LLOYD S AVENUE LONDON EC3

Transcription

1 LLOYD S AVENUE LONDON EC3 reversionary freehold CITY OF LONDON office investment

2 2 3 OVERVIEW Freehold. Highly reversionary City of London investment. Situated in close proximity to Fenchurch Street Station and Lloyd s of London. Comprising approximately 23,815 sq ft (2,212 sq m) of lettable office and ancillary accommodation. Multi-let to eleven tenants with a weighted average unexpired term of 5.4 years to expiries and 3 years to breaks. Highly reversionary passing rent of 946,443 per annum exclusive, equating to a low overall average of per sq ft. Numerous lease events within the next 24 months. All leases excluded from the 1954 L&T Act. Tangible asset management opportunities exist to enhance value including: Re-gearing leases; Negotiating rent reviews effective from 2018; Upgrading floors and re-letting on improved terms; Exploring alternative uses; Increasing floor area by relocating roof top plant/central service core into the rear service yard, subject to planning. PROPOSAL Offers in excess of 18,500,000 are invited, subject to contract, for the freehold interest. This reflects a net initial yield of circa 4.80% and a capital value of 777 per sq ft, assuming purchaser s costs of 6.80%.

3 4 The Shard 5 10 LLOYD S AVENUE Tower Hill Fenchurch Street 20 Fenchurch Street Lloyd s of London Leadenhall Building 30 St Mary Axe The Botolph Building Liverpool Street

4 6 7 LOCATION The property occupies a highly prominent corner position with frontage to Lloyd s Avenue and Crutched Friars. 10 Lloyd s Avenue is situated directly east of Fenchurch Street Station, and approximately 350 metres from Lloyd s of London, the focal point of global insurance. Lloyd s of London, the world s oldest and leading specialist insurance market, is home to in excess of 50 managing agents and 80 syndicates. Lloyd s Avenue neighbours the Aldgate / Whitechapel / Brick Lane sub-markets. This area has witnessed explosive growth in recent years, driven largely by the Technology, Media and Telecommunications (TMT) and creative sectors. There has also been significant high density, high value, residential and mixed use development along the eastern City fringe, notably Leman Street, Tower Hill, East Smithfield and London Dock, coupled with major regeneration at St Katharine Docks to the south. Extensive hotel led development has also taken place. Collectively these initiatives have created a vibrant 24/7 location with exceptional amenity.

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6 FO L HANBURY NO RT ON BROADGATE LIVERPOOL LOCAL DEVELOPMENTS TE BI ET RE ST D OA ALDGATE AL TOWER GATEWAY EE T TR RC ST 4 The White Chapel Building 9 3 Minster Court, EC3 Developer: Ivanhoe Cambridge & Greycoat Size: 275,000 sq ft PC: Q (TBC) 10 One Braham Street, E1 Developer: Starwood Capital / Aldgate Developments Size: 300,000 sq ft PC: Q One Creechurch Place 6 The Relay Building Developer: Hondo Enterprises / Angelo Gordon Size: 97,000 sq ft PC: Fenchurch Street, EC3 Developer: Partners Group & Marick Developments Size: 240,000 sq ft PC: Q Vanquish, 18 Aldgate Place, E1 13 Emperor House & Roman Developer: Mitsui Fudosan / Stanhope Size: 175,000 sq ft PC: 2014 Developer: Derwent London Size: 270,000 sq ft PC: EET T STR L MIN ROYA OW 3 70 Mark Lane, EC3 ET TT ER STRE Dixon House, 1 Lloyd s Avenue, EC3 Developer: Greenoak / MAPFRE Size: 60,000 sq ft PC: Q RE T EET T STR 3 EA 7 10 Fenchurch Avenue, EC3 Developer: CORE / Generali Size: 400,000 sq ft PC: Q ST 13 CO GR 2 Aldgate Tower Owner: ChinaLife / Brookfield Size: 317,000 sq ft PC: 2014 N 8 PRES Fenchurch Street Developer: Canary Wharf Group / Land Securities Size: 685,000 sq ft PC: 2014 MA LE 16 TREE ELL S HS A 11 FENCHURCH 17 ROAD LI RIES N FE 7 S T ES MANS H RC U CH ET RE TE ET E TR ST MINO MES AL 10 A DG LL COMMERCIAL AT DG 5 GH I EH E RE T ET LEADENHA EC ST H G HI 17 E T H S E ESTR T E RE AN EE R ST BR EX C IT SD D H W HA L ICK BR S LE T EE TR D ID N U EL P HA RO W 6 IT L PE EC T HI ALDGATE EAST O O Offices Pipeline AD LS M A number of high profile developments have been undertaken in the vicinity which has greatly improved the status of this location, BE the diversity of the occupier base V and levels IS M A of amenity. RK Offices Completed CIA ER MM CO SH OP SG A W H LD ET STRE RTH O ENTW TOWER HILL RE ET ET Developer: Helical / HOOPP Size: 272,500 sq ft PC: 2016 Hotels Trinity Square, EC3 Developer: Reignwood Size: 100-room hotel, 41 residences, retail and leisure use PC: Q Residential 15 Citizen M Tower Of London Developer: CitizenM Size: 370 room hotel PC: Aldgate Bus Station, 16 Minories, EC3 Developer: 4c Hotels Size: 300 room hotel PC: Q Goodman s Fields, E1 Developer: Berkley Homes Size: 7 acre mixed-use scheme, 920 new homes, student housing, hotel, 112,000 sq ft of retail and leisure PC: Developer: British Land / Baratt London Size: 463 new homes, office, hotel and retail use PC: Wall House, Crutched Friars Planning Consent granted for a new 200,000 sq ft office building. New owners are working up business plan incorporating alternative uses. 40 Leadenhall Street, EC3 Developer: THRE Size: 878,000 sq ft PC: Q2 2020

7 12 13 COnnectivity 10 Lloyd s Avenue benefits from excellent transport communications. It is situated directly adjacent to Fenchurch Street station and is within a short walk of Liverpool Street, Cannon Street, Monument, Aldgate, Tower Hill and Tower Gateway stations. LIVERPOOL WENTWORTH MOORGATE PRINCES BANK KING WILLIAM CANNON CORNHILL THREADNEEDLE MONUMENT GRACECHURCH OLD BROAD LOWER THAMES BISHOPSGATE 750 METRES GREAT TOWER 650 METRES LEADENHALL 100 METRES FENCHURCH HOUNDSDITCH BEVIS MARKS FENCHURCH ALDGATE 300 METRES 600 METRES 200 METRES MIDDLESEX ALDGATE COMMERCIAL ALDGATE HIGH WHITECHAPEL HIGH MINORIES TOWER HILL MANSELL TOWER GATEWAY ALDGATE EAST ROYAL MINT ALIE PRESCOT STATION DISTANCE SERVICES Fenchurch Street 100 metres Rail: Mainline rail services to Essex & East Anglia Tower Hill & Tower Gateway Aldgate & Aldgate East 200 metres Underground: Circle, District. Docklands Light Railway (DLR) to Canary Wharf & London City Airport 300 metres Underground: Circle, District, Hammersmith & City, Metropolitan Monument 600 metres Underground: Circle, District, Waterloo & City and Northern via link with Bank Liverpool Street 650 metres Underground: Circle, Hammersmith & City, Metropolitan and Northern. Rail Services to Essex, Cambridgeshire, Norfolk and Suffolk. Stansted Express rail service Bank 750 metres Underground: Central, Northern and Waterloo & City. Docklands Light Railway (DLR) to Canary Wharf & London City Airport. THE ELIZABETH LINE (CROSSRAIL) Communications will be further enhanced by the arrival of Crossrail at Liverpool Street in LUTON 85 MINUTES The c. 15 billion Crossrail project is Europe s largest infrastructure project. The services will be fully integrated with London s existing transport network. State-of-the-art trains will carry an estimated 200 million passengers per year and will bring and extra 1.50 million people to within 45 minutes of central London. STANSTED 70 MINUTES Approximate journey times from Liverpool Street Station: 40 CITY 35 MINUTES HEATHROW PADDINGTON BOND FARRINGDON LIVERPOOL CANARY WHARF STRATFORD HEATHROW 50 MINUTES (35 MINUTES FROM 2018 VIA CROSSRAIL) 35 MINS 9 MINS 7 MINS 2 MINS 6 MINS 8 MINS GATWICK 60 MINUTES

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9 16 17 DESCRIPTION 10 Lloyd s Avenue was refurbished around an existing frame in 1997, having originally been constructed in the 1980 s. The reception was upgraded in 2016 and a partial upgrade of the common areas was also undertaken at this time. The building provides 23,815 sq ft (2,212 sq m) of lettable office and ancillary accommodation arranged over basement, ground and seven upper floors. All office accommodation is located at ground floor level and above. The floorplates are column free and have excellent levels of natural daylight from three elevations. Access to the property is via a well-proportioned reception. This leads to two six-person passenger lifts. There is a large service yard to the rear, accessed from Crutched Friars. This houses three car parking spaces and bike racks. Amenities include:- Full height glazed fenestration on first to sixth floors. Column free floorplates. Four pipe fan coil air conditioning. Raised access floors. Metal tiled suspended ceilings (the 1st floor has mineral fibre tiles). Two six-person passenger lifts. Male and female WCs at each level. Impressive seventh floor roof terrace. Basement showers. Three car parking spaces and bike racks.

10 18 19 ACCOMMODATION The property has been measured by Murphy Surveys in accordance with the RICS Code of Measuring Practice (6th Edition) and comprises the following approximate net internal floor areas. FLOOR USE AREA (SQ FT) AREA (SQ M) Seventh Offices 2, Sixth Offices 3, Fifth Offices 3, Fourth Offices 3, Third Offices 3, Second Offices 3, First Offices/Medical 2, Ground Offices 1, Ground Reception Basement Storage AGGREGATE 23,815 2,212.5 The property has also been measured to the International Measuring Standards. These areas can be provided upon request.

11 20 21 IMPRESSIVE VIEWS from THE SEVENTH FLOOR ROOF TERRACE

12 22 23 GROUND FLOOR TyPICAL FLOOR (4th) LLOYD S AVENUE OFFICE WC WC RECEPTION LOBBY STAIRCASE OFFICE CRUTCHED FRIARS WC WC OFFICE LOBBY STAIRCASE FIRST FLOOR SEVENTH FLOOR TERRACE WALL OUTLINE FROM FLOOR BELOW (GROUND FLOOR) OPEN TO BELOW RESTRICTED HEADROOM 1.5M OFFICE OFFICE STAIRCASE STAIRCASE WC WC LOBBY LOBBY WC WC RESTRICTED HEADROOM 1.5M RESTRICTED HEADROOM 1.5M Not to scale. Indicative only. Not to scale. Indicative only.

13 24 25 TENANCIES 10 Lloyd s Avenue is multi-let to eleven tenants in accordance with the tenancy schedule below. The contracted rent of 946,443 per annum exclusive equates to per sq ft overall. The first to fifth floors (16,100 sq ft) are let at an average rent of per sq ft. The seventh floor has recently been let at 64 per sq ft and accordingly the building is highly reversionary. The asset has a weighted average unexpired lease term of 5.4 years to lease expiries and 3 years to tenant s breaks, as of March All leases are excluded from the Landlord and Tenant Act 1954 and are drawn on effective full repairing and insuring terms. TENANCY SCHEDULE TENANT FLOOR USE AREA (SQ FT) LEASE START DATE LEASE EXPIRY DATE NEXT RENT REVIEW DATE CONTRACTED RENT ( PA) Hutchinson 3G UK Ltd Part Roof Mast - 19/05/ /05/ /05/ ,213 - Landlord s option to determine for refurbishment or redevelopment, upon serving twelve months notice. Three yearly upwards only rent reviews to the greater of Open Market Rent or annual RPI rent review outstanding. Indexation supports an uplift to 23,240 per annum. Market evidence supports 25,000 per annum. Service charge capped at 665 per annum plus annual RPI. Hill International Ltd Seventh Offices 2,311 16/01/ /01/ , Rent commencement date 16/09/2017 to be infilled by Vendor. Hill International N.V. act as surety. Six month rent deposit. Service charge capped at 32,410 per annum ( per sq ft) plus annual RPI. Synarbor Ltd Sixth Offices 3,399 22/06/ /06/ /06/ , Just Teachers Ltd act as surety. Tenant s option to determine as at 21/06/2021, upon serving six months notice. Four months rent free if break not exercised. Global Listings Ltd Fifth Offices 3,401 07/06/ /06/ , Service charge capped at 42,225 per annum ( per sq ft) plus annual RPI. Xenomorph Software Ltd Fourth Offices 3,407 15/11/ /11/ /11/ , Tenant s option to determine as at 14/11/2018, upon serving six months notice. Nine months rent free if break not exercised. Service charge capped at 42,318 per annum ( per sq ft) plus annual RPI. Lease subject to a schedule of condition. Salvation Army Housing Association Hanjin Heavy Industries & Construction Co. Ltd RENT ( PSF) COMMENTS Third Offices 3,406 05/10/ /10/ , Service charge capped at 38,649 per annum ( per sq ft) plus annual RPI. Second (Front) Offices 1,341 10/02/ /02/ /02/ , Tenant s option to determine as at 10/02/2019, upon serving six months notice. Five months rent free if break not exercised. Lease subject to a schedule of condition. Carter Perry Bailey LLP Second (Rear) Offices 2,038 28/04/ /04/ , Tenant s option to determine as at 28/04/2019, upon serving six months notice. Six months at half rent if break not exercised. Service charge capped at 24,403 per annum ( per sq ft) plus annual RPI. Lease subject to a schedule of condition. General Medical Clinics Ltd First Offices or Medical 2,507 29/09/ /09/ /09/ , Tenant s option to determine as at 28/09/2018, upon serving six months notice. Service charge capped at 29,904 per annum ( per sq ft) plus annual RPI. Netroadshow, Inc Ground (North) Offices /09/ /09/ , Thornton Tomasetti Ltd Ground (South) Offices /09/ /09/ , Global Listings Ltd 1 Car Space /06/ /06/2018-2, Vacant Basement Storage , Vendor to provide a twelve month rent top up. Vacant 2 Car Spaces ,000 - Vendor to provide a twelve month rent top up. TOTAL 23,815* 946,443 * Including reception of 210 sq ft

14 26 27 TENANT S PROFILE Synarbor Ltd / Just Teachers Ltd surety Global Listings Ltd Carter Perry Bailey LLP Hanjin Heavy Industries & Construction Co. Ltd (20.2% of contracted rent) (11.2% of contracted rent) (6.6% of contracted rent) (4.3% of contracted rent) Just Teachers Ltd is a leading supplier of teachers, nursery nurses and support staff into schools, colleges and nurseries nationwide. Further information is available at Global Listings is a TV-based international media company specialising in the supply of comprehensive programme information; Press Schedules, EPG s, Video On Demand, TV Highlights, TV Listings, Subtitled and Translations. The company employs an editorial team of 200+ staff across 100 countries. Further information is available at Carter Perry Bailey LLP Carter Perry Bailey LLP is a specialist niche law firm, practicing in both contentious and non-contentious insurance and reinsurance, commercial litigation, arbitration and trust and fiduciary disputes. The practice was established in Further information is available at Established in Korea in 1937 as a shipbuilder, HHIC has built approximately 1,000 ships of various kinds. Business lines include: Construction (airports, bridges and infrastructure etc) Shipyards Power generation Sustainable energy Further information is available at Hill International Ltd / Hill International N.V - surety (15.6% of contracted rent) Hill is a publicly-traded company listed on the New York Stock Exchange. It is one of the largest construction consulting firms in the world providing project management and construction claims services to public and private clients worldwide. Hill has 4,600 professionals in 100 offices worldwide. Further information is available online at Salvation Army Housing Association (10.1% of contracted rent) Salvation Army Housing Association (SAHA) are a registered provider and an exempt charity that started developing housing and services in They are a wholly controlled subsidiary of The Salvation Army. Further information is available at NetRoadshow, Inc (4.6% of contracted rent) Founded in 1997, NetRoadshow provides U.S. Securities & Exchange Commission (SEC) compliant online solutions for the global banking community. NetRoadshow has offices in New York, Atlanta, London, Hong Kong, San Fransisco and Los Angeles. Further information is available at Thornton Tomasetti Ltd (4.2% of contracted rent) Thornton Tomasetti provides engineering design, investigation and analysis services to clients worldwide. The organisation has 1,200 engineers, architects, sustainability practitioners and support professionals. Further information is available at Xenomorph Software Ltd General Medical Clinics Ltd (11.3% of contracted rent) (8.6% of contracted rent) Xenomorph was established in 1995, has offices in London, New York and Singapore and is a privately owned company. The company develops software solutions for financial markets. The company s products are used by trading, research, risk, product control, IT and back-office staff at investment banks, brokerages, insurers, hedge funds and asset management companies. The business has 25 years of experience and a large and growing base of blue chip clients. Fields of expertise / business lines include: Occupational health and specialist medical Corporate wellness and health screening Private GP services Further information is available at Further information is available at

15 28 29 TENURE PLANNING MARKET COMMENTARY The property is held Freehold, under title number NGL The approximate extent of the freehold ownership is outlined in red on the Ordnance Survey extract plan below. Lloyd's Registry 2 S AVENUE 10 Marlow House 3 LLOYD'S AVENUE 8 6 NORTHUMBERLAND ALLEY Sutherland House The local planning authority is the City of London Corporation. The property is not listed. It is however situated within the Lloyd s Avenue Conservation Area. 5 Friary Court RANGOON CRUTCHED FRIARS 6 Boun 3 to 5 CRUTCHED FRIARS 2 Lutidine House Jardine House 1 WB City Occupational Market City s take-up for the final quarter of 2016 totalled 2,0 m sq ft, the highest since Q and a 63% increase on the previous quarter s level. Activity was well above the long-term quarterly average of 1.7 m sq ft, and was driven by strong activity across the whole market. There were three transactions in excess of 100,000 sq ft, the largest being the FT s pre-letting of 186,000 sq ft Bracken House, EC4. The TMT sector once again dominated the City letting profile; the sector accounted for 32% of take-up. Over the course of 2016, TMT occupiers have acquired in excess of 1.4 m sq ft, more than any other business sector. City Investment Market There has been significant increase in the level of active requirements from financial sector tenants. At the year-end, the financial sector accounted for 994,000 sq ft of active demand, a rise of 58% over the previous quarter and the highest since Q Availability remained relatively stable in the final quarter at 7.7 m sq ft, reflecting a vacancy rate of 6.6%. Supply remains well below the long-term average 9.3 m sq ft, although it is 30% above its level at this point last year. The prime rent in the City remained stable at per sq ft for the fifth consecutive quarter. Rent free periods remained unchanged from the previous quarter s level and are typically 6-9 months on a five year term certain commitment. Total City Investment turnover for 2016 was down 28% on 2015 however Q investment turnover totalled 2.7bn, up 133% on the previous quarter and 44% above the long-term average of 1.8bn. Availability at the end of Q totalled 2.32bn, 23% down on the previous quarter and with 1.1bn of this figure under offer there remains a significant shortage of investment stock. Prime City yields remained unchanged at 4.25% at the end of 2016 largely due to demand, especially from overseas investors significantly outstripping supply. 10 Key Investment Transactions Cycle Hire Station Address Tenure WAULT (Years) Price Yield Cap Val (psf) Date FENCHURCH PH Eastcheap, EC3 Freehold m 4.03% 909 Dec Cornhill, EC3 Freehold m 4.43% 988 Dec Camperdown Street, E1 Freehold m 4.17% 602 Dec CRUTCHED FRIARS Savage Gardens 26 9 One America Square 62 Cornhill, EC3 Freehold m 4.48% 980 Sep Eastcheap, EC3 Freehold m 4.61% 1,005 Sep DoubleTree by Hilton COOPER S ROW BPs 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

16 30 FURTHER INFORMATION SERVICE CHARGE The service charge budget for the year 2017 is 334,266 equating to per sq ft. All tenants contribute towards service charge. Certain leases provide for capped service charge provisions which increase annually in line with RPI. The current budget is anticipated to produce an income shortfall of circa 37,709. Further information is available upon request. ENERGY PERFORMANCE CERTIFICATE The EPC Rating for 10 Lloyd s Avenue is D (98) (Certificate Number: ). Further information is available on request. CAPITAL ALLOWANCES No capital allowances are available. VALUE ADDED TAX The property is elected for VAT. It is envisaged that the sale will be structured by way of a Transfer of a Going Concern (TOGC). PROPOSAL Offers in excess of 18,500,000 are invited, subject to contract, for the freehold interest. This reflects a net initial yield of circa 4.80% and a capital value of 777 per sq ft assuming purchaser s costs of 6.80%. CONTACT For further information please contact the Vendor s joint agents: LIME LONDON, EC3M 7AY Douglas Hall Tel: +44 (0) douglas.hall@hallkemp.com WOOLGATE EXCHANGE, 25 BASINGHALL, LONDON, EC2V 5HA Mark Lock Tel: +44 (0) mark.lock@knightfrank.com Aneta Popiel-Blachnio Tel: +44 (0) aneta.popiel-blachnio@knightfrank.com

17 MISREPRESENTATION ACT 1967 & DECLARATION Hall Kemp (trading name of HK Property Services Ltd) and Knight Frank LLP for themselves and for the vendors of this property who agents they are give notice that:- a) the particulars are set out as general outline only for the guidance of intending purchaser s and do not constitute, nor constitute part of, or an offer or contract; b) all descriptions, dimensions, references or 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 s should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of them; c) no person in employment of Hall Kemp (trading name of HK Property Services Ltd) and Knight Frank has any authority to make or give any representation or warranty whatever in relation to this property. PROPERTY MISDESCRIPTION ACT 1991 These details are believed to be correct at the time of compilation but may be subject to subsequent amendment. February 2017.