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Rateable Value
According to the Valuation Office website the rateable value for the property is as follows;
| 38 New George Street | £41,750 |
| 40 New George Street | £86,000 |
The business rate multiplier is 49.9 pence for rateable values below £51,000 and 51.2 pence for rateable values of £51,000 or more.
Accommodation
The property has been measured by BKR Floor Plans and provides the following Net Internal floor areas:
| 38 New George Street (Clubsport Skechers Ltd) | ||
| Net Frontage | 4.60 m | 15’1” |
| Gross Frontage | 5.23 m | 17’2” |
| Zone A | 28.15 sq m | 303 sq ft |
| Zone B | 28.52 sq m | 307 sq ft |
| Zone C | 27.78 sq m | 299 sq ft |
| Remainder | 0.74 sq m | 8 sq ft |
| ITZA | 532 | |
| Ground Floor Total | 85.19 sq m | 917 sq ft |
| Basement | 285.30 sq m | 3,071 sq ft |
| Total | 370.49 sq m | 3,988 sq ft |
| 40 New George Street (Go Outdoors Retail Ltd) | ||
| Net Frontage 1 | 4.37 m | 14’4” |
| Net Frontage 2 | 4.18 m | 13’9” |
| Gross Frontage | 9.99 m | 32’9” |
| Zone A | 55.74 sq m | 600 sq ft |
| Zone B | 54.90 sq m | 591 sq ft |
| Zone C | 55.46 sq m | 597 sq ft |
| Remainder | 66.80 sq m | 719 sq ft |
| ITZA | 1,135 sq ft | |
| Ground Floor Total | 232.90 sq m | 2,507 sq ft |
| First Floor | 313.54 sq m | 3,375 sq ft |
| Second Floor | 314.09 sq m | 3,381 sq ft |
| Basement (Plant) | Not measured | |
| Total | 860.53 sq m | 9,263 sq ft |
The measured survey report is available to download and will be re-addressed to a purchaser at a cost of £195 + VAT.
Tenure
The property is held under a head lease from Plymouth City Council for a term of 125 years from 13th December 2012, expiring on 12th December 2137 (approximately 113 years unexpired) at a ground rent of 11% of rents received. There is no head rent payable if the property is vacant where the Landlord is ‘Actively Marketing’ the units (as defined at schedule 4 of the Lease).
The current rent payable under the head lease is £14,672 per annum.
Tenancies
The property is currently let as follows;
| Summary: | ||
| 38 New George Street | Clubsports Skechers Ltd | £60,883 per annum |
| 40 New George Street | Go Outdoors Retail Ltd | £72,500 per annum |
| Total Gross Income | £133,383 per annum | |
| Ground Rent | £14,672 per annum | |
| Net Income | £118,711 per annum |
38 New George Street
Let to Clubsport Skechers Limited (t/a Skechers) for a term of 10 years from 4th January 2016, expiring on 3rd January 2026. The current passing rent is £60,883 per annum.
There is a cap on the tenant’s contribution to the service charge cap (initially £2,000 per annum), which increases in line with RPI. The service charge cap for the current service charge year is £2,895.63.
40 New George Street
A renewal lease has been entered into with Go Outdoors Retail Limited (t/a Millets) for a term of 5 years from 14th August 2023, expiring on 13th August 2028. There is a tenant’s break option on 14th August 2026, subject to six months’ notice.
The current passing rent is £72,500 per annum. There is a period of half rent (£36,250 per annum) from 14th August 2023 to 13th February 2024. The vendor will ‘top-up’ the income by way of an appropriate adjustment on the completion sum in order that a purchaser does not suffer an income shortfall.
The unit was previously let to Blacks Outdoor Retail Ltd (t/a Millets) at a rent of £150,000 per annum. Hence, the rent has been significantly rebased and is 52% below the previous rental level.
The current net receivable rent after deducting the head rent is £118,711 per annum.
Covenants
Clubsport Skechers Limited (Co. No. 08647261) has reported the following figures:
| Year Ending | 31st December 2022 | 31st December 2021 |
| Turnover | £15,187,044 | £9,440,874 |
| Pre-Tax Profits | £1,061,706 | £1,907,727 |
| Shareholders’ Funds | £3,387,546 | £2,854,581 |
Incorporated in 2013, the company is a Skechers franchisee.
Headquartered in California, Skechers trades on the New York Stock Exchange and is an award-winning global brand with record annual sales of $7.44 billion in 2022. Along with its diverse footwear offering, the company also has a growing range of apparel and accessories for men, women and children. Skechers has approximately 5,000 company and third party-owned retail stores worldwide in approximately 180 countries with international business representing more than half of its total sales. For further information visit investors.skechers.com.
Go Outdoors Retail Limited (Co. No. 12659342) has reported the following figures:
| Year Ending | 28th January 2023 | 29th January 2022 |
| Turnover | £338,248,000 | £316,320,000 |
| Pre-Tax Profit | £13,096,000 | £21,494,000 |
| Shareholders’ Funds | £56,824,000 | £45,704,000 |
Go Outdoors mission is to inspire and equip everyone for life outdoors. Go Outdoors is the UK’s leading outdoor specialist retailer, having the widest in-store range of outdoor clothing, footwear and equipment while serving a broad range of outdoor activities including walking, camping, caravanning, cycling, fishing, running and equestrian. For further information see www.gooutdoors.co.uk.
The company is a wholly owned subsidiary of JD Sports Fashion Plc.
Established in 1981, the JD Group is a leading global omnichannel retailer of Sports, Fashion and Outdoor brands. The Group now has approximately 3,400 stores across 38 territories, with a strong presence in the UK, Europe, North America and Asia Pacific. For the year ending January 2023, JD Sports Fashion Plc reported a Revenue of £10.125 billion, Pre-Tax Profits of £440.9 million and Net Assets of £2.6 billion. JD Sports has a market capitalisation of £5.9 billion. For further information visit www.jdplc.com.
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 in excess of £865,000 (Eight Hundred and Sixty Five Thousand Pounds), subject to contract, reflecting a net initial yield of 13.0%, assuming purchaser’s costs of 5.4%.
Please note a purchaser will be re-charged the costs of the searches (£1,009.05) and measured survey (£195 + VAT) which are provided in the data room.
Please note a purchaser will be charged a Transaction Fee of 1.0% of the Purchase Price + VAT.
Investment Considerations
An opportunity to acquire a city centre retail investment;
The property is located in the heart of Plymouth’s prime retailing pitch;
Over 60% of the income is secured against Go Outdoors Retail Ltd who are wholly owned by JD Sports (Pre-Tax Profits £441 million, Market Cap £5.9 billion);
New lease from August 2023;
Significantly rebased rent – 52% below previous rental level;
No head rent payable if the property is vacant;
A purchase at the asking price reflects an attractive net initial yield;
Attractive lot size for an investor.
