PRIME SOUTH WEST LONDON SERVICE CENTRE FREEHOLD INVESTMENT LET TO BMW (UK) LIMITED FOR A TERM OF 10 YEARS STEWARTS ROAD I BATTERSEA I SW8 4UG

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Donald Gabriel Henry
5 years ago
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1 PRIME SOUTH WEST LONDON SERVICE CENTRE FREEHOLD INVESTMENT LET TO BMW (UK) LIMITED FOR A TERM OF 10 YEARS STEWARTS ROAD I BATTERSEA I SW8 4UG

2 Battersea Bridge Battersea Power Station Westminster Vauxhall Bridge New Covent Garden Market STEWARTS ROAD The Shard

3 INVESTMENT SUMMARY A rare opportunity to acquire a redeveloped BMW Service Centre in a prime south west London location. On practical completion the property will be let to the undoubted covenant of BMW (UK) Limited for a term of 10 years. The property is centrally located in Battersea within the established Stewarts Road industrial area just off the Wandsworth Road. The property provides easy access to central London and is equidistant between Vauxhall and Clapham Junction. The site extends to approximately 1.08 acres offering long term redevelopment potential to alternative uses including residential (STPP). The completed building will comprise a purpose built BMW Service Centre which will extend to approximately 59,406 sq ft (5,519 sq m) over ground and first floor. Parking for 118 cars and 55 motorbikes will be provided at ground and first floor deck level accessed by a ramp. Construction of the Service Centre will commence in June 2015 and will be managed by Lendlease on behalf of BMW. The building programme is expected to complete within 31 weeks. PC is expected in December On Practical completion BMW will enter into a new 10 year lease at an initial rent of 565,935 per annum. The lease will be subject to a fixed uplift on the fifth anniversary to 656,073 per annum reflecting a 3.00% p.a. compounded uplift. Offers are invited in excess of 10,700,000 to forward commit to purchase the freehold interest on practical completion. A purchase at this level will reflect a Net Initial Yield of 5.00% and a guaranteed Reversionary Yield of 5.80% in December 2020 assuming standard purchaser s costs of 5.80%.

4 LOCATION The property is located close to central London in Battersea within the Borough of Wandsworth. Battersea is approximately 2.5 miles south west of Trafalgar Square with nearby major roads including the M4, A4, A3, A23 and A40. Heathrow Airport is approximately 13 miles west of the Borough and Gatwick Airport about 30 miles to the south. Vauxhall mainline and underground station is approximately 1 mile to the north and Clapham Junction mainline railway station is approximately 2 miles to the west. SITUATION The property is situated just off Stewarts Road, approximately 500 metres from it s junction with Wandsworth Road (A3036). Central London is accessed via either Vauxhall Bridge approximately one mile to the north east along the Wandsworth Road or Battersea Bridge one mile to the north accessed along Queenstown Road. The subject property forms part of a mixed use area of Battersea, with New Covent Garden Market to the east side, Battersea Park and Power Station to the north and Clapham Common to the south. Park Lane MAYFAIR PICCADILLY COVENT GARDEN A4 Stewarts Road provides a mixture of commercial uses including industrial, offices, residential and educational uses. Nearby commercial occupiers include Tarmac, Biffa and Plumb Centre. HYDE PARK A4 Pall Mall Trafalgar Square A301 A3217 A3216 Royal Hospital Road BELGRAVIA BATTERSEA PARK A302 Chelsea Bridge Rd A3214 GREEN PARK Buckingham Palace PIMLICO Battersea Power Station Grosvenor Rd A302 A202 A3205 NINE ELMS The Mall WESTMINSTER Whitehall Millbank Houses of Parliament Vauxhall South Lambeth Rd A3036 A3203 LAMBETH VAUXHALL A3 A3204 A23 A302 Kennington Park Rd PRINCE OF WALES DR LURLINE GARDENS QUEENSTOWN RD Battersea Park BATTERSEA PARK RD A3205 Queenstown Road QUEENSTOWN RD PRINCE OF WALES DR A3216 Abellio London Battersea Bus Depot BATTERSEA PARK RD A3205 LINFORD ST WADHURST RD Stewarts Road THESSALY RD PATMORE ST STEWARTS RD New Covent Garden Market DEELEY RD THESSALY RD Battersea Park Queenstown Road Queenstown Rd Stewarts Rd BATTERSEA Wandsworth Road A3036 A23 BROUGHTON ST PRAIRIE ST B224 DICKENS ST WANDSWORTH RD A3036 Wandsworth Road

BATTERSEA AND NINE ELMS REGENERATION AREA The property is located to the south west of the Vauxhall/ Nine Elms/ Battersea Opportunity Area (VNEB OA), set to become one of the largest regeneration

5 BATTERSEA AND NINE ELMS REGENERATION AREA The property is located to the south west of the Vauxhall/ Nine Elms/ Battersea Opportunity Area (VNEB OA), set to become one of the largest regeneration areas in London, in what will become a new distinctive quarter of London dominated by high density residential mixed use schemes. The overall development encompasses 195 hectares on the south bank of the Thames including parts of the London Borough of Wandsworth and Lambeth and stretching from Chelsea Bridge in the west, through East Battersea, Nine Elms and Vauxhall up through Lambeth Bridge on Albert Embankment. The focal point for the regeneration will be a new rejuvenated power station, one of London s most famous buildings, as well as comprising the new American embassy currently under construction, a reconfigured Covent Garden market and several major residential development projects, some of which are already underway. The pipeline is large, with 16,000 homes expected to be delivered over the medium term. Key to the regeneration will be the delivery of the proposed Northern Line extension from Kennington to Battersea where The Secretary of State for Transport has given the go-ahead. The proposal involves extending the Northern Line by two stops, at Battersea Power Station and the other south at the junction of Pascal Street and Wandsworth Street. Planning has been granted for the extension.

DESCRIPTION BMW have used the site as a service centre since 2002.

predominantly used as vehicle parking with car workshops to the rear. The tenant, BMW, has recently been granted planning permission to undertake a full redevelopment of the site.

6 DESCRIPTION BMW have used the site as a service centre since The original property comprised a light industrial unit converted to provide a customer reception, parts showroom and diagnostic centre with a large open forecourt to the front which was predominantly used as vehicle parking with car workshops to the rear. The tenant, BMW, has recently been granted planning permission to undertake a full redevelopment of the site. The new scheme will include a new car deck with 118 car parking spaces and 55 motorbike spaces with ramped access, new auto car wash, 2 lane drive through, increased number of car workshop bays from 16 to 21, increased number of bike workshops from 8 to 10 plus an MOT bay, new larger car service reception with lounge, cafe and a distinct MINI service reception, new larger bike service reception with cafe and shop, rationalised office accommodation on both ground and first floors and updated site entrance with new signage and branding. The centre will be branded as BMW Park Lane and will service central London BMW and MINI customers.

PLANNING, PROFESSIONAL TEAM AND PROJECT DELIVERY Planning permission has been granted under

Permitted use A vehicle servicing and preparation facility to include vehicle servicing,

industrial uses within use class B1, B2 and B8 of the 1987 Use Classes Order.

professional and construction team is appointed and working on the project including MDG as

7 PLANNING, PROFESSIONAL TEAM AND PROJECT DELIVERY Planning permission has been granted under planning numbers 2014/1698 & 2015/0312. Permitted use A vehicle servicing and preparation facility to include vehicle servicing, inspection, parking and ancillary activities together with general office, warehousing and industrial uses within use class B1, B2 and B8 of the 1987 Use Classes Order. Details of the design and specification can be found in the data room and a full design, professional and construction team is appointed and working on the project including MDG as Architect and Lendlease as Project Manager. A full suite of warranties will be made available to the purchaser. Completion is expected in early December 2015.

8 TENURE Freehold. SITE The site extends to approximately 1.08 Acres. TENANCY On practical completion the tenant BMW (UK) Limited will enter into a new 10 year lease at an initial passing rent of 565,935 per annum. The lease will be subject to a fixed uplift at year 5 reflecting a 3.00% per annum compounded fixed uplift. COVENANT The tenant BMW (UK) Limited Co. No has a Dun & Bradstreet rating of 5A1 with the lowest probability of business failure (100 out of 100). 31st Dec st Dec st Dec 2011 ( 000) ( 000) ( 000) Sales Turnover 4,164,873 3,781,730 3,485,269 Profit/(Loss) Before Taxes 179,186 52,908 40,178 Tangible Net Worth 812, , ,031 Net Current Assets 869, , ,000 (Liabilities)

9 ACCOMMODATION The proposed floor areas provided by the Architects, MDG. Floor Accommodation Sq m Sq ft Ground Service Centre 1, ,980 Meeting Room Lift Parts Ground Car Park Deck & Ancillary 1,809 19,472 First Service Centre ,454 Void over Workshop Office Office Office WC WC Canteen Kitchen First Car Deck (inc Ramp Down) 1,440 15,500 Total Gross Internal Area 5,519 59,406 F I R S T F L O O R Parts Lift Bike Workshop Car Workshop Car Parking Service Ramp WC G R O U N D F L O O R Car Parking Jet Washes Ramp

10 LETTING MARKET Prime headline industrial rents in Battersea are now achieving up to 18 psf, with strong tenant demand and constrained supply continuing to drive rental growth. Assuming half rate on the deck areas at Ground and First Floor levels, the rent passing equates to a low per sq ft. A schedule of recent letting transactions in the locality is set out below. ADDRESS DESCRIPTION LETTING TERMS RENT PSF 1. Unit 7, Linford Street Business Estate Battersea, London SW8 4UN A 3,300 sq ft industrial unit forming part of a secure gated estate constructed beneath the former Eurostar viaduct. Currently under offer Unit 8, Parkfields Industrial Estate Battersea, London SW11 5BA Light industrial/warehouse unit of 2,700 sq ft with electrically operated roller shutters, forecourt parking. Let in September 2014 to AAAN LTD on a 10 year FRI lease at a rent of 35,000 per annum Unit 2, Michael Manley Industrial Estate Clyston Street, Battersea, London SW8 4TU A 1,450 sq ft 1980 s industrial unit. Let to Mears Ltd. for a term of 4 years 6 days from 11th July Unit 1, Parkfields Industrial Estate Battersea, London SW11 5BA Light industrial/warehouse unit of 1,599 sq ft. Let in March 2014 to Mama Lan Ltd on a 10 year FRI lease subject to a tenant only break at the 5th year Unit 1, Michael Manley Industrial Estate Clyston Street, Battersea, London SW8 TU A 1,450 sq ft 1980 s industrial unit. Let to Mears Ltd. for a term of 4 years 14 days from 3rd April Unit 6, Parkfields Industrial Estate Battersea, London SW11 5BA Light industrial/warehouse unit of 2,716 sq ft. Electrically operated roller shutters, car parking, newly refurbished. Let in February 2014 to Chelsea Rupert Cordle Town & Country on a 4 year FRI lease Unit 12, Ellerslie Square Industrial Estate Lyham Road, London SW2 5DZ Light industrial/warehouse unit of 15,765 sq ft. October Let to TFL on a 5 year lease

11 INVESTMENT MARKET The Greater London industrial investment sector has seen consistently strong investor demand in the last 24 months driven by excellent rental growth prospects and limited supply. A schedule of recent industrial investment transaction in Greater London is set out below; ADDRESS DESCRIPTION LEASE TERMS DATE COMPLETED PRICE NIY 1. Units 1-6, Fairfield Trade Park Villiers Road Kingston Upon Thames London KT1 3AY An 81,844 sq ft terrace of two storey 1980 s warehouse units. Tenants include Royal Mail, Howden s and Magnet. 665,490 pa with a WAULT of 3.4 years to break and 5 years to expiry. September ,205, % 2. One Park Royal Cumberland Avenue London NW10 7RX A 106,910 sq ft warehouse/ industrial premises with integrated three-storey offices. Let to Enotria Wine Cellars Limited for a term of 15 years, at 1,256, pa. August ,625, % 3. Unit 1, Sovereign Park Coronation Road, Park Royal London NW10 7QP A modern detached warehouse unit arranged over three floors totalling 39,610 sq ft. Let to Bonhams 1793 Ltd on a 15 year lease from 23 Dec Passing rent 300,000 pa. July ,000, % 4. Unit 10, White Hart Avenue White Hart Triangle London SE28 Modern high bay warehouse constructed in 2009 with an eaves height of 21 metres extending to 107,552 sq ft. Let to Iron Mountain (UK) limited until 19/07/2029 at 805,845 pa and subject to a fixed up lift in July 2014 to 934,195 pa. September ,975, % 5. The London Collection Portfolio A portfolio of Greater London industrial estates and business centres including. Units 1-4 Michael Manley Industrial Estate, Clyston Street, Battersea. Four 1980 s industrial units totalling 5,800 sq ft. The Battersea units are let to Mears Ltd. reflecting per sq ft. October 2014 Portfolio Sale at circa 44.4 Million 5.53%

12 EPC EPC details can be made available on request. VAT The property is elected for VAT and it is proposed the sale will be by way of a TOGC. PROPOSAL Offers are invited in excess of 10,700,000 to forward commit to purchase the freehold interest on practical completion. A purchase at this level will reflect a Net Initial Yield of 5.00% and a guaranteed Reversionary Yield of 5.80% in December 2020 assuming standard purchaser s costs of 5.80%. FURTHER INFORMATION Additional information will be made available in the data room. For access to the data room or to arrange an inspection please contact; - Robert Millar Director T: E: rmillar@steerforthpartners.com Steerforth Limited 3 5 Barrett Street London W1U 1AY FINANCE Should you require debt finance, attractive terms have already been secured. Please contact Clive for further information. Clive Offord Director T: M: No. 8, 30 Maddox Street Mayfair London W1S 1PS Steerforth Limited for themselves and for the vendors or lessors of this property whose agents they are give notice that: (i) the particulars are set out as a general guideline only for the guidance of intending purchasers or lessees and do not constitute, nor constitute part of an offer or contract. (ii) 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 representation of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them. (iii) no person in the employment of Steerforth Limited has any authority to make or give any representation or warranty whatever in relation to this property. (iv) all rentals and prices are quoted exclusive of VAT. June Newmans Limited REF:15332

130 City Road, London EC1V 2NW

31 Old Burlington Street, Mayfair, London W1S 3AS 020 7292 7404 www.burlingtonpartners.com 130 City Road, London EC1V 2NW Central London Multi-Let Investment Opportunity with Considerable Active Management