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SECTION 1: INTRODUCTION
1.1This report will assess the strengths and weaknesses of 43 Middle Street, Yeovil, Somerset, BA20 1LG as a suitable acquisition for investment.
1.2 The report will assess the suitability of the construction of the property before moving on to look at issues affecting the property's investment potential.
1.3 The property is located in Yeovil, an affluent South Somerset market town, located 131 miles west of central London.
1.4 The urban population of Yeovil is approximately 41,000 persons, although some 150,000 people live within twelve miles of the town centre.
SECTION 2: PROPERTY CONSTRUCTION APPRAISAL
2.1 Photographs showing various aspects of the property are attached at Appendix 1.
2.2 General Description
The property is a substantially constructed, mid-terraced period building of solid brick construction under a pitched roof, arranged on ground and three upper floors configured to provide a ground retail unit with ancillary accommodation above. This type of construction is in keeping with properties in the local retail area.
The ground floor is solid and the upper floors are of suspended timber construction. The front elevation at 1st/3rd floors are relieved by sliding timber framed sash windows with security grills, in part, to the rear elevation at first and second floor levels.
2.3 Ground floor retail unit
2.3.1 The ground floor has a full height metal framed picture display window, an essential requirement for most retailers.
2.3.2 The ceiling is suspended (minimum/maximum floor to ceiling tile height of 2.30m/2.85m). A limited ceiling height is in keeping with most retailers' demands as their products need to be in reach and view of their customers and they therefore do not require additional ceiling height. A limited ceiling height also means that the occupier will save money on heating the unit in the winter and cooling it in the summer.
2.3.3 The ground floor has recessed strip lighting. Strip lighting is extremely good at illuminating a space. This is obviously essential for a retailer as customers must be easily able to view the products available.
2.3.4 On the ground floor there are independent air conditioning units and a heater above the entrance. Being able to maintain an optimum temperature is an essential requirement of any retailer.
2.3.5 The walls are plastered and painted. This simplicity of decoration will allow any occupier to easily re-decorate or fit out the unit to whatever specification they choose.
2.3.6 The ancillary accommodation to the rear of the ground floor, which in turn provides access to the yard is used as an office/staff area and includes a WC facility and is generally of similar specification to the sales area although has a floor to ceiling height of 2.52m. This space is extremely beneficial for a retailer as it allows staff quick and easy access to their communal area as well as a WC facility.
2.4 The First Floor
Accessed via an external staircase approached off the rear yard, the floor comprises of two rooms of basic specification with timber flooring, suspended ceiling (floor to ceiling height of 2.75m), spotlighting and plastered and painted/exposed brick walls. This floor would be used primarily as a storage space by the retailer below and therefore its basic specifications are ideal.
2.5 The Second Floor
The second floor is accessed either via the external staircase which serves the first floor or via an internal staircase from the first floor. It comprises of two rooms and a WC facility and is of similar decorative specification as the first floor except with a plastered and painted ceiling and a floor to ceiling height of 2.76m. By having a WC facility and an external access point this space could be utilised by the occupier as an office. Its simplistic decoration would easily allow for an office conversion. It must be highlighted however that it is not heated.
2.6 The Third Floor
The third floor, accessed only via an internal staircase, comprises two rooms which are of similar decorative specification as the second floor. The accommodation forms part of the roof and the walls therefore slope, in part. The maximum floor to ceiling height is 2.38m. This space could be effectively utilised as a storage space.
SECTION 3: ANALYSIS OF INVESTMENT POTENTIAL
Middle street is the main retail thoroughfare of Yeovil. The property is situated on the North side of Middle Street on the pedestrian section (restricted vehicle access). The property occupies prime pitch within close proximity to Vicarage Walk and Glovers Walk. Occupiers include JJB Sports, Vision Express, Boots, Ottakars, Going Places and Specsavers.
3.2 Building Design
3.2.1 The property is a four storey building providing a ground floor retail unit with ancillary accommodation to the three upper floors.
3.2.2 The ground floor retail unit is slightly irregular in shape, narrowing towards the rear/north of the property. This is due to the site on which the property has been constructed being slightly irregularly shaped (narrowing at its Northern most end) and slightly sloping (west to east direction). This factor will affect the rental value of the property and its appeal to new occupiers.
3.2.3 Access to the upper floors of the property is from an external staircase approached from the rear yard. Access to this rear yard is either from the rear of the ground floor or from the adjacent yard. Rights of access from the adjacent yard are however restricted to emergency escapes only. As a result of this restricted access the upper floors cannot be let to separate tenants.
3.2.4 The restriction on letting the upper floors to separate tenants results in a wasting of available space within the property. The first floor provides adequate space for storage for the occupier; however the second and third floors have no real use and are therefore wasted space. As a result of this only a nominal rental value can be attached to the second floor and no rental value can be attached to the third floor.
3.2.5 The occupier could also argue for a rental discount due to the fact that they maintain the whole building but only actually use the ground and first floor.
3.3 Condition of the Property
3.3.1 Although the ground floor unit is fitted out in the corporate style of the tenant and has been relatively well maintained, those areas that the public do not have access to have not been well maintained over the years and appear tired and worn.
3.3.2 The three upper floors of the property are not currently utilised by the tenant and their condition is matching with this.
3.3.3 In the front rooms of the first, second and third floor, the window sills are rotten and there is evidence that this has been caused by water damage. It is recommended that the sills are replaced and the windows re-sealed in order to make them watertight.
3.3.4 On the second floor there is evidence of damp penetration:
(a) In WC, top corner of rear wall.
(b) In front room under window.
(c) On the ceiling in second room and WC lobby.
It is recommended that this is further investigated to establish the cause of the problem and then repair is carried out to make the structure good.
3.3.5 On the third floor there is evidence of damp penetration from staining to:
(a) The rear room ceiling and the wall around the chimney breast.
(b) Front room ceiling around the chimney breast.
(c) On the floor of the stairs below perspex glazing to the main roof.
This is most likely due to defective roof tiles, for recommendations see section 3.2.6.
3.3.6 It can be visibly seen that a couple of slates on the roof have slipped and this could be causing the problems highlighted in section 3.2.5. It is recommended that all the slipped slates should be replaced in order to leave the roof covering complete and watertight. Access to carrying out these repairs would require scaffolding and would potentially be expensive due to the building's height and position on the street.
3.3.7 Externally, general remedial works are required to the fabric of the building, particularly to the areas of brickwork that have been weathered over the years and to the paintwork on the timber framed windows. It is recommended that the brickwork should be re-plastered and timber window frames re-decorated.
3.3.8 It is noted at the rear of the property that the guttering appears blocked and there is evidence of joints leaking. It is recommended that the gutters should be cleaned out and the defective joints re-sealed.
3.3.9 It is recommended that a structural survey of the building be carried out. This would highlight any significant problems within the actual structure of the property, such as blue asbestos or any other deleterious materials, which would be extremely costly to repair.
3.3.10 It is recommended that the lease of the property should be reviewed to ensure that it includes full repairing and insuring terms. If it does then the tenant is responsible for the upkeep and repair of the interior and exterior of the property. If it does not then investigations should be made into the possibility of including such terms at the next lease renewal date.
3.4 Condition of the Site
3.4.1 Ground Conditions- There is no apparent adverse ground conditions that might affect the property and it has been assumed that the property has been constructed using foundations which are adequate to support the structure, and that site conditions are stable and will remain so.
3.4.2 Flooding Risk- It is understood that the property does not lie within an indicative floodplain, as defined by current Environment Agency mapping.
The property has mains electricity, gas, water and sewerage services connected.
3.6 Town Planning and Statutory Considerations
3.6.1 Town Planning
-The property is not listed.
-The property is not in a Conservation Area.
-The property has no apparent key planning issues
3.6.2 Statutory Considerations
-The property is likely to require a Fire Certificate for its current use, but it has not been possible to see a copy.
-The property does not appear to require any significant modifications to enable most potential occupiers to comply with the Disability Discrimination Act 1995. However a more detailed investigation needs to be carried out by a specialist in order to gain a definitive answer.
The property is fully let to Claire's Accessories UK for a term of 10 years from 15 September 2002. The rent is subject to five yearly reviews, the next being with effect from September 2007.
SECTION 4: CONCLUSION
4.1 From the findings of this report the property at 43 Middle Street, Yeovil, Somerset, BA20 1LG is recommended as an attractive investment.
4.2 The property occupies a prime retail location within Yeovil, an affluent market town. It should be re-let readily if it was to become vacant.
4.3 The construction of the property is ideally suited to the needs of a retailer and is very much in keeping with properties in the local area.
4.4 The property is in reasonably good condition both internally and externally with only minor repairs currently necessary. The site itself has no apparent problems and there are no serious Statutory or Town Planning restrictions.