£120,000
(£120,000.00/sq. ft)
Retail premises for saleMain Street, Ferryhill DL17
From 1 - 1,410 sq. ft
About this property
Overview
Property Type: Retail Investment
Configuration: 2 retail units (total 1,410 sq ft)
Tenure: Long leasehold / freehold (not specified - assuming freehold for yield analysis)
EPC Ratings: Both D
Asking Price: £120,000
Total Rental Income: £13,380 per annum
Net Initial Yield (niy): 11.15% (gross)
This property presents a high-yielding retail investment in a secondary County Durham location, appealing to private investors seeking income security and limited capital outlay.
2. Location and Market Context
Ferryhill is a small market town in County Durham with good access to the A167 and A1(M), connecting it to Durham (8 miles north) and Darlington (13 miles south).
The property is positioned on Main Street, the principal retail pitch, opposite B&M and Coral, ensuring steady footfall.
Surrounding uses are predominantly local retail and service businesses, indicating stable tenant demand for affordable high street premises.
The area benefits from strong local catchment but limited upward rental pressure - suggesting secure but modest long-term growth.
3. Tenancy & Lease Profile
Unit Lease Term Unexpired Term Tenant Type Notes
16 Main Street 15 years 10 years 5 months Local Retailer Long lease providing income stability
17 Main Street 5 years 1 year 9 months Local Retailer Shorter lease - potential re-letting or rent review opportunity
Weighted Average Unexpired Lease Term (WAULT): Approx. 6 years.
The tenant mix of independent local retailers reflects the local economy - low vacancy risk but limited covenant strength.
Opportunity exists to re-gear leases or re-let on updated terms to enhance capital value.
4. Financial Analysis
Metric Amount / Detail
Asking Price £120,000
Gross Annual Rent £13,380
Gross Yield 11.15%
Estimated Net Yield (after ~10% costs) ≈10.0%
Capital Value per sq ft £85/sq ft (approx.)
Commentary:
The yield is strong, well above the regional average for small retail (typically 8–9%), indicating compensatory return for secondary location and tenant risk.
Even allowing for short lease expiry on one unit, the return profile remains attractive.
There may be limited capital growth potential, but income security is solid given the long lease on Unit 16.
5. Risk Profile
Risk Assessment Commentary
Tenant covenant Moderate Local retailers – limited financial strength but embedded in local market.
Lease expiry risk Low–Moderate One lease expiring in years; risk mitigated by good location and low rents.
Market liquidity Moderate Small-town retail units are less liquid but attract income-focused buyers.
Yield shift risk Low Given high entry yield, limited downside risk unless vacancy arises.
Mitigation Strategies:
Re-gear or extend shorter lease to improve WAULT and saleability.
Diversify tenant mix if re-letting, e.g., to service or convenience users.
Maintain property condition to support re-letting prospects.
6. Investment Appraisal Summary
Strengths
Double-unit freehold with stable income stream.
High yield (11%+) offering strong cash-on-cash returns.
Main retail pitch location with good visibility.
One long lease ensuring income continuity.
Weaknesses
Secondary location limits rental growth and capital appreciation.
Local covenant risk and short lease on one unit.
Limited potential for redevelopment or alternative use.
Overall Assessment:
This property represents a robust income-producing retail investment ideal for private investors seeking stable returns and manageable asset size. The 11% yield provides a strong margin over borrowing costs, compensating for local covenant and re-letting risks. Long-term value uplift would rely on lease management and maintaining occupancy.
Property Type: Retail Investment
Configuration: 2 retail units (total 1,410 sq ft)
Tenure: Long leasehold / freehold (not specified - assuming freehold for yield analysis)
EPC Ratings: Both D
Asking Price: £120,000
Total Rental Income: £13,380 per annum
Net Initial Yield (niy): 11.15% (gross)
This property presents a high-yielding retail investment in a secondary County Durham location, appealing to private investors seeking income security and limited capital outlay.
2. Location and Market Context
Ferryhill is a small market town in County Durham with good access to the A167 and A1(M), connecting it to Durham (8 miles north) and Darlington (13 miles south).
The property is positioned on Main Street, the principal retail pitch, opposite B&M and Coral, ensuring steady footfall.
Surrounding uses are predominantly local retail and service businesses, indicating stable tenant demand for affordable high street premises.
The area benefits from strong local catchment but limited upward rental pressure - suggesting secure but modest long-term growth.
3. Tenancy & Lease Profile
Unit Lease Term Unexpired Term Tenant Type Notes
16 Main Street 15 years 10 years 5 months Local Retailer Long lease providing income stability
17 Main Street 5 years 1 year 9 months Local Retailer Shorter lease - potential re-letting or rent review opportunity
Weighted Average Unexpired Lease Term (WAULT): Approx. 6 years.
The tenant mix of independent local retailers reflects the local economy - low vacancy risk but limited covenant strength.
Opportunity exists to re-gear leases or re-let on updated terms to enhance capital value.
4. Financial Analysis
Metric Amount / Detail
Asking Price £120,000
Gross Annual Rent £13,380
Gross Yield 11.15%
Estimated Net Yield (after ~10% costs) ≈10.0%
Capital Value per sq ft £85/sq ft (approx.)
Commentary:
The yield is strong, well above the regional average for small retail (typically 8–9%), indicating compensatory return for secondary location and tenant risk.
Even allowing for short lease expiry on one unit, the return profile remains attractive.
There may be limited capital growth potential, but income security is solid given the long lease on Unit 16.
5. Risk Profile
Risk Assessment Commentary
Tenant covenant Moderate Local retailers – limited financial strength but embedded in local market.
Lease expiry risk Low–Moderate One lease expiring in years; risk mitigated by good location and low rents.
Market liquidity Moderate Small-town retail units are less liquid but attract income-focused buyers.
Yield shift risk Low Given high entry yield, limited downside risk unless vacancy arises.
Mitigation Strategies:
Re-gear or extend shorter lease to improve WAULT and saleability.
Diversify tenant mix if re-letting, e.g., to service or convenience users.
Maintain property condition to support re-letting prospects.
6. Investment Appraisal Summary
Strengths
Double-unit freehold with stable income stream.
High yield (11%+) offering strong cash-on-cash returns.
Main retail pitch location with good visibility.
One long lease ensuring income continuity.
Weaknesses
Secondary location limits rental growth and capital appreciation.
Local covenant risk and short lease on one unit.
Limited potential for redevelopment or alternative use.
Overall Assessment:
This property represents a robust income-producing retail investment ideal for private investors seeking stable returns and manageable asset size. The 11% yield provides a strong margin over borrowing costs, compensating for local covenant and re-letting risks. Long-term value uplift would rely on lease management and maintaining occupancy.
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