Poundland's money as good as anybody's

Published on Monday 24 May 2010 19:01

WOOLWORTHS was one of those retailers that many of us only started to fully appreciate once it was gone.

We suddenly realised how useful the store had been for all sorts of purchases from a torch and its batteries to blank CDs and inexpensive children's toys.

In a few locations in the UK (Stornoway on the Western Isles among them), the brand was reinvented by entrepreneurial former employees who saw this not only as a chance to make a reasonable living (albeit as the result of very hard graft) but also to restore the "quasi-social service" that many longer-term customers had considered Woolworths to be.

In a paradoxical way, the recession may have helped keep the former Woolworths units filled, given the number of discount chains that saw a gap in the market.

The food retailer Iceland seemed to be first off the mark, grabbing the most desirable locations, and it was quickly followed by discount specialists such as Poundland and Poundstretcher.

A milestone was reached this month with a deal that will see Poundland, described as Europe's largest single price discount retailer, take over the former Woolworths store on Argyle Street in Glasgow. It will be Poundland's biggest store in Scotland.

The property, 20,000sq ft of space over the ground and basement floors, has been let on a ten-year lease at an initial rental of 375,000 a year. The accommodation will be redeveloped to create a suitable space for Poundland and will be ready for occupation in September.

Poundland was represented by CBRE while Cushman & Wakefield acted on behalf of the landlord, Redevco. Kevin Sims, retail director in Scotland for CBRE, said: "This will be a new flagship store for Glasgow. It is an important acquisition and reinforces Poundland's position as Scotland's leading single price operator."

Flagship or not, the deal brings a discount retailer into a large chunk of Argyle Street prime space, which some might regard as a sign that Glasgow's retail core is starting to struggle.

But specialist retail agent Fraser Smith said: "Let's face it, the only retailers who are moving in at the moment are from the discount and value sectors. Poundland have proven to be a very good covenant and they offer landlords what they want, especially at the present time – the knowledge that their rental income stream is secure.

"To a landlord wishing to secure a letting with an underlying strength, whether or not the tenant is a discount store is immaterial"

SLI buys Jamaica St car park for 11.5m

THERE seems to be a section of the population who are almost welded to the car, despite increasingly restrictive on-street parking regimes in the centres of major cities, coupled with ever rising fuel costs

Therefore it should not be all that surprising to learn that the 750-space, multi-storey Jamaica Street Car Park (pictured), which occupies a prime site in central Glasgow has been bought by Standard Life Investments for 11.5 million, a price that produced net initial yield of 7 per cent.

The car park is let to Britannia Parking on a 25-year lease expiring in 2031 and incorporating RPI-linked uplifts at each rent review.

Campbell Docherty of GVA Grimley, who acted for the vendor, La Salle Investmentmanagement, said: "The city centre location and proximity to St Enoch Shopping Centre and Argyle Street makes this an attractive investment for an investor seeking long-term secure income with guaranteed rental uplifts"

BUSINESS RATEPAYERS HARD HIT

SCOTTISH non-domestic ratepayers will be particularly hard hit by the new rateable valuation, according to Richard Spence, director at Drivers Jonas Deloitte.

In addition to the new valuations being based on rental values and build costs relevant at April 2008 the Scottish Government also announced that no transitional relief would be applied at the 2010 Revaluation, he said. "Transitional relief was used to phase in increases in rates liability and given the increase in rateable values at this revaluation, its removal in Scotland is particularly unwelcome. It will also create a disparity with the system in England which retains a transitional scheme. While the reduction in the uniform business rate, set at 40.7p (previously 48.1p) for properties with a rateable value below 35,000 or 41.4p (previously 48.5p) for larger premises, will lessen the increase in liability, this is the same UBR as applied in England, so Scottish ratepayers will be disadvantaged given the absence of such a transition relief scheme."