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![]() Protected: Iconic Retail Arcade in the Heart of Bournemouth
LocationBournemouth is a famous coastal town and is the principal commercial and retailing centre in the county of Dorset. The town is approximately 95 miles (153 km) south-west of London, 76 miles (122 km) south of Bristol and 32 miles (52 km) west of Southampton. The town benefits from excellent road communications with the A338 and A31 providing easy access to the M27 motorway, which links to the M3 and the wider national motorway network. Bournemouth railway station provides regular and direct trips to London Waterloo with the fastest journey time being 1 hour and 50 minutes. There are regular trips to London Paddington with one change and the journey time being 2 hours. Bournemouth international airport is 4 miles (6.4 km) north of the town centre and Southampton international airport is 33 miles (53 km) to the north-east. Retailing and DemographicsBournemouth benefits from a thriving tourism industry and is one of the leading holiday resorts in the UK attracting over 11.5 million tourists in the last year, bringing in over £500 million in tourism spend. The primary retail catchment area is home to over 514,000 residents with the population having an above average representation in the A, B and C1 social groups. The town’s population is forecast to grow at a higher rate than the UK average over the period up to 2026. The attractiveness of the retail core has been further enhanced by the development of a £50 million leisure scheme knows as BH2. This 120,000 sq ft regeneration scheme was developed by Legal & General and comprises a 10 screen Odeon cinema and 14 restaurants. Approximately £500 million has been invested into the town centre since 2015. This has contributed to making Bournemouth one of the UKs ‘21 vibrant digital clusters across the UK’. Bournemouth has been nicknamed ‘silicon beach’ given that it has the fourth highest concentration of digital and creative industries in the UK outside of London. Bournemouth University and Arts University Bournemouth together have a student population of 23,000. Major employers in Bournemouth include JP Morgan, Siemens, Nationwide, Whitbread, Tesco and Barclays to name a few. The town benefits from 7 miles of sandy beaches with some attractions including Bournemouth Pier, Museums and grade I listed churches. [Sources: www.dorset.live, www.bcpcouncil.gov.uk, www.ons.gov.uk, www.citypopulation.de]. Summary
Situation‘The Arcade’ is situated between Old Christchurch Road and Gervis Place within the centre of Bournemouth. The arcade is a popular destination for shoppers as well as being a convenient cut through route. Bournemouth Pier is approximately 350 metres from the property. Retailer located on Old Christchurch Street include Mc Donalds, Pandora, Greggs, EE, WH Smith and Costa. Retailers located on Gervis Place include Cote Brasserie, The Stable, Yobu, Franco Manca, JD Wetherspoon and the Real Greek. DescriptionThe property comprises an attractive Grade II listed Victorian Retail Arcade arranged into eleven retail units with ancillary accommodation. The property benefits from a glazed domed roof and includes coloured glass end panels and an original 19th century clock as well as Victorian tiled flooring. The following link will take you to the official website for The Arcade – www.bournemoutharcade.com/. AccommodationThe property provides currently total accommodation of 48,419 square feet / 4,498 square meters gross, 39,813 square feet / 3,698 square meters net. Please refer to the available tenancy schedule which provides a detailed breakdown of the units within The Arcade. Furthermore, a detailed schedule of accommodation and floor plans can be downloaded from the downloads section below. This will be assigned to a purchaser at a cost of £1,745 + VAT. PlanningPlanning permission has been obtained for the conversion to residential of the ancillary accommodation above units 2 to 7 and unit 23. This enables seven new residential units to be created. Application 7-2021-12534-P relates to the creation of five residential units, whilst application 7-2019-6315-AO provides for the formation of two residential units. https://planning.bournemouth.gov.uk/plandisp.aspx?recno=102967# https://planning.bournemouth.gov.uk/plandisp.aspx?recno=98810 In addition, an existing residential unit is positioned above unit 1, and a further unit has the potential to be created above unit 20 although planning does not currently exist. We suggest that the potential value to be created by residential conversion is in the order of £1.095m. Please refer to the tenancy schedule for further information. TenureFreehold. The arcade has three freehold ownerships. Firstly the majority of the property owned by the vendor, Silverlake Estates LLP; units 8-11 owned by Interceptor 3 Limited; and, units 12 & 13 owned by Mellowood Properties. In 1922, the arcade had 12 freehold owners. At that time, they entered into a deed to manage the communal parts. “The 1922 Committee” overseas the management of the communal parts of the arcade, appointing managers. Service ChargePlease refer to the tenancy schedule for details of the service charge and breakdown per tenancy. Schedule 1 charges relate to the costs incurred by the vendor in managing the units being sold. Schedule 2 charges relate to the maintenance of the common parts by The 1922 Committee. The current service charge budget is £16,250 for Schedule 1 items and £64,994 in respect of Schedule 2 items. Due to the void units, there is a current deficit of -£29,674 to the freeholder. TenancyIn accordance with the tenancy schedule, the property produces a current income of £537,906 per annum which after shortfalls amounts to a true net income of £508,232 per annum. Note that the income will drop in May 2024 when a new lease with Waterstones commences at the agreed level of £70,000; this renewal is in the process of being documented. We suggest that the estimated rental value of The Arcade is £537,929 per annum. The current arrears position is as follows: • Gembox Jewellers £49,959 It should be noted that the arrears from Gembox are the result of ill-health of the tenant. As a result, the current owner has taken no action but the individual is now recovered and planning to clear the arrears. Tenants Information
CovenantSpace NK Ltd (Co. No. 02773985), has reported the following figures:
For further information visit www.spacenk.com. The high profits in 2021 are because of an intercompany sale. Waterstones Booksellers Ltd (Co. No. 00610095), has reported the following figures:
For further information visit www.waterstones.com. Charles Fox (Jewellers) Ltd (Co. No. 00202014) has reported the following figures:
For further information visit www.charlesfoxjewellers.com. Richmond Classics Limited (Co. No. 02192148) has reported the following figures:
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 in the region of £5,350,000 (Five Million, Three Hundred and Fifty Thousand Pounds), for the freehold interest. A purchase at the asking price reflects a true net initial yield (after shortfalls) of 8.9% and a reversionary yield based upon the suggested rental value of 9.2%. with purchasers costs at 6.60%. Having regards to the potential value over £1m to be extracted by residential conversions as outlined above, we suggest a sensible allocation of the purchase price for this opportunity to be in the order of £300,000. This would allocate £5,050,000 of the purchase price for the retail arcade which reflects a net initial yield of 9.4% and a reversionary yield of 10.0%. Please note that a purchaser will be re-charged the costs of the measured survey (£1,745 + VAT), and the searches which are to be provided. Investment Considerations
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