PRIME RETAIL INVESTMENT OPPORTUNITY

HOUSE OF FRASER 226-234 HIGH STREET LINCOLN

INVESTMENT SUMMARY nn The historic Cathedral City of Lincoln is the principal administrative centre for the county of Lincolnshire.

nn Total current passing rent of £520,089 per annum (equating to £6.61 psf).

nn The entire property has the security of income from both House of Fraser Limited and House of Fraser (Stores) Limited.

nn The property is situated in a prime position within the pedestrianised area of Lincoln High Street.

nn Unexpired lease term of 25.3 years.

nn Freehold.

nn Upwards only, five yearly rent reviews to open market value, with the next review on 30th July 2014.

nn We are instructed to seek offers in excess of £8,200,000 (Eight Million, Two Hundred Thousand Pounds) which reflects a net initial yield of 6.00% after normal acquisition costs of 5.8%.

nn Retailers in the immediate vicinity include M&S, Primark, River Island, BHS, Boots, Office and Dorothy Perkins.

Lincoln Castle

31

A156

Saxilby

30

A57

Chesterfield

Tuxford A1

29

Mansfield

Nettleham

LINCOLN

Spilsby Woodhall Spa

Waddington

A46

Navenby

Newark-on-Trent

DERBY

Lincoln University

A15

A17

26

A52

SKEGNESS

Coningsby

Ruskington

Hucknall

A52

Sleaford

NOTTINGHAM

A17

Boston

ROPE W ALK

Bottesford

West Bridgford

GRANTHAM

25

A52

Donington

A607

Colsterworth

M1

Loughborough

23

A1

Spalding

Holbeach

KING’S LYNN

Bourne

Melton Mowbray A15

22

11

Oakham

M42

LEICESTER

Market Deeping

Stamford

A47

10

M69

9 8

2 1

BAILGATE STEEPHILL

A IT TR

THE

ATE CLASKETG

MINT

HAWKSHEAD

ER SILV

GUILDH ALL ST

PRIMARK CLARKS

ST

JOULES

SALKERG ATE OFFICE

CAFFE NERO GAME ANN SUMMERS WATERSTONES

Waterside Shopping Centre

DOROTHY PERKINS

A15

PAPERCHASE FAT FACE CORNH ILL

TOPSHOP BHS MONSOON RIVER ISLAND

RD

HUNGA TE

SLUG & LETTUCE

LN

NS T

LINCO LN

BEAUMONT FEE

The Mall

BOOTS

ST M ARY ’S S T Lincoln

A57

A46

24

A42

M&S

A16

Horncastle

Branston

North Hykeham

27

ZIZZI Brayford Pool

Wragby A158

A614

28

Louth Mablethorpe

A46

ODEON

ASK

North Somercotes

A15

Retford

Worksop

MINT ST

WAGAMAMA

Market Rasen

34

M1

A16

A57

AY D W

SHEFFIELD

Lincolnshire Wolds

TI O

GRAN THAM ST

BROADGATE

Gainsborough

1 32

A46

RA

S

MELVILLE ST

Caistor Kirton in Lindsey

3

ROTHERHAM A1(M) 33

BRA YFO RD WH ARF N

Brigg

4

BLACKS PREZZO

GRIMSBY

M180

3

POUNDLAND

21

Uppingham

PETERBOROUGH

Wisbech

SITUATION The property is situated on the corner of Mint Street and the pedestrianised section of High Street, which forms the northern end of the city’s prime retailing pitch. House of Fraser is one of the anchors on the High Street and other national retailers in the immediate vicinity include Marks & Spencer, BHS, Primark, Blacks, Joules, Game, Office, Waterstones, Dorothy Perkins and Boots the Chemist.

Swaffham Downham Market

PL

Lincoln University

PIZZA EXPRESS

HIGH ST

36

34 34

2

SCUNTHORPE 5

O

CARLUCCIOS

AN D

W I G F OR

36

Peak District

M180

Hatfield

4 37 DONCASTER

M1 35

M181

Thorne

5 1

RP

HIG H ST

Barnsley

37

NANDOS

M18

38

MOTHERBY LN

WH ARF E

A19

VICTO RIA ST MOTH ERBY H ILL

THE AVE NUE

A15

BRA YFO RD

34

Wakefield

40

B13 08

LINCOLN

E

Humberside International and East Midlands airportsHull are easily accessible being 25 and 48 miles 37 30 41 awayM62 respectively and provide direct flights to many European and continental destinations. 32 31 36 33

25

NE WL

38

M62

PATISSERIE VALERIE

TESCO EXPRESS

CO

27

43

ST

26

47

WE

Lincoln Central Railway Station is operated by East Midlands Trains who provide services along with Northern Rail. Lincoln Central provides regular services to London King’s Cross with a fastest journey time of 1 hour 50 minutes. There are also direct services to Leicester (1 hour 44 minutes), Sheffield (1 hour 20 minutes) and Nottingham (52 minutes).

P AR ADE

LL HI

The town has excellent road communications, being located in close proximity to both the A1 (M) and the M1 motorway. Both of these major arterial routes are easily accessed via the A57 and the A46 which run directly into Lincoln. The A46, A57 and A15 also provide strong communication links to neighbouring towns of Scunthorpe, Grimsby and Newark‑on‑Trent.

1

VIC TO RIA TR

RD

The historic cathedral city of Lincoln is the principal urban centre in the county of Lincolnshire. Lincoln is located 120 miles (192 km) to the north of London, 32 miles (51 km) to the north east of Nottingham, and 48 miles (77 km) to the north of Peterborough.

DRURY LN

TR

G RIN SP

H UG RO O RB YA

LOCATION

STO N GREEN

AL EX AN DR A

Lincoln Cathedral

CATHEDRAL ST

MONKS RD

RETAILING IN LINCOLN Lincoln is geographically removed from any significant competing centres, and is therefore by far the dominant retail centre for its catchment population. The estimated shopping population of Lincoln is 251,000, ranking the city 41st of the PROMIS centres. The city’s population is forecast to increase well ahead of the national average over the next 5 years. Total retail floorspace in Lincoln is estimated at 1.51m sq ft (31st of Promis 200), which is comparable to the Promis regional centre average. Lincoln’s pedestrianised High Street is a linear thoroughfare providing an attractive and bustling retail offer. The prime retail pitch runs from House of Fraser to Cornhill. The High Street benefits from a high concentration of major UK multiples including Marks & Spencer, Primark, River Island, BHS, Boots, Office, Paperchase, TopShop, Fat Face and Dorothy Perkins. Lincoln’s High Street offer is further complimented by the Waterside Shopping Centre and an abundance of restaurants, bars and cafés. Lincoln enjoys a strong level of retailer demand, with Promis reporting 23 active requirements in October 2013, against a national average of 14.

CATCHMENT & DEMOGRAPHICS Lincoln is an affluent regional, administrative and commercial centre. The city’s population currently stands at 93,500, with an extensive county population of approximately 713,500 (Census 2011). The city’s population is further bolstered by the University of Lincoln, which is now ranked in the Top 50 of ‘The Guardian University Guide 2013’ and has a population of approximately 12,000 students. Lincoln, being a medieval cathedral city has a thriving tourism industry with over 200,000 tourists visiting the city annually. Source: Visit Britain Both the tourist industry and the University significantly enhance the city’s retail spend, creating a thriving retail and leisure economy.

Proposed H&M

Proposed Next

DESCRIPTION The property is a prestigious department store that benefits from a return frontage and access from both High Street and Mint Street. House of Fraser occupies the premises in its entirety trading on ground, first and second floors with ample ancillary space on the basement level. Internally, links between the three trading floors are good with, escalators, customer lifts and two ancillary staircases. This should offer flexibility to the landlord should they ever wish to reconfigure the space. The property has been measured by Plowman Craven in accordance with the RICS Code of Measuring Practice (6th Edition). Below are the gross internal areas taken from the report: Floor

Use

Basement

Ancillary

Sq M

Sq Ft

455

4,898

Ground

Retail

2,656.9

28,599

1st

Retail

2,221

23,906

2nd

Retail

1,788.6

19,252

3rd

Ancillary/Plant

183.3

1,973

7,304.8

78,628

Total

A copy of the Plowman Craven report is available from the data room on the Lewis Ellis website.

TENURE The property is held freehold.

TENANCY The entire property is let to House of Fraser Limited on a full repairing and insuring 40 year lease from 30th July 1999 expiring 29th July 2039 with 5 yearly upward only rent reviews to open market value. The current passing rent is £520,089 per annum equating to £6.61 psf on an overall basis. The next rent review will be on 30th July 2014. The entire property is sublet to House of Fraser (Stores) Limited for the full term less 7 days and thus benefits from the security of both House of Fraser Limited and House of Fraser (Stores) Limited.

COVENANT INFORMATION House of Fraser was established in Glasgow in 1849 and they currently trade from 62 locations throughout the UK and Ireland. The company currently has annual sales in excess of £1.3 billion and occupies approximately 5 million sq ft of retail floorspace. In January 2014 House of Fraser reported their best ever Christmas trading period to date and stated how they expect to report a further growth in full year earnings. House of Fraser Limited have a D&B rating of 1A2 and a tangible net worth of £1,000,000 representing a lower than average risk of business failure. The company recorded the following financial accounts over the past three years:

Tangible Net Worth Net Current Assets (Liabilities)

26 Jan 2013

28 Jan 2012

29 Jan 2011

£1,000,000

£1,000,000

(£9,000,000)

(£304,900,000)

(£304,900,000)

(£104,900,000)

House of Fraser (Stores) Limited have a D&B rating of 5A1 and a tangible net worth of £59,000,000 representing a minimum risk of business failure. The company reported the following financial accounts over the past three years: 26 Jan 2013

28 Jan 2012

29 Jan 2011

£680,500,000

£653,200,000

£617,900,000

Profit/(Loss) Before Taxes

£18,600,000

£11,500,000

£37,700,000

Tangible Net Worth

£59,000,000

£28,100,000

£73,200,000

(£39,500,000)

(£63,000,000)

(£78,100,000)

Sales Turnover

Net Current Assets (Liabilities)

INVESTMENT MARKET Evidence of recent department store acquisitions are as follows: Address

Status/ Date

Tenant

Unexpired Term Certain

Price

Net Initial Yield

Purchaser

44/66 Palmerston Road Southsea

Q1 2014

Debenhams

26

£13.8m

6.00%

Henderson

67-71 High St Worcester

Q3 2013

Debenhams

63

£8.9m

5.23%

Private Overseas

48-54 Commercial Road Bournemouth

Q3 2013

Primark

9.5

£12.75m

5.97%

Private

32-38 North Street & 40-44 Ship Street Brighton

Q3 2013

TK Maxx JD Sports Multiyork

AWULT 9.5

£11.6m

5.50%

LaSalle IM

1-15 Albert Street Nottingham

Q3 2013

Marks & Spencer

15

£21m

5.85%

Henderson

152-170 Terminus Road Eastbourne

Q2 2012

Debenhams

20

£11.88m

6.25%

LaSalle IM

Prime High Street retail unit yields in Lincoln are in the region of 4.50% NIY. This is evidenced by Teeside Pension Fund’s recent acquisition of 200-201 High Street (River Island) for £5.78m reflecting a net initial yield of 4.50%. Another notable off market deal was the acquisition of 203 High Street (Lloyds TSB) in Q4 2013 by a private investor for £1.71m equating to a net initial yield of 5.75%.

EPC The property has an EPC rating of 79 (Band D). A copy of the certificate is available on the Lewis Ellis website.

VAT The Property is VAT elected.

PROPOSAL We are instructed to seek offers in excess of £8,200,000 (Eight Million, Two Hundred Thousand Pounds) which reflects a net initial yield of 6.00% after acquisition costs of 5.8%.

FURTHER INFORMATION Should you require further information or wish to view the property please contact: Simon Lewis Tel: 020 7493 3330 Mob: 07831 527 960 Email: [email protected] Julian Gallagher Tel: 020 7493 3330 Mob: 07941 413 299 Email: [email protected] James Elkington Tel: 020 7493 3330 Mob: 07810 722 459 Email: [email protected]

Lewis Ellis LLP for themselves and for the vendors or nominees or lessors of this property whose agents they are give notice that: (1) the particulars are set out as a general outline only for the guidance of the intending purchasers or lessees, and do not constitute part of an offer or contract; (2) 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, but any intending purchasers or tenants should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them; (3) no person in the employment of Lewis Ellis LLP has any authority to make or give any representation or warranty whatever in relation to the property. Designed and Produced by Creativeworld. Tel: 01282 858200. March 2014.