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Please consider the environment before printing this Property |
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Prominent Residential Investment with Ground Floor Commercial
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for sale
Private Treaty
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£
635,000
Subject to contract
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Location
The Cathedral and University City of Bangor is located in North-West Wales, approximately 96 km (60 miles) west of Chester and 100 km (62 miles) north-west of Wrexham. The city is also within easy reach of Liverpool and Manchester.
The city benefits from good road communications, being served by the A5 and A55 which links with the M56 Motorway to the east. Bangor is also connected with to the national railway network with a fastest journey time to London Euston of 3 hours and 38 minutes.
Situated on the doorstep of the Snowdonia National Park and with beaches, areas of natural beauty and family attractions in close proximity Bangor is a popular tourist destination, particularly in the summer months.
Bangor University has over 10,000 students and contributes significantly to the local economy. It has been named Welsh University of the Year in the Daily Mail’s University Guide 2024 and was ranked 44 in the UK in The Times & The Sunday Times Good University Guide 2024.
Summary
- Prominent corner position in Bangor town centre
- Significant Government investment at the nearby Manai Shopping Centre with the development of a Health and Wellbeing Hub (£30m investment).
- 8 residential apartments
- Shop let to strong covenant, Sense (Total Funds £50.76m)
- Shop tenant has not exercised break option for October 2025, showing commitment to the unit
- Freehold
- £635,000, subject to contract
- 10.05% True Net Initial Yield
Situation
The property occupies a prominent corner position on Waterloo Street in the heart of the city centre. The Deiniol Shopping Centre is positioned to the rear, and the Menai Shopping Centre close to the east of the property along the High Street.
Nearby occupiers include Clarks, Santander, Pandora and The Works.
Town Centre Developments:
A major boost to Bangor is underway with a planned new Health and Wellbeing Hub. A further development in the town centre reflects increased optimism in the location’s growth prospects.
Description
The property comprises a high-quality residential development providing 8 studio apartments, all with their own bathrooms, above a retail unit. The residential area is self-contained with an entrance on Waterloo Street. It is of steel frame construction with brick infill walls, rendered elevations and a concrete roof overclad with felt.
The Menai Shopping Centre – New £30m Bangor Health Hub:
The Menai Shopping Centre forms the central retail location in Bangor. Totalling some 130,000 sq ft, occupiers include JD Sports, Hays Travel, Three, The Factory Shop, Superdrug and Burger King.
The Menai Shopping Centre was previously anchored by a Debenhams department store. The store is to become a significant health and wellbeing hub with some £30m of investment having been approved by the Betsi Cadwaladr University Health Board and Gwynedd Council. Plans have been submitted to the Health Board and Welsh Government for formal approval. Contracts have been exchanged to sell a long leasehold interest to the Health Board for the Hub and it is anticipated that completion will occur during 2025 once Welsh Government approval has been granted.
The development will provide a significant boost to Bangor city centre with an increase anticipated in footfall within the city centre as a result. It is anticipated that the new Health Hub will open 2025/2026. Please refer to press releases :
The sale of the former Debenhams unit includes passing the ownership of the town-centre multi-story car park to the Health Board.
Varcity Living Scheme:
Nearby at 290-294 High Street, Varcity Living Limited is undertaking a substantial redevelopment of the former Peacocks store to comprise commercial space on ground floor with residential accommodation on the upper floors. The project is part-funded by the UK Government through the UK Shared Prosperity Fund.
Accommodation
The property has been measured by BKR Floor Plans and provides the following floor areas:
| RETAIL UNIT | |||
| Net Frontage | 8.69 m | 28’6” | |
| Gross Frontage | 9.29 m | 30’6” | |
| Zone A | 48.49 sq m | 522 sq ft | |
| Zone B | 42.36 sq m | 456 sq ft | |
| Zone C | 26.10 sq m | 281 sq ft | |
| ITZA | 820 | ||
| Total Ground Floor Net Internal | 116.96 sq m | 1,259 sq ft | |
| Lower Ground Net Internal | 91.41 sq m | 984 sq ft | |
| Total Net Internal Area | 208.37 sq m | 2,243 sq ft |
| RESIDENTIAL UNITS | ||
| Apartment 1 | 24.62 | 265 |
| Apartment 2 | 22.85 | 246 |
| Apartment 3 | 25.36 | 273 |
| Apartment 4 | 25.27 | 272 |
| Apartment 5 | 24.62 | 265 |
| Apartment 6 | 22.85 | 246 |
| Apartment 7 | 25.36 | 273 |
| Apartment 8 | 24.25 | 261 |
| Total Gross Internal Area | 195.18 | 2,101 |
A set of floor plans and measurements is available to download; the measured survey report will be re-addressed to a purchaser at a cost of £495 + VAT.
Rateable Value
According to the Valuation Office website the rateable value for the retail unit is £20,250.
The business rates multiplier is 0.499.
Energy Performance Certificates (EPC’s)
Please find the EPCs within the data room. The EPCs for the property are as follows:
| Apartment 1 | D |
| Apartment 2 | C |
| Apartment 3 | C |
| Apartment 4 | D |
| Apartment 5 | C |
| Apartment 6 | C |
| Apartment 7 | C |
| Apartment 8 | D |
| Shop | C |
We understand that by installing new storage heaters, EPC ratings can be improved for apartments 1,4 and 8 at a cost of £1,279 per apartment.
Running Costs
There are various costs in operating the residential investment which are non-recoverable. Please refer to the “Burton House Budget” (available to download) which estimates the service charge cost to the landlord for 2024 is £6,025. This will increase slightly in 2025 to £6,214 as the management fee for the communal parts is due to increase from £1,311 to £1,500.
The current owners have appointed a managing agent in relation to residential accommodation. The current charge is 8.34% (+VAT) for the rent collected.
The residential tenants pay directly water/electricity costs. The apartments are heated by electric radiators; there is no gas supply.
Tenure
The interest being sold is freehold.
Tenancies
The residential apartments are let at rents of £550 per month; one apartment is let at £525 per month but is increasing in July also to £550 per month. Hence, the gross annual residential income for an investor will be £52,800 per annum.
The retail unit is let to Sense, The National Deafblind and Rubella Association on an effective full repairing and insuring lease from 19th October 2020 until 17th October 2027 at a current rent of £22,500 per annum. The lease provided for a break clause on 19th October 2025 subject to 6 months’ notice; the tenant did not exercise their break option.
Hence, the total gross income for an investor will be £75,300 per annum. After deduction of the non-recoverable costs, the net income is £69,086 per annum. Should a purchaser appoint a managing agent as opposed to self-manage the residential accommodation, the net income would be £67,764 per annum.
Residential Values
It is suggested that the residential apartments have a capital value in the order of £70,000 per unit, totalling £560,000 vacant possession.
Arrears
There are currently no arrears.
Covenant
The tenant, Sense, The National Deafblind and Rubella Association (registered charity number 289868) has reported the following figures;
| 31st March 2024 | 31st March 2023 | |
| Total Income | £94,976,000 | £86,527,000 |
| Net Increase in Funds | -£2,193,000 | £5,335,000 |
| Total Funds | £48,563,000 | £50,760,000 |
VAT
The property is elected for VAT. We anticipate the sale should be capable of being treated as a Transfer of a Going Concern (TOGC).
Capital Allowances
Note that the capital allowances will be retained by the vendor.
Proposal
We are instructed to seek a figure of £635,000 (Six Hundred and Thirty Five Thousand Pounds), subject to contract, reflecting a net initial yield of 10.05% (assuming standard purchaser’s costs of 7.74%).
Please note that a purchaser will be re-charged the costs of the searches £931.44 which are provided in the data room.
Please note that a purchaser will be charged a Transaction Fee of 1% of the Sale Price plus VAT.
Investment Considerations
An opportunity to acquire a prominent residential investment in Bangor town centre;
The location will benefit from significant inward investment as the new Health Hub opens;
The commercial element is let to a strong covenant;
The property is available at an attractive yield;
Attractive lot size to an investor.
Contacts
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Singer Vielle
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Vendor's Solicitor Firm
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