Central London location
Let to Tesco Stores Limited
Undoubted Income – Net Assets £5,472 million
15 years unexpired lease term
10 years term certain
5-yearly rpi-linked rent reviews
Highly prominent property with extensive frontage
Offers in excess of £2,746,000, subject to contract
4.25% Net Initial Yield
Southwark is a district of Central London situated on the south bank of the River Thames, approximately 3.2 km (2 miles) south-west of London’s West End and less than 1.6 km (1 mile) south of the City of London.
It forms the north-western part of the wider London Borough of Southwark, which borders the City of London and the London Borough of Tower Hamlets to the north, the London Borough of Lambeth to the west and the London Borough of Lewisham to the east. Tower Bridge, The Millennium Bridge, Blackfriars Bridge, Southwark Bridge and London Bridge all connect the City of London to the borough.
Many of London’s most renowned tourist attractions are located in the vicinity including The London Eye, Tate Modern, The Shard, Imperial War Museum, Borough Market, The Old Vic and The National Theatre. The famous South Bank is a short walk away with festivals, cinemas and pop-up markets.
In common with much of the south bank of the Thames, Southwark has experienced extensive regeneration over recent years with many new residential and office developments, shops, restaurants, galleries and bars. The area is in easy walking distance of the City and West End. As a result, it has become a major business hub for many national and international corporations.
The location benefits from excellent communications and is served by multiple underground and overground train stations. London City Airport is approximately 13 km (8 miles) to the east and Heathrow Airport approximately 27 km (17 miles) to the west, both easily accessible via London’s public transport system.
The property occupies a highly prominent position fronting Blackfriars Road, in close proximity to St George’s Circus and the junction with Borough Road. Other nearby occupiers include Starbucks (adjacent), Pret A Manger, Costa, Sainsbury’s Local, H10 London Waterloo Hotel and The Prince’s Trust.
The immediate vicinity consists of office buildings, hotels, restaurants, cafes, shops, homes, educational buildings, leisure businesses and tourist attractions. London South Bank University and its halls of residence are immediately to the south, hence the property benefits from being in an area housing a very large student population.
The property benefits from excellent communication links being within a five-minute walk from Southwark Station (Jubilee line) with direct trains to Westminster, Bond Street, Canary Wharf and Stratford. London Waterloo (Underground & National Rail Terminus), Elephant & Castle (Northern & Bakerloo lines), Lambeth North (Northern line) and Blackfriars (Thames Link, Circle & District lines) are also all within easy walking distance. Numerous bus routes also serve the area providing easy access to the West End and other parts of London.
The property forms part of “Blackfriars Circus”, a prestige, contemporary development by Barratt Homes completed in 2017/18. The scheme comprises five buildings over a large plot of land bordered by Blackfriars Road and Borough Road providing over 330 modern apartments as well as substantial office and retail accommodation, plus two new public spaces. Designed by the award winning Maccreanor Lavington architects, Blackfriars Circus was the Brick Award 2018 winner and shortlisted for the prestigious riba London Award 2020 and 2021 Neave Brown Award for Housing.
The investment comprises a double-fronted ground floor unit, Unit 1, which benefits from extensive frontage onto Blackfriars Road. Internally the property has been fitted out by the tenant in their usual corporate style and predominantly provides an open-plan retail area with ancillary accommodation to the rear. There is a loading bay to the front of the property.
The property has an EPC rating of B. A copy of the EPC is held within the data room.
The property has been measured by bkr Floor Plans and provides the following accommodation:
Net Frontage 53’6” 16.31m
Gross Frontage 57’9” 17.60m
Gross Internal Area 4,162 sq ft 386.65 sq m
Net Internal Area 3,884 sq ft 360.82 sq m
The measured survey is available to download and will be re-addressed to a purchaser at a cost of £225 + VAT.
Virtual Freehold. 999 year lease from 1st April 2016 at a peppercorn rent.
The property is let to Tesco Stores Limited on effectively a full repairing and insuring lease for a term of 20 years from 30th June 2017, expiring on 29th June 2037 (15 years unexpired lease term). There is a tenant’s break option on 30th June 2032, subject to six months’ notice.
The lease benefits from five yearly rent reviews. The rent is reviewed in line with the Retail Price Index (rpi), collared and capped at 1% and 4% respectively.
The 30th June 2022 rent review is currently being documented at £124,226.96 per annum (£321 per sq m / £29.85 per sq ft overall). The previous rent was £107,500 per annum. There are further rent reviews on 30th June 2027 and 30th June 2032.
Tesco Stores Limited (Co. No. 00519500) has reported the following figures:
27th February 2021 29th February 2020
Revenue £42.451 billion £42.951 billion
Pre-Tax Profits £1.018 billion £1.151 billion
Net Assets £5.472 billion £5.334 billion
Tesco is a British grocery and general merchandise retailer that operates internationally. Not only is Tesco one of the most valuable brands in the UK, it is also the sixteenth most valuable retail brand worldwide as of 2021. In the United Kingdom, Tesco is the leading grocery retailer with a consistent share of over 27 percent of the market ().
The Tesco Group employs more than 345,000 people and operates over 4,750 stores in five markets; the UK, Ireland, Czech Republic, Slovakia and Hungary. The Tesco Group also includes Tesco Bank, Tesco Mobile, a network of One Stop convenience stores, the UK’s leading wholesale business, Booker, and their data-science business, dunnhumby. For the year ending 26th February 2022, Tesco Plc reported Group Sales of £54.8bn and Pre-Tax Profits of £2,033m. For further information visit .
The property has been registered for VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (togc).
We are instructed to seek offers in excess of £2,746,000 (Two Million, Seven Hundred and Forty Six Thousand Pounds), subject to contract, reflecting a net initial yield of 4.25%, assuming purchaser’s costs of 6.42%.
Please note that a purchaser will be re-charged the costs of the measured survey (£225 + VAT) and searches (£824.45) which are provided in the data room.
Please note a purchaser will be charged a Transaction Fee of £10,000 + VAT.
An opportunity to acquire a Central London investment;
The investment provides undoubted income, being let to Tesco Stores Limited (Net Assets £5,472 million);
Long unexpired lease term of 15 years (10 years term certain);
The lease benefits from rpi-linked rent reviews;
The property occupies a highly prominent position fronting Blackfriars Road, within five minutes’ walk from Southwark Station;
The property forms part of a prestige, award winning development by Barratt Homes;
A double unit property, providing a Landlord with flexibility at lease expiry;
A purchase at the asking price reflects an attractive net initial yield.
For full details please visit our website or view PDF brochure below
* Sizes listed are approximations. Please contact the agent to verify actual sizes.