73-75 NORTH STREET GUILDFORD GU1 4AW PRIME MIXED USE INVESTMENT IN THE HEART OF GUILDFORD

Transcription

1 73-75 NORTH STREET GUILDFORD GU1 4AW PRIME MIXED USE INVESTMENT IN THE HEART OF GUILDFORD

2 INVESTMENT SUMMARY Guildford is a thriving employment centre with a highly affluent population. The town is regarded as the luxury shopping capital of the UK (outside of Central London) attracting some of the highest consumer spending in the South East. Guildford is a key South East office location which has attracted major corporate occupiers. The subject property benefits from a prominent location fronting North Street and is in close proximity to all town centre amenities. Nearby retailers include Laura Ashley, French Connection, Caffe Nero and House of Fraser. The property comprises a multi let retail and office building of 14,514 sq ft (1,384.4 sq m) arranged over ground, first, second and third floors. Office floors were fully refurbished to a high specification in May New 10 year FRI lease to Explore Learning (D&B rating of 3A1) at per sq ft with a guaranteed uplift at the fifth year linked to CPI (cap at 4% pa). Explore Learning use the offices as their UK headquarters and primary training facility. Four retail units at ground floor are fully let to Patisserie Valerie, Sally Salon services, Sevenoaks Sounds & Vision and Sanrizz. Total rent received is 541,050 per annum. Attractive AWULT of 8.2 years to expiry and 7.6 years to breaks. 89% of the income is considered very low risk. Freehold. Low supply of good quality office stock pushing prime rents to over per sq ft. Offers sought in excess of 8,450,000 (Eight Million, Four Hundred and Fifty Thousand pounds), subject to contract and exclusive of VAT. A purchase at this level represents a net initial yield of 6.00% after purchaser s costs of 6.68% NORTH STREET, GUILDFORD GU1 4AW

3 Maidenhead A404(M) Hayes Slough A312 M4 LOCATION Windsor Guildford is the principal commercial and administrative centre in Surrey and benefitsreading from a highly affluent catchment population. The town is located approximately 27 miles southwest of central London adjacent to the Surrey Hills Area of Outstanding National M4 Beauty. The town has excellent road communications with Junction 10 of the M25 located 9 miles to the north, accessed via the A3 dual carriageway. Guildford also benefits from excellent rail links with a regular mainline service from Guildford Station to London Waterloo, providing a fastest journey time of 35 minutes. The station accommodates over 8 million passengers per year, making it the busiest in station in Surrey. Heathrow and Gatwick Airports are within a 25-minute drive time and offer both domestic and international flights. Ascot Kingston upon Thames M3 Weybridge M3 Farnborough GUILDFORD A331 A23 Croydon A240 A3 Woking A214 Twickenham Bracknell M3 Guildford is an affluent and thriving employment centre which offers a strong commuter base and provides an excellent array of shopping and leisure amenities in the town centre together with higher education facilities at the University of Surrey. The town has become an attractive location for corporate occupiers including Electronic Arts, Sanofi Aventis, Avaya, Philips, BAE Systems and Colgate-Palmolive. In January 2018, Network Rail/Kier obtained planning permission for a 150m regeneration scheme at Guildford Station which will provide a new Gateway to the town. This will include a new station building, 438 new homes, 2,000 sq m of Grade A office space Alton and a radically enhanced station environment, with an attractive station plaza and high quality public realm. Around 25m of the total 150m funding will be spent on station improvements, with plans in place to provide a larger ticket hall anticipated to accommodate further passenger growth. Heathrow Airport A30 Wokingham A243 J10 Epsom A217 M25 A23 Leatherhead Caterham A3 A24 Aldershot Dorking Farnham M23 A31 Godalming A3 Bordon Horley Cranleigh A24 Gatwick Airport Crawley CONNECTIVITY Road Rail - Direct Services Distance Station Central London 27 miles London Waterloo 35 mins Reading 28 miles Reading 34 mins Southampton 59 miles Woking 8 mins Journey Time Airport Motorway Airport Distance M25 (J 10) 9 miles Heathrow 22 miles A3 2 miles Gatwick 26 miles 13 miles Farnborough 14 miles Southampton 58 miles Distance M3 (J4) A13 A4 M25 A329(M) LONDON M4 PRIME MIXED USE INVESTMENT IN THE HEART OF GUILDFORD A22

4 LON ATH DEC SITUATION The subject property is prominently located at the eastern end of North Street immediately adjacent to Laura Ashley. Other retailers nearby include RBS, HSBC, French Connection and Caffé Nero. North Street provides a good level of footfall due to the tenant mix and pedestrian flow between the Friary Centre (the primary shopping centre within the town) and High Street, the prime retail pitch which runs parallel to North Street. Guildford station is located 0.4 miles to the west of the subject property NORTH STREET, GUILDFORD GU1 4AW ET TRE HS HIG

5 University of Surrey Guildford Cricket Club Guildford Crown Court Guildford Railway Station Highways England The Friary Guildford Stevens & Bolton LLP White Lion Walk NOR HIG H ST REE T TH S TREE T The Friary Shopping Centre Development Site Royal Grammar School SUBJECT PROPERTY Tunsgate Quarter Yvonne Arnaud Theatre Guildford Castle PRIME MIXED USE INVESTMENT IN THE HEART OF GUILDFORD

6 RETAILING IN GUILDFORD The retail offer in Guildford is excellent with the town regarded as the luxury shopping capital of the UK (outside of Central London) attracting some of the highest consumer spending in the South East. Retail expenditure is expected to grow by 2.7% pa over the period (PMA), supported by 4 million tourists annually, an affluent residential catchment and a university population of approximately 16,000 students across University of Surrey, The College of Law and Guildford College. The prime pitch within Guildford is located on the pedestrianised section of the High Street, where key retailers include: M&S, House of Fraser, LK Bennett, Boots, H&M and Russell & Bromley. Recent in-movers include: Kikki.K, Masimo Dutti, Joules, Zara and Sweaty Betty. There are three shopping centres within the town including The Friary Centre, White Lion Walk and the recently refurbished Tunsgate Square. In September 2016, Guildford Borough Council chose M&G Real Estate (owners of the Friary Centre) as their preferred JV partner to develop a 23 acre site adjoining the Friary Centre on North Street. This scheme will significantly strengthen the North Street pitch providing better connectivity to the Friary Centre and an improved retail line up. Guildford is one of the few towns where rents have risen post-recession. Prime rents on the High Street were 240 Zone A in 2007 and now stand at 320 Zone A. Over the last decade, Guildford has achieved the highest level of prime rental growth outside London - evidencing the strength of its retail environment (PMA) NORTH STREET, GUILDFORD GU1 4AW

7 GUILDFORD OFFICE MARKET Guildford is an affluent and thriving commercial centre that has developed into a strong and well-established office market in the South East. The town s skilled labour force, working environment and excellent transport links to Central London have led to robust occupier demand from a number of national and international occupiers. The town has an estimated office stock of 3.1 million sq ft, split between the core town centre and out-of-town market. The town centre has been traditionally dominated by refurbished space, due to a lack of suitable development sites and has consequently witnessed a dearth of speculatively built Grade A stock. Current Grade A town centre availability stands at 300,000 sq ft (less than 1% of total office stock). Prime headline rents in Guildford increased to psf in Q (an increase of 2% over 12 months) evidenced by the Smith & Williamson letting at Onslow House and WSP at 2 London Square. A combination of insufficient levels of Grade A availability, strengthening occupier demand and the introduction of the first speculatively refurbished Grade A scheme (Pembroke House) in over 2 years, is set to drive rental tone further. We set out below a table of recent Grade A office lettings: Property Date Tenant Area Rent (psf) 2 London Square Q WSP 27, Onslow House Q Smith & Williamson 12, Pennell House Q Semafone 14, Hays House Q Fireproof Solutions 3, Tempus Court Q Tuffin Ferraby Taylor 2, Hays House Q Zennor Oil & Gas 4, Guildford Business Park Q Enstar EU 17, PRIME MIXED USE INVESTMENT IN THE HEART OF GUILDFORD

8 2 to 6 uildford Institute e DESCRIPTION The building comprises four retail units and three floors of fully refurbished office accommodation benefiting from a dedicated entrance fronting North Street. The offices (totalling 10,846 sq ft) benefit from the following specification, having undergone a substantial refurbishment to provide Grade A space: Reconfigured reception area Installation of new M&E plant including VRV air conditioning and one passenger lift Suspended ceilings with recessed modular LED energy efficient lighting Low level perimeter skirting trunking Fully refurbished male, female and disabled WC/shower facilities New double-glazed windows and roof covering (10 year warranty) Def 66 12c 13 12b NORTH STREET 67 to to 20 12a LB 73 73a 11 73b Bank 10 Shelter PCs Wallis House 1 to 9 Shelter TCB 1 2 Library The Old Cloth Hall The Brewhouse Jeffries Passage There is car parking at the rear for six vehicles. Furthermore, there are six pay and display car parking spaces at the front of the property. 60a to ACCOMMODATION 21 MARKET STREET The property has been measured by Lane & Frankham in accordance with the International Property Measurement Standards (1st Edition May 2015) and provides the following floor areas: 0m 10m 20m 30m Property Floor Tenant Sq Ft Sq M o North Street GF Retail Sally Salon Services Ltd GF 637 FF 197 ITZA 481 GF 59.2 FF A North Street GF Retail Stonebeach Ltd t/a Patisserie Valerie GF 661 FF 287 ITZA 467 GF 61.4 FF B North Street GF Retail Sevenoaks Sound & Vision Ltd GF 1,016 FF 226 ITZA 579 GF 94.4 FF North Street GF Retail Sanrizz Properties Ltd GF 644 ITZA 469 GF North Street Lobby Explore Learning Ltd North Street FF Office (NIA) Explore Learning Ltd 2, North Street SF Office (NIA) Explore Learning Ltd 4, North Street TF Office (NIA) Explore Learning Ltd 3, Total 14,514 1,348.4 *There is a basement of 853 sq ft (79.2 sq m) NORTH STREET, GUILDFORD GU1 4AW

9 TENURE Freehold. TENANCY The property is let to five tenants in accordance with the tenancy schedule below generating a total rental income of 541,050 per annum. The AWULT is 8.2 years to expiry and 7.6 years to breaks. All outstanding rent free periods to be topped up by the vendor. Unit Floor Use Tenant Area (sq ft) Area (sq m) Start Date Rent Review Break Date Expiry Date Rent (pa) 73 North Street Ground Retail Sally Salon Services Ltd /11/ /11/ , * 73A North Street 73B North Street Ground Ground Retail Retail Stonebeach Ltd t/a Patisserie Valerie Sevenoaks Sound & Vision Ltd Rent (psf) (ITZA) /11/ /11/ /11/ /11/ , * 1, /09/ /09/ , * Comments Five year reversionary lease signed on 03/07/2018 at 70,000 pa (uplift from 66,000 pa) which commences on 29/09/2018 (Vendor to top up) 75 North Street Ground Retail Sanrizz Properties Ltd /03/ /03/ /03/ , North Street Ground First, Second & Third Office Explore Learning Ltd 10,846 1, /05/ /05/ /05/ , Rent review geared to CPI (cap at 4% pa) in 5th year. 21 months rent free to be topped up by the vendor. Half rent on the ground floor lobby. Total 14,514 1, ,050 *First floor accommodation analysed at A/10. PRIME MIXED USE INVESTMENT IN THE HEART OF GUILDFORD

10 COVENANT INFORMATION Explore Learning Ltd Explore Learning Ltd (53% of income) was founded in 2001 and is based in Guildford at the subject property which is their UK HQ. The company has 137 centres nationwide and provides private learning services to children aged 4 to 14. Explore Learning was named in The Sunday Times Best Companies to Work For in 2016 for the fourth time. The company has a D&B Rating of 3A1 representing a minimum risk of business failure 31 Dec Dec Dec 2014 Sales/Turnover 42,786 37,562 31,552 Profit/Loss Before Taxes 3,236 2,186 2,575 Tangible Net Worth 14,236 11,889 10,739 Net Current Assets (Liabilities) 4,646 1,772 1,379 Sally Salon Services Ltd Sally Salon Services Ltd (11% of income) t/a Sally Beauty is a global brand with over 160 stores in the UK. Sally Beauty offers a wide range of professional hair and beauty products to trade and retail customers and stores are staffed with trained professionals. The company has a D&B Rating of 5A1 representing a minimum risk of business failure 31 Sep Sep Sep 2015 Sales/Turnover 151, , ,877 Profit/Loss Before Taxes 4,790 5,633 4,701 Tangible Net Worth 41,906 36,258 31,564 Sevenoaks Sound & Vision Ltd Sevenoaks Sound & Vision Ltd (13% of income) was founded in 1972 and specialises in audio, hi-fi and TV sales trading from 26 stores nationwide. The company has a D&B Rating of 2A1 representing a minimum risk of business failure. 30 Jun Jun Jun 2015 Sales/Turnover 16,556 15,521 14,684 Profit/Loss Before Taxes (183) Tangible Net Worth 1,986 1,879 1,785 Net Current Assets (Liabilities) 1,705 1,610 1,482 Stonebeach Ltd t/a Patisserie Valerie Stonebeach Ltd t/a Patisserie Valerie (12% of income) is a leading UK branded café and casual dining group offering cakes, pastries, snacks, meals and hot and cold drinks from over 180 stores in the UK. The company has a D&B Rating of 5A1 representing a minimum risk of business failure. 30 Sep Sep Sep 2015 Sales/Turnover 101,774 91,916 79,744 Profit/Loss Before Taxes 18,487 15,938 13,219 Tangible Net Worth 67,943 52,927 40,431 Net Current Assets (Liabilities) 36,607 25,302 16,277 Sanrizz Properties Ltd Sanrizz Properties Ltd (11% of income) was founded in 1980 and has since grown to a group of eight hair salons in London and the south east. The company has a D&B Rating of D2 representing a lower than average risk of business failure. 31 Mar Mar Mar 2015 Tangible Net Worth 72,812 70,605 10,278 Net Current Assets (Liabilities) Income Analysis (190,113) (192,351) 19,562 Explore Learning Sally Salon Services Ltd Sevenoaks Sound & Vision Ltd Stonebeach Ltd t/a Patisserie Valerie Sanrizz Properties Ltd Net Current Assets (Liabilities) 15,417 11,480 9, NORTH STREET, GUILDFORD GU1 4AW

11 SERVICE CHARGE VAT There are two service charge schedules covering the retail and office elements of the building. Further details are available in the data room. The property is elected for VAT and it is anticipated that the sale will be treated as a TOGC. ENERGY PERFORMANCE CERTIFICATE DATA ROOM The property has an EPC rating of band D. Further information is available in the data room. There is a dataroom for the property containing key tenancy information, title documents and EPC certificates. Access can be obtained via Lewis Ellis. PRIME MIXED USE INVESTMENT IN THE HEART OF GUILDFORD

12 PROPOSAL We are instructed to seek offers in excess of 8,450,000 (Eight Million Four Hundred and Fifty Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this price would reflect a net initial yield of 6.00%, assuming standard purchasers costs of 6.68%. FURTHER INFORMATION Should you require further information or wish to view the property, please contact either: David Kos Jeff Ellis Tel: Tel: Mob: Mob: dkos@lewisellis.co.uk jellis@lewisellis.co.uk Lewis Ellis LLP for themselves or nominees or lessors of this property whose agents they give notice that: (1) the particulars are set out as a general outline only for the guidance of the intending purchasers or lessees, and do not 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 satisfy themselves by inspection or otherwise as to the correctness of each of them; (3) no person in the employment of Lewis Ellis LLP has any authority to make or give any representation or warranty whatever in relation to the property. Designed and Produced by Creativeworld. Tel: September 2018.