Parc Tawe North comprises eight units of a combined 116,700 sq ft retail warehouse park. The property is located on the edge of the city centre in an established retail area.
Homebase, which entered into a Company Voluntary Arrangement (CVA) in August 2018, had proposed to reduce the passing rent on their unit by 90%. Recognising that better terms could be agreed elsewhere, we chose to serve notice to secure vacant possession of the unit. At the same time, we negotiated the release of a restrictive covenant to allow additional food retailing on the park.
Working with another one of our occupiers, Lidl, who occupied a 10,000 sq ft unit on a lease expiring in 2023, we entered into an agreement whereby Lidl agreed to take the entire 35,500 sq ft previously occupied by Homebase. Following enabling works by us, Lidl will take a 20-year lease, with a break after 15 years, at an annual rent of £0.4 million, in line with ERV. The lease is subject to five yearly RPI based rent reviews capped at 2% per annum.
Having secured an anchor occupier for the largest unit on the park, we are pursuing the second stage of our strategy by improving the external areas and focusing on letting the remaining space.
Through this approach we have significantly mitigated the negative impact of the Homebase CVA.