Salusbury Road

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Hilary Jordan
5 years ago
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1 Salusbury Road London NW6 Freehold mixed use investment in Central London

105-109 Salusbury Road London NW6 Investment Summary Mixed use investment comprising office, health club and restaurant. Purchase price in excess of 12,300,000.

Car parking for 38 spaces providing an excellent ratio of 1:88 sq m (1:952 sq ft). Site area of 0.3 hectares (0.6 acres). Capital value of 3,660 per sq m ( 340 per sq ft).

The property is within close proximity to Queens Park rail and underground station. Reversionary passing rent of 586,776 per annum.

2 Salusbury Road London NW6 Investment Summary Mixed use investment comprising office, health club and restaurant. Purchase price in excess of 12,300,000. Net initial yield of 4.5%. Reversionary yield of 5.8%. True equivalent yield of 5.8% Total lettable area of 3,360 sq m (36,163 sq ft). Car parking for 38 spaces providing an excellent ratio of 1:88 sq m (1:952 sq ft). Site area of 0.3 hectares (0.6 acres). Capital value of 3,660 per sq m ( 340 per sq ft). Queens Park is 5.0 kilometres (3.0 miles) from Central London. Salusbury Road is a vibrant street providing the main focus for Queens Park s shops and restaurants. The property is within close proximity to Queens Park rail and underground station. Reversionary passing rent of 586,776 per annum. Excellent covenant profile; tenants include ITE Group Plc, Fitness First Clubs Ltd and Vodafone. Weighted average unexpired term of 13.5 years. Planning permission for a further two floors of residential comprising a gross internal area of 998 sq m (10,743 sq ft) with an end value of 2,600,000.

3 Location CHRISTCHURCH AVENUE BRONDESBURY PARK THE AVENUE WILLESDEN LANE WINCHESTER CAVENDISH ROAD DYNE ROAD BRONDESBURY A4003 Queens Park benefits from its close proximity to Central London being only approximately 5.0 kilometres (3.0 miles) to the south-east. The area is situated between some of the most desirable and affluent residential suburbs in London including St John s Wood 2.0 kilometres (1.3 miles) to the south east, Hampstead 2.0 kilometres (1.3 miles) to the north east and Notting Hill 2.9 kilometres (1.8 miles) to the south. Since the 1990s, Queens Park has developed into a vibrant residential and commercial location displaying many of the characteristics of its neighbour Notting Hill. The rapid growth in house prices in the area has resulted in an increasingly affluent demographic and high quality retail and restaurant facilities. In addition, the location is enhanced by Queens Park itself which comprises approximately 80 acres of park area. CHEVENING ROAD QUEEN S PARK KINGSW OD AVENUE SALUSBURY ROAD BRONDESBURY ROAD TE NYSON ROAD VICTORIA ROAD QUEEN S PARK DONALDON B451 GLENGALL ROAD KILBURN HIGH ROAD A5 HAZELMERE RD BRONDESBURY VILLAS KILBURN KILBURN HIGH ROAD BRONDESBURY SALUSBURY ROAD WEST HAMPSTEAD KILBURN HIGH ROAD MAIDA VALE KILBURN BRONDESBURY RD HARROW ROAD NOTTING HILL FINCHLEY ROAD SOUTH HAMPSTEAD ABBEY ROAD MAIDA VALE FINCHLEY ROAD WESTWAY BELSIZE PARK ST JOHNS WOOD EDGWARE ROAD PADDINGTON BAYSWATER PRIMROSE HILL MARYLEBONE Communications Salusbury Road is 2.6 kilometres (1.6 miles) north of the A40 (M) motorway, providing direct access to the M40 motorway which connects to the M25 London Orbital Route. The A5 is located less than 1.1 kilometres (0.7 miles) from Queens Park providing access to the A407 (North Circular) which links with the M1 motorway and A1(M) trunk road. Both Central London and Heathrow airport can be reached by car in approximately 20 minutes. Queens Park railway and underground station provides London Underground services on the Bakerloo line with a journey time to Central London of approximately 25 minutes. The mainline rail service provides connections to Paddington railway station. In addition, Brondesbury Park mainline railway station is located 0.4 kilometres (0.3 miles) from the property providing services on the North London line to Richmond, West Hampstead and Stratford. Heathrow airport is approximately 31.0 kilometres (18.0 miles) to the south west. The Heathrow Express rail service departs from Paddington railway station, 5.3 kilometres (3.3 miles) to the south-east, every 15 minutes. BAYSWATER ROAD

Situation The property is situated on the eastern side of Salusbury Road between the junctions of Lonsdale Road and Winchester Avenue. Salusbury Road runs north to south through Queens Park.

1 miles) west of the building. Queens Park railway and underground station is located approximately 0.5 kilometres (0.3 miles) south of the property.

the building is arranged over three floors and is vertically split into two sections around a central service core.

4 Situation The property is situated on the eastern side of Salusbury Road between the junctions of Lonsdale Road and Winchester Avenue. Salusbury Road runs north to south through Queens Park. The immediate area is a mix of commercial and residential uses. Salusbury Road provides the majority of the area s shops and restaurants whilst Queens Park itself is only 0.2 kilometres (0.1 miles) west of the building. Queens Park railway and underground station is located approximately 0.5 kilometres (0.3 miles) south of the property. Description Constructed in 1938 of a concrete frame with brick elevations under a flat roof, the property has since been extended to the rear.the building is arranged over three floors and is vertically split into two sections around a central service core. The office accommodation benefits from an entrance with a full height atrium, excellent natural light, tenant installed air conditioning, raised floors, suspended ceilings and Category II lighting. The offices benefit from an 11 person passenger lift, male and female toilets and a kitchenette on each floor. In addition, there is a large outdoor terrace with decking at first floor level. The health club is situated on the east section of the first floor comprising a cardio and free weights area with ancillary changing rooms. The accommodation was refurbished in 1994 and benefits from air conditioning and suspended ceilings. TYPICAL FLOORPLATE The restaurant is situated on the west section of the ground floor and benefits from a high quality tenant s fit out including air-conditioning and a glass roof over part.

Accommodation We have been advised of the following floor areas; Internal Sq m Sq ft Area Office Net 2,019 21,736 Health Club Gross 794 8,547 Restaurant Gross 546 5,880 Total 3,360 36,163 In

ft), The site area is 0.3 hectares (0.6 acres). Tenure Freehold.

64 per sq m ( 8.42 per sq ft) on the health club and 128.09 per sq m ( 11.90 per sq ft) on the restaurant. Please see the tenancy and accommodation schedule.

5 Accommodation We have been advised of the following floor areas; Internal Sq m Sq ft Area Office Net 2,019 21,736 Health Club Gross 794 8,547 Restaurant Gross 546 5,880 Total 3,360 36,163 In addition, the property benefits from an atrium of approximately 79 sq m (850 sq ft), a first floor terrace of 88 sq m (950 sq ft) and 38 car parking spaces providing a ratio of 1:88 sq m (1:952 sq ft), The site area is 0.3 hectares (0.6 acres). Tenure Freehold. Tenancy The investment is multi-let on full repairing and insuring leases producing a total income of 586,776 per annum equating to per sq m ( per sq ft) on the office accommodation, per sq m ( 8.42 per sq ft) on the health club and per sq m ( per sq ft) on the restaurant. Please see the tenancy and accommodation schedule. Covenant We have been advised of the following floor areas; Covenant Date of Turnover Pre tax Net Activity % of Accounts profit Assets income ITE Group Plc 30 Sept 78.5 million 23.0 million 17.9 million The company is a leading organiser of international trade 75.1% 2005 exhibitions and conferences. The company employs over 550 staff in 18 offices worldwide and annually stages over 150 events in 17 countries. Further information is available at Zone Media 30 Nov 24.1 million 4.4 million 9.4 million The company is a wholly owned subsidiary of Zone Vision Enterprises Ltd 2004 International Holdings who are a leading international (sub-tenant) broadcaster and distributor of thematic television channels having broadcaster and distributor of thematic television channels having over 130 million paying subscribers. Fitness First Clubs 31 Oct 130 million ( 3.3 million) 22.0 million The company has 434 fitness clubs and 1.2 million members 11.7% Limited 2005 in 15 countries. They were acquired by BC Partners, a European private equity group in Fitness First Ltd 31 Oct 5.2 million ( 493,000) 210 million (Guarantor) 2004 The Faucet Inn Pub 31 May 5.5 million ( 272,051) 913,454 The company runs a chain of unbranded pubs. 11.9% Company Plc 2005 Vodafone Ltd 31 Mar 4.5 billion 314 million 1.1 billion T h e c o m p a n y p r o v i d e s a f u l l r a n g e o f m o b i l e 1.3% 2005 telecommunications services, including voice and data communications. Vodafone has equity interests in 27 countries and Partner Networks in a further 27 countries with almost all the Group's mobile subsidiaries operating principally under the brand name 'Vodafone'.

Estimated Rental Value The total estimated rental value of the investment is approximately 750,110 per annum equating to 269.11 per sq m ( 25.

00 per sq ft) overall on the restaurant.

Finchley Road, NW3 Allied Irish Bank 12,000 30.00 Open market letting Jul 05 Branch Hill Mews, Hampstead NW3 Canon Automotive Ltd 2,600 26.

68 Open market letting Belsize Park NW3 services company Jun 03 111 Salusbury Road, Octopus Publishing 5,841 26.

00 Rent review Belsize Park NW3 Club Mar 04 Highate Studios, Highgate Road, LA Fitness 7,804 10.

6 Estimated Rental Value The total estimated rental value of the investment is approximately 750,110 per annum equating to per sq m ( per sq ft) overall on the office accommodation, per sq m ( per sq ft) overall on the health club and per sq m ( per sq ft) overall on the restaurant. We are aware of the following recent rental evidence ; Date Location Tenant Size (sq ft) Rent ( per sq ft) Transaction Type Office Jul Finchley Road, NW3 Allied Irish Bank 12, Open market letting Jul 05 Branch Hill Mews, Hampstead NW3 Canon Automotive Ltd 2, Open market Letting Oct 05 1 Belsize Crescent, Unknown financial 1, Open market letting Belsize Park NW3 services company Jun Salusbury Road, Octopus Publishing 5, Open market letting Queens Park NW6 (next door) Group Ltd Health Club Mar 05 Belsize Park Gardens, Springhealth Leisure 16, Rent review Belsize Park NW3 Club Mar 04 Highate Studios, Highgate Road, LA Fitness 7, Rent review Highgate N6 Oct 03 Worple Road, Wimbledon, SW9 Esporta 28, Rent review Sep 03 O2 Centre, Finchley Road, Esporta 43, Sale and Leaseback Hampstead NW3 Restaurant & Retail Apr St John s Wood High Street, Carluccios 5, Open market letting St John s Wood NW8 Feb Willesden Lane, Willesden NW6 Tesco 5, Open Market Letting Mar West End Lane, First Quench Retailing Ltd1, Open Market Letting West Hampstead NW6

Residential Development Potential Current planning consent exists to construct 2 additional floors of 18 residential units with a gross internal floor area of 998 sq m (10,743 sq ft).

Should this proposal obtain consent, the landlord was intending to re-apply for residential consent with this higher density. Plans are available on our website www.dbaprop.co.uk.

7 Residential Development Potential Current planning consent exists to construct 2 additional floors of 18 residential units with a gross internal floor area of 998 sq m (10,743 sq ft). A second planning application has been submitted for an office development with a gross internal floor area of 1,494 sq m (16,082 sq ft). Should this proposal obtain consent, the landlord was intending to re-apply for residential consent with this higher density. Plans are available on our website We understand that residential values in Queens Park are in the region of 5,382 per sq m ( 500 per sq ft). Assuming a build cost of 150 per sq ft and deducting usual fees and a developer s profit of 15% the residual value of the existing planning permission is approximately 2,600,000. Proposal We have been instructed to seek offers in excess of 12,300,000 (Twelve Million, Three Hundred Thousand Pounds) reflecting a capital value of 3,660 per sq m ( 340 per sq ft) and the following yield profile based upon costs of %. ; Value Added Tax The property has been elected for VAT. Net initial yield 4.5% Reversionary yield 5.8% True equivalent yield 5.8% The residual value of the existing residential planning permission is approximately 2,600,000 based on residential values at 5,382 per sq m ( 500 per sq ft).

8 Investment Considerations An opportunity to acquire a substantial multi-let and mixed use investment in London. Queens Park is a rapidly emerging and affluent area of North West London whilst Salusbury Road is a vibrant street providing the main focus for Queens Park s shops and restaurants. The property is situated only a few minutes walking distance from both Queens Park itself and the rail and underground station. Excellent car parking provision of 38 spaces providing a ratio of 1:87 sq m (1:942 sq ft). The building occupies a large and prominent site of 0.3 hectares (0.6 acres). Modern office accommodation benefiting from a full height atrium, outdoor terrace, excellent natural light, air conditioning as well as large, open-plan and flexible floor-plates. Futher Information 3rd and 4th floors residential and office development plans, 1997 planning consent for residential scheme and 2006 planning application for office scheme. Floor plans of existing layout. Service charge accounts and budget. Copy of occupational leases. Circle file including all tenancy information. The restaurant comprises a large ground floor unit offering a unique opportunity on Salusbury Road for an A1/A3 occupier. We understand that Fitness First trade well from the building having approximately 2,500 members. Average unexpired term of 13.5 years. Excellent covenant profile; tenants include ITE Group Plc, Fitness First Clubs Ltd and Vodafone. Strong potential for rental growth based on recent comparable rental evidence and the continued development of Queens Park as both a commercial and residential location. The passing rent of 550,776 per annum is reversionary to 750,110 per annum. The current office rent reflects per sq ft whilst the building next door ( Salusbury Road) achieved a ground floor letting in a poorer office market 3 years ago at per sq ft. Opportunity to action rent reviews from 2007 to Residential planning consent with an end value of approximately 2,600,000. There may be potential to increase the density of the existing consent to a development with an end value of 3,900,000. Capital value of 3,660 per sq m ( 340 per sq ft). This is a discount to the price achieved next door in July 2005 for the office investment for a price of 8,750,000 reflecting a capital value of 3,983 per sq m ( 370 per sq ft). After deducting the residual value of the existing planning consent, the purchase price equates to a capital value of 2,887 per sq m ( 268 per sq ft) and the yield profile increases to ; Net initial yield 5.7% Reversionary yield 7.3%. True equivalent yield % David Baroukh Associates 6a Wimpole Street, London W1G 8AL Telephone: Facsimile: David Baroukh: David Harrison: david@dbaprop.co.uk harry@dbaprop.co.uk MISREPRESENTATION CLAUSE David Baroukh Associates and Vokins Chartered Surveyors, Commercial Property Consultants for themselves and for the Vendors or Lessors of these properties give notice that the particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract. All descriptions, dimensions, references to condition and necessary permissions 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 must satisfy themselves by inspection or otherwise as to the correctness of each of them. No person in the employment of David Baroukh Associates has any authority to make or give any representation or warranty whatever in relation to these properties. All maps are for identification purposes only and should not be relied upon for accuracy. October 2006 Subject to Contract and Excluding VAT

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