Iconic Retail Arcade in the Heart of Bournemouth

Private Treaty

The Arcade, 1-22 Old Christchurch Road

| Bournemouth

| BH1 1DS

6,500,000

Guide price

Iconic Retail Arcade in the Heart of Bournemouth

For Sale

Private Treaty

The Arcade, 1-22 Old Christchurch Road

| Bournemouth

| BH1 1DS

6,500,000

Guide price

Summary

Well established Retail Arcade in the town centre
100% prime retailing pitch
Highly prominent frontages onto Old Christchurch Road and Gervis Place
Planning permission for residential on the second floor
Value add potential via repurposing of the upper parts
Grade II listed (no empty rates)
Rent has been rebased to £xxx, down from historic high of £xxx
Freehold
£6,500,000, subject to contract
xx% Net Initial Yield

Location

Bournemouth 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 Demographics

Bournemouth 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].

Situation

‘The Arcade’ is a high footfall pedestrianised thoroughfare linking Old Christchurch Road to Gervis Place and benefits from entrances and exits onto both. 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.
Retailing in Bournemouth is focused around two prime pedestrianised thoroughfares, Old Christchurch Road and Commercial Road. So, the immediate vicinity is considered the 100% prime retailing pitch in Bournemouth.

The location has benefitted from recently completed local authority public realm improvements which include repaving, the creation of a stepped central place for performances, new lighting, seating and planting.

Businesses on Old Christchurch Street include Mc Donalds, Pandora, Greggs, EE, WH Smith and Costa.

Businesses on Gervis Place include Cote Brasserie, The Stable, Yobu, Franco Manca, JD Wetherspoon and the Real Greek.

Description

The property comprises a Grade II listed Victorian Retail Arcade arranged over basement, Ground, first and second floors totalling xxx sq ft and currently arranged as 11 retail units, vacant basement accommodation and 1×1 bedroom flat on the second floor. There is planning permission for an additional 5 flats on the second floor.

The property has prominent frontages to both Old Christchurch Road and Gervis Place with servicing to the rear of some units.

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.

There is one residential flat let on an assured shorthold tenancy which is situated above the Space NK unit and accessed via Gervis Place.

Units 12 and 13 and the old House of Fraser store are held in separate ownership. Plans are in place to redevelop the disused House of Fraser store into a mixed-use scheme consisting of business units, retail units and student accommodation consisting of 129 rooms.

Floor plans and a goad plan is available to download from the downloads section below.

There is a potential opportunity to increase the massing of the upper parts subject to planning permission.

The following link will take you to the official website for The Arcade – www.bournemoutharcade.com/.

Planning

The property has listed building consent for the conversion of the second floor. There is currently 1 x 1 bedroom flat on the second floor and the permission is to create an additional 5 x 1-bedroom flats with open plan living room and kitchen. Planning Application Number 7-2021-12534-P.

There current 1×1 bedroom flat is currently producing £10,800 per annum.

Based on the passing rent of the existing flat, we suggest that the ERV of the flats once the planning permission is implemented will be in the order of £65,000.

Service Charge

Ellis & Partners currently manage The Arcade. The service charge runs on a calendar year basis and is demanded quarterly on account based on a service charge budget.

The service charge budget for the year ending December 2023 is £64,994 which reflects £xxx psf.

For the year ending December 2023, there is a total of £9,922 in service charge arears owed by tenants and £1,518 relating to the previous year.

Accommodation

The property has been measured by BKR Floor plans and provides the following net initial floor areas:

MS Table here

A measured survey and set of floor plans are available to download. This will be assigned to a purchaser at a cost of £xxx + VAT.

Asset Management

Extend / re-gear existing leases.
Implement residential planning permission for to create an additional 5 x 1 bedroom flats on the second floor.
Seek rental increases at renewals.
Refurbish the arcade.
shop units.

Tenure

Freehold.

Units 12, Unit 13 and the old House of Fraser are held in separate ownership but have entrances on to the Arcade. A deed of covenant dated 1922 sets out several provisions in respect of The Arcade. Further information can be downloaded from the data room.

Tenancy

The Arcade is currently multi let to 8 tenants. There are 3 vacant units and vacant basement accommodation. The vendor will provide a 2-year rental and service charge top up on the vacant elements.

The total rental income, including vendor top ups is £576,906 per annum. The total annual top up amount is £75,000.

The previous total rent was approximately £878,406 per annum.

So, the rent has been re-based downwards to 66% of the previous rent.

The occupied units are let on full repairing and insuring leases to a mix of national and local retailers.

Some tenants include Waterstones, Space NK, Charles Fox Jewellers (whose lease is from 1961), Gembox Jewellers and Vintage Paradise to name a few.

A full tenancy schedule can be downloaded from the downloads section below.

The rents range from £xxx psf ZA to £xxx per sq ft Zone A. The highest Zone A rate achieved historically was £154 psf ZA.

57% of the income is secured against Waterstones Booksellers Ltd, Space NK Ltd and Charles Fox (Jewellers) Ltd.

The weighted average unexpired lease term is approximately 9 years.

Tenants

Unit	Tenant	About	Link
1	Space NK Ltd	Beauty products retailer with over 75 stores in the UK & Ireland. Previous lease commenced in 2007.	Website
2	Vintage Paradise	Vintage clothing and accessories.	Website
03-Apr	Richmond Classics	Founded in Bournemouth in 1988. Designer fashion.	Website
05-Jun	Gembox Jewellers Ltd	Jewellery Shop. Previous lease commenced in 2009.	Website
7	Under Offer	TBC
14-16	Waterstones Booksellers Ltd	British book retailer with over 300 stores. Previous lease commenced in 2014.	Website
17	Essential Jewellers	Founded in 1990. Jewellery Shop with 5 stores. Previous lease commenced in 2014.	Website
18-19	Fantastic Things	Gifts, Homeware and clothing shop.	Website
20	Charles Fox (Jewellers) Ltd	In occupation of Units 21-22a since 1969. Have recently expanded into Unit 20. Official Rolex dealer, fine jewellery and diamonds.	Website
21-22a
23-23a	Maravi Brands	Coffee Shop.	Website

Covenant

Space NK Ltd (Co. No. 02773985), has reported the following figures:

	26 March 2022	27 March 2021	28 March 2020
Revenue	£119,138,575	£111,824,388	£125,710,067
Pre-Tax Profits	-£1,005,205	£88,802,776	£3,679,842
Net Worth	£16,363,142	£26,983,910	£35,091,117

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:

	30 April 2022	24 April 2021	25 April 2020
Revenue	£399,798,000	£230,885,000	£376,024,000
Pre-Tax Profits	£50,622,000	£4,172,000	£21,048,000
Net Worth	£105,466,000	£63,382,000	£60,501,000

For further information visit www.waterstones.com.

Charles Fox (Jewellers) Ltd (Co. No. 00202014) has reported the following figures:

	31 January 2022	31 January 2021	25 April 2020
Net Worth	£2,633,257	£2,227,717	£1,945,450

For further information visit www.charlesfoxjewellers.com.

Richmond Classics Limited (Co. No. 02192148) has reported the following figures:

	31 January 2022	31 January 2021	25 April 2020
Net Worth	£789,672	£711,566	£658,845

For further information visit www.richmondclassics.com.

VAT

The 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.

Proposal

We are instructed to seek offers of £6,500,000 (Six Million Five Hundred Thousand Pounds), subject to contract, reflecting a net initial yield of 8.32%, assuming standard purchaser’s costs of 6.64%.

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

Investment Considerations

Rare opportunity to acquire an iconic retail arcade in the heart of
BournemouthPlanning permission to create an additional 5 flats on the second floor
Rent has been rebased downwards to 66% of the previous rent
Prominent frontages onto Old Christchurch Road and Gervis Place
Freehold
Potential to increase the massing on the upper parts, subject to planning permission
Grade II listed – no empty rates payable
Future rental growth potential
Significant investment has been deployed into the surrounding area
Located just 350 from the famous Bournemouth Pier

Contact Lead Agent

Daniel Elia

+44 (0) 203 701 1353

daniel@singervielle.co.uk

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