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Case Study 1 - James Bridge
Case Study 2 - Hale Trading Estate
Case Study 3 - Priest House
Case Study 4 - Oak Park
Case Study 5 - Vaughan Trading Estate
Case Study 6 - Percy Business Park
Case Study 7 - Conoco
Case Study 8 - Hurst Business Park
CASE STUDY 1
James Bridge - Mixed Retail, Leisure, Trade & Industrial Development
* 1 Million SqFt Scheme
* Retail including:- Ikea, Burger King, Currys PC World.
* 35,000 SqFt Gala Bingo Club
* 110,000 SqFt Car Super Market
* 60,000 SqFt Distribution Unit
* Lettings to Blue Chip Tenants
* Investment Sales
* Complex Engineering and Reclamation Issues
Introduction
James Bridge was built on the site of the former FH Lloyd Steel Works. Comprehensive remediation and reclamation were required along with complex engineering issues including a river diversion.
The site lies just off the Ray Hall Interchange the busiest stretch of motorway in Europe and strategically located for distribution and out of town retail.
The Development
Phase one included two retail warehouses, Ikea a burger king unit and "Cargo Club" warehouse club. The Cargo Club was subsequently re sold to a home improvement user.
Phase two included a "Gala Bingo" club at 35,000 SqFt one of the largest in the country.
Also in phase two was a car supermarket and a distribution unit for a major local convenience store operator.
The car supermarket was pre-funded by Abbey Life, the Bingo club was sold to a private investor and the warehouse is owner occupied.
A further 185,000 SqFt of retail space is currently at planning appeal.
Summary
In the role of Lead Agent on the scheme I was responsible for marketing of the developments and investment sales subsequently.
I was also able to offer advice with regard to design of the buildings to not only ensure that they were suitable for the occupiers but were also acceptable to the funding institutions.
The scheme in total when complete will provide a mixed development of approaching 1.5 million SqFt and will represent by far the largest development carried out in the Black Country Development Corporation's area
The scheme was both challenging and rewarding as it involved breaking new ground in development type, rental levels and the complex engineering problems involving a highway underpass and river diversion.
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CASE STUDY 2
Hale Trading Estate - Tipton
* Development of Advance Factory Units
* Joint Venture with Specialist Vehicle
* Public/Private sector Co-operation
* Regeneration of Derelict Site
* Reclamation of Contaminated Land
* Fully Let at Record Rents for Location
* Managed Including Service charge and Collections
* Proactive Advice Saves £30k on Build Costs
Introduction
The Hale Trading Estate was originally intended to provide relocation opportunity for displaced businesses following massive infrastructure developments in the area.
The project involved the reclamation of an existing derelict site. The project required the demolition of the existing buildings, site investigation, and reclamation treatment.
The Development
Following clearance of the site the ground was prepared by regrading, digging out of "hot spots", importing inert fill and vibro-compaction.
Phase 1 included 2 units of 1750sqft, 3 of 1150sqft, and 5 of 2500 sqft.
Phase 2 included 2 units of 1150sqft and 2 of 1900sqft.
Phase 3 was a single design and build unit of 10,000sqft for Royal Mail.
Each phase showed an increase in rental value over the previous phase and the addition of the Royal Mail letting increased value by securing 30% of rental income on "Blue Chip" tenant.
Summary
As lead consultant I was able to maximise return and capital value through proactive advice from design through to marketing.
The development was technically both interesting and demanding, and involved input in a number of areas including:-
* Design, for operational and investment purposes.
* Grant Aid
* Reclamation and Remediation
* Letting and Estate Management
* Co-operation with Development Corporation
* Complex Engineering Issues
* Lease Terms
* Rental Levels and Investment Yields
* Marketing Campaigns
* Design of Promotional Materials and Advertising
* Tenant Selection
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CASE STUDY 3
Priest House - Cradley Heath
* Multi Let Office Building
* Improved Capital Value from £190k - £350k
* Proactive Management
* Facilities Management, House keeping
* Improved Letting Levels
* Increased Rental Levels and Re-gearing of leases
* Refurbishment of Common Areas and Improved Security.
* Onward Sale of Investment and Management of Property Retained
Introduction
Priest House was built in 1980 as a group head quarters building for a local manufacturing concern. Following the sale of the business one of the former directors retained the building and sold it with vacant possession for £190,000.
The Building
The property has a good level of specification including compartment trunking, 6 person lift, part raised floors, and bespoke presentation suite.
Unusually Priest House has a high level of on site car parking.
Management
The first priority was to let the building to establish a rental stream. This was achieved over the first 9 months to 100% occupancy plus two lettings for telecommunications installations.
Over the next two years the rents were improved on as the relatively short leases either fell in or were re-geared.
Various improvements were made to the property including a new fire alarm system, improved security, improved kitchen and welfare facilities and redecoration of the common areas.
Summary
Following the physical and lease improvements to the building we were able to dispose of the property at a greatly increased price of £350,000.
The majority of the improvements were funded out of the service charge made possible by the full occupancy of the building.
Over approximately 3 years the building showed a rental growth from nil to £45,000pa and capital growth from £190,000 to £350,000 a growth of 84% or 28%pa.
The new owners were happy to retain our services to manage the property and rental level are likely to rise over the next 12 months to £55,000 and capital value to in the region of £440,000. This represents growth in 18 months of 17%pa in capital terms and a return on the original investment of 15.7% pa in income terms clearly demonstrating the value of proactive property asset management.
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CASE STUDY 4
Oak Park Retail Scheme Brierley Hill
* 48,400 SqFt of Retail Warehouse
* Lettings to Major Retail Tenants
* Complex Enterprise Zone Tax Shelter
* Redevelopment of Steel Works
* Site Reclamation and Remediation
* Competition from Adjoining Hyper Mall
* Sale to investment fund.
Introduction
Oak Park was built on the site of a former tube works in the Dudley Enterprise Zone. The zone was established to regenerate the former Round Oak Steel Works which closed during the early 1980's recession.
The main Round Oak site was redeveloped to provide the largest shopping centre in Europe in excess of 2 million SqFt.
Oak Park was developed nearby competing with the Merryhill Shopping Centre as it was now known principally on price convenience for bulky goods and availability to second tier retailers.
The retail units were let to Wickes Building supplies, Aldi stores and Midland Fabric Warehouse in units of 26,040SqFt, 12,360SqFt
and 10,000SqFt respectively.
The scheme let at £8.00 per SqFt and sold to a tax efficient fund for a single figure yield.
Oak Park represented one of the last true out of town retail parks to be constructed in the area before the implementation of PPG6 and PPG13. These were introduced to protect town centres and implemented sequential testing which saw the end of major out of town retail development in the UK.
Summary
As sole agent I was able to ensure that the development was fully let and assist in the disposal of the completed development.
Oak Park was both interesting and professionally challenging and involved a number of technically complex issues including:-
* Grant Aid
* Enterprise Zone Allowances
* Tax Efficient Funds
* A Variety of Engineering Difficulties
* Obtaining Tenants in a Fiercely Competitive Location
* Onward Sale to Institutional Purchasers of a Reclaimed Site
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CASE STUDY 5
Vaughan Trading Estate - Tipton
· 830,000 SqFt Manufacturing and Distribution Complex
· Occupancy Improved From 20% to Near Full Occupation.
· 10 Acres Sold For Residential Redevelopment.
· Lettings to Plc Tenants
· Advice Regarding Redevelopment Options
· Improvement in Asset Value to bid of 4 times Purchase in under 3 years.
Introduction
The estate was originally owned by clients and let to a major manufacturing group.
When the group re structured the client sold the estate to the tenants who used this method to absolve themselves of their leasehold obligations.
The tenants then sold the now vacant estate by tender. The original owners were successful in re-purchasing the estate at a much reduced price.
The owner managed to let some of the void space and retained my firm as letting agents.
Over the next 2 years the estate was filled with tenants and was producing in excess of £1m per annum largely as a result of proactive marketing by our practice.
When the estate was re-geared to provide an acceptable investment scenario, an approach was received which was worked up into an offer of in excess of £10M over 4 times the original buy back price.
The offer was eventually declined to facilitate further development of the site which remains in the ownership of the client to this day.
Summary
By an aggressive approach to marketing the estate was fully let and showed excellent capital growth. The original "buy back" price was more than covered by the sale of the development site for residential development.
In the long term the property has proved a sound investment, exhibiting a high yield and spectacular capital growth,
The performance of the investment was entirely due to proactive marketing high levels of occupancy being vital for maintaining the viability of this type of investment where some of the buildings are reaching the end of their useful life.
High overall levels of occupancy and therefore a good overall yield is essential to the future of the investment to facilitate the gradual redevelopment of the older buildings.
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CASE STUDY 6
Percy Business Park - Oldbury West Midlands
· Investment Purchased For Client at £1.8m
· Lettings of Vacant Space
· Rent Reviews and Lease Renewals
· Assisted with Management
· Sold on After 6 Months at £2.7m
· Retained Agency and Management With New Owner.
Introduction
The Percy Business Park is an industrial "break up" estate in the industrial West Midlands.
Extending to some 70,000 SqFt on about 5 acres and proving units of 500, 1000, 1500, 2000 and 2,400 SqFt.
The estate was in a run down condition on purchase having been acquired as part of a package by a development company with some additional land.
Once the original owner had developed the additional land into a small retail park the Percy Business Park was offered for sale at an initial yield of just over 12%.
Our client purchased at £1.8m on February 14th.
The Project
Having been asked to advise the client on the purchase it became rapidly obvious that the estate was in need of a strong dose of proactive management.
The estate was run down and in poor repair. There was much rubbish and the communal areas were in a filthy condition.
The tenant mix was very poor with an overly large proportion of low grade auto repairers.
The existing site manage was working without resources and had become over familiar with the tenants, including the problem tenants.
Summary
By proactive management including maintenance works, cleaning, increasing rent roll, letting vacant units organising lease renewals and rent reviews, and removal of delinquent tenants the estate was "turned around" inside 6 months.
The sale and purchase provided an interesting challenge, having contaminated land issues and complex infrastructure problems in particular drainage and electrical services.
By solving the infrastructure difficulties and instilling some discipline into the estate management regime the estate was improved and operating smoothly.
The value of the estate was increased by 50% inside 6 months and sold on at a substantial profit.
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CASE STUDY 7
Re-designing Valuation Reports for Conoco
· Development of New Valuation Product
· Response to Industry Concerns and Requirements
· Improved Information Provision
· Reduced Cost of reporting
· More Analytical Approach to Valuation
· Design of Client Driven Solution within Statutory Guidelines for Valuation
Introduction
Petrol Filling Station valuations are a highly specialised area of work to the extent that probably no more than a dozen valuers in the UK would claim competence or even experience.
Conoco Retail Credit department approached our company given previous experience in the field to provide valuation services.
The department required valuation services, in connection with security for trade facilities and mortgages.
The majority of the cases are small independent operators with 3 – 4 filling stations in the £300,000 -£1.5m range.
The Project
We were asked to design a new valuation report format to improve the service to the Credit Analysts.
More concise information was required in a more usable order, also a more detailed feel for the trading situation.
A more systematic appraisal of competition was called for and a more critical analysis of the real impact of competition.
Compliance
Finally the reports had to comply with RICS standards which is a requirement of lending bodies and auditors.
Summary
By creating a uniform system of reporting and providing the concise product required the survey and drafting times were decreased. A consequence of the revised reporting system was also a significant reduction in costing and turn around time.
Streamlining the valuation and appraisal process and the increased speed of decision making has enabled the area sales managers to aggressively market the brand.
A number of operators with other franchises have been recruited. Much of the success has been due to the reduced lead time when pitching the supply agreements to potential new operators.
· Improved Valuation Product
· Reduced Reporting Time
· Tailored To Client Requirements
· Reduced Costs
· Client/Consultant Cooperation
· Redefinition of Industry Standard
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CASE STUDY 8
Hurst Business Park Dudley
· Purpose built Steel Processing Plant
· Complex Engineering Issues
· Enterprise Zone Project
· Most Modern Slitting Line in Europe
· £2.7 Million Project + £3 Million in Plant
· Multi-national Client
Introduction
The client had a need to replace an obsolete manufacturing plant for splitting of steel coil.
The plant was required to process the new 20 ton coils on two lines and provide storage for 1000 tons plus of coil and processed product.
Firstly a sale was agreed for the disposal of the existing site to a residential developer and then a site was identified in the nearby Dudley Enterprise Zone.
As the site was developer tied negotiations for a design and build project were commenced. One of the main problems was to design a building that worked operationally but would be acceptable for future alternative use later.
The engineering difficulties included 2 mine shafts on site and the need to provide two 5 M deep de-coiling pits. The cranage requirement gave rise to a need for point loadings of approaching 100 tons.
There were a number of other issues including building regulation changes which may have required a passenger lift and the building specification called for a cladding type manufactured by a competitor which was not acceptable.
The original framing was intended to be a swage beam type which would have been unworkable in that particular application.
Summary
· Delivery of Design and Build Solution
· Solution of Engineering Problems
· Production of Highly Functional Building without sacrificing fundability
· Innovative Solutions to Problems
· Complete Consultancy Package Throughout Project
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