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Accommodation
The property provides the following approximate Net Internal Areas:
| Ground Floor | 157.94 sq m | 1,700 sq ft |
A set of floor plans is available to download.
Tenure
Virtual Freehold (long lease expiring 27th December 3019 at a peppercorn rent).
Tenancy
The property is let to Coffee#1 Limited on a full repairing and insuring lease for a term of 10 years from 31st January 2025, expiring on 30th January 2035. There is a tenant break option on the sixth anniversary of the term, subject to six months’ prior written notice.
The tenant benefits from a rent free period until 30th November 2025, after which the rent payable is £34,000 per annum, rising to £40,000 per annum from 1st February 2027. The vendor will ‘top-up’ the income so that an investor benefits from an initial rent of £40,000 per annum.
The lease benefits from an upwards only open market rent review on 31st January 2030.
Covenant
Coffee#1 Limited has reported the following figures:
| Year Ending | 31st May 2024 | 31st May 20223 |
| Revenue | £51,556,000 | £44,698,000 |
| Pre-Tax Profits | £6,151,000 | £4,621,000 |
| Net Assets | £25,961,000 | £19,885,000 |
Founded in 2001, Coffee#1 Ltd is a UK-based coffee house chain with a strong presence across Wales, the Southwest, the South Coast, and parts of the Midlands. The company has grown significantly, expanding from 92 stores in 2019 to 119 as of May 2024.
In 2019, The Nero Group acquired a 70% stake in Coffee#1 from SA Brain, with SA Brain retaining 30%.
In 2022, The Nero Group completed its acquisition, gaining full ownership of Coffee#1. Since the acquisition, the company has continued to expand and strengthen its market position under the financial backing and expertise of The Nero Group.
Coffee#1 operates as a standalone brand alongside The Nero Group’s other brands; Caffe Nero, Harris +Hoole and Aroma. Caffe Nero is the largest independent coffee house group in Europe, operating over 1,000 stores across 10 countries, employing over 5,500 people in the UK.
This strong growth trajectory, coupled with the stability and support of The Nero Group, makes Coffee#1 a secure and reliable covenant for potential investors.
VAT
The property has been registered for VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).
Proposal
We are instructed to seek a figure of £478,000 (Four Hundred and Seventy-Eight Thousand Pounds), subject to contract, reflecting a net initial yield of 8.0%, assuming purchasers’ costs of 4.60%.
Please note that a purchaser will be re-charged the costs of the searches (£1,080.50) which are provided in the data room.
Please note that a purchaser will be charged a Transaction Fee of 1% of the Purchase Price plus VAT.
Investment Considerations
An opportunity to acquire a well-secured coffee house chain investment;
Affluent South-East location and popular commuter town;
Let to Coffee#1 Limited, wholly owned by The Nero Group;
Recently let on new 10-year lease from January 2025;
Modern unit which has been fitted out to a high-quality specification;
Strong catchment, being situated below a luxury new build development, with a GDV of £40m, providing 129 residential dwellings;
A purchase at the asking price reflects an attractive net initial yield;
Attractive lot size to an investor;
