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![]() Protected: Retail/Leisure Investment in Affluent Town
LocationThe Cathedral city of Chester is one of the premier retailing destinations within the UK and is a popular tourist centre. The city is the administrative centre of Cheshire and is situated in the north west of England approximately 15.4 miles (25 km) south of Liverpool, 11.1 miles (18 km) east of Wrexham and 33 miles (54 km) south west of Manchester. Chester has a good transport infrastructure. The A55, to the east of Chester city centre, connects in a northerly direction to Junction 11 of the M53 Motorway. This leads to Liverpool in a north westerly direction and also to Junction 15 of the M56 Motorway which leads to the M6 Motorway and Manchester in a north easterly direction. The A55 also provides access to north Wales to the west and the A483 provides access to Wrexham and Shrewsbury to the south. Rail links are also strong with direct services to Liverpool (42 mins), Manchester (1h 4 mins) and London Euston (2h 4 mins). Chester is within close proximity to two international airports in Manchester International Airport and Liverpool John Lennon Airport. Both airports provide domestic and international flights. The city’s population is forecast to grow at a higher rate than the UK average over the period up to 2026. The city has an affluent population with an above average representation in the A, B and C1 social groups. The level of car ownership within Chester is also far above the national average with a high amount of 2 car households. (Source: Promis). The city is one of the most attractive central shopping areas in the UK, with a primary retail catchment of 810,000 people which extends to 1.3 million people within a 30-minute drivetime. The heart of the city centre is located within the Roman Walls and is well known for the historic, two storey “Rows” buildings. The central shopping area has a mix of national and independent retailers and leisure businesses. There is an estimated 1.4 million sq ft of retail accommodation in the city centre and Cheser is ranked 38th in the UK on this measure. Further investment is being injected into this historic city centre with the redevelopment of Chester Northgate with Cheshire West and Chester Council investing £70 million into the scheme. The development, opened in the summer of 2022 and has built on the success of Storyhouse and complements the existing businesses in the city centre. Further developments are planned for this scheme including a new six-screen cinema. The old library frontage has been transformed into a new arcade and provides a stunning arched entrance into the development, which is also accessible from Hunter Street and Princess Street. The scheme provides new public square for the city, linking the new market hall, Storyhouse and the Town Hall. (source: www.chesternorthgate.com) Chester is also an important tourist destination, with over 14 million people visiting each year and spending an estimated £2.12 billion in the city and its surrounding area annually. Key attractions include the Cathedral, the Zoo, the “Row-level” shopping and Chester “Roodee” Racecourse which is recognised as the world’s oldest operational racecourse. (Source: chester.westcheshiregrowth.co.uk) The city is also home to The University of Chester, established in 1839, is one of the oldest higher education institutions in the country. The University has some 19,000 students with five campuses in and around Chester. The city’s cultural heritage, excellent communications, and significant retail and leisure offer has also attracted numerous financial and business services to the area. Businesses based in and around Chester include Bank of America, DTCC, B&M Retail and Bristol-Myers Squibb. Summary
SituationThe property occupies a highly prominent position on Bridge Street and is a self-contained street facing element of the Grosvenor Shopping Centre. The entrance to the shopping centre is directly adjacent to the property which is on the lower level of the ‘two level’ shopping landscape of Bridge Street. The Grosvenor Shopping Centre is the dominant centre in Chester and comprises approximately 250,000 sq ft of retailing space. The centre is occupied by TK Maxx, Sports Direct, Costa, HMV, Jigsaw, Gieves & Hawkes, Vodafone and has a car park with 410 spaces. Other businesses in the immediate vicinity include Cote Brasserie, Carluccio’s, Leonidas, Slug & Lettuce, Five Guys, Caffe Nero, Nando’s, Oliver Bonas, JoJo Maman Bebe, French Connection and Moda in Pelle. This makes the vicinity highly attractive to leisure business as well as high end retailers. DescriptionThe property comprises a double fronted retail/leisure property arranged over ground floor level with outside seating and operates as a high-end coffee shop and barista school. There is a sales counter to the front with seating to the front, middle and rear. The barista school is located to the middle of the property. There is a kitchen, ancillary accommodation and private areas towards the rear. The property is Grade II listed so there is no empty business rates liability. AccommodationThe property has been measured by BKR Floor plans and provides the following net initial floor areas:
A measured survey and set of floor plans are available to download. This will be assigned to a purchaser at a cost of £695 + VAT. TenureVirtual Freehold. A new 999 year long leasehold, from completion of this transaction at a peppercorn rent. TenancyThe property is let to 200 Degrees Coffee Shops Ltd (t/a 200 Degrees° Coffee) on a full repairing and insuring lease for a term of 10 years, from 24th February 2023, expiring 23rd February 2033. The lease is subject to a tenant only break option on 24th February 2028, subject to 6 month’s written notice. Therefore there are 9.5 years unexpired and 4.5 years to the break clause. The passing rent is £60,000 per annum, rising to £62,500 from 24th February 2025 and rising again to £65,000 from 24th February 2026. There is an upwards only open market value rent review effective 24th February 2028. The tenant benefits from a rent-free period which will expire on 24th August 2024. The vendor will top up the rent by way of an adjustment to the completion sum so that a purchaser will effectively receive £60,000 per annum from completion. The passing rent equates to a Zone A rate of £49 per square foot. The property was previously let to Patisserie Valerie who were paying a rent of £75,000 per annum. Service ChargeThe property forms part of The Grosvenor Shopping Centre for which it has a share of communal charges. The budget for 2023 is £13,542. The service charge is fully recoverable from the tenant. Covenant200 Degrees Coffee Shops Ltd (Co. No. 08902756) has reported the following figures:
200 Degrees° Coffee is a coffee shop chain and barista school trading from 20 coffee shop locations and 7 barista schools locations across the United Kingdom. In addition to the physical store business, 200 Degrees° Coffee operate an online shop selling coffee beans, coffee pods, coffee machines, home brew equipment and merchandise. The company has grown sustainably over last 10 years to a successful and profitable business. For further information visit www.200degs.com. VATThe property has been registered for VAT and it is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC) so that VAT will not be payable on the purchase price. ProposalWe are instructed to seek offers of £715,000 (Seven Hundred and Fifty Thousand Pounds), subject to contract, reflecting a Net Initial Yield of 8%, and a guaranteed Reversionary Yield of 8.3% from February 2025 and 8.63% from February 2026, assuming standard purchaser’s costs of 5.33%. Please note that a purchaser will be re-charged the costs of the measured survey (£695 + VAT), the searches (£xxx) which are provided in the data room and a transaction fee of 1% + VAT. Investment Considerations
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