Freehold Mixed-Use Investment Opportunity

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1 Freehold Mixed-Use Investment Opportunity

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3 Executive Summary Prominent freehold warehouse style building originally constructed in the 1930 s as a bicycle factory Vibrant and ever improving location close to Angel underground station 26,824 sq ft (2,492.1 sq m) of office and bar/restaurant accommodation arranged over basement, ground and six upper floors Substantially refurbished in 2001 to include a new roof-top extension Newly refurbished 3rd floor and reception Multi let to six tenants producing a total income of 729,449 per annum exclusive Low average overall office rent of per sq ft Office lease expiries between 2016 and 2020 Low average overall bar/restaurant rent of per sq ft Bar/restaurant lease expiries in 2026 and 2030 Average weighted term of 6.62 years to expiry and a term certain of 5.57 years Investment Rationale The offices are considered to be highly reversionary, as reflected in the recent letting of the third floor at per sq ft The bar/restaurant units are considered to be highly reversionary The current Estimated Rental Value is in the region of 1,039,219 per annum Excellent opportunity for change of use to residential and to increase floor area, subject to planning We are seeking offers in excess of 14,250,000 (Fourteen Million, Two Hundred and Fifty Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 4.84%, a reversionary yield of 6.9%, adopting our Estimated Rental Value of 1,039,219 per annum, and an attractive capital value of 531 per sq ft after allowing for standard purchaser s costs of 5.8%. 2

4 Location The local area is recognised as one of London s most vibrant and established business, residential and entertainment districts with its lively street markets, numerous coffee bars and gourmet restaurants including Smokehouse, Prawn on the Lawn, House of Wolf and Jamie s Italian. It is also home to a diverse range of fashion retailers from independent boutiques to the mainstream retailers such as Reiss, Monsoon, and Space NK. The 11 theatres, two cinemas and numerous art galleries attracting visitors from all over London provide further amenities. The Business Design Centre is in close proximity hosting some 80 exhibitions and 250 conferences, attracting over half a million visitors every year. Situation The property is located on the east side of Essex Road, in the London Borough of Islington, and is bounded by Colebrooke Row and Elliott s Place to the side and rear. The area is well served by public transport with Angel Underground station (Northern Line), Highbury & Islington Underground and Mainline Station (Victoria Line, Overground and First Capital Connect) and Essex Road Mainline Station (First Capital Connect) within a short walk linking the area to the West End and City. King s Cross St Pancras Eurostar terminal and London Euston mainline stations are within a short distance to the south west. Numerous bus routes operate along Essex Road and Upper Street providing easy access to the surrounding area. Suncourt House benefits from being located outside the London Congestion Zone yet still sits strategically within Central London s extensive communications infrastructure. 3

5 Camden Passage Angel Angel Building Upper Street Business Design Centre Kings Cross 4

6 L I V E R P O O L R O A D & ISLINGTON Local Occupiers 01 Cancer Research UK 02 Elite Models 03 Expedia 04 Sage 05 Squire & Partners Architects 06 Wolff Olins 07 Jacques Vert 08 Ticketmaster 09 Eviivo Ltd 10 Smyle Creative C A L E D O N I A N R O A D 20 U P P E R S T R E E T 35 C A N O N B U R Y R O A D E SSEX ROAD E S S E X R O A D 15 Bars & Restaurants 11 Bill s 12 The Breakfast Club 13 The Bull 14 Charles Lamb Pub & Kitchen 15 The De Beauvoir Deli Co 16 Duke of Cambridge 17 The Elk In The Woods 18 Fredericks Restaurant 19 Hummingbird Bakery 20 House of Wolf 21 Isarn 22 Jamie s Italian 23 Le Mercury 24 Meat People 25 Ottolenghi 26 Pig & Butcher 27 Planet Organic L I V E R P O O L R O A D U P P E R S T R E E T C A M D E N PA S S A G E E S S E X R O A D N E W N O R T H R O A D Retail 28 Angel Flowers 29 Atelier Abigail Ahern 30 Broad Gallery 31 Business Design Centre 32 Cass Art 33 Centrestage Studios 34 Space NK Apothecary 35 twentytwentyone 36 Waitrose Hotels & Leisure 37 Almeida Theatre 38 The Life Centre Yoga Studio 39 Mall Antiques Arcade 40 O2 Academy 41 Sadler s Wells Theatre 42 Screen on the Green 43 Virgin Active Gym 44 Vue Cinema 05 3 minutes walk KING S CROSS P E N T O N V I L L E R O A D ANGEL S T. J O H N S T R E E T G O S W E L L R O A D C I T Y R O A D Not to scale. For identification purposes only. E A S T R O A D R O S E B E R Y AV E N U E OLD STREET 5

7 Description Suncourt House, Essex Road, comprises a 1930 s brick built warehouse style building. The property was substantially refurbished in 2001 to provide bar/restaurant premises at ground and basement levels with six floors of self contained offices above, including a roof-top penthouse extension. The 3rd floor and building reception have recently been refurbished. The offices provide modern and contemporary accommodation and benefit from excellent natural light together with panoramic views over London on account of the building s prominent corner position. The office specification includes: Bespoke re-modelled reception Feature entrance door with security and 24 hour access Fully accessible metal tiled flooring Wall and ceiling mounted fan coil units providing controlled heating and cooling Suspended lighting Automatic passenger lift serving ground to 5th floors Double glazed windows 2.9m floor to ceiling heights Roof terraces on 4th, 5th and 6th floors Excellent natural light Demised WCs The ground and lower ground floor bar/restaurant units, which have prominent frontages along Essex Road and Colebrooke Row, have been fitted out by the existing tenants to a high standard and commensurate with use. 6

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9 Accommodation FLOOR PLANS The building has been measured by Plowman Craven Associates, whose report is fully assignable, and has the following net internal areas: Floor Use Sq M Sq Ft 6th Offices th Offices ,768 4th Offices ,128 3rd Offices ,003 3rd Floor COLEBROOKE ROW ESSEX ROAD 2nd Offices ,130 1st Offices ,137 Ground Reception Ground Retail Unit 1* ,363 ELLIOTT S PLACE Basement Retail Unit 1* ,909 ESSEX ROAD Ground Rear Retail Unit 2* Total 2, ,824 *Measured on a gross internal basis. Ground Floor COLEBROOKE ROW ELLIOTT S PLACE Not to scale. For identification purposes only. 8

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11 Tenancies The property is multi let to six tenants and produces a total current income of 729,449 per annum, in accordance with the following tenancy schedule. All the upper floor leases are outside the security of tenure and compensation provisions of the Landlord and Tenant Act 1954, as amended. Floor Area sq ft Tenant Lease Start Lease Expiry Next Rent Review Rent pa ( psf) ERV pa ( psf) L&T Act 1954 Comments 6th 5th 701 2,768 Corelogic Limited 17 Sept Sept ,800 ( 32.52) 156,105 ( 45.00) Outside Stepped rent as follows: 17/9/2013 to 16/4/2015: 56,400 17/4/2015 to 16/9/2018: 112,800 Vendor will top up any unexpired concessionary rent. 4th 3,128 Corelogic Limited 17 Sept Sept ,120 ( 32.33) 134,504 ( 43.00) Outside Stepped rent as follows: 17/9/2013 to 16/4/2015: 50,560 17/4/2015 to 16/9/2018: 101,120 Vendor will top up any unexpired concessionary rent. 3rd 4,003 Net Media Planet 1 Sept Aug ,129 ( 43.00) 172,129 ( 43.00) Outside Tenant only break upon 6 months notice on 31 Aug Half rent for first 6 months. Vendor will top up any unexpired concessionary rent. 2nd 4,130 Bamber and Reddan Architects Ltd 1 Mar Feb Mar ,400 ( 20.19) 179,590 ( 43.00) Outside Tenant only break upon 6 months notice on 28 Feb car parking space. 1st 4,137 Intent Media Ltd 8 July June ,000 ( 24.17) 179,891 ( 43.00) Outside 1 car parking space. Ground Reception 302 Ground Rear 383* The Bar With No Name Ltd 25 Dec Dec Mar ,000 ( 26.11) 12,000 ( 31.33) Inside Outstanding Rent Review Ground Basement 4,363* 2,909* Barworks (Islington) Ltd 13 Apr Apr Apr ,000 ( 20.62) 205,000 ( 28.19) Inside TOTAL 26, ,449 ( psf overall) 1,039,219 assuming 2,000 per car space ( psf overall) *Measured on a gross internal basis. There is a basement transformer chamber with a lease to London Power Networks until 21/01/2101 subject to a redevelopment break with not less than 9 months notice. A copy of the lease is available on the Data Site. 10

12 TENANT Information Tenure Freehold. Corelogic: The vendor holds a rent deposit of 33, Bamber and Reddan Architects Limited: The vendor holds a rent deposit of 48, The Bar With No Name Limited: The vendor holds a rent deposit of 5, Intent Media Limited: The vendor holds a rent deposit of 30, Not to scale. For identification purposes only. This plan is based upon an Ordnance Survey Map with the sanction of the controller of HM Stationery Office. Crown Copyright reserved. Barworks (Islington) Limited: The vendor holds a rent deposit of 44, Planning Net Media Planet: The vendor holds a rent deposit of 103, The property is located in the London Borough of Islington, is not listed but is situated within the Duncan Terrace/Colebrooke Row Conservation Area. 11

13 Market Commentary Office Leasing The Central London office market continues its upward trend into Q One of the biggest success stories has been the Tech Belt, with demand outweighing supply in its villages. Office requirements now include Clerkenwell, Shoreditch, Old Street and Angel and as such rents have been steadily increasing. Address Tenant Date Area (sq ft) Rent (psf) 1 Olivers Yard Orms Architects Jul-14 6, Farringdon Road MMT Digital Jun-14 2, Haywards Place Kinosis Feb-14 2, Alphabeta, 14 Finsbury Square SEI Ltd Jan-14 57,905 1st Floor th floor Bryant Building, Gt Eastern St The Capital Markets Company Dec-13 23, Overall 45 on best Buckley Building, 49 Clerkenwell Green Deloitte Digital Sep-13 26, Retail / Restaurant Leasing Central London Retail and Restaurant operators remain interested in new opportunities, with a particular interest in the Tech Belt. Angel continues to be a true mixed-use location, with its reputation as a haven for shopping and fine dining. The high footfall and exciting range of retailers has meant that demand for units in Angel is substantial and as such rents are increasing. Address Tenant Date Area (sq ft) Rent (psf) 133b Upper Street Meatailer Ltd Jul , Upper Street Superdry May-14 8, Upper Street Scribbler Apr-14 1, Upper Street Five Guys Nov-13 2, Upper Street SS Contractors Nov-13 1, Upper Street Topps Tiles Feb-13 1, Investments The combination of improving transport links (Crossrail, perhaps most significantly), popular local amenities and comparatively low occupational costs has meant the Tech Belt has proved popular with tenants and investors alike. Interest from investors has been substantial in these villages, with capital values reaching unprecedented levels. Address Sale Price Date NIY Area (sq ft) Price (psf) 186 City Road 23.3 million July % 38, Goswell Road million July % 17, Upper Street 4.41 million May % 5, Peartree Court 8.95 million Nov % 14, Kirby Street 14.3 million Aug % 22, The accuracy of the information in the above tables cannot be guaranteed as it has been sourced from third parties. 12

14 VAT Proposal The property is elected for VAT purposes. It is anticipated that the sale will be treated as a transfer of a going concern (TOGC). We are seeking offers in excess of 14,250,000 (Fourteen Million, Two Hundred and Fifty Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 4.84%, a reversionary yield of 6.9%, adopting our Estimated Rental Value of 1,039,219 per annum, and an attractive capital value of 531 per sq ft after allowing for standard purchaser s costs of 5.8%. Further Information Further information is available at where the following documents can be found: Occupational leases Freehold title Measured survey and duty of care letter Asbestos and fire risk reports EPC Certificates Service charge information Should you wish to access the password controlled data site or arrange an inspection, please contact: Simon Hall shall@hanovergreen.co.uk Peter Trinder ptrinder@hanovergreen.co.uk Richard Susskind richard@richardsusskind.com Jonathan Franks jonathan@richardsusskind.com IMPORTANT NOTICE Hanover Green and Richard Susskind & Co gives notice to anyone who may read these particulars as follows: 1. These particulars are prepared for the guidance only of prospective purchasers. They are intended to give a fair overall description of the property but are not intended to constitute part of an offer or contract. 2. Any information contained herein (whether in the text, plans or photographs) is given in good faith but should not be relied upon as being a statement or representation of fact. 3. Nothing in these particulars shall be deemed to be a statement that the property is in good condition or otherwise nor that any services or facilities are in good working order. 4 The photographs appearing in this brochure show only certain parts and aspects of the property at the time when the photographs were taken. Certain aspects may have changed since the photographs were taken and it should not be assumed that the property remains precisely as displayed in the photographs. Furthermore no assumptions should be made in respect of parts of the property which are not shown in the photographs. 5. Any areas, measurements or distances referred to herein are approximate only. 6. Where there is reference in these particulars to the fact that alterations have been carried out or that a particular use is made of any part of the property this is not intended to be a statement that any necessary planning, building regulations or other consents have been obtained and these matters must be verified by any intending purchaser. 7. Descriptions of a property are inevitably subjective and the descriptions contained herein are used in good faith as an opinion and not by way of statement of fact. September Q