Protected: High Yielding, Secure Bank Investment

Accommodation

The property has been measured by Lane & Frankham Ltd and provides the following Net Internal Areas:

A copy of the measured survey report is available to download.

Tenure

The property is held under a head lease from Plymouth City Council for a term of 125 years from 25th March 1991 (approximately 92 years unexpired) at a ground rent of 10% of rents received (£12,000 per annum). There is no head rent payable if the property is vacant.

Tenancy

The property is entirely let to Bank of Scotland PLC (t/a Halifax) on a full repairing and insuring lease for a term of 5 years from 13th January 2024, expiring on 12th January 2029.

The passing rent is £120,000 per annum. There is a period of half rent (£60,000 per annum) from and including 13th January 2024 to and including 12th January 2025. The vendor will ‘top-up’ the income by way of an appropriate adjustment on the completion sum in order that a purchaser does not suffer an income shortfall.

We understand the tenant has been in occupation since 2009 and entered into a lease renewal in 2024, demonstrating their desire to remain in the property. At lease renewal the rent was significantly rebased from £365,000 per annum under the previous lease. Hence, the rent is 67% below the previous rental level.

After deduction of the head rent, an investor will benefit from a net income of £108,000 per annum.

Part of the ground floor of 24 New George Street was previously underlet to EE Limited from 1st November 2017 to 9th January 2024, subject to a tenant break option on 1st November 2022. The break option was exercised and EE are no longer in occupation. 

Covenant

Bank of Scotland PLC (Co. No. SC327000) has reported the following figures:

The Bank of Scotland was established in 1695 and is the oldest bank in Scotland. The Banks’ main activities including management of savings, current banking accounts, credit accounts, insurance, loans and mortgages, investment, and retirement policies. The Bank enjoys a ranking in the five best banks in the United Kingdom and is a wholly owned subsidiary of the Lloyds Banking Group plc.

For more information please see: www.bankofscotland.co.uk.

VAT

The property has been registered for VAT. It is anticipated that the sale will be treated as a Transfer of Going Concern (TOGC), subject to the buyer satisfying the requirements of a TOGC set-out in the Special Conditions of Sale.

Proposal

We are instructed to seek a figure of £1,020,000 (One Million and Twenty Thousand Pounds), subject to contract, reflecting a net initial yield of 10.0%, assuming the purchasers’ costs of 5.77%.

Please note a purchaser will be re-charged the costs of the searches (£1,084.82) which are provided in the data room.

Please note a purchaser will be a charged a Transaction Fee of £10,000 + VAT.

Investment Considerations

1. City centre investment opportunity;

2. Let to the undoubted covenant of Bank of Scotland Plc;

3. New lease from January 2024;

4. Significantly rebased rent, 67% below previous rental level;

5. The tenant has been in occupation since 2009 and renewed their lease in 2024, demonstrating their desire to remain in the property;

6. The property is located in the heart of Plymouth’s prime retailing pitch;

7. Attractive lot size to an investor;

8. Attractive net initial yield.