ALTITUDE INVESTMENTS TYPHOON BUSINESS CENTRE Oakcroft Road Chessington KT9 1RH ALTITUDE - RAISING THE GAME 1
DESCRIPTION Hugely busy South East location Excellent reversionary potential Planning permission to extend the building Attractive 7.84% net initial yield Freehold Guide Price 3,500,000.00 The property comprises of a mixed use building, with predominantly good quality office accommodation with one warehouse. The offices have been well refurbished offering open plan, light and spacious accommodation over a range of sizes. The office specification includes a suspended ceiling, new LED lights, comfort cooling cassettes and dedicated on-site parking which is at a premium in Chessington. The warehouse is accessed from the rear with a full height roller shutter door, solid concrete floors and 6m eves. The roof contains translucent light panels. There are currently no voids in either the office accommodation, or the warehouse element. There has been a long history of no voids and is currently a waiting list for interested occupiers, with no arrears on the any of the rent payments. ALTITUDE - RAISING THE GAME 2
LOCATION Chessington is located in Kingston, South West London, 6 miles inside J9 of the M25. Kingston is one of the famous and affluent borough of London, it is known as one of the top retail destinations in the South East, outside of central London, and its proximity to beautiful stretches of the river Thames. SITUATION The property is situated in Chessington, a densely populated area of Greater London, with a local population of near 20,000. Chessington provides a strong commercial location within easy commute from central London and the Surrey, Kent & Berkshire counties. The immediate location is a mixture of industrial and office uses, with minimal local vacancy and a huge premium for car parking. The area hosts a number of established occupiers including Prochem, Screwfix & Alliance Healthcare. Click here for Google Street View Click here for Google Map Heathrow 15 miles Gatwick 22 miles Central London 15 miles Putney Bridge 15 mins away by car Chessington to Waterloo 36 mins Tolworth to Waterloo 34 mins ALTITUDE - RAISING THE GAME 3
ACCOMMODATION The total floor area for the building is 2,209 sq m (23,783 sq ft) with the breakdown as follows. OFFICE SPACE 1,666 sq m (17,943 sq ft) WAREHOUSE 542 sq m (5,840 sq ft) Offices range from 780 sq ft up to 2,719 sq ft. a breakdown of the offices sizes is available on the tenancy schedule below. There is allocated off street parking to the front of the building, as well as a well sized car park to the rear, with a total of 46 spaces for the building. There is also additional income from four freight containers stored in the corner of the car park. The income is set out in the tenancy schedule attached. Space for parking is at a massive premium in Chessington and there is scope to charge for parking to further increase the rent roll. CONVENANT Please click here to view covenants ALTITUDE - RAISING THE GAME 4
TENANCY SCHEDULE GROUND FLOOR TENANT TYPE SQ FT ANNUAL RENT PSF ORIGINAL LEASE START RENEWAL LEASE START Warehouse IMX Ltd Warehouse/Office 5,840 97,500.00 16.70 31/08/2016 31/08/19 & 31/08/21 Unit 1 Your-Move.co.uk Limited Office 2,017 38,323.00 19.00 22/01/2010 01/02/2015 Unit 2 Tiffany Rose Ltd Office 1,043 79,359.00 20.56 01/11/2014 Unit 3 Tiffany Rose Ltd Office 780 79,359.00 20.56 01/11/2014 Unit 4.1 Tiffany Rose Ltd Office 2,037 79,359.00 20.56 01/11/2014 RENT REVIEW BREAK LEASE END 31/10/2017 & 31/10/2019 & 31/10/2021 31/10/2017 & 31/10/2019 & 31/10/2021 31/10/2017 & 31/10/2019 & 31/10/2021 Mutual break at reviews 01/02/2015 & 01/02/2017 31/08/2023 31/01/2020 31/10/2019 31/10/2024 31/10/2019 31/10/2024 31/10/2019 31/10/2024 Unit 4.2 Culross Aerospace Limited Office 2,719 43,008.00 15.82 06/02/2008 05/02/2016 None 05/02/2018 1st Floor Unit 5 Briggs Amasco Limited Office 1,757 40,000.00 22.77 29/11/2002 30/11/2020 & 31/11/2021 30/11/2019 30/11/2022 Unit 6 Human Race Limited Office 1,746 53,500.00 15.13 08/02/2014 Unit 7 Human Race Limited Office 1,791 53,500.00 15.13 08/02/2014 Unit 8 Unit 9.1 Holden Group Holdings Limited Big Thoughts on Food and Drink Limited Total 23,783 442,752.04 18.62 Less: Service Charge Plus: Container Rent -166,367.00 15,840.20 Net rent 292,225.24 12.29 01/05/2014 & 08/02/2016 & 01/05/2016 01/05/2014 & 08/02/2016 & 01/05/2016 01/12/2014 30/04/2017 01/12/2014 30/04/2017 Office 1,444 45,382.80 31.43 ONGOING ONGOING ONGOING ONGOING ONGOING Office 1,306 6,000.00 18.22 01/02/2015 01/02/2015 None 31/01/2017 31/01/2018 Unit 9.2 Insta Clean Office 1,306 8,500.00 18.22 15/02/2016 15/02/2017 Unit 9.3 Aaron Anderson & McKinsey Limited Office 1,306 9,300.00 18.22 22/02/2012 22/02/2016 None None 21/02/2019 Tokenhelp (UK) Limited Office 1,303 21,879.24 16.79 02/04/2011 None 02/04/2016 31/08/2017 ALTITUDE - RAISING THE GAME 5
PROPOSAL Our client is seeking offers of 3,500,000 (Three Million, five Hundred Thousand Pounds), subject to contract, reflecting an attractive net initial yield of 7.84% with purchases costs at 6.5%. The trading businesses in The Typhoon centre are not affected by the sale. The vendors (who currently occupy part of the building) have already agreed a new 5 year lease on 1,444 sq ft, showing their commitment to the location. TENURE Freehold TENANCY The property is let to 12 different tenants, on varying lease lengths. The tenants pay an all in price for accommodation, rates and services. Total income comes to 434,692 per annum, with total costs (service charge) coming in at 166,367. A breakdown of the service charge costs can be provided on request. Net income is therefore 268,325 per annum. INVESTMENT CONSIDERATIONS Huge reversionary rental uplifts Great asset management potential Planning permission to add third floor Thriving SE commercial location Great access to Central London and the major motorway network ALTITUDE - RAISING THE GAME 6
ASSET MANAGEMENT The building offers a number of ways to increase rent roll and add value. The rents are currently well below market level, which has been established by the latest review to Briggs at 22.77 psf gross. The majority of the tenants are on rents set in the recession, and they currently average below 18 psf across the centre. The ERV is clearly set above 20 psf and therefore the rental level is more like 500,000 gross (up from the current 420,000). Rent reviews have been done in house, these could be set up in a traditional manner on an open market or RPI basis to bring the rents into line. The warehouse (5,840 sq ft) could be converted into office accommodation, bringing the rent up from 12.84 psf to the office levels of 22.77 psf adding another 58,000 pa gross. A mezzanine level could be put in the warehouse (as has been done in the rest of the building), to double the floor area and increase income by another c. 133,000pa gross. There is a newly received planning consent for another story to the front elevation of the building The consent would provide another 150 sq m (1,600 sq ft) on its own private level. Rents are expected to be in the region of 25 psf or above, therefore offering another 40,000 pa gross. The sale of the asset will prevent the vendor from implementing the consent, but development can be commenced at any point after purchase. Parking is a massive premium in the area, and people are even resorting to building underground parking lots as the rents back up the cost of doing so. This site does not currently charge for parking, so further income could be derived from that with ERV at 2,500 per space per annum. All in all, the income potential from the site is significant. The initiatives mentioned about add c. 270k pa gross not including the car parking or adding another story to the front elevation. As you can see, there is scope to almost double the gross rental income. The service charge currently equates to c.35% of the gross income. With car parking removed (as it doesn t add any cost to service charge), the increase in NET INCOME would be in the region of 300,000 per annum. INITIATIVE RENTAL INCREASE PER ANNUM RENT REVIEWS TO ERV 80,000 CONVERTING WAREHOUSE GF 58,000 ADDING WAREHOUSE FF 133,000 NEW THIRD STORY ON FRONT ELEVATION 40,000 PARKING 115,000 TOTAL 426,000 ALTITUDE - RAISING THE GAME 7
CONTACT US Exeter Office: 20 Southernhay West, Exeter, EX1PR Tel: 01392 660 000 London Office: Stratford Place, Mayfair, London, W1C 1ES Tel: 0203 770 2828 Midlands Office: 5-7 High Street, Henley In Arden, West Midlands, B95 5AA Tel: 0203 770 2828 Contact: George Turnbull Mobile: 07815 867 807 Email: george.turnbull@altitude-investments.com Web: www.altitude-investments.com ALTITUDE Investments 0203 770 2828 www.altitude-investments.com MISREPRESENTATI ON ACT 1967 Messrs Altitude Property Investments Ltd, for themselves and for the vendors or lessors of this property whose agents they are, give notice that: (i) these particulars are produced in good faith, are set out as a general guide only and do not constitute any part of an offer or contract. (ii) they are believed to be correct but any intending purchasers or tenants should not rely on the them as statements or representations of fact and must satisfy themselves as to the correctness of each of them; (iii) no person in the employment of Altitude Property Investments Ltd has any authority to make or give any representation of warranty in relation to this property. Finance Act 1989 Unless otherwise stated, all prices and rents are quoted exclusive of VAT. Property Misdescriptions Act 1991 These details are believed to be correct at the time of compilation, but may be subject to subsequent amendment. ALTITUDE - RAISING THE GAME 8