Drake House, Derry's Cross

Plymouth PL1 2SW

Overview

  • Exceptionally prominent city centre leisure investment totalling 33,886 sq ft
  • Highly visible and modern building, constructed in 2002, located in the primary leisure pitch
  • Primary Retail Population of 458,000 (Source PROMIS)
  • Let to national and well-regarded brands including Grosvenor Casinos, Walkabout and Marston's
  • Neighbouring occupiers include Travelodge, Revolution, Wildwood, Bella Italia, Wetherspoons and Theatre Royal
  • Rent passing of £463,905 per annum, reflecting £13.69 per sq ft overall
  • Attractive WAULT of 10.62 years to earliest determination
  • Immediate access to significant local car parking provision, including a 71 space car park to the rear of the property and the 612 space Theatre Royal multi-storey car park behind Derry's Cross
  • The surrounding area is undergoing a major transformation with a large number of commercial, student and residential developments under construction or recently completed
  • We are instructed to seek offers in excess of £5,450,000 (Five Million, Four Hundred and Fifty Thousand Pounds), for our client's freehold interest, subject to contract and exclusive of VAT.
  • A purchase at this level would reflect a Net Initial Yield of 8.00% and an attractive capital rate of £161 per sq ft, assuming purchaser's costs of 6.61%.

Location

Plymouth is the second largest city in the South West and is widely renowned for its maritime history and its association with being an international seaport. The city is situated approximately 45 miles south west of Exeter, 112 miles south west of Bristol and 220 miles south west of London.

Plymouth city centre is located 2.8 miles to the south of the A38 Devon Expressway connecting the M5 at Exeter to the north east with Cornwall via the A390 and A30 arterial roads.

Plymouth is situated on the South Devon Main Line, a major route from London Paddington to Penzance, via the Great Western Main Line.

Plymouth Railway Station is on the northern edge of the city centre, approximately a 15 minute walk from the property. The station is the second busiest interchange in Devon, providing a wide range of regular regional and Inter-City services operated by Great Western Rail (GWR) and CrossCountry.

Plymouth

Plymouth is the largest port city "Britain's Ocean City" on the south coast of England with a population of 259,200 (ONS 2013), making it the 15th largest city by population in the UK. In addition to a large commercial and ferry port, Plymouth hosts the largest military naval base in Western Europe, stationing over 2,500 armed forces personnel and significant manufacturing and engineering supporting sectors.

Plymouth Science Park is the region's largest science and technology park with over 140,000 sq ft of office and laboratory space. Plymouth University is the 9th largest in the UK with 23,200 students enrolled. Plymouth's dominance within the south west has resulted in very little competition from surrounding retail centres and the city has seen a number of new retailers opening stores, including Jack Wills, Joules and White Stuff. City centre retail floorspace in Plymouth is estimated at 1.55 million sq ft, provided by two covered shopping centres and numerous high street shops situated on New George Street, Old Town Street, Cornwall Street and Armada Way. There are also three department stores; Marks & Spencer, Debenhams and House of Fraser. Drake Circus and The Armada Centre provide a combined 735,000 sq ft of retail and leisure accommodation.

Drake Circus is the prime destination with an annual footfall of around 17 million shoppers, providing 560,000 sq ft, anchored by Primark (66,000 sq ft) and Marks & Spencer (124,000 sq ft), with ample car parking. Additionally, The Armada Centre, comprises 175,000 sq ft of retail accommodation, with occupiers including Wilkinson, Peacocks, Laura Ashley and Sainsbury's.

Situation

The property is prominently located in the city centre's main leisure pitch, on the south western edge of Plymouth city centre, with frontage onto Derry's Cross roundabout.

The unit occupies a highly visible pitch on one of Plymouth's busiest thoroughfares from Union Street to the main city centre retailing provision to the north east, also capturing footfall from Theatre Royal and Plymouth Pump Rooms.

The property is adjacent to a number of national leisure occupiers in the neighbouring purpose-built Derry's Cross scheme, comprising 85,711 sq ft of leisure floorspace including a 96 bedroom Travelodge, The Gym, Bella Italia, Revolution Bar and Wildwood.

The property benefits from immediate access to significant local car parking provision, including a 71 space car park to the rear of the property at Derry's Cross Car Park. There are a further 612 spaces in the multi-storey car park adjacent to the Theatre Royal.

Local transport links are excellent with numerous local bus services available on Union Street, Derry's Cross and Royal Parade. Plymouth Railway Station is situated a 15 minute walk to the north.

Description

The property comprises a modern three storey building constructed in 2002, providing leisure accommodation on the ground and two upper floors. The ground floor includes two popular bar/restaurant units as well as the entrance to the casino. The two upper floors accommodate the casino on the first floor and staff/ancillary provision on the second floor.

The property is of steel frame construction which supports composite profiled metal and cast concrete floor and roof decks. Given the sloping nature of the site, ground floor areas to the rear are below ground level and are formed with a concrete retaining wall.

Internally the units have been fitted out by the tenants to suit their occupational requirements; including a casino fit out at first floor and a restaurant and pub at ground floor. Servicing is via the rear of the property, accessed from Derry's Cross.

Accommodation and Tenancies

A schedule of Accommodation and Tenancies can be found within the link below.


Tenure

Freehold.

Tenancy

A schedule of Accommodation and Tenancies can be found within the link below.


Covenant Information

Grosvenor Casinos Limited (48% of income)
Grosvenor Casinos is the UK's largest multichannel casino operator, providing gaming and restaurant facilities for members at 52 casinos located in major towns and cities across the UK. It is owned by The Rank Group who operate exclusively in the casino, bingo and online gaming industries across Belgium, Spain and the UK. The Grosvenor Casinos Network currently employs 6,300 employees across the UK. The company currently has a Dun & Bradstreet rating of 5A2, an underlying turnover of £216M and a pre tax profit of £3.46M for the year ending 30 June 2019.

Stonegate Pub Company Limited (25% of income)
In 2016 Stonegate Pub Company acquired the Australian themed Walkabout brand for £39.5M, which has subsequently become one of the largest pub owners and operators in the UK with brands including Slug & Lettuce, Venues, Yates, Common Room, Classics Inns and Town Pub & Kitchen. In July 2018, Stonegate Pub Company announced the acquisition of the cocktail and bar operator Be At One for c.£50M and 15 London bars from Novus Leisure for c.£30M, increasing the pubs portfolio which currently holds 770 pubs and bars. In July 2019, Stonegate announced its plans to acquire Ei's nationwide pub portfolio of over 4,000 pubs for £1.27bn. This acquisition would make the combined group Britain's largest pub company.

The unit has undergone a full refurbishment as part of a portfolio wide improvement strategy following a £595M refinancing facility.

Marston Estates Limited (27% of income)
Marston's Estates Limited is a wholly owned subsidiary of Marston's Plc. Marston's Plc is a FTSE 250 listed company and the UK's leading brewer of cask and bottled beers. Their estate extends to 1,400 pubs, restaurants and bars across the UK, employing c.14,000 people, with brands including Wychwood, Young's, Courage and Estrella Damm. Marston's Estates Limited has a Dun and Bradstreet Rating of 5A2 representing a lower than average risk of business failure.

The unit is underlet to San Shui Limited (t/a Sizz All), who have traded from the premises since 2008.

Local Development Analysis

Further information can be found within the marketing particulars.

Development Potential

Further information can be found within the marketing particulars.

Occupational Market Commentary

Further information can be found within the marketing particulars.

VAT

The property has been elected for VAT. It is anticipated that the sale will be treated as a Transfer of Going Concern (TOGC).

EPC

An Energy Performance Certificate is available upon request and provides a rating of D (90).

Service Charge

Drake House has a single service charge account covering the entire building.

The service charge budget for the year ending 31 July 2020 is £19,556 reflecting £0.58 per sq ft.

Dataroom

For access to the Allsop Marketing Data Room please use the following link: https://datarooms.allsop.co.uk/register/drakehouse

Proposal

We are instructed to seek offers in excess of £5,450,000 (Five Million, Four Hundred and Fifty Thousand Pounds), for our client's freehold interest, subject to contract and exclusive of VAT.

A purchase at this level would reflect a Net Initial Yield of 8.00% and an attractive capital rate of £161 per sq ft, assuming purchaser's costs of 6.61%.

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NET INITIAL YIELD:
8%
PRICE:
£5,450,000
REGISTER INTEREST
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