HEADER Jewry Street London EC3 HIGHLY REVERSIONARY MULTI-LET FREEHOLD CITY OF LONDON INVESTMENT. Copy

Transcription

1 1 HEADER Copy 7-17 Jewry Street London EC3 HIGHLY REVERSIONARY MULTI-LET FREEHOLD CITY OF LONDON INVESTMENT

2 2 3 HEADER INVESTMENT SUMMARY Copy A WELL LET FREEHOLD WITH EXCITING REPOSITIONING OPPORTUNITIES IN A RAPIDLY CHANGING AREA OF CENTRAL LONDON WHERE THE TRADITIONAL CITY CORE MEETS THE DYNAMIC NEW MEDIA TECH WORLD OF ALDGATE Freehold. Located at the crossover between the increasingly vibrant Aldgate district popular with Technology Media Telecommunications (TMT) occupiers and the established City of London financial and insurance heartland. Close to numerous mainline and underground stations, such as Aldgate, Fenchurch Street and Tower Hill. Also close to the new Crossrail station at Liverpool Street (opening in 2018). The building comprises 45,062 sq ft of offices over ground and 7 upper floors as well as 7 basement car parking spaces. Multi-let to include 12 office tenants, producing a total passing rent of 1,319,326 per annum, reflecting very low average rent of approximately per sq ft per annum for the ground and upper floor office space. All occupational leases are outside of the L&T Act 1954 (Part II). Well timed lease events to enable rents to be driven forward in the short to medium term with weighted average terms of 3.70 years to expiry and just over 3.11 years to breaks. Considerable active management, repositioning, alternative use opportunities in the short to medium term as well as significant medium to long term redevelopment potential, subject to planning. Offers are sought in the order of 30,850,000, subject to contract and exclusive of VAT. The above price reflects a net initial yield of 4.00% (assuming a purchaser s costs at 6.77%) and a net capital value of 685 per sq ft. Assuming market rents of 50 per sq ft per annum on the best accommodation the reversionary yield would be in excess of 6.75%.

3 4 ROYAL EXCHANGE/ LLOYD S OF BANK LONDON FENCHURCH STREET THE LEADENHALL BUILDING TOWER ST MARY AXE HERON TOWER 5 LIVERPOOL STREET ALDGATE HEADER HEADER Copy Copy OLD SPITALFIELDS MARKET SHOREDITCH HIGH STREET ALDGATE EAST

4 6 7 LOCATION BOUNDARY HOUSE IS SITUATED WITHIN THE CITY OF LONDON AT THE POINT WHERE THE TRADITIONAL FINANCIAL AND INSURANCE DISTRICTS MEET THE RAPIDLY EMERGING EASTERN AREA AROUND ALDGATE. The property is located on the west side of Jewry Street, close to the junction with Fenchurch Street to the north and Crutched Friars to the south, which gives occupiers the benefit of easy access to the traditional insurance district of London. Institutions within close proximity include The London Underwriting Centre, Lloyd s of London, Lloyd s Registry of Shipping and The London Metal Exchange. Local insurance and shipping market occupiers include Miller Group, AXA, Towergate Insurance, JLT, AIG, Lockton, Elborne Mitchell, Chubb and BMS. The surrounding area to the east of Jewry Street is rapidly evolving and has attracted some of the most prominent Technology Media Telecommunications (TMT) companies in London. This area, known as Aldgate, has become home to a wide mix of occupiers such as Uber, WeWork, Tag Worldwide, Thomson Reuters, Maersk and Sky. In addition to the above, Boundary House is also within easy reach of such destinations such as the Leadenhall Market, Spitalfields Market, Brick Lane, St Katharine Docks and the Whitechapel Art Gallery, all with their vibrant mix of dining, shopping, entertainment and cultural attractions.

5 LOCAL OCCUPIERS HEADER Local Occupiers Copy 1. Accenture 2. ACE Insurance 3. AIG 4. Amlin 5. Aon 6. Arch Insurance 7. Ascot Underwriting 8. Aspen Insurance 9. Aviva PLC 10. Axis Speciality Europe 11. Beazley Group 12. Brit 13. Browne Jacobson 14. Chubb 15. Clyde & Co 16. Curzon Maritime Ltd 17. Cunningham Lindsey 18. The Fairtrade Foundation 19. Gensler 20. HCC International 21. Hermes 22. Interiors Group 23. JLT 24. Kennedys 25. Kirkland & Ellis 26. LCH Clearnet 27. Lloyd s 28. Lockton 29. Markel International 30. Miller Insurance Group 31. Munich RE Group 32. PLP Architecture. 33. QBE Europe 34. Royal Bank of Scotland 35. RSA 36. Salesforce 37. SG Hambros Bank 38. Standard Life Investments 39. Sungard Availability Services 40. Swiss RE 41. TAG Worldwide 42. Thomas Miller 43. Tokio Marine Kiln 44. Trinity House 45. Uber 46. W.R. Berkley 47. Wells Fargo 48. Westpac Banking Corporation 49. WeWork 50. Willis Restaurants & Bars 1. Omino 2. Skygarden 3. Luc s Brasserie 4. Le Paris Grill 5. Duck & Waffle 6. The Culpeper 7. The Dispensary 8. East India Arms 9. One Under Lime 10. Lamb Tavern 11. The Mayor of Scaredy Cat Town 12. Discount Suit Company Cocktail Bar 13. The Three Lords 14. Number The Hoop & Grapes 16. Hungry Donkey Greek Kitchen 17. Pitt Cue 18. Draft House thing 19. Walter & Monty 20.WM Barker and Co Hotels & Leisure 1. Virgin Active 2. Motel One 3. Hotel Indigo 4. David Lloyd 5. Chamberlain Hotel London 6. Apex City of London Hotel 7. Grange City Hotel 8. Tower Of London 9. St Katherine Dock

6 10 11 COMMUNICATIONS ALDGATE CHANGING The local transport communications are excellent with Fenchurch Street Station (mainline, District and Circle Line Underground), Tower Hill and Aldgate East Underground (District and Circle Line Underground and DLR at Tower Hill) all nearby, whilst Bank Underground (Central, Northern, Waterloo & City lines and DLR) and Liverpool Street (Mainline, District & Circle and Central lines) are within close walking distance. Station Service Average Walking Time Distance Aldgate Underground - Metropolitan, Circle 2 mins 210m Aldgate East Underground - Circle, Hammersmith & City 5 mins 450m Fenchurch Street Overground 1.5 mins 120m ALDGATE IS ONE OF LONDON S FASTEST DEVELOPING SUB-MARKETS. THE AREA HAS EVOLVED AS A MIXED USE DISTRICT AND HAS CONSEQUENTLY EXPERIENCED A STRONG UPSURGE IN RETAIL, CAFES, RESTAURANTS AND HOTELS TO THE LOCALITY. THE BALANCE BETWEEN WORK, PLEASURE AND CONVENIENCE IS NOW ONE OF THE MOST APPEALING ASPECTS OF THE AREA, ATTRACTING A WIDE VARIETY OF OCCUPIER TO THE VICINITY. Tower Hill Underground - Circle, District 4 mins 300m Liverpool Street CROSSRAIL Overground, (Crossrail 2018) Underground - Central, Circle, Metropolitan, Hammersmith & City 8 mins 750m Tower Gateway DLR 4 mins 350m Monument Underground - Circle, District 11 mins 804m Crossrail is due to be delivered in 2018 and is set to revolutionise London s East-West connections with high speed, high frequency train services. London s overall transport capacity will increase by 10%, transporting up to 200 million people per annum, with up to 24 trains per hour in each direction at peak times. The eastern core of Aldgate has seen considerably high levels of investment over recent years with over 2 million sq ft of office space having been developed and more than 1 million sq ft of it being taken up in the last 18 months or so. In addition more than ten acres of parks, seating areas and gardens are being regenerated within the proximity of Jewry Street. This has been combined with over 40 new restaurants, cafes and bars, as well as numerous new hotels who add to list of local amenities close to Boundary House. Furthermore there are over 10 new residential developments which will ensure a modern, vibrant, balanced environment. At the northern end of Jewry Street, the Aldgate area will receive a major uplift in spring 2017 as changes to the traffic layout ensure well thought out traffic flow, introduce pedestrian crossing points, allow easier navigation of bus services and introduce two new public spaces on the eastern edge of the City of London. The Aldgate Highway Changes and Public Realm Improvements Project will enhance safety for road users by improve cycling routes, pedestrian routes and connections whilst introducing more greenery and improving lighting in the area STANSTED STRATFORD FOREST GATE ROMFORD SHENFIELD READING HAYES & HARLINGTON HANWELL EALING BROADWAY PADDINGTON TOTTENHAM COURT ROAD MOORGATE/ LIVERPOOL STREET MARYLAND MANOR PARK MAIDENHEAD SOUTHALL WEST EALING ACTON MAIN LINE BOND STREET FARRINGDON WHITECHAPEL CUSTOM HOUSE ABBEY WOOD HEATHROW AIRPORT LUTON GATWICK CANARY WHARF WOOLWICH Liverpool Street station is a short walk from Boundary House, which will have the following journey times once Crossrail services are complete in Station Existing journey time (mins) Journey time following opening of Crossrail (mins) Canary Wharf 19 6 Whitechapel 5 2 Farringdon 4 2 Tottenham Court Road 8 4 Bond Street 11 7 Paddington Heathrow The Aldgate Highway Changes and Public Realm Improvements Project

7 12 13 LOCAL DEVELOPMENTS 1 Minories Estate 4C Hotels 2 Beagle House Aldgate Developments 3 1 Commercial Street Redrow/Angelo Gordon THE SURROUNDING INSURANCE DISTRICT AND ALDGATE AREAS HAVE RECENTLY SEEN EXCEPTIONAL LEVELS OF INVESTMENT AND DEVELOPMENT, ATTRACTING SOME OF THE UK S LARGEST PROPERTY COMPANIES, DEVELOPERS AND HOUSE BUILDERS. 4 Heron Tower Aldgate Tower Aldgate Developments 5 Goodman s Fields Berkeley Homes 6 Matrix, Aldgate High Street Dorsett Hospitality 3 St Botolph Building Tower St Mary Axe 6 7 Lloyds of London 5 1 The Leadenhall Building 7 Creechurch Place Helical Bar/HOOPP 8 40 Leadenhall Street TIAA Henderson Real Estate 9 The Butterfly Fosun and Portsoken Advisors Fenchurch Street Aldgate Union Derwent London Fenchurch Street Partners Group & Marick 12 Dixon House, Fenchurch Street Greenoak Roman Wall House L+R (being sold) 14 Royal Mint Street IJM Land 15 9 Prescot Street Derwent London

8 14 15 DESCRIPTION Boundary House comprises a purpose built office building constructed circa mid-1950 s and is arranged over basement, ground and seven upper floors. The building has a net internal area of 45,062 sq ft including basement storage accommodation. The property is of reinforced concrete framed construction with reinforced concrete floors. The elevations are clad with cavity facing brickwork inset with single glazed painted steel framed windows. There is an area of painted steel framed single glazed curtain walling to the front elevation and there is reconstituted stone cladding provided up to first floor level to the street facing elevations. The main entrance to the building on Jewry Street leads to the reception area which has two six-person passenger lifts serving all floors with the exception of the basement and 7th floor. The building is served by three staircases with WCs located off the main staircase at each level with the exception of the ground and 7th floor. The property has undergone a rolling refurbishment programme and the specification of the offices varies on the individual floors / units. A number of the floors (5th, 6th and pt 7th) remain as centrally heated offices with the remainder benefiting from air-conditioning / cooling systems (instillations dates ranging from 1998 to 2015 depending on the floor / units). The provision of raised floors, perimeter trunking and suspended ceilings varies also from floor to floor. Detail on the specification of each of the floors is available upon request. The building benefits from 7 car parking spaces located in the basement of the building and accessed off the junction of Rangoon and Jewry Street.

9 16 17 ACCOMMODATION FLOOR PLANS The building has been measured by Plowman Craven in accordance with the RICS Code of Measuring Practice (6th edition) to provide the following Net Internals Areas: FLOOR AREA SQ M AREA SQ FT 7th Floor 181 1,943 6th Floor 329 3,542 5th Floor 406 4,373 4th Floor 580 6,239 3rd Floor 746 8,033 2nd Floor 745 8,031 1st Floor 686 7,381 Ground Floor 473 5,094 Basement Storage TOTAL 4,187 45,062 There are 7 car spaces in the basement 5TH GROUND 2ND BASEMENT A copy of the Plowman Craven report is available upon request. (this includes the new IPMS 3 measurements which the vendor has opted out of for marketing purposes) JLT Space 1 JEWRY STREET Seacrest Space 7 Antares Space 6 Seacrest Space 4 Ropner Space 3 Seacrest Space 2 Seacrest Storage Cage Seacrest Space 5 Seacrest Storage Cage Not to scale. For identification purposes only.

10 18 19 TENURE TENANCIES TENANT FLOOR AREA SQ FT LEASE START LEASE EXPIRY BREAK DATE* NEXT REVIEW RENT P.A. RENT PER SQ FT P.A. COMMENT Holman Fenwick Willan Part 7th /09/ /05/ /12/ , Rent free from 25/12/2017 to 23/06/2018 and 24/06/2020 to 28/09/2020. Sub-let to Fidentia Insurance Brokers Ltd at 26,167 p.a.x. Freehold. The building is multi-let to 12 office tenants with lease expires between November 2017 and May All the leases are outside the protection of the Landlord and Tenant Act 1954 (Part II). The basement car parking spaces and storage accommodation are let on numerous licences and there is additional income from telecom providers via roof top and basement installations. Ropner Insurance Services 5th, 6th & Part 7th 8,970 26/12/ /12/ , Holman Fenwick Willan 4th 6,239 29/09/ /05/ /12/ , Holman Fenwick Willan 3rd (West) 2,311 29/09/ /05/ /12/ , Rent free from 25/12/2017 to 23/6/2018 and 24/6/2020 to 28/09/2020. Rent free from 25/12/17 to 23/06/2018 and 24/6/2020 to 28/09/2020. The tenancy schedule is outlined opposite: SQ-M2 3rd (South) 2,736 16/07/ /07/ , Brink's 3rd (North) 2,986 15/04/ /04/ /04/ , The break option is personal to Brinks Ltd and there is a rent free from 15/04/2017 to 15/07/2017. Seacrest Shipping Company 2nd (South) 2,227 02/07/ /07/ , Senior Wright 2nd (North) 5,804 06/05/ /03/ , Grimme Butcher Jones 1st (West) 1,945 04/03/ /03/ , Wings Corporate Travel 1st (North) 3,157 16/08/ /08/ /08/ , Tenant exercised break option to terminate in 15/08/2017 Building Services Design 1st (South) 2,279 22/11/ /11/ , Callcredit Public Sector (being surrendered **) Ground (West) 1,575 19/12/ /06/2016** 78, Currently being surrendered and under offer to re-let at 50 per sq ft on a 5 year lease term** London Business Connections Ground (South) 1,708 25/03/ /03/ /03/ , month additional rent free if break is not activated Coal Intelligent Technology Ground (North) 1,811 30/09/ /09/ , EE Ltd & Hutchison 3G Basement and Roof N/A 25/12/ /12/ /12/ ,087 Rent review linked to RPI. Tenant can terminate at any time on six months notice and Landlord on 12 months. Seacrest Shipping Company Storage Cages (in basement car park) /07/2014 2,500 Terminable by either party on three months notice. JLT Management Services 1 x car parking space N/A 31/03/2013 3,500 Terminable by either party on one months notice. Ropner Insurance Services 1 x car parking space N/A 28/10/ /12/2019 2,000 Terminable on one months notice by either party after 28/4/16 Antares Underwriting Services 1 x car parking space N/A 28/01/2011 3,500 Termnable by either party on one months notice. Seacrest Shipping Company 4 x car parking spaces N/A 02/07/ /07/ ,000 Documented under occupational lease. UK Power Networks (formerly LEB) Basement N/A 24/07/ /07/ An electricity transformer chamber. Annual rent of 1 shilling. (Not excluded from L&T Act 1954 II) Total 45,062 1,319, Rent psf calculated on office accomodation only. Not to scale. For identification purposes only. This plan is based upon the Ordnance Survey Map with the sanction of the controller of H.M. Stationery Office. Crown Copyright reserved. ALL OCCUPATIONAL TENANCIES ARE HELD OUTSIDE OF THE L&T ACT 1954 (Part II) (with exception of basement transformer) NB. Details of service charge caps and rental deposits can be provided upon request. There are no anticipated service charge shortfalls for the service charge year ending June *Tenant only breaks. **The ground floor west unit is currently being surrendered and under offer to re-let at 50 per sq ft on a 5 year lease term. The vendor will top up the rent free period or provide 12 month rent cover at 50 per sq ft should the letting not proceed.

11 20 21 Key Tenant Covenants Holman Fenwick Willan LLP Holman Fenwick Willan LLP, founded in 1883, is an international law firm with over 450 lawyers and support staff (151 partners) working from offices all over the UK. Accounts to the 31st March 2015 show the company made a pretax profit of 49,468,000 with a turnover of 128,903,000 and a total assets of 80,992,000. The Score of 87. Senior Wright Ltd Senior Wright Ltd is a Lloyd s Broker established in Accounts to the 31st December 2014 show the company had a turnover of 3,492,334 and total assets of 8,681,963. The Score of Ropner Insurance Services Ropner Insurance Services is one of the leading Marine brokers within the London market, incorporated in Accounts to the 31st March 2015 show the company made a turnover of 7,123,051 and total assets of 10,871,985. The Score of Brink s Brink s, incorporated in 1969, is an American security and protection company with 134,000 employees worldwide. Accounts to the 31st December 2014 show the company made a pre-tax profit of 2,502,000 with a turnover of 36,236,000 and a total assets of 23,701,000. The Score of SQ-M2 square metre, incorporated in 2002 with c. 25 staff, is a refurbishment and fit-out contractor working within listed, residential and commercial properties. Accounts to the 30th December 2014 show the company made a pre-tax profit of 473,913 with a turnover of 21,450,060 and a total assets of 7,886,148. The Score of 75. Seacrest Shipping Company Ltd Seacrest Shipping Company, incorporated in 1961, are Shipping Agents with a 200-year history, 50 years of which have been in London. Accounts to the 30th April 2015 show the company had a turnover of 830,000 and a total assets of 789,822. The Score of 100. Grimme Butcher Jones Ltd Grimme Butcher Jones is a long established broker at Lloyds specialising in Aviation. Accounts to the 31st December 2014 show the company had a turnover of 2,706,092 and a total assets of 20,290,024. The Score of Wings Corporate Travel Wings Travel Management are international specialists in offshore, marine and high-profile corporate travel. Accounts to the 28th February 2015 show the company had a turnover of 3,291,998 and total assets of 4,113,884. The Score of % 13 % 10 % 8 % 8 % 7 % 7 % 6 % 214, , , , ,000 95,538 87,750 78,260 TOTAL INCOME 1,319,326 ESTIMATED RENTAL VALUE 2,230,000* MARKET COMMENTARY The City of London occupational office market continues to be very active. Vacancy rates are approximately 5% (c. 5.5m sq ft) which is one of the lowest since Total take up for the year ending 2015 exceeded 7m sq ft, the second highest for some 15 years and take up for Q has remained strong. Prime Rents currently stands at approximately per sq ft per annum. Rental growth is forecast to continue with prime rents set to rise to per sq ft per annum plus by At Boundary House rents of per sq ft per annum on the 1st floor (west) and close to per sq per annum on the ground floor (south) have recently been achieved. Our estimated rental value assumption of per sq ft on the best accommodation therefore reflects good value in the City context. *Assumes the office rents range from 45 to 50 per sq ft pa (depending on the floor/unit) and they are in a well presented condition to include air conditioning/cooling. A breakdown of the ERVs is available on request.

12 22 23 REPOSITIONING/REDEVELOPMENT REPOSITIONING OPPORTUNITIES In the short to medium term there is scope to make improvements/ create additional space by adopting strategies such as opening up floors and removing existing corridors/lobbies and removing perimeter heating, potential levelling the entrance and creating a cut away on the ground floor allowing a basement conversion to useable office, studio or retail accommodation. Other asset management initiatives include driving rents in the short term by potential lease re-gears and surrenders (such as the Wings unit on the 1st floor north) as well as re-letting the ground floor unit that is currently being surrendered. The exterior of the building would also benefit from recladding of front façade and a more contemporary entrance canopy and lobby. There is also the possibility of adding additional floors on the western wing of the building, subject to structure and planning permission. The building provides potential for alternative uses, such as hotel use, either by way of redevelopment or reconfiguration of the existing building, subject to planning and relevant consents. REDEVELOPMENT OPPORTUNITIES Lacey and Saltykov have carried out a feasibility study to provide a predominantly grade A office building on the site. The base case scenario comprises a net internal area of approximately 75,509 sq ft over basement, ground and 11 upper floors. This scheme takes on board s from the City of London Planning Department following a pre-application meeting in 2014 and incorporates set backs on the top two floors. Without the set backs the scheme could potentially provide 80,524 sq ft. The proposed scheme is subject to planning and the other assumptions as set out in the feasibility report which is available on request. Lacey and Saltykov s proposed approximate base case floor by floor areas (incorporating set backs on the top two floors) are set out below: Level GIA (sq m) GIA (sq ft) NIA (sq m) NIA (sq ft) B , B , ,435 Ground 501 5, ,078 CGI of development Level , ,395 Level , ,395 Level , ,395 Level , ,395 Lacey + Saltykov Architects have provided these images as part of a feasibility study having received preapplication advice from the City of London. Level , ,395 Level , ,006 Level , ,006 Level , ,006 Ground Floor Level Typical Floor (Levels 6, 7, 8, 9) Level , ,006 Level , ,252 Level , ,745 Total 9, ,529 7,015 75,509

13 24 PLANNING PROPOSAL The site is located within the City of London. It is not located within a Conservation Area and of the property is not listed. EPC Our client is seeking offers in the order of 30,850,000 (thirty million, eight hundred and fifty thousand pounds), subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 4.00% (assuming a purchaser s costs at 6.77%) and a net capital value 685 per sq ft. Assuming market rents of 50 per sq ft on the best accommodation the reversionary yield would be in excess of 6.75% Boundary House has an Energy Performance Certificate (EPC) rating of D. DATAROOM VAT Access available upon request. The building has been elected for VAT. The sale may be treated as a Transfer of a Going Concern (TOGC) depending on the purchasers VAT status. CONTACT & VIEWINGS Please contact the below for further information and viewings: Mike Pope mike.pope@gryphonproprtypartners.com Jeremy Trice jeremy.trice@gryphonpropertypartners.com John Morton john.morton@gryphonproprtypartners.com Misrepresentation Act 1967: Gryphon Property Partners for themselves and for the vendor(s) or lessor(s) of this property whose agents they are, give notice that: 1. These particulars do not constitute, nor constitute any part of, an offer or contract. 2. None of the statements contained in these particulars as to the property are to be relied on as statements or representations of fact. 3. Any intending purchaser or lessee must satisfy himself by inspection or otherwise as to the correctness of each of the statements contained in these particulars. 4. The vendor(s) or lessor(s) do not make or give and neither Gryphon Property Partners nor any person in their employment has any authority to make or give, any representation or warranty whatever in relation to this property. Finance Act 1989: Unless otherwise stated all prices and rents are quoted exclusive of VAT. Property Misdescription Act 1991: These details are believed to be correct at the time of compilation but may be subject to subsequent amendment. April (Q3464)