Stapleton Tyre Services, Cygnet Park

Peterborough PE7 8JA

Overview

  • Prime logistics facility constructed in 2005 which extends to 181,975 sq ft (16,906 sq m)
  • Located at Cygnet Park, Peterborough, close to Junction 17 of the A1(M) Motorway, which provides excellent links around the South East, Midlands and East Anglia
  • Upon completion of the sale, STAPLETON'S (TYRE SERVICES) LIMITED will enter in to a new 20 year lease without break. The lease will be guaranteed by EUROPEAN TYRE ENTERPRISE LIMITED, the UK topco
  • The passing rent will be £900,000 per annum (equating to £4.95 per sq ft) which will be reviewed on a 5-yearly basis in line with CPI, subject to a collar and cap of 1.00% - 3.00% per annum compounded
  • Stapleton's (Tyre Services) Ltd is one of the UK's largest tyre distributors with a turnover of in excess of £300m. The tenant has a D&B rating of 4A1 and the guarantor has a D&B rating of 5A1
  • Site area extending to approximately 2.99 ha (7.39 acres), providing a site coverage of approximately 40%
  • Freehold

Proposal

Offers are invited in excess of £15,900,000 which reflects an attractive NIY of 5.25%, assuming purchaser's costs of 7.73%. This reflects a price of £87 per sq ft.

A purchase at this level will reflect a minimum yield of 5.52% in 2024 given the CPI collar provided (i.e. 1.00% pa), or a yield of 6.09% in 2024 given the CPI cap (i.e. 3.00% pa).

Location

Peterborough is an established cathedral city within Cambridgeshire, being one of the largest cities within the South East region. The city is situated approximately 85 miles north east of London, 35 miles north of Cambridge and 75 miles east of Birmingham.

The city is situated east of the A1(M) Motorway, which provides an excellent north-south route along the east of England, down to the M25 and London in a southbound direction, and providing connections to Yorkshire, Lincolnshire and the North East in a northbound direction. The A47 provides access to Junction 21 of the M1 to the west, whilst the A47 eastbound provides access to East Anglia.

Peterborough Railway Station is situated on the East Coast Mainline which allows direct access to London King's Cross with a journey time of approximately 50 minutes. Northbound services run regularly to destinations such as York (1 hr 10 min), Leeds (1 hr 30 min) and Newcastle (2 hr 25 min). Furthermore, the station is served by the Cross Country operated Birmingham to Peterborough line which provides services to Leicester (55 min) and Birmingham (1 hr 45 min).

Peterborough is well served by local airports including Luton Airport which is approximately 60 miles to the south west and Stansted Airport which is approximately 65 miles to the south east. The A14 East West dual carriageway, which connects to the A1(M), provides access to the deep water ports of Felixstowe and Harwich.

Situation

Cygnet Park comprises a commercial development situated to the south of Peterborough, close to Junction 3 of the A1139 Fletton Parkway. The dual carriageway acts as a city centre ring road, running from the south west of the city connecting to the A1(M) and around anti-clockwise to the north east of the city centre.

Southern Peterborough is an established distribution location with a number of other substantial developments in close proximity to the subject property. Kingston Park, which is located one junction east of Cygnet Park, is the Prologis scheme which is part developed out and includes occupiers such as Amazon (550k sq ft), Debenhams (730k sq ft) and Willis & Gambier (190k sq ft). In addition, Ikea operates out of a distribution facility of approx. 1m sq ft nearby.

Roxhill are currently on-site and promoting their Peterborough Gateway scheme which is located due west of the subject property at J1 of the A1139. The developer has planning permission for 5 million sq ft of prime logistics and distribution on the 180-acre site.

Description

The property comprises a prime detached logistics facility which was constructed in 2005, and which was subsequently extended by the previous owner occupier in 2012.

Constructed with a steel portal frame, the building provides a 6-bay warehouse with additional 3 storey concrete framed office building. Within one of the bays there are a number of concrete floor mezzanine structures allowing storage on three levels.

The specification includes:

  • 13.5m clear working eaves height
  • 12 dock-level loading doors
  • 2 level access loading doors
  • Fully racked
  • Extensive yard and car parking (128 spaces)
  • Separate HGV gated entrance
  • Fully sprinklered with water storage tank
  • Fully self-contained site with secure perimeter fencing
The offices were recently refurbished by the occupier at considerable expense which includes new conference and meeting room facilities, air conditioning, new partitioning and suspended ceilings. A new racking system was recently installed at a cost of approx. £1m.

Accommodation

The building provides the approximate floor areas found within the link below.

Plowman Craven are currently measuring the building in accordance with the RICS Code of Measuring Practice (6th Edition) and the new International Property Measurement Standards (IPMS). A copy of the survey can be assigned to the purchaser.

Operation

The building operates as one of 2 main large distribution facilities for Stapleton's wholesale business who also operate a number of other smaller distribution units around the country.

The property is held freehold. The building has capacity for 330,000 tyres which are sourced from around the globe and subsequently distributed to wholesale customers as well as individual branches. The building provides a separate entrance and trade counter for customers to both purchase tyres as well as store seasonal use tyres on-site.

Site Area

The site extends to approximately 2.99 ha (7.39 acres).

Site coverage is approximately 40%.


Tenure

The property is held freehold.

Tenancy

Leaseback

Upon completion of the sale, the property will be let to Stapleton's (Tyre Services) Limited for a term of 20 years without break.

The lease will be guaranteed by European Tyre Enterprise Limited (ETEL), the UK top-co.

The passing rent will be £900,000 per annum, equating to £4.95 per sq ft overall. The rent will be reviewed in line with the Consumer Price Index (CPI), subject to a collar of 1.00% and a cap of 3.00%, compounded annually and effective 5-yearly.

The tenant will have the automatic right to extend their lease for a term of 10 years on a maximum of two occasions.

Covenant Information

Tenant

Stapleton's (Tyre Services) Ltd is one of the UK's largest and leading tyre distributors, with in excess of 80 years' experience specialising in the passenger car, 4x4 and van tyres sector. Capabilities include tyre warehousing and distribution for the specialist tyre retail trade and the car dealership sector.

The business employs over 1,000 people at 11 strategic locations across the UK, supported by a nationwide fleet of 400 delivery vehicles.

Sales turnover has increased year on year for the past 3 years, with headline figures from the most recent accounts being found within the link below.

The business has a Dun & Bradstreet rating of 4A1, representing a 'minimum risk' of business failure.

Guarantor

European Tyre Enterprise Limited (ETEL) is the UK holding company which has control over the group's subsidiaries, as well as providing funding and central support services. The business was acquired in 1994 by the Japanese Itochu Corporation, which subsequently purchased the Kwik Fit business in 2011. The principal activities of the group are the wholesale, distribution and retail sale of passenger and commercial vehicle tyres alongside servicing activities and automotive repair, including brakes, exhausts, MOT testing, and air conditioning recharge.

ETEL incorporates a UK distribution fleet of over 450 vehicles from a national network of 11 locations, around 750 UK centres and 300 mobile vehicles serving five million retail customers a year.

Under the ETEL there are a number of brands, including the following of note:

  • The Tyre Pros
  • Kwik Fit
  • Kwik Fit Plus
  • Central Tyre
  • Tyre City
ETEL has a Dun & Bradstreet rating of 5A1, representing a 'minimum risk' of business failure.


VAT

The property is elected for VAT and therefore VAT will be payable on the purchase price and SDLT on the gross purchase price.

EPC

The property has an Energy Performance Certificate rating of C57. A copy of the certificate is available upon request.

Legal Costs

Each party is to bear their own costs.

Capital Allowances

There are no transferable allowances.

Proposal

Offers are invited in excess of £15,900,000 which reflects an attractive NIY of 5.25%, assuming purchaser's costs of 7.73%. This reflects a price of £87 per sq ft.

A purchase at this level will reflect a minimum yield of 5.52% in 2024, given the CPI collar provided (i.e. 1.00% pa), or a yield of 6.09% in 2024 given the CPI cap (i.e. 3.00% pa).

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NET INITIAL YIELD:
5.25%
PRICE:
£15,900,000
REGISTER INTEREST
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