Investment Sale Acorn Business Park, Killingbeck Drive, Leeds, West Yorkshire, LS14 6UF

Transcription

1 Investment Sale Acorn Business Park, Killingbeck Drive, Leeds, West Yorkshire, LS14 6UF To M1 Junction 46 York Road A64 High Yielding Business Park Investment Sale To Leeds City Centre

2 Investment Summary High Yielding multi let business park investment opportunity. Located directly off the A64 one of the main arterial routes providing direct access to Leeds City Centre only 2.5 miles to the west. Acorn Business Park is situated adjacent to Killingbeck Retail Park which is anchored by an ASDA supermarket and tenants including McDonalds, B&Q, Carpetright and Comet. The business park provides a total of 40,796 sq ft (3,790 sq m) of office accommodation arranged around 11 individual two storey office buildings together with the larger Kernel House office building located opposite. The business park is multi let to 9 tenants with two vacant units. The property produces a total income of 481,765 per annum, reflecting a modest rental level of only per sq ft. We are seeking offers in excess of 2,800,000 (Two Million, Eight Hundred Thousand Pounds), subject to contract, for the benefit of the freehold and long leasehold interests. This reflects a Net Initial Yield of 16.26% after allowing for purchasers costs of 5.8% and a low capital value of only per sq ft.

3 A65 A61 A6068 A650 A629 M621 A646 A56 A646 A58 M62 A642 M1 A629 M60 A628 A629 M60 A1 A64 A64 A63 A63 M62 M62 A638 A1 A628 A635 A1 M1 M18 York Rd Foundry Ln A64 Wykebeck Valley Rd Halton Moor Ave York Rd A64 York Rd Selby Rd A63 S Pkwy A6120 Cross Gates Rd Selby Rd Ring Rd Cross Gates A63 Cross Gates Station Ring Rd Halton Barwick Rd Penda s Way A6120 M Description Acorn Business Park, constructed in the late 1980 s, is a campus-style office development containing 16 self-contained detached twostorey office buildings. A number of the office buildings have been sold off on long leases. The subject property therefore comprises the controlling interest in 10 buildings plus Kernel House. In total the subject property provides 40,796 sq ft (3,790 sq m) and 114 car parking spaces. The office buildings comprise of: Brick elevations beneath pitched slate tile roofs Concrete floors & staircases throughout Suspended ceilings with Category II lighting Location The property is located to the east of Leeds city centre approximately 198 miles (318 km) north of London and 44 miles (70 km) northeast of Manchester. The City of Leeds is strategically located close to the intersection of the M1 and the M62 Motorways and in turn, the wider National Motorway Network. The City has a district population in excess of 715,000 and a catchment population in excess of 6 million, within a 60 minute drive. Leeds City station is the busiest railway station outside central London providing direct rail access to London Kings Cross, with a fastest journey time of 2 hours and 6 minutes. The city is the location of one of the largest financial centres in England outside London and also hosts the only subsidiary office of the Bank of England in the UK. The financial sector is the region s largest employer and it is expected to provide 24% of the region s additional jobs over the next decade. The financial services and business sector currently employs 120,000 people, accounting for approximately 1 in 4 jobs. Major employers within Leeds include Leeds Metropolitan University (3000), Unison (2500), Arla Foods Plc (2000) and GE Capital Global (1800). Situation Acorn Business Park is situated to the north of the A64 York Road, some 2.5 miles (4 km) to the east of Leeds City Centre. York Road is a busy arterial route which provides direct access into Leeds City Centre to the west, and to Junction 46 of the M1 Motorway, approximately 2 miles (3 km) to the south-east via the A63/A6120. The immediate vicinity is characterised by a mixture of retail, commercial and residential accommodation. The neighbouring Killingbeck Retail Park is anchored by an Asda Supermarket and petrol filling station with other occupiers including a McDonald s drive thru, and three retail warehouse units occupied by B&Q, Carpetright and Comet. In addition, the Magistrates Court have taken occupation of a building immediately adjacent to the Acorn Business Centre and Killingbeck Court which is another small B1 office scheme recently completed to the East. Gas fired centrally heated hot water radiators A number of units have incorporated comfort cooling air cassettes (Tenant installations) Each property benefits from a spacious landscaped environment with dedicated car parking spaces. The property includes Kernel House which is located on a self contained site to the north side of Killingbeck Drive with car parking to the side and rear of the property. Kernel House comprises a two storey office constructed in an L shape with brick elevations beneath a pitched slate roof. Internally the property comprises a similar specification to the other units on Acorn Business Park with suspended ceilings, Category II lighting and gas fired central heating system. Site The property occupies a site of approximately 0.92 ha (2.27 acres).

4 Acorn Business Park, Killingbeck Drive, Leeds, West Yorkshire, LS14 6UF Tenure The property is held by way of both freehold, virtual freehold and long leasehold interests as identified in the plan opposite and is explained below: Crown Copyright All rights reserved. Not to scale. The area hatched in green (Kernel House) is held long leasehold for a term of 125 years from 18th July 1989, at a peppercorn. The areas hatched in red are held freehold, unit 9 has been sold off on a long lease. The areas in outlined in red are car parking spaces held virtual freehold for a term of 999 years. Units 5, 6, 8, 11 and 14 are owned by third parties and do not form part of the sale. Tenancies The property currently produces 481,765 per annum and is multi let to 9 tenants by way of 10 Full Repairing and Insuring leases. The average weighted unexpired term is 2.35 years to expiry. Unit Description Tenant Area (sq ft) Lease Start Lease Expiry Rent (pa) Rent (psf) Unit 1 Leeds City Council 2,622 04/11/ /11/ , Unit 2 Arundel Williams & Surplice Ltd 1,609 29/09/ /09/ , Unit 3 Reg Vardy (TMG) Ltd 3,321 24/06/ /06/ , Unit 4 Daniels Chilled Foods Limited 4,132 31/03/ /09/ , Unit 7 Mayer Brown Ltd 1,542 01/03/ /07/ , Unit 10 Vacant 2,506 0 Unit 12 Specialist Computer Holdings Ltd 3,413 25/03/ /03/ , Unit 13 Right Management Ltd 2,468 01/03/ /02/ , Unit 15 Vacant 4,361 0 Unit 16 Crown Management Ltd 1,561 25/03/ /03/ , Kernel House Steria Limited 13,261 18/07/ /07/ , Car Spaces Right Management Ltd 01/03/ /02/2018 1,000 Unit 9 Sold Off 30/08/ /12/ , Total 40,796 There is a fully recoverable service and estate charge. Details can be provided upon request. Comments

5 Covenant We have provided up to date accounts for each of the tenants. There is no accounting information available for Leeds County Council, who are a government body. As shown with both Leeds City Council and an average Credit Safe score of 82/100 across the remaining income, the property benefits from good covenant security. Unit Tenant Passing Rent % Year Ending Turnover Pre Tax Profit Shareholder Funds Credit Safe Rating 1 Leeds City Council 7.99% n/a n/a n/a n/a Government 2 Arundel Williams & Surplice Ltd 3.65% 31/12/2011 n/a n/a 60,809 31/12/2010 n/a n/a 67,109 54/100 3 Reg Vardy (TMG) Ltd 9.99% 30/09/ ,727,000 5,100,000 99,855,000 30/09/ ,688,000 9,362,000 99,479,000 96/100 4 Daniels Chilled Foods Limited 12.46% 31/12/ ,055,000 9,261,000 29,911,000 31/12/ ,324,000 14,185,000 23,456,000 95/100 7 Mayer Brown Limited 4.98% 31/12/2011 n/a n/a 1,845,151 31/12/2010 5,473,451 ( 78,469) 2,270,187 96/ Specialist Computer Holdings Ltd 10.38% 31/12/2011 2,486,963,000 14,509, ,056,000 31/12/2010 2,238,425,000 17,538, ,518,000 95/ Right Management Ltd 7.27% 31/12/ ,473,000 ( 384,000) 15,603,000 31/12/ ,932,000 5,276,000 15,087,000 78/ Crown Management Ltd 4.83% 31/03/ n/a 3,200 31/03/2010 1,550 n/a 2,550 45/100 Kernel House Steria Limited 38.45% 31/12/ ,733,000 35,017,000 20,044,000 31/12/ ,577,000 30,738,000 86,580,000 98/100 Market Commentary Leeds office take-up for 2011 finished at 281,454 sq ft for 2011 up 10% on the total for Q1, 2012 has begun well with take-up for the quarter totalling 56,021 sq ft. The vast majority of deals are for enquiries up to 5,000 sq ft which accounts for 62% of total take-up with only 3 larger deals occurring during Q1, Indications are that for Q2 the Leeds office market is expected to achieve a take up of circa 50,000 sq ft. Historic headline rents in the out-of-town Leeds market peaked at per sq ft at White Rose Office Park in 2006, with rents on the other major Leeds Business Parks ranging from per sq ft. The subject property achieved a rental peak of per sq ft. Units 10 and 15 are available to let with agents quoting per sq ft. At the start of 2012 there is no office development under construction and without a pre-let it is unlikely that there will be any development of offices within the market during With the lack of any new development it is likely that supply will diminish during 2012 and into the start of Providing good prospects for growth off today s rental levels.

6 Asset Management The property benefits from a number of asset management opportunities that may enhance value, such as: Lease re-gears, surrender and re-lets. Break up and individual sale of units. Refurb and re-let supported and funded by dilapidations receipts from a number of original leases. Buy-in freehold interest of Kernal House. Alternative use for residential, leisure or retail subject to planning. VAT We understand that the property is elected for VAT. Energy Performance Certificates Complete EPC s for each unit are available in a separate PDF document as an appendix to this brochure. Proposal We are seeking offers in excess of 2,800,000 (Two Million Eight Hundred Thousand Pounds), subject to contract, for the benefit of the freehold and long leasehold interests. This reflects a Net Initial Yield of 16.26% after allowing for purchasers costs of 5.8% and a low capital value of only per sq ft. Contacts Lambert Smith Hampton 6th Floor 3 Hardman Street Leeds Spinningfields Manchester M3 3HF Lambert Smith Hampton 9 Bond Court LS1 2JZ Abid Jaffry Adam Varley ajaffry@lsh.co.uk avarley@lsh.co.uk Ben Roberts broberts@lsh.co.uk Lambert Smith Hampton United Kingdom House 180 Oxford Street London W1D 1NN Nick Lloyd nlloyd@lsh.co.uk Further information on the property can be obtained from: Subject to Contract and Exclusive of VAT Lambert Smith Hampton June 2012 Disclaimer: 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) Except 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.