FOR SALE HIGH YIELDING INVESTMENT Refurbished industrial and office facility in a popular industrial estate Total accommodation comprises 5,013 sq m/53,962 sq ft Let to Odfjell Drilling (UK) Ltd 3A1 covenant Very low rent c.45% below market value Annual CPI uplifts 10 year lease expiring 28 February 2025 Offers over 3,300,000 exc VAT Attractive net initial yield of 9.77% INDUSTRIAL & OFFICE FACILITY CRAWPEEL ROAD ALTENS INDUSTRIAL ESTATE ABERDEEN AB12 3FG
ABERDEEN THE BUILDINGS Aberdeen is Scotland s third largest city with a population of approximately 225,000 and a regional catchment population of over 500,000. It is the administrative capital of the North East of Scotland and benefits from two universities, an expanding international harbour and airport, seven major research institutes, together with world renowned food, fisheries and agricultural research establishments. Aberdeen has strong communication links with the rest of Scotland, the UK and Europe. The trunk road links Aberdeen with the Scottish motorway network, making Edinburgh and Glasgow accessible in just over 2 hours. The city is also linked to major towns and cities throughout the UK by rail and air travel. Aberdeen International Airport, which lies to the north west of the city, provides frequent daily services to the principal UK cities and direct flights to Europe. The Airport is currently undergoing major construction works to accommodate the increase in passenger numbers and separately it accommodates the world s busiest commercial Heliport. CRAWPEEL ROAD HARENESS ROAD LOCAL ECONOMY Located 120 miles north of Edinburgh, Aberdeen is one of the UK s biggest success stories. An internationally recognised global centre of excellence in the energy industry, the city and the surrounding region is a key engine of the Scottish and UK economies. Many of the world s leading oil producing companies have substantial regional HQ s in the city. Examples include BP, Shell, Total, Chevron, Conoco Philips and Nexen. These multinationals are supported by many oil service companies with a local presence in the city, including Wood Group PSN, Halliburton and Schlumberger. In recent years the city has outperformed the rest of Scotland in terms of economic growth, productivity and business birth rates. Numerous surveys have rated Aberdeen as having the best quality of life in the country. Whilst the recent fall in the oil price has reduced business activities during the last six months the city still has much to look forward to. Construction work on the long awaiting bypass road has now started and is scheduled for completion by the end of 2017. Similarly, a multimillion pound expansion of Aberdeen International Airport is underway which will absorb the increased passenger numbers and international flights. Finally, the City Council have recently published their Masterplan for a 2.9bn regeneration of the city centre over the next 20 years.
LOCATION The property is located on the west side of Crawpeel Road, close to its junction with Hareness Road within Altens Industrial Estate, Aberdeen. Altens is one of Aberdeen s most popular office and industrial locations and has been established since the early 1980s. A947 The estate is situated approximately 2 miles south of the city centre and is directly accessed from Wellington Road (A956), one of the city s main arterial routes. This makes the property easily accessible to the harbour, the railway station and the /M90 route south. The precise location of the property is shown on the street plan and an extract from Promap is provided to illustrate our understanding of the boundaries. A96 RIVER DON Nearby occupiers include Maersk Oil, Total Amec Foster Wheeler and Wood Group. RIVER DEE WEST TULLOS ROAD WELLINGTON ROAD (A956) A944 ABERDEEN WESTERN PERIPHERAL ROUTE LANG STRACHT NORTH ANDERSON DRIVE NORTH DEESIDE ROAD ABERDEEN WELLINGTON ROAD STONEHAVEN ROAD THE PROPERTY CRAWPEEL ROAD HARENESS ROAD A93 RIVER DEE SOUTER HEAD ROAD
DESCRIPTION The property comprises a substantial office and industrial facility with a secure yard and associated car parking. The total site is estimated to be approximately 1.26 hectares (3.10 acres) and has been developed to provide six adjoining and inter-connected buildings - three of which are used entirely for offices, one hybrid providing offices and warehousing, one large workshop unit with an extension and a small storage building. A partial refurbishment of the facility was carried out in 2014 with the landlord and tenant contributing to the total cost. BUILDING 1 provides a mix of open plan and partitioned offices on three levels together with meeting rooms and a spacious reception. Externally, the building is constructed of facing brick with a mansard style roof clad with profiled metal decking. Access to all floors is taken by way of an internal staircase and an 8 person passenger lift. BUILDINGS 2 AND 3 provide additional office accommodation over two levels with the internal layout a mix of open plan and private rooms. The ground floor of Building 3 has been recently converted to provide a modern staff restaurant. BUILDING 4 is a steel portal framed industrial unit with block/brick dado walls and profiled metal cladding above, under a profiled metal clad roof. The building has been divided internally to provide a large section of offices on two levels at the front and warehousing to the rear with a wallhead height of approximately 6.5m. The offices are mainly cellular. There is also a small mezzanine floor suitable for lightweight storage. BUILDING 5 is a steel portal framed industrial unit with block/brick dado walls and profiled metal cladding above under a profiled metal clad roof. The wallhead height is approximately 8.5m. The building has been extended by a small thermoinsulated modular unit attached to the south gable wall. This is a tenant s fixture. BUILDING 6 comprises two steel framed lean-to stores attached to the east elevation of Building 5. SERVICES - Both industrial units have newly installed warm air blowers for heating and hi-bay lighting. There are two electrically operated roller shutter doors within each unit giving access to the yard area at either end. Building 5 also has the benefit of an overhead gantry crane for heavy lifting. The office buildings are generally heated by a gas fired central heating system and in some areas cooled by cassette units integrated within the ceiling which also incorporates modern fluorescent fitments. EXTERNAL - There is a generous yard area to the rear and sides of the warehousing units which, in addition to circulation, is suitable for external storage. The yard is mainly surfaced in concrete. The facility has ample car parking with 59 spaces provided for staff and visitors. ENERGY PERFORMANCE CERTIFICATE The building has an EPC rating of D and a copy of the certificate is available upon request. SITE PLAN 5 6 3 4 2 1 CRAWPEEL ROAD
ACCOMMODATION From measurements taken on site, in accordance with the RICS Code of Measuring Practice, we estimate the gross internal floor area of the premises to be as follows: Accommodation Sq m Sq ft Building 1 - Offices 1,066.43 11,479 Building 2 - Offices 599.88 6,457 Building 3 Offices/Restaurant 468.60 5,044 Building 4 Offices 1,125.52 12,115 Building 4 - Warehouse 515.70 5,551 Building 4 - Mezzanine 127.92 1,377 Sub - Total 1,769.14 19,043 Building 5 - Workshop 777.41 8,368 Building 5 Workshop Extension 153.48 1,652 Sub - Total 930.89 10,020 Building 6 - Stores 178.28 1,919 RENTAL ANALYSIS & MRV The table below outlines our analysis of the passing rent and MRV calculation. This demonstrates that the rent for the property is highly reversionary. In our opinion the market rent for the property is in the order of 45% higher than the passing rent. Please note that the extension to Building 5 has been excluded as this is a tenant s fixture. Building Sq Ft Rental Rate Rental MRV Rate MRV Building 1 Offices Building 2 Offices 11,479 8.00 91,833 11.00 126,271 6,457 6.00 38,745 9.50 61,346 TOTAL 5,013.22 53,962 Useable Yard 2,971.60 31,980 TENURE The property is held on a Heritable title, equivalent of English Freehold. TENANCY Building 3 Offices/Restaurant Building 4 Offices Building 4 Warehouse Building 4 Mezzanine Building 5 Workshop Building 6 Stores 5,044 7.00 35,309 10.00 50,441 12,115 5.50 66,634 9.00 109,037 5,551 5.00 27,754 7.00 38,856 1,377 2.75 3,787 2.50 3,442 8,368 5.00 41,838 7.50 62,757 1,919 4.50 8,637 5.00 9,597 The building is let to Odfjell Drilling (UK) Ltd by way of a full repairing and insuring lease (subject to a Schedule of Condition) from 1 March 2015 until 28 February 2025. The passing rent is 341,700 per annum, which is subject to upwards only annual reviews equivalent to the increase in the CPI. Useable Yard 31,980 0.85 27,183 1.00 31,980 Total 341,720 Total 493,727 Say 341,700 MRV Say 495,000
TENANT COVENANT Odfjell Drilling is a listed international drilling, well service and engineering company with 3,000 employees and operations in more than 20 countries. The company was founded in Norway in 1973 and has a proven track record of outstanding performance in the harsh environment and ultra deepwater oil extraction markets. The headline financials for Odfjell Drilling (UK) Ltd for the last three published financial years are as follows: Year 31/12/2014 31/12/2013 31/12/2012 Turnover 76,723,000 68,901,000 57,587,000 Pre-Tax Profit 274,000 3,200,000 720,000 Net Worth 8,853,000 8,843,000 6,477,000 The company has a D&B Rating of 3A1 and a Creditsafe Rating of 60 (Low Risk). Further information is available from their website www.odfjelldrilling.com OCCUPATIONAL PROPERTY MARKET Viewed over the past 10 years, occupier demand for office and industrial property in Aberdeen has been strong as a direct consequence of high activity levels in the North Sea Oil and Gas industry. This sheltered the city from the worst effects of the UK economic downturn following the 2008 banking crisis. Despite the recent drop in the oil price, long term lettings are still occurring as occupiers continue to expand and improve the quality of their premises. Local developers and landlords have been the main benefactors as there has been naturally occurring rental growth in the city in recent years, due to the acute shortage of quality space. The chart below illustrates the growth in headline rental rates for industrial space, excluding the office element which is valued separately in Aberdeen. HEADLINE RATES - INDUSTRIAL (EXCLUDING OFFICES): 2005-2015 10.00 9.00 8.00 8.50 8.50 8.50 8.50 8.50 9.50 9.50 9.00 RENT 7.00 7.50 6.00 6.00 5.00 4.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YEAR
INVESTMENT PROPERTY MARKET Despite the current slowdown in the oil industry Aberdeen continues to attract interest from investors willing to look beyond the challenging short term market conditions. For over 40 years the city has had an active and robust local economy which has proved to be resilient in testing times. There is evidence of occupiers continuing to commit to medium to long term leases which should give investors comfort that the city will retain it s position as the oil capital of Europe for many years to come. In the office and industrial sectors there has been significant activity during the past two years. We have listed some relevant transactions in the table below: Date Property Purchaser Price NIY Tenant Comments Jan 16 Kirkton Drive, Raiths Aprirose 7.65m 7.46% Helix New 15 year sale & leaseback. Oct 15 Badentoy North, Portlethen ABF Pension Fund May 15 Gateway Drive, Aberdeen Gateway TIAA Henderson 5.4m 5.97% KCA New 20 year lease with guaranteed uplifts. 5.762m 6.29% Oilstates Forward commitment. New 15 year lease with guaranteed uplifts. Apr 15 1 Westpark, Blackburn Private 2.54m 7.25% Reservoir Group New 15 year lease with guaranteed uplifts. Dec 14 Unit 3A International Way, ABZ, Kirkhill Private Trust 4.1m 5.83% SPX New 15 year lease with guaranteed rental uplifts. Sep 14 Peregrine Road, Westhill AAM 9.80m 6.13% Forum New 15 year lease with guaranteed rental uplifts. Sep 14 Raiths House, Kirkton Drive, Raiths Ignis 22.35m 6.35% Weatherford Existing lease with 12 years unexpired. Sep 14 Arctic House, Kirkton Drive, Raiths NHV 3.50m 5.54% Reel Existing lease with 10 years unexpired. Jul 14 Unit Z3B Badentoy Crescent, Badentoy Park Jun 14 Kirkton Drive, Raiths F&C UK Property Fund Friends First 2.875m 6.45% Downhole Products New 15 year lease with guaranteed rental uplifts. 4.1m 5.94% Siemens Mixed office & industrial facility with unexpired term of 11 years. May 14 Howe Moss Terrace, Kirkhill CCLA 7.00m 7.25% Aker Mixed office & industrial facility with unexpired term of 3.5 years. Apr 14 Wellheads Terrace, Dyce KF Investors 12.11m 7.00% Petrowell/RST Warehouse with WAULT of c. 5 years.
PROPOSAL VIEWING Our client is seeking offers in excess of 3,300,000 exclusive of VAT for their heritable interest in the property. To arrange a viewing or for further information, please contact: A purchase at this level reflects an attractive net initial yield of 9.77% after allowing for purchasers costs including LBTT. VAT The property has been elected for VAT and it is anticipated that the sale will be treated as a Transfer of a Going Concern. Ken Shaw ken.shaw@ryden.co.uk Paul Richardson paul.richardson@ryden.co.uk Tel: 01224 588866 Fax: 01224 589669 Ryden 25 Albyn Place Aberdeen AB10 1YL (i) Messrs Ryden LLP for themselves and for vendors or lessors of this property whose agents they are give notice that: the particulars are set out as a general outline only for the guidance of intended purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract; (ii) all descriptions, dimensions, reference to condition and necessary permissions for use and occupation, and other details are given without responsibility and any intending purchasers or tenants 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; (iii) no person in the employment of Messrs Ryden LLP has any authority to make or give any representation or warranty whatever in relation to this property. Date of publication May 2016.