modern single let industrial investment opportunity · the main industry in grangemouth and the...
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MODERN SINGLE LET INDUSTRIAL INVESTMENT OPPORTUNITY
4-6 SOUTH LUMLEY STREET GRANGEMOUTHFK3 8BT
2 4-6 SOUTH LUMLEY STREET GRANGEMOUTH
INVESTMENT SUMMARY
• Modern single let industrial investment opportunity;
• Located in Grangemouth, approximately 24 miles west of Edinburgh and 27 miles east of Glasgow;
• Grangemouth is one of Scotland’s most strategic industrial, manufacturing and distribution locations;
• The property comprises a modern warehouse, extending to 43,256 sq.ft (4,018.6 sq.m), that has been comprehensively refurbished;
• Let in its entirety to Epiroc UK & Ireland Ltd with a guarantee in place from Epiroc AB (D&B Failure Score of 83/100);
• The property is let until 10th June 2023, incorporating a tenant break option on 10th June 2021, providing an unexpired term of 4.68 years to expiry and 2.68 years to break;
• Current rent is £194,652 per annum, reflecting a low passing rent of £4.50 psf;
• Heritable interest (Scottish equivalent of English Freehold);
• The site area extends to 1.83 acres (0.74 hectares), providing a low site coverage of 54%.
Offers in excess of £2,165,000 (Two Million, One Hundred and Sixty Five Thousand Pounds Sterling), exclusive of VAT, are sought for our clients Heritable interest in the property.
This reflects an attractive net initial yield of 8.50% and a capital
rate of £50psf, assuming purchaser’s costs of 5.85%.
3 4-6 SOUTH LUMLEY STREET GRANGEMOUTH
M74
M9
M77
A1M8M8
M90
M80M73
M74
M9
M80 EDINBURGH
GLASGOWLIVINGSTON
STIRLING
ST ANDREWSPERTH
ABERDEEN
DUNDEE
AYR
STRANRAERDUMFRIES
INVERNESS
GRANGEMOUTH
LOCATION
Grangemouth is a strategically located town in East Stirlingshire forming part of the Falkirk Council area within Scotland’s Central Belt. It is located approximately 24 miles to the west of Edinburgh and 27 miles to the east of Glasgow. It is well connected to Scotland’s motorway network, with the M9 motorway running along the southern side of the town, with two junctions providing links to the motorway. The excellent access makes Grangemouth one of central Scotland’s most strategic industrial, manufacturing and distribution locations.
The main industry in Grangemouth and the wider Falkirk area is petrochemicals, with the Grangemouth refinery Scotland’s main petrochemical complex, one of the largest of its kind in Europe. INEOS operate the complex, which employs 1,300 people, and have recently announced
they will depend on the expertise based at Grangemouth when developing their new propane dehydrogenation unit in Europe, in a move set to benefit the local economy. A further £0.5 billion is set to be invested in Grangemouth within the next two years, with the construction of a new power plant and doubling the size of the cracking facility.
Grangemouth also houses Scotland’s largest container port, with approximately 9 million tonnes of cargo passing through the dock each year. The success of the port is due to the town’s
location in the heart of Scotland which makes is readily accessible for distribution to all parts of the country. Grangemouth is also one of Scotland's main rail freight terminals, that has benefitted from major investment in the last decade, making it an integral part of transporting cargo to Aberdeen and the English Midlands.
4 4-6 SOUTH LUMLEY STREET GRANGEMOUTH
M9
M9
Grangemouth
Freight Terminal
WH Malcolm
ASDA
Syngenta
H.W Coates
Whyte & Mackay
Jarvie Plant
Jewson
Grangemouth Port
4-6 South Lumley Street
6
CalaChem
5 4-6 SOUTH LUMLEY STREET GRANGEMOUTH
J4
J5
J6
J7M9
M876
M9
M9 M876
M9
M9
M9
FALKIRK
GRANGEMOUTHBAINSFORD
CAMELON
SOUTHBROOMAGE
GLEN VILLAGE REDDING
WESTQUARTER
LAURIESTON
STENHOUSEMUIRNORTHBROOMAGE
CARRONSHORE
CARRON
RIVER FORTH
A904
A904
A904
A905
INCH
YRA
ROAD
A905
A904
A9
A904
A9
CALLENDAR ROAD
A9
A803
TOWARDSENDINBURGH
TOWARDSGLASGOW
B9 13
2
SOUTH LUMLE Y ST
REET
4-6 SOUTH LUMLEY STREET
SITUATION
The site sits within central Grangemouth, in a prominent position
at the junction between South Lumley Street, Wallace Street and
Dundas Street.
The property is well placed to benefit from the M9 motorway, with Junctions 5 and 6 both located less than 1.5 miles from the property. The M9 connects to Edinburgh in the east and to Glasgow in the west, via the M876. It also provides direct access to the north of Scotland, creating comprehensive motorway access throughout Scotland.
The surrounding area is a mixture of residential and industrial usage. Grangemouth Port is located approximately 0.3 miles north of the property, making it an ideal position for Epiroc, who service and supply component parts to the oil and gas industries.
Surrounding occupiers include Jewson, Whyte & Mackay Distillers, Malcolm Group, Asda Distribution Depot and INEOS.
Drive Times:
Destination Miles Drive Time
Falkirk 3 9 minutes
Stirling 13 19 minutes
Edinburgh 24 35 minutes
Glasgow 27 33 minutes
Perth 41 50 minutes
Dundee 60 1 hour 10 minutes
6 4-6 SOUTH LUMLEY STREET GRANGEMOUTH
DESCRIPTION
The property comprises a modern industrial unit, with
associated office and workshop accommodation. It extends
to 43,256 sq.ft (4,018.6 sq.m) and has been comprehensively
refurbished.
The building is constructed predominantly of brick, with a
steel and timber roof structure. The roof has been re-clad with
insulated polyester coated steel panels and incorporates twin-
skinned translucent panels to provide natural daylight into
the unit. The eaves height in the warehouse is approximately
4.11m.
The main warehouse is accessed via 3 roller shutter doors,
with 11 further doors providing access to the workshops that
run along the western elevation of the property. Electronically
operated roller and sectional overhead doors have been
installed throughout the property. The existing floor slab
within the warehouse has been overlaid with a new 150mm
reinforced concrete slab.
The building has been fitted with an entirely new electrical
installation with all new switch gear and distribution cabling.
The building is lit via LED lighting panels.
The property has the benefit of a 0.55 acre (0.22 hectare) yard
area accessed from Dundas Street.
7 4-6 SOUTH LUMLEY STREET GRANGEMOUTH
ACCOMMODATION
The property has been measured in accordance with the RICS
Code of Measuring Practice (6th Edition) and extends to the
following approximate Gross Internal Areas (GIA):
Destination Sq.ft Sq.m
Warehouse 2,789.3 30,024
Front Office 185.2 1,993
Workshops 481.9 5,187
Garage 245.2 2,639
Ancillary Office 317.0 3,412
Total 4,018.6 43,256
The total site area extends to 1.83 acres ( 0.74 hectares), providing a low site coverage of approximately 54%.
TENANCY INFORMATION
The property is let in its entirety to Epiroc UK & Ireland Ltd with a guarantee in place from Epiroc AB. It is let
on Full Repairing and Insuring terms, subject to a general specification schedule of condition, from 11th June 2018 until 10th June 2023, incorporating a tenant break option on 10th June 2021, subject to 6 months notice.
The current rent is £194,652 per annum, equating to a low passing rent of £4.50 per sq.ft.
The tenant was previously based across 11 units in Stirling and consolidated into the subject property this year. South Lumley Street is ideally positioned for Epiroc for access to the port and motorway network and they have invested over £250,000 fitting out the unit for their occupation.
8 4-6 SOUTH LUMLEY STREET GRANGEMOUTH
COVENANT
Epiroc is a Swedish engineering company formed in 2017 by Atlas Copco, a
multinational manufacturing and engineering business which was founded in 1873
and employs in excess of 45,000 staff. Epiroc is headquartered in Stockholm and
manufactures equipment for the mining and construction industries, employing
approximately 13,000 people.
Epiroc UK & Ireland UK Ltd is a newly incorporated business entity and therefore do not have historical financial performance figures. The lease is guaranteed by Epiroc AB, D&B Failure Score of 83/100. A summary of their most recent financial performance is follows:
DEC 2017
Total Assets* £4,253,166,000
Tangible Net Worth* £3,783,836,000
*All figures are based on the currency exchange rate as at 26th September 2018 (OECD)
9 4-6 SOUTH LUMLEY STREET GRANGEMOUTH
SCOTTISH INDUSTRIAL PROPERTY MARKET
The Scottish industrial market is currently experiencing under-supply in prime areas, that has been compounded by a limited amount of development activity in the last 10 years. Current supply
across Scotland has fallen by approximately 49% since 2010 to the present 14.9m sq.ft. The vacancy rate has dropped from 14.6% to 7.5%, with only 6% of available stock being new or refurbished.
Minimal development is expected in the coming years and it is forecasted that industrial supply will continue to fall throughout 2018 and into 2019. As a result, this will create a landlord friendly
market with the potential for rental growth and the reduction in incentives going forward.
The industrial investment market in Scotland continues to be favoured by investors due to the strong occupational story and low capital values per sq.ft. The opportunities offered in Scotland provide a relative yield discount to the rest of the UK, that income focussed investors can benefit from.
Recent investment transactions are highlighted below:
Date Address Area
(Sq.ft)
AWULT Price NIY Capital Rate
(psf)
Comments
Sep-18 Fullarton Drive, Cambuslang 61,199 5 years £5.03m 5.90% £82 Single let to Speedy Asset Services Ltd
Sep-18 Laurieston Road, Grangemouth 88,017 10 years £4.90m 7.50% £56 Single let to Thornbridge Sawmills Ltd
Aug-18 Wardpark, Cumbernauld 20,258 7.5 years £1.63m 7.00% £80 Single let to Briggs Equipment UK
Dec-17 Units 1, 2 & 3 Starlaw Park, Livingston 138,474 10.3 years £8.65m 7.75% £62Sale comprised three distribution units let to Alcatel-Lucent Uk Ltd,
CFH Docmail, Young’s Seafood Ltd
Oct-17 Unit 1, Oakbank Park, Livingston 32,1508 years
(2.5 years to break)£1.60m 9.79% £50 Single let to Vow Europe Ltd
Oct-17 Righead Industrial Estate, Bellshill 27,07715 years
(12 years to break)£2.35m 7.25% £87 Single let to Nationwide Platforms Ltd
Oct-17 Excelsior Park, Wishaw 112,127 9.5 years £8.76m 5.75% £78 Single let to the Royal Mail Group
Sep-17 Houston Industrial Estate, Livingston 43,370 5 years £2.59m 7.50% £60 Single let to SCS
Sep-17 2 James Street, Bellshill 52,857 9.5 years £4.125m 6.04% £78 Single let to HSS Hire Service Group and recently refurbished
Aug-17 6 Brittain Way, Eurocentral 39,893 10.50 years £3.315 6.40% £83 Single let to DX Networks who recently extended
The availability of industrial stock in Grangemouth specifically, is at critical levels. There is approximately 20,000 sq.ft of stock under offer, leaving less than 19,000 sq.ft of accomodation available, non of which was constructed post 2000.
10 4-6 SOUTH LUMLEY STREET GRANGEMOUTH
FURTHER INFORMATION
TENURE
Heritable interest (Scottish equivalent of English Freehold)
CAPITAL ALLOWANCES
All available capital allowances will be transferred to the purchaser.
VAT
The property has been elected for VAT and therefore the sale will be treated by way of
TOGC.
ENERGY PERFORMANCE
The property has an EPC Rating of ‘C’ and a copy of the certificate can be provided on
request.
INVESTMENT PROPOSAL
Offers in excess of £2,165,000 (Two Million, One Hundred and Sixty Five Thousand Pounds Sterling), exclusive of VAT, are sought for our clients Heritable interest in the property.
This reflects an attractive net initial yield of 8.50% and a capital
rate of £50psf, assuming purchaser’s costs of 5.85%.
CONTACT
Ross Burns Charlie McNaught
+44 (0) 141 567 6625 +44 (0) 141 567 6612
+44 (0) 7887 653 360 +44 (0) 7525 824 607
[email protected] [email protected]
© Crown Copyright 2018. All rights reserved. Promap licence number 100020449. Jones Lang LaSalle licence number 100017659.
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