102-104 High Street, Redcar, Cleveland, TS10 3DL

Description

A Ground Floor Double Fronted Retail Unit Fully Let Producing £20,000 Per Annum (Reflecting a Gross Initial Yield of 20% on Lower End of Guide)

Accommodation

Ground Floor: Retail Unit; WC.

Location

Situated on a mixed use road close to local shops and amenities. The open spaces of Redcar Beach are within easy reach. Transport links are provided by Redcar Central rail station.

Tenure / Property Information

Investment Analysis

Fully let ground-floor double-fronted retail unit with stated rent of £20,000 per annum. The auction description states a 20% gross initial yield at the £100,000 lower guide, implying £100,000 at that income yield. The supplied guide range of £100,000–£150,000 implies gross yields of approximately 20.0%–13.3%. No completed commercial comparables, purchaser premium, disbursements or independent valuation evidence were supplied.

Investment Snapshot

Strategy Recommendation

Consider only as a long-term commercial income purchase at or near the lower guide, subject to reviewing the lease, tenant covenant, break clause, RPI provisions and all legal-pack disbursements. Avoid a flip strategy because no value-add works or resale margin are evidenced.

Works Required

No refurbishment works are evidenced. The unit is described as let, has an EPC rating of C and includes a WC. A £0 works allowance is used for the base calculations, subject to legal-pack and inspection confirmation.

Rental & Market Context

Potential BRRR Position

At a £100,000 purchase price and no evidenced refurbishment allowance, the known base cost is £101,800 including the stated administration charge. A 75% refinance against the £100,000 base GDV would provide £75,000, leaving approximately £26,800 before finance, tax and other auction costs. The refinance outcome is dependent on lender acceptance of the leasehold commercial property, tenant covenant and valuation.

Buy-to-Let Analysis

Commercial income investment with a stated passing rent of £20,000 per annum from The Imaginarium Creative Studios Ltd. At the £100,000 lower guide, the gross yield is 20.0%; at the £150,000 upper guide, it is approximately 13.3%. The calculation excludes the unspecified buyer premium, disbursements and any finance, tax, insurance, maintenance or management costs.

Flip Analysis

No refurbishment or resale value uplift is evidenced. On the base £100,000 GDV, the known purchase and administration cost is £101,800 before buyer premium, disbursements, selling costs, finance and tax, producing a £1,800 shortfall before those additional costs. A reliable flip surplus cannot be established.

Investor Risks & Due Diligence

• The tenant has a break clause in 2031, creating future void and reletting risk.

• The stated rent is contractual lease rent, but tenant covenant strength and payment history are not supplied.

• Buyer premium and possible legal-pack disbursements are unspecified and excluded from the base cost.

• Leasehold commercial lending and refinancing terms are not confirmed.

• The upper guide produces a materially lower gross yield of approximately 13.3% before operating costs.

• RPI review performance and the detailed lease wording require legal review.

Recommendation

Consider only as a long-term commercial income purchase at or near the lower guide, subject to reviewing the lease, tenant covenant, break clause, RPI provisions and all legal-pack disbursements. Avoid a flip strategy because no value-add works or resale margin are evidenced.

Strategy Rating

Analysis Confidence

The rent, lease term, indexation, break clause, tenure, EPC and guide range are supplied, but there are no commercial comparables, independent valuation, purchaser premium, full costs, tenant financial information or legal-pack disbursements.