G R ACECHUR CH STR EET

Transcription

1 G R ACECHUR CH STR EET LON DON EC3 Prime City of London Mixed Use Investment Opportunity

2 81 GRACECHURCH STREET INVESTMENT SUMMARY Gracechurch Street is located in the core of the City of London Core City of London location in close proximity to Leadenhall Market and the Bank of England. The property occupies a prominent location on the eastern side of Gracechurch Street. The property is held on a 150 year Long Leasehold from The Master and Wardens of the Guild or Fraternity of the Body of Christ of the Skinners of London from 24th June The Headlease is geared to the higher of the Minimum Rent of 50,000 per annum and 10% of the Net Income. Grade II Listed building providing 19,418 sq ft (1,804 sq m) of office, retail and ancillary accommodation arranged over basement, ground and four upper floors. The property was extensively refurbished in The office accommodation extends to 12,493 sq ft (1,161 sq m) and is multi-let to three tenants accounting for 63.44% of the income, the passing rent is 607,823 per annum, equating to a reversionary overall rent of per sq ft. The retail accommodation extends to 6,925 sq ft (643 sq m) and is multi-let to four tenants at a passing rent of 350,250 per annum equating to per sq ft overall. The total gross passing rent is 958,073 per annum (including vendor top-ups), with a WAULT of approximately 6.19 years1 to lease expiries and 4.32 years to break options. Any outstanding rent-free periods will be topped up by the vendor at completion. The current head rent payable is 61,398.40, the total net rent equates to 896, Offers are sought in excess of 15,000,000, subject to contract for the Long Leasehold interest reflecting a net initial yield of 5.60%2 and a capital value of 772 per sq ft, assuming purchaser s costs of 6.73%. 1 Weighted Average Unexpired Lease Term to expiries assumes a 5 year lease extension for Planet of the Grapes Ltd. 2 Assuming vendor top-up of any outstanding rent free at completion. 1 2

3 GRACECHURCH STREET LOCATION Gracechurch Street is located in the traditional core of the City of London, occupying a prominent position on the eastern side of Gracechurch Street. The property is located in close proximity to the historic Leadenhall Market which dates back to the 14th Century and attracts significant footfall due to its lively and contemporary atmosphere. Gracechurch Street is one of the City of London s major thoroughfares linking London Bridge to Bishopsgate and is positioned close to the Tower Cluster, a collection of London s most prominent towers including 20 Fenchurch Street ( The Walkie Talkie ), The Leadenhall Building and 30 St Mary Axe ( The Gherkin ). Due to its proximity to the Bank of England and Lloyd s of London, the sought after central location has traditionally attracted financial and insurance occupiers which today include Deutsche Bank, Rothschild & Co, Aon, AXA XL, Allianz, QBE and Willis Towers Watson The area continues to experience strong demand from a number of the world s leading professional and banking services, and more recently technology and media companies. This demand is further supported by the vibrant mix of retail and leisure amenities, with Gracechurch Street being the location of choice for many leading retailers including Gap and Marks & Spencer. The location is experiencing further significant growth and investment, with developments such as 22 Bishopsgate, 80 Fenchurch Street, 1 Leadenhall Street, and 150 Leadenhall Street amongst others due to complete over the next few years, reinforcing its position at the heart of the City of London Bank of England The Royal Exchange Sky Garden Smythson 5. Leadenhall Market St Mary Axe

4 81 GRACECHURCH STREET 5 6 CONNECTIVITY Gracechurch Street is ideally located to benefit from London s efficient and rapidly expanding public transport network. Bank 4 mins walk (0.2 miles) Liverpool St. 10 mins walk (0.6 miles) Aldgate 10 mins walk (0.5 miles) The property benefits from excellent transport infrastructure, being situated in close proximity to a number of Mainline Rail and London Underground stations. These stations include: Mansion House 10 mins walk (0.4 miles) Fenchurch St. 7 mins walk (0.3 miles) Cannon St. 7 mins walk (0.3 miles) Monument 3 mins walk (0.1 miles) London Bridge 12 mins walk (0.8 miles) Source: TfL New Liverpool Street Elizabeth Line Entrance (CGI) Bank and Monument Underground Station Upgrade Bank Station is currently undergoing an extensive upgrade due to be completed by 2021, with a new entrance planned at King William Street, a 4 minute walk away from the property. The interlinked stations will feature several new escalators, a new station entrance and more room for Northern line passengers. Proposals include: Journey Times on the Elizabeth Line Reading 61 mins Slough 37 mins Heathrow 33 mins Paddington 10 mins Bond Street 7 mins Tottenham Court Road 4 mins Farringdon 2 mins Liverpool Street Whitechapel 2 mins Stratford 8 mins Canary Wharf 6 mins New southbound tunnel and platform for the Northern line. New station entrances on Cannon Street and King William Street. Step-free access between the Northern line, DLR and the street. A moving walkway for quicker and easier access. More lifts and escalators to ease congestion and improve accessibility. Elizabeth Line (Crossrail) Gracechurch Street is within a short walking distance (0.6 miles) of Liverpool Street Station which will act as the primary connection for Crossrail in the City of London. Due for completion in Autumn 2019, the Elizabeth Line (Crossrail) will deliver a direct connection between all of London s main employment centres, linking Heathrow with Paddington, the West End, the City and Canary Wharf. In peak times a train will run every two and a half minutes in each direction. Two new ticket halls are being constructed at Liverpool Street and Moorgate and will be connected by underground platforms. The railway will have an estimated 200 million travellers each year and is expected to reduce London journey times by up to 70%. The new network will support major regeneration across London and add an estimated 42bn to the UK economy. New Bank Station Entrance (CGI)

5 81 GRACECHURCH STREET LONDON WALL GUILDHALL GRESHAM STREET 37 QUEEN ST KING ST MANSION HOUSE 43 POULTRY 8 QUEEN VICTORIA ST COLEMAN ST MOORGATE PRINCES ST KING WILLIAM ST CANNON STREET MOORGATE 9 31 FINSBURY CIRCUS LOTHBURY THROGMORTON ST 26 CANNON ST BANK LONDON WALL THREADNEEDLE ST CORNHILL LOMBARD ST MONUMENT OLD BROAD ST GRACECHURCH ST 13 LIVERPOOL ST BISHOPSGATE THE LEADENHALL BUILDING 6 44 LEADENHALL ST LEADENHALL MARKET 20 FENCHURCH STREET 1 LIVERPOOL STREET EASTCHEAP GREAT TOWER ST HOUNDSDITCH BEVIS MARKS 30 ST MARY AXE FENCHURCH STREET FENCHURCH STREET DEVELOPMENT PIPELINE Gracechurch Street is located in a thriving office location. A number of notable schemes have been developed within a 200m radius of the property, with several further large scale developments forthcoming Fenchurch Avenue, EC3 Developer Size Generali/CORE/Greycoat 420,000 sq ft PC Completed 2018 Comments Majority pre-let to M&G Investments 4 2 The Scalpel, Lime Street, EC3 Developer WR Berkeley Corporation Size PC Q ,303 sq ft (35 storeys) Comments 53% let or under offer 5 3 Aurum, Lombard Street, EC3 Developer McKay Securities Size 57,480 sq ft PC Q Comments 100% let to St James s Place 6 10 LONDON BRIDGE UPPER THAMES ST LOWER THAMES ST LONDON BRIDGE 22 Bishopsgate, EC2 80 Fenchurch, EC3 150 Leadenhall, EC3 Developer AXA/Temasek/PSP/QuadReal Developer Exemplar and Partners Group Developer Mitsubishi Estate Company/Stanhope Size 1.380M sq ft (62 storeys) Size 252,250 sq ft Size 568,000 sq ft LOCAL OCCUPIERS PC Comments c.800,000 sq ft is under offer PC Q Comments Under construction PC Comments Revised planning consent granted in Creative/Tech Professional Finance Insurance 1. CGI Group 2. The Office Group 3. Salesforce 4. WeWork 5. Insightful Technology 6. Splash Creative 7. Caplin Systems 8. Epiq Systems 9. Worldpay 10. Ventiv Technology 11. Accenture 12. Kennedys 13. White & Case 14. British Council for Offices 15. Hunton & Williams / Kirkland Ellis 16. Holman Fenwick Willan 17. IPS Group Ltd 18. Sidley Austin 19. Latham & Watkins 20. Meet Recruitment 21. Coventry University 22. Royal Bank of Canada 23. Standard Life 24. Financial Reporting Council 25. Lloyds Banking Group 26. Rothschild & Co 27. Schroders 28. China Construction Bank 29. Deutsche Bank 30. Blackrock 31. ING 32. Royal Bank of Scotland 33. AXA XL 34. Allianz 35. WR Berkeley 36. Prudential 37. Investec 38. Hiscox 39. AIG 40. Lloyd s Register 41. Towergate Insurance 42. Willis Towers Watson 43. Liverpool Victoria 44. Aon 40 Leadenhall Street, EC3 Developer TH Real Estate Size 909,600 sq ft PC Comments Under construction One Undershaft, EC3 Developer Aroland Holdings/Perennial Size 968,752 sq ft PC Comments Planning consent granted One Leadenhall, EC3 Developer Brookfield Size 385,000 sq ft PC Comments 100,000 sq ft under offer to Munich Re

6 GRACECHURCH STREET Liverpool St. 100 Bishopsgate 30 St Mary Axe 1 Undershaft 22 Bishopsgate Tower 42 Leadenhall Market 20 Fenchurch Street Monument London Bridge The Shard London Bridge Bank Cannon St. Bloomberg HQ

7 81 GRACECHURCH STREET THE BUILDING Gracechurch Street was originally constructed in the 1850s, the elevation fronting Gracechurch Street is finished with Portland stone and the side façades overlooking Bulls Head Passage are finished in glazed brickwork. The building was extensively refurbished in the mid 1980 s, and more recently modernised in 2012, with a scheme designed by Trehearne Architects, which included the replacement of all plant and machinery. The property comprises 19,418 sq ft (1,804 sq m) of office, retail and ancillary accommodation arranged over basement, ground and four upper floors. The offices are accessed via a newly refurbished reception (2018) from Gracechurch Street with the retail units benefitting from dedicated access off Gracechurch Street and Bulls Head Passage. 2. SPECIFICATION Gracechurch Street underwent a significant programme of refurbishment in 2012 to upgrade the building s plant and machinery. This included works to the air conditioning systems together with lift replacement. The building benefits from the following specification: VRF air conditioning system; Metal tile suspended ceilings; LED lighting; Raised floors on the 1st and 2nd floors and trunking on the 3rd and 4th floors; Finished floor to ceiling heights typically ranging from 2.5 m to 2.73 m across the upper floors; Male and female WCs on all floors; Tenant shower and changing facilities on the 2nd floor; Refurbished manned reception; Passenger lift. 1. Exterior Detail 2. Reception 3. EE, 81 Gracechurch Street

8 81 GRACECHURCH STREET ACCOMMODATION The property has been independently measured by Plowman Craven in accordance with the RICS Code of Measuring Practice 6th Edition and the International Measuring Standards IPMS. The survey is assignable to a purchaser and a Duty of Care Letter can be provided. Basement Retail 4,264 sq ft / sq m 1st Floor Office 3,253 sq ft / sq m 2nd Floor Office 3,233 sq ft / sq m A copy of the full measured survey and associated floor plans can be downloaded from the data room. Floor Use sq ft (NIA) sq m (NIA) 4th Office 2, Bulls Head Passage Bulls Head Passage 3rd Office 3, nd Office 3, st Office 3, Ground Retail 81 GS Retail 82 GS Retail 1 BHP Retail 9-10 BHP Gracechurch Street Gracechurch Street Gracechurch Street Basement Retail 82 GS 4, Total 19,418 1,804.0 Ground Floor Retail 2,661 sq ft / sq m 3rd Floor Office 3,159 sq ft / sq m 4th Floor Office 2,848 sq ft / sq m Retail 1 BHP Retail 82 GS Bulls Head Passage Retail 9-10 BHP Retail 81 GS Bulls Head Passage Bulls Head Passage Reception N Office Retail Reception Storage Core For indicative purposes only. Not to scale. Gracechurch Street Gracechurch Street Gracechurch Street

9 81 GRACECHURCH STREET nd Floor, First Title Insurance 2. Reception 3. 2nd Floor, First Title Insurance

10 81 GRACECHURCH STREET TENURE CORNHILL The property is held on a 150 year Long Leasehold from The Master and Wardens of the Guild or Fraternity of the Body of Christ of the Skinners of London from 24th June GRACECHURCH STREET Leadenhall Court Leadenhall Market WHITTINGTON AVENUE Ward Bdy Lloyd's Building The Headlease is geared to the higher of the Minimum Rent and 10% of the Net Income. The geared rent is calculated annually on the 1st April of each year of the term. The current head rent payable is 61,398.40, the total net rent equates to 896, Bulls Head Passage STREET PASSAGE BEEHIVE PASSAGE LEADENHALL PLACE The Minimum Rent is currently 50,000 per annum and is reviewed every 10 years to the greater of the Minimum Rent passing and 5% of the average annual Net Income over the period of five years immediately preceding the relevant review date. The next review date is the 24 June Ship Tavern Passage XL House Risin Bollard LIME STREET Sackville House CULLUM STREET N The property is registered under title no: AGL TENANCY SCHEDULE DEMISE TENANT AREA SQ FT SQ M LEASE FROM LEASE EXPIRY RENT START NEXT BREAK BREAK CLAUSES NEXT RENT REVIEW ANNUAL RENT RENT psf INSIDE / OUTSIDE ACT COMMENTS 4th Floor, 81 Gracechurch Street FCMB UK Ltd 2, /07/ /07/ /07/ /07/2023 Tenant 19/07/ , Outside If the Tenant does not exercise the break they are entitled to a further 9 months' rent free until The vendor will top-up any outstanding rent-free at completion. 3rd Floor, 81 Gracechurch Street Protean Investment Risks Ltd 3, /09/ /09/ /09/2021 Tenant - 161, Outside The Tenant is paying half rent of 80, until If the Tenant does not exercise the break they are entitled to a further 5 months' rent free until nd Floor, 81 Gracechurch Street First Title Insurance Plc 3, /09/ /09/ , Outside 1st Floor, 81 Gracechurch Street FCMB UK Ltd 3, /07/ /07/ /04/ /07/2023 Tenant 19/07/ , Outside If the Tenant does not exercise the break they are entitled to a further 2 months rent free until The vendor will top-up any outstanding rent-free at completion. 81 Gracechurch Street - Retail EE Ltd /11/ /11/ /11/ , Inside 82 Gracechurch Street - Retail Robert Dyas Property Ltd 5, /03/ /03/ , Inside 1 Bulls Head Passage - Retail Zdenka Trutzova /02/ /02/ , Inside 9 & 10 Bulls Head Passage - Retail Planet of the Grapes Ltd /10/ /04/ /10/ , Outside As part of the 2017 rent review, the rent has fixed incremental increases over the next 5 years as follows - Year 1-53,500 p.a, Year 2-54,500 p.a, Year 3-55,500 p.a, Year 4-56,500 p.a & Year 5-57,500 p.a. The vendor will top-up any outstanding rent-free at completion. A lease extension for a further 5 years until April 2031 has been agreed with the tenant. Total Gross Rent 19,418 1, , * Current Head Rent Payable 61, TOTAL NET RENT 896, *Total rent is inclusive of vendor rental top-up.

11 81 GRACECHURCH STREET TENANT COVENANT The covenant information for the five tenants which account for the highest percentage of income at Gracechurch Street is set out below. FCMB Bank (UK) Limited 30.77% of Rent Passing FCMB Bank (UK) Limited is an independently incorporated, wholly-owned subsidiary of First City Monument Bank Ltd (FCMB), a member of the FCMB Group PLC, a leading financial services group based in Nigeria, listed on the Nigerian Stock Exchange. At December 2017, FCMB had 3.7 million customers and 204 branches in Nigeria and a wholly owned subsidiary in the UK. In the year ended 31 December 2017, FCMB Bank (UK) Limited reported a profit of $1.12m. The company has a D&B rating of 4A1. Further information can be found at Protean Investment Risks Ltd 16.82% of Rent Passing Protean Investment Risks Ltd is a Registered Lloyd s Broker, regulated by the Financial Conduct Authority specialising in the investment industry, financial services and technology sectors. The company has a D&B rating of F2. Further information can be found at First Title Insurance Plc 15.86% of Rent Passing First Title Insurance Plc is a UK regulated specialist insurance company, dedicated to helping property owners, developers and lenders protect investment and maximise returns. In the year ended 31 December 2017, First Title reported a statutory accounts profit after tax of 2.1m. The company has a D&B rating of 4A1. Further information can be found at EE Ltd 11.79% of Rent Passing EE, part of the BT Group is the largest and most advanced digital communication company in Britain, delivering mobile and fixed communications services. EE has approximately 553 retail stores and services more than 31 million connections across its mobile, fixed and wholesale networks. Under the umbrella of the BT Group, the company has reported a turnover of 23.7bn in 2018 and a profit of 2.6bn before tax. The company has a D&B rating of 5A1. Further information can be found at 3. Robert Dyas Property Ltd 16.67% of Rent Passing Robert Dyas is a UK hardware retailer founded in London in 1872 with 95 stores spread across the South of England. Since 2012, Robert Dyas has been owned by Theo Paphitis, the entrepreneur and long-time star of BBC s Dragons Den. In the year ended 31 April 2017, Robert Dyas reported an increase in turnover to 123.4m. The company has a D&B rating of 2A2. Further information can be found at 1. Robert Dyas, 82 Gracechurch Street 2. Planet of the Grapes, 9 & 10 Bulls Head Passage 3. First Title Insurance, 2nd Floor, 81 Gracechurch Street

12 81 GRACECHURCH STREET HEADLEASE SUMMARY 1. Term 150 years from 24 June 2011, expiring 23rd June Landlord The Master and Wardens of the Guild or Fraternity of the Body of Christ of the Skinners of London. Premises All those premises known as 80, 81 and 82 Gracechurch and 1, 9, 10, 11 and 12 Bulls Head Passage. User Not without the consent in writing of the Landlord, such consent not to be unreasonably withheld, to use the premises otherwise than as office, retail, restaurant or bar, or any combination of those uses, and for storage or ancillary use. Not to use the premises for residential purposes. Rent Calculation The annual rent payable during each accounting period (yearly calculated on the 1st April) will be an amount equal to the greater of: a) The Minimum Rent; and b) 10% of the Net Income (as defined). The Net Income includes rents received on let accommodation and deemed notional rent payable on vacant accommodation. The current head rent payable is 61,398.40, the total net rent equates to 896, Minimum Ground Rent 50,000 per annum until the first review date. Alienation a) Not to assign the whole of the premises without the prior written consent of the Landlord, not to be unreasonably withheld or delayed. b) Not to underlet the whole or any part of the premises other than in compliance with part 2, schedule 5 of the Headlease. c) Not to underlet at anything other than the best terms reasonably obtainable in the open market. Repair Full repairing terms. Alterations 1. The Tenant shall not carry out any structural alterations to the premises by which the extent of the Net Internal Area will be more than 5% less than the NIA as expressed in the Certificate of Practical Completion. 2. The Tenant shall not carry out any other alterations to the premises without the prior consent of the Landlord (not to be unreasonably withheld or delayed) save that the Tenant may carry out alterations without consent which: a) Do not affect the exterior of the premises or the building; b) Do not affect the structural integrity of the building; c) Non-structural alterations including the erection and removal of demountable partitioning. Insurance The Tenant is obliged to keep the premises insured in the joint names of the Landlord and the Tenant. Minimum Ground Rent Review The minimum ground rent is to be reviewed every 10 years to the greater of the Minimum Rent passing and 5% of the average annual Net Income (as defined) over the period of five years immediately preceding the relevant review date. The next review date is 24 June Building Exterior

13 FURTHER INFORMATION CONTACT Planning The property is situated in the City of London. The property is Grade II listed under list entry number and lies within the Leadenhall Market Conservation Area. VAT The property is not elected for the purposes of VAT. EPC 81 Gracechurch Street has an EPC rating of B (49). A copy of the certificate can be downloaded from the data room. For further information or to arrange an inspection please contact: James Abrahams james.abrahams@allsop.co.uk Jonathan Ruback jonathan.ruback@asllop.co.uk Matt Millman matthew.millman@allsop.co.uk Marsha Rabinovich marsha.rabinovich@allsop.co.uk Data Room Further information can be downloaded from the data room at Proposal Offers are sought in excess of 15,000,000, subject to contract for the Long Leasehold interest reflecting a net initial yield of 5.60%* and a capital value of 772 per sq ft assuming purchaser s costs of 6.73%. *Assuming vendor top-up of any outstanding rent free at completion. Allsop LLP on its behalf and for the Vendors or Lessors of this property, whose Agents they are, give notice that: These particulars are set out as a general outline only for guidance to intending Purchasers or Lessees, and do not constitute any part of an offer or contract. Details are given without any responsibility and any intending Purchasers, Lessees or Third Parties 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 Allsop LLP has any authority to make any representation or warranty whatsoever in relation to this property. Unless otherwise stated, all prices and rents are quoted exclusive of VAT. November Designed and produced by Cre8te cre8te.london