the outlet centre for newcastle - cushwakesales.com quays... · the adjacent property of...

SAVE CLOSE

THE OUTLET CENTRE FOR NEWCASTLE

mailto:[email protected];[email protected]

2 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS

An established retail and leisure

destination…

SAVE CLOSE


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

SAVE CLOSE


FACTORY OUTLET RETAILING

A highly successful retailing format for customers, retailers and investors.


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

SAVE CLOSE

mailto:[email protected];[email protected];[email protected]


NEWCASTLE UPON TYNE

KEY DEVELOPMENT INITIATIVES

LONDON

A696

A69

A19

A1

A189

A19

NewcastleUpon Tyne

Stockton-on-Tees

Sunderland

Blyth

Durham

Chester-le-Street


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

SAVE CLOSE



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

SAVE CLOSE



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.

SAVE CLOSE


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.


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

SAVE CLOSE



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

SAVE CLOSE


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)


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.

SAVE CLOSE



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.

SAVE CLOSE


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


1

2

3

4

5

6

7

SAVE CLOSE



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


Sports wear

1

1

3

UNIT 13

Strong performer Introduce more Outdoor wear

6

UNIT 4/5


footwear

4

7

4

4 4

SAVE CLOSE


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.


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.

SAVE CLOSE


SAVE CLOSE


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]

SAVE CLOSE


the outlet centre for newcastle - cushwakesales.com quays... · the adjacent property of...

Documents