London EC1. Rare highly reversionary mixed use investment

Transcription

1 Rare highly reversionary mixed use investment

2 2 HATTON GARDN & -9 GRVILL STRT 6 GRVILL STRT INVSTMNT SUMMARY Two prime highly reversionary mixed-use assets located in the heart Hatton Garden, London s world-renowned jewellery district Perfectly situated to benefit from the 201 launch of Crossrail, less than 200m from Farringdon Station Incredibly rare, neither asset has been traded in nearly 0 years Comprising six retail units at ground and lower ground levels with offices and residential accommodation over three upper floors totalling 961. sq m (,2 sq ft) Multi-let producing a total passing rent of,0 per annum Highly reversionary; average office rents reflect only.0 per sq ft with office rents in Hatton Garden achieving 0 per sq ft 2 Offers for both assets are invited in excess of,00,000, subject to contract, reflecting the following yield profile assuming purchasers cost of 6.1% and our opinion on RV: WAULT of 6.2 years to expiry and.2 years to break Net Initial Yield.% Freehold Net Reversionary Yield 6.% Multiple asset management opportunities allowing a purchaser to drive rental income and increase the massing (STPP) quivalent Yield 6.01% Highly reversionary average retail rents reflect a low.2 per sq ft ITZA with the most recent letting in the property achieving 2.2 per sq ft ITZA 2 2 Hatton Hatton Garden Garden & & -9-9 Greville Greville Street Street // 6 6 Greville Greville Street Street London C1

3 CLRKNWLL ROAD 2 CROSSRAIL XTNSION FARRINGDON ROAD LIVRPOOL STRT CITY OF LONDON/ MOORGAT 6 LADNHALL BUILDING FARRINGDON 20 FNCHURCH STRT 9 CROSSRAIL XTNSION SMITHFILD MARKT ST PAUL S CATHDRAL 12 GOLDMAN SACHS HQ 1 CHANCRY LAN 1 NW STRT SQUAR 1 TH SHARD 16 LONDON BRIDG TOWR BRIDG 1 MILLNNIUM BRIDG TAT MODRN 20 CANARY WHARF

4 LOCATION The highly prestigious Hatton Garden is globally renowned as the centre of London s jewellery trade. Since the 0s, the location has flourished and is today home to hundreds of jewellery related businesses and over retailers, cementing Hatton Garden as the premier business cluster for the jewellery industry. The economic affinities and cultural distinctiveness of Hatton Garden continues to drive retailers to the location as well as significant consumer footfall. Due to launch in 201, Hatton Garden and Greville Street are ideally positioned to benefit from the opening of Crossrail at Farringdon Station, located less than 200m from the subject properties. Greville Street serves as the thoroughfare connecting Farringdon to Hatton Garden consistently driving footfall. Hatton Garden sits within the wider Midtown sub-market. The area is known as one of London s most exciting locations demanding attention from a diverse range of media, technology and corporate occupiers. Tenants such as Amazon, Warner Brothers, Skype, Saatchi and Saatchi, Deloitte and J Sainsbury PLC are located nearby emphasising the attraction of the location amongst the worlds leading businesses. Goldman Sachs new headquarter building is under construction less than a mile from the subject properties, as the charm and individuality of Midtown continues to attract elite occupiers across all sectors. The unique mixture of historic landmarks and state-of-the-art developments has drawn a number of retail, leisure, food & beverage and hotel occupiers to the area significantly boosting local amenity. Notable examples of this include boutique bowling alley All Star Lanes, Bounce table tennis bar and Leather Lane Market. Restaurant occupiers in the location include Hush Brasserie, Chicken Shop, Kimchee and the Bleeding Heart Bistro. Located 200 meters from Farringdon Station, Hatton Garden sits in the heart of Midtown; a diverse and established sub-market ideally positioned between the city and west end. 6

5 NU SITUATION The charm and individuality of Midtown continues to attract elite occupiers across all sectors. CORPORAT/ TMT OCCUPIRS 1 AMAZON SCRT SCAPS LAMB S CONDUIT STRT CLRKNWLL ROAD 2 BLL POTTINGR DLOITT SKYP 9 ACOM SAATCHI AND SAATCHI GOLDMAN SACHS MDIACOM WARNR BROTHRS BDFORD PLAC GRAY S INN GARDNS GRAY S KIRBY STRT 1 6 SAINSBURY S RSTAURANTS 1 SMITHS OF SMITHFILD 1 TH GRILL ON TH MARKT 1 LAZY BONS 16 HIX LISUR 21 SMITHFILD MARKT 22 TH GYM BOX ST JAMS S PLAC WALTH MANAGMNT BLDING HART BISTRO KIMCH GAUCHO GRILL ISOLABLLA ALDWYCH THATR THATR ROYAL DRURY LAN STRT BLOOMSBURY WAY SOUTHAMPTON ROW 2 NW OXFORD STRT HIGH HOLBORN THOBALD S ROAD HOLBORN 0 KINGSWAY 6 20 RD LION STRT HIGH HOLBORN WHTSTON PARK 9 1 LINCOLN S INN FILDS INN ROAD CHANCRY LAN 2 CHANCRY LAN LATHR LAN FTTR LAN 22 HATTON GARDN FARRINGDON FARRINGDON STRT SNOW HILL SMITHFILD MARKT 1 CITY THAMSLINK 2 BOUNC 2 ALL STAR LANS LGAL 29 IRWIN MITCHLL 0 MISCHON D RYA 2 2 ROYAL OPRA HOUS PACOCK THATR HOGAN LOVLLS FRSHFILD BRUCKHAUS DRINGR LONG ACR DRURY LAN KINGSWAY 12 2 CARY STRT ROYAL COURTS OF JUSTIC BLL YARD NW FTTR LAN 2 FLT STRT SHO LAN 1 OLD BAILY 1 2 CHARLS RUSSLL SPCHLYS TAYLOR WSSING 6 BIRD & BIRD BRACHR RAWLINS LLP FLORAL STRT 2 BOW STRT 26 2 ALDWYCH STRAND ARUND TUDOR STRT QU 9

6 KING S CROSS CONNCTIVITY L ROAD PNTONVIL CIT Y RO AD RO SC G RO ILF GU CITY THAMSLINK T STR IVAL N KI OR DS TR T PRC AD L RO WL GOS OLD R SS T STR OLD STRT D OA (COMING IN 201) CITY THAMSLINK ST PAUL S TT R L A N F 1 AY GSW KIN BLACKFRIARS AND MANSION HOUS TOTTNHAM COURT ROAD STRATFORD KING S CROSS ST PANCRAS INTRNATIONAL BANK G RID OB LO TR WA 1 CANNON STRT BLACKFRIARS BLACKFRIARS BRIDG BLACKFRIARS UNDRPASS TMPL CITY THAMSLINK FLT STRT STR PADDINGTON LONDON WALL CHANCRY LAN N BRID G CANARY WHARF MOORGAT LOND O A0 BARBICAN FARRINGDON RIDG AD S RO SOU THW ARK B ALD OB TH RGAT CHANCRY LAN MOO FARRINGDON OAD CLRKNWL L R D ON ROA BOND STRT D FARRING OAD W RO N TO MP HA UT Multiple bus routes along Farringdon Road and Clerkenwell Road. LAC CK P SO Farringdon Station also provides access to the Circle, Hammersmith & City and Metropolitan lines whilst the Central line can be accessed via Chancery Lane Station just a minute walk from the properties. ISTO TAV R INN AYS GR Hatton Garden benefits from excellent connectivity which will be further enriched when Crossrail begins service from Farringdon Station in 201, just 200m from the properties. Once running, Farringdon Station is set to be Britain s busiest station, being the only station to provide interchange between the east-west Crossrail, the north-south Thameslink and the London Underground. It is expected to that over trains every hour will pass through Farringdon, leading to increased levels of occupier and investor demand to the location. S B RY AV NU ST PANCRAS INTRNATIONAL SOUTHWARK LONDON BRIDG 2 21 HATHROW LONDON BRIDG 1 LIVRPOOL STRT WATRLOO AST WATRLOO BOROUGH

7 DSCRIPTION The two separate properties sit within immediate proximity of each other in the prime retailing location of Hatton Garden. Totalling 961. sq m (,2 sq ft) both assets boast significant prominence. They comprise 6 retail units at ground and lower ground level with office and residential accommodation arranged over upper floors. Hatton Garden is globally renowned as the centre of London s jewellery trade while Greville street additionally providing prime retail space. It also serves as an essential thoroughfare from the newly developed Farringdon Station. 2 HATTON GARDN & -9 GRVILL STRT occupies a prominent location on the corner of Hatton Garden and Greville Street in the prime pitch of Hatton Gardens Jewellery Quarter. The ground floor and basement comprises self-contained retail units of high quality fit-out with one fronting Hatton Garden and a further three on Greville Street. Above are two storeys of recently refurbished office accomodation, benefitting from good natural light and excellent floor to ceiling heights. The third floor has been converted to residential usage and provides two flats; a one-bedroom and a two-bedroom unit with a roof terrace providing views across London. This property totals 6.0 sq m (6,6 sq ft). Access is provided via stairwells from both Hatton garden and Greville Street. 6 GRVILL STRT is positioned on the northern side of Greville Street close to its junction with Hatton Garden. The ground floor and basement comprise of 2 self-contained retail units, trading as independent Jewellers and floors of fully-let office accommodation above. This property totals 26.6 sq m (,16 sq ft) and can be accessed via a prominent central stair core from Greville Street. Two striking properties of significant prominence being offered for the first time in nearly 0 years 12 1

8 TNANCIS & ACCOMMODATION 2 Hatton Garden & -9 Greville Street 6 Greville Street Demise Use Floor Area (sq ft) (ITZA) 2 Hatton Garden & -9 Greville Steet Tenant 2 Hatton Garden (ground) Retail 6 (16) Robert Craig Jewellery Ltd (t/a Madison) Greville Street (ground) and 2 Hatton Garden/ -9 Greville Street (basement) Retail & Ancillary Term Commencement Rent Review Term xpiry Rent ( pa) Rent ( psf) (ITZA for retail) Security of Tenure , Y Comments 6 () Jade Jewellers Ltd , Y Tenant holding over Rent Deposit: 21,000 a Greville Street (ground) Retail 2 (2) Heera Diamonds Ltd , Y Rent Deposit: 2,600 9 Greville Street (ground) Retail 221 (20) TRI A Trading Company Ltd 2 Hatton Garden (first) Office 99 Studio Cullinan and Buck Architects Ltd (t/a Scalbal) /9 Greville Street (first) Office 6 Kyriacos Kyriacou (t/a Giggy's) 2 Hatton Garden (second floor, mid and rear office) 2 Hatton Garden (second floor, front office) Office On the Corner ntertainment Ltd , Y Rent deposit: 1, , N Serivce charge capped at,00 + VAT pa Rent Deposit:, , Y Review Outstanding 6 month rolling break ,60.00* N *Contracted rent of 1,6 based on psf per annum Serivce charge capped at 6,0 + VAT pa Rent Deposit:,990.0 Office 2 Alexandra Huerga , Y Rent deposit:,020 2 Hatton Garden (third) Residential AST ,00 /9 Greville Street (third) Residential 609 AST ,600 SUBTOTAL 6,6 (1,22) 69,00 Demise Use Floor Area (sq ft) (ITZA) 6 Greville Steet 6 Greville Street (ground floor east and basement) Tenant Retail () Tri Phuong Nguyen (t/a Diamond Palace) Term Commencement Rent Review Term xpiry Rent ( pa) Rent ( psf) (ITZA for retail) Security of Tenure Comments , Y Rent Review Outstanding 6 Greville Street (ground floor west) Retail 0 (2) Andrew R Ullmann Ltd ,0.6 Y Review Outstanding Break: Greville Steet (first floor west) Retail/Office Andrew R Ullmann Ltd , Y Review Outstanding Break: Greville Street (first floor) Office 166 Daniel Mitchell , Y Rent Deposit: 1,20 Break: Greville Street (second Floor) Office 66 T-One Technologies Ltd , Y Tenant holding over 6 Greville Street (third floor) Office 2 Raymond Wheeler , Y Rent Deposit:,000 SUBTOTAL,16 (1),00 TOTAL,2 (1,99),0 1 1

9 90 Hatton Garden TNUR MARKT COMMNTARY Freehold. Office Occupancy Retail Occupancy a 6 12 Greville Street Warriner House Prime office rents in Hatton Garden have continued to increase with recent activity breaking 0 per sq ft. With a low passing rent of.0 per sq ft. both assets are highly reversionary, offering a purchaser the opportunity to capitalise on this rental growth. The most recent deal in the property was at per sq ft, outlining the substantial reversion. Within the wider Midtown sub-market, just under a million sq ft of office accommodation was absorbed in 2016, the strongest year since 20. Paired with a lack of newly developed office stock, the vacancy rate fell to a 1 year low in Q 2016 to just.1%. These competitive market dynamics have driven rental levels to surpass their previous peak, narrowing the gap with the west end. This has encouraged a series of large scale developments with nearly two million sq ft under construction at the end of Q2 20. All the major schemes being delivered in 20 are fully pre-let with leasing trends continuing to be positive. Investment Comparables Retail units on Hatton Garden and Greville Street are always in high demand from retailers looking to profit from the economic benefits of the globally renowned jewellery cluster as well as a growing and increasingly affluent consumer footfall. Despite being dominated by the jewellery trade, occupiers across other sectors continue to seek units in the surrounding location with a number of national multiple occupiers trading nearby Occupational evidence remains limited for Hatton Garden and Greville Street as retail units rarely become available to let. Paired with excess occupational demand, units tend to trade significantly above quoting levels. The most recent transaction within the subject properties saw a record breaking level of 2.2 per sq ft ITZA achieved at a Greville Street. In direct comparison, 2a Hatton Garden has recently gone under offer well in excess of the quoting level of 10,000 per annum as well as demanding a substantial premium. The average retail rent within the subjects stands at.2 per sq ft ITZA highlighting the significant reversionary potential. ASST MANAGMNT Both properties present multiple asset management opportunities, allowing a purchaser to benefit from income and capital growth. Some of these include: Initiate outstanding rent reviews and lease renewals allowing a purchaser to immediately capitalise on established rental growth Increase the massing of both assets (STPP) Re-gear the shorter leases, increasing the WAULT and improving the yield profile Opportunity to capture the rental growth created by the launch of Crossrail with 20 rent reviews and expiries Refurbish some of the unrefurbished office accommodation further driving rents Address Date Area (sq ft) Price Initial yield 6- Hatton Garden C1N 20 Greville Street C1 Craven House, 121 Kingsway WC2B 2 Bedford Row WC1R 26-2 ly Place C1N - Hatton Garden C1N /1 Haywards Place C1R The Corner Building, 91/9 Farringdon Road C1M Q2 20 2,226 2.m.66% Q ,0 1m.0% Q ,16 2.0m.% Q1 20 2, 2.2m.99% Q1 20 1,2.1m.0% Q2 2016, m.% Q ,.1m.6% Q , 2.m.0% 16

10 FURTHR INFORMATION VAT The properties are elected for VAT and therefore VAT will be chargeable on purchase price, however the intention is to sell the subject property by way of a transfer of a going concern (TOGC). PC PC s are provided via the datasite. DATASIT Access to the datasite is available upon request. PROPOSAL Offers for both assets are invited in excess of,00,000, subject to contract, reflecting the following yield profile assuming purchasers cost of 6.1% and our opinion on RV: Net Initial Yield:.% Net Reversionary Yield: 6.% quivalent Yield: 6.01% For all enquiries, please contact sole agents: Ryan Smith + (0)20 22 rssmith@lsh.co.uk Simon ddy + (0) seddy@lsh.co.uk Lambert Smith Hampton Group Limited and its subsidiaries and their joint agents if any ( LSH ) for themselves and for the seller or landlord of the property whose agents they are give notice that: (i) These particulars are given and any statement about the property is made without responsibility on the part of LSH or the seller or landlord and do not constitute the whole or any part of an offer or contract. (ii) Any description, dimension, distance or area given or any reference made to condition, working order or availability of services or facilities, fixtures or fittings, any guarantee or warrantee or statutory or any other permission, approval or reference to suitability for use or occupation, photograph, plan, drawing, aspect or financial or investment information or tenancy and title details or any other information set out in these particulars or otherwise provided shall not be relied on as statements or representations of fact or at all and any prospective buyer or tenant must satisfy themselves by inspection or otherwise as to the accuracy of all information or suitability of the property. (iii) No employee of LSH has any authority to make or give any representation or warranty arising from these particulars or otherwise or enter into any contract whatsoever in relation to the property in respect of any prospective purchase or letting including in respect of any re-sale potential or value or at all. (iv) Price or rent may be subject to VAT and any prospective buyer or tenant must satisfy themselves concerning the correct VAT position. (v) xcept in respect of death or personal injury caused by the negligence of LSH or its employees or agents, LSH will not be liable, whether in negligence or otherwise howsoever, for any loss arising from the use of these particulars or any information provided in respect of the property save to the extent that any statement or information has been made or given fraudulently by LSH. (vi) In the case of new development or refurbishment prospective buyers or tenants should not rely on any artists impressions or architects drawings or specification or scope of works or amenities, infrastructure or services or information concerning views, character or appearance and timing concerning availability or occupation and prospective buyers or tenants must take legal advice to ensure that any expectations they may have are provided for direct with the seller or landlord and LSH shall have no liability whatsoever concerning any variation or discrepancy in connection with such matters. September 20. 1

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