PRIME CITY CENTRE RETAIL INVESTMENT

PRIME CITY CENTRE RETAIL INVESTMENT Major Asset Management Upside Potential TESCO 15 PARKER STREET LIVERPOOL INVESTMENT SUMMARY LOCATION Central Bu...
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PRIME CITY CENTRE RETAIL INVESTMENT Major Asset Management Upside Potential TESCO 15 PARKER STREET LIVERPOOL

INVESTMENT SUMMARY LOCATION

Central Business District; and Liverpool ONE, one of

Liverpool is the commercial and administrative capital

Europe’s leading retail and leisure destinations.

of Merseyside and the fifth largest city in England, with over 1.5 million people living within 30 minutes’ drive of

DESCRIPTION

the city centre and 5 million within a one hour drive. The

15 Parker Street comprises an imposing former

city is located approximately 56 km (35 miles) west of

department store arranged over basement, ground and

Manchester; 157 km (98 miles) north west of Birmingham

seven upper floors and provides one of the largest,

and 349 km (218 miles) north west of London.

best configured units in the city centre, extending to 12,539.20 sq. m (134,972 sq. ft.) in total. The property

ECONOMY

is arranged to provide a ground floor and basement

Liverpool is the second largest city in the North West of

retail unit occupied by Tesco Metro; a first and second

England, the country’s largest economic region outside

floor retail unit with escalator access occupied by Sports

London and the South East, with the Merseyside

Direct; with the remaining 66,192 sq. ft. of upper floor

economy alone worth over £20 billion and home to

accommodation unoccupied.

252,000 businesses. In addition, Liverpool and the surrounding region is the number one recipient of foreign

TENURE

direct investment in the UK, outside of London and the

Virtual Freehold – 999 years from 1st January 1924 at a

South East, contributing to an economic renaissance

fixed, peppercorn rent.

over the past 15 years which has returned the city to prosperity and provided a strong base for future growth.

Liverpool is also one of the most popular retail and tourism destinations in the UK, with a shopping population of over 680,000 and a tourism industry which is the 5th largest in the UK, contributing an estimated £3.8 billion to the local economy each year and bringing both economic and reputational advantages to the City Region.

SITUATION 15 Parker Street occupies an extremely prominent corner position in the heart of the city centre, positioned at the junction of pedestrianised Parker Street and Houghton Street, directly opposite both Clayton Square and St John’s Shopping Centres and within 40m of Church Street, Liverpool’s prime retail pitch. In addition, the property occupies an excellent strategic position between Liverpool Lime Street rail station; the city’s

TENANCY

VAT

The entire property is let on an overiding lease to

The above property has been elected for VAT and it is

Tesco Stores Ltd by way of 25 year FRI lease from 17th

anticipated that the sale will be structured as a Transfer of

November 1993, with an unexpired term of over 3 years.

a Going Concern (TOGC).

PASSING RENT

PROPOSAL

The property currently produces a total net rental income

We are seeking offers in excessive of £13,840,000

of £1,463,700 per annum.

(Thirteen Million, Eight Hundred and Forty Thousand Pounds). An acquisition at this level will

MAJOR ASSET MANAGEMENT POTENTIAL

provide a purchaser with an attractive net initial yield of

On lease expiry, this substantial property has the

10%, after deduction of purchaser’s costs at 5.75%, or a

potential to be redeveloped to provide prime shop units

capital value of only £102 psf.

at ground and first floor levels, whilst unlocking the potential of the upper floors for alternative uses such as private residential; hotel; leisure; office and student accommodation

LIVERPOOL Liverpool is the commercial and administrative capital

terminal, capable of handling 95% of the world’s

of Merseyside serving an urban area population of

container vessels. Over the next decade Liverpool will

approximately 470,000, with over 1.5 million people living

deliver some of the UK’s largest and most ambitious

within 30 minutes’ drive of the city centre and 5 million

development and infrastructure schemes including Pall

within a one hour drive. The city is located approximately

Mall (a £90m “Gateway” project); New Royal Liverpool

56 km (35 miles) west of Manchester; 157 km (98 miles)

University Hospital; Alder Hey Children’s Hospital and

north west of Birmingham and 349 km (218 miles) north

Liverpool University’s Bio Innovation Campus.

west of London. In addition to the port and these future regeneration Liverpool is the sixth largest city in the United Kingdom

projects, the wider Liverpool economy has also

and the second largest in the North West, the country’s

undergone one of the most remarkable transformations

largest economic region outside London and the South

of any European city over the past decade. Over £5

East. Historically, Liverpool’s economy was built on its

billion of inward investment has been delivered through

port, which at one stage was the largest international port

public and private partnership, providing a much wider

in the world. The Port continues to be a significant driver

and sustainable base worth more than £20 billion in

behind the city’s economy with one of the most ambitious

total and home to 252,000 businesses. Liverpool and

regeneration projects in the UK, Liverpool Waters, set

the surrounding region is also the number one recipient

to extend over 60 hectares of historic dockland to

of foreign investment in the UK after London and the

deliver over 1.3 million sq. m of mixed use space, the

South East, which has resulted in over 3,000 companies

creation of 15,000 new jobs within the site and a further

choosing the area as their base of operations.

22,000 jobs across the Liverpool region over the next 30 years. In addition, Liverpool2, a £300m project by

The city is the third largest wealth management centre

Peel Holdings, is due to complete later this year and

in the UK and home to a number of major financial

will provide the UK’s most central deep water container

institutions; public bodies and manufacturing and service

sector employers including:■■ Barclaycard

■■ Maersk (UK HQ)

■■ HM Revenue & Customs

■■ Sony

■■ Liverpool Victoria

■■ Ford

■■ Royal Sun Alliance

■■ Jaguar Land Rover

■■ Deutsche Bank

■■ Unilever

■■ NYK (UK HQ)

■■ Eli Lily

Liverpool is also a former European Capital of Culture and benefits from a substantial tourism, sporting and cultural economy. Key attractions include Liverpool and Everton football clubs; the Grade II Listed Albert Dock; the Three Graces (UNESCO World Heritage Site); Echo Arena; Royal Liverpool Philharmonic; The Grand National;

Tate Liverpool; Cavern Walks (birthplace of The Beatles) and the largest Anglican Cathedral in the world; all contributing an estimated £3.8 billion to the economy each year. The city is also home to four universities; The University of Liverpool; Liverpool John Moore’s University; Liverpool Hope University and Sir Paul McCartney’s Liverpool Institute of Performing Arts; producing around 18,000 graduates each year and an annual student population of approximately 50,000.

CLAYTON SQUARE SHOPPING CENTRE

ECHO ARENA & CONFERENCE CENTRE

MUSEUM OF LIVERPOOL

ALBERT DOCK LIVERPOOL ONE

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COMMUNICATIONS Road - Liverpool benefits from an excellent and highly developed transport infrastructure, being served by the M62, M58 and M57 motorways, which provide easy access to the M6, approximately 19 km (12 miles) to the east and the national motorway network beyond. In addition, the Mersey Tunnels provide access to Junction 1 of the M53, approximately 5.6km (3.5 miles) to the west of the city centre, which offers Wirral, Chester and North Wales based residents a motorway link into Liverpool City Centre.

Rail - Liverpool Lime Street Station provides a regular, daily service to London Euston (fastest journey time of 2 hours 4 minutes) and Manchester (32 minutes). In addition, the Merseyrail Loop system connects Liverpool to the Merseyside suburbs, the Wirral and Chester.

Air - Liverpool John Lennon Airport is located 9 km (5.5 miles) south east of the property and is one of the UK’s and Europe’s fastest growing regional airports with 5.3 million passengers annually. The airport offers 10 daily flights to London Heathrow with regular daily flights to Paris (8 flights per day); Amsterdam (10); New York (6) and Toronto (1); in addition to budget flights to a variety of European destinations. Manchester Airport is also 57 km (36 miles) to the east of the city and is the UK’s third largest airport.

Sea - Mersey Ferries operate regular cross river services 7 days a week between Pier Head and Seacombe (Wirral) with a journey time of 10 minutes. P&O and Norfolkline Irish Ferries also offer daily services to Dublin; Belfast and the Isle of Man. In addition, Liverpool Cruise Terminal opened in 2007 and regular lines to dock include Cunard; Celebrity and Princes with over 80,000 passengers visiting the city each year. The Port of Liverpool is also the Global Logistics hub for Northern UK and Ireland and is the largest west coast container port, offering air freight opportunities through Liverpool John Lennon Airport.

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RETAILING IN LIVERPOOL Liverpool city centre is one of the strongest retailing centres in the UK and ranks 2nd of the top 200 Promis retailing centres in terms of retail provision, providing approximately 2.6 million sq ft of city centre retail floor space.

Major anchor store retailers represented in Liverpool include Marks & Spencer; John Lewis; Debenhams; Bhs and Primark, together with all of the country’s leading national multiples, including Boots; Next; Top Man/ Topshop; JD Sports; River Island; TK Maxx and H&M. In addition, the city has an extremely strong high quality fashion offer, including Harvey Nichols; Michael Kors; Armani Exchange; All Saints; Hugo Boss; Hollister; Jack Wills; Diesel; Kurt Geiger; Cath Kidston; Zara; Reiss; Superdry and Nike.

Mass market retailing in Liverpool is focused around pedestrianised Church Street and Lord Street, together with St John’s Shopping Centre and Clayton Square Shopping Centre, all of which immediately surround 15 Parker Street generating a significant amount of footfall past the property. The junction of Parker Street and Church Street is within 40m of the property and Church Street, together with its western extension Lord Street, provides Liverpool’s prime high street pitch. Major anchors on Church Street and Lord Street include Marks & Spencer; TK Maxx; Primark; Top Man/Top Shop; Next; H&M; River Island and Bhs.

St Johns Shopping Centre is located immediately to the north of 15 Parker Street and comprises the largest covered scheme in the city centre, extending over two levels to provide 541,000 sq. ft. in 149 units anchored by JD Sports; Aldi; 99p Stores; Wilkinson; Poundland; Home Bargains and St John’s Market, together with a 590 space car park.

Clayton Square Shopping Centre is also located immediately opposite the property and comprises a recently refurbished, two level, covered scheme extending to 130,000 sq. ft. in 20 units anchored by a Boots (recently extended); Clas Ohlson; Peacocks; Maplin and Poundworld.

LIVERPOOL ONE Arguably the single greatest example of the renaissance of Liverpool and the city centre is Grosvenor’s Liverpool ONE, a retail led, mixed use scheme completed in 2008 and located within 100m of the property. Liverpool ONE is Europe’s largest open shopping destination and extends over 42 acres of the city centre, providing 1.65 million sq. ft. of retail space; 230,000 sq. ft. of leisure space and over 580 residential apartments. The scheme is anchored by a flagship John Lewis (top 5 performing in UK) and Debenhams department stores together with 170 high street names including Top Man/ Top Shop (largest in Europe outside of London); Zara (27,000 sq. ft.); Beauty Bazaar Harvey Nichols; Hollister; Lego; Boux Avenue; Adidas; Superdry; Urban Outfitters; Apple and Samsung, with 90% of new entrants in the last two years debuting. Leisure operators within the scheme include a 14 screen Odeon Cinema (best performing in the country outside of London); Byron; Jamie’s Italian; Cote; Wagamama and TGI Friday’s with average catering spend 30% higher than in a typical city centre or regional mall.

Rather than acting independently as a stand alone destination, Liverpool ONE is comprised of 36 individual buildings that fully integrate with the rest of the city centre on a 24/7 basis. The profile of Liverpool city centre and its standing in the national retail hierarchy has therefore been significantly enhanced since 2008, as evidenced by the total catchment population having grown by 75%; annual footfall by 45%; and Liverpool’s share of consumer spend in the North West by 58% over the same period (Source: Javelin Group).

LIVERPOOL ONE

ALBERT DOCK

ST GEORGE’S HALL

LIME STREET STATION

ST JOHN’S SHOPPING CENTRE & BEACON

ADELPHI HOTEL PRI ME CHU RCH STR EET

CLAYTON SQUARE SHOPPING CENTRE

CENTRAL STATION

SITUATION 15 Parker Street is a substantial block of property with frontages to pedestrianised Parker Street and Houghton Street. The property is advantageously positioned immediately opposite the entrances to the largest covered schemes in the city centre, St John’s and Clayton Square Shopping Centres; and within 40m of Church Street, Liverpool’s prime retailing pitch. National retailers in the immediate vicinity include TK Maxx; Superdrug; Clas Ohlson Boots; Poundland and Costa.

The property also occupies an excellent strategic position between Liverpool Lime Street rail station to the north east; Liverpool Central Station to the south east; Liverpool’s Central Business District to the west; and Liverpool ONE to the south west. 15 Parker Street therefore enjoys some of the strongest shopper footfall in the city centre.

DESCRIPTION 15 Parker Street comprises an imposing former

The property is arranged to provide a ground floor and

department store, arranged over basement, ground

basement retail unit occupied by Tesco Metro; a self-

and seven upper floors to provide one of the largest,

contained first and second floor retail unit with escalator

best configured units in the city centre. The property

access from Parker Street occupied by Sports Direct;

was constructed in the 1920s and is of steel frame

with the remaining upper floors unused.

construction with brick work walls and Portland stone cladding, extending to 12,539.20 sq. m (134,972 sq. ft.) in total. The property occupies a highly visible corner position and, together with 17 Parker Street (Superdrug), forms an island site bounded by Parker Street; Houghton Street; Houghton Lane; Tyrer Street and Leigh Street.

ACCOMMODATION The property provides the following approximate gross internal floor areas:Description

Tenant (Occupier)

SQ. M.

Sq. Ft.

Basement Ancillary

Tesco (Tesco Metro)

1,553.60

16,723

Ground Floor Sales/Storage

Tesco (Tesco Metro)

1,664.81

17,920

First Floor Sales/Storage

Tesco (Sports Direct)

1,581.38

17,022

Second Floor Sales/Storage

Tesco (Sports Direct)

1,590.02

17,115

Third Floor Ancillary

Tesco (Unused)

1,584.54

17,056

Fourth Floor Ancillary

Tesco (Unused)

1,555.18

16,740

Fifth Floor Ancillary

Tesco (Unused)

1,572.46

16,926

Sixth Floor Ancillary

Tesco (Unused)

1,343.37

14,460

Seventh Floor Ancillary

Tesco (Unused)

93.83

1,010

TOTAL

12,539.20

134,972

TENANCIES AND RENTAL INCOME The entire property is let Tesco Stores Ltd by way of 25 year FRI lease from 17th November 1993, with an unexpired term of over 3 years. Part of the first floor together with the first and second floor has been sublet to Sports Direct. Further information is available on request. The property currently produces a total net rental income of £1,463,700 per annum, which equates to a low rate of approximately £10.84 psf on an overall basis.

TESCO STORES LTD Tesco is the third largest retailer in the world and the UK’s dominant supermarket operator, with a market share estimated to be in excess of 30%. The company opened its first store in 1924 and now trades from over 3,100 stores across the UK, employing over 310,000 people.

For the year ending February 2013, Tesco Stores Limited reported a sales turnover of £42,662,000,000; a profit before tax of £921,000,000; and a tangible Net Worth of £3,113,000,000. In addition, over 65% of the wider Tesco Group sales and profits are generated by the UK business. The company has the strongest possible Dun & Bradstreet rating of 5A1, indicating a financial strength of £35+ million and an overall condition, which is Strong (Minimal risk of business failure).

MAJOR ASSET MANAGEMENT OPPORTUNITY

Goods in 16 m² 167.7 SF

Plant

30 m² 319.4 SF Existing Lift Lift

Existing Lift Lift

On lease expiry, there is an opportunity to regain full or partial vacant possession of the property for redevelopment to deliver the reconfigured layout that maximises the full potential of the building. Plant

10 m² 110.8 SF

Subject to planning, the property has the potential to

RU 01

633 m² 6817.6 SF

deliver a variety of ground floor retail split options to target retailers seeking good quality, well-configured space in one of the strongest retail pitches in the city.

The first and second floors are already accessed

Existing Lift Lift

separately via an escalator fronting Parker Street and traded by Sports Direct. These floors would also suit

Existing core to first 103 m² 1105.1 SF

leisure uses such as a Food Court or bar/restaurants.

The upper five floors, which provide approximately 66,192 sq. ft. of unused space, enjoy excellent natural

Ground Floor Retail Option A 1

Ground Floor Retail Option A 1 : 100

light and have a uniform configuration. We believe that

Store

23 m² 252.5 SF

Common Room

they would suit a variety of alternative uses, including

91 m² 975.2 SF

Existing Lift

hotel; leisure; student residential; office and private residential.

Various indicative redevelopment/reconfiguration layouts are set out below to illustrate the full potential of this asset

Room

R

146 m² 1575.7 SF

and floor plans are available on request.

1 15

Potential Courtyard Common Room

176 m² 1892.2 SF

102 m² 1102.9 SF

Existing Lift

Suites

356 m² 3831.6 SF

Upper Floor Student Residential/ Hotel 1

Upper Floor Student Residential/ Hotel 1 : 100

Goods in

Plant

Potential Lift

16 m² 167.7 SF

30 m² 319.4 SF

Potential Lift

Existing Lift

Existing Lift

Potential Lift

Potential Lift

Existing core to upper floors

Existing core to upper floors 81 m² 866.9 SF

81 m² 866.9 SF

RU 02

128 m² 1372.9 SF

RU 03

82 m² 883.2 SF

Plant

10 m² 110.8 SF

RU 03

70 m² 757.8 SF

RU 02

RU 01

633 m² 6817.6 SF

315 m² 3388.8 SF

RU 04

147 m² 1579.3 SF

RU 04

146 m² 1568.3 SF

Existing Lift

Existing core to first

RU 05

179 m² 1923.4 SF

103 m² 1105.1 SF

Ground Floor Retail Option B Ground Floor Retail Option B

1

1 : 100

Potential Lift

Potential Lift

WCs

91 m² 975.2 SF

Existing Core Potential Lift

43 m² 467.8 SF

Existing Core Existing Lift

Room

146 m² 575.7 SF

Potential Artrium

Office

1214 m² 13062.2 SF

Existing Lift

Upper Floor Office Upper Floor Office

1

1 : 100

Potential Lift

43 m² 467.8 SF

TENURE

PROPOSAL

The property is held by way of a 999 year long lease

We are seeking offers in excessive of £13,840,000

from the Lord Mayor Alderman and Citizens of the City of

(Thirteen Million, Eight Hundred and Forty

Liverpool from 1st January 1924 at a fixed, peppercorn

Thousand Pounds). An acquisition at this level will

rent.

provide a purchaser with a very attractive net initial yield of 10%, after deduction of purchaser’s costs at 5.75%,

PLANNING The property lies within the central retail core and currently has planning consent for A1 A2 and A3 use.

VAT The property has been elected for VAT and it is anticipated that the sale be structured as a Transfer of a Going Concern (TOGC).

EPC Copies of the Energy Performance Certificates for the property are available upon request.

or a capital value of only £102 psf.

FURTHER INFORMATION For further information please contact the joint agents:-

R E A L E S TA T E A D V I S O R S

Paul Jones Jonathan Phillips Jonathan Mills Metis Real Estate Advisors 53 King Street,Manchester M2 4LQ 0161 359 4306 [email protected] [email protected] [email protected]

James Harrocks Ben Roberts Lambert Smith Hampton 6th Floor, 3 Hardman Street Manchester M3 3 HF 0161 228 6411 [email protected] [email protected] MISREPRESENTATION CLAUSE Metis Real Estate Advisors and Lambert Smith Hampton for themselves and for the vendors or lessors of this property whose agents they are, give notice that (i) these particulars are produced in good faith, are set out as a general guide only and do not constitute any part of an offer or contract; (ii) they are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact but must satisfy themselves as to the correctness of each of them; (iii) no person in the employment of Metis Real Estate Advisors or Lambert Smith Hampton has any authority to make or give any representation or warranty in relation to this property. Quest Design October 2015