THE MILL STREET ESTATE LONDON SE1

Transcription

1 THE MILL STREET ESTATE LONDON SE1

2 INVESTMENT SUMMARY Freehold. The Mill Street Estate comprises a site extending to 0.6 acres in an exciting and dynamic Southbank location close to Butlers Wharf and Tower Bridge, within easy reach of London Bridge and the City of London. The principal buildings include Mill House, The Italian Building and The Lantern Building with a further three residential buildings which have been sold on long leasehold interests. The principal buildings comprise a total of 31,100 sq ft NIA (36,176 sq ft GIA). 29 secure underground car parking spaces. Currently multi-let with vacant possession available from August 2017 if required. Highly reversionary income. Outstanding opportunities to enhance value: Office refurbishment. Active management of existing occupiers. T H E I TA L I A N B U I L D I N G Permitted Development Rights. Alternative uses. Increase site density. Offers are invited in excess of 19.5 million for the freehold interest, subject to contract and exclusive of VAT, reflecting a low capital value of 627 per sq ft. T H E M I L L S T R E E T E S TAT E 3

3 BANK L O M B A R D S T R E E T G R A C E C H U R C H LLOYD S BUILDING F E N C H U R C H S T R E E T FENCHURCH STREET M I N O R I E S CANNON STREET U P P E R T H A M E S S T R E E T MONUMENT 1,100 Metres THE CITY OF LONDON 15 minutes LOW E R T H A M E S TOWER GATEWAY TOWER HILL S T R E E T L O N D O N B R I D G E THE TOWER OF LONDON E A S T ST KATHARINE DOCKS S M I T H F I E L D SOUTHWARK CATHEDRAL BOROUGH MARKET 950 Metres B O R O U G H H I G H S T R E E T LONDON BRIDGE 12 minutes S T T H O M A S S T R E E T T O O L E Y S T R E E T 400 Metres TOWER BRIDGE 5 minutes THE MILL STREET ESTATE LO N G L A N E G R E AT D O V E R S T R E E T B E R M O N D S E Y S T R E ET T O W E R B R I D G E R O A D J A M A I C A R O A D 500 Metres BERMONDSEY 7 minutes THE LOCATION CONNECTIVITY The Mill Street Estate is strategically positioned in Southwark, being one of London s most dynamic and exciting sub-markets. The Estate is located to the east of Borough, London Bridge and Tower Bridge and to the west of Bermondsey. The Estate occupies a virtual island site extending to 0.6 acres on the eastern side of Mill Street at its junction with Wolseley Street, with frontage to Dockhead. The property benefits from strong connectivity to the London transport network with mainline and underground services being near to Bermondsey and London Bridge stations (which will be significantly enhanced with the London Bridge Station upgrade due to complete in Spring 2018). NORTHERN LINE This strong growth location has attracted an increasingly wide and diverse occupier audience including Technology, Media and Telecommunications, Architect, Legal and Consultancy occupiers. This diversity of occupiers illustrates the significant change Southwark and the immediate area has experienced in recent years and which now benefits from outstanding amenities to include Hotel Indigo (opening 2018), Maltby Street Market, Lalit London 5* Hotel, Butlers Wharf Chophouse, The White Cube Gallery, Le Pont De La Tour, Cantina Del Ponte and Blueprint Café King s Cross Old Street (Journey times in minutes) Moorgate Bank London Bridge Borough JUBILEE LINE 13 Clapham Common Bond Street Green Park Waterloo London Bridge Bermondsey Canary Wharf Stratford

4 LO N D O N WAT E R LO O LO N D O N BRIDGE BOROUGH MORE M A R K E T LO N D O N THE SHARD BUTLERS WHARF TOW E R B R I D G E C I T Y O F LO N D O N S T K AT H E R I N E D O C KS C O U R AG E YA R D SHAD THAMES THE MILL S T R E E T E S TAT E LONDON SE1 6 T H E M I L L S T R E E T E S TAT E T H E M I L L S T R E E T E S TAT E 7

5 THE ESTATE The Mill Street Estate occupies a virtual island site extending to 0.6 acres. The principal buildings comprise two former Victorian warehouse buildings and a restaurant totalling 31,100 sq ft of office and retail accommodation. The residential buildings comprise 35 apartments which have been sold on long leasehold interests at a peppercorn. Mill House comprises 21,572 sq ft arranged over basement, ground and five upper floors. The building was originally constructed in 1882 and is an attractive warehouse building with period crittall metal windows. The building has excellent natural light throughout and includes the following specification: Recently replaced passenger lift (January 2015). Wooden floors. Perimeter and underfloor trunking. Plastered and exposed ceilings. Suspended lighting. Electric heaters. Male and females WC s on each half landing. A central courtyard is situated between all the buildings and is accessible for all tenants. The principal buildings benefit from 29 car parking spaces. The Italian Building comprises 7,348 sq ft arranged over basement, ground and four upper floors. The building was originally constructed in 1905 and is an attractive warehouse building with excellent natural light and includes the following specification: Recently replaced passenger lift (January 2015). Perimeter trunking. Suspended lighting. Electric heaters. Excellent floor to ceiling heights. Male and female WCs on alternate floors. The Lantern Building comprises a 2,180 sq ft selfcontained two storey structure arranged over basement, ground and one upper floor. The restaurant was constructed in 1991 and is situated between Mill House and the Italian Building M I L L S T R E E T W O L S E L E Y S T R E E T 5 1 to 3 5 to 12 TENURE D O C K H E A D Freehold. The area edged in blue has been sold long leasehold for a term of 999 years from 29/09/1995 at a peppercorn. Not to scale. For identification purposes only. This plan is based upon the Ordnance Survey Map with the sanction of the controller of H.M. Stationery Office. Crown Copyright reserved 8 THE MILL STREET ESTATE THE MILL STREET ESTATE 9

6 ACCOMMODATION The property has been measured by Lane & Frankham in accordance with the RICS Property Measurement (1st Edition) and comprises the following floor areas: FLOOR USE IPMS NIA GIA SQ FT SQ FT SQ FT Fifth Offices 2,775 2,710 3,016 Fourth Offices 2,958 2,889 3,211 Third Offices 3,474 3,413 3,734 Second Offices 3,479 3,420 3,739 First Offices 2,997 3,150 3,447 Ground Offices ,489 Ground Restaurant / Offices* 1,741 1,741 1,765 Ground Reception Lower Ground Offices 3,177 3,146 3,541 SUB TOTAL 21,706 21,572 23,942 Mill House FLOOR USE IPMS NIA GIA SQ FT SQ FT SQ FT First Restaurant* ,144 Ground Restaurant* ,097 Lower Ground Ancillary* SUB TOTAL 2,180 2,180 2,975 FLOOR USE IPMS NIA GIA SQ FT SQ FT SQ FT Fourth Offices 1,303 1,281 1,616 Third Offices 1,301 1,287 1,572 Second Offices 1,272 1,241 1,555 First Offices 1,267 1,241 1,561 Ground Offices ,425 Ground Reception Lower Ground Offices 1,257 1,247 1,530 SUB TOTAL 7,466 7,348 9,259 TOTAL 31,352 31,100 36, car parking spaces. * shown as NIA, IPMS not applicable for restaurant space The Italian Building 10 THE MILL STREET ESTATE THE MILL STREET ESTATE 11

7 FLOOR PLANS GROUND FLOOR THIRD FLOOR MILL STREET MILL STREET COURTYARD COURTYARD DOCKHEAD Not to scale. Indicative only. DOCKHEAD Not to scale. Indicative only. The Italian Building Mill House 12 THE MILL STREET ESTATE THE MILL STREET ESTATE 13

8 TENANCY Unit Tenant Area Lease Date Fixed Break Rolling Break Rent Review Current Rent ERV ERV (sq ft) (Start) (End) (Date) (Months) (Date) ( pa) ( pa) ( PSF) Fifth Slightly Mad Studios Ltd 2, Aug Aug Aug , , Fourth Social Development Direct Ltd 2, Jan Jan-20-6 mths 1 (M) - 96, , Third VACANT 3, , Second VACANT 3, , First Ptarmigan Media Ltd 3, Jun Aug , , Ground North Ptarmigan Media Ltd Jun May ,218 36, Ground South VACANT 1, , Ground Reception Lower Ground North Twisted Global Limited 1, Oct May-17-3 mths (L) - 12,960 48, Lower Ground South TRND Ltd 1, Apr Apr-18-6 mths (M) - 33,561 70, Car Parking VACANT ,000 - Car Parking 19 Slightly Mad Studios Ltd 1 01-Mar mth (M) - 1,500 2,000 - Car Parking 20 Mason Williams (Manchester) Ltd 1 06-May mth (M) - 1,500 2,000 - Car Parking 21 Forth Studio Ltd 1 01-Oct mth (M) - 1,500 2,000 - SUB TOTAL 21, ,684 1,048, Unit Tenant Area Lease Date Fixed Break Rolling Break Rent Review Current Rent ERV ERV (sq ft) (Start) (End) (Date) (Months) (Date) ( pa) ( pa) ( PSF) Restaurant VACANT 2, , SUB TOTAL 2,180 98, Unit Tenant Area Lease Date Fixed Break Rolling Break Rent Review Current Rent ERV ERV (sq ft) (Start) (End) (Date) (Months) (Date) ( pa) ( pa) ( PSF) Fourth Mason Williams (Manchester) Ltd 1, Nov Jul ,277 62, Third Forth Studio Ltd 1, Sep Jul-17-6 mths 2 (M) - 39,705 63, Second Silkroad Technology UK Ltd 1, May May-17-6 mths (M) - 42,671 58, First Consider Creative Ltd 1, Dec Jul ,385 58, Ground East Newable Limited Oct Jul ,560 27, Ground West VACANT , Ground Reception Lower Ground Mix Associates Ltd 1, Sep Jul ,264 49, SUB TOTAL 7, , , ESTATE TOTAL 31, ,546 1,476, NOTE - all leases contracted outside the L&T Act Break exercised effective 28/08/17 2 Break exercised effective 31/03/17 (M) - Mutual break option; (L) - Landlord break option 14 THE MILL STREET ESTATE THE MILL STREET ESTATE 15

9 THE OPPORTUNITIES MARKET ACTIVITY The principal buildings offer contemporary warehouse style offices which are widely sought by occupiers in this dynamic location. The Mill Street Estate provides exciting asset management opportunities to enhance value: OFFICES - ASSET MANAGEMENT Vacant possession is achievable from August 2017 providing an opportunity for a refurbishment of the properties to reposition the buildings and attract new tenants at market leading rental levels. The courtyard is significantly underutilised and with the re-introduction of restaurant / A3 use at The Lantern Building, the buildings could become a vibrant and sought after destination, further enhancing value. RESIDENTIAL - PERMITTED DEVELOPMENT RIGHTS Permitted Development Rights were granted in November The scheme provides a total of 33 units (11 studios, 6 1-beds, and 16 2-beds) comprising 22,497 sq ft Net Saleable Area, with 22 secure underground car parking spaces and 49 cycle spaces. In addition the vendor has prepared an application for the conversion of the part lower ground and part ground floor of Mill House and the entire Lantern Building to provide 5 residential units across 5,845 sq ft Net Saleable Area and 3 secure underground car parking spaces, subject to gaining necessary consents. No affordable housing contribution is required under PDR. ALTERNATIVE CHANGE OF USE Given other surrounding uses, the property may offer opportunities for hotel, student accommodation, serviced apartments or other valuable uses subject to the necessary consents. Southwark represents one of the most exciting and dynamic central London property markets characterised by historic low levels of supply, competitive occupational demand and unprecedented investment. Grade A availability in Southwark is currently approximately 200,000 sq ft (1.17%) compared with take up for 2016 of approximately 760,000 sq ft. LEASING COMPARABLES Address Tenant Floor Size (sq ft) Baden Place, Crosby Row, SE1 Confidential Confidential 4, U/O Baden Place, Crosby Row, SE1 Onalytica Ground 2, Dec-16 India House, 45 Curlew Street, SE1 Berkeley Homes 1st 6, Oct-16 Baden Place, Crosby Row, SE1 Young Minds Trust 2nd 4, Aug Queen Elizabeth Street, SE1 Channel 3 Consulting 2nd & Mezz 3, May Queen Elizabeth Street, SE1 Audiencescience Ground 2, Apr-16 The Clove Building, 4 Maguire Street, SE1 Expedition Engineering 1st 7, Apr Shad Thames, SE1 Schneider GB Basement & Ground 2, Mar-16 New Concordia Wharf, Mill Street, SE1 Strategy Desk Pt Ground Mar-16 New Concordia Wharf, Mill Street, SE1 Wilson Mason Pt Ground 2, Feb-16 Courage Yard, Copper Row, SE1 Zoopla Ground-2nd 43,193 c Feb-16 9 Holyrood Street, SE1 The Reptile Group 1st 2, Nov-15 9 Holyrood Street, SE1 Centre for Cities 2nd 2, Oct-15 Rent (psf) Date INVESTMENT COMPARABLES Address Size (sq ft) Tenure Tenancy Rent Price NIY Cap Val (psf) 9 Holyrood Street, SE1 14,190 Freehold Multi-let m (Quoting) 4.98% 853 Shand House, Shand Street, SE1 22,768 Freehold Multi-let m (Quoting) 4.01% Tooley Street, SE1 5,105 Virtual Freehold Multi-let m (Quoting) 4.34% 1,077 Prospero House, Borough High Street, SE1 43,761 Virtual Freehold Multi-let m (Quoting) 5.50% 694 Rose Court, 2 Southwark Bridge, SE1 147,144 Freehold Secretary of State m 4.52% Long Lane, SE1 24,936 Freehold Vacant m India House, 45 Curlew Street, SE1 37,988 Freehold Multi-let m 5.00% Southwark Street, SE1 51,129 Freehold Multi-let m 4.33% 943 Magdalen House, Tooley Street, SE1 25,849 Freehold Multi-let m 3.75% 900 Bramah House, Bermondsey Street, SE1 15,714 Freehold Multi-let m 4.44% 907 RESIDENTIAL COMPARABLES Address Beds Size (sq ft) 16 THE MILL STREET ESTATE THE MILL STREET ESTATE 17 Price Cap Val (psf) 4 Tanner Street, SE1 2 bed 806 sq ft 985,000 1,122 Feb Tudor House, One Tower Bridge, SE1 1 bed 525 sq ft 860,000 1,638 Jan St George s Wharf, Shad Thames, SE1 Studio 463 sq ft 523,500 1,131 Mar Providence Square, SE1 2 bed 549 sq ft 645,000 1,175 Nov New Concordia Wharf, SE1 Studio 560 sq ft 689,500 1,231 Feb-15 Date

10 FURTHER INFORMATION VAT PLANNING The property has been elected for the purposes of VAT. It is envisaged that the sale will be structured by way of Transfer of Going Concern. The Mill Street Estate is situated in the London Borough of Southwark. The properties are not listed and lie within the Tower Bridge Conservation Area. DATA ROOM PROPOSAL Further information can be found in the legal data room, access to which is available upon request. EPC The EPC ratings for each unit are available in the legal data room. We are instructed to invite offers for the whole in excess of 19,500,000 (Nineteen Million Five Hundred Thousand Pounds) for the freehold interest, subject to contract and exclusive of VAT, which reflects a highly attractive capital value of only 627 per sq ft; however, offers for the individual properties will also be considered. A purchase of the whole reflects a potential reversionary yield of 7.09% on letting of the whole at ERV. A purchase of the corporate entity may be available on request. CONTACT For further information or to arrange an inspection of the property which is to be strictly by appointment only, please contact: COMMERCIAL Aidan Meynell aidan.meynell@struttandparker.com +44 (0) Fraser Campbell-Wilson fraser.campbell-wilson@struttandparker.com +44 (0) William Orr william.orr@struttandparker.com +44 (0) RESIDENTIAL Mark Dorman mark.dorman@struttandparker.com +44 (0) Rebecca Jones rebecca.jones@struttandparker.com +44 (0) Kate Hunter kate.hunter@struttandparker.com +44 (0) COMMERCIAL Jonnie Ray Jonnie@cortexpartners.co.uk +44 (0) Tim Cuzens Tim@cortexpartners.co.uk +44 (0) Pedro Milborne Pedro@cortexpartners.co.uk +44 (0) Misrepresentation Act - Strutt & Parker LLP give notice that these particulars are set out as a general outline only for the guidance of intending Purchasers or Lessees, and do not constitute any part of an offer or contract. Details are given without any responsibility and any intending Purchasers, or Lessees or Third Party should not rely on them as statements or representations of fact, but must satisfy themselves by inspections or otherwise as to the correctness of each of them. No person in the employment of Strutt & Parker LLP has any authority to make any representation or warranty whatever in relation to this portfolio of property. MARCH (Q3707) 18 THE MILL STREET ESTATE