A PRIME FREEHOLD OFFICE INVESTMENT KLAMATH HOUSE 18-19 CLERKENWELL GREEN LONDON EC1
View north View south east SUMMARY RATIONALE Opportunity to acquire a contemporary freehold building in Prime Clerkenwell Modern fully specified freehold office building Comprehensively refurbished in 2012 15,003 ft² on lower ground, ground and four upper floors Entirely let to Wallacespace Ltd on full repairing and insuring terms for 10 years from 27th August 2013 Total income of 500,000 per annum reflecting only 33.33psf overall Rent review in August 2018. Offers in excess of 14,500,000 subject to contract and exclusive of VAT, reflecting a capital value of 966psf overall before purchaser s costs Prime position on Clerkenwell Green Dual frontage building Within five minutes walk of Farringdon Station, one of London s most important transport hubs Exceptionally bright and efficient floor plates Just under eight years of income from an established covenant Highly reversionary income prime Clerkenwell rents over 65psf Recent substantial refurbishment Net initial yield of 3.26% rising to an estimated 4.89% in August 2018 and an equivalent yield of 4.68% Substantial capital allowances
LOCATION Klamath House is situated in prime Clerkenwell at the centre of the old village, overlooking the Green and the imposing former Middlesex Sessions Court House. The immediate location comprises a mixture of offices, housing and some excellent pubs and restaurants. Clerkenwell is a favoured location for companies in the creative, technology and fashion industries, who are attracted by the excellent transport links, character of the buildings, culture and high level of amenities. The location is home to many leading office occupiers and numerous high quality independent retailers, and exclusive hotels.
TRANSPORT The property is within a five minute walk of the newly refurbished Farringdon Station. Connections include three underground lines, Thameslink and Crossrail, which is scheduled to open in 2018. When fully open, an estimated 140 trains per hour will flow through the Farringdon interchange and it will be the only station from which passengers will be able to access all three networks, becoming one of Britain s busiest train stations. Crossrail is estimated to bring an additional 1.5 million people within 45 minutes commuting distance of London s key business districts. Travel times from Farringdon Station King s Cross/St Pancras 3 mins Liverpool Street 5 mins London Bridge 12 mins Paddington 18 mins Gatwick Airport 55 mins Travel times when Crossrail opens Tottenham Court Rd. 2 mins Liverpool Street 2 mins Bond Street 4 mins Canary Wharf 8 mins Heathrow Central 32 mins Times are approximate. ST. PANCRAS INTERNATIONAL KING S CROSS ST PANCRAS SOUTHHAMPTON ROW ST. GEORGE S GARDENS BRUNSWICK SQ. GARDENS GRAY S INN ROAD GUILFORD STREE T RUSSELL SQUARE FINSBURY FARRINGDON ROAD ROSEBERY AVENUE ST. JOHN STREET GOSWELL ROAD CLERKENWELL ROA D CITY ROAD PERCIVAL STREET LEVER STREET CLERKENWELL CLERKENWELL GREEN CROSSRAIL CITY THAMESLINK OLD STREET OLD STREET BARBICAN CITY ROAD View West towards Farringdon Station BLOOMSBURY STREET BLOOMSBURY WAY NEW OXFORD ST. TOTTENHAM COURT ROAD K INGSWAY THEOBALDS ROAD GRAY S INN GARDEN CHANCERY LANE HIGH HOLBORN HOLBORN LINCOLN S INN FIELDS CHANCERY LANE KLAMATH HOUSE Hatton Garden HOLBORN FARRINGDON C H A R T E R H O U S E S T CITY THAMESLINK ALDERSGATE STREET BARBICAN HOLBORN VIADUCT C HEAPSIDE ST. PAUL S MOORGATE LONDON WALL LIVERPOOL STREET FLEET STREET BANK
DESCRIPTION Klamath House is an attractive stone and glass clad modern office building with dual frontage to Clerkenwell Green and Clerkenwell Road. The property was originally constructed in the 1990 s but was comprehensively refurbished and re-clad in 2012 to comprise 15,003 sq ft of office accommodation on lower ground, ground and four upper floors. The ground and first floors benefit from a double height atrium and a light well provides a high level of natural light to the upper floors. The fourth floor has two balconies with impressive views over the Green and St James s Church to the north and south towards the City. The lower ground floor is open plan with above average natural light from set back windows fronting Clerkenwell Road and Clerkenwell Green. Fourth Floor There is a single lift and two staircases linking the office floors. Plant rooms are situated in the lower ground floor with air conditioning condensers situated externally at roof level. The tenant has fitted out the premises to a high standard to comprise a mix of meeting rooms and open plan break-out accommodation. The ground floor rear comprises a canteen and seating area for clients of Wallacespace. The landlord s grade A specification includes: Exposed ceiling mounted VRV cooling and heating systems on lower ground to third floors (floor mounted on fourth floor) Raised floors throughout Millliken Layline floors Modern suspended fluorescent and LED spot lights 10 person passenger lift Fourth floor balcony/terrace Ground Floor W.C. facilities at each floor level
ACCOMMODATION Exceptionally bright and efficient floor plates The property has been measured in accordance with the RICS Code of Measuring Practise. FLOOR USE NET INTERNAL AREA (Sq ft) (Sq m) 4th Offices 2,114 196.4 3rd Offices 2,490 231.3 2nd Offices 2,511 233.2 PLANT ROOM W.C. W.C. 1st Offices 2,508 233.0 Ground Offices 2,590 240.6 LIFT MOTOR ROOM LOWER GROUND FLOOR Ground Reception (notional) 173 16.0 Lower Ground Offices 2,617 243.1 Total 15,003 1,393.8 NB Floor to ceiling heights are typically 3m (floor to slab) OFFICE W.C. w.c. w.c. W.C. GROUND FLOOR TYPICAL UPPER N PLANS NOT TO SCALE
PLANNING The property lies within London Borough of Islington in the Clerkenwell Green Conservation Area. In March 2011, part ground and lower ground floor obtained consent for A1 and A3 uses but a later amendment changed the use to offices in line with the current tenant s occupation. Third Floor Ground Floor Ground Floor First Floor
63 53 62 61 49 7b a 8a to h 7 PH 6 5 3 1 42 55 PH 43 Clerkenwell House 44 45 to 47 Cycle Hire Station 6 5 4 2 to 1 18 1 41 7 32 34 35a 36a to i 33a 33b 37a 39 40 Clerkenwell Green PCs 15 14a 14 Lovatt House 12 to 13 8 10 to 11 9 St Johns House 53 17 96 to 100 18 to 19 17a 9 20 21 120 114 110 102 to 108 122 120a Clerkenwell Road Shelter 49 to 53 57 to 61 1 Ground Floor Reception Crown copyright and database rights 2015 OS Licence 100035409. 64 El Sub Sta 13 to 16 60 59 Lower Ground Floor Ground Floor
TENURE Freehold TENANCY The entire property is let to Wallacespace Ltd for 10 years from 27th August 2013 expiring 26th August 2023 (circa 8 years unexpired). The lease is held on full repairing and insuring terms and is subject to a rent review on the 27th August 2018. The lease is contracted outside the security of tenure provisions of the Landlord & Tenant Act 1954. The rent passing is 250,000 per annum payable quarterly in advance from 18th August 2014, rising to 500,000 per annum from 18th June 2016. The vendor will top up the rent from the date of completion until 18th June 2016. The rent review in August 2018 assumes the property is finished to a landlord s Category A specification (disregarding tenant alterations) as a whole and for a term equal to 10 years with an upwards only rent review at the 5th anniversary of the review date. There is a Rent Deposit Deed in favour of the landlord in the sum of 250,000 together with a sum equivalent to VAT of 50,000. There are provisions for the deposit to increase after rent reviews to a sum equivalent to six months rent plus VAT. COVENANT INFORMATION Fourth Floor Wallacespace provide offsite accommodation for meetings, training, research, events and conferences, typically for periods from one day to a week. They operate from premises in Covent Garden, St Pancras and Clerkenwell Green. Further information can be obtained from their web site: www.wallacespace.com According to credit agency Equifax, the company was incorporated in 1993 and has a financial stability assessment for 2015 as A - Excellent. Their accounts for the year ending June 2014 show a turnover of 6.096 million and pre-tax profits of 1.633 million. The company s net worth is reported as being 3.35 million. First Floor
LETTING TRANSACTIONS Office vacancy rates in Clerkenwell are at historically low levels. Demand is strong and there is a shortage of Grade A warehouse type accommodation. Recent comparable transaction include: DATE ADDRESS RENT FLOOR AREA TERM psf Sq Ft Q3, 2015 35 Alfred Place, WC1 51.37 LG-4 th 14,309 10 years Q2, 2015 Prince Consort House, 109-111 Farringdon Road, EC1 66.00 1 st 3,177 5 years Q2, 2015 The Corner, 91-93 Farringdon Road, EC1 65.00 5 th 2,768 5 years Q2, 2015 40 Compton Street, EC1 62.00 4 th 6,265 5 years Q2, 2015 Exmouth House, 3-11 Pine Street, EC1 68.00 3 rd 3,641 3 years Q1, 2015 Diamond House, 36-38 Hatton Garden, EC1 62.00 Ground & Part 1 st 2,922 10 years Q1, 2015 Lector Court, 151-153 Farringdon Road, EC1 65.00 1 st 2,418 5 years View down Aylesbury Street Clerkenwell Road Leather Lane
ESTIMATED RENTAL VALUE The reversionary yield of 4.89% has been calculated by assuming a net effective ERV of 750,000 per annum ( 50psf overall) based on a headline rent of 60psf on best space. INVESTMENT TRANSACTIONS There is strong demand for well let investments in Central London as demonstrated by some of the transactions below. DATE ADDRESS DESCRIPTION AREA Sq ft RENT psf PRICE NIY PSF Q3, 2014 Wren House, 43 Hatton Garden, EC1 Grade II listed converted church 15,497 41.50 14,500,000 4.25% 936 Q2, 2015 65, Clerkenwell Road, EC1 Multilet Victorian warehouse partly refurbished Q2,2015 Angel House, 338 Goswell Road, EC1 Art-Deco former tobacco warehouse 12,682 32-44 11,000,000 4.12% 867 46,000 29 33,950,000 3.70% 738 Q2, 2015 102-108 Clerkenwell Road, EC1 Multilet Victorian warehouse 17,317 21-32 15,200,000 3.00% 877 Q4, 2014 80 Clerkenwell Road, EC1 Victorian warehouse let short term with planning to extend Q4, 2014 17-18 Haywards Place, EC1 Multilet Victorian warehouse 10,850 25 8,500,000 3.01% 783 9,461 30-35 8,500,000 4.14% 898 Q4, 2014 Lever Building, 85 Clerkenwell Road, EC1 Q3, 2014 77-79 Farringdon Road, EC1 Grade A Victorian warehouse Multilet Victorian warehouse 30,637 46 31,600,000 4.04% 1,031 27,383 38-45 25,500,000 3.39% 913 EPC Klamath House has an EPC rating of C (65). A copy of the certificate is available at www.kinglypartners.com/klamath
VAT The property has been elected for VAT and the sale will be structured as a TOGC. CAPITAL ALLOWANCES There are 1.31m- 2.115m of Capital Allowances available. These are being passed on to the purchaser. It is estimated this could lead to a tax saving of 187,000-283,000 in the first 10 years. Buyers to seek independent advice. Further information is available at www.kinglypartners.com/klamath. WARRANTIES Building warranties will be made available to the purchaser. PROPOSAL Offers in excess of 14,500,000 are sought for the freehold interest. A purchase at this price reflects the following profile after purchaser s costs at 5.80%. Net Initial Yield: 3.26% Reversionary Yield in August 2018: 4.89% (based on a net effective rent) Equivalent Yield: 4.68% Price: 966psf (before costs) FURTHER INFORMATION Further information is available at www.kinglypartners.com/klamath. To arrange an inspection, please contact: James Maclachlan 020 7858 6865 07798 698 982 jmac@kinglypartners.com Paul Rowntree 020 7858 6863 07825 507 523 pr@kinglypartners.com Misrepresentation Act NOTICE: Messrs Kingly Partners for themselves and for the vendors of this property, whose agents they are, give notice that: (i) These particulars are only for the guidance of prospective purchasers and do not form part of any offer or contract. (ii) Whilst the information contained herein is issued in good faith, neither the firm nor its clients guarantee its accuracy and it is not to be relied upon as statements or representation of fact. (iii) Any intending purchasers must satisfy themselves as to the correctness of each of the statements made herein. (iv) The vendor does not make or give, and neither the firm nor any of its employees have any authority to make or give, any representation or warranty whatever in relation to this property. (v) Nothing in these particulars constitutes a statement that the property and/or any services or facilities are in good condition or working order. (vi) These particulars were completed in September 2015. (vii) Kingly Partners will not be liable, in negligence or otherwise, for any loss deriving from these particulars. Designed and produced by Oracle Creative 020 7935 7359 www.oraclecreative.co.uk