Location

Crown Business Park is an established commercial location situated on the edge of the Old Dalby. Based on an old airfield, the Business Park has gained popularity over recent years, because of its convenient location.

Old Dalby is a village in Leicestershire, is it located off the A607 approximately 9 miles north-west from Melton Mowbray and 15 miles from Leicester, which has easy access to the M1/A46 communication routes.

Situation

Crown Business Park is home to a number of manufacturing and logistics businesses and is a popular location, mid-way between Nottingham, Leicester and Melton Mowbray.

Unit 1 at The Enterprise Business Park will comprise of a new build steel portal framed warehouse unit which will have an eaves height of approximately 8 metres (providing opportunity for mezzanine floor fit out) together with a 3-phase electricity supply, plus internal office and staff accommodation.

The property will benefit from 14 demised car parking spaces to the perimeter and loading access at the front.

Construction is expected to complete September/October 2021.

Rational for Purchase

This is high-quality new build warehouse unit in a popular location has been identified by LPS for the sale/leaseback terms which offer an attractive investment in a very popular sector. The build specification means that the unit will always be attractive to logistics/fulfillment operators and is adjacent to busy routes.

The opportunity to diversify our offers, coupled with the strong covenant attractive lease terms provide certainty of tenure and therefore income, over the next 10 years.

Purchase Price

The total syndicated purchase price including costs (stamp duty, legals etc.) is £1,125,000.

It is intended that this syndicate will not raise borrowing, thus we are classifying it an ‘income syndicate’, because of the higher initial yield, which arises simply because there are no borrowing costs.

It’s expected that the longer-term prospects are to deliver an excellent income yield over the investment period.

Initial investment is a minimum of £50,000 per investor.

Tenant & Covenant Strength

Direct Trade Bag Company Ltd trading as Direct Textiles & Bags (DTB Europe) was formed from three separate companies Direct Trade Bags, Direct Textiles and Castle Embroidery.

DTB Europe produce a wide range of promotional bags, garments and corporate workwear, all ethically sourced and produced in house. They are recognised as one of the major operators in their sector in the UK.

DTB Europe and the management team have over 20 years of experience, they know the industry inside out and have long standing relationships with major UK plc clients.

For the year ending 31^st December 2019, DTB reported a turnover of £12.87m and net assets of £1.64m.

We are informed that despite the Covid pandemic and inevitable disruption to their events work, both turnover and net assets have improved for the 2020 trading year.

Rental Income

With the tenant secured the rental yield after management charges is offering an immediate return of 5.33% p.a. with no rent-free period.

Based upon an increase in rent at the five-yearly review using RPI at 2% p.a. the returns are likely to increase to 5.8% p.a.

Letting 

The unit (7,621 sq. ft) excluding mezzanine will be acquired by LPS 008 Ltd let to Direct Trade Bag Company Ltd by the way of a new 10-year unbroken effective full repairing and insuring lease.

Rent reviews are upward only every 5 years, increases are linked to RPI, compounded annually subject to a maximum of 3% p.a. and minimum of 1% p.a.

The Lease Terms

Tenant: Direct Trade Bag Company Ltd

Term:      10 Years unbroken

Rent:        £60,000 p.a. with no                 rent-free period

Reviews:   At 5 Years, upward only RPI linked, compounded annually, with a collar and cap of 1% p.a. and 3% p.a.

Borrowing

The syndicate will not raise borrowing on this scheme.