Humberston Road, Cleethorpes

Location

Cleethorpes is a seaside resort on the estuary of the Humber in North East Lincolnshire with a population of approximately 40,000.

It is 3 miles south east of Grimsby and 40 miles north east of Lincoln.

Cleethorpes town is at the convergence of three main Lincolnshire roads A180, A16 and A46.

Regular bus services to Grimsby, Immingham and nearby villages are operated by Stagecoach and Skegness via Louth during the summer.

Trains from Cleethorpes operate to Barton-upon-Humber via Grimsby, Manchester Airport and Newark-on-Trent. Trains to London are available via Doncaster.

Cleethorpes is home to Blundell Park, the home ground of the football team Grimsby Town, one of the few EFL teams who has their home ground in a different town.

Situation

The development is being built on the former Humberston Motors site, which is a motor trade site, never having had any fuel station facilities.

The locality is served by a number of single independent retailers, with one large format (Tesco Extra) situated around 1 mile away.

Experience has shown, that these rarely impact the income C-store, in fact in many instances the new store takes a lot of trade due to the easier access, quicker service etc. that convenience shopping now demands.

Rational for Purchase

LPS have agreed to purchase this quality scheme since our ‘multi-unit’ syndicates have provided a track record of greater returns for investors achieved from higher yields that can be obtained alongside the anchor tenant (and stronger covenant).

This particular scheme was introduced as an off-market transaction, which thus enabled us to negotiate the best possible terms for our investors.

Whilst the tenant in Unit 2 (Cooplands) have a 5-year break clause, the 1,000 sq. ft unit is viewed as one that would let well as an alternative use e.g. hairdresser, fast food takeaway.

Purchase Price

The total syndicated purchase price inclusive of purchasers’ costs is £1,600,000.

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

We expect that the longer-term prospects are to deliver not only an excellent income yield, but also good prospects for capital growth over the investment period.

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

Humberston Road, Cleethorpes

Tenant & Covenant Strength

The Co-operative Food Group Ltd is part of the Co-operative Group which has an annual turnover of £9bn.

The co-op currently trades from approximately 2,700 food stores in the UK and employs over 70,000 people.

Coopland & Son (Scarborough) Limited have been quality bakers since 1885, with a turnover of £47m.

Cooplands now have over 150 shops and 11 cafes over Yorkshire, Lincolnshire and the North East.

Rental Income 

With the tenant secured the rental yield after management charges is offering an immediate return of 5.35% p.a.

Based upon an increase in rent at the five-yearly review of CPI at 2.5% p.a. the returns are likely to increase above 5.50%pa.

Humberston Road, Cleethorpes

Letting

The principle unit (4,090 sq. ft) has been let to the Co-operative Food Group Ltd (the main operating company of the National Co-operative Group) for a period of 15 years, with a tenant only break at 10 years. Rent reviews are every 5 years with CPI indexation with an increase cap maximum of 3% p.a. and minimum of 1%.

The initial rent is £68,000 p.a. which equates to £16.63 psf.

The second unit is (1,000 sq. ft) has been let to Cooplands & Son (Scarborough) Limited for a period of 10 years, with a tenant only break at 5 years.

Rent review at the end of year 5 on an upward only open market rent review.

Initial rent is £18,000 p.a which equates to £18.00 psf.

Both units have a rent-free period of 6 months from the date of practical completion.

Humberston Road, Cleethorpes

The Leases

Unit 1 Tenant:  Co-operative Food Group

Term:      15 Years

Rent:        £68,000 p.a

Payable:  TBC

Reviews:  Upward only every 5 Years

Unit 2 Tenant:  Coopland & Son (Scarborough) Limited

Term:      10 Years

Rent:        £18,000 p.a

Payable:  TBC

Reviews:  5 Yearly Open Market

Humberston Road, Cleethorpes

Borrowing

The syndicate do not intend to raise borrowing on this scheme.

floor plan

map

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Location

Cleethorpes is a seaside resort on the estuary of the Humber in North East Lincolnshire with a population of approximately 40,000.

It is 3 miles south east of Grimsby and 40 miles north east of Lincoln.

Cleethorpes town is at the convergence of three main Lincolnshire roads A180, A16 and A46.

Regular bus services to Grimsby, Immingham and nearby villages are operated by Stagecoach and Skegness via Louth during the summer.

Trains from Cleethorpes operate to Barton-upon-Humber via Grimsby, Manchester Airport and Newark-on-Trent. Trains to London are available via Doncaster.

Cleethorpes is home to Blundell Park, the home ground of the football team Grimsby Town, one of the few EFL teams who has their home ground in a different town.

Situation

The development is being built on the former Humberston Motors site, which is a motor trade site, never having had any fuel station facilities.

The locality is served by a number of single independent retailers, with one large format (Tesco Extra) situated around 1 mile away.

Experience has shown, that these rarely impact the income C-store, in fact in many instances the new store takes a lot of trade due to the easier access, quicker service etc. that convenience shopping now demands.

Rational for Purchase

LPS have agreed to purchase this quality scheme since our ‘multi-unit’ syndicates have provided a track record of greater returns for investors achieved from higher yields that can be obtained alongside the anchor tenant (and stronger covenant).

This particular scheme was introduced as an off-market transaction, which thus enabled us to negotiate the best possible terms for our investors.

Whilst the tenant in Unit 2 (Cooplands) have a 5-year break clause, the 1,000 sq. ft unit is viewed as one that would let well as an alternative use e.g. hairdresser, fast food takeaway.

Purchase Price

The total syndicated purchase price inclusive of purchasers’ costs is £1,600,000.

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

We expect that the longer-term prospects are to deliver not only an excellent income yield, but also good prospects for capital growth over the investment period.

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

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Analytical Cookies
Privacy Policy