Hucknall is a small market town in Nottinghamshire, in the district of Ashfield, with a rapidly expanding residential area, 7 miles to the north west of Nottingham. It has a resident population of approximately 32,000 people.
It is located close to the A611 by-pass and within 3 miles to the M1, with easy access to the Nottingham Express Transit into the centre of Nottingham.
The site of 1.75 acre is to the east of Hucknall, located on Emperors Way off Papplewick Lane. This is a new residential housing estate being developed by Barratt and Bellway, with a further 1,000 established houses to the north. There is a new primary school on the development and four others within half a mile radius.
This type of location is perfect for a ‘neighbourhood centre’ and previous schemes of this nature have been successful for investors.
LPS have agreed terms to acquire the Papplewick Lane retail development from Newcrest. Newcrest Estates Ltd are one of the UK’s leading developer of local and neighbourhood retail centres. They specialise in the development of commercial property serving new and existing residential communities.
The development was built in early 2017 and compromises of a 4,000 sq ft convenience store with three smaller retail units, one at 1,000 sq ft and two at 800 sq ft.
The main unit is let to national food retailer, The Co-operative Food Group, as the anchor tenant. There is ample car parking.
The two smaller units are to be let to Vets4Pets the national veterinary arm of Pets at Home.
The final 1000 sq ft unit is currently vacant with lots of interest. This unit is being marketed with the intention of securing more localised businesses, suited to this type neighbourhood centre.
Rational for Purchase
This is another high quality new build property, which has strong tenant quality/covenant in the form of the national Co-Operative Group.
Neighbourhood centres are proving to be popular when sited in close proximity to residential development, as UK consumers buying habits evolve from weekly/monthly ‘major shops’ at out of town sites, to more regular use of convenience stores.
This investment falls into that category and with our experience of the Co-Op as a tenant, we are happy to bring this scheme to investors, in conjunction with Newcrest Estates Ltd who are an experienced developer of such schemes. The surrounding residential development by two of the UK’s national housebuilders, provides a strong basis for this to be a positive long term purchase.
The anchor tenant gives a strong income stream which will be distributed to investors after borrowing costs and some small reserving. The further three units are likely to be popular in such a strong position and will attract more localised services, as we have seen in previous schemes.
The Total syndicated purchase price including costs (legals etc.) is £1,505,000 which will included borrowing of £525,000 provided on a non-recourse loan by NatWest Bank plc.
Initial investment will be for a minimum of £50,000, offering access to a high quality brand new investment property with a strong tenant covenant with a regular ongoing quarterly income stream and potential for capital growth over the term held.
The prospect for capital growth arises from increasing rental income by securing tenants for the vacant unit. our experience of this type of development gives us confidence that the vacant unit will let, in due course. The purchase price reflects this.