORD

SELBY

CAWOOD

WHELDRAKE

POCKLINGTON

TADCASTER

HILLAM

KNOTTINGLEY CARLTON

HOWDEN NEWPORT

NORTH FERRIBY

BEVERLEY

MARKETWEIGHTON

BURSEA

LEVEN

RETFORD

DONCASTER SHEFFIELDAIRPORT

SHEFFIELD

BRADFORD

LEEDS

YORK

WAKEFIELD

HULL

PEAK DISTRICTNATIONAL PARK

HUMBER

LEEDS BRADFORDAIRPORTLOCATION AND

DEMOGRAPHICS • Doncaster is the second largest town within South Yorkshire and

one of its principle commercial centres. It is located 27 miles, south east of Leeds, 25 miles north east of Sheffield and 175 miles north of London.

• The A1(M) (via either junction 37 or junction 36) provides quick and easy access to the wider motorway network. At J35 it interchanges with the M18 (J2) which provides direct access to M1 (J32) motorway approximately 16 miles south west of the town.

• Doncaster has a district population of 289,000 persons with a catchment of 600,000 persons within 10 miles of the town centre.

• Rail access to Doncaster is provided by the East Coast Mainline, enabling a journey time of less than 1 hour and 40 minutes from London King’s Cross. This high-speed rail link also connects Doncaster with Leeds, York and Edinburgh to the north, providing a strategic advantage to the location.

• Robin Hood airport which opened in 2005 is to the south of Doncaster town centre whilst East Midland, Birmingham and Manchester airports are all within easy reach.

DONCASTER IS THE SECOND LARGEST TOWN WITHIN SOUTH YORKSHIRE AND ONE OF ITS PRINCIPLE COMMERCIAL CENTRES”

M1

M1

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M180

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M6

M6

M8

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M90

M77

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M4M4

M40

M23 M20

M62

M62

M25

M25

M6

M42

M11

EDINBURGHAIRPORT

LEEDSAIRPORT

MANCHESTERAIRPORT

STANSTEDAIRPORT

GATWICKAIRPORT

HEATHROWAIRPORT

EAST MIDLANDSAIRPORT

LIVERPOOLAIRPORT

LUTONAIRPORT

GLASGOWAIRPORT

Plymouth

LONDON

GLASGOW

BRISTOL

NEWCASTLE UPON TYNE

EDINBURGH

CARDIFF

SOUTHAMPTON

BIRMINGHAMAIRPORTBIRMINGHAMAIRPORT

EAST MIDLANDSAIRPORT

MANCHESTERAIRPORT

MANCHESTER

NORWICH

LIVERPOOL

LEEDS HULL

BIRMINGHAM

LEICESTER

SHEFFIELD DONCASTER


LODGE ROAD OWSTON LANE

B1220 HAMPOLE BANK LANE

B1220 SKELLOW ROAD B1220 A

SKERN ROAD

B1220 C

HURCH LA

NE

BENTLEY M OOR LANE

RED HOUSE LANE

A638

A638

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A1

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NCASTER ROAD

A19 D

ON

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STER ROA

D

HIGH ST

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ON

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AD

QUEEN’S RD

OWSTON HALL &ROBIN HOOD GOLF CLUB

ROBIN HOODGOLF CLUB

A1(M)38

Adwick

CARCRAFTENTERPRISE PARK

ROUTE TO A1(M)

SITUATIONThe property is situated in the residential suburb of Carcroft which is 7 miles north west of Doncaster town centre. Carcroft is 1 mile to the east of J38 of the A1(M) (Redhouse Interchange) and 1.2 miles west of the A19.

The premises have extensive frontage to the High Street and Skellow Road (B1220) from which the main vehicle access is to the store.

Immediate to the rear of the store also fronting the High Street is a DFS retail warehouse of circa 30,000 sq ft and an Iceland store of 6,000 sq ft.

Carcroft also serves the adjoining rural towns and villages of Adwick-le-Street, Askern, Skellow and Sutton.


DESCRIPTIONThe property comprises a plot of land of 1.92 acres on which a purpose built supermarket was developed in the early 1970’s for ASDA.

The store trades under ASDA’s ‘Superstore’ concept, providing retailing and ancillary accommodation of circa 57,000 sq ft.

In addition there is a tarmacked customer car park adjoining the superstore providing parking for 340 vehicles on a site of 2.83 acres.

There is also, at the junction of High Street and Skellow Road, a development site of 0.4 acres with planning consent for a petrol filling station of six pumps plus a retail unit of 1,110 sq ft.

An indicative plan of the layout for the petrol filling station is shown to the left.

THE PROPERTY COMPRISES A PLOT OF LAND OF 1.92 ACRES ON WHICH A PURPOSE BUILT SUPERMARKET WAS DEVELOPED IN THE EARLY 1970’S FOR ASDA.”


FLOOR AREASAt the last rent review the floor areas were agreed between the landlord and tenant and have been documented in a ‘Statement of Agreed Facts’ dated February 2015. This document confirms the agreed gross internal areas to be as follows:

AREA SQ FT SQ M

Ground Floor 49,796 4,627.9

First Floor 3,926 364.9

Covered Loading Bay 2,715 252.3

Roof Plant 829 77

TOTAL 57,266 5,322.1



TENURE

The area of land edged red and the green hatched line on the ordnance survey plan is freehold.

The area edged blue is held on a 999 year lease from 25 March 2007 at a peppercorn (freeholder is Doncaster Council).

TENANCY

The area edged red on the plan is let to Asda Stores Limited on an FRI lease for a term of 99 years from 29 September 1974 at a current rent of £265,000 pa. There are 10 yearly upward only rent reviews based upon a ‘reasonable ground rent’.

The rent is assessed for an area of land of 1.92 acres together with the buildings erected on the site.

In 2004 and 2014 the review as awarded by an independent expert who adopted the ground rent should reflect 35% of the market rent which in 2014 was agreed between parties to be £13.75 sq ft.

The tenant has a right to use the car park although it is outside their demise.

The area within the hatched green line is a vacant site of approximately 0.4 acres.

TENURE AND TENANCY INFORMATION

KEY FREEHOLD (DEMISED TO ASDA) 1.92 ACRES LONG LEASEHOLD (UNDEMISED) 2.83 ACRES ASDA’S OWN FREEHOLD UNDEMISED DEVELOPMNENT SITE OF 0.4 ACRES


ASDA was founded in 1949 and are one of the UK’s ‘Big 4’ supermarket chains which dominate the UK grocery market. Trading from over 260 stores, they employ over 145,000 staff members and serve over 18 million customers every week.

The company trade over different store formats from supercentres to small convenience.

Asda Stores Limited is the main trading company of Asda, being a wholly owned subsidiary of the ASDA Group. The latest financial figures available for the tenant are shown below.

YEAR ENDING 31/12/2019(000’S)

31/12/2018(000’S)

31/12/2017(000’S)

Turnover £22,874,700 £22,842,800 £21,951,800

Profit before tax £108,300 £484,800 £379,000

Tangible net worth £5,498,800 £5,471,500 £5,007,300

The company currently have a D&B rating of 5A2 with a tangible net worth of £5.4 billion.

In February 2020 the Asda business was bought by the Issa Brother and TDR Capital from Walmart who have retained an equity interest in the business. Under the new ownership the business is looking to expand, especially its ‘Asda on the Move’ convenience format.

TENANT INFORMATION


MAJOR FOOD SUPERMARKET COMPETITION WITHIN DONCASTERAsda Carcroft has a dominant trading position for the north Doncaster catchment. The city has representation from all the major occupiers but the majority are located south of the city.

DONCASTER

ASKERN

CARCROFTA638

A638

5 minsdrive time

10 minsdrive time

15 minsdrive time

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A1

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5THERE IS ONLY ONE COMPETING STORE WHICH FALLS WITHIN THE 10 MINUTE ISOCHROME, BEING THE MORRISONS ON YORK ROAD”

A MORRISONS, YORK ROAD

B SAINSBURY’S, FRENCHGATE SHOPPING CENTRE

C ASDA, BALBY

D TESCO EXTRA, WOODFIELD WAY

E ASDA, BAWSTRY ROAD

F SAINSBURY’S EDEN THORPE

G ASDA MOOR THORPE



FOODSTORE OCCUPATIONAL MARKET AND RENTAL VALUE

RENTAL HISTORY

The store is reviewed to a ‘reasonable ground rent’ for the site which is 1.92 acres together with a supermarket of circa 57,000 sq ft. At the last review the rent increased from £168,000 pa to its current level of £265,000 pa which is subject to a review on 29 September 2024 and 10 yearly thereafter.

The independent expert adopted the ground rent should equate to 35% of the market rent which reflected £13.75 per sq ft at the 2014 settlement and the same principle was adopted at the 2004 settlement.

OCCUPATIONAL MARKET & RENTAL VALUE

Over the last five years there has been limited new development by the ‘Big 4’ supermarkets and therefore limited land deals reported. The likes of Aldi and Lidl have been expanding the paying between £850,000 – £1,500,000 per acre for sites in the north of England.

In addition, whilst there has been limited ‘new build’ evidence, a number of stores have had their rents reviewed or re-geared. We set out below some comparable evidence:

PROPERTY DATE SIZE (SQ FT) RENT (£ SQ FT) TRANSACTION

Sainsbury’sColton Leeds Jun 20 67,032 + 9,760

New build £21.75 New build extensions & Re-gear

MorrisonsBlaydon, Gateshead Dec 19 71,096 £17.00 Re-gear

Sainsbury’s Ripley, Derbyshire Oct 19 75,723 £19.25 Re-gear

AsdaHulme, Gtr Manchester Apr 19 87,549 £21.95 Re-gear

Sainsbury’sKimberley, Nottinghamshire May 18 56,462 £17.50

+ 10% fittings Re-gear

Based on the above evidence, and taking a cautious approach, a rent of £15.00 per sq ft. (£855,000 pa) we believe will be achievable at the 2024 review.

ADOPTING THE INDEPENDENT EXPERT’S PREVIOUS METHOD OF CALCULATING THE RENT UNDER THE GROUND LEASES, WE BELIEVE THE PASSING RENT IN 2024 SHOULD INCREASE TO A MINIMUM OF £299,250 PA.”


ASSET MANANGEMENT OPPORTUNITIESIn addition to driving returns through future rental growth we believe there are a number of asset management opportunities available to a buyer to generate additional value.

1. DEVELOPMENT SITE

The sale includes a site of 0.4 acres which has planning consent for a petrol filling station. Our client marketed the site in 2020 obtaining various offers the highest being £550,000, Due to the imminent sale of the Asda business to the Issa Brothers and their previous experience in the petrol forecourt business through Euro Garages the sale was put on hold as we believe Asda may now show interest in running a site as a branded Asda petrol filling station.

2. UNLOCKING MARRIAGE VALUE

We feel there is massive marriage value to be unlocked between the two interests. Taking into account the new ownership structure of Asda we believe there will be opportunity to explore ways of share upside. The new owners have demonstrated recently their intentions of driving value within the business with the sale and leaseback of their logistics operation for £1.4 billion.

3. CAR PARK

This is currently not demised under the lease but Asda have a right to park cars only on the site. We feel there is a negotiation to be had with the tenant allowing them greater use of the car park for signage, trolley stores and other ancillary operations which could be negotiated as part of a wider lease re- structuring discussion.

4. ASDA FREEHOLD OWNERSHIP

Asda own part of the store freehold which is shown on the plan attached and which we understand is circa 10,000 sq ft. This we feel has limited value to Asda but offers an opportunity to unlocked latent value if any lease restructure can be agreed.

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AML

A successful bidder will be required to satisfy all AML requirements when Heads of Terms are agreed.

VAT

We are advised that the property is elected for VAT purposes and therefore the sale of the property will attract VAT. It is anticipated that the sale will be treated as a transfer of a going concern.

FURTHER INFORMATION

If you wish to view of require any further information please contact:

DAVID WINTERBOTTOMT 0161 956 4103 M 07836 225552E [email protected] A Avison Young

Norfolk House 7 Norfolk Street Manchester M2 1DW

JAMES YATEST 0113 280 8090M 07983 586654E [email protected] Avison Young

Avenue HQ 10-12 East Parade Leeds LS1 2AJ

Misrepresentation Act 1967. Unfair Contract Terms Act 1977 The Property Misdescriptions Act 1991. These particulars are issued without any responsibility on the part of the agent and are not to be construed as containing any representation or fact upon which any person is entitled to rely. Neither the agent nor any person in their employ has any authority to make or give any representation or warranty whatsoever in relation to the property. October 2021. RB&Co 0161 833 0555. www.richardbarber.co.uk

PROPOSAL

We are instructed to request offers in excess of £7,650,000 (Seven Million, Six Hundred and Fifty Thousand Pounds) which reflects a net initial yield of 3.5% rising in 2024 to 3.95%, net of costs at 6.66%.

The above assumes £550,000 for the development site and the rent rises to £299,250 pa in 2024.


avisonyoung.co.uk/110698

mailto:[email protected]

mailto:[email protected]

let to for another 52 years

Documents