Newmarket, Louth

Lincoln Property Syndicates are Scheme Administers for this syndicate.

Location

Louth is a market town in the East Lindsey district of Lincolnshire. Louth is the principle town and centre for a large rural area of eastern Lincolnshire. It has a resident population of approximately 20,000 people.

Louth is located roughly 50 minutes from Lincoln. The development is located on Newmarket Road next to The Newmarket Medical Practice.

Situation

LPS are now syndicate administrators for this scheme since July 2017 after taking over from the current administrators.

The development was built in 2014 and compromises of a convenience store with smaller retail units.

The main unit is let to national food retailer, The Co-operative Food Group, as the anchor tenant. There is ample car parking.

The other unit is let to Warwick Healthcare Limited.

Rational for Purchase

This was another high quality new build property, which has strong tenant quality/covenant in the form of the national Co-Operative Group.

Neighbourhood centres are 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.

The anchor tenant gives a strong income stream which will be distributed to investors after borrowing costs and some small reserving.

Purchase Price

The Total syndicated purchase price was £1,235,000, which included borrowing of £570,000, provided on a non-recourse loan by NatWest Bank plc.

Initial investment offers 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.

Newmarket, Louth

Tenant & Covenant Strength

The Co-operative Food Group Ltd is part of the Co-operative Group which has over 4,500 outlets in the UK and employees 70,000 people. The food retailer is the largest division with over 2,700 stores.

Rental Income & Prospects

With both units being let we believe this will provide a rental yield of circa 3.9% p.a.

Newmarket, Louth

Letting

The larger unit is let to the Co-operative Group Food Ltd (the main operating company of the National Co-operative Group) for a period of 15 years. Rent reviews are every 5 years with RPI indexation with an increase cap maximum of 4% p.a. and minimum of 1%.

The Second Unit is let to Warwick Health Care Limited who are a local Pharmacy.

Newmarket, Louth

The Leases

Unit 1:     Co-operative Food Group Limited

Term:      15 Years

Rent:        £57,500 p.a

Payable:  Monthly in Advance

Reviews:  Upward only every 5 years

 

Unit 2:    Warwick Health Care Limited

Term:      15 Years

Rent:        £15,000 p.a

Payable:  Quarterly in Advance

Reviews:  Upward only every 5 years

Newmarket, Louth

Borrowing

The syndicate has had indicative approval to borrow £570,000 to facilitate the purchase. With repayments commenced at Practical Completion.

floor plan

map