Category "Uncategorized"


New Trade/ Retail Instruction

by Cheetham and Mortimer

Preston Trade Park.

Unit of 5,391 sq. ft. adjacent to Howdens, Benchmarx, Euro Car Part and The Bathroom Showroom. For further information all Barrie 0161 828 8797


C&M completes purchase of Eastgate Retail Park, Accrington.

by Cheetham and Mortimer

Acting for family office clients of Glenbrook, we are pleased to have concluded the purchase of this retail park investment. Originally, it was presented for sale at the beginning of 2018 with an asking price of £5,200,000 but investor sentiment became tainted by the malaise of the retail sector. The investment was eventually acquired for a price of £2.825m and it is expected to generate a running return of approximately 10% for the new owners.

At first glance, it is easy to dismiss this type of product. However, there is much to commend. The scheme dominates the local market and has a flexible planning consent. The occupier profile is convenience orientated and includes representation from such reputable retailers as Home Bargains, Pets At Home and Iceland. All the tenants report satisfactory trading performance and the passing rents are perceived to be sustainable. Comprising a site area of over 3 acres, and a car park for over 200 vehicles, it also includes land for additional development.

Unfortunately, the scheme lost Poundstretcher following their recent administration but there is already strong occupier interest from a replacement traditional retailer. Hence, the investment offers a stable income with asset management potential. For letting opportunities, please contact Barrie Cochrane (07778 159924)


The Changing Fortunes of Retail

by Cheetham and Mortimer

John Lewis has always been viewed as the “bellweather” for the retail sector and their latest trading update merely reinforces the fact that the viability of traditional high streets and town centres up and down the country is being challenged more than ever before. There is a temptation to attribute short term financial performance to the cost of combating the coronavirus pandemic but the truth is that Covid 19 has simply accelerated an ongoing transition to digital platforms.

However, if you think that is simple to achieve – think again. Online platforms are expensive to operate. It is reported that the Online System Spend by Next in January 2019 amounted to £167m. The company estimates that capex on online systems will increase by 328% over the next 24 months. How many retailers can absorb that level of expenditure when margins are already under pressure?

For online retailing to succeed, the customer requires choice, value and convenience. Life for pure online players has its own challenges – particularly in respect of customer retention. It is reported that Amazon spent $11bn on advertising last year – again, how many retailers can sustain that level of expenditure?

Multi-channel retailing is the stable medium. This throws a life line to some high streets and shopping centres but against a wider picture of consolidation. There will be winners and losers. The winners will still suffer a painful readjustment in value. The losers will need to reinvent themselves – not with open spaces and statues of people who have never offended anyone – but with alternative uses for which there is genuine demand. The challenges are multiple. It will undoubtedly require local councils to step up and take the lead, but with limited resource, they will require assistance from the private sector in the form of partnerships. Sadly, there are no quick fixes. This will take time but if there is one positive from the pandemic, it has hopefully accelerated the process.


Investors prove reluctant to entirely abandon sector when fundamentals are strong

by Cheetham and Mortimer

Altrincham – Atlantic Street Retail Park

With the comfort of four under bidders, a sale of this interesting retail warehouse investment opportunity was never really in doubt – albeit there was still a sense of relief when it finally completed last week after 5 months in the hands of solicitors. It was the property that just kept on giving…. problems.

The property comprises part of the former B&Q Warehouse in Altrincham. The ownership was broken up and part was initially sold to Aldi – who are currently on site building their new store. The residual was subdivided and leased to an independent bowling operator and United Carpet on 10 year leases. Such a simple plan…. which will be fully catalogued by my forth coming best seller looking at all aspects of property ownership including deeds of variation, service charge apportionment, planning, drainage, boundary disputes, unauthorised works and Party wall agreements.

We managed to address all the issues and the sale completed at the originally agreed price of £3.45 m. In addition to generating an attractive return of 8.75%, the buyer can anticipate an improvement in the trading potential of the location arising from the imminent arrival of a new attractive neighbour, but in the long term, the adjacency of the Bridge Water Canal provides a great development site.

There is no doubt that location played a determining role in generating buyer interest. However, we believe that this demonstrates renewed confidence in the retail warehouse sector. In this instance, the use had in part been repurposed, but values where ultimately underpinned by the prospect of owning a significant quantity of land.

Retail warehouses undoubtedly offer scope to be repositioned or repurposed within the evolving retail world. We gained a valuable insight into the process of evolution and learnt some valuable lessons along the way. We would be delighted to have an opportunity to share our experiences on other properties.

For further information contact Robert Millington

Developer Jeopardy

by Cheetham and Mortimer

We were saddened by the news that Simons Developments have been placed into Administration – especially as it came so soon after the same fate had befallen other established regional players; notably Pochins and The Marcus Worthington Group.

At some point or other, Cheetham & Mortimer had worked with all three companies. All three had proven to be valued clients. They acted with integrity. They were professional. They got the job done for their customers. They will be missed.

Their demise will undoubtedly be also felt by the communities they served and the wider market. All three companies had strong and proud links to their local communities – not only providing jobs, but also their support for local charities and projects.

All three were recognised as mid-market operators. All three operated a Developer/Contractor model with a varying degree of emphasis. Perhaps, that sowed the seeds to their failure? It was apparent that the construction machines needed feeding and there was a persistent pressure to source new development projects. Perhaps, that caused a distraction and a movement up the risk curve into unfamiliar territory?

Construction has become more complicated. From the outset, the legal agreements have become more complicated and possibly lack the flexibility to address the inevitable unforeseen practical problems that often arise only after works commence. Parties enter these agreements in good faith but when things start going wrong, the blame game begins and that can be costly and time consuming to resolve.

Construction has become more costly. Wage costs have risen. The pool of available talent is possibly declining with the prospect of Brexit and requirements around Health & Safety and staff welfare add further cost. That’s before the rising cost of raw materials. Managing cash flow is a nightmare.

Despite all these rising risks, developers and contractors have been forced to operate on lower and lower profit margins. Clearly, in respect of our former clients, the return wasn’t sufficient to justify the risk.

Hence, over time, it is within the wider commercial market where their demise will perhaps become most apparent. These companies didn’t just build commercial projects such as Grocery Stores and Distribution Warehouses. They built hospitals, education facilities and care homes. The loss of their skill and experience will be to the detriment of such users. Perhaps the days of the Contractor/Developer model are limited but like everything else in life, it will be the forces of supply and demand that will prevail. Those contractors that survive will be able to command a higher risk premium for their services and the cost of development, especially in the Regions, might have become a lot more expensive.