H A T T O N G A R D E N L O N D O N E C 1 Prime Highly Reversionary Mixed Use Investment
HATTON GARDEN 3 INVESTMENT SUMMARY Located in Midtown, one of London s most vibrant areas and growth locations. Within 300m of Farringdon Station which will become a Crossrail interchange in 2018. Situated in the prime section of Hatton Garden, London s famous jewellery district. Comprising three retail units at ground and lower ground floors with highly specified offices arranged over four upper floors and a mezzanine. Comprehensively refurbished in 2009. Total net internal floor area of 1,080.43 sq m (11,630 sq ft). Multi-let producing a total passing rent of 441,000 p.a. Highly reversionary, the office rent reflects only 38.14 per sq ft. Office rents have achieved 70 per sq ft on Hatton Garden. Office lease expiry in 2018 providing a well-timed lease event to take advantage of rental growth post introduction of Crossrail. Average passing retail rent of 111ZA with recent lettings achieved on the street of 165ZA. Offices single let to BI Wines and Spirits Limited with a D&B rating of 3A1 and minimum risk of business failure. Freehold. Offers invited in excess of 11 million reflecting a capital value of 946 per sq ft and the following yield profile, assuming standard purchasers costs of 6.80% and our opinion of ERV: Net initial yield: 3.75% Reversionary yield: 5.79% Equivalent yield: 5.36%
SMITHFIELD MARKET FARRINGDON CLERKENWELL ROAD GOLDMAN SACHS DEVELOPMENT NEW STREET SQUARE CHANCERY LANE GRAY S INN GARDENS WATERLOO LONDON EYE HOUSES OF PARLIAMENT ROYAL COURTS OF JUSTICE COVENT GARDEN LINCOLN S INN FIELDS THE WEST END TOTTENHAM COURT ROAD BRITISH MUSEUM
HATTON GARDEN 07 LOCATION Midtown is one of London s most exciting areas and growth locations. Enjoying a rich business biodiversity and increasing popularity, the area has blossomed with substantial tenant demand drawn by its expanding amenity and unrivalled access. The area attracts a broad range of occupiers particularly favoured by tenants from the technology, media and telecommunications (TMT) sector drawn to its unique building stock and cosmopolitan atmosphere. Tenants such as Mindshare, Dreamworks, Warner Brothers, Publicis Group, GDF Suez and Bell Pottinger are all located nearby. Some of the world s most influential corporations are also in close proximity including the headquarters of Amazon, Deloitte and Goldman Sachs. The Goldman Sachs Headquarters, currently being developed totalling 1 million sq ft, and the landmark 700,000 sq ft development of New Street Square, home to the headquarters of Deloitte and Taylor Wessing, are immediately to the south. Hatton Garden itself has an international reputation as the centre of London s jewellery industry. Established in the late 19th Century, today it is one of the finest and most renowned jewellery locations in the world with over 300 businesses and 55 retail units dedicated to the trade. It is also home to London s diamond bourse which is located opposite and acts as a significant catalyst for office and retail demand. The increasingly varied workforce has attracted a new breed of hoteliers and restauranteurs who have colonised the area in recent years. The majority have migrated from the fashionable areas of Shoreditch and Hoxton which illustrates the areas growing profile. Further examples of the growing amenity include Bounce table tennis bar and restaurant, the ever popular Leather Lane market and the soon to open Gym Box on Leather Lane which will help continue grow street activity and footfall.
Chancery lane S I TUATION A prominent building situated in the prime section of Hatton Garden, the property sits close to the junction with Holborn Circus and equidistant from Farringdon and Chancery Lane Stations. NEW STREET SQUARE FARRINGDON Under construction. Practical Completion in 2018 SMITHFIELD MARKET
HATTON GARDEN 11 COMMUNICATIONS Theobald s Road Farringdon Road Transport links are excellent and will be further improved when Crossrail begins service in 2018. Chancery Lane Underground Station is situated approximately 250 metres west of the property providing easy access to both the City and West end via the Central Line. The recently refurbished Farringdon Station (Circle, Metropolitan and Hammersmith & City lines) is within a 3 minute walk and also provides direct Thameslink services to Gatwick and Luton Airports, together with St Albans, Brighton, Wimbledon and Sevenoaks. Clerkenwell Road Crossrail/ Elizabeth Line Crossrail is Europe s largest infrastructure project costing approximately 15 billion. Crossrail will directly connect all of London s main business centres, linking Heathrow with Paddington, the West End, City and Canary Wharf. Farringdon Station is 300 metres from the subject property and will uniquely provide three-way connectivity to the London Underground, Thameslink and Crossrail networks. Once opened in 2018, roughly one quarter of the population of England will be able to reach Farringdon Station within 45 minutes, this amounts to a staggering 13.25 million people. With over 140 trains per hour forecast to pass through the interchange, this location is expected to become an ever increasing business hub for occupiers seeking world class connectivity. Farringdon Station will provide a direct link to three of London s five airports, with travel times to London destinations significantly reduced. Farringdon Road farringdon barbican Gray s Inn Road Aldersgate Street Luton CHANCERY LANE Holborn Hatton Garden Lane New Fetter Farringdon Street Newgate Street Heathrow 32 mins Paddington 8 mins Heathrow Express Bond Street 4 mins St Pancras International 300 Metres Farringdon Circle Hammersmith & City Metropolitan 3 mins 1 Mile King s Cross Northern Circle Hammersmith & City Metropolitan Piccadilly Victoria Liverpool Street 2 mins Stratford 10 mins Canary Wharf 8 mins coming 2019 Fleet Street city thameslink st paul s Tottenham Court Road Central Northern 650 Metres Holborn Central 100 Metres Chancery Lane Central 300 Metres City Thameslink HATTON GARDEN St Paul s Central Bank Central Northern Waterloo & City DLR Liverpool Street Central Circle Hammersmith & City Metropolitan Blackfriars Circle District Queen Victoria Street Gatwick London Bridge Northern Jubilee temple Victoria Embankment blackfriars Upper Thames Street dge
Comprehensively refurbished in 2009 both externally and internally to an exceptional standard.
HATTON GARDEN 15 DESCRIPTION 8-10 Hatton Garden is prominently located on the south side in the prime section of Hatton Garden. The property comprises three retail units at lower ground and ground floors with highly specified office accommodation over three upper floors including a mezzanine. Totalling 1,080.43 sq m (11,630 sq ft), the property was comprehensively refurbished in 2009 thoroughly upgrading the building externally, internally and the M&E to an exceptionally high standard. The offices were fully refurbished to provide open plan floorplates allowing the property to be single or multi-tenanted on a floor by floor basis. The modern accommodation provides open and light space benefitting from good floor to ceiling heights throughout and excellent levels of natural light from its three elevations. A dedicated entrance to Hatton Garden provides access to the main office core and 8 person passenger lift serving all floors. Well refurbished c.2,000 sq ft floor plates are in very limited supply in the locality and ideally suit the type of occupier attracted to the area. The retail units comprise fully glazed frontages with high end individual fit outs in keeping with the exclusive products retailed by each tenant. Located in the prime section of Hatton Garden, it is consistently in high demand from occupiers with historically exceptionally low vacancy rates. The office specification includes: RF concealed climate controlled floor standing units. Raised floors. Open floor plates with full height frameless glass partitioning. Suspended category II lighting. Kone Monospace 8 person passenger lift serving all floors. Key fob reader security system on all floors. Male and female WC s on each floor with integral shower facilities on the second and third. Disabled WC located on the ground floor. Kitchen and breakout area on each floor. Two roof terraces on the 4th floor. Excellent natural light throughout.
Highly specified office accommodation providing floorplates that ideally suit the type of occupiers attracted to the area 17
HATTON GARDEN 19 ACCOMMODATION The property has recently been measured in accordance with the RICS Property Measurement 1st Edition 2015 to provide the following areas. The measured survey is assignable and available on request. ADDRESS USE DESCRIPTION AREA (SQ M) Unit 8 Unit 9 Unit 10a Retail Retail Retail AREA (SQ FT) Zone A 20.53 221 Basement 38.28 412 Basement Tea Making 3.53 38 Total Area 62.34 671 ITZA 24.71 266 Zone A 35.86 386 Zone B 28.52 307 Zone C 2.04 22 Storage 16.07 173 Basement 85.10 916 Total Area 167.59 1,804 ITZA 60.75 654 Zone A 25.55 275 Zone B 22.67 244 Zone C 34.00 366 Zone D 10.13 109 Basement inc Vaults 100.43 1,081 Total Area 192.77 2,075 ITZA 56.69 610 Retail Sub Total 422.70 4,550 8-10 Offices Reception 22.95 247 1st 188.96 2,034 2nd 164.62 1,772 3rd 137.68 1,482 4th 124.95 1,345 Mezzanine 18.58 200 Office Sub Total 657.74 7,080 TOTAL 1,080.43 11,630
HATTON GARDEN 21 TENANCIES The subject property is fully-let producing a total rental income of 441,000 per annum with over 76% let to businesses with a minimum risk of business failure. TENURE: FREEHOLD UNIT/ FLOOR USE TENANT AREA SQ FT LEASE START LEASE EXPIRY RENT REVIEW RENT ( PSF/ ZONE A) RENT ( PA) ERV ( PSF/ZA) ERV ( PA) Unit 8 Ground & Basement Retail Beverley Hills Jewellers Limited 2,075 23/06/2008 22/06/2023 22/06/2018 107 65,000 150 91,500 Unit 9 Ground & Basement Retail Smith & Green Jewellers Limited 1,804 15/10/2007 14/10/2022 15/10/2017 109 71,000 150 98,100 HATTON GARDEN Unit 10a Ground & Basement Retail Lauder Jewellers Limited 671 06/08/2008 05/08/2023 06/08/2018 132 35,000 150 39,900 Retail Sub-Total 4,550 171,000 229,500 8-10 Hatton Garden 1st-4th Offices BI Wines and Spirits Limited 7,080 03/07/2008 02/07/2018-38.14 270,000 67.50* 450,249 Offices Sub-Total 7,080 38.14 270,000 450,249 TOTAL 11,630 441,000 679,749 * On best accommodation 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.
HATTON GARDEN 23 PLANNING VAT The property falls within the jurisdiction of the London Borough of Camden and designated within the Hatton Garden Conservation Area. This property is elected for VAT and it is proposed that the sale will be structured as a TOGC. Ely Passage is an adopted highway which runs through the front of the property. The highway provides access to the famed Ye Olde Mitre, the oldest public house in London, which is well known throughout London for its age and appearance in a number of high profile films. The passage is maintained by The Ely Place Commissioners.
HATTON GARDEN 25 COVENANT INFORMATION BI Wines and Spirits Limited (t/a Bordeaux Index) Bordeaux Index was founded in 1997 and has since established itself as one of the premier fine wine traders with offices in London, Hong Kong, Los Angeles and Singapore. The company offers a personalised service to its international client base on wine selection, investment and storage. Bordeaux Index created LiveTrade, the world s first on-line trading platform for fine wine, which has received numerous awards for innovation and has subsequently traded over 300 million of wine. Beverley Hills Jewellers Ltd Housed in one of Hatton Garden s flagship stores, the company is an icon of British jewellery design. Established in 1987, the company provides a wide selection of fine jewellery carrying a tradition of excellence and fine craftsmanship from their designers, consultants and gemologists. Smith & Green Jewellers Ltd Established in 2006, the company specialises in the finest handmade jewellery producing ranges of individually designed and hand crafted jewellery. The lease was assigned by Hirsh Limited who are now located on Grafton Street. Lauder Jewellers Limited Founded by Simon Lauder, Lauders Jewellers is a privately owned company and today is a feature boutique retailer on Hatton Garden. The company designs and creates the finest diamond jewellery. As well as their own work, they display one off pieces by some of the country s finest young goldsmiths. The company has a minimum risk of business failure with a Dun & Bradstreet rating of 3A1. For the year ending 31 December 2014, the company had a sales turnover of 70,016,917 with a pre-tax profit of 946,316 and a net worth of 14,521,258. Further information can be found at www.bordeauxindex.com The company has a minimum risk of business failure and a Dun & Bradstreet rating of 2A1. For the year ending 30 June 2014, the company had a sales turnover of 10,825,841 with a pre-tax profit of 884,964 and a net worth of 4,668,057. Beverley Hills took an assignment from Andrew Diamonds Limited. Further information can be found at www.beverleyhillsjewellers.com For the year ending 30 September 2014, the company had a net worth of 96,989 with current assets of 95,860. Further information can be found at www.smithgreenjewellers.co.uk For the year ending 30 September 2015, the company had a net worth of 48,962 with current assets of 76,114. Further information can be found at www.lauderjewellers.com
HATTON GARDEN 27 MARKET COMMENTARY Office Occupational Retail Occupational Investment Central London take up reached almost 15 million sq ft in 2015, one of the highest on record and significantly above the long term trend. Together with the wider central London market, Midtown has continued in the same vein of increasing tenant demand and an acceleration in take up against a back drop of limited supply which has driven rental growth. With a Grade A vacancy rate of only 3.3%, and with a shortage of suitable office space in the West End combined with the high total occupancy costs, there is an established trend of occupiers looking to Midtown as an attractive alternative. Midtown has long been an established location for Professional, Financial and Legal occupiers especially the latter due to its proximity to the Law Courts and Inns of Court. However, numerous high quality developments have led to an influx of occupiers from the City and West End. In particular tenants from the technology, media and telecommunications (TMT) sector have been attracted to Midtown by a combination of unique accommodation and cosmopolitan atmosphere. With a greatly improving amenity and the arrival of Crossrail in 2018, the area is set to further enhance its reputation as one of London s creative capitals. Prime headline rents on Hatton Garden have recently achieved 70.00 per sq ft. With a passing office rent of only 38.14 per sq ft, the property is highly reversionary and offers an excellent opportunity to take advantage of forecasted rental growth with a lease expiry in 2018. Midtown is in high demand from retailers seeking to take advantage of the growing worker, visitor and resident footfall. Hatton Garden itself is one of the world s oldest and most revered jewellery destinations and as such operates as a market in its own right. Comparable transactions are limited as historically Hatton Garden has benefitted from exceptionally low vacancy rates, especially along the southern and prime section of the street which the subject property forms part. Characteristically Hatton Garden provides smaller units ideally suiting the jewellery tenants wanting representation on the street. When units become available they are fiercely contested usually attracting rental premiums and setting new headline levels. Recently the Wonder Gallery let 16-18 Hatton Garden for a 15 year term at a rent of 200,000 p.a. with a 7 months rent free incentive reflecting a rent of 165 Zone A. In addition, Leather Lane which usually operates at a significant discount to Hatton Garden, has recently achieved 160 ZA and is expected to achieve in excess of this figure over the next 6 months. The 3 retail units in 8-10 Hatton Garden reflect an average of 111 ZA showing a strong reversion and excellent prospects for growth in this prime section of the street. Central London investment transactions reached 18 billion in 2015 making it one of the most active years on record and significantly higher than the 10 year annual average. London continues to remain the world s number one destination for real estate investment. London is perceived as a safe haven for overseas investors due to a transparent and competitive market, established legal system and political stability. Investors have been eager to secure London assets offering excellent rental and capital growth prospects. Landlords in the area have been looking to hold assets to benefit from the expected positive impacts and rental benefits of Crossrail which is due to open in 2018. As a result investment availability in the heart of Farringdon and Midtown remains constrained. Please find below recent comparable investment transactions in the immediate area: ADDRESS AREA (SQ FT) TENANT RENT ( PSF) TERM DATE Clover House, 147-149 Farringdon Road EC1 2,368 Vungle 71.00 5 years Q1 2016 36 Hatton Garden EC1 3,000 We Are London 70.00 5 years Q1 2016 Diamond House, 36-38 Hatton Garden, EC1 Prince Consort House, 109-111 Farringdon Road, EC1 The Corner, 91-93 Farringdon Road, EC1 31 Great Sutton Street, EC1 1,837 Molten Holding Group 65.00 5 years Q3 2015 3,177 Hiveworks Ltd 66.00 5 years Q2 2015 2,768 Cubic Transportation Systems Ltd 65.00 5 years Q2 2015 1,388 Undisc 70.00 10 years Q2 2015 ADDRESS DATE TENURE AREA (SQ FT) 6/7 Hatton Garden Clerkenwell House, 45-47 Clerkenwell Green PRICE NIY CAPITAL VALUE ( PSF) COMMENTS Q1 2016 FH 10,783 9.35m 3.79% 867 Two interconnected buildings, requires full refurbishment. Q4 2015 FH 10,087 11.00m 2.58% 1,091 Multi-let offices with expiries between 2016 & 2019. No retail element. 2 Pear Tree Court Q4 2015 FH 14,343 15.00m 3.74% 1,046 Let to Euromonitor International Ltd till 2021. No retail element. Klamath House, 18-19 Clerkenwell Green Wren House, 43 Hatton Garden Q4 2015 FH 15,003 15.75m 3.00% 1,049 Single-let to Wallacespace Ltd until 2023. Modern building. No retail element. Q2 2015 FH 15,497 14.50m 4.19% 936 ft Grade II Listed office. Let until 2023/24.
HATTON GARDEN 29 FURTHER INFORMATION EPC The property has the following EPC ratings: 10a Hatton Garden D(79) 8 Hatton Garden D(100) 9 Hatton Garden C(72) 8-10 Hatton Garden D(91) Certificates available on request. PROPOSAL Offers invited in excess of 11 million reflecting a capital value of 946 per sq ft and the following yield profile, assuming standard purchasers costs of 6.80% and our opinion of ERV: Net initial yield: 3.75% Reversionary yield: 5.79% Equivalent yield: 5.36% CONTACT For further information or to arrange an inspection, please contact: David Harrison Tel: 020 7529 5705 Email: davidharrison@michaelelliott.co.uk Dominic Rowe Tel: 020 7529 5706 Email: dominicrowe@michaelelliott.co.uk Mark Shipman Tel: 020 7529 5708 Email: markshipman@michaelelliott.co.uk Peter Ng Tel: +65 6733 3212 Email: peterng@michaelelliott.co.uk Misrepresentations Act 1967 & Declaration: Michael Elliott 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 has any authority to make or give any representations or warranty whatever in relation to this property. April 2016 www.cube-design.co.uk (Q3471)