2-3 Northbrook Street, Newbury, RG14 1DJ

The property comprises of two purpose built, modern, well configured retail units on the ground floor with basement, first and second floor ancillary space. Clarks utilise their basement accommodation as storage. Costa utilise their basement as a ‘Costa Coffee Training Academy’, which provides a regionaltraining centre for all their employees. This is fitted out to a high specification. Costa Coffee have valuable additional outdoor seating adjacent to the River Kennet.
LocationNewbury is an affluent and attractive market town that boasts historic buildings and traditional streetscapes. The town is strategically located within the M4 motorway corridor in Berkshire, 53 miles west of London, 25 miles south of Oxford and 18 miles west of Reading.
SituationThe property occupies a prime position on the pedestrianised Northbrook Street, in close proximity to the junction with Bridge Street and the River Kennett. This area is particularly busy as the bridge provides the link between the north and south side of the town. Nearby occupiers include Boots, Holland & Barrett, Starbucks, Lloyds TSB and Camp Hopson Department Store. The property benefits from a return frontage which overlooks the River Kennet, where a footpath leads past the building to the surrounding residential area.
TenureFreehold
Rental LevelsThe letting to Clarks was agreed in January 2012 and represents a re-based level. The Costa Coffee letting was agreed in April 2007, and is in line with current rental levels. We have analysed the passing rents to the following ‘headline’ rates:
- Unit 2 Costa Coffee £117 Zone A- Unit 3 Clarks £117 Zone A- First Floor office PinkGreen £11.40 per sq ft
Rental levels within Newbury have historically reached over £150 Zone A. Given the property lies in a prime trading location, we are of the opinion that rental growth prospects for the subject property is strong. The first floor office unit was let at the bottom of the market and we therefore consider this to be rack-rented. Applying £11.50 per sq ft to the second floor office results in a rental value of £13,900 per annum.
ProposalWe are instructed to seek offers in excess of £3,100,000 (three million, one hundred thousand pounds), subject to contract and exclusive of VAT, for the freehold interest in the property. A purchase at this level would reflect a net initial yield of 6.75%, following the letting of the vacant office, a revisionary yield of 7.17% would be realised, assuming normal purchaser’s costs of 5.8%.

Location