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Site
The site extends to approximately 1.79 acres.
The sub-station area hatched in blue on the site plan (available to download) is let to SP Manweb until November 2081. Excluding this land, the net area is 1.70 acres.
Tenure
Virtual Freehold (new 999-year lease at a peppercorn rent).
Tenancy
The site is currently let to AAK International AB on a full repairing and insuring lease (subject to a minor Schedule of Condition), for term of 10 years from 3rd September 2024, expiring 2nd September 2034 (in excess of 8.75 years unexpired). The lease is outside 1954 Act protection.
There is a tenant’s break option in year 5, subject to a £40,000 tenant break penalty. The tenant has been in occupation for over 20 years and recently signed a lease renewal, demonstrating their commitment to this location.
The annual rent is as follows:
| 3rd September 2024 – 2nd September 2025 | £60,000 per annum | |
| 3rd September 2025 – 2nd September 2026 | £65,000 per annum | |
| 3rd September 2026 – 2nd September 2027 | £70,000 per annum | |
| 3rd September 2027 – 2nd September 2028 | £75,000 per annum | |
| 3rd September 2028 – 2nd September 2029 | £80,000 per annum |
The vendor will top up the income to £80,000 per annum by way of an appropriate adjustment on the completion sum.
There is an open market rent review on 3rd September 2029, with a cap and collar of 1.5% – 3.5% per annum (minimum uplift £5,250pa, maximum uplift £12,250pa).
The area hatched blue on the site plan (available to download) is let to SP Manweb plc on a lease expiring on 15th November 2081, subject to a peppercorn rent. The tenant has the option to determine this lease upon providing 6 months’ notice to the landlord.
Covenant
AAK is a Multi-oil Ingredient House, specializing in plant-based oils and fats. The company is listed on Nasdaq Stockholm with headquarters in Malmö, Sweden. The company has 4,100 employees with 20 production plants worldwide.
The Company operates the UK’s largest edible oils refinery in Hull, with additional manufacturing facilities adjacent to the subject property in Runcorn.
AAK reported net sales of £3.55 billion and an operating profit of approximately £386 million in FY 2024. Further information is available here: www.aak.com/investors/financial-reports
AAK International AB is registered in Malmo and performs financing activities and cash management for associated companies within the AAK Group. In addition, through their UK branch, the Company manufactures and sell vegetable oils and fats.
In the year to 31 December 2023 AAK International AB had Net Sales of 4,480,237,000 SEK (approx. £327,886,144 as at Jan 2025). Full accounts are available to download.
The tenant owner-occupies the adjoining property and uses the subject site for staff car parking; hence it is important for their operations.
Estimated Rental Value
We consider the property to have an Estimated Rental Value of £93,500 per annum (£55,000 per acre).
Future Redevelopment Potential
Indicative plans have been prepared which demonstrate the possibility of accommodating a nine unit multi-let industrial estate on the site with units ranging from 2,368 sq ft to 2,605 sq ft.
Alternatively, plans are also available which show the configuration of a single 27,000 sq ft unit across the site.
Copies of these plans are available to download.
VAT
The property has been opted for the purposes of VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).
Proposal
We are instructed to seek offers in excess of £840,000 (Eight Hundred and Forty Thousand Pounds), subject to contract, reflecting:
| Net Initial Yield | 9.00% |
| Reversionary Yield at Review (assuming 3.5%pa cap) | 10.40% |
| Headline Reversionary Yield | 10.55% |
| Capital Value (excluding substation demise) | £494,000 per acre |
Please note that a purchaser will be re-charged the costs of the searches (£xxx) which are provided in the data room.
Please note that a purchaser will be charged a Transaction Fee of 1.0% of the Purchase Price plus VAT.
Investment Considerations
An opportunity to acquire a highly secure investment with future development potential;
The property is situated in an established commercial location;
The property comprises a fully ringfenced secure, sufaced site extending to 1.79 acres;
Let to the undoubted covenant of AAK International AB;
The tenant has been in occupation for over 20 years and renewed their lease in August 2024, demonstrating their commitment to this location;
The tenant owner-occupies the adjoining property and uses the subject site for staff car parking,
A purchase at the asking price will provide an investor with an attractive yield profile;
Attractive lot size for an investor.
