GATE STREET LONDON WC2. Midtown Freehold Investment Opportunity

Transcription

1 GATE STREET LONDON WC2 Midtwn Freehld Investment Opprtunity

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3 EXECUTIVE SUMMARY 8 Gate Street represents a unique pprtunity t acquire a securely let Midtwn freehld prperty with exceptinal future redevelpment ptential: Freehld Prime Midtwn lcatin, just t the nrth f the prestigius Lincln s Inn Fields 11,678 sq ft NIA (11,934 sq ft IPMS 3) f ffice and ancillary accmmdatin arranged ver lwer grund, grund and fur upper flrs Single let t Cartesian Ltd until March 2021, prviding an unexpired term f apprximately five years Passing rent f 600,500 per annum, equating t a lw verall average f per sq ft n the NIA in the cntext f rents in Midtwn nw achieving 70 per sq ft Excellent rental grwth prspects fr Midtwn, which is frecast t be ne f the tp three perfrming sub-markets in Central Lndn Outstanding future redevelpment ptential upn lease expiry, including increasing the massing and site density and explring alternative uses Attractive lt size with very limited cmpeting pprtunities Offers are invited fr the freehld interest in excess f 10,250,000, subject t cntract and exclusive f VAT A purchase at this price reflects an attractive net initial yield f 5.50% (assuming purchaser s csts f 6.70%) and a capital value f 878 per sq ft n the NIA 02/03

4 THE CITY ST PAUL S CATHEDRAL FARRINGDON STATION SMITHFIELD MARKET UK COMMERCIAL COURTS CHANCERY LANE STATION GATE STREET LINCOLN S INN FIELDS HOLBORN STATION

5 THE SHARD LOCATION 8 Gate Street is lcated in the heart f Midtwn, a fcal Central Lndn sub-market which is strategically psitined between the West End and the financial and insurance districts f the City f Lndn. ROYAL COURTS OF JUSTICE BLACKFRIARS STATION Midtwn is glbally recgnised as the cre f Lndn s lng-established legal district due t its prximity t the histric institutins f the Ryal Curts f Justice and the fur Inns f Curt. Hwever, Midtwn has benefitted frm a substantial renaissance in recent years, largely led by the cmpletin f a number f successful ffice develpments. The significant imprvements t the lcality have bradened the appeal f this area and attracted an impressive internatinal ccupier base, including leading glbal rganisatins frm the prfessinal, financial, media and crprate sectrs. Ntable lcal ccupiers include Delitte, Gldman Sachs, Time Warner, Ggle, Mishcn de Reya and Olswang. LONDON SCHOOL OF ECONOMICS & POLITICAL SCIENCE The prperty is prminently situated n the east side f Gate Street, in clse prximity t Kingsway and High Hlbrn, tw f the principal arterial rutes thrugh Central Lndn. Gate Street itself intersects with Lincln s Inn Fields, just t the suth f the building. Whilst the Midtwn market is predminantly characterised by cmmercial buildings, Lincln s Inn Fields prvides a mix f ffice and residential buildings, in additin t the rare attribute f a landscaped public park which is ne f the largest in Lndn. The lcal amenities are excellent with bth High Hlbrn and Kingsway prviding an eclectic array f retailers, bars and restaurants. The central lcatin als places the building clse t a number f Lndn s mst famus institutins, including Smerset Huse, Cvent Garden, the Ryal Opera Huse, British Museum, King s Cllege Lndn and the Lndn Schl f Ecnmics and Plitical Science. 04/05

6 RUSSELL SQUARE N Time Warner Mediacm 3. G AT E STREET BRITISH MUSEUM FARRINGDON Skype Olswang HOLBORN Mishcn de Reya TOTTENHAM COURT ROAD Amazn CHANCERY LANE LINCOLN S INN FIELDS Leg 6. Delitte Bird & Bird Gldman Sachs Yah ROYAL COURTS OF JUSTICE LSE COVENT GARDEN ROYAL OPERA HOUSE Freshfields CITY THAMESLINK King s Cllege Lndn British American Tbacc TEMPLE SOMERSET HOUSE LEICESTER SQUARE BLACKFRIARS CADILLY IRCUS KEY LOCAL SCHEMES CHARING CROSS EMBANKMENT Africa Huse Kingsway Westn Huse High Hlbrn Develper: Freshwater Size: 120,000 sq ft ffices Status: Refurbishment, pre-let t Mischn de Reya Develper: Frgmre Size: 63,000 sq ft ffices Status: Underging refurbishment, majrity reprted t be pre-let t Mischn de Reya in the late 60s psf High Hlbrn 262 High Hlbrn 35 Chancery Lane Develper: Hines Size: 69,000 sq ft ffices Status: Cmpleted new develpment, multi-let Develper: Lazari Investments Size: 41,000 sq ft ffices Status: Planning permissin in place fr a mixed-use scheme Develper: Endurance Land & Aberdeen Asset Management Size: 66,000 sq ft ffices Status: Underging refurbishment, due t cmplete in Q WATERLOO Lacn Huse 84 Thebalds Rad SOUTHWARK Develper: Blackstne Size: 192,000 sq ft ffices Status: Refurbishment cmpleted in Q Arriva UO at psf (6th flr) 6.

7 COMMUNICATIONS CROSSRAIL 8 Gate Street benefits frm exceptinal transprt links with the West End, City and Canary Wharf being easily accessible via the fllwing: Crssrail is Eurpe s largest infrastructure prject prviding a new high speed rail link underneath Central Lndn t Heathrw and the suburbs beynd. Hlbrn Statin (1 minute) Central and Piccadilly Undergrund lines. Tttenham Curt Rad Statin (10 minutes) Central and Nrthern Undergrund lines; Crssrail frm Chancery Lane Statin (7 minutes) Central Undergrund line. Farringdn Statin (14 minutes) Circle, Hammersmith & City and Metrplitan Undergrund lines; Thameslink services; Crssrail frm In 2018, Crssrail will arrive in Central Lndn and 8 Gate Street lies a shrt walk frm bth the Tttenham Curt Rad and Farringdn Crssrail Statins. The Crssrail prject will prvide: 40 statins acrss Lndn and the Suth East An extra 1.5 millin peple brught t within 45 minutes f Central Lndn 10% increase in Lndn s rail capacity, dramatically cutting jurney times 200 millin passengers will be carried annually Hlbrn Statin is the 11th busiest statin n the Lndn Undergrund netwrk and by 2031 demand is expected t increase by 30%. The statin is due t be upgraded t increase capacity, including a new secndary entrance, interchange link and a re-mdelled ticket hall with step-free access. The prject is anticipated t be delivered by the mid-2020s. Reading Hayes & Harlingtn HEATHROW Suthall Ealing Bnd Hanwell Bradway Street FARRINGDON Whitechapel West Ealing Actn Main Line Paddingtn TOTTENHAM COURT ROAD Liverpl Street GATE STREET Stratfrd Canary Wharf Shenfield Abbey Wd 06/07

8 DESCRIPTION 8 Gate Street is a self-cntained ffice building with an impsing brickwrk frntage t Gate Street. The building was riginally cnstructed in the early 1970s and cmprehensively refurbished in The prperty prvides apprximately 11,678 sq ft NIA f ffice and ancillary accmmdatin arranged ver lwer grund, grund and fur upper flrs. Upper flrplates range in size frm 785 sq ft t 2,617 sq ft NIA, prviding regular and pen plan accmmdatin with excellent levels f natural light n bth the Gate Street façade and rear elevatin. Additinally, the lwer grund flr benefits frm a significantly enhanced flr-t-ceiling height f 3.15m and a degree f natural light n bth the eastern and western elevatins. The base specificatin typically cmprises the fllwing: VRF air cnditining Metal tiled suspended ceilings Raised flrs Duble glazing Male, female and disabled WCs Shwer facilities n 4th flr One passenger lift

9 ACCOMMODATION The prperty has been measured by Plwman Craven in accrdance with bth the RICS Cde f Measuring Practice (6th Editin) prviding net internal areas, and the RICS Prperty Measurement (1st Editin) prviding IPMS 3 areas. The prperty cmprises the fllwing apprximate flr areas: Flr Use Net Internal Area IPMS 3 sq ft sq m sq ft sq m 4th Offices rd Offices 1, , nd Offices 2, , st Offices 2, , Grund Offices 1, , Lwer Grund Offices 2, , Lwer Grund Strage Ttal 11,678 1, ,934 1,108.7 Please nte that the abve area schedule excludes the receptin which cmprises apprximately 235 sq ft. GROUND FLOOR N Offices Cre GATE STREET SECOND FLOOR GATE STREET Fr illustrative purpses nly. Nt t scale. 08/09

10 4 235 t TENURE Freehld. The apprximate extent f the freehld wnership is shwn utlined red n the Ordnance Survey extract plan belw t 99 HIGH HOL SOUTHAMPTON ROW TCBs 110 LB 267 PCP 23.4m 23.7m TCBs 247 t 261 HOLBORN PLACE 229 t m 227 Chancery Curt Htel 94 Hlbrn Statin Kingsburne Huse New Turnstile 8 10 Little Turnstile t 246 Westn Huse 7 PH PH m LB GATE STREET t m Gate Street Africa Huse GATE STREET 6 WHETSTONE PARK Sane Museum PH 0m 10m 20m 30m Kingsway Shelters 64 t 78 Twyfrd Place Cathlic Church f St Anselm and St Cecilia 60 Nrthgate Huse REMNANT STREET Lincln's Inn Fields LINCOLN'S INN Canada Walk Statue 62 Huse Pwis Ordnance Survey Crwn Cpyright All rights reserved. Licence number Pltted Scale - 1:1250 7

11 TENANCY 8 Gate Street is single let t Cartesian Ltd n a full repairing and insuring lease expiring 24th March 2021, thereby prviding an unexpired term f apprximately five years. The ttal rent passing is 600,500 per annum, equating t per sq ft verall n the NIA. There are n future rent reviews and the tenant is currently benefitting frm a six mnth rent free perid until 25th September The vendr is prpsing t prvide a rental tp up n the utstanding rent free perid frm sale cmpletin. TENANT COVENANT Cartesian is a specialist cnsulting firm fcused n the glbal cmmunicatins, technlgy and digital media industries. Established in 1996, Cartesian serves the leading firms and rganisatins in the industry, including Service Prviders, Netwrk Operatrs, Technlgy Firms, Digital Media Prducers and Distributrs, Gvernment and Regulatry Authrities and Industry Assciatins. Cartesian has ffices in Lndn, Bstn, Kansas City, New Yrk and Washingtn. Cartesian Ltd has been awarded a Dun & Bradstreet credit rating f 3A1, reflecting a tangible net wrth in excess f 8 millin and representing a minimum risk f business failure prfile. Cartesian Ltd generated revenues in excess f 21 millin during the financial year ending December Further financial infrmatin can be prvided upn request. Please visit fr further infrmatin. 10/11

12 REDEVELOPMENT POTENTIAL 8 Gate Street ffers exceptinal pprtunity fr redevelpment at lease expiry, subject t the necessary cnsents. The current incme stream prvides valuable time and pprtunity t explre the ptins in further detail. PLANNING 8 Gate Street is lcated in the Lndn Brugh f Camden. The prperty is nt listed but lies within the Blmsbury Cnservatin Area. The permitted use is fr ffices (Class B1a) with the exceptin f the furth flr which has permitted use f residential (Class C3). Hwever, we understand that the Valuatin Office Agency recrds indicate that business rates have been paid since As the furth flr has been used as ffices fr mre than ten years, we understand that the lawful use is nw ffices (Class B1a). Further cmmentary in this regard is prvided in the Indig Planning Reprt, a cpy f which is cntained in the datarm. The Indig Planning Reprt cncludes that there is utstanding ptential t extend the existing building upwards by at least tw streys and infill the rear f the building at the secnd, third and furth flrs, subject t apprpriate design and the necessary cnsents. The reprt als cmments that change f use f part r the entire building t residential culd be acceptable, particularly in the cntext f the histric residential use n the furth flr within the building and the permitted residential uses at the adjining 6 Gate Street and 10 Gate Street. FEASIBILITY STUDY In tandem with the advice prvided by Indig Planning, Trehearne Architects have prduced a Feasibility Study utlining the exceptinal ptential t add tw new flrs and extend the building envelpe t the rear, thereby substantially increasing the flr area. Tw separate ffice and residential redevelpment schemes have been prduced n this basis. The ffice scheme prvides larger, mre efficient flrplates and increases the existing net internal area by apprximately 70% t 19,817 sq ft. The residential scheme prvides 20 units n the upper flrs ranging frm 2-bedrm apartments t studi flats and includes terraces n the fifth and sixth flrs and tw retail / restaurant units at grund flr and basement levels. The stair cre is centrally lcated t enable ptimum distributin f apartments. The residential scheme cmprises apprximately 18,912 sq ft f net internal area. A cpy f the Trehearne Architect s Feasibility Study, including flr area schedules, is prvided in the datarm. Purchasers are advised t make their wn enquiries in respect f future redevelpment ptential.

13 Existing building frm the frnt Existing building frm the rear Prpsed ffice scheme frm the frnt Prpsed ffice scheme frm the rear Prpsed residential scheme frm the frnt Prpsed residential scheme frm the rear 12/13

14 MIDTOWN MARKET COMMENTARY Leasing Market Midtwn has ne f the lwest vacancy rates f all Central Lndn sub-markets at just 4.5% and is characterised by an acute lack f new develpment supply. There is nly 655,000 sq ft f new and refurbished space under cnstructin speculatively in Midtwn which is nt already cmmitted and due fr cmpletin between nw and the end f T put this in cntext, Midtwn recrded ttal take-up in 2015 f 1.1 millin sq ft. It is anticipated that the severely restricted supply pipeline and cntinued rbust tenant demand will place significant upward pressure n rents. Prime rents in Midtwn currently stand at 70 per sq ft and are frecast t exceed 80 per sq ft by the end f The fllwing are sme examples f recent nearby letting transactins: Prperty Demise Term Rent (psf) Carline Huse, High Hlbrn, WC1 7th flr 5 years ,593 sq ft 110 High Hlbrn, WC1 7th flr 10 years ,136 sq ft (break 5) 235 High Hlbrn, WC1 1st 6th flrs 10 years ,350 sq ft Swan Huse, High Hlbrn, WC1 5th flr 5 years ,947 sq ft St Barthlmew Huse, Fleet Street, EC4 3rd flr 5 years ,725 sq ft (break 3) Investment Market Central Lndn is the mst liquid, transparent and secure real estate market in the wrld. Current histrically lw exchange rates, cmbined with bth future rental grwth prspects and superir returns ver ther asset classes, creates a unique investment pprtunity. The fllwing are sme examples f recent cmpleted Midtwn investment transactins: Prperty NIA (sq ft) Tenancy Price NIY Capital Value (psf) 29 Lincln s Inn Fields, 13,367 Vacant Pssessin 13.7M N/A 1,025 WC Lincln s Inn Fields, 12,306 Vacant Pssessin 11.55M N/A 939 WC2 St Barthlmew Huse, 12,241 Multi-let 13.6M 3.34% 1, Fleet Street, EC4 3.5 years WAULT psf 9-12 Bell Yard, 6,837 Single let 6.23M 3.60% 911 WC2 1.8 years psf 200 Strand, 12,432 Single let 17.3M 3.98% 1,392 WC2 7.2 years psf

15 FURTHER INFORMATION VAT We understand that the prperty has been elected fr the purpses f VAT. It is envisaged that the sale will be structured by way f a Transfer f a Ging Cncern (TOGC). Datarm Access t an nline datarm cntaining the fllwing infrmatin is available n request: Title Infrmatin Lease Dcuments Plwman Craven Measured Survey Trehearne Feasibility Study Indig Planning Reprt Energy Perfrmance Certificate EPC The prperty has an EPC rating f D (92). PROPOSAL Offers are invited fr the freehld interest in excess f 10,250,000, subject t cntract and exclusive f VAT, reflecting an attractive net initial yield f 5.50% (assuming purchaser s csts f 6.70%) and a capital value f 878 per sq ft n the NIA. 14/15

16 CONTACT Ed Bush T +44 (0) M +44 (0) E ed.bush@knightfrank.cm Kate Hrtn T +44 (0) M +44 (0) E kate.hrtn@knightfrank.cm Imprtant Ntice 1. Particulars: These particulars are nt an ffer r cntract, nr part f ne. Yu shuld nt rely n statements by Knight Frank LLP in the particulars r by wrd f muth r in writing ( infrmatin ) as being factually accurate abut the prperty, its cnditin r its value. Neither Knight Frank LLP nr any jint agent has any authrity t make any representatins abut the prperty, and accrdingly any infrmatin given is entirely withut respnsibility n the part f the agents, seller(s) r lessr(s). 2. Phts etc: The phtgraphs shw nly certain parts f the prperty as they appeared at the time they were taken. Areas, measurements and distances given are apprximate nly. 3. Regulatins etc: Any reference t alteratins t, r use f, any part f the prperty des nt mean that any necessary planning, building regulatins r ther cnsent has been btained. Nne f the services r appliances have been tested and n warranty is given r is t be implied that they are in wrking rder. A buyer r lessee must find ut by inspectin r in ther ways that these matters have been prperly dealt with and that all infrmatin is crrect. 4. VAT: The VAT psitin relating t the prperty may change withut ntice. Knight Frank LLP is a limited liability partnership registered in England with registered number OC Our registered ffice is 55 Baker Street, Lndn, W1U 8AN, where yu may lk at a list f members names. Date f particulars: May 2016.