singerviellesales.com Central London Retail Investment Opportunity Within one of London s major growth areas An area of significant investment and development Let to Bathstore Highly re-lettable and divisible unit Low passing rent of only 13.48 per sq ft in a growing showroom & retail location Guide Price 1,215,000, subject to contract 7.0% net initial yield www.singerviellesales.com 62-68 68 Commercial Road, London E1 1NU
Location The property is located in the Aldgate / Whitechapel area in the middle of a significant transformation and is now considered as one of Central London s growth destinations alongside Shoreditch and Spitalfields where a blend of high profile development, transport improvements and continued expansion of the City of London eastwards is creating a cosmopolitan and vibrant location desirable both domestically and globally. Its proximity to the financial heart of London s Square Mile and the fashionable, creative and cultural destinations of Brick Lane, Hackney, Shoredtich, Spitalfields, Hoxton and Clerkenwell for living, shopping, dining and leisure combine to make the area extremely attractive for business and lifestyle. Communication facilities are currently provided by a number of options. The London Underground and Overground network is easily accessible; - Aldgate (Circle and Metropolitan Lines) - Aldgate East (District and Hammersmith & City Lines) - Whitechapel (District and Hammersmith & City Lines and the East London Line) - Tower Gateway (Docklands Light Railway) - Tower Hill (Circle and District Lines) The immediate vicinity is set to be transformed further and pedestrian flows increased in 2018 when Crossrail opens at Whitechapel Station and Liverpool Street Station. Whitechapel will be a major beneficiary from Crossrail. The new Whitechapel Crossrail Station will use the existing Whitechapel Road entrance to the Whitechapel London Underground and London Overground Station. A shared concourse, ticket hall and station operations room will lead to a fully integrated station that provides a step free interchange between Crossrail, Hammersmith and City, District and Overground lines. At peak times there will be 24 Crossrail trains every hour in each direction in addition to the existing London Underground and London Overground services. This will support the economic growth in the surrounding area, and Whitechapel will become an important interchange due to its position at the eastern point of the central section of the Crossrail route and being one Crossrail stop from Liverpool Street. Journey times to Heathrow Airport will be only 39 minutes, whilst Whitechapel to Canary Wharf will be reduced to just 3 minutes. Links to Eurostar via Stratford will be similarly accessible. For further information about Crossrail visit www.crossrail.co.uk London s key airports are also conveniently accessible, in particular London City Airport which is 23 minutes away via Tower Gateway on the Docklands Light Railway. Gatwick Airport is 35 minutes from Blackfriars Station and London Stansted is just 45 minutes via the Stansted Express from Liverpool Street Station.
Situation The property is within Zone 1 in the London Borough of Tower Hamlets on the eastern fringe of the City of London. 62/82 Commercial Road forms the ground floor of a highly prominent 10 storey residential building known as The Skyline Plaza Building which occupies the entire section of Commercial Road between Henriques Street and Back Church Lane. The locality surrounding the property is a blend of retail, contemporary and traditional residential, educational and research and hospital uses maintained by a diverse local multicultural community. The property is diagonally opposite London Metropolitan University and the Sir John Cass Faculty of Art, Architecture and Design. In addition, the international furniture brand Ligne Roset has its largest urban showroom in the world opposite the property at 37-39 Commercial Road. We also understand that the ground floor of the Pure Whitechapel student development project which is adjacent to the subject property is under offer to a national supermarket brand. Therefore, the property is ideally situated to benefit from the burgeoning showroom and retail activity to come to the area. The property is just 300 metres from Aldgate East Underground Station (District & Hammersmith & City Lines) and 700 metres from Aldgate Underground Station (Circle & Metropolitan Lines). In addition, Whitechapel Station is located approximately 750 metres from the property which also provides access to the London Underground network and London Overground Services to Canary Wharf and Greater London. Tower Gateway on the Docklands Light Railway is 350 metres away. Transportation is to be further enhanced when Crossrail comes in 2018 to Liverpool Street and Whitechapel Crossrail Stations as described above.
Local Developments There has been and continues to be significant inward investment in the Aldgate area with a number of high profile developments to propel the area forward in terms of profile and vibrancy. A selection of these nearby schemes are set out below; 122-126 Backchurch Lane Situated immediately behind the subject property construction is underway to develop a new Grade A office building of approximately 2,300 sq m (24,767 sq ft) over basement, ground and four upper floors. Pure Aldgate Student Living Situated adjacent to the subject building, Pure Aldgate is an exciting new student living development currently under construction with completion scheduled for Summer / Autumn 2015. The architecturally designed building will be built to 19 storeys providing 417 rooms plus amenity space including a sky lounge and open air roof terrace. Met Buildings, 41-71 Commercial Road Situated diagonally opposite the subject property London Metropolitan University sold their freehold interest in June 2015 in this extremely prominent campus building comprising approximately 12,433 sq m (134,000 sq ft) on a site of 1.065 acres. Marketed as an opportunity for refurbishment or development we understand the property was sold to a Government funded educational occupier for 53m equating to 395 per sq ft capital value. The quoting price was offers in excess of 35m equating 261.50 per sq ft. Goodmans Fields A 7 acre development project by Berkeley Homes of circa 900 residential units, 650 student rooms, a 250 bedroom hotel and inexcess of 9,290 sq m (100,000 sq ft) of retail and offices. The scheme will complete in phases between 2015 and 2019.
Aldgate Place A joint venture between British Land and Barratt Homes, Aldgate Place is a mixed use development which will comprise some 500 residential units, a 500 bedroom hotel, retail and offices. Completion is scheduled in 2015. New Loom House, 101 Back Church Lane A Grade II Listed converted former warehouse of 10,432.8 sq m (112,295 sq ft,) the property was purchased by Helical Bar in 2013 and is to be refurbished. Aldgate Tower Developed by Brookfield Multiplex and designed by Wilkinson Eyre, Aldate Tower is a state of the art office tower built to 16 storeys comprising 29,450 sq m (317,000 sq ft). One Commercial Street A premium development by Redrow which extends to 21 storeys and includes 217 residential units, office accommodation and retail space. It has been reported that Angelo Gordon, the American private equity group, has bought the entire development. Altitude, Aldgate E1 Barratt Homes is developing a 27 storey building to comprise 235 residential units together with 1,347 sq m (14,450 sq ft) of commercial accommodation. Cityscape, London E1 A 120 unit residential development project by Telford Homes. St Katherine Docks A 46,451 sq m (500,000 sq ft) mixed use estate set around a marina in picturesque setting. The two principal office buildings known as International House and Commodity Quay have been refurbished and being offered at quoting rents of 522 per m ( 48.50 per sq ft). In summary, an area of significant investment and development activity.
Description The property comprises a rectangular shaped retail unit with extensive frontage to Commercial Road and return frontage to Back Church Lane arranged over ground floor and mezzanine plus parts of basement for storage / ancillary. Internally, the property is configured on ground floor providing the sales / showroom space and a mezzanine level which is used for ancillary purposes. The accommodation is mainly open plan with good floor to ceiling height and has been fitted out to a high standard by the tenant in their usual corporate style. The tenant also has rights to park up to 5 cars at the rear of the property. Accommodation We have been advised that the following floor areas have been historically agreed with the tenant: Planning Net Internal Areas Ground Floor Sales 552.30 sq m 5,945 sq ft Ground Floor ITZA 374.40 sq m 4,030 sq ft Zone A 328.48 sq m 2,567 sq ft Zone B 229.75 sq m 2,473 sq ft Zone C 84.07 sq m 905 sq ft Mezzanine / Ancillary 68.00 sq m 732 sq ft Total 623.31 sq m 6,677 sq ft The permitted use under the lease is as follows; Not to use or permit to be used the demised premises except either as a shop for the display and sale of bathroom suites and associated goods or as a shop for such other retail purposes within Class A1 with landlord s consent (not to be unreasonably withheld or delayed) or other purposes within either Class A2 or A3 as approved in writing by the lessor.
1. The Property 2. 122-126 Backchurch Lane 3. Pure Whitechapel Student Living 4. Goodmans Fields 5. Altitude 6. Aldgate Place 7. Aldgate Tower 8. One Commercial Street 9. Cityscape 10. Nido Student Living 11. Spitalfields Market 12. Shoreditch 13. 30 St Mary Axe 14. The Leadenhall Building 15. 20 Fenchurch Street 16. Heron Tower 17. Tower 42
Tenure Tenancy The interest for sale comprises the long leasehold with respect to the part basement and ground floor at 62 to 82 Commercial Road which is for a term from 27th August 1997 to 18th June 2111 at a peppercorn rent. Therefore, there are approximately 96 years unexpired. The landlord is responsible for procuring that the superior long leaseholder complies with its obligations to insure the building of which the premises forms part; the tenant pays an appropriate proportion of the insurance costs. A copy of the insurance policy is available within the data room. The tenant is responsible for paying the landlord a proportion of any costs of repairing any common parts of the building. The property is let to Bathstore.com Limited (t/a Bathstore), on a Full Repairing and Insuring lease for a term of 15 years from 11th November 2003, expiring 10th November 2018. The November 2013 rent review was agreed in August 2014 resulting in a rental increase from 70,000 per annum to 90,000 per annum. The current passing rent of 90,000 per annum equates to only 145.08 per sq m ( 13.48 per sq ft) overall and 15.00 Zone A applying A/12 to the mezzanine. The tenant pays a fair proportion of the costs incurred by the superior landlord in organising the insurance. Superior Structure The freehold landlord has granted a superior long lease interest of the property, 62 to 82 Commercial Road, to Proxima GR Properties Limited from 27th August 1997 to 21st June 2111. This interest is also being offered by Singer Vielle le as a separate investment. The superior long leaseholder has granted individual long leasehold interests in respect of 130 residential apartments and the ground floor and part basement retail unit. The ground floor and part basement retail unit is let by the superior long leaseholder as described above under Tenure and is the interest for sale.
Covenant The tenant, Bathstore.com Limited (Co No. 02240475), has reported the following figures; 31 July 2014 31 July 2013 Turnover 112,012,000 98,903,000 Pre-tax Loss 2,272,000 765,00 Shareholder s Funds 7,195,000 9,466,000 Bathstore is the United Kingdom s leading specialist bathroom retailer supplying bathroom equipment and accessories with 172 stores. The company was sold in July 2014 by the private equity investor Endless LLP as part of a management buy-out ending a two year association with the company in which time sales grew by 30% and improved EBITDA by 5m. The company is led by chief executive Gary Favell who previously ran MFI. The company was previously owned by Wolseley UK and sold to Endless in May 2012. The ultimate parent company is Bathstore Group Limited (Co. No. 08058001) which has reported the following figures; 31 July 2014 31 July 2013 Turnover 112,012,000 98,903,000 Pre-tax Loss ( 2,484,000) 6,225,00 Shareholder s Funds 6,313,000 8,790,000 For further information visit www.bathstore.com
Market Commentary The passing rent on the subject property equates to just 145.08 per sq m ( 13.48 per sq ft) overall and 15.00 Zone A. We understand that as part of the adjacent Pure Whitechapel Student Living scheme a new ground floor retail unit will be available to let on practical completion which is due in August 2015. The unit which will comprise 257.80 sq m (2,775 sq ft) GIA is understood to be offered at a rent of 62,500 per annum ( 242 per sq m / 22.50 per sq ft) on a new lease to be agreed. Also, Sainsbury s has entered into an Agreement for Lease for a new convenience store at Goodmans Fields, Berkeley Homes prestigious new mixed use development. The company has taken a 377.8 sq m (4,067 sq ft) unit on a new 15 year lease at 90,000 per annum ( 238.33 per sq m / 22.13 per sq ft). The investment has also been sold at 1,700,000 reflecting a net initial yield of 5.0%. Therefore, we believe that based upon current market activity the current passing rent of the subject property is reversionary today. VAT The property has been elected for VAT. It is anticipated that the sale of this property will be treated as a Transfer of a Going Concern (TOGC).
Investment Considerations 1. An opportunity to acquire a Central London retail investment in a major growth area; 2. The immediate vicinity is set to improve significantly with a number of major mixed use developments and the arrival of Crossrail for which the property is perfectly located; Proposal 3. The property comprises a highly prominent, large and divisible modern retail unit; 4. If the premises had to be rere-let in the open market we suggest that there would be interest from various retailers including convenience store operators and showrooms for the whole or alternatively it would also lend lend itself easily to being split for multiple occupation; Guide Price 1,215,000 (One Million, Two Hundred and Fifteen Thousand Pounds), subject to contract, reflecting a net initial yield of 7.0% 5. The current passing rent equates to only 13.48 per sq ft which is reversionary, therefore, a purchaser will benefit from future rental growth prospects; prospects; 6. The investment provides a purchaser with an attractive and liquid lot size for a Central London property investment; 7. A purchase at the asking price will provide an investor with an attractive net initial yield. Singer Vielle 94-96 Wigmore Street London W1U 3RF Vendors Solicitor Jones Day 21 Tudor Street London EC4Y 0DJ Tel: +44 (0) 207 935 7200 Tel: +44 (0) 207 039 5316 Neil Singer Dale Henry Richard Wolfryd Andrew Gumpert neil@singervielle.co.uk dale@singervielle.co.uk richard@singervielle.co.uk atgumpert@jonesday.com Misrepresentation Act 1967 Singer Vielle for themselves and for the Vendors or Lessors of this property whose Agents they are give notice that: 1. The particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract 2. 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 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. 3. No person in the employment of Singer Vielle has any authority to make or give any representation or warranty whatever in relation to this property. 4. All maps are for identification purposes only and should not be relied upon for accuracy. 5. Unless otherwise stated, all prices and rentals quoted are exclusive of Value Added Tax to which they may be subject. Finance Act 1989 Unless otherwise stated, all prices and rents are quoted exclusive of VAT. Property Misdescriptions Act 1991 These details are believed to be correct at the time of compilation, but may be subject to subsequent amendment. Concerning the Properties listed and/or appearing on the Site: 1. Under no circumstances shall we be liable to you for any direct, indirect, consequential, incidental or special damages arising out of your purchase or lease of any Properties on the Site. 2. Under no circumstances shall we be liable for any errors or incompleteness of the information relating to any Property listed on this Site or if any Property has been withdrawn from sale or lease nor shall we be responsible for any inaccurate dimensions of any Properties or price listed. 3. Our website service permits you to enquire about and to purchase or lease Properties appearing on or listed on this Site. Such enquiries, purchase or leasing can only be made and permitted strictly subject to the terms and conditions set out below. 4. We do not accept responsibility or liability for the completeness or accuracy of information appearing on this Site which is provided by the Vendors or Lessors of the Property concerned who are solely responsible for such information. 5. Whilst we believe that the Properties listed are available for purchase or lease we make no guarantee that this is the case or that they have not been withdrawn by the Vendor or Lessor of the same. All Properties appearing or listed on the Site are subject to changes, errors or omissions. We have not verified the accuracy of the information relating to the Properties or any dimensions which have been given by the Vendors or Lessors. 6. All Properties are listed subject to contract and the prices shown are exclusive of VAT if applicable.