Egstow Park lies on the main A61 Chesterfield to Derby road, 5 miles south of Chesterfield and 1 mile from Clay Cross town center, situated midway between Junctions 28 &29 of the M1. This brownfield site is undergoing significant development and is immediately adjacent to a large residential development of 160 new homes, undertaken by St Modwen Homes, with the objective of creating a fully serviced residential community that has excellent communication links to the North and South of the area. The land allocated to retail development has a McDonald’s and Marston’s pub already operating successfully and further retail development (non-food and beverage) will shortly be coming to market.
The very busy A61 Chesterfield to Derby road, provides significant traffic flow and therefore a great opportunity for this type of drive-thru development.
LPS have been offered this development from Carnwarth Estates Ltd, headed by two very experienced property professionals who have an Agreement for Lease in place with Costa Coffee (Costa Ltd) who are ultimately owned by the global food and beverage group, Coca Cola Inc.
Carnwarth own the land on a long leasehold (250 years), with a peppercorn rent, purchased from St Modwen plc. They will provide a contract to build the unit to Costa’s specifications. LPS have Heads of Terms in place to buy the site and make stage payments during the build, therefore offering an SDLT saving which is being passed to investors, with the requirement to provide their capital ‘up front’, but with returns paid from acquisition of the land (i.e. during the build stage) and not as usually is the case, with effect from Practical Completion.
Rational for Purchase
The Drive-thru sector has and continues to enjoy significant growth as consumers shift in behaviour, changes to more frequently buying food and beverage provision ‘on the go’.
Roadside operator requirements are driven today by this more sophisticated consumer base wanting convenience, cleanliness and choice. Busier lives demand convenience and fast service, coupled with more efficient use of land and space, thus providing many opportunities in this sector. Spending in ‘quick service’ coffee outlets in the UK reached £2.1bn in 2017, out of a total of £10.1bn spending in the sector.
For investors, this means there is scope to enjoy long term inflation linked income streams, backed by strong covenants.
LPS have been looking for such opportunities for some time, to provide investors with much needed diversity and we are offering this (our first) scheme of this nature, which has been negotiated off market, with attractive terms.
The agreed purchase price for the land and construction of the unit is £1.093m inclusive of purchasers’ costs. The land is to be acquired at £275,000, upon the syndicate immediately reaching its funding aim.
By providing the benefit to the developer of development funding, we have negotiated an ‘interest payment’ rebate for the amounts paid during the build period, including the cost of the land purchase, prior to Practical Completion. This enables us to make this a more attractive investment scheme than conventionally seen in this sector.