3 QUEENS ROAD READING, RG1 4AR

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1 3 QUEENS ROAD READING, RG1 4AR PRIME SOUTH EAST MULTI-LET TOWN CENTRE OFFICE INVESTMENT lsh.co.uk

2 Investment Summary Grade A office investment located in the heart of Reading town centre, totalling 15,445 sq ft Reading is the principal commercial centre in the Thames Valley and the largest single office market in the South East outside central London The town centre has recently benefited from an 895m upgrade to the train station and will be connected to London by Crossrail from 2019 The property is located in the adjacent to the excellent retail and restaurant offering at The Oracle shopping centre and an NCP car park Fully refurbished in 2015 at a cost of 1,500,000. Collateral warranties and capital allowances will be made available to the purchaser. The property is multi-let to 5 tenants providing a WAULT of 5.82 years to lease expiries and 3.04 years to break options. Total rent of 401,070 per annum equating to a low average rent of psf Suitable for conversion to alternative uses including residential, subject to obtaining necessary consents Freehold Offers are sought in excess of 6,000,000 (Six Million Pounds) subject to contract and exclusive of VAT A purchase at this level reflects a net initial yield of 6.28%, assuming purchaser s costs of 6.63%, and a low capital value of 388 psf. 3 QUEENS ROAD READING, RG1 4AR 1

3 Location Reading is considered the capital of the Thames Valley and is the largest commercial centre in the South East outside of Central London. World leaders in finance, IT, global communications and a high concentration of FTSE 100 companies have their headquarters in the town. The Thames Valley is also home to leading universities including Reading, Oxford, and Oxford Brookes. Reading has been ranked the 21st top European business city for foreign direct investment by the Financial Times making it the third ranking UK city. Reading was also named the second most business friendly small city in Europe. OXFORD M40 LONDON LUTON AIRPORT HIGH WYCOMBE M25 WATFORD M1 M40 A40 A404 A34 A4074 READING M4 SLOUGH LONDON M4 M4 NEWBURY 3 QUEENS ROAD READING, RG1 4AR A1 BRACKNELL LONDON HEATHROW AIRPORT A4 A322 M3 A33 WOKING M3 FARNBOROUGH LONDON GATWICK AIRPORT 3 QUEENS ROAD READING, RG1 4AR 2

4 Aerial map 1 Reading Station Broad Street Forbury Gardens Forbury Retail Park P QUEENS ROAD READING, RG1 4AR 3

5 Blagrave Street Station Road Cross Street Union Street Cheapside Situation Communications The property is prominently situated on Queen s Road in Reading town centre. The train station and the town s prime retail locations, Broad Street and The Oracle shopping centre, anchored by John Lewis, are just a short walk away. Reading offers a vibrant living environment with access to a young and highly skilled workforce within the immediate area. The town centre benefits from excellent leisure amenity including with a selection of quality hotels and restaurants and an ever-growing number of independent shops and cafes that are bringing an even greater sense of personality to the town. By Road M4 (J11) 3.5 miles Oxford 20 miles M25 (J15) London 25 miles 38 miles Reading benefits from excellent links to the national motorway network, accessible from junctions 10, 11 and 12 of the M4. By train London Paddington 25 minutes River Thames Oxford 24 minutes TO BIRMINGHAM OXFORD BRISTOL WALES SOUTH COAST THE SOUTH WEST Caversham Road READING Vastern Road Forbury Road Forbury Road Napier Street King s Meadow TO LONDON Swindon 28 minutes Bristol 53 minutes Reading station has recently been substantially upgraded by a 895 million redevelopment. By air Greyfriar s Road Garrad Street Forbury Gardens Heathrow International Airport Gatwick Airport 25 miles 64 miles Friar Street West Street St. Mary s Butts Broad Street Kings Street Kings Road Forbury Road Crossrail (The Elizabeth Line) / WRLtH Chain Street Gun Street Yield Hall Place London Street Kennet & Avon Canal Maidenhead Ealing Broadway Bond Street Farringdon Stratford Shenfield Castle Street Kennet & Avon Canal Queen s Road Lon Queen s Road outh Street S Reading Slough Heathrow Airport Paddington Tottenham Court Road Liverpool Street Abbey Wood Crossrail services will be in operation from 2019 and Western Rail Link to Heathrow (WRLtH) will further enhance the existing transport connections between Reading and Heathrow Airport. 3 QUEENS ROAD READING, RG1 4AR 4

6 Description The property comprises a purpose built office building constructed in 1990 and arranged over ground and three upper floors. Internally the building provides open plan office accommodation and externally there is surface level car parking to the rear. The offices were comprehensively refurbished in 2015 to provide the following specification: Double height entrance and reception area New VRF air-conditioning New double glazed windows New full access raised floors New metal tile suspended ceilings New WCs and showers on each floor Newly refurbished lift to all floors The total cost of the refurbishment was 1,500,000. A full scope of works is available upon request. Collateral warranties and capital allowances will be made available to the purchaser. The property has a total of 10 parking spaces at surface level, providing a ratio of 1:1,512sq ft. 3 QUEENS ROAD READING, RG1 4AR 5

7 Accommodation The property has been measured in accordance with the RICS Code of Measuring Practice (6th Edition) and provides a total of 15,445 sq ft NIA. Sq ft Sq m Reception Ground Floor 3, First Floor 3, Second Floor 3, Third Floor 3, Total 15,445 1, Tenure The property is held freehold Service Charge The Service Charge budget for 2017 is 61,886 equating to 4.06 psf. Site Area The property occupies a site of 0.09 acres (0.22 hectares). An indicative floor plan for the building is shown below: Highbridge Wh STAR LANE El Sub Sta 4 3 Multistorey Ca QUEEN'S ROAD Cycle Hire Station QUEEN'S RO SITE PLAN AND GROUND FLOOR 3 QUEENS ROAD READING, RG1 4AR 6

8 Tenancy The property is multi-let to 5 tenants with a weighted average unexpired lease term of 5.82 years to lease expiries and 3.04 years to break options. Floor Name Floor Area (sq ft) Rent ( pa) Rent ( psf) Lease Start Lease Expiry Rent Review Break Option Comment Gnd Aspire Achieve Advance Ltd 3,635 90, /10/ /10/2022 n/a 10/10/2020 (Tenant) Outside the 1954 Act. Half rent until 10th Apr vendor to top up. Service Charge Cap at 6psf linked to RPI. There is a cap of 32,175 pa on Business Rates payable by the Tenant. The current shortfall of 13, pa will be guaranteed by the vendor. 6 months half rent if break option not exercised. 1st (A) McLaren Construction (UK) Ltd 2, , /05/ /05/2022 n/a 03/05/2020 (Mutual) Outside the 1954 Act. Rent commencement 20th Dec vendor to top up. Rent Deposit of 17, months half rent if break option not exercised. 1st (B) Abaco S.p.A. 1, , /07/ /07/2022 n/a 20/07/2020 (Mutual) Outside the 1954 Act. Rent Deposit of 22,985. Rent commencement 21st Nov months half rent if break option not exercised. 2nd Operational Research In Health Ltd 3, , /03/ /03/ /03/ /03/2021 (Tenant) Outside the 1954 Act. Half rent until 4th June vendor to top up. Rent Deposit of 62, months half rent if break option not exercised. 3rd etouches Ltd 3, , /10/ /12/2022 n/a Total 15, , When the 1st floor was split, each suite was remeasured on an IPMS 3 basis and the Rent ( psf) has been applied to this area for the purpose of the letting. 01/01/2021 (Tenant) Outside the 1954 Act. Rent of 53,653 pa from 1st Dec 2017 to 30th Nov vendor to top up to full rental level. Rent Deposit of 32,191. Guarantor - etouches inc. Break penalty of 29, QUEENS ROAD READING, RG1 4AR 7

9 Covenant Information The property is occupied by tenants offering good covenant strength from the human resources, technology, construction and healthcare industries. etouches Ltd (Co. Regn. No ) etouches is the leading event management software solution for data-driven, global events organisations. Creditsafe Rating: 46 (C) Moderate Risk 31 December December May 2014 Turnover Pre-tax Profit Shareholder s Funds 27,041 ( 12,757) ( 38,219) Aspire Achieve Advance Ltd t/a 3aaa (Co. Regn. No ) 3aaa Apprenticeships deliver Professional Services Apprenticeships in IT, Digital Marketing, Financial Services, Business Administration and Management. Creditsafe Rating: 76 (A) Very Low Risk 31 July July July 2014 Turnover 25,505,156 15,746,365 8,349,740 Pre-tax Profit 4,038,961 ( 3,338,596) ( 1,303,419) Shareholder s Funds 7,392,546 4,096,627 6,985,460 McLaren Construction (UK) Ltd (Co. Regn. No ) McLaren Construction is an award winning contractor with an established reputation for consistent delivery of outstanding projects across all market sectors. Creditsafe Rating: 80 (A) Very Low Risk 31 July July July 2014 Turnover 149,564, ,944, ,738,470 Pre-tax Profit 12,774,935 ( 15,526,123) 3,619,903 Shareholder s Funds 7,719,433 15,427,543 27,595,143 Abaco S.p.A. t/a Abacogroup UK (Co. Regn. No. FC031571) Abaco are a Geographic Information System (GIS) software company based in Italy specialising in solutions for processing spatial data. Creditsafe Rating: N/A. Further financial information is available upon request. 31 December December December 2013 Turnover 15,405,176 9,141,149 5,739,395 Pre-tax Profit 7,217,125 3,913,890 1,615,762 Shareholder s Funds 6,524,750 3,512,119 1,864,592 Operational Research in Health Ltd (Co. Regn. No ) Operational Research for Health Care are a business management consultancy focussing on the development and use of operations research in health. Creditsafe Rating: 95 (A) Very Low Risk 31 December December December 2014 Turnover Pre-tax Profit Shareholder s Funds 557, , ,953 3 QUEENS ROAD READING, RG1 4AR 8

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11 Further details of all the tenants approved fit-out works, demonstrating significant investment in the property, are available upon request. 3 QUEENS ROAD READING, RG1 4AR 10

12 Reading Market Commentary Key Reading town centre transactions in 2017 to date include: Property Tenant Date Area (sq ft) Lease Length Rent (per sq ft) Forbury Works Stott & May Oct-17 2, Forbury Works Gryphon Oct-17 3, Thames Tower Reading Bridge House The White Building The White Building Objective Corporation Jul-17 6, Group BC Jul-17 4, WorkDay Jul-17 13, Carbon Black Jun-17 5, Aquis House Aon Jun-17 4, Aquis House Carabao May-17 4, Aquis House Venn Group May-17 3, Brunel Stibo Systems May-17 3, Rent Prime town centre headline rents in Reading continue to set new record levels, reaching psf in Q Reading continues to attract the best companies as a hub for businesses in Technology, Finance, Energy and Professional Services. Recent inward investment has come from: 3 Queens Road is rented at a discount to prime Reading town centre rents providing an opportunity to capture further growth 2017 take-up is ahead of the long term average totalling 184,000 sq ft in the town centre to date (forecast) (forecast) (forecast) (forecast) (forecast) 80% of total take-up was Grade A space, demonstrating occupier demand for good quality accommodation. There are only 5 buildings in Reading town centre offering Grade A office suites between 1,000 sq ft and 5,000 sq ft. 3 QUEENS ROAD READING, RG1 4AR 11

13 Investment Market Commentary Investment demand for South East Offices has gained momentum during 2017 with volumes now exceeding over 3.4bn to date. This level of activity has been sustained through 2015 and 2016 with demand coming from a wide range of investors. Good quality town centre assets have been in particularly high demand as access to transport infrastructure and amenity become major factors for office occupiers. Prime yields currently stand at 5.00% % and are under downward pressure as rental growth becomes tangible allowing investors to price in reversionary value. There is a significant demand for multi-let properties with potential to take advantage of the strong reversionary rental growth available in supply constrained locations. Recent transactions of town centre office assets in the South East: Property Date Area (sq ft) Tenant WAULT Price NIY Cap Val (psf) Purchaser One York Road, Uxbridge Forbury Works, Reading - 24,398 Multi-let 6.2 Q m Q.6.25% 452 Available Sep ,898 Multi-let m 5.30% 553 Standard Life Cityview, Brighton Sep ,085 Multi-let m 5.53% 461 Blenheim House, Guildford 6 South Park, Sevenoaks Phoenix House, Reading Hays House, Guildford Adelphi House, Reading Dec ,634 Multi-let m 5.39% 421 June ,199 Multi-let m 5.57% 329 Parliament Properties The Drapers Company Martins Properties July ,583 Multi-let m 6.24% 400 Fidelity May ,250 Multi-let m 4.95% 540 Feb ,792 Multi-let m 6.08% 384 Columbia Threadneedle Reading Borough Council 3 QUEENS ROAD READING, RG1 4AR 12

14 Proposal Offers in excess of 6,000,000 (Six Million Pounds) are sought, subject to contract and exclusive of VAT A purchase at this level reflects a net initial yield of 6.28%, assuming purchaser s costs of 6.63%, and a low capital value of 388 psf. For further information, please contact: Charlie Lake clake@lsh.co.uk Matt Jones mhjones@lsh.co.uk Tom Fletcher tfletcher@lsh.co.uk VAT The property is elected for VAT and therefore VAT will be chargeable on the purchase price. However, it is anticipated that the sale will be treated as a Transfer of Going Concern. EPC The property has an EPC Rating of B (46). A copy of the EPC is available upon request. Lambert Smith Hampton October Details of Lambert Smith Hampton can be viewed on our website This document is for general informative purposes only. The information in it is believed to be correct, but no express or implied representation or warranty is made by Lambert Smith Hampton as to its accuracy or completeness, and the opinions in it constitute our judgement as of this date but are subject to change. Reliance should not be placed upon the information, forecasts and opinions set out herein for the purpose of any particular transaction, and no responsibility or liability, whether in negligence or otherwise, is accepted by Lambert Smith Hampton or by any of its directors, officers, employees, agents or representatives for any direct, indirect or consequential loss or damage which may result from any such reliance or other use thereof. All rights reserved. No part of this publication may be transmitted or reproduced in any material form by any means, electronic, recording, mechanical, photocopying or otherwise, or stored in any information storage or retrieval system of any nature, without the prior written permission of the copyright holder, except in accordance with the provisions of the Copyright Designs and Patents Act Warning: the doing of an unauthorised act in relation to a copyright work may result in both a civil claim for damages and criminal prosecution.