Hot on the heels of its announcement last week that Barkby Group had acquired the leasehold of the Eliot Arms at South Cerney, near Cirencester, which recently underwent a half million-pound makeover by owner Arkell’s Brewery, the Milton Park-based real estate business has reiterated its focus of building and scaling a high-quality, substantial portfolio of modern, ESG-compliant roadside real estate investments.
Barkby Group looks to roadside real estate investment for growth
29 November 2022
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It revealed that construction is progressing well at its commercial schemes at Wellingborough and Maldon, with Wellingborough scheduled to complete construction next month.
Barkby will retain the development as an investment. The total contracted rent is £234,000 per annum with contracted tenants being Greggs Plc, Formula One Autocentres Ltd, City Plumbing Supplies Holdings Ltd and C. Brewers & Sons Ltd.
Maldon is scheduled to complete construction by April 2023, with a total expected rent of £268,000 per annum with contracted tenants being Costa Coffee Ltd, Formula One Autocentres Ltd, Toolstation Ltd with the remaining unit under offer.
A revised planning application has also been submitted for a 27,000 sq.ft. scheme at Swindon, and a decision is expected early in the new year. The scheme will be anchored by a national drive through operator with a trade and industrial occupiers taking the remainder of the site.
The company said: "Given downward valuation pressure in the commercial property market over the last six months we are seeing high quality assets, at attractive valuations, becoming available with a lot less competition to acquire.
"We are seeing a significant opportunity to scale our pipeline, and are in negotiations on a number of new Roadside developments and investments. We are targeting increasing our ongoing pipeline to £200m."
Revenues were down three per cent year on year compared with Q1 2021, broadly in line with the overall sector as household spending decreases, Barkby said.
But "Christmas bookings look strong and we remain optimistic for a strong festive trading period."
The company added that the majority of its energy contracts were fixed in December 2020 until December 2023, so the business is well protected from the wider energy cost pressures facing the industry.
The company added "Whilst we continue to grow the pub portfolio the Board continues to review future strategy of the PubCo."
Following its announcement in July that it planned to sell non-core businesses, it completed the sale of its stake in Verso Biosense stake for £2.6m in August 2022. A sales process was launched for Workshop Coffee in September 2022. This has coincided with a strong recovery in the business as it returns to pre-pandemic levels. The sales process is progressing, with discussions ongoing with a number of interested parties under NDA.
Centurian Automotive: the business will be transferred out the Group on the 1 January 2023, with the existing management team acquiring the ongoing business for nil overall consideration.
Cambridge Sleep Sciences: over the summer CSS has developed several significant licensing opportunities with global technology companies for the IP behind SleepHub. The previously launched sales process has been paused whilst these opportunities progress. The Board believes that completion of these licensing opportunities will have a material impact on the potential valuation of the CSS business.
Charles Dickson, Barkby's Executive Chairman, said: "Following on from our July announcement we have made good progress in streamlining the Group. We have completed the sale of our stake in Verso Biosense and made further progress exiting the remaining non-core businesses.
We remain focussed on scaling the real estate business, with a particular focus on high quality modern sustainable roadside developments in the form of drive-thru's, trade counter, last mile logistics, convenience food, EV charging hubs and light industrial commercial buildings. Our view is that this strategy, once scaled, has the ability to deliver double digit annualised total accounting returns."
