We are looking forward to Acuitus’ upcoming commercial property auction on the 28th March 2018.
For our Pre-Auction Snapshot, we analyse a few select properties and apply Blue Alpine’s proprietary scoring guide. In our article, we look at the particulars of a property, locational analysis and investment angles.
At Blue Alpine, we consider many aspects of a property before investing. Therefore, we have created a proprietary scoring system for property investment opportunities. To name a few categories we consider for our proprietary scoring system, but this is not the exhaustive list: planning, property condition, occupier, surrounding properties, location, yield, the lease, rent versus rateable value, etc. The total score possible for any property is 40 points. Please find below the score ranges and their respective buying signal.
Lot #: 1
Town: Salisbury
Address: 69 Netherhampton Road, Salisbury, Wiltshire, SP2 8NA
Investment Opportunity: Convenience Store Investment
Tenant: One Stop Stores Limited
Blue Alpine’s Proprietary Scoring: Pre-Auction
Locational Analysis:
Salisbury has a population of approx. 40,000 and located in the county of Wiltshire (population of 706,300). As of 2015, Wiltshire’s GDHI (gross disposable household income) per head was £20,704.
Snapshot of Property Pre-Auction:
Tenancy & Accommodation:
Investment Angles:
Future Change of Use/Redevelopment potential (subject to lease and consents). Currently comprising convenience store with forecourt parking and one bedroom flat with separate entrance.
Blue Alpine’s Pre-Auction Commentary (PAC):
This property is entirely let to One Stop Stores Limited (a part of Tesco Plc) and comprising of a convenience store with forecourt parking and one bedroom flat with separate entrance. One Stop Limited signed a new 20-year lease in January 2018, so this is a blue-chip covenant on long lease.
The property is located in an attractive and affluent Cathedral City within Wilshire with GDHI of £20,704 per head. We believe this property is a buy and hold with future potential of change of use for redevelopment.
Lot #: 2
Town: London
Address: 497 Kingsbury Road, London, NW9 9ED
Investment Opportunity: Retail and Residential Investment
Tenant: Yum III (Ltd) t/a Pizza Hut
Blue Alpine’s Proprietary Scoring: Pre-Auction
Locational Analysis:
The property is located in Brent (Greater London) with a population of 328,300. As of 2015, Brent’s GDHI (gross disposable household income) per head was £22,728. From January 2017 to January 2018, the total value property sales were £1.3 billion.
Snapshot of Property Pre-Auction:
Tenancy & Accommodation:
Investment Angles:
The second-floor lease only has 63 years before expiration, therefore there is an opportunity to renegotiate for payment of approx. £25,000.
Blue Alpine’s Pre-Auction Commentary (PAC):
The property is let to Yum III (Ltd) t/a Pizza Hut until 2023 with a tenant option to renew until 2033, so there is a strong covenant. The nearby occupiers include Boots, HSBC, Costa Coffee, Aldi and Barclays.
The pre-auction yield of 4.22% is a bit lower than what we like to see. We believe the pre-auction yield reflects the demand of tenancy for the area, properties do not stay vacant for long.
We consider this property a buy and hold investment.
Lot #: 5
Town: Rushden
Address: 27 / 29 High Street, Rushden, Northamptonshire, NN10 0QE
Investment Opportunity: Retail Investment
Tenant: Boots UK Limited
Blue Alpine’s Proprietary Scoring: Pre-Auction
Locational Analysis:
The population of Rushden is 29,272 (Census 2011), making it the fifth largest town in the county of Northamptonshire. Rushden is 15 miles north-east of Northampton. As of 2015, Northampton’s GDHI (gross disposable household income) per head was £18,254, which is similar for East and South Northamptonshire. From January 2017 to January 2018, the total value of property sales was approx. £784 million.
Snapshot of Property Pre-Auction:
Tenancy & Accommodation:
Blue Alpine’s Pre-Auction Commentary (PAC):
This property is situated on the western side of High Street and is let to Boots UK Limited until 2023 with no breaks. There’s also a fixed 1.5% annual rental increase rising over time to £49,910.79 in 2022. The nearby occupiers include Peacocks, Lloyds Bank, WH Smith and Argos.
We believe this property is a good investment to buy and hold, it has a strong blue-chip covenant that has been in occupation since 1919.
Lot #: 45
Town: Toddington
Address: 2 and 4 High Street and 42 Market Square, Toddington, Bedfordshire, LU5 6BY
Investment Opportunity: Retail Investment
Tenant: Sublet to local estate agent on the ground floor and two separate tattoo studios on the upper floors
Blue Alpine’s Proprietary Scoring: Pre-Auction
Locational Analysis:
The property is located in a predominantly affluent residential commuter town located 7 miles north of Luton and 35 miles north-west of the City of London. Luton has a population of 216,800 and as of 2015, it has a GDHI (gross disposable household income) per head of £14,762. Central Bedfordshire has a GDHI of £19,577 per head and a population of 278,900. From January 2017 to January 2018, the total value of property sales was approx. £848 million.
Snapshot of Property Pre-Auction:
Tenancy & Accommodation:
Blue Alpine’s Pre-Auction Commentary (PAC):
This property is sublet to a local estate agent on the ground floor and two separate tattoo studios on the upper floors, therefore the strength of covenant is not as strong as letting to larger companies.
The property has a prominent corner position and located in a predominantly affluent residential commuter town, near Luton and not far from the City of London.
We consider this property a buy and hold investment.
References:
Disclaimer: All views expressed in this article are Blue Alpine’s and do not represent the opinions of any other agency, organisation, employer or company whatsoever. Assumptions made in the analysis are not reflective of the position of any entity other than Blue Alpine’s – and, since we are critically-thinking human beings, these views are always subject to change, revision, and rethinking at any time. Please do not hold us to them in perpetuity.
The authors and Blue Alpine are not to be held responsible for misuse, reuse, recycled and cited and/or uncited copies of content within this article by others.
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