Freehold Reversionary City Centre Office Investment

Transcription

1 Freehold Reversionary City Centre Office Investment BRISTOL Monarch House, Queen Charlotte Street, BS1 4EX Investment Summary Central Bristol location close to Queen Square Multi-let modern offices on ground and five upper floors Freehold In total 15,525 sq ft; 14,237 sq ft NIA office space, 1,288 sq ft ground floor retail 55 % let to the excellent covenant of LearnDirect Ltd WAULT 6.55 year to expiry and 1.23 years to break Total income 209,092 per annum Average passing rent per sq ft. Historic planning consent for change of use to student accommodation Offers are sought in excess of 2,700,000 (Two Million Seven Hundred Thousand pounds) exclusive of VAT for the freehold interest, reflecting a net initial yield of 7.28% assuming purchaser s costs of 6.41% and a capital value of 174 per sq ft. Allowing an ERV of per sq ft this reflects a reversionary yield of 8.80%. A sale on behalf of:-

2 LOCATION Bristol is the 5 th largest conurbation in the UK and the South West s major commercial and retail centre. This year the city was voted as the best place to live and work in the UK. Bristol has an estimated population of 428,000 (2011 census) and a larger urban zone with an estimated 1.6 million residents. Bristol is ranked 3 rd highest per capita GDP after London and Nottingham. Bristol s employment rate is 73.9% (September 2016) the highest of the core cities. The city s two Universities, Bristol University and the University of the West of England contribute to the skilled labour pool and Bristol accommodates more than 50,000 students in total and boasts one of the highest retention rates in the UK. COMMUNICATIONS The city benefits from excellent strategic road links. Located at the intersection of the M4 and M5 motorways providing access to the South West, South Wales, the Midlands and South East England. The M32 connects the city centre with the M4 at Junction 19. Bristol is located 120 miles west of London, 90 miles south of Birmingham and 44 miles east of Cardiff. Bristol is served by two main line railway stations, Temple Meads in the city centre and Parkway 5 miles north of the city centre. Both stations provide regular intercity services to major destinations across the UK including London Paddington, Manchester, Birmingham and Cardiff. The fastest journey time to London Paddington from Temple Meads is 1 hour 40 minutes, which will improve further once the 2.8 billion electrification of the railway occurs. Bristol international airport serves over 7.5 million passengers a year, flying to 114 scheduled destinations throughout the UK and all the other major European countries, and is one of the fastest growing regional airports in the UK.

3 SITUATION Monarch House is situated in a popular central location on Queen Charlotte Street which links Baldwin Street with Queen Square. The building is a short distance from Bristol Bridge which links to Victoria Street leading to Bristol Temple Meads railway station and adjoining the inner ring road (A4044) which links directly to the M32 and provides easy access to the M4/ M5 national motorway network. The location is close to the leisure offer of Welsh Back and the Floating Harbour is a short walk away. There is a 421 space NCP car park opposite the building. DESCRIPTION Monarch House is a modern office building comprising a ground floor retail unit with office accommodation over first to fifth floors. The office space has been refurbished to provide carpeting, suspended ceilings, LG7 lighting, raised access floors, air conditioning and male/female toilets on alternate floors. The property benefits from 2 passenger lifts. The property benefits from 10 secure car parking spaces at ground floor level accessed from Queen Charlotte Street. ACCOMMODATION Floor Sq ft Ground Floor retail 1,288 First Floor offices 2,820 Second Floor offices 2,897 Third Floor offices 2,852 Fourth Floor offices 2,848 Fifth Floor offices 2,820 TOTAL 15,525

4 BRISTOL Monarch House, Queen Charlotte Street, BS1 4EX TENURE Freehold PLANNING The ground floor benefits from planning consent for uses within A1 and A2. The first, second and third floors benefit from planning consent for flexible use classes B1/D1. In February 2013 a planning application was approved for change of use of the upper floors to student accommodation (use class Sui Generis). VAT We understand the property is elected for VAT. It is anticipated the sale will be dealt with as a Transfer of a Going Concern (TOGC). EPC Copies of EPC Certificates are available on request.

5 TENANCIES The property is fully let and, including a rental guarantee and the income from the car park licence, produces a rental income of 209,092 per annum. The average passing rent is per sq ft. Leases are drawn on full repairing insuring terms. Average weighted unexpired term to lease expiry is 6.55 years and 1.23 years to break. Floor Tenant Total NIA (sq ft) Lease Start Lease Expiry Break Date Rent Review Rent p.a. Rent p.s.f p.s.f. Comments 1954 Act Ground Central Studio Salon Ltd 1, , ,608 Includes 2 car spaces In First, second & third LearnDirect Ltd 8, * , ,104 Includes 1 car space Out Fourth Cypad Ltd 2, ** , ,568 Includes 1 car space*** Out Car parking licence Cypad Ltd 1,500 Fifth Vendor Guarantee 2, , , month rent, rates and service charge guarantee. Includes 2 car spaces 3 car parking spaces Vacant 4,500 1,500 per car TOTAL 15, , ,900 *Tenant can break on 6 months notice. 25,650 (plus VAT) penalty payable if tenant exercises break. Landlord can break on 9 months notice. ** 6 months notice. If tenant do not exercise their break option they benefit from 3 months half rent. *** Tenant has a service charge cap equating to 9.00per sq ft, subject to review.

6 COVENANT INFORMATION The property is let to the following tenants: LearnDirect Ltd LearnDirect are the UK s largest provider of skills, training and employment services. The company help people gain skills for work including qualifications in maths, English and IT and vocational qualifications and Apprenticeships in lots of industries. LearnDirectLtd 31/07/15 31/07/14 31/07/13 Turnover 171,289, ,781, ,684,000 Pre-tax profit 2,948,000 3,010,000 16,404,000 Shareholders funds 7,223,000 5,595,000 18,636,000 Cypad Limited Cypad provide tablet and web based solutions for school catering, cleaning and local authorities and service organisations. The company offer a suite of apps for school catering that provide support through the process of providing a school meals service. Further information can be found on the company s website Central Studio Salon Ltd Popular central Bristol hair salon established in 1986.

7 BRISTOL CITY CENTRE OFFICE MARKET Prime Headline rents in Bristol are per sq ft and anticipated to reach per sq ft during city centre take up 783,000 sq ft, 29% above 5 year average Current grade A availability 48,232 sq ft less than one year s worth of demand Most significant reduction in availability within Grade A and high quality Grade B office markets Bristol is predicated to outperform every other Big 6 regional office market over the next 4 years Tenant s incentives reducing ERV Based the on the rental evidence achieved in the nearby buildings in our opinion the rental value for Monarch House is conservatively per sq ft. The reversionary rent, including additional income from the car parking spaces, equates to 252,900 per annum. RENTAL EVIDENCE Date Address Rent (per sq ft) Size (sq ft) Tenant June 2016 Bridge House, Baldwin Street ,685 REPL Group July 2016 Royal London Buildings, Baldwin Street ,634 Swordfish September 2016 Newminster House, Baldwin Street ,935 Thatcher Associates

8 BRISTOL Monarch House, Queen Charlotte Street, BS1 4EX PROPOSAL Offers are sought in excess of 2,700,000 (Two Million Seven Hundred Thousand pounds) subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 7.28% and a low capital value of 174 per sq ft. Assuming an ERV of per sq ft, an acquisition at this level reflects a reversionary yield of 8.80%. CONTACT For further information or to arrange an inspection of this property, please contact the sole agents: Gemma-Jane Ogden T: E: gemma-jane.ogden@htc.uk.com or Ian Lambert T: E: ian.lambert@htc.uk.com JUNE 2017 Hartnell Taylor Cook LLP for themselves and for the vendor or lessor of this property, whose agent they are, give notice that: These particulars are set out as a general outline only for the guidance of intending purchasers or lessees and do not constitute part or whole of an offer or contract; All descriptions, dimensions, photographs, 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 intending purchasers or lessees should not rely on them as statements or representations of fact and must satisfy themselves as to their correctness; No person in the employment of Hartnell Taylor Cook LLP has any authority to make or give any representation or warranty whatsoever in relation to this property or these particulars nor enter into any contract on behalf of the vendor or lessor; Unless otherwise stated, all prices, rents and other charges are quoted exclusive of VAT. Any intending purchasers or lessees must satisfy themselves independently as to the incidence of VAT in respect of any transaction; All plant, machinery, equipment, services and fixtures and fittings referred to in these particulars were present at the date of publication. They have not been tested and we give no warranty as to their condition or operation; No responsibility can be accepted for any expenses incurred by intending purchasers or lessees in inspecting properties that have been sold or withdrawn.