173-181 High Street & Castle Way, Southampton, Hampshire, SO14 2BY

Description

Substantial multi-let leasehold retail and leisure investment with vacant upper parts. Tenants include Tesco Express, expiring 2039, HMV, expiring 2031, and The Gym Group, expiring 2035, all with no breaks. Gross initial yield: 15% commercial. Asset management potential includes letting or repurposing vacant upper floors. The property is approximately 200m from Westgate Shopping Centre.

Accommodation

Total accommodation approximately 8,658.38 sq. m (93,198 sq ft), including approximately 38,073 sq ft to let on the 2nd, 3rd and 4th floors

Location

Southampton is the main commercial and administrative centre of Hampshire, located 70 miles south-west of Central London. The city benefits from road communications via the M27 and M3 motorways. Southampton Central Rail Station is 850m from the property and provides regular services to London Waterloo, Portsmouth and Bournemouth. The property is situated on the west side of High Street close to its junction with East Street and benefits from frontage to Castle Way opposite Albion Place. Nearby occupiers include Burger King, Costa Coffee, Poundland, Boots and Rush Hair.

Tenure / Property Information

Investment Analysis

Commercial investment guide range is £3.5m–£3.75m. A £3.625m midpoint is used only as an indicative base scenario, not a formal valuation. The reported 15% gross initial yield cannot be independently tested because passing rents, rent roll and full lease details are not supplied. The £4.955m 2016 comparable is historic and should not be treated as current market value. The lease has approximately 90 years unexpired and carries £55,124.40 annual ground rent, stated to equal 10.5% of rents received.

Investment Snapshot

Strategy Recommendation

Treat as a specialist commercial income and asset-management acquisition, not a residential BTL or conventional flip. Proceed only after reviewing the special conditions, full occupational leases, rent roll, ground-rent mechanism, title, vacant upper-floor condition, planning position and costs of letting or repurposing.

Works Required

No specific physical defects or refurbishment works are evidenced. The identified asset-management opportunity is to let or repurpose approximately 38,073 sq ft of vacant upper floors, subject to planning, condition, demand, lease and cost review.

Rental & Market Context

Sold Comparables

The following completed sales were identified within approximately 5 miles:

Potential BRRR Position

A commercial BRRR approach may be possible if the vacant upper floors can be let or repurposed, but no works budget, achievable commercial rent, valuation evidence or finance terms are supplied. Applying 75% to the indicative £3.625m base scenario gives £2.71875m refinancing proceeds before finance, tax and transaction costs; cash left in cannot be established.

Buy-to-Let Analysis

This is a leasehold commercial retail and leisure investment rather than a conventional residential BTL. Tesco Express, HMV and The Gym Group are stated to occupy parts, but passing rents and a detailed rent roll are not supplied. The stated 15% commercial gross initial yield cannot therefore be recalculated or assessed on net income. Residential rental listings are not relevant to the commercial investment analysis.

Flip Analysis

A flip case cannot be reliably quantified. The guide midpoint is £3.625m, but no supported refurbishment budget, current resale valuation, selling allowance or vacant-possession strategy is provided. The £4.955m comparable completed in 2016 is historic and insufficient to support a current resale value.

Investor Risks & Due Diligence

• Approximately 38,073 sq ft of upper floors are vacant, with no evidence of achievable rents, letting costs or repurposing costs.

• Annual ground rent is £55,124.40 and is stated to equal 10.5% of rents received, reducing the income available to the leaseholder.

• The lease is leasehold with approximately 90 years unexpired; full title and lease terms require review.

• Tenant lease details are incomplete beyond stated occupiers and expiry dates, so income security and covenant strength cannot be assessed.

• Seller or third-party additional charges may apply, but buyer premium and administration charges are not supplied.

• The reported 15% commercial gross initial yield cannot be independently verified without passing rents and a full rent roll.

Recommendation

Treat as a specialist commercial income and asset-management acquisition, not a residential BTL or conventional flip. Proceed only after reviewing the special conditions, full occupational leases, rent roll, ground-rent mechanism, title, vacant upper-floor condition, planning position and costs of letting or repurposing.

Strategy Rating

Analysis Confidence

The guide range, lease term, ground rent, occupancy summary and floor areas are supplied, but passing rents, lease documents, operating costs, condition, planning, buyer fees and current comparable evidence are incomplete.