the outlet centre for newcastle - cushwakesales.com quays... · the adjacent property of...
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2 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS
An established retail and leisure
destination…
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FESTIVAL PARK | EBBW VALE | NP23 8FP 3
INVESTMENT CREDENTIALS
A well-established retail investment Approximately 135,521 sq ft (12,590 sq m) with 740 parking spaces
Highly populated catchment Access to over 500,000 people within a 20-minute drive -time, rising to 2.5 million within a 60-minute drive-time
High annual footfall Attracting over 1.4 million visitors
International and national tenant line-up Tenants include Clarks, Nike, GAP, Poundland, Next, The Body Shop, Subway and Costa
Affordable rents Estimated average centre effort rate of less than 13%
A responsive asset-class Numerous opportunities to exploit the strong performance of sports and outdoor brands whilst pursuing new sources of growth through retail and leisure initiatives
High yielding investment opportunity Estimated current net income in the region of £1,191,310
ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS 3
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FACTORY OUTLET RETAILING
A highly successful retailing format for customers, retailers and investors.
4 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS
A responsive asset class…
“The factory outlet sector is rapidly establishing a reputation as a defensive yet responsive subsector and is increasingly attracting new entrants.”
££ £
CUSTOMERS
Broad range of branded merchandise
Energising retail format
Value orientated offer
RETAILERS
Modern shopping environment
Aligned interest with landlord
High degree of brand protection
INVESTORS
Low occurrence of overrenting
Active asset management
Sales growth feeds through to rent
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NEWCASTLE UPON TYNE
KEY DEVELOPMENT INITIATIVES
LONDON
A696
A69
A19
A1
A189
A19
NewcastleUpon Tyne
Stockton-on-Tees
Sunderland
Blyth
Durham
Chester-le-Street
ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS 5
HIGHLY POPULATED CATCHMENT WITH LOCAL STRENGTHRoyal Quays Outlet Centre (“Royal Quays”) is located in North Shields, North Tyneside, a commercially strategic location, situated approximately 5 miles (8 km) to the east of Newcastle City centre and 0.6 miles (1 km) to the west of the Port of Tyne International Passenger Terminal.
Population to grow by 1.5% by 2022
59% aged between 20 and 64
£140 total weekly comparison spend
per household
Low unemployment of 3%
Source: CACI (40-minute catchment)
Drive-time Population (2017)
20 mins 0.6 million 40 mins 1.6 million 60 mins 2.5 million
295,800
total population
71% economically active
17m visitors in 2015
0.9% employment growth to March 2018
North Tyneside Local Plan 2017Potential 8,838 additional homes by 2032
Murton Killingworth Gap Moor
3,000 homes 2,000 homes
1,000 sq m retail 500 sq m retail
17 ha employment land / education facilities
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6 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS
A1(M)
A194(M)
NorthShields
SouthShields
Sunderland
Jarrow
Washington
Gateshead
WhitleyBay
Gosforth
Newcastleupon Tyne
Wallsend
Whickham
Lamesley
East Boldon
NewcastleInternational
Port ofTyne
NewcastleCentral
MeadowWell
(0.5miles)PercyMain
(0.6miles)
TYNE A ND WEAR M
ETRO
SYSTEMAX
RUE END STREET
A1058
A1
058A19
A19
A19A19
A1018
A194
A1231
WESSINGTON WAY
A1 A1
A692
A694
A167
A696
A1
A1
A1
A184
A184
LOCATION & COMMUNICATIONRoyal Quays is well located in North Shields, approximately 5 miles (8 km) east of Newcastle City Centre and 9 miles (14 km) North of the City of Sunderland.
The Scheme is positioned strategically 0.6 miles (1 km) to the east of the A19, which provides the only road access across the Tyne to the east of Newcastle’s City centre.
The A19 provides access north to the A1, which leads directly to Edinburgh approximately 122 miles (196 km) along the Northumberland Coast. To the south, the A19 links with the A194 and from there the A1(M), giving access to the wider motorway network.
Locally, North Shields is easily accessible via the Tyne and Wear Metro network, which provides regular services running through North Tyneside to South Tyneside, Newcastle City Centre, Newcastle Airport, Gateshead and Sunderland City Centre.
Newcastle’s International Airport is the largest in the North East and is located 13 miles (21 km) to the North West of Royal Quays. The airport is a significant economy driver, contributing £1.16 billion into the regional economy every year and supporting 3,450 on site jobs and a further 15,425 across the region (Source: Newcastle International Airport).
22 min drive
24 min drive
20 min drive
North Shields... a well-connected commuter town
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ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS 7
COBLE DEAN
COBLE DEAN
HAYHOLE ROAD
0.5 mile
< A19 1.5 miles
Growing leisure critical mass…
Whilst Royal Quays offers an established retail centre with a range of comparison and convenience shopping, it also occupies a strategic position in the heart of a growing leisure destination.
In addition to a broad choice of established adjacent leisure attractions including a bowling alley, gym, water park, marina and hotel, further complementary attractions are proposed.
The adjacent property of approximately 155,000 sq ft, situated to the south east, is proposed to be opened as a five-a-side football complex and multi-use activity centre.
Royal Quays has established its own leisure success with the c.20,000 sq ft “Kidz Kingdome” attraction, comprising a trampoline centre. Royal Quays is perfectly positioned to benefit from the location’s growing reputation for leisure with the introduction of further family attractions.
Over 400,000 sq ftof local retail and leisure critical mass
Proposed five-a-side football complex and multi-use activity leisure centre.
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ROYAL QUAYS OUTLET CENTRE
Opened in 1996 and remodelled in 2001,
Royal Quays comprises an established
factory outlet centre with a broad range of
value orientated merchandise. The centre
is arranged with open paved malls around
a broad circuit configuration.
The malls are easily accessible through
two principal entrances from the parking
facilities to the north and east of the centre.
The centre comprises 51 units and is
anchored by Nike, Next, Poundland and
GAP. The largest occupiers are strategically
positioned throughout the centre to
promote customer flow. Central areas
within the scheme have been laid to lawn
with mature planting and benches which
creates an attractive village aesthetic and
focal point within the centre.
Free parking is provided immediately
adjacent to the north and east of the
scheme for approximately 740 cars.
8 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS
7
8
9-12
13
14
15
16
17
45a
45b
46 47
48
49
5051
52
53
5455
1 2 3 4/5 641 42 43
44
38
37
36
34/35
3332
3130
29 2827
26
25
24
23
22
20/21 19
18b
18
Get
me
a ki
tche
n
Get
me
a bat
hroo
m
SOFA
135,521 sq ft across 51 units
126,821 sq ft of retail
8,700 sq ft of food and beverage
2,710 sq ft average unit size
740 free parking spaces
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ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS 9
TENURE
The buildings and car park are held freehold.
The area shaded blue comprises an area demised to
Premier Inn Ltd until 2121 including exclusive rights over
that proportion of the car park.
The “Kidz Kingdome” leisure facility is leased to Ensco Limited
for a term of 15 years (the “Ensco Lease”) which is, in turn,
sublet to the ultimate leisure operator, Funderworld Limited
for a term of 10 years from June 2018 (the “Funderworld
Sublease”). The Ensco Lease is expected to be surrendered
whilst the benefit of Funderworld Sublease is expected to
be assigned by Ensco Limited to the ultimate purchaser of
the freehold interest.
PLANNINGThe original planning application was permitted for:
• 135,980 sq ft of Class A1 Factory Outlet use
• 8,471 sq ft of Class A3 Food and Drink use
• 3,283 sq ft of Ancillary uses
In 2016, a consent was granted to extend Unit 39 up to
20,000 sq ft of factory outlet A1 retailing construction. This
has not been implemented and the consent is currently
being renewed.
The site has been subject to numerous additional permissions
on individual units since the original consent was granted.
Parties are encouraged to review the appropriate planning
consents which are available publicly.
OUTLET LEASE STRUCTURE
Whilst the terms of individual agreements vary throughout
Royal Quays, leases typically comprise the following key
components:
Rent
Rents comprise a combination of Base and Turnover Rent
with Turnover Rent representing a prescribed percentage
of the tenant’s turnover. The total rent payable by a tenant
comprises the greater of Base Rent or Turnover Rent.
Service Charge
Service charges are typically recovered from tenants on a
pro rata basis, according to floor space occupied. In some
instances, tenants benefit from a capped service charge.
The service charge budget for 2018 amounts to £653,108
per annum, equating £4.85 per sq ft per annum. A unit (Unit
18 - 869 sq ft), previously used as an Information Centre
and excluded from the service charge area has recently
been returned to retail use and is expected to be included
within the centre service charge area for 2019.
A detailed tenancy schedule is available upon request within
the marketing data room.
El Sub Sta
Subway
North Parade
44
1
21
COBLE DENE
DW
Mast
HOWDON
ROAD
Sta
ROTARY WAY
El Sub
40
50
HAYHOLE RO
AD
8
El Sub Sta
Path (um)
33
LB
Centre for Advanced Industry
45
El Sub Sta
54
Depot
FB
24
PC
17
South Parade
25
TCB
PC
28
6
7
Redburn Dene
Dene
Wal
k
41
COBLE DENE
(disused)
20
39
19
38
Ordnance Survey, (c) Crown Copyright 2015. All rights reserved. Licence number 100022432
TouristInfomationOffice
1
Notes Rev Description Date By
Drawing No. Revision
Date
Paper size Drawn by Checked
Project Code
Project
Client
Content
Drawing Scale
This drawing is copyright. All dimensions and details are to be verified on site. Any discrepancies are to be notified to the Architect prior to work commencing. Do not scale from drawings.
6 Manor Place, Edinburgh, EH3 [email protected]
www.covellmatthews.co.ukt:0131 226 3366
EXISTING SITE PLAN
Royal Quays Proposed Leisure and Retail ProjectNorth Shields Investment Properties Ltd
03.09.18 1:1000@ A1, 1:2000@A3
HB
801 SK16 --
A1
-
N
1:1000
0 402010 10 50m 100m 150mFor indicative purposes only
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TENANTSA strong mix of national and international retailers…
The tenant line-up reflects a robust mix of fashion and homeware brands with exciting potential to introduce further brands whilst extending the sports, fashion and outdoor offer.
Key representation… Major national and international brands service a large and growing local population; providing an excellent opportunity to boost performance with further complimentary retail and leisure occupiers...
1.4 million
Total Annual Footfall
£16.7 million Total Annual Turnover (Year to July 2018)
10 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS
Top 5 tenants by turnover Top 5 tenants by turnover density(Excludes units of less than 500 sq ft)
Top 5 tenants by estimated rent
700
600
500
400
300
200
100
0
Detailed historic tenant by tenant turnover data is available within the marketing data room.
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ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS 11
7
8
9-12
13
14
15
16
17
45a
45b
46 47
48
49
5051
52
53
5455
1 2 3 4/5 641 42 43
44
38
37
36
34/35
3332
3130
29 2827
26
25
24
23
22
20/21 19
18b
18
Get
me
a ki
tche
n
Get
me
a bat
hroo
m
Sof
a U
Lik
e
Effort Rates
35%+
25–35%
15–25%
< 15%
Low estimated average effort rate of less than 13%…
Note: Effort rates reflect the proportion of a tenant’s total turnover that its rent, service charge and business rates obligations represent.
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VALUE ENHANCEMENT
The centre’s outlet lease structure provides the freedom to pursue numerous opportunities to enhance value:
Lease vacant units
Target a variety of high density complementary
fashion, sports and outdoor brands to grow turnover.
Introduce new anchor brands
Target new national value orientated anchor brands/
major space users to evolve the tenant mix, drive
increased footfall, further increase dwell times and
ultimately spend per visit. Potential target for Unit 39.
Capitalise on the demand for sports and outdoor clothing
Target additional international sports and outdoor
clothing brands to follow the strong turnover
performance of Nike and Mountain Warehouse.
Extend home and interior cluster
Introduce further Family orientated home and interior
operations under the “Get Me...” branding, leveraging
off the success of Get Me A Bathroom. Various
additional deals are proposed.
Enhance the food and beverage offer
Capitalise on the success of Subway and Costa by
introducing other complimentary food & beverage
operators to improve the family experience, dwell-
times and spend per visit.
Introduce further leisure
Capitalise on the appeal and footfall generated within
the centre and by neighbouring leisure attractions,
to enhance the family “day out” experience. Potential
opportunity for Unit 39.
Update marketing targets
Refocus marketing to convert additional potential
footfall from touristic shoppers traveling through the
international passenger terminal and the expected
increase in local visitation following completion of
the major 2-year A19/A1058 junction improvement in
early 2019.
In addition to these specific initiatives, the scheme lends itself
to the following opportunities to grow net income on a day to
day basis:
• Reduce service charge voids • Reduce service charge caps • Reduce vacant rates • Introduce mall income attractions
By way of a guide, the adjacent plan on Page 13 identifies
potential opportunities for value enhancement.- Reduce
12 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS
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4
5
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7
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ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS 13
UNIT 39 Proposed
20,000 sq ft Anchor A1 unit
UNIT 22
Strong performer Introduce more Home & Interior
UNIT 8 A3 opportunity
Proposed 25-year lease
to neighbouring leisure operator
14
1
2
1
1
5
UNIT 25
Strong performer Introduce more
F&B
63
UNIT 19
Strong performer Introduce more
Sports wear
1
1
3
UNIT 13
Strong performer Introduce more Outdoor wear
6
UNIT 4/5
Strong performer Introduce more
footwear
4
7
4
4 4
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ESTIMATED CURRENT NET INCOMEIn estimating Current Net Income, the following headline assumptions have been adopted:
• Contracted base rents and turnover percentages for existing tenants apply
• Actual individual tenant turnover for the year to the end of July 2018 has been adopted.
• Where tenants have been in occupation for less than 12 months, an annualised assumption of turnover has been adopted.
• Where tenants have been in occupation for less than 3 months, an average centre turnover density has been adopted.
• Proposed transactions with [1st for Fabric (Unit 8), Get Me A Hot Tub (Unit 44), Get Me Trade Supplies (Unit 45b), Get Me Décor (Unit 48), Get Me Lighting Unit 50] are concluded in accordance with expectations.
• Ancillary Income of £168,000 per annum, including the occupational income from the Kids Activity Dome and separate Mall Income
• Budgeted service charge expenditure for the year to January 2019 of £653,108 per annum.
• Irrecoverable business rates payable by the Landlord are based upon the 2018-19 uniform business rate multipliers in England of 48.0p for small businesses and 49.3p for large businesses.
14 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS
Rental Income: Total Rent £1,432,878 Ancillary Income £168,000
Gross Rent Income £1,600,878
Service & Insurance Charge: Service & Insurance Charge Income £312,488 Service & Insurance Charge Budget (£653,108)
Business Rates: Non-recoverable Business Rates (£68,948)
Irrecoverable Property Costs (£409,568)
Estimated Current Net Income £1,191,310
Notes
Due to the fluid nature of occupancy in the outlet sector and the variable nature of turnover rents, the Estimated Current Net Income is likely to periodic revision.
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DISCLAIMER Cushman & Wakefield, as agent for the vendors or lessors of this property, gives notice that: (i) These particulars are set out as a general outline for guidance only, do not form any part of an offer or contract and must not be relied upon as statements or representations of fact; (ii) All descriptions, dimensions, photographs, references to condition and necessary permissions for use and occupation and other details are given in good faith and are believed to be correct, but intending purchasers or lessees should not rely on them as statements or representations of fact and must satisfy themselves as to their correctness; (iii) No person acting on behalf of Cushman & Wakefield has any authority to make or give any representation or warranty whatsoever in relation to this property. Cushman & Wakefield accepts no responsibility for any statement made in these particulars; (iv) Any areas, measurements or distances given are approximate. Unless otherwise stated, all purchase prices, any rents or outgoings are correct at the date of publication, and unless otherwise stated, are quoted exclusive of VAT; (v) Images may be computer generated. Photographs show certain parts of this property as they appeared at the time they were taken; and (vi) Any descriptions given of this property cannot be taken to imply this property is in good repair, has all necessary consents, is free of contamination, or that the services and facilities are in working order. Intending purchasers or lessees are advised to carry out their own investigations. Publication Date: October 2018 | Cushman & Wakefield LLP | Regulated by the Royal Institution of Chartered Surveyors. Brochure by Mango 020 7060 4142
43-45 Portman Square London W1H 6LY
FURTHER INFORMATION
EPCsRoyal Quays has been assessed for energy performance and Energy Performance Certificates are available upon request within the marketing data room.
VATThe property is registered for VAT and it is proposed that the asset transaction will be treated as a ‘Transfer of a Going Concern’.
PROPOSALOffers are invited for the freehold interest in Royal Quays Outlet Centre and the benefit of the Funderworld Sublease.
CONTACTS
ALEX POUND
Partner – Retail Investment
Direct: +44(0)20 7152 5557 Mobile: +44(0) 7810 631 427 [email protected]
DOMINIC BARNARDSurveyor – Retail Investment
Direct: +44(0) 207 152 5970 Mobile: +44(0) 7970 761 972 [email protected]
PETER ATKINSONPartner – Investment
Direct: +44(0) 191 223 5715 Mobile: +44(0) 7718 251 493 [email protected]
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