For Sale unicentre Lords Walk Preston Lancashire PR1 1DH High Yielding City Centre Multi Let Office Investment Let to Government Tenants
Investment Considerations > Multi Let City Centre office in Preston which is the administrative capital of Lancashire > The property has a floor area of 87,971 sq ft > The Property is let to the Crown Prosecution Service, H.M.R.C, The Challenge Network, A4E Limited and Vodafone Limited > 91% of the income is secured to Government tenants > The current average weighted unexpired term is 8 years to expiry and 4. years to tenants break option > Part Freehold part Long Leasehold > The current contracted rent is 9,69 per annum > The Net operating Income is 814,169 per annum > Low passing rent of between 9.9 and 1.0 per sq ft > There is approximately 14,904 sq ft (17%) which is vacant and refurbished to a good specification > Low Capital Value of 7 per sq ft > We are instructed to seek offers in excess of 6,400,000 (Six Million, Four Hundred Thousand Pounds), subject to contract and exclusive of VAT. This reflects a net initial yield of 14% and a yield of 11.9% based on the Net Operating Income
Location BLACKPOOL A6 A A8 A6 1 BIRKENHEAD 4 7 A61 A9 A8 A70 1 A7 A6 M8 M7 4 A80 A8 A9 A09 4 A70 A9 A08 1A A6 LYTHAM ST. ANNE S PRESTON BLACKBURN LIVERPOOL WALLASEY SOUTHPORT FORMBY ORMSKIRK LEYLAND A8 6 M6 7 8 A49 A677 A8 A9 A79 A80 M6 ST HELENS 11 9 10/1A A70 M6 8 6/1 7 WARRINGTON 1 A7 A6 A00 WIDNES 4 M6 A6 0 9 9/1 1/1 1 CHORLEY WIGAN 8 M61 M6 4 6 A6119 BOLTON A666 A8 A676 4 M6 A7 6 1/1 A671 7 ACCRINGTON 11 10 9 8 A6 A60 A6 A8 16 1/1 8 BURY A081 7 9 1 A6 6 1 COLNE 1 NELSON M6 11 10 18/4 17 19 0 A6010 4/1 BURNLEY RAWTENSTALL ROCHDALE A6010 A4 19 MANCHESTER A646 A6 M60 0 M67 (M) 1 A6 A7 STOCKPORT M60 6 7 A6 1 A60 M6 OLDHAM 4 M67 A6018 ASHTON-UNDER -LYME A646 A68 A69 A69 HALIFAX GLOSSOP B A6 HUDDE Preston is the administrative capital of Lancashire and is located 48 km (0 miles) to the north west of Manchester, 17 km (11 miles) to the west of Blackburn and km ( miles) south of Lancaster. The city centre has popular retail, leisure and cultural amenities that draw visitors from across the county. Preston is very accessible being located at the junctions of the M6, M61 and M motorways and at the intersection of the A9, A6 and A49. The subject property is located on the north east edge of the city centre and is situated on Lords Walk, which connects the main A6 Ring Road with Church Street and the city centre retail area. Therefore is well-located for access to the main routes in and out of the city centre. The main town centre amenities are all within walking distance. Preston Bus Station (with multi-storey car park above) is a major transport hub and is situated next to the property. Lancashire County Council have confirmed that it plans to invest million to regenerate and refurbish the bus station so that it will become a vibrant and attractive open public space. It is envisaged that this will be a catalyst for further wider regeneration of the city centre. The improvements will include a new Youth Zone which will incorporate an Indoor Sports Hall, an Outdoor Pitch, a Climbing Wall, Fitness Suite and an area for music, dance and arts and crafts. There will also be a new public area. This work is currently in progress with completion anticipated by 019. A number of office buildings within Preston City Centre have recently been redeveloped into residential properties under the recent changes to permitted development rights. Therefore current supply in the city has been dramatically reduced and this has led to significantly improved letting and rental growth prospects.
Description The subject property comprises a 1960s 1 storey detached office building. The property is of concrete frame construction with concrete cladding panelled and glazed elevations. The main office tower providing offices on ground to eleventh floors. The office tower provides rectangular shaped, open plan floor plates of 60 sq m (7,000 sq ft). To the front of the property is a three storey podium providing an entrance lobby/ reception, a ground floor showroom/office suite and two floors of offices above. All the current vacant floors have been refurbished to a good specification. Some suites have raised floors with power and communication sockets, others have perimeter or skirting level trunking. Tenants have installed air conditioning into some suites. The building is single glazed with some floors having secondary glazing. Access between floors is by four lifts; there are also two separate staircases serving the building. There are male and female WC facilities on each floor and shower facilities on the third and sixth floors. TULKETH ROAD A07 WATERY LANE A8 W. STRAND A07 STRAND RD FYLDE ROAD A8 GUILD WAY A9 CORPORATION STREET RING WAY A9 FISHERGATE HILL NORTH ROAD A6 LORDS WALK CHURCH STREET A606 unicentre DEEPDALE ROAD QUEEN STREET MANCHESTER RD RIBBLETON LANE LONDON ROAD A6 A64 NEW HALL LANE A9 Vacant Suite Situated on the eastern side of the property are two small surface car parks providing 0 car spaces together with a loading entrance. Additional car parking is provided on a separate plot of land located on the south side of Lords Walk and opposite the property. This car park is tarmac surfaced and has approximately 70 marked parking bays. Part of this car park is covered by a ramp giving access into the bus station and multi-storey car park. TO SOUTHPORT & LIVERPOOL LIVERPOOL ROAD A9 A9 FISHERGATE Preston Railway Station CHAPEL STR E ET AV E NHAM LANE 4
Tenure We understand the office building and surrounding land is held freehold under Titles LA479, LA191, LA8660 and LA869. The separate car park on the south side of Lords Walk (highlighted pink) is held on a 99 year lease from 4 April 197, expiring on April 071 under title LA7688. The current ground rent payable is 18,000 per annum; there is a mechanism in the lease to review the rent every years, with the review basis geared to the reasonable rental value for the demised premises. The landlord is Preston City Council. The lease plan confirms the land demised totals 1,7 sq m (1, sq yards).
Tenancies The property is let in accordance with the following tenancy schedule: Approximately 91% of the passing income is secured against Government tenants. Both tenants have recently demonstrated their commitment to the building. The Crown Prosecution Service (CPS) have recently removed a tenant s break option. The accommodation occupied by HMRC on the th - 11th floors has recently agreed a new 10 year lease with a year break option. The headline rent is currently 9,69 per annum. This will reduce to 84, per annum in November 018 on commencement of the reversionary lease to the Secretary of State. Unit Number Tenant Net Internal Area Current Rent ERV Lease Dates Next Review Break Option Outside the 194 Act Service Charge Liability Business Rates Liability Sqft PA / Sqft / Sqft Start Expiry Date Date Pt Ground Floor Store Vacant 1,606.00 11. 18,068 7,444.07,69.00 Suite 1-4 GF A4E Ltd (People Plus),76.00 8,61 10. 11. 44,8 4/08/11 /08/18 Base rent is 6,00 pa plus 4 car spaces at,00. Suite GF Vacant 66.00 11. 6,68,60.40 1,99.9 First Floor Suite E Vacant 1,.00 11. 1,019 6,18.08,68.40 First Floor Suite F Vacant 8,460.00 11. 9,17 9,1.4 8,01.0 Second Floor - 1 car spaces The First Secretary of State - Crown Prosecution Service Comments 9,77.00 117,1 1.49 11. 10,491 4/04/006 /04/01 Service Charge Cap at 47,14 (.0 psf) Third Floor - 1 car spaces The First Secretary of State - Crown Prosecution Service 6,98.00 8,876 11.86 11. 78,81. /06/006 /06/01 Service Charge Cap at,110 (.0 psf) 4th Floor Suite 1 The Challenge Network,48.00 8,11 10.0 11. 41,1 1/04/16 14/04/1 1/04/19 Base rent is 6,61pa. plus car spaces at 1,90 4th Floor Vacant,0.00 11. 9,409 16,0. 11,017.00 Fifth - Sixth Floors - 4 car spaces Seventh-Eleventh Floor - 80 car spaces The Secretary of State for Communities and Local Government (see comments) The Secretary of State for Communities and Local Government (see comments) 1,970.00 4,9.00 177,64 481,77 10.99 11.9 11. 11. 17,16 9,906 17/11/0 17/11/0 1/0/8 1/0/8 1/0/ 1/0/ 1/0/ 1/0/ The th - 11th floors are currently let to Trillium (Prime) Property GP Limited. A reversionary lease is in place on a floor by floor basis of these floors to The Secretary of State for Communities and Local Government. The combined passing rent will reduce to 0,000 per annum on 1/4/018. Tenant to receive further 6 months rent free if break not exercised. 1 Car Space The Challenge Network 60 60,600 1/04/16 1/04/19 Y 8 Car Spaces Secretary of State ( Car Park),600,600.00,600 4/1/04 Y Licence can be determined upon one months notice Part of Roof Vodafone Ltd 1,000 1,000.00 1,000 18/06/010 17/06/00 Y Total 87,971.00 9,69 1,010,74 71,9.1 48,99.8 Therefore after deducting Landlords shortfalls in respect of Business Rates, Insurance and Service Charge contributions for the vacant suites along with the leasehold rent the current Net Operating Income is 814,169 per annum. 6
Covenant Strength The two main tenants are the Crown Prosecution Service and H.M.R.C. Both of which are government tenants and deemed to be of undoubted standing. Both tenants have recently demonstrated their commitment to the building. They represent circa 91% of the passing rent. We have summarised the other tenant s financial standing below. They represent only 9% of the passing rent. A4E Limited (Company Number 06140) - 4% of passing rent Action for Employment Ltd is a leading public sector service provider, serving tens of thousands of people across Europe. They work in partnership with governments (local and central), public sector organisations, private sector companies and voluntary and community groups. A summary of their most recent accounts is as follows: Year End 1/1/01 (9 months) 1/0/01 1/0/014 Turnover 66,77,000 166,44,000 189,9,000 Pre-Tax Profit - 1,799,000 9,7,000,7,000 Net Assets - 10,90,000 19,000 -,11,000 A4E Limited has a Creditsafe score of 9/100 The Challenge Network (Company Number 068441) - 4% of passing rent The Challenge is the UK s leading registered charity (charity no. 1199) for building a more integrated society. They design and deliver programmes that bring different people together to develop their confidence and skills in understanding and connecting with others. A summary of their most recent accounts is as follows:- Year End 1/10/016 1/10/01 1/10/014 Turnover 6,79,000,96,000 7,647,000 Pre-Tax Profit -,18,000,6,000 4,4,000 Net Assets 7,976,000 10,494,000 6,9,000 The Challenge Network has a Creditsafe score of 7/100. Vodafone Limited (Company Number 0147187) - 1% of passing rent Vodafone Ltd is one of the UK s largest providers of telecommunication services and is part of the Vodafone group which is the nd largest mobile phone company in the world. A summary of their most recent accounts is as follows: Year End 1/0/016 1/0/01 1/0/014 Turnover 6,18,00,000 6,94,00,000 6,969,00,000 Pre-Tax Profit - 66,800,000-61,000,000-04,800,000 Net Assets 7,199,400,000 1,410,400,000,,000,000 Vodafone Ltd has a Creditsafe score of 7/100 7
Service Charge The current service charge budget for the year ending 0th June 018 is 406,780 per annum which reflects 4.6 per sq ft. Asset Management > Approximately,000 has been budgeted for in the existing service charge for common area refurbishment. > Low passing rents should prove a strong foundation for future rental growth. > Improvements to adjacent major transport interchange and the creation of new public realm should improve both macro and micro locations. > Both Government tenants have recently demonstrated their long term commitment to the building. > Continue to explore further re-gear opportunities with tenants > Let the remaining space to increase income and reduce void costs > Potential alternative uses.in Medium to Long term > Reduce holding costs to improve net operating income. 8
Proposal We are instructed to seek offers in excess of 6,400,000 (Six Million, Four Hundred Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level would reflect a net initial yield of 14%. This also reflects a low capital value of only 7 per sq ft. Based on the current Net Operating Income the yield would be circa 11.9%. This could reduce to 10.% in November 018 on commencement of the reversionary lease to The Secretary of State on the th - 11 th floors.. Energy Performance Certificate The property has been rated as having an EPC rating of D-100. EPC Information can be provided on request. 9
Further Information For further information or to arrange an inspection please contact: James Porteous 0161 8 7408 james.porteous@eu.jll.com MISREPRESENTATION ACT 1967 DISCLAIMER COPYRIGHT JONES LANG LASALLE IP, INC. 018. All rights reserved. Jones Lang LaSalle Limited for themselves and for the vendor of this property whose agents they are give 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 purchasers should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them. c) No person in the employment of Jones Lang LaSalle Limited has any authority to make or give any representation or warranty whatever in relation to these properties. SUBJECT TO CONTRACT S EXCLUSIVE OF VAT JANUARY 018