1 Grove House 90 WESTBOURNE GROVE NOTTING HILL, LONDON W2
3 Investment Summary Prominently situated on Westbourne Grove in the heart of the affluent and luxury Notting Hill Prime Notting Hill location. Mixed use retail and office building benefitting from a large 15 metre frontage to Westbourne Grove. Freehold. 11,636 sq ft NIA (1,080.9 sq m) arranged over ground and four upper floors. Numerous asset management, refurbishment and development opportunities exist with full vacant possession obtainable by September 2019. Current passing rent, including top-up of 539,014 per annum. Full planning consent to redevelop a new six storey building comprising retail over lower ground and ground floors with 11 luxury residential apartments above. Excellent market dynamics with a desirable local retail pitch and historically low office supply in the immediate vicinity. Significant local regeneration projects including the 1bn redevelopment of Whiteleys Shopping Centre, the arrival of Crossrail at Paddington and Frogmore s earmarked redevelopment of the Notting Hill Estate. Offers in excess of 11,550,000. NIY of 4.37%, assuming vendor top-up and purchaser s costs of 6.70%. Reversionary yield of 4.68% upon settlement of outstanding Sainsbury s rent review (assuming Calderbank ERV). Capital value: 993 psf on existing NIA and 669 psf on the consented areas.
PADDINGTON OU RN E G RO V E GH STB PADDINGTON CENTRAL WE REGENT S PARK WHITELEYS MARYLEBONE THE CITY MAYFAIR HYDE PARK KNIGHTSBRIDGE NOTTING HILL GATE
6 Location Notting Hill Internationally recognised as a premier retail, residential and leisure destination, Notting Hill is one of Central London s most desirable and affluent neighbourhoods, home to an eclectic mix of fashionable boutiques, restaurants, markets and bars attracting a global audience. Visitors are a significant driver of the local economy with Portobello Road market and the Notting Hill Carnival helping to attract millions of visitors each year. 7
8 9 Westbourne Grove Westbourne Grove forms one of the main arterial routes linking Paddington and Bayswater to the east with Portobello Road in the west. The property occupies a prominent position on the north side of the street close to its junctions with Hereford Road and Monmouth Road benefitting from excellent levels of footfall. Westbourne Grove is a prime retail location in Notting Hill encompassing a variety of galleries, restaurants, high-end fashion houses, national retailers and desirable boutiques. The western end of the street which adjoins Portobello Road is particularly renowned for its high end boutiques and fine dining with occupiers including James Purse, Orlebar Brown, 202, Chucs, Sandro, Daylesford & Maje to name a few. The eastern end of the street leading to Paddington has traditionally been a more secondary retail pitch. However, in recent years the area has witnessed significant investment as a result of numerous residential led developments, the 5bn regeneration of Paddington and the proposals for Whiteleys Shopping Centre. As a result, a number of high profile multi-national brands including Heal s, BoConcept, Planet Organic, Gourmet Burger Kitchen and Franco Manca all now have a presence. Additionally, Whiteleys Shopping Centre, just 0.3 miles to the east, boasts tenants including Zara, H&M and Marks & Spencer. The scarcity of local supermarkets ensures strong tenant demand at with the residential nature of the location driving supermarket demand. However, there is a distinct lack of retail units that could provide adequate floor plates suitable for a supermarket occupier.
10 11 Local Developments Newcombe House, Notting Hill Gate Proposals for a striking 17-storey building providing up to 46 high-end apartments, 40,000 sq ft of office space and 30,000 sq ft of new retail space together with a brand new public realm, have been drawn up by a joint venture between Brockton Capital and U + I. Notting Hill Gate Estate A regeneration program is underway to transform Notting Hill Gate into a modern transport hub whilst protecting the area s bohemian heritage. Frogmore, who owns the 171,000 sq ft estate, is currently improving the façades of the existing buildings whilst applying for planning permission for a comprehensive redevelopment to include extending and improving the retail, improved public realm with wider pavements, decreased traffic and enhanced public art. Whiteleys Shopping Centre A 1 bn regeneration has been announced for the Grade II listed department store just to the east of. Due for completion in 2020, the scheme will provide 100 luxury town houses and apartments arranged around a central courtyard with a boutique hotel, cinema and retail. As part of the development, traffic calming and pedestrianisation is planned, which will vastly improve the consumer experience of Westbourne Grove. Several other smaller schemes have been recently completed enhancing the local area and amenities including: 14-16 Westbourne Grove, London, W2 Queens, Queensway, Bayswater, London, W2 The Imperial, St Stephen s Gardens, W2 Garden House, Kensington Gardens Square, W2 Developer: Alchemi Group Size: 20, 1-3 bedroom apartments above retail Luxury boutique residential development 2 minutes along Westbourne Grove from the Property Developer: Derwent London Size: 16, 1-3 bedroom apartments above retail Restoration of an Art Deco cinema creating 16 striking apartments above retail Developer: Euroterra Capital Size: 16, 1-3 bedroom apartments Victorian residential terrace restored to its former glory to create 16 luxury apartments Developer: Residential Land Size: 57, 1-2 bedroom apartments Grade II listed property, sensitively restored to create 57 apartments overlooking Kensington Gardens Square, just to the south of the Property
12 13 Connectivity Just over half a mile from Paddington Station, a major London transport hub ELGIN AVENUE MAIDA VALE Developments: 1 The Imperial, St Stephen s Gardens 2 14-16 Westbourne Grove 3 The Queens Building, Queensway 4 Garden House, Kensington Square Gardens 5 Whiteleys, Queensway 6 Notting Hill Gate Estate 7 Newcombe House PARK ROAD Office: 8 Kingfisher 9 Misys 10 Statoil 11 Vodafone 12 Visa 13 Marks & Spencer OUTER CIRCLE Retail: 14 Chucs 15 James Perse 16 Daylesford 17 Sandro 18 Orlebar Brown 19 202 20 Maje 21 Space NK 22 Franco Manca 23 Byron Burger 24 Gourmet Burger Kitchen 25 Planet Organic 26 BoConcept WARWICK REGENT S PARK HARROW ROAD WARWICK AVENUE AVENUE MARYLEBONE BAKER STREET WESTWAY 12 Mins WESTBOURNE PARK A40 10 Mins ROYAL OAK LITTLE VENICE 8 9 10 11 12 WESTWAY 13 EDGWARE ROAD MARYLEBONE ROAD CRAWFORD STREET MARYLEBONE BAKER STREET MARYLEBONE HIGH STREET PORTOBELLO ROAD 15 16 17 14 18 19 20 NOTTING HILL 1 CHEPSTOW ROAD WESTBOURNE GROVE 21 22 23 24 25 4 26 2 5 3 QUEENSWAY 9 Mins BAYSWATER INVERNESS TERRACE BISHOP S BRIDGE ROAD BAYSWATER EDGWARE ROAD EDGWARE ROAD 20 Mins PADDINGTON LANCASTER GATE PRAED STREET WEST SUSSEX GARDENS BAYSWATER ROAD GEORGE STREET MARBLE ARCH GLOUCESTER PLACE PARK LANE BOND STREET BROOK STREET GROSVENOR STREET 11 Mins NOTTING HILL GATE QUEENSWAY HYDE PARK CARRIAGE DRIVE MAYFAIR HOLLAND PARK 6 7
14 Paddington Station is undergoing the most significant transformation since it was first built in the 1800s. One of London s gateway stations, the Grade I listed building will be one of the first new Crossrail central stations to open in 2018. 15 Paddington, lying half a mile to the east, has been established as one of Central London s most important office, residential and leisure hubs attracting a significant number of international companies who choose it as their headquarters. Centred around its transport hub, Paddington has undergone significant regeneration with over 5 billion of investment to date. Major corporate tenants currently include Kingfisher, Misys, Statoil, Vodafone, Visa and Marks & Spencer. T Crossrail STRATFORD ROMFORD SHENFIELD STANSTED 19 HAYES & HARLINGTON 36 16 EALING BROADWAY 9 7 PADDINGTON 6 3 4 37 8 10 13 CUSTOM HOUSE MAIDENHEAD 30 WEST EALING ACTON MAIN LINE BOND STREET FARRINGDON ABBEY WOOD WHITECHAPEL 17 HEATHROW AIRPORT 51 LIVERPOOL STREET TOTTENHAM COURT ROAD 25 20 29 LUTON GATWICK CANARY WHARF WOOLWICH Heathrow Express: Paddington to Heathrow Journey Time - 15 minutes Great Western Railway Destination Journey time (minutes) Reading 24 Oxford 56 Bath (Spa) 86 Bristol (Temple Meads) 99 Cardiff 120 Penzance 305
16 17 Description Previously known as The Roxy, was used as a cinema until the mid 1960s and currently comprises a prominent mixed use building totalling 11,636 sq ft (1,080.9 sq m) NIA arranged as a prime retail unit over ground and first floors with offices over second to fourth floors. Originally constructed in the early 1970s with a concrete frame structure and rendered brick façade to Westbourne Grove, the building benefits from excellent levels of natural light throughout with a full rear elevation to Hereford Mews. The ground and first floors comprise a self-contained supermarket retail unit totalling 4,997 sq ft (464.2 sq m) NIA benefitting from an internal staircase, goods lift and goods loading access point on Westbourne Grove. The unit is arranged as a trading area over ground floor with staff rooms, office and storage over first floor.
18 19 Accessed from a dedicated glazed entrance on Westbourne Grove, the office accommodation is arranged over second to fourth floors and totals 6,639 sq ft (616.8 sq m) NIA. The offices benefit from flexible, open plan and broadly rectangular floorplates with excellent levels of natural light throughout and large terraced areas at third and fourth floors. Specification Passenger Lift Roof Terraces (3rd & 4th Floors) Raised Floors Air Conditioning Suspended Ceilings Telephone Entry System Male, female and disabled WCs and showers
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22 23 Accommodation Second Floor Plan Unit Use Gross Internal Areas Net Internal Areas Sq m Sq ft Sq m Sq ft Fourth Office 158.4 1,705 138.3 1,489 Third Office 253.6 2,730 218.0 2,347 Second Office 299.9 3,228 260.4 2,803 First Retail 300.2 3,231 229.0 2,465 Retail 309.6 3,333 235.2 2,532 Zone A 78.6 846 Zone B 84.3 907 Ground Zone C 68.7 739 Zone D 3.6 39 ITZA 138.38 1,489 Total 1,321.7 14,227 1,080.9 11,636 Ground Floor Plan HEREFORD MEWS Fourth Floor Plan Terrace LIGHT WELL TERRACE ATM Not to scale. Indicative only. WESTBOURNE GROVE
24 25 Tenure: Tenancies Freehold Multi-let producing a total topped up rent of 539,014 per annum as per the tenancy schedule below: Demise Tenant NIA Sq Ft (ITZA) Lease Start Date Lease Expiry Date Rent Review Date Rent Per Annum Rent psf (Zone A) Inside the Act Comments HEREFORD ROAD MONMOUTH ROAD Telecom Site EE Limited and Hutchison 3G UK Limited - 01-Apr-16 31-Mar-21 01-Apr-17 21,000 - No Mutual rolling break option at any time upon 6 months' notice. Fixed annual increases of 5,000 per annum. HEREFORD MEWS Fourth Deliberate PR Limited 1,489 12-Oct-16 28-Sep-19 90,152 60.55 No Tenant is paying half rent until 11 May 2017. S/C Cap - 11.80 per sq ft subject to annual RPI increases. 90 WESTBOURNE GROVE Third King Media Management Limited 2,347 15-Feb-17 28-Sep-19 126,500 53.90 No 9 month s rent free. S/C Cap - 9.50 per sq ft. Second Vacant 2,803 151,362 54.00 12 month rental top-up. Office Sub-Total 6,639 368,014 55.43 First Sainsbury's 2,465 29-Sep-99 28-Sep-19 28-Sep-14 150,000 30.02 Supermarket Limited ( 93.09 Ground 2,532 ZA) (1,489) Yes 2014 rent review outstanding. Calderbank served at 188,750. 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. Retail Sub-Total 4,997 150,000 30.02 Total 11,636 539,014 46.32
26 27 Planning Located within The City of Westminster and the Westbourne Grove Conservation Area. Full planning permission was granted in September 2015, to demolish and erect a brand new 21,047 sq ft seven storey building to include the addition of new basement and fifth floors. Designed by CZWG Architects, the scheme draws from the area s Art Deco history to create a striking and timeless development comprising a 5,988 sq ft (556.3 sq m) GIA A1 retail unit arranged over lower ground and ground floors with 11 luxury residential units (6 x 1 bed, 1 x 2 bed and 4 x 3 bed units) arranged over first to fifth floors. The design ensures that each apartment has a terrace or winter garden and many of the units have two or more. The permission also provides for extending the building s frontage out in line with the adjoining buildings, notably increasing the massing. Further information can be found on Westminster Council s website with the reference 14/10572/FULL CGI showing the proposed new façade
28 29 Consented floor areas and plans We set out a schedule of areas for the scheme below: Proposed Upper Floor Plan (2nd) HEREFORD MEWS Floor Use GIA NIA Floor Apartment Bedrooms Area (Sq M) (Sq Ft) (Sq M) (Sq Ft) Fifth Residential 144.5 1,558 127.2 1,369 (Sq M) (Sq Ft) Fifth 11 3 57.6 620 Lightwell APARTMENT 4 3 BED RISER Fourth Residential 216.3 2,328 177.8 1,914 Fourth 76.2 820 UTILITY RISER AOV Third Residential 275.4 2,964 225.7 2,429 Second Residential 305.1 3,284 255.7 2,752 Fifth 10 3 69.6 749 Fourth 101.6 1,094 LIFT First Residential 321.8 3,464 271.9 2,926 Ground Residential 54.1 582 - - Third 9 1 59.2 637 8 1 56.8 611 APARTMENT 5 1 BED APARTMENT 6 1 BED Basement Residential 81.7 879 - - 7 2 109.7 1,181 Residential Sub Total 1,398.9 15,059 1,058.3 11,390 Second 6 1 59.2 637 Ground Retail 300.0 3,229 277.5 2,987 Basement Retail 256.3 2,759 268.9 2,894 5 1 56.8 611 4 3 139.7 1,504 1 bedroom apartment Retail Sub Total 556.3 5,988 546.4 5,881 TOTAL 1,955.2 21,047 1,604.7 17,271 First 3 1 59.2 637 2 1 56.8 611 3 bedroom apartment WINTER GARDEN WINTER GARDEN WINTER GARDEN 1 3 155.9 1,678 TOTAL 1,058.3 11,390 WESTBOURNE GROVE Proposed Ground Floor Plan HEREFORD MEWS Proposed Upper Floor Plan (5th) EXISTING LIGHTWELL LIFT TERRACE LIFT RESIDENTIAL ENTRANCE LOBBY APARTMENT 10 3 BED APARTMENT 11 3 BED GOODS LIFT TV Retail REFUSE COLLECTION STORE 3 bedroom apartment TERRACE TERRACE Not to scale. Indicative only. WESTBOURNE GROVE
30 31 Asset Management also benefits from numerous other asset management opportunities to add value including: Regearing the retail lease to Sainsbury s Converting the first floor to B1 offices upon expiry of the Sainsbury s lease Refurbishing and reletting the vacant office floors to take advantage of an extreme lack of office accommodation in the local area Potential for an additional basement & fifth floor (in line with the existing planning permission) Improve and enhance the prominence of the office entrance
32 33 Westbourne Grove benefits from significantly discounted total occupancy costs in comparison with the Central London Market. King s Cross Prime Rents 77.50 Total occupancy costs 121.76 Shoreditch Marylebone Fitzrovia Prime Rents 70.00 Total occupancy costs 107.83 Grove House Overall Rent 55.43 Total occupancy cost 83.84 psf * Paddington Prime Rents 77.50 Total occupancy costs 113.95 Prime Rents 90.00 Total occupancy costs 134.17 Mayfair Prime Rents 115.00 Prime Rents 90.00 Total occupancy costs 136.22 City Core Prime Rents 70.00 Total occupancy costs 108.18 Total occupancy costs 182.05 Kensington & Chelsea Belgravia & Knightsbridge Hammersmith Prime Rents 52.50 Total occupancy costs 83.98 Prime Rents 65.00 Total occupancy costs 101.57 Prime Rents 85.00 Total occupancy costs 132.58 * Based on average rent + 14.75 rates + 11.00 service charge
34 35 Investment Market London s global appeal, low interest rate environment and safe haven status combined with a perceived discount to the Sterling has meant the investment market continues to witness high levels of demand from both overseas and domestic investors. Occupational Market Extreme lack of supply with just a handful of comparable office floorplates available within a 1.5 mile radius. Retail Address Date Price Yield Capital Value (psf) Tenant 11-15 Borough High Street, SE1 Jan-17 15.00m 3.40% 1,634 Pret a Manger FH 197 Kensington High Street, W8 Nov-16 7.00m 3.40% 1,782 Starbucks FH Queens, 96-98 Bishop s Bridge Road, W2 Oct -16 3.50m 3.61% 1,118 Heal & Son FH Walmer Castle, 58 Ledbury Road, W11 Sep-16 5.50m 3.39% 1,159 Mitchel & Butlers FH 100 Queensway, W2 Jun-16 4.15m 3.00% 1,490 F.T. Ho and K.L. Wong (t/a Tao Kitchen) 96 Westbourne Grove, W2 Mar-16 2.55m 3.27% 789 Starbucks FH Tenure FH Retail Leasing Comparables Address Tenant Transaction Date Zone A psf 187 Westbourne Grove, W2 TBC Open Market Letting U/O 207.00 112 Westbourne Grove, W2 TBC Open Market Letting U/O 200.00 58A Westbourne Grove, W2 Reflexions Open Market Letting Oct-16 90.00 237 Westbourne Grove, W11 The Dayrooms Open Market Letting Oct-16 303.00 58 Westbourne Grove, W2 Yog Land Open Market Letting Jun-16 90.00 179 Westbourne Grove, W11 Verve Pets Lease Renewal Mar-16 215.00 108 Westbourne Grove, W2 Carluccios Rent Review Aug-15 145.00* *Let with A3 use reflecting 65.00 psf on ground floor trading. Office / Mixed use Address Date Price Yield Capital Value (psf) Tenant Tenure Office Leasing Comparables 137-143 Notting Hill Gate, W11 U/O Q 10.0m Q 1.91% Q 850 Pizza Express, Leyland SMD. Upper parts vacant. 10 Gate Street, WC2 Jan-17 3.30m 3.15% 870 Multi-let FH 20-22 Mortimer Street, W1 Nov-16 11.65m 3.55% 1,283 Carlton Books FH 19 Golden Square, W1 Jun-16 10.50m 0.68% 2,075 EAT. Upper parts vacant. FH FH Address Tenant Transaction Date Rent psf The Porchester Building, W2 Virgin Open Market Letting Dec-16 55.00 ISN House, 86-87 Campden Street, W8 Tigg Coll Architects Open Market Letting Aug-16 55.13 Peak House, 92 Golborne Road, W10 Sisley UK Open Market Letting May-16 55.00 52A Cromwell Road, SW7 CTMLN Ltd Open Market Letting May-16 58.00 Westbourne Studios, 242 Acklam Road, W10 Undisclosed Open Market Letting May-15 58.42
36 37 Further Information EPC EPCs are available on request. VAT is elected for VAT and it is proposed that the sale will be treated as a Transfer of Going Concern (TOGC). Proposal Offers in excess of 11,550,000 for the freehold interest, reflecting a topped up net initial yield of 4.37% (assuming purchaser s costs of 6.7%), a reversionary yield of 4.68% (upon settlement of outstanding Sainsbury s rent review) and a low capital value of 993 psf on the existing areas and just 669 psf on the consented areas. Contact For further information or to arrange an inspection please contact: Dominic Rowe Director dominicrowe@michaelelliott.co.uk +44 (0)20 7529 5706 Scott Lister Associate Director scottlister@michaelelliott.co.uk +44 (0)20 7529 5704 Peter Ng Director peterng@michaelelliott.co.uk +65 6733 3212 Rob Corbett Director rob.corbett@eu.jll.com +44(0)20 7399 5545 Francesca Spiller Associate Director francesca.spiller@eu.jll.com +44(0)20 7087 5569 Harriet Walker-Arnott Graduate Surveyor harriet.walker-arnott@eu.jll.com +44(0)20 7852 4298 Misrepresentations Act 1967 & Declaration: Michael Elliott and JLL for themselves and for the vendors of this property whose agents they are given notice that: a) the particulars are set out as general outline only for the guidance of intending purchasers and do not constitute, nor constitute part of, an offer or contract; b) all descriptions, dimensions, 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 any intending purchaser should not rely on them as statements or representations of fact but should satisfy themselves by inspection or otherwise as to the correctness of each of them; c) no person in the employment of Michael Elliott nor JLL has any authority to make or give any representations or warranty whatever in relation to this property. February 2017 www.cube-design.co.uk (Q3673)
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