Accrofab, Unit 11 Stoney Cross Business Park, Stoney Gate Road

Spondon, Derby, Derbyshire DE21 7RX

Overview

Investment Summary

  • Modern industrial unit, located in an established commercial area of Derby
  • Total accommodation of 3,127.32 sq m (33,662 sq ft) on a site of 0.728 hectares (1.800 acres)
  • Sale & leaseback to Accrofab Limited for 20 years without break
  • Initial rent of £200,000 per annum exclusive
  • 5-yearly reviews in line with the Retail Prices Index (collar & cap of 2%-4% per annum compounded)
  • Freehold
We are instructed to invite offers of £3,275,000 (three million, two hundred and seventy-five thousand pounds), subject to contract and exclusive of VAT, for the freehold interest in the property. A purchase at this level would reflect a net initial yield of 5.74%, having deducted purchaser's costs of 6.48%, with reversion after five years to a minimum of 6.33% and maximum of 6.98%.

Location

Derby is a historic city located in the heart of the country, approximately 12 miles west of Nottingham, 23 miles north of Leicester, 35 miles north east of Birmingham, 32 miles south of Sheffield and 112 miles north west of central London.

Derby has a population of some 257,000 people and an estimated workforce of 126,900. The city has a strong industrial heritage, becoming (and remaining) a major railway node and engineering centre in the nineteenth century. In addition, Rolls-Royce started the manufacture of aircraft engines in the city a century ago and civil aerospace engines is still the company's largest division and Derby its largest location. Therefore, manufacturing, and particularly high-tech manufacturing, accounts for a high proportion of employment (15.8% compared with 8.8% across England), while transport/logistics employment is also above average (5.8% compared with 5.0%).

With its strategic location, Derby has excellent transport links:-

  • The M1 motorway runs to the east of the city, with Junction 25 approximately 7 miles away via the A52 dual carriageway. The A50 runs to the south of the city, providing a major east-west link between the M1 (Junction 24A) and M6 (Junction 15) at Stoke-on-Trent.
  • Derby is a major railway hub, served by East Midlands and Cross Country trains between London and most regions of the country, with over 4 million people using the station, plus almost 800,000 interchanges, a year. Approximate journey times are 25 minutes to Nottingham, 40 minutes to Birmingham and 1 hour 50 minutes to London St Pancras.
  • East Midlands Airport, which is located approximately 13 miles south east of the city centre, handled 4.87 million passengers in 2018, flying to 100 destinations across the UK, Europe and North America. It is also the most important airport in the UK for dedicated cargo flights, handling some 1,000 tonnes a day.

Situation

The property is situated in the Spondon district of Derby, approximately two miles east of the city centre. It is an established industrial area - Rolls-Royce is a major and long-term occupier - while there has been considerable recent development of logistics/distribution units due to the communications, attracting occupiers such as Kuehne & Nagel (for Heineken) and XPO (for Ted Baker); the A52, which passes through Spondon, is the arterial route between Derby and Junction 25 of the M1 motorway (with Nottingham beyond), while the A5111 Raynesway/A6 provide an alternate route to/from the south.

Stoney Cross Business Park is situated less than half a mile from the A52, with the Derby-Nottingham railway line immediately to the south - Spondon has a station, which is less than five minutes walk - and housing to the north. Developed about 20 years ago on a greenfield site, the business park comprises a number of detached industrial buildings, occupiers of which include Gallagher and Pattonair.

Description

Description

Unit 11 Stoney Cross Business Park is a detached industrial building constructed in 2001/2 for Accrofab.

The two-bay building is of steel portal frame construction with an eaves height of approximately 6m, profile metal sheet cladding to the elevations above low-level masonry walls and profile metal sheet cladding to the roof. Loading is via three level access doors in the front elevation. There are two-storey offices at the front of the unit and additional offices within the warehouse element.

Car parking and loading are to the front of the unit, while the site is enclosed by secure palisade fencing.

Accommodation

The property provides a total of 3,127.32 sq m (33,662 sq ft) calculated on a Gross Internal Area basis in accordance with the Royal Institution of Chartered Surveyors' professional statement, RICS Property Measurement (1st Edition), as detailed in the schedule below.

The site extends to approximately 0.728 hectares (1.800 acres) and so the site coverage is 40%.


Tenure

The property is held freehold.

There is a small estate charge, relating primarily to Stoney Gate Road, which will be recoverable from the tenant under the lease.

Tenancy

The property will be let to Accrofab Limited on effectively Full Repairing & Insuring terms for 20 years from completion of the transaction without break. The initial rent will be £200,000 per annum exclusive, with 5-yearly rent reviews in line with the Retail Prices Index (RPI), subject to a collar and cap of 2%-4% per annum compounded; this will give an increase after five years to a minimum of £220,816 per annum exclusive and maximum of £243,331 per annum exclusive.

Covenant Information

Accrofab is a manufacturer of precision engineered parts for the aerospace industry, primarily components for gas turbines, and has approximately 140 staff. Established as an independent business in 1977, the company is now part of Bromford Industries. Bromford Industries is a supplier of performance critical parts for the global aerospace, defence and industrial gas turbine sectors, whose customers include major OEMs such as Safran, Rolls-Royce, Siemens, Messier-Bugatti-Dowty, GE Power & Water and Alstom. Bromford Industries has some 450 staff across four UK facilities, as well as operations in the USA and India. Accrofab Limited has a Dun & Bradstreet rating of 3A 1, indicating a minimum risk of business failure, and a maximum credit rating of £405,000. Further information can be found within the schedule below.


VAT

The property is not elected to tax for VAT.

Capital Allowances

There are no Capital Allowances available.

Energy Performance Certificate

The building has an energy performance rating of C based on a score of 66; the Energy Performance Certificate (EPC) and Recommendations Report are available on request.

Proposal

We are instructed to invite offers of £3,275,000 (three million, two hundred and seventy-five thousand pounds), subject to contract and exclusive of VAT, for the freehold interest in the property. A purchase at this level would reflect a net initial yield of 5.74%, having deducted purchaser's costs of 6.48%, with reversion after five years to a minimum of 6.33% and maximum of 6.98%.

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NET INITIAL YIELD:
5.74%
PRICE:
£3,275,000
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