The Pompey Centre

Portsmouth, Hampshire PO4 8SL

Overview

  • The City of Portsmouth is predominantly located on Portsea Island on the south coast in Hampshire, approximately 19 miles east of Southampton and 70 miles south-west of London.
  • Portsmouth is the 27th largest population centre in the UK, with a resident population of 215,000, and is the only city in the UK whose population density exceeds that of London.
  • The Pompey Centre benefits from being located in the centre of Portsea Island adjacent to Fratton Park just off the A2030 Goldsmith Avenue, the principal route leading west towards the city centre.
  • A well-established modern purpose built scheme developed in 2003 on 24.1 acres totalling approximately 290,956 sq ft, with 1,033 car spaces.
  • A rare opportunity to acquire a mixed use scheme including Trade Park, Industrial, Hotel, Retail, Leisure and Restaurants.
  • The Pompey Centre is let to a leading mix of national multiple tenants including B&Q, McDonald's, Safestore, KFC, Topps Tiles, Accor Hotel, Lloyds Pharmacy and the NHS.
  • Total scheme income of £4,040,445 per annum (including guarantees) of which the majority is let to Very Low Risk covenants with a WAULT of 8 years to expiry.
  • Immediate potential rental uplifts on some outstanding reviews, lease renewals and lettings.
  • Asset management opportunities to add value and floorspace over the medium term.
  • Predominantly Freehold.


We are instructed to seek offers in the region of £56,000,000 (Fifty-Six Million Pounds) subject to contract and exclusive of VAT. An acquisition at this level would reflect a Net Initial Yield of 6.76% rising to approximately 6.9% within two years (owing to expected uplifts at rent review, renewal and RPI) assuming purchaser's costs of 6.8%.

Location

Portsmouth is predominantly located on Portsea Island on the south coast in Hampshire, approximately 19 miles south-east of Southampton and 70 miles south-west of London.

The city has one of the strongest marine and maritime economies in the UK, as well as being home to the Royal Navy. Global giants in the advanced manufacturing, defence, technology and aerospace are located in the city, including BAE Systems, IBM, Babcook, QinetiQ, Airbus and PALL Europe.

Portsmouth is the 27th largest population centre in the UK which currently stands at 215,000 and is projected to grow to 250,000 by 2050, also accommodating 18,000 new homes by 2034. The city's working population is 4% higher than the national average. The University of Portsmouth is ranked within the top 50 with a student population of 23,000. The first University Technical College opened in 2017 in the city to boost regional employment and to supply a highly skilled advanced workforce.

Tourism

In 2015, Portsmouth and Southsea ranked in the top 20 most visited towns and cities in the UK. Portsmouth has an abundance of tourist attractions predominantly focused around its maritime history and the naval base.

Leading attractions that help contribute significantly towards the local economy include HMS Victory, The Mary Rose Museum, HMS Warrior, Spinnaker Tower, Royal Navy Submarine Museum as well as Charles Dickens Birthplace Museum and the D-Day Museum.

The highly successful Gunwharf Quays, in the top 3 designer outlets in the UK, has an exciting array of shopping and dining which adds to the significant spend from outside Portsmouth's catchment.

Portsmouth's Growth Agenda

Major initiatives include:

Tipner & Horsea Gateway
Funding has been secured as part of the Government's City Deal to kickstart this prominent waterfront site bordering the M275. Up to 2,730 homes and business space to accommodate more than 3,700 permanent jobs is planned over the next decade.

City Centre
Significant investment is planned to reshape the city centre including provision of accommodation to house 4000 students together with new road and public realm improvements. The University is intending to create a world leading city centre campus over the next decade.

Rail

Portsmouth is served by three rail stations: Portsmouth & Southsea to the west, Fratton located centrally and Hilsea to the north. Fastest journey times from Fratton Station:
Chichester - 19 minutes
Southampton Central - 38 minutes
London Waterloo - 1 hour 24 minutes

Road

The scheme has strong road communications with the A2030 providing direct access to the A3 approximately 1.9 miles to the north west, and from there the M275 and wider motorway network.

The M275 provides the main connecting link to Southampton along the M27 to the west and Chichester along the A27 to the east.

Central London can be accessed by the A27 and A3(M) via Guildford.

Portsmouth benefits from being extensively covered by the First bus network currently running within the city, with approximately 50 bus routes in Portsmouth, Fareham and Gosport.

Ferry

Portsmouth offers direct ferries to France in under three hours, with routes to Cherbourg, Caen and Le Havre amongst the destinations.

Situation

The Pompey Centre is exceptionally well established in Portsmouth being adjacent to Fratton Park and having been a leading business orientated location for 15 years.

High Density Catchment & Demographic

  • Population According to CACI Limited, an estimated 160,885 people live within a 10-minute drive-time of the property, increasing to over 230,383 people within a 15-minute drive.
  • Strong Growth The population of Portsmouth has seen above average growth of 0.68% per annum between 2011 - 2017 (PROMIS).
  • Comparatively Affluent Over 54% of the 10-minute catchment population is classified within categories AB (in higher or intermediate managerial/admin/professional careers) and C1 (in supervisory, clerical, junior managerial/admin/professional careers), which is higher than the UK average.
  • Within a 10-minute drive time, those considered to be within the "Rising Prosperity" and "Comfortable Communities" Acorn categories account for 42.5% of the profile.
  • Portsmouth benefits from large scale touristic spending with Visit Britain estimating an annual injection of approximately £39 million between 2014 and 2016.
  • Average house prices in Portsmouth increased by 7.6% between Q4 2016 and Q4 2017, 3.3% more than the PROMIS average.

Description

  • The only modern, purpose built trade park in Portsmouth, together with a number of industrial units.
  • The only dedicated DIY provision on Portsea Island.
  • Strong mix of alternatives hotel, NHS & self-storage.
  • Leading A3 restaurants McDonald's & KFC.
  • Close to Fratton Park, home to Portsmouth FC, as well as a new Tesco superstore adjacent.
  • The site, developed in 2003, extends to approximately 24.1 acres (9.7 hectares) and totals approximately 290,956 sq ft of accommodation and 1,033 car spaces.

Scheme Configuration

The property was developed in 4 distinct phases that comprise the following:

Phase 1:
Site Area: 15.6 acres
GIA Floorspace: 180,074 sq ft
Car Parking Provision: 829 spaces
Planning Uses: A1 (Restricted), A3, D1, D2, B8
Occupiers: Safestore, KFC, McDonald's, B&Q, Bensons, Better Gym, Krazy Kaves

Phase 2:
Site Area: 3.4 acres
GIA Floorspace: 41,107 sq ft
Car Parking Provision: 126 spaces
Planning Uses: B2, B8
Occupiers: Topp Tiles, CEF, Bathstore, Elliotts, Global Furniture Express, Plumblink Plumbing Supplies Ltd, Portsmouth Plumbing Supplies, Tile Giant, C.Brewer & Sons, Formula One Automotive

Phase 3:
Site Area: 2.1 acres
GIA Floorspace: 37,765 sq ft
Car Parking Provision: 52 spaces
Planning Uses: A1, B2, B8, D1
Occupiers: Mr Clutch, Sue Ryder, Sally Salon, Lloyds Pharmacy, Sunnyside Surgery, NHS.

Phase 4:
Site Area: 3 acres
GIA Floorspace: 32,010 sq ft
Car Parking Provision: 26 spaces
Planning Uses: A1, C1
Occupiers: Ibis, Subway, Inhealth Ecotech Ltd.

Scheme Construction

The scheme was developed in 2003 and is of the following construction:

Trade Park: Steel portal frame construction with steel profile sheet cladding and pitched roofs incorporating roof lights. Internally the units have an eaves height of 6m, up and over shutter doors and WC facility. Each tenant has fitted out with units according to specific business needs, with some sale and storage mezzanines.

Retail / A3 / Gym: Steel portal frame construction with steel panel elevations and partially glazed frontages. The units house external canopies overhanging the glazed entrance points.

Industrial / NHS / Self Store: Steel portal frame construction with steel profile sheet cladding with some partially and fully glazed frontages. Roller shutters access doors.

Hotel: Steel portal frame construction with steel cladding flat roof and double-glazed windows. Partially glazed entrance.

Car Parking: A combination of paving, concrete slabs and tarmac with black top finish.

Scheme Access

  • Vehicle access is from the Pompey Centre Estate road just off the A2030 Goldsmith Avenue.
  • Servicing for the B&Q unit is via a concrete yard to the rear of the property accessed from Dickinson Road, just off Fratton Way.
  • There is a regular bus service to The Pompey Centre from the city centre and surrounding areas.
  • Tenure

    Predominantly Freehold.

    Tenancy

    The site is split into phases allowing greater flexibility and liquidity.

    Part of Phase 4 is held on 999 year leases.

    Phase 1 (180,074 sq ft)

    Safestore, KFC, McDonald's, B&Q, Bensons, Better Gym and Krazy Kaves

    Phase 2 (41,107 sq ft)

    Topps Tiles, CEF, Bathstore, Elliotts, Global Furniture Express, Plumblink Plumbing Supplies Ltd, Portsmouth Plumbing Supplies, Tile Giant, C.Brewer & Sons and Formula One Automotive

    Phase 3 (37,765 sq ft)

    Mr Clutch, Sue Ryder, Sally Salon, Lloyds Pharmacy, Sunnyside Surgery and NHS

    Phase 4 (32,010 sq ft)

    Ibis, Subway and Inhealth Ecotech Ltd

    Secure Income Profile

    The scheme is let to a diverse mix of national operators, the majority of which are dominant in their sectors of the market. 44% of the scheme income is secured to B&Q until 2027, with a further 25% secured for over 5 years.

    Excluding two vacant units, the income risk is limited with 91% of the scheme's income secured against tenants rated by Experian as having a 'Very Low Risk' of business failure.

    Further information on the tenants' recent accounts is available on request.

    Future Income Enhancement

    The positive attributes to drive future performance include:
    • Trade Park conclude the last two renewals in light of improved rental tone and let the one remaining vacant unit on the park to set a new benchmark Headline Rent
    • Opportunity to improve WAULT by undertaking renewals, lease extensions and removal of any tenant break clauses industrials, A3 units & Hotel
    • Exploit potential to carve up Bensons into smaller units for A3 use and drive rental tone
    • There are outstanding requirements for retailers such as Dunelm, Matalan (relocation), Home Bargains and Aldi amongst others to be accommodated in Portsmouth. Potential for The Range relocation
    • Subject to B&Q consent to develop out small pods in the car parks
    • Enjoy RPI based uplifts on 13% of the income

    Planning

    Outline planning permission was granted in May 2001, for the construction of Fitness Centre, Class B1/B8 units, Class A1 Retail Unit, Class A3 Food & Drink unit and Class B8 units with associated parking, landscaping and access roads.

    Unit 1 (B&Q) is subject to the following restrictions: Non-food bulky retail limited to DIY and/or garden goods; furniture, furnishings and textiles, carpets and floor coverings; camping, boating and caravanning goods; motor vehicle and cycle goods; electrical goods including computers; and pet supplies.


    VAT

    We understand the property has been elected for VAT and it is anticipated that the transaction will be treated as a transfer of a going concern.

    SERVICE CHARGE

    The property operates a service charge relating to the 4 phases with further information available on request.

    EPCS

    Certificates for all units are available on request.

    SURVEYS

    A phase 1 environmental risk assessment is being undertaken and will be made available on request.

    DATA ROOM

    A data room is available with supporting documents and further information. Please contact Cushman & Wakefield for access.

    Proposal

    Offers invited in the region of £56,000,000 (Fixty-Six Million Pounds) subject to contract and exclusive of VAT. An acquisition at this level would reflect a Net Initial Yield of 6.76% rising to approximately 6.9% within two years (owing to expected uplifts at rent review, renewal and RPI) assuming purchaser's costs of 6.8%.

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    NET INITIAL YIELD:
    6.76%
    PRICE:
    £56,000,000
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