Sale of National Distribution Centre Investment Wolverhampton
Task
Investment disposal including advice in respect of the existing lease and building, value, marketing strategy and negotiations.
The property was substantially refurbished 20 years ago and comprises a freehold single storey national distribution centre of 119,600 sq ft, within a self-contained site of almost 6.8 acres. The main building of steel frame construction with part brick/block walls, and having insulated composite panels above, and an insulated metal deck roof and concrete flooring.
The Distribution Centre has an eaves height of approximately 20ft 10ins (6.35m) and is approached from four insulated sectional overhead doors providing drive-in loading on the frontage and there is also dock-level loading with dock levellers from one side.
Built within the warehouse structure is a two storey office area partitioned to provide reception, general and private offices, board-room as well as canteen and toilet facilities.
Externally is a concrete paved perimeter roadway and service yard providing heavy goods vehicle parking for approximately 19 vehicles and also a tarmacadam-surfaced car park incorporating 83 spaces within a secure site.
The site and premises being in a prominent position in close proximity of the Jaguar Land Rover Engine Plant, and well located for access to Wolverhampton city centre and the motorway network.
Approach
Following initial discussions with the client a review was undertaken of the existing lease arrangements which contained a tenant’s only break clause option in just over 12 months.
Following advice and further discussions with the client, negotiations were put in hand with the tenants, ASSA ABLOY Ltd, extending the term certain to almost 4 years in return for a mid-term rent free period, at the existing passing rental of £360,000 per annum exclusive.
Consideration was given to the marketing approach and before commencement research was put in hand as to rating, tenant covenant strength, planning issues and potential, and then advice provided in relation to value, saleability, marketing and related matters.
Prior to formal marketing we embarked upon discussions with the client’s solicitors and a full legal pack was prepared to avoid any delays once a potential purchaser had been identified and terms agreed.
In readiness of marketing, comprehensive PDF and printed details were prepared encompassing a full package of information likely to be required by a prudent investor.
After reviewing the pricing strategy, a schedule of most likely purchasers for the type and size of investment was prepared with initially limiting approaches, one-to-one, by telephone to the most likely audience and then providing comprehensive information to those that expressed an interest. The approach taken was appreciated by investors, giving serious purchasers the opportunity to fully consider the investment and before any extensive form of marketing was undertaken.
No purchaser emerged from the short-list, the PDF details were forwarded more generally but, nevertheless, selectively to investment companies, and then to selected agents for specific clients known to be seeking the type of investment. As a result inspections followed and discussions/negotiations entered into with seriously interested parties.
Outcome
Terms were agreed upon behalf of Churchbridge Estates Ltd for a sale to Helical Bar Plc at a price of £3,900,000 which was in excess of the guide price. Helical Bar were focusing on acquiring smaller single let industrial properties at the time.
As funds were readily available it was possible to agree exchange of contracts within 10 working days of the comprehensive legal pack being provided. Following much activity during that 10 day period, including a building survey, exchange of contracts took place with subsequent completion of the transfer of The Meadows building to Helical Bar Plc.