Unit 40 Crowther Industrial Estate, Phoenix Road

Washington, Tyne and Wear NE38 0AD

Overview

  • Prime industrial investment opportunity situated in the heart of the North East's premier Industrial and Logistics location
  • Modern detached unit extending to 55,059 sq ft (5,115.1 sq. m.)
  • Strategically located at the convergence of the A1(M), A194 and the A1231
  • Let to OpSec Security Limited with a guarantee from Orca Bidco Limited on a new 10 year lease from September 2020 at £228,500 (£4.15 psf) with tenant only break in Year 5
  • Highly invested tenant who has recently committed to a lease renewal and who is about to invest in a new machinery line at the property.
  • Large site extending to 5.78 acres, with a low site coverage of 20.9%, including expansion land
  • Freehold
  • Modest rental tone for the quality and location of the unit, with significant growth prospects
  • Highly restricted supply of 50,000 sq. ft. + units in the region alongside an almost non-existent development pipeline
  • Asking price of £3.18m reflecting a NIY of 6.75% and a low Capital Value of £58 per sq ft. A purchase at this level would reflect a NRY of 7.32% based on our opinion of Market Rent (£4.50 psf)

Location

Washington is a strategically placed former New Town, located in the Tyne and Wear conurbation in the North East. The town is situated 8 miles south of Newcastle upon Tyne, the commercial and administrative capital of the North East.

Washington is at the epicentre of the region's motorway network and bounded by the A1231 Sunderland Highway which connects both the A1 (M) and the A19. The area is well served by both commercial and public transport links, with the Port of Tyne being just 5 miles (8km) to the east and Newcastle International Airport situated 15 miles to north west of the property facilitating national and international flights. In addition Newcastle Central Station, a main station on the East Coast Mainline, connects the city to London in 2 hours and 50 minutes and Edinburgh in 1 hour and 30 minutes.

Washington is home to a wide range of industrial and office occupiers across c. 6.5 million sq. ft. of commercial space. Amazon, Nissan, Asda, Clipper, Rolls Royce and BAE Systems all have a sizable presence on the Washington Gateshead A1 corridor.

Amazon are currently on site with construction of two units at Follingsby Park totalling 2.16 million sq. ft. having purchased the site in Q1 2020. Nissan have had an extensive investment into Sunderland in the last decade taking 430,000 sq. ft. through its logistics operator Vantec and 421,000 sq. ft. at Hillthorn Park, Washington in 2016. in August 2020 L&G announced its plans to fund 620,000 sq. ft. of industrial space at Hillthorn Park.

Situation

Crowther Industrial Estate occupies a prominent position adjacent to Junction 65 of the A1 (M) and at the heart of the region's road network. Junction 65 is the intersection of the A1(M) with the A1231 Sunderland highway to the east and the A194 which leads to South Tyneside and the Tyne Tunnel to the north. The A1 (M) continues to the north with Washington and Team Valley both within 5 miles of the estate.

The area surrounding the property is dominated by industrial and trade counter uses with the nearby Portobello Industrial Estate and Trade Park providing a range of different uses. Occupiers such as Rolls Royce, Snorkel, Walker Filtration and BAE Systems occupy significant warehouses approximately 2 mile south of the subject property.

Description

The property comprises a modern, detached industrial warehouse built in the late 1980s, of steel portal frame construction. Internally the building benefits from a two-storey office element with glazed frontage with the warehouse containing of multiple items of machinery that are essential to their primary function of the manufacturing of holograms, as well as two laboratory spaces. The minimum eaves height of the warehouse area is 5.4m.

Externally the site benefits from c. 80 car parking spaces and a security gatehouse. The site is enclosed with palisade fencing and 24 hour CCTV is operational due to the nature of the activities onsite.

To the north-west elevation there is expansion land suitable for c. 15,000 sq. ft. subject to the obtaining the necessary consents and permissions. The unit is situated on a site of 5.78 acres (2.34 hectares) providing a low site coverage of 20.9%.


Tenure

Freehold.

Tenancy

The property is let to OpSec Security Limited [CRN: 1997954] on a 10-year term commencing 01 September 2020 with a guarantee from Orca Bidco Limited [CRN: 09819731]. There is a tenant only break clause that is activated with 6 months' notice on 01 September 2025.

The passing rent is £228,500 per annum, reflecting a modest rent of £4.15 per sq ft.

The lease includes rent review provisions on the 5th anniversary of the term to the higher of the preceding or open market rent.

Covenant Information

OpSec Security Limited is a global provider in the design, manufacture and provision of authentication and anti-counterfeiting products and services.

It operates in over 40 countries with principal customers consisting of private and public sector organisations throughout Europe, Africa, the Middle East and the Far East.

OpSec's products are used across a wide range of private sector industries including Pharmaceuticals & medical devices, automotive industries as well as by producers of luxury and sportswear apparel. Government uses include revenue protection & tax stamps as well security foils and labels.

Amongst their clients includes Visa and Mastercard who use OpSec for the production of holograms on their credit and debit cards.

Opsec Security Limited forms part of the OpSec Security Group plc, which is ultimately owned by the private equity arm of investment manager Investcorp.

Industrial Market

Further details can be found within the marketing particulars.


EPC

Available upon request

Proposal

Offers are sought in excess of £3,180,000 (Three Million, One Hundred and Eighty Pounds) reflecting a Net Initial Yield of 6.75%, after deducting purchasers costs of 6.47%. A purchase at this level would reflect a low Capital Value of £57.76 per sq ft. A purchase at this level would reflect a NRY of 7.32% based on our opinion of Market Rent (£4.50 psf)

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NET INITIAL YIELD:
6.75%
PRICE:
£3,180,000
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