Protected: Industrial / Warehouse Investment Opportunity offered on behalf of Joint Receivers

Accommodation

The property has been measured by BKR Floor Plans and provides the following Gross Internal floor areas:

A set of floor plans is available to download and the measured survey report will be re-addressed to a purchaser at a cost of £790 + VAT.

EPC

The property has an Energy Performance Certificate rating of C. The Certificate and Recommendation Report can be found in the data room.

Rates

The Rateable Value for the year 2024/2025 is £49,250 with rates payable being £24,575.75.

Site

By reference to the title plan, the property does not extend beyond the footprint of Unit 25.

Tenure

The property is held freehold (see title BM332053).Rights are granted to use the parking spaces and service yard in front of the property.

We understand that the tenant is planning to vacate the unit at the lease expiry.

Service Charge

The current service charge contributions for Unit 25 for the year to March 2025 is £5,835.17.  The budget along with recent demands can be found within the data room.

The current freeholder has not been paying the service charge for the contribution to the maintenance of the estate. However, the Receivers will settle this debt on completion of the sale. Current arrears (at 26th June) are £5,147; please see Statement of Account in the data room.

Tenancy

The property is let to Brandsafe Protection Limited at a current rent of £59,192 per annum (£7.97 per sq ft) from 20^th August 2021 until 1^st April 2025.  The lease is effectively full repairing and insuring, subject to a Schedule of Condition attached to the lease (available to view in the data room).

Rental Value & Vacant Possession Value

We are aware of the following recent letting evidence:

24-27 Alston Frive MK13 9HA
9,232 sq ft Let November 2023 to Jung Heinrich at £10.50 per sq ft

Erica Road, MK12 6HS
8,378 sq ft let Feb 2024 to Europcar Group at £9.72 per sq ft

4 Maryland Road MK15 8HF
5,847 sq ft let June 2023 to Howden Joinery Properties at £9.50 per sq ft

Burners Lane MK11 3HA
6,711 sq ft let March 2024 to Red Edge Concepts at £9.25 per sq ft.

28 Alston Drive MK13 9HA
6,601 sq ft let Feb 2024 to SS White Technologies at £9.00 per sq ft

We suggest that in an open market new letting for Unit 25 it is reasonable to expect a rent to be achieved of £9.50 per sq ft, giving rise to an anticipated rent of £70,100 per annum.

From our enquiries there is little evidence available at present of vacant possession sales but local agents’ opinions anticipate values of £150 to £170 per sq ft.

Covenants

Brandsafe Protection Limited reported for the year ending March 2023 a turnover of £9.774m, pre-tax profits of £1.153m and a balance sheet of £8.798m.

VAT

Whilst we are aware that VAT is collected on rents, showing the property to be VAT elected, the Joint Receivers do not yet have a copy of the Option to Tax and have applied to HMRC for confirmation. Therefore, whilst it is anticipated that the sale will be by way of a Transfer of a Going Concern (TOGC), note that the purchaser will be required to pay a sum in relation to a potential VAT liability on completion, held in escrow by the seller’s solicitor. This sum will be returned once HMRC have provided the confirmation that the property is VAT elected.

Proposal

We are instructed to seek offers in the region of £800,000 (Eight Hundred Thousand Pounds), subject to contract, reflecting a net initial yield of 7.01% assuming standard purchaser’s costs of 5.49%.

Based upon the provable estimated rental value of £70,100 per annum, a purchase at the asking price will show a reversionary net yield of 8.31%. 

A purchase at the asking price reflects an attractive capital value overall of £108 per sq ft / £1,167 per sq m.

Please note that a purchaser will be re-charged the costs of the measured survey (£790 + VAT) and searches (£974.64) which are provided in the data room. 

Investment Considerations

1. An opportunity to acquire an attractive industrial / warehouse investment

2. Attractive initial and reversionary yields;

3. Opportunity to add-value by establishing new rental level in 2025;

4. The asking price reflects a discount to the vacant possession value.

Disclaimer

Receivers Paul James Greenhalgh and James Liddiment by the powers given by the Mortgage and all other powers given by statute or otherwise who act as agents for the Company and without personal liability. Both are licenced by the Insolvency Practitioners Association and are bound by the Insolvency Code of Ethics.