4-5LOCHSIDEWAY EDINBURGH PARK EH12 9DT

Transcription

1 4-5LOCHSIDEWAY EDINBURGH PARK EH12 9DT FOR SALE/TO LET 41,958 SQ FT OUTSTANDING OFFICE REFURBISHMENT OPPORTUNITY WITH INCOME SECURED UNTIL NOVEMBER 2019

2 02 INVESTMENT SUMMARY LOCHSIDE WAY IS ARGUABLY THE MOST CONNECTED EDINBURGH PARK OFFICE BUILDING SITUATED NEXT TO THE EDINBURGH PARK CENTRAL TRAM HALT. LANDMARK GRADE A OFFICE FITTED OUT TO AN EXCEPTIONALLY HIGH STANDARD TO FORM A REGIONAL HEADQUARTERS BUILDING, PROVIDING TOTAL ACCOMMODATION OF 41,958 SQ FT (3, SQ M) 150 DEDICATED CAR PARKING SPACES PROVIDING AN EXCELLENT RATIO OF 1:280 PER SQ FT CURRENTLY LET TO THE OUTSTANDING COVENANT OF DIAGEO SCOTLAND LIMITED (D&B RATING OF 5A1) AT 812, PER ANNUM, EQUATING TO A LOW RENT OF ONLY PER SQ FT UNTIL NOVEMBER OFFERS ARE SOUGHT IN EXCESS OF 8.5 MILLION EXCLUSIVE OF VAT FOR OUR CLIENT S HERITABLE INTEREST, REFLECTING A NET INITIAL YIELD OF 9% AND A LOW CAPITAL RATE PER SQ FT OF OUTSTANDING REFURBISHMENT OPPORTUNITY WITH THE OPTION TO INCREASE NET LETTABLE FLOOR AREA SUBSTANTIALLY AND RE-CONFIGURE THE ENTRANCE, SUBJECT TO OBTAINING THE NECESSARY PLANNING CONSENTS 8 ALTERNATIVELY THE BUILDING IS AVAILABLE TO LEASE ON FULL REPAIRING AND INSURING TERMS TO BE AGREED FROM THE LEASE EXPIRY IN NOVEMBER 2019 EDINBURGH PARK IS SCOTLAND`S PREMIER BUSINESS PARK, PROVIDING HIGH QUALITY OFFICE ACCOMMODATION TO OVER 30 OCCUPIERS EMPLOYING OVER 7,000 PEOPLE

3 03 EDINBURGH AIRPORT - 12 MINUTES EDINBURGH PARK CENTRAL - 1 MINUTE WALK HAYMARKET STATION - 14 MINUTES PRINCES STREET - 20 MINUTES

4 04 LOCATION Edinburgh, Scotland s capital city and UNESCO World Heritage Site, sits at the heart of a diverse regional economy that provides the seat of Scotland s government, is home to the nation s legal system and is a globally recognised financial centre. The city has a population of approximately 498,800 and sits within a large regional catchment of more than 1.6 million people. Edinburgh is one of the fastest growing and most productive cities in the UK. EDINBURGH`S BIGGEST STRENGTH IS THE RANGE OF SUCCESSFUL TECHNOLOGY COMPANIES IN THE CITY. MANY OF THEM WERE STARTED IN THE CITY AND ARE NOW COMPETING ON THE WORLD STAGE. SOME OF THE BEST KNOWN NAMES INCLUDE SKYSCANNER, FANDUEL, CRANEWEAR, FREEAGENT, ROCKSTAR, MIICARD, NUCLEUS FINANCIAL, ZONEFOX AND LENDING CROWD. Edinburgh is recognised for its strength in banking, investment management, and asset services. Measured by equity assets under management, the city is ranked as one of Europe s largest financial centres. In addition, it has 500 billion worth of funds under management, ranking it as the eleventh largest hedge fund management centre in the world. The city is home to financial institutions such as Aberdeen Standard Investments, Royal Bank of Scotland, Lloyds Banking Group, Clydesdale Bank, Virgin Money and Tesco Bank. Green Investment Bank and Sainsbury s Bank both chose Edinburgh as their home, further enhancing the city s reputation as a global financial centre. High value service industries account for 86% of Edinburgh s employment. It is therefore not surprising that Edinburgh s gross value added (GVA) per head is 1.7 times the UK average, totalling 34,562. The city has a strong educational heritage, boasting four universities providing an education hub for over 100,000 students, including 16,000 international students, making it the most popular destination (after London) for overseas students wishing to study at universities within the UK. This in part accounts for Edinburgh s workforce being one of the most highly educated in the UK with 55% holding a degree or professional level qualification. Edinburgh attracts 3.5 million tourists every year and is the second most visited city in the UK after London. In addition, the city is host to the world s largest annual arts festival adding an estimated 245 million to the local economy.

5 05 EDINBURGH PARK Edinburgh Park is Scotland s premier business park, providing high quality office accommodation to over 30 occupiers employing over 7,000 people. Edinburgh Park was established in the early 1990s as a joint development between Miller Group and City of Edinburgh Council. Since then it has become one of the UK s foremost business locations consistently attracting high calibre international companies to set up regional and national headquarters. The entire park extends to over 148 acres and over 1 million sq ft of office accommodation. Edinburgh Park is situated approximately 6 miles west of Edinburgh city centre and 2 miles east of Edinburgh International Airport. The Park offers high quality office accommodation and excellent on-site amenities within a tranquil setting. Edinburgh Park is home to over 30 of the UK s top companies including: JP Morgan, HSBC Securities, WSP, Origo Services, Lloyds Bank and Sainsbury s Bank. FUTURE DEVELOPMENT The remaining development land between 4-5 Lochside Way and Edinburgh Park train station was purchased by Parabola in late The site extends to 50 acres and benefits from planning permission for 2 million sq ft of offices, hotel and retail. Parabola are due to submit a new planning application for the land which will comprise a mixed use scheme of residential, retail, hotel and offices. The offices will be spread across 7 buildings, extending to 632,000 sq ft.

6 06 Edinburgh Gateway Train/ Tram Station Gyle Centre KEY 1. Business Stream 2. RSPB 5 3. JP Morgan 4. SLR Consulting BT 6. Fujitsu 7. Menzies Distribution 8 8. Sainsbury s Bank 9. Agilent Edinburgh Park Central LOCHSIDEWAY HSBC 11. JLT 12. Lloyds Bank 13. Aegon/Kaimes Capital 14. Energize Fitness & Spa 15. Regus 16. Pre-let To Diageo 17. Lockheed Martin 18. HSBC Securities 19. RBS

7 07 COMMUNICATIONS Edinburgh Park is served by excellent transport links throughout Edinburgh and further afield. FORTH ROAD BRIDGE & NORTH M90 EDINBURGH INTERNATION- AL AIRPORT A902 A90 A902 M9 GLASGOW & WEST EASTFIELD ROAD A8 M8 EDINBURGH GATEWAY HERMISTON GAIT GYLE SHOPPING CENTRE SOUTH GYLE EDINBURGH PARK A8 A71 HAYMARKET WAVERLEY EDINBURGH CITY CENTRE EDINBURGH CITY BYPASS A720 A70 CAR Edinburgh Park lies adjacent to the Edinburgh City Bypass, with the M8 motorway easily accessible and offering links to Scotland s main motorway networks: Glasgow 45 mins Newcastle 2 hrs Aberdeen 2 hrs BUS There are three bus stops in the area, with several routes (2, 12, 18, 20, 21, 22, 36, 63, 300) passing through Edinburgh Park providing connections to all corners of the city, including: Gyle Shopping Centre 2 mins City centre 25 mins Ocean Terminal 57 mins Airport 15 mins TRAM In 2014 the highly anticipated Edinburgh Tram was launched. This integrated with the wider Edinburgh transport network and provided a dedicated link between the airport, Edinburgh Park and the city centre. The line comprises 16 stops and extends to 8.7 miles, with services running every 10 minutes. Edinburgh Park is served by several stops and Edinburgh Park Central tram halt is immediately outside 4-5 Lochside Way, allowing for quick access to the airport and city centre: Airport 12 mins Haymarket 14 mins Princes Street 20 mins St Andrew Square 23 mins PLANE Edinburgh International Airport provides flights to over 130 destinations both domestic and global, recently starting flights to Dubai. Only 5 minutes from Edinburgh Park, the airport processes more than 12.5 million passengers every year, and over 26 million forecast by 2030: London 1 hr 10 mins Brussels 1 hr 40 mins Paris 1 hr 50 mins Amsterdam 1hr 20 mins Frankfurt 1hr 55 mins New York 6hrs 30 mins TRAIN Edinburgh Parks dedicated railway station is 5 minutes walk and provides direct access to Edinburgh`s two main railway stations at Waverley and Haymarket, providing frequent services to and from all main UK cities, together with local train services to Glasgow and other locations throughout Scotland: Glasgow 50 mins Newcastle 1 hr 30 mins Aberdeen 2 hrs 15 mins London 4 hrs 20 minutes

8 08 AMENITIES Edinburgh Park offers a superb setting for business and living, benefitting from a wide range of facilities and services available on site or in the immediate vicinity, including retail provision at The Gyle shopping centre and Hermiston Gait retail park. The Park Centre offers a gym and swimming pool, nursery and bar/ brasserie. Hotels on the Park include Novotel, Premier Inn and Ibis. There is an underpass adjacent to Aegon s headquarters, which provides pedestrian access to the Gyle Shopping Centre from the north end of the Park. THE GYLE SHOPPING CENTRE Edinburgh s Gyle Shopping Centre offers a wide choice of established national retail outlets and small specialist shops under one roof in a relaxed and stylish environment. The centre is home to Marks & Spencer clothing and food court, Next, Boots, New Look and other recognised retailers. It hosts a number of casual restaurants, including Frankie & Benny s and Costa. There are also plans to extend the centre, with the addition of a cinema and an increase in the number of leisure units.

9 09 DESCRIPTION The property, designed by Alan Murray Architects, was built in 1999 and provides a striking landmark building constructed over ground and two upper levels clearly visible from the Edinburgh City Bypass. It overlooks one of the central lochs and benefits from an attractive outlook with excellent natural light throughout. Built to a Grade A open plan specification, the property has been fitted out by the existing tenant to an exceptional standard to include: Clear floor to ceiling height of 2.7m Category 5 cabling Suspended ceilings with recessed computer capability lighting Substantial canteen and client bar facility Two 10-person (800kg) passenger lifts The property would benefit from a refurbishment and the opportunity exists to re-model the entrance and substantially increase the floor area following the lease expiry. GROUND FLOOR 13,724 SQFT Raised access floors throughout office areas Full air-conditioning by Variable Air Volume (VAV) system FLOOR SQFT SQM Ground (Reception) The property benefits from 150 dedicated car parking spaces, offering an unrivalled car parking ratio of 1:280 per sq ft. The property has the net internal areas shown below. Ground 13,724 1, First 13,787 1, Second 14,179 1, TOTAL 41,958 3, FIRST FLOOR 13,787 SQFT SECOND FLOOR 14,179 SQFT

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11 11 ASSET MANAGEMENT INITIATIVES Comprehensively re-design the subjects to include improvement of the entrance and the potential to re-locate the plant and increase floor area Refurbish the existing M & E throughout Consider extending the building towards the southern elevation Benefit from the unexpired income giving the opportunity to obtain the necessary planning consents Enter into negotiations surrounding the terminal dilapidations with the existing tenant

12 12 COVENANT Diageo Scotland Limited is part of the Diageo Group, global leaders in premium drinks business, with an exceptional collection of over 200 internationally recognised brands across spirits, beers and wines, reaching more than 180 countries world-wide. These labels include Tanqueray, Captain Morgan, Johnnie Walker and Smirnoff. GLOBAL LEADERS IN PREMIUM DRINKS BUSINESS A summary of the last three years accounts is as follows: DESCRIPTION Y/E 30 JUNE 2015 Y/E 30 JUNE 2016 Y/E 30 JUNE 2017 TURNOVER 1,144 million 1,060 million 1,132 million PRE-TAX PROFIT 307 million 216 million 277 million NET ASSETS / WORTH 2,005 million 1,937 million 2,082 million

13 13 OCCUPATIONAL MARKET COMMENTARY INVESTMENT MARKET The West Edinburgh office market is Scotland s 4th largest office market. Unlike the majority of regional cities in the UK Edinburgh s out of town market is well connected by public transport and is closely linked to the city centre. This allows businesses to co-locate between Edinburgh Park and the city centre whilst still being able to operate between buildings easily was an exceptionally strong year for take-up in the Edinburgh market, exceeding 1,1m sq ft to include several major pre-lets to the GPU at New Waverley, State Street Bank at Quartermile 3, Standard Life Aberdeen at 10 George Street and Computershare at 4 North. The Edinburgh Park market has started 2018 strongly with a pre-letting to Diageo of 40,000 sq ft at Lochside Place. With the acute shortage of space we anticipate Grade A rents within Edinburgh Park will shortly be in the region of 25 psf. Edinburgh has a proven track record in attracting investment from national and international investors, with strong market fundamentals, its status as a capital city and its CECI placing as second in UK rankings of HOT 100 UK office locations all adding to the attraction. The last 24 months has witnessed circa 1bn of Edinburgh office transactions with buyers including GLL, Aberdeen, Triuva, Deka, Trinova, Legal & General, Patrizia, Al Rashed & Sons Group, MAS and Rockspring all making significant acquisitions. We are also aware of ongoing demand being shown from a full range of Institutional, overseas and private investors. We are of the view that prime city centre yields are currently evidenced at 5% but we are predicting these to dip closer to 4.5% as the market evolves over the coming 6 months. We believe this flight to quality will continue from occupiers seeking the best space and in turn investors seeking to acquire these properties.

14 14 INVESTMENT PROPOSAL We are instructed to seek offers in excess of 8.5 million exclusive of VAT for our client s heritable interest, reflecting a net initial yield of 9% and a low capital rate per sq ft of CAPITAL ALLOWANCES There will be no capital allowances available with this property unless by separate negotiation. VAT The property is elected for VAT and therefore VAT will be payable on the purchase price, however, it is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC). EPC An energy performance certificate has been prepared and is available upon request. LEASE TERMS Alternatively the building is available to lease on full repairing and insuring terms to be agreed from the lease expiry in November SPV The property is held in an Isle of Man Company and this could form part of the transaction. Further details are available upon request.

15 FURTHER INFORMATION For further information or to arrange an inspection please contact: Stephen Kay T: M: E: Nick White T: M: E: Gavin G Scott T: M: E: gavin@cuthbertwhite.com Chris Cuthbert T: M: E: chris@cuthbertwhite.com Sara Dudgeon T: M: E: sara@cuthbertwhite.com CuthbertWhite Ltd 38 Thistle Street Edinburgh EH2 1EN T: IMPORTANT NOTICE: CuthbertWhite Ltd for the Landlord of this property, whose agents they are, give notice that: 1. The particulars are intended to give a fair and substantially correct overall description for the guidance of intending tenants and/or purchasers and do not constitute part of an offer or contract. Prospective tenants and/or purchasers ought to seek their own professional advice. 2. All descriptions, dimensions, areas, reference 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 tenant and/or purchasers 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 CuthbertWhite Ltd has any authority to make or give any representations or warranty whatever in relation to this property nor enter into any contract on behalf of the Landlord. 4. No responsibility can be accepted for any expenses incurred by intending tenants and/or purchasers in inspecting properties which have been sold, let or withdrawn. Particulars prepared June 2018.