folkestone - klm-re.com
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SOUTH EAST SUPERMARKET ANCHORED RETAIL INVESTMENT
F O L K E S T O N E
S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T
F O L K E S T O N E
I N V E S T M E N T S U M M A RY
Well-Located South-East town
Dominant retail offer for the town centre
256,000 sq ft of retail accommodation
Anchored by a 86,000 sq ft Asda
570 space NCP car park let on a long lease
14% increase in NOI since 2013
Strong covenant weighting of 67.4% to 5A1 tenants which include Primark, TK Maxx, SportsDirect and Next
Strong retailer trading performance
Modern open-air scheme
Low service charge
WAULT 6.2 years to expiry
SANDGATE ROADA2033
SAGA
LIDL
WILKO
FOLKESTONE MUSEUM
A2034 CHERITON ROAD
BOUVERIE ROAD WEST
SAINSBURY’S
FOLKESTONE CENTRAL
B O U V E R I E P L A C E F O L K E S T O N E S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T
LO C AT I O N & CO N N EC T I V I T YThe coastal town of Folkestone is situated in Kent approximately 6 miles south west of Dover and 70 miles south east of London.
Folkestone has excellent road access, located at the end of the M20/A20, which provides fast access to the Channel Tunnel at Ashford, Maidstone, London and the M25. The A259 south coast trunk road is also in close proximity providing access to Hastings, Eastbourne and Brighton.
The scheme benefits from direct access to the town’s bus station with regular services between Ashford and other nearby towns.
The town is served by two railway stations, with Folkestone West providing a regular rail service to London Charing Cross with a fastest journey time of 1 hour 30 minutes and Folkestone Central running to London St Pancras with a fastest journey time of 55 minutes. High speed commuter services from Dover also stop at Folkestone and via the South Eastern main line link to Ashford International. The journey time to London via this route has been reduced to under 1 hour.
The closest airport to Folkestone is Lydd Airport which is a distance of 13.2 miles away.
M20
M2
M25
M25M25
M25
M23
M20
M26
M4M4
M3
M40
M1 M11
M11A1(M)
CHANNELTUNNEL
TERMINAL
STANSTED
HEATHROW
GATWICK
SHOREHAM
CITY
LYDD/ASHFORD
LUTON
A2070
A28
A259
A259
A259
A256
A229
A299
A2
A2
A20
A21
A2
A27A27
A21
A22
A22
A22
A24
A24
LONDONLONDON
SOUTHEND-ON-SEA
MARGATE
BASILDON
DOVER
FOLKESTONEFOLKESTONE
MAIDSTONE
HASTINGS
EASTBOURNE
CHATHAM
BRIGHTON
WORTHING
WOKING
DARTFORD
EPSOM
CRAWLEY
GUILDFORD
SLOUGH
BARNET
HARLOW
CHELMSFORD
CANTERBURY
ASHFORD
B O U V E R I E P L A C E F O L K E S T O N E
A259
A259
EAR
LS AV
ENU
E
A25
9A
259
RADN
OR
PARK
RO
AD A259
A259 B LACK BU
LL R
D
A2034
A2033 SANDGATE ROAD
BOUVERIE RD WEST
CHERITO
N G
ARDEN
S MID
DELBURG SQ
SHEL
LON
S ST
CHERITON ROAD
MID
DELBURG SQ
A2033 FO
OR
D RO
AD
N
EW ST DOVER RO
AD
A20
33
DOVER ROAD
A20
33
DO
VER
RD
RADNOR BRIDGE ROAD WEAR BAY RD
TON
TINE STREET T
RA
M R
OA
D
A
260
TRA
M R
OA
D
S OUTHERN WAY
SANDGATE R
OAD
SANDGATE ROAD
Radnor Park
Folkestone Central
SUBJECTPROPERTY
S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T
B O U V E R I E P L A C E F O L K E S T O N E
D E M O G R A P H I C SFolkestone is the principal town in the Shepway District of Kent with a population of 64,477 and a primary catchment population of 35,587.
The town captures a high proportion of its catchment and has an estimated comparison spend of £101m for 2018 which places Folkestone 50th, ahead of Ashford, Chichester and Walton On Thames, Surrey.
Tourism is a major part of the Folkestone economy with Folkestone & Hythe estimated to have a total tourism value of £252 million showing 2% annual growth. The town is a popular seaside resort with one of the only sandy beaches in the area and therefore attracts visitors from a large catchment due to the aforementioned good transport links.
Major employers in the town include Church and Dwight, the US company famous for such brands as Arm & Hammer and insurance firm Saga – both have their UK headquarters in the town.
The town’s population profile shows above average levels of “Affluent Greys” and “Aspiring singles”. The rural areas surrounding Folkestone are particularly affluent, containing high volumes of the most affluent
ACORN category “Wealthy Achievers”. These consumers have high levels of disposable income.
The town also benefits from the Folkestone Academy which boasts over 1,000 students and focuses in media and creative arts.
In the past 5 years the town has been transformed through large scale inward investment and development in and around the old town and harbour quarter area. This has resulted in the growth of the art community, galleries and independent cafes and bars.
Further planned investment into the town centre will continue to improve the town’s demographic and catchment profile.
Source : CACI
A259
A2070
A259
A259
A256
A299
A299
A299
A249
A28
A28
A28
A20
A2
A2
A2
M20
M20
M2
HAMSTREET
NEW ROMNEY
ST MARY’S BAY
RAMSGATE
CANTERBURY
DOVER
GRAVENEY
FOLKESTONE
SITTINGBOURNE
ASHFORD
FOLKESTONE
PRIMARY
SECONDARY
TERTIARY
64,477T O TA L
C AT C H M E N T P O P U L A T I O N
£252 millionE S T I M AT E D T O TA L
T O U R I S M V A L U E O F F O L K E S T O N E & H Y T H E
2%P R O J E C T E D A N N U A L
T O U R I S M G R O W T H O V E R T H E N E X T 1 2 M O N T H S
R E TA I L C AT C H M E N T
78%C A R S H O P P E R S
< 2 0 M I N S D R I V E T I M E
S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T
R E TA I L I N G I N F O L K E S T O N EThe pedestrianised Sandgate Road was historically the prime retailing pitch in the town, however, the opening of Bouverie Place Shopping Centre in 2007 has seen the prime retail pitch in the town consolidate into the scheme.
The town centre offers an attractive pedestrianised shopping environment linking Bouverie Place to Sandgate Road with national multiple retailers including Boots, Wilko’s, Bon Marche, Superdrug and WH Smiths.
Bouverie Place forms the town’s prime pitch anchored by an Asda Superstore and one of the town’s main car parks. Key retailers include Primark, TK Maxx, Sports Direct and Poundland. The retail provides a strong convenience and affordable fashion offer serving the local community.
The rents in Bouverie Place are currently between £40 – £65 psf Zone A. This provides the retailers with sustainable rents, which can
be further evidenced by the positive retailer turnover data in the scheme.
These sustainable rental levels are further supported by the fact that in the recent New Look CVA, there was no reduction in rent to this store. JD Sports are also under offer to take the Peacocks unit RU04 at the same passing rent. This signature letting further under pins the occupational demand for the scheme.
The nearest competing towns are Dover, Ashford and Canterbury which are located a substantial distance from Folkestone. The closest town, Dover has a smaller supply of shopping than Folkestone.
B O U V E R I E P L A C E F O L K E S T O N E
77%O F S H O P P E R S
V I S I T T H E C E N T R E O N C E A W E E K
50 minsA V E R A G E
D W E L L T I M E
S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T
B O U V E R I E P L A C E F O L K E S T O N E
G R O U N D L E V E L F I R S T F L O O R
S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T
Ownership
D E S C R I P T I O N Bouverie Place was opened in 2007 and consists of approximately 256,000 sq ft of retail accommodation situated in the heart of Folkestone town centre. The scheme is anchored by an 86,000 sq ft Asda superstore with 20 shops occupied by key national retailers such as Primark, TK Maxx, New Look, Deichmann, Sportsdirect and Poundland.
The scheme is arranged as a ‘High Street’ style scheme with the large MSUs located under the Asda superstore, which provides a covered shopping environment. A travellator located next to TK Maxx takes shoppers from the ground floor to the supermarket and the car park. The remainder of the scheme is open air with Starbucks and Caffe Delicia providing outside seating which helps create an attractive shopping and eating environment, which links into Sandgate Road and the rest of the town centre.
The ownership includes both the Superdrug and Costa Coffee on Sandgate Road which helps control the linkage with the town centre. In addition, there are two shops (Burger King and Subway) located to the rear of scheme on Bouverie Place.
There are 12 flats located above Starbucks / Cards Direct which have been sold off long leasehold. These flats are accessed from Oxford Terrace.
The scheme also sits adjacent to the main bus station in the town and only 650 metres from Folkestone Central Railway Station. The Harbour Quarter district lies 500m to the south and this area is currently undergoing extensive regeneration. Directly to the north west of the scheme is Middelburg Square, where a 480 space NCP car park is located.
The annual footfall is 4.2 million per annum.
B O U V E R I E P L A C E F O L K E S T O N E
256,000 sq ftR E TA I L A N D F O O D
I N T H E H E A R T O F F O L K E S T O N E T O W N
C E N T R E
S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T
B O U V E R I E P L A C E F O L K E S T O N E S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T
I N V E S T M E N T A N D R E G E N E R AT I O N O F T H E T O W N C E N T R E
Folkestone has seen significant investment in the old town and harbour area over recent years. This has resulted in an influx of a trendy art community around the historic cobbled streets and the arrival of independent cafes, bookstores, bars and galleries.
In addition Folkestone and Hythe District Council in collaboration with other key stakeholders in the town have undertaken an exciting town centre vision based upon research and analysis of the needs of the Folkestone population. The focus will be to provide additional uses within the town centre such as a cinema, food and beverage, offices and residential uses (see next page).
This exciting vision for the town centre will complement the already vibrant creative and harbour quarters. The proposals include introducing leisure and entertainment in the form of a cinema in the Debenhams (see sketch plan above) with a complementary food and beverage offering.
B O U V E R I E P L A C E F O L K E S T O N E S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T
C O A S TA L Q U A R T E R
H A R B O U R Q U A R T E R
T O W N C E N T R E
C I V I C Q U A R T E R
C R E AT I V E Q U A R T E R
S A N D G AT E R O A D
B O U V E R I E P L A C E
D E B E N H A M S
T O W N C E N T R E V I S I O N
K E Y
CAR PARK
CINEMA
FOOD & BEVERAGE
RESIDENTIAL / OFFICE
SHARED ENTERPRISE WORKPLACES
COMMUNITY SERVICES
RESIDENTIAL
B O U V E R I E P L A C E F O L K E S T O N E S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T
T E N U R EFreehold.
C A R P A R K I N GThe centre benefits from a 570 space multi storey car park arranged over 3 levels. The car park is let and operated by NCP on a 35-year FRI lease, reviews 5 yearly, expiring in 2042. The lease provides a current income of £176,250 per annum.
In addition, Asda pays an annual car park contribution to supplement concessionary parking arrangements for customers. The rent payable by Asda for the first 35 years of the term is subject to annual RPI increases. The current passing rent received is £118,488 per annum.
The car park is open 24 hours per day Monday – Sunday. The current car park charges are as follows:
1 HOUR £1.70
1 TO 2 HOURS £2.90
2 TO 3 HOURS £4.10
3 TO 4 HOURS £5.60
4 TO 24 HOURS £7.00
WEEKEND 1 HOUR £1.70
WEEKEND 2 HOURS £2.90
WEEKEND 3 HOURS £4.10
WEEKEND 4 HOURS £5.60
WEEKEND 5 HOURS £7.00
WEEKEND 24 HOURS £20.00
B O U V E R I E P L A C E F O L K E S T O N E
I N C O M E A N A LY S I SWe set out below the property’s income as follows:
Gross Contracted Rent £2,363,014
Shortfalls £39,802
Marketing Contribution £40,000
Net Income £2,283,212
WAULT 6.2 years to expiry.
7.4% of the gross passing rent secured to National Car Parks Ltd for in excess of 23 years.
5% of the gross passing rent secured to the Asda car park for 23 years subject to annual RPI until 2042.
A S S E T M A N A G E M E N T O P P O R T U N I T I E SThere are numerous asset enhancement opportunities at Bouverie Place:
• Take advantage of strong retailer trading to re-gear lease.
• On lease expiry split the Choice unit to create 2 separate retail units on ground floor and a gym operator on the first floor.
• Potential residential use above the Asda.
• Target Sandgate Road retailers to create rental tension e.g. Boots, Wilko’s.
• Introduce further food and beverage to improve dwell times.
• Buy in or sell off ownership fronting Sandgate Road.
• The mixed use proposals for the town will further improve the customer dwell time and continue to consolidate Bouverie Place as the prime retail offer in the town centre.
The top five tenants at the shopping centre represent 47.1% of the entire net operating income.
T O P 5 T E N A N T S B Y I N C O M E
Primark £361,000
Next £233,968
NCP £176,250
New Look £155,000
TK Maxx £150,000
10.2%15.8%
6.6%6.8%
7.7%
I N C O M E P R O F I L E B Y C O V E N A N T
The scheme has 67.4% of the total net income secured to 5A1 Covenants.
94.8%
5.18%
National
Local/other
S O U T H E A S T S U P E R M A R K E T A N C H O R E D R E TA I L I N V E S T M E N T
S E R V I C E C H A R G EThe current annual service charge budget for the year ending 31 December 2019 is £975,982 which equates to £3.75 per sq ft.
E P CA full EPC survey has been conducted and can be found in the data room.
B U I L D I N G S U R V E Y S All the surveys are assignable and are available on the data room.
V ATThe property is registered for VAT and it is proposed that the sale will be treated as a ‘Transfer of a Going Concern’.
C A P I TA L A L L O W A N C E SAvailable upon request.
D ATA R O O MAccess available upon request.
S P VThe property can be purchased either as a property transaction or corporate purchase of the Luxembourg SPV. Further information available upon request.
P R O P O S A LOffers are invited for the freehold interest subject to contract and exclusive of VAT.
C O N TA C T D E TA I L SMARK BENNETTmbennett@klmretail.comD: +44 (0)20 7317 3711T: +44 (0)7795 010 198
ROB DALES rdales@klmretail.com D: +44 (0)20 7317 3705T: +44 (0)7740 535 395
ED GAMBARINIegambarini@klmretail.comD: +44 (0)20 7317 3713T: +44 (0)7825 689 037
MISREPRESENTATION ACT | COPYRIGHT | DISCLAIMER
KLM, for themselves and for the vendors of this property, whose agents they are, give notice that (1) the particulars and any further information communicated by any means to potential purchasers of the property described in the particulars, or their advisers, in connection with the possible sale of the property are provided solely for the purpose of assisting potential purchasers in decided whether they wish to proceed with further investigation of the property and do not constitute either the whole or any part of an invitation, offer or contract for sale of the property; (ii) all descriptions, dimensions, references to condition and necessary permissions for use and occupation and other details are given in good faith and are believed to be correct as at the date of the particulars (or the date of the relevant information if earlier). However, potential purchasers are not entitled to rely on them as statements or representations of fact but should satisfy themselves by searches, enquiries, surveys and inspections or otherwise with regard to the accuracy of such details. No responsibility or liability is or will be accepted by KLM, the vendor(s) of the property or any of their respective subsidiaries, affiliates, directors, officers, representatives, employees, advisors, or agents for any loss or damage suffered by any party, resulting from reliance on the particulars or any other information communicated by any means to that party, or its advisers, in connection with the possible sale of the property. No person in the employment of KLM or the vendor(s) has authority to make or give any representation or warranty, express or implied, in relation to the property. References to KLM include any joint agents acting with KLM. May 2019. Designed and produced by Creativeworld. Tel 01282 858200.
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