FOR SALE TOWER HOUSE TEESDALE SOUTH BUSINESS PARK THORNABY PLACE, STOCKTON-ON-TEES TS17 6SF

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Lisa Robinson
5 years ago
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1 MODERN, MULTI-LET OFFICE INVESTMENT IN A STRATEGIC LOCATION WITH STRONG INCOME PROFILE FOR SALE

EXECUTIVE SUMMARY A modern, 9,969 sq ft office unit with generous parking provision on an attractive Riverside plot with complementary café facility.

2 EXECUTIVE SUMMARY A modern, 9,969 sq ft office unit with generous parking provision on an attractive Riverside plot with complementary café facility. Strategically located on Teesdale Business Park, the prime office location on Teesside. Multi-let to a strong tenant mix including British Polythene, Five Rivers Childcare and Marston Group, with a total rent roll of 133,775 per annum. WAULT of 4.3 years to expiry (3.3 years to break), providing excellent asset management potential through lease restructure. Excellent potential alternative use value through conversion to residential use. Offers in excess of 1.185M are sought for the freehold interest reflecting a net initial yield of 10.50% after deduction of standard purchaser s costs of 5.8%. PARK THORNABY PLACE, STOCKTON-ON-TEES ON TEES TS17 6SA 6SF

3 LOCATION Stockton-on-Tees is situated approximately 250 miles north of London, 58 miles north of Leeds and 35 miles south of Newcastle upon Tyne. The town is an important sub-regional centre and is a major focus for retail and leisure activity in the area. The Teesdale Business Park is positioned to the east of the town centre, within the curve of the River Tees. Stockton is positioned at the intersection of the A19 and Trunk Road, which provide easy access to the A1 (M), approximately 15 miles to the west. Travelling via the A19, it is possible to connect to Leeds, York, Durham and Newcastle within one hour s drive time. Scotland Glasgow Edinburgh Carlisle Newcastle Sunderland Middlesbrough Stockton-on-Tees is an astutely located commercial centre within both the immediate urban conurbation and the wider region of the North East of England. It has an urban area population of circa 85,000 people and a wider district population of approximately 190,000 people, with an estimated 350,000 people living within 6 miles of the town centre. Immediate access to the National Rail Network is provided by Thornaby Station, which is approximately two to three minutes walk from the subject property. Thornaby Station connects to Darlington and the East Coast Main Line. In turn this provides direct services to London s Kings Cross (2½ hours travel time) and Edinburgh (2 hours travel time). Leeds A68 HEXHAM A68 A689 A696 A69 CHESTER-LE-STREET A688 A684 A1(M) Newcastle Airport GATESHEAD A690 SCOTCH CORNER A688 A68 65 A1(M) STOCKTON 58 DARLINGTON A1(M) A167 A19 NEWCASTLE UPON TYNE DURHAM A19 A690 TYNEMOUTH Port of Tyne SOUTH SHIELDS A181 Durham Tees Valley Airport SUNDERLAND A19 SEAHAM A689 HARTLEPOOL Teesport MIDDLESBROUGH A171 TEESDALE SOUTH BUSINESS PARK TS17 6SF STOCKTON Wales A1305 Manchester Liverpool A135 Birmingham Cardiff Bristol Nottingham England A1305 A1130 London A1046 River Tees Princeton Dr Thornaby Queen s Campus A1130 BUSINESS PARK TEESDALE SOUTH B6541 Teesside Shopping Park A19 North A1046 Stockton Rd A19 South Tees Bridge Approach Rd A19 A1032 B6541 B1032 B6541 Heywood St B1032 West Lane Hospital A178 Newport Rd Hartington Rd B1272 North Rd Borough Rd Teesside University Albert Park Middlesbrough MIDDLESBROUGH A172

SITUATION Teesdale Business Park is situated to the south of Stockton town centre on the River Tees and extends to over 700,000 sq ft of office, education, leisure and residential space.

4 SITUATION Teesdale Business Park is situated to the south of Stockton town centre on the River Tees and extends to over 700,000 sq ft of office, education, leisure and residential space. It is estimated that 4,500 people are employed on the park and it is widely recognised as the commercial heart of Teesside in addition to being one of the major business centres in the north east. Major occupiers on the park include Inland Revenue, Santander, DVLA, Swift Insurance, Barclaycard, Siemens, Atkins, the Royal Bank of Scotland, First Choice Holidays plc, Cummins Ltd, Halcrow Group, Serco, Allied Bank and Bond Dickinson solicitors. Durham University s Queens Campus and Woolfson Research Institute are located on the estate, alongside Stockton Riverside College, creating demand for retail and leisure use alongside residential accommodation, the conversion potential for which underpins capital values across Teesdale Park. Teesdale South is located at the south eastern edge of Teesdale Business Park, benefitting from an attractive vantage point over the River Tees and immediate access from the and A1130. Stockton Town centre is located within a short walking distance to the north, with nearby amenities including a café, gymnasium and supermarket. Immediately opposite the subject property on the northern bank of the River Tees, Dunelm Homes have planning consent to develop 60 houses and 114 riverside apartments, increasing critical mass and adding further vibrancy to the location, which already encompasses offices, leisure, retail and industrial / trade counter uses, with excellent transport connectivity. In addition, Muse Developments alongside Stockton Borough Council are currently building a 300M mixed use scheme including residential on NorthShore, situated on the opposite side of the River Tees. GVA are involved in advising Muse and we are aware that the scheme is targeting rents of per sq ft for Grade A space on a pre-let basis. The first office building extending to an area of 43,000 sq ft, has been pre-sold to Thirteen Group Housing Association for a price exceeding 165 per sq ft, with the Fusion Hive, a new innovation centre, also nearing completion.

STOCKTON TOWN CENTRE ROYAL MAIL ADMIRAL HOUSE SANTANDER CUBIC NORTH SHORE DEVELOPMENT RBS ATKINS GLOBAL TEESDALE BUSINESS PARK WHS CASTLEGATE SHOPPING CENTRE HM REVENUE & CUSTOMS ALLIED BANK

5 STOCKTON TOWN CENTRE ROYAL MAIL ADMIRAL HOUSE SANTANDER CUBIC NORTH SHORE DEVELOPMENT RBS ATKINS GLOBAL TEESDALE BUSINESS PARK WHS CASTLEGATE SHOPPING CENTRE HM REVENUE & CUSTOMS ALLIED BANK SAINSBURYS MECCA BINGO GROSVENOR CASINO DURHAM UNIVERSITY BRIDGE ROAD RETAIL PARK A1305 RIALTO COURT STUDENT RESIDENTIAL SCHEME New residential development with consent for 174 dwellings To A19 North & South To A1 North & South

DESCRIPTION The property comprises a modern, four-storey office building of steel frame construction, with brick / block walls, surmounted by a pitched, hipped roof with tile covering.

lighting. Heating is generally via perimeter radiators throughout the buildings, with individual suites benefitting from tenant s own air conditioning installation.

6 DESCRIPTION The property comprises a modern, four-storey office building of steel frame construction, with brick / block walls, surmounted by a pitched, hipped roof with tile covering. To the north western edge of the site is located a single storey café facility of cavity brick construction with full height glazing surrounding the customer areas, allowing the full benefit of riverside views. The internal office accommodation is set out to provide highly flexible cellular and open plan offices arranged around a central core, with suspended ceilings and modern recessed lighting. Heating is generally via perimeter radiators throughout the buildings, with individual suites benefitting from tenant s own air conditioning installation. Vertical access is via a passenger lift and stair to all floors, with fully refurbished common parts. The café features spacious customer and serving area with a fully fitted commercial kitchen to the rear. Externally, there is a large block paved car park providing 43 marked parking bays with a generous ratio of 1 space per 232 sq ft (1 space per 263 including café).

5 2,288 Second 253.52 2,729 Third 251.29 2,705 Offices Total 926.

7 ACCOMMODATION The property provides the following net internal areas: Areas (NIA) Floor sq m sq ft Tower House Ground ,247 First ,288 Second ,729 Third ,705 Offices Total ,969 Café (External) ,326 Total 1, ,295 Tower House Café TENURE Freehold.

TENANCY The salient tenancy information is detailed below: Tower House Tenant Location Size sq ft Commencement Break Next Review End Rent British Polythene Ltd Part Ground 1,118 01/11/2012 N/A

8 TENANCY The salient tenancy information is detailed below: Tower House Tenant Location Size sq ft Commencement Break Next Review End Rent British Polythene Ltd Part Ground 1,118 01/11/2012 N/A 01/11/ /10/201 14,000 Romero Insurance Brokers Ltd Part Ground 1,129 01/05/ /04/ /05/ /04/ ,300 Five Rivers Childcare Ltd Part First 1,148 06/11/ /11/ /11/ /11/ ,150 Nas Legal Ltd Part First 1,140 21/07/ /07/ /07/ /07/ ,200 Marston Group Ltd Part Second 1,152 01/04/2013 N/A 01/04/ /03/ ,000 Vacant Part Second 1,547 1 year rent, rates and service charge guarantee at 12 per sq ft 13,885 DTA Consulting Engineers Part Second 1,546 01/07/ /07/ /07/ /06/ ,000 Dynamic Distance Learning Part Third 1,549 21/02/2015 N/A 01/02/ /01/ ,125 Café Lynne Brudenell Whole 1,326 04/02/2002 N/A ,000 11, ,660

COVENANT Name Year End Turnover PTP Shareholder s Funds Creditsafe Rating British polythene Limited 31/12/2014 320.1M 4.4M 16.

38M 448,020 387,260 80 - Very Low Risk Five Rivers Childcare Limited 30/09/2014 17.

9 COVENANT Name Year End Turnover PTP Shareholder s Funds Creditsafe Rating British polythene Limited 31/12/ M 4.4M 16.1M 91 -Very Low Risk Romero Insurance Brokers Limited 31/04/ M 448, , Very Low Risk Five Rivers Childcare Limited 30/09/ M - 565, , Low Risk Nas Legal Limited 31/08/ , Low Risk Marston Group Limited 31/05/ M 4.29M 18.47M 76 Very Low Risk DTA Consulting Engineers LLP 31/05/ , Low Risk Dynamic Distance Learning Ltd 31/03/ , Moderate Risk

OCCUPIER MARKETS/ASSET MANAGEMENT The North East occupational market has witnessed a return to strength, with prime headline office rents regaining their pre-recession peaks and year on year take up

10 OCCUPIER MARKETS/ASSET MANAGEMENT The North East occupational market has witnessed a return to strength, with prime headline office rents regaining their pre-recession peaks and year on year take up starting to increase significantly, exceeding recorded levels for the preceding four years. Added to this, a lack of development during the economic downturn has led to a shortage of good quality office space across the region, with supply shortages appearing in key locations. The Teesside Occupier Market covers the areas of Middlesbrough, Stockton, Billingham and Hartlepool, together with surrounding smaller settlements, with an approximate population of 650,000 people. Teesdale Business Park is the prime office location on Teesside, located adjacent to Stockton town centre. It is the largest park on Teesside and attracts the region s major occupational requirements. Rents on the park peaked in 2007, when they reached rates of per sq ft for the smaller new build space of up to 5,000 sq ft with per sq ft generally accepted as the rental tone at the time. We are aware that some modern stock on the estate is currently let at rents of per sq ft, rising to per sq ft. Tower House is offered to the market with the benefit of rental guarantees over currently vacant space at a highly competitive per sq ft.

INVESTMENT MARKET The north east investment market has mirrored a recovery in other provincial centres, with strong demand for both single and multi-let offices in key locations supported by improved

11 INVESTMENT MARKET The north east investment market has mirrored a recovery in other provincial centres, with strong demand for both single and multi-let offices in key locations supported by improved economic conditions and prospects for rental growth. Details of a number of recently completed single and multi-let investment sales are provided in the table below. Address Description Lease Terms Price Date & NIY Comments Royal Mail Building, Doxford International Business Park, Sunderland 36,350sq.ft office building constructed in mid 1990s over 3 floors. Royal Mail Group plc for 10 years from Nov 2012 with tenant break option in Nov 2017 at 390,000pa, reflecting sq ft. Currently marketed at 4.1M 9.00% We are aware that there is good interest at the asking level. The tenant benefits from a 9 mth incentive if they do not break. Teesdale House, Teesdale Business Park 15,964 sq ft office on Teesdale Business Park, located centrally on the estate. Fully let to NHS Property Services Limited with 3 years unexpired term certain. 1.55M June % Very strong interest with later bids received at 1.6M (9.42%). Unit 2 Staithes, The Watermark, Gateshead Detached office unit located on an established estate within 1/2 mile of the A1(M). Unit extends to 3,850 sq ft. Let to WHP Partnership at a rent of 70,500 per annum ( per sq ft) with 3 years unexpired at the time of sale. 695,000 September % Rent passing equates to per sq ft. Dunedin House, Teesdale Business Park 98,268 sq ft multi-let office on the same estate as the subject, constructed % let to tenants including Secretary of State for the Environment, Atkins and RBS. 4.75M August % Triple Net Significant capex required throughout common parts and office suites. Tyneside House, Skinnerburn Road, Newcastle Business Park Mid 1990 s office building on established business park extending to 26,580 sq ft with garage store of 6,553 and 195 CPS. Freehold. 25 years to Environment Agency from June1995 at 350,000 pax ( 12/sq ft) FR & I terms with 5 yearly OM reviews (6.25 years UT) M June % Located on eastern (city centre) edge of late 1980 s early 1990 s business park. Government tenant. Asking price was 3.675M.

12 INVESTMENT CONSIDERATIONS We consider the following points are of particular relevance when assessing the investment. Prominent multi-let mixed use investment in an established commercial location, providing 9,969 sq ft of modern, high specification office accommodation with newly-refurbished common parts alongside a complementary café facility totalling 1,326 sq ft. Excellent transport links and in close proximity to a well-educated workforce pool and university campus. Strong tenant mix, with value-add opportunities through lease restructure. Favourable car parking provision of 1 space per 232 sq ft among the best on the estate. A high level of development ongoing in the vicinity, increase critical mass in the location and offering clearly defined alternative use potential. VAT The property has been elected for VAT and it is envisaged that the transaction will be treated as a TOGC. EPC EPCs available on request. SERVICE CHARGE The estate operates a service charge covering maintenance of common parts, building services and landscaping at a rate of 2.45 per sq ft, fully recoverable from tenants. PROPOSAL Our client is seeking offers in excess of 1.185M (One Million, One Hundred and Eighty Five Thousand pounds) subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 10.50% after deduction of standard purchaser s costs of 5.8%. GVA Grimley Limited Conditions under which Particulars are issued GVA Grimley Limited for themselves, for any joint agents and for the vendors or lessors of this property whose agents they are, give notice that: 1.) The particulars are set out as a general outline only for the guidance of intending purchases or lessors and do not constitute, nor constitute part of, an offer or contract. 2.) All descriptions, dimensions, references to condition and necessary permission for use and occupation, and other details, are given in good faith and are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them. 3.) No person in the employment of GVA Grimley Limited or any joint agents has any authority to make or give any representation or warranty whatever in relation to this property. 4.) All rentals and prices are quoted exclusive of VAT. Reproduced by courtesy of the Controller of HMSO. Crown Copyright reserved. Licence No If applicable, with consent of Chas E Goad, Cartographers, Old Hatfield, Geographers A-Z Map Co Ltd and/or The Automobile Association. For identification purposes only. October Designed & produced by Ref-831 FURTHER INFORMATION Luke Symonds Direct Dial: luke.symonds@gva.co.uk Simon Beanland Direct Dial: simon.beanland@gva.co.uk gva.co.uk/9177

Teesdale House. Modern Office Investment Opportunity in a Strategic Location with Secure Government Income. Stockton TS17 6BL

Teesdale House. Modern Office Investment Opportunity in a Strategic Location with Secure Government Income. Stockton TS17 6BL Teesdale House Modern Office Investment Opportunity in a Strategic Location with Secure Government Income Stockton TS17 6BL Executive Summary Location Situation Description Accommodation Tenure Tenancy