the swan centre, leatherhead, kt22 8ah · technology, wates group, exxon mobil, berkeley homes,...

The Swan Centre, Leatherhead, KT22 8AH

Well secured, south east, retail investment with asset management opportunities





INVESTMENT SUMMARY■ A prominent and substantial retail holding situated within the

affluent, popular and busy Surrey town of Leatherhead

■ Well secured to a variety of popular national multiple retailers including Boots, Poundland, Card Factory, WH Smith, Next,

Costa, Holland & Barrett, Vodafone, Specsavers, Burtons/

Dorothy Perkins, Timpsons and Thomas Cook

■ The scheme is anchored by Sainsbury’s Supermarket albeit this is not within the ownership

■ Circa 70% of the income secured to National Multiple tenants

■ 339 car parking spaces

■ Long Leasehold

■ Weighted average unexpired lease term (WAULT) of 5.1 years to expiry

■ Multiple asset management opportunities

■ Low base rental tone of £40 psf ZA

■ Offers in excess of £8,300,000 (Subject to Contract and Exclusive of VAT)

■ Reflecting an attractive net initial yield of 8%





LOCATIONLeatherhead is an affluent Surrey commuter town and established retail and office location. The town is located 23 miles (37km) south west of Central London, 16 miles (26km) north east of Guildford, and 18 miles (29km) east of Woking.

The town benefits from excellent road communications being located 1 mile (1.6km) south of Junction 9 of the M25 motorway, which provides access to the M3 motorway 14 miles (22km) to the west and the M23 13 miles (21km) to the east.

Leatherhead Railway Station is less than a five minute walk from The Swan Centre. The terminus provides frequent services to London (Victoria and Waterloo) in a fastest journey time of 47 minutes, aswell as the rest of the UK.

London Gatwick Airport is located 19 miles (30km) to the south east of Leatherhead and is the UK’s second busiest airport connecting over 34 million passengers a year, to approximately 200 destinations in 90 countries worldwide.

A4010

A24

A3

A3

A31

A331

A332

A404

A30

A22

A264

A22

A22

A23

A232A24

A3

A3

A40

A316

A10

A406

A205 A2

A12

A12

A13

A406

A21

A413

A503

A20

M4

M3

M25

M25

M25

M25

M23

M40

M40

M1

M11

M4

M1

LEATHERHEAD

LONDON

Dorking RedhillGuildford

WokingEpsom

Crawley

Horsham

East Grinstead

BromleyMitcham

Twickenham

Weybridge

Godalming

Haslemere

Farnham

Farnborough

Bracknell

Reading

Maidenhead

High Wycombe

Royal Tunbridge

WellsCranleigh

Dagenham

Harrow

Watford

Dartford

Sevenoaks

Romford

GatwickAirport

Heathrow Airport





LOCAL ECONOMY & DEMOGRAPHIC PROFILELeatherhead is a significant regional centre located within the Mole Valley District of Surrey within close proximity to the M25 and national motorway networks. The estimated population within a mile radius of Leatherhead is 13,465 (Experian). 36.14% of the catchment demographic is in the AB social grade, significantly above the national average. A higher than average proportion of the population is in the higher managerial, administrative and professional socio economic class, with a significant percentage of workers employed within the professional, scientific and technical occupations. Adopting Experian’s Mosaic UK Consumer classifications for the 10 mile contour they compare the socio–economic profile of the town to GB as follows:

Classification (Groups) Leatherhead (10 Mile Contour) GB Base %

Alpha Territory 19.3% 3.5%

Professional Rewards 7.9% 8.7%

Suburban Mind-sets 18.9% 12.4%

Careers & Kids 7.4% 5.6%

New Homemakers 6.3% 4.3%

Industrial Heritage 1.5% 7.7%

Claimant Culture 1.1% 5.9%

Ex-Council Community 4.4% 9.8%

Liberal Opinions 20.5% 8.4%

Voices of Authority 7.5% 1.2%

Business Class 9.4% 1.6%

Serious Money 2.4% 0.5%

Balcony Downsizers 2.1% 0.9%

Garden Suburbia 13.2% 2.9%

Footloose Managers 5.4% 1.5%

Convivial Homeowners 10.5% 1.7%

Crash Pad Professionals 7.3% 1.2%

Leatherhead benefits from a dominant office market and has attracted a number of ‘blue chip’ international companies to the area, providing UK Headquarter offices for CGI Logica, Kellogg Brown & Root and Unilever (UK & Ireland only). Other high profile employer’s include ERA

Technology, Wates Group, Exxon Mobil, Berkeley Homes, Police

Federation, Babcock and NHS.





This Goad Plan is for identification only and not to be scaled as working drawing. No part of this plan may be entered into an electronic retrieval system without prior consent of the publisher. © Crown copyright 2015. Licence number PU100017316. For full terms and of copyright conditions visit www.goadplans.co.uk/copyright

Long Leasehold

Held Long Leasehold. Under-let on long lease to K/S Leatherhead and MVDC until 22/03/2080 at a peppercorn rental.

KEY

CLINTONSPO

UNDLAND

MY DENTIST

To the Station





RETAILING IN LEATHERHEADLeatherhead is a popular and compact retail destination with a loyal, affluent customer base. The town centre provides approximately 267,000 sq ft of retail accommodation, with the prime offer focussed in The Swan Centre (anchored by Sainsbury’s, Boots, WH Smith and Next). This is supplemented by the High Street where a number of national multiple retailers are also located. In addition a market runs twice a week (Thursday and Saturday) along the High Street, within close proximity to the subject property.

SITUATIONThe Swan Centre comprises a large section of Leatherhead town centre with the primary entrance located on the High Street adjacent to Argos,

Travelodge and Halifax. The centre benefits from a secondary access on Swan Mews which adjoins the High Street, while the car park is accessed via Leret Way. The Swan Centre benefits from footfall generated by Sainsbury’s Supermarket, which is located within the scheme albeit outside the ownership.





THE SWAN CENTREThe Swan Centre is centrally located forming the majority of the prime retailing offer in Leatherhead anchored by Sainsbury’s (not part of the ownership) and accessed from the pedestrianised High Street. The majority of Leatherheads national multiples are sited within the scheme while the nearby High Street is occupied by a mix of national, regional and local retailers, restaurants and A2 users.

Developed in the early 1980’s the predominantly ‘open’ scheme presents well and is served well by the centres’ 339 space multi-storey car

park (accessed via Leret Way). Shoppers parking here will ordinarily use the North Mall entrance where Sainsbury’s, the car park lifts/ stairs and centre’s public toilets are located.

TRANSFORM LEATHERHEAD PROJECTMole Valley District Council (MVDC) is working with Nexus Planning and Broadway Malyan - planning, regeneration and design specialists - to prepare a long term masterplan for Leatherhead town centre.

Further information is available at www.molevalley.gov.uk/transformleatherhead

Day CentreSwan House Levet House





ACCOMMODATIONThe property provides an approximate total floor area of 9,849m² (106,019 sq ft) apportioned per unit as outlined within the Tenancy Schedule.

TENURE The SchemeLong Leasehold – The property is held long leasehold from Mole Valley District Council for 99 years from 25th March 1981 (64.5 years unexpired). The leaseholder benefits from an option to extend for a further 26 years which effectively extends the term to 90.5 years unexpired.

The head rent is subject to a minimum rent of £122,400 pax and a gearing equivalent to 20% of 99% (19.8%) of the gross rents received (excluding the net car park income) throughout the year from 25th March to 24th March. The rent can move upwards and downwards and is paid quarterly.

We project the headrent for 2015/2016 will amount to circa £141,157 and that this will rise in 2016/2017 to £167,178 assuming the current tenancy information and outstanding rent free periods.

The Car ParkLong Leasehold – The car park is held long leasehold from Mole Valley District Council (MVDC) for 99 years (less 3 days) from 25th March 1981. MVDC underlet the car park to the vendor by way of a sublease from 1st October 2001 until 24th September 2035 paying a principal rent equating to 50% of the net receipts (after permitted deductions) from the operation of the car park less the minimum rent of £60,000 per annum exclusive. The leaseholder has a right to terminate the sublease at any time throughout the term giving no less than 6 months, prior notice on the proviso that all the covenants in the lease have been satisfied.





TENANCY SCHEDULEAddress Tenant Trading as Areas Lease

Start Date

Lease Expiry Date

Option to Determine

Next Rent Review

Current Rent

Service Charge Yr End

31/21/2016

RV (2010)

Rates Payable

Insurance (to

31/05/2016)

Landlord Shortfalls

Comments

Description Sq ft m2

Unit 1 Boots Opticians Professional Services Limited

Boots Opticians

GF Sales 1,214 113 03/10/2014 02/10/2024 02/10/2019 (T)

03/10/2019 £37,500 £16,366 £43,250 £21,322 £546.49 TBO on 02/10/2019 at no less than 6 months prior written notice. Tenant received 9 months rent free to be topped up by the vendor.ITZA 1,022 95

First Floor Anc 401 37Unit 2 Poundland Limited Poundland GF Sales 4,580 425 11/05/2004 10/05/2019 £74,000 £23,722 £65,500 £32,292 £1,272.62 £7,160 Recently assigned from AG Retail Cards Limited. Poundland

pay monthly rents by way of a side letter. Poundland received 6 months rent free from Clinton's. Recommend 5% for quantum and 5% for frontage to depth. The tenant benefits from a service charge cap of £16,561 pax which increases with RPI annually.

ITZA 1,835 170Basement Anc 970 90

Unit 3 AG Retail Cards Limited Clintons GF Sales 1,953 181 21/10/2015 20/10/2025 20/10/2020 21/10/2020 £35,000 £15,878 £31,000 £15,283 £471.58 New 10 year lease. TBO in year 5. Tenant received 15 months rent free, to be topped up by the vendor.ITZA 893 83

First Floor Anc 270 25Unit 4 Sportswift Limited Card Factory GF Sales 1,882 175 30/05/2013 29/05/2023 29/05/2018

(T)30/05/2018 £40,000 £16,452 £38,000 £18,734 £533.17 £10,403 TBO on 29/05/2018. The tenant benefits from a service charge

cap of £6,049 pax which increases with RPI annually.ITZA 933 87First Floor Anc 255 24

Unit 5 Boots UK Limited Boots GF Sales 5,932 551 25/03/1981 24/03/2021 25/03/2016 £77,500 £51,461 £80,500 £39,687 £2,125.85 Boots received 12 months rent free in exchange for a 5 year reversionary lease. RF finishes on 24/12/2015, to be topped up by the vendor.ITZA 1,893 172

GF Anc 3,837 356First Floor Anc 492 46

Unit 6 WH Smith Retail Holdings Ltd WH Smith GF Sales 6,087 565 24/06/1981 23/06/2021 24/06/2016 £60,000 £39,868 £71,000 £35,003 £1,501.04 5 year reversionary lease from 24/06/2016 (signed in Oct 2012 when tenant recieved 9 months rent free). Rent agreed at next review at £60,000 pax. Recommended allowance of 7.5% for quantum.

ITZA 1,856 172GF Anc 920 85First Floor Anc 92 9

Unit 7 Burton/ Dorothy Perkins Properties Ltd

Dorothy Perkins

GF Sales 2,620 243 29/09/2013 28/09/2018 28/09/2016 £40,000 £20,470 £59,500 £29,334 £699.00 TBO on 28/09/2016. Recommend allowance of 5% for return frontage and 5% for lack of storage. ITZA 1,436 133

First Floor Anc 141 13Unit 8-12, 19-25 Swan Centre

K/S Leatherhead Sainsburys Supermarket 42,487 3,947 27/12/2001 22/03/2080 £0 £175,479 £830,000 £409,190 £9,618.05 Long lease to K/S Sainsbury's who pay a head-rent to MVDC. K/S Sainsbury's have the right to extend this lease by 26 years subject to them correctly serving notice. Sub- underlet to Sainsburys Supermarkets Limited for 35 years from 25/09/2000 until 24/09/2035.

Unit 13a, 28 Swan Centre

Timpson Limited Timpsons GF Sales 449 42 08/04/2008 07/04/2018 £16,000 £3,061 £15,250 £7,320 £122.13ITZA 415 39

Unit 13b, 30 Swan Centre

Muhammed Shakir Saleem Best Brows GF Sales 339 31 19/09/2014 18/09/2019 18/09/2016 £13,500 £3,061 £12,250 £5,880 £116.13 TBO on 18/09/2016. If the tenant does not exercise their option to determine their lease, they shall receive 3 months rent free from 19/06/2016. Tenant deposit of £3,375 + VAT.ITZA 329 31

Unit 15-16 Costa Limited Costa Coffee GF Sales 1,315 122 22/08/2005 21/08/2015 £39,500 £9,948 £39,750 £19,597 £378.92 10 year lease renewal agreed with the tenant. TBO in year 6. Rent reduced from £44,500 pax. No incentive. Tenant is in the process of re-fitting the store. Recommend plus 5% for return frontage, minus 12.5% for frontage to depth and lack of storage.

ITZA 1,078 100

Unit 17-18, 20 Swan Centre

Next Group Plc Next GF Sales 2,582 240 24/06/15 23/06/2020 24/06/2018 £57,250 £31,374 £58,000 £28,594 £1,165.20 New 5 year lease recently agreed. 3 month rent penalty if tenant exercises TBO on 24/06/2018. Rent dropped from £72,000 pax. The tenant received no rent free. Recommend allowance of 5% for frontage to depth and 2.5% for return frontage.

ITZA 1,436 133First Floor Anc 1,694 157Basement Anc 416 39

Unit 19, 16 Swan Centre

Vodafone Limited Vodafone GF Sales 1,381 128 13/04/2012 12/04/2022 12/04/2017 13/04/2017 £42,000 £12,243 £30,250 £14,913 £435.08 TBO on 12/04/2017. Vodafone assigned the lease from Phones 4U Limited on 28/01/2015.ITZA 799 74

Basement Anc 205 19Unit 20, 14 Swan Centre

Holland & Barrett Limited Holland & Barrett

GF Sales 1,396 130 20/04/2010 19/04/2020 20/04/2015 £34,700 £13,009 £30,750 £15,160 £439.08 RR from 20/04/2015 being documented at a nil uplift.ITZA 809 75Basement Anc 259 24


Specsavers Optical Superstores Limited

Specsavers GF Sales 1,003 93 23/09/2014 22/09/2024 22/09/2019 23/09/2019 £27,400 £11,478 £28,250 £13,927 £379.69 TBO on 22/09/2019. Tenant in occupation since 2004.ITZA 682 63Basement Anc 343 32


Thomas Cook Retail Limited Thomas Cook GF Sales 573 53 29/09/2006 28/09/2016 £19,420 £4,591 £23,750 £11,709 £172.20 Recommend 7.5% allowance for frontage to depth.ITZA 501 47





Address Tenant Trading as Areas Lease Start Date

Lease Expiry Date

Option to Determine

Next Rent Review

Current Rent

Service Charge Yr End

31/12/2016

RV (2010)

Rates Payable

Insurance (to

31/05/2016)

Landlord Shortfalls

CommentsDescription Sq ft m2


Pervez Tahir Savills Dry Cleaning

GF Sales 1,044 97 08/03/2011 07/03/2021 08/03/2016 £9,500 £1,530 £7,500 £3,600 £53.26 Rent deposit of £3,750 + VAT.ITZA 913 85


Nicholas Robert Harrington Nicholas Harrington Hairdressing

GF Sales 339 31 10/09/2014 09/09/2024 09/09/2019 10/09/2019 £13,500 £3,061 £13,500 £6,480 £116.13 TBO 09/09/2019. Rent deposit of £3,375 + VAT.ITZA 329 31GF Anc 28 3


The Carphone Warehouse Limited

Carphone Warehouse

GF Sales 1,044 97 29/11/2007 28/11/2017 £42,000 £14,539 £32,750 £16,146 £498.46ITZA 913 85Basement Anc 868 81

31 High Street Spicy Curry Restaurants Ltd Lal Akash Restaurant

GF Sales 983 91 29/09/2009 28/09/2029 29/09/2019 £35,000 £11,096 £17,200 £8,256 £663.58 £1,402 Rent deposit of £7,500 + VAT. RR from 29/09/2014 being documented at as a nil increase. The tenant benefits from a current service charge cap of £9,694, which increases with RPI annually.

ITZA 630 59FF Sales 1,151 107Basement Anc 853 79

Day Centre Mole Valley District Council GF 4,517 419 25/03/1981 22/03/2080 £1 £9,682 £9,300 £4,464 £1,123.76 MVDC have the right to extend this lease by 26 years subject to them correctly serving notice. Partially refit in 2013. The tenant are demised 8 car parking spaces.

Centre Manager Centre Manager £12,500 £6,000 £6,000.00Rear Service Yard, 45-47 High StreetLeret House Touch Associates Ltd Touch FF Office 3,400 316 05/02/2015 04/02/2020 04/02/2018 £54,720 £6,732 £54,400 £26,819 £731.92 TBO 04/02/2018. Rent Deposit £13,680 + VAT. Tenant received

7.5 months rent free. The Landlord and the Tenant agree that the provisions of sections 24 to 28 (inclusive) of the Landlord and Tenant Act 1954 are excluded in relation to the tenancy created by this Lease. The tenant has an area demised in front of their entrance for car parking as well as 7 marked spaces on the service deck.

Swan House Basil E. Fry & Co Limited Basil Fry & Co GF Reception 447 42 05/05/2015 04/05/2025 04/05/2020 05/05/2020 £94,000 £13,214 £86,500 £42,645 £2,077.88 TBO 04/05/2020. Rent Deposit £24,000 + VAT. Tenant received 5.5 months rent free. The Landlord and the Tenant agree that the provisions of sections 24 to 28 (inclusive) of the Landlord and Tenant Act 1954 are excluded in relation to the tenancy created by this Lease. The tenant are demised 15 car parking spaces.

GF Office 2,832 263FF Office 2,425 225

Storage Unit £0Public Toilets Mole Valley District Council 25/03/1981 22/03/2080 £1 £1,005 £2.28 MVDC have the right to extend this lease by 26 years subject to

them correctly serving notice.Car Park Mole Valley District Council 25/03/1981 22/03/2080 £1 MVDC have the right to extend this lease by 26 years subject to

them correctly serving notice.Miscellaneous Income

Exhibition & Other Income 01/06/2006 31/05/2056 £10,702 Estimated net income received Y/E 12/2013 = £9,884. Net Income received Y/E 12/2014 = £11,519. Two year average = £10,702 adopted.

Photo Booth Photo-Me International Plc 01/06/2006 31/05/2099 £0Car Park Income Only

NILCOSC 01/06/2006 31/05/2099 £11,074 £19,734 £109,000 £53,737 £153.74 Estimated net income received Y/E 12/2013 = £8,927.82. Net Income received Y/E 12/2014 = £13,220.788. Two year average = £11,074 adopted.

Burton House £15,565 Separate Service Charge ScheduleSubstation The Southern Electricity Board 25/03/1981 22/03/2080 £1

106,019 9,849 Total Gross Income £884,269 £24,965

LESS PROJECTED HEAD RENT Swan Centre (20% of 99% of the income). NB: The car park head rent already accounted for in the net car park

income

£141,157

NET RENT (After Head Rent Deduction) £743,112

Less L/L shortfalls £24,965

LESS L/L Marketing Cost (50%) £15,000

TOTAL NET CURRENT INCOME £703,147

Address Tenant Trading as Areas Lease Start Date

Lease Expiry Date

Option to Determine

Next Rent Review

Current Rent

Service Charge

2014/2015

RV (2010)

Rates Payable

Insurance (to

31/05/2016)

Landlord Shortfalls

Comments

Description Sq ft m2





TENANCIESThe Swan Centre is well secured to a host of national multiple tenants Boots, Boots Opticians, Poundland, Card Factory, WH Smith, Next,

Costa, Holland & Barrett, Vodafone, Specsavers, Burtons/ Dorothy

Perkins, Timpsons and Thomas Cook. The scheme is anchored by Sainsbury’s Supermarket albeit this is not within the ownership.

The leases are predominantly drawn on institutional terms with outgoings recovered through a comprehensive service charge.

CURRENT INCOMEThe current gross contracted income is £884,269 pax

We anticipate the head-rent for March 2015 - March 2016 will amount to £141,157.

Accordingly, the anticipated current net income, less Landlord shortfalls, Landlord contribution to marketing and less head rent is £703,147 pax

The vendor will top up outstanding rent free periods.

CURRENT INCOME ANALYSIS

The average weighted unexpired lease term is 5.1 years to expiry.

30%Local

Operators70%

National Multiple Tenants

Income Analysis by Covenant Strength

Regional5.65%

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ad£285

£285

£240

£115 £90 £80 £70 £60 £50 £40

Rental Tone (PSF Zone A) in Competing Centres in Surrey

The rental tone within the scheme is circa £40 Zone A which is very low when compared to prime rental values in surrounding towns. Accordingly, we believe there are strong prospects for future rental growth.





PROPERTY MANAGEMENT & SERVICE CHARGEA comprehensive service charge budget is currently in operation on the property. The service charge costs are apportioned based on each occupiers Weighted Gross Internal Area as per the occupational leases.

The proposed service charge budget for the year ending 31st December 2016 amounts to £529,053 per annum (£513,527.83 in 2015). A service charge report is available upon request.

The current landlord shortfall is £24,965 pax.

VATThe Property has been elected for VAT and any disposal is proposed to be by way of a Transfer of a Going Concern (TOGC).

EPCEnergy Performance Certificates (EPCs) are available on request.

ASSET MANAGEMENT OPPORTUNITIES• Look to re-gear head leases with Mole Valley District Council

• Proactively seek to increase the AWULT of the holding through lease re-gears and renewals

• Strong possibility of rental growth going forward given low vacancy rate and modest current rental tone

• Look to improve mall income

• Engage with Mole Valley District Council and their planning consultants over ‘Transform Leatherhead’

• Potential to partake in a larger wholescale redevelopment of

the town centre

PROPOSALWe have been instructed to seek offers of £8,300,000 (Eight Million, Three Hundred Thousand Pounds),

subject to contract and exclusive of VAT for the long-leasehold interest reflecting a net initial yield of 8% allowing for purchaser’s costs of 5.8%.

FURTHER INFORMATIONFor more information, to arrange an inspection or for access to the data room, please contact:

David Freeman 020 7659 4830

[email protected]

Ed Smith

020 7659 4831 [email protected]

MISREPRESENTATION These particulars do not constitute an offer or contract. They are intended as a guide to prospective purchasers. All reasonable care has been taken in the preparation of these particulars but their accuracy is not guaranteed. The purchaser should satisfy himself and as to the correctness of these details. Neither the agents nor the vendors or lessors are to be or become under any liability or claim in respect of these particulars. These particulars are supplied on the understanding that all negotiations are conducted through this office. November 2015.

Adrian Gates Photography & Design 07710 316991

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