On behalf of: Prime Heathrow Office Investment Opportunity

Transcription

1 On behalf of: TWO Roundwood avenue Stockley Park Heathrow UB11 1AF Prime Heathrow Office Investment Opportunity

2 Executive Summary - The UK s premier business park - Fantastic communications to be further enhanced by Crossrail and probable Heathrow expansion - Stockley Park is home to a Who s Who of global corporates - Attractive and mature business park environment with excellent amenities - Two self-contained HQ office buildings totalling 93,570 sq ft with flexibility for future amalgamation car spaces with excellent ratio of 1 car space per 285 sq ft - Let to two investment grade global corporates - Hasbro (lease expiry 9/2013) and Gilead Sciences (lease expiry 4/2017) - Total current income of 2,545,506 per annum - Opportunity to refurbish North Building (Hasbro) on lease expiry to Grade A specification - South Building (Gilead) refurbished to Grade A specification - opportunity to regear existing lease - Offers in excess of 20,000,000 (Twenty Million Pounds), reflecting a net initial yield of 12.03% and a capital value of only 214 per sq ft

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4 LOCATION Stockley Park heads the league of the UK s leading business parks, providing over 1.74 million sq ft of Grade A office accommodation strategically located only 2 miles north of Heathrow Airport and 15 miles West of Central London. The park s high standard of accommodation and excellent location have consistently attracted a broad range of national and global corporations. Stockley Park offers a range of amenities including cafes, bars, shops and restaurants. Stockley Park s communication links are unrivalled, with the park benefiting from the following: Road Stockley Park is located on the A408 (Stockley Road) providing immediate access to Junction 4 of the M4 motorway circa 1 mile away, which in turn provides direct access to Central London, Slough, Reading and the South West. The A408 also links Stockley Park to the M40 and M25 motorways which enable easy access to the national motorway network. Air Stockley Park is only 2 miles from London Heathrow Airport, the world s busiest international airport, which is currently used by over 90 airlines flying to 170 destinations worldwide and in 2011 served 69 million passengers. In 2008 Heathrow Terminal 5 became fully operational, increasing capacity by some 35 million passengers per year. The airport s owners, BAA Ltd, continue to invest in its development with plans underway to replace Terminals 1 & 2 by Due to its strategic location Stockley Park also has easy access to other major UK airports via the national motorway airport - London Gatwick Airport (40 miles), London Stansted Airport (70 miles) and London Luton Airport (40 miles). Public Transport Stockley Park benefits from excellent public transport links via, bus, national rail and London Underground networks. A direct train service is available from London Paddington to Hayes & Harlington with a typical journey time of 17 minutes. Alternative services are available, also from London Paddington, to West Drayton with a typical journey time of 22 minutes. Both stations are within 2 miles of Stockley Park and dedicated bus services provided regular connections. In 2018 Stockley Park will benefit significantly from the delivery of Crossrail, Europe s largest engineering project, which will connect 37 stations from Heathrow Airport and Maidenhead in the West to Abbey Wood and Shenfield in the East. This new heavy-duty suburban rail service will link the City, Canary Wharf, the West End and Heathrow Airport with significantly reduced journey times on at least 24 trains every hour accommodating up 1,500 passengers each. Stockley Park Occupiers will be able to access Crossrail at Hayes & Harlington station. a40 a Harrow 2 M1 a4155 M40 a a404 Uxbridge a40 a405 Maidenhead Slough a312 a412 9B a40(m) a4 7 M25 Ealing a4 a408 CENTRaL 8/ B 4 2 LONDON 3 1 a308 M4 4a a4 Hammersmith Windsor 14 Heathrow a205 Richmond a a316 Bracknell 1 Staines a23 12 Kingston a322 a3 M3 Croydon 11 Camberley 3 from Oxford from Swindon Bath Bristol South Wales from Taunton Exeter Plymouth Cornwall Reading Maidenhead Slough West Drayton Heathrow Terminal 1,2,3 Terminal 4 Hillingdon Uxbridge Bus Links Bus Links Hatton Cross Ickenham Hayes & Harlington Ealing Broadway Ruislip Ruislip Manor THAMES TRAINS DISTRICT PICCADILLY Watford Eastcote PICCADILLY Acton Town Rayners Lane METROPOLITAN Paddington CIRCLE Hammersmith Earls Court South Kensington from the North West Liverpool Manchester Birmingham Rugby Northampton Milton Keynes Baker Street BAKERLOO Victoria Euston Embankment Waterloo Maps not to scale from Glasgow Edinburgh Newcastle Yorkshire Derby the East Midlands Peterborough Piccadilly Circus Kings Cross St.Pancras Liverpool Street CIRCLE Blackfriars from Kent Paris Brussels

5 TWO Roundwood avenue

6 Situation Stockley Park, originally the product of a joint venture between Kajima, PRUPIM and Aldersgate, has been recognised as one of Europe s best business park locations since its phased development began in the mid 1980s. It is set in 400 acres of mature landscaping, providing 1.74 million sq ft of headquarters style accommodation and numerous associated amenities. Indicative of the quality of Stockley Park is its current tenant mix, including global corporate brands such as GlaxoSmithKline, BP, Apple, Sharp Electronics, Canon, Marks & Spencer and IMG. The range of investors that have acquired holdings within the park over the past 25 years is further testament to its quality. Amenities at the park are provided at The Arena and include a Virgin Active Health Club, Alexanders Wine Bar, Costa, WH Smith and Wetherspoons Bar. Adjacent is an 18 hole golf course and a nursery providing childcare throughout the working day. Further information is available at the Stockley Park website -

7 Property Tenant A B C D E F G H I J K L M N O P Q R S T U V W 1, 2 & 3 Ironbridge Rd GlaxoSmithKline 1 Longwalk Road Celgene Corporation 2 Longwalk Road Vacant 3 Longwalk Road Marks & Spencer 4 Longwalk Road BP Properties 1 Roundwood Avenue NetApp World Vision 3 Roundwood Avenue Activision Adobe 5 Roundwood Avenue Pipex 7 Roundwood Avenue Fiserv Europestar 5 Longwalk Road IMG 6 Roundwood Avenue Canon Europe Ltd 1 Furzeground Way Regus 2 Furzeground Way Apple 2 Roundwood Avenue Hasbro (UK) Ltd Gilead Sciences Ltd 4 Roundwood Avenue HP Enterprise Service (UK) Limited 4 Furzeground Way Sharp Electronics 3 Furzeground Way Havi Global Solutions Otsuka Pharmaceuticals Toshiba IBM Canadian High Commission Nobel Biocare 2 The Square Aspect Communications 1 The Square Coats Holdings Almirall Grass Valley 3 The Square Canon 6/9 The Square KPMG HQ Global Workspace 5 The Square BP 4 The Square Perot Systems Almirall Cisco Rocket Software A A A To M40 and Uxbridge A408 Stockley Road A408 Stockley Road Bennetsfield Road B C D To M4 (Junction 4), Heathrow Airport & M25 (Junction 15) Longwalk Road E TWO Roundwood avenue f G H i J Championship Golf Course The Arena Roundwood Avenue The Grand Union Canal K L N O P R M S Furzeground Way Q T The Square U N W V Not to scale

8 DESCRIPTION Two Roundwood Avenue is a modern HQ office building completed in 1988, arranged over two floors and extending to circa 93,570 sq ft (8,692.8 sq m). Originally designed as a single building, the property was separated in 2000 to form two self-contained buildings, the North Building and the South Building. The original tenant of the whole, Hasbro, downsized from 93,570 sq ft to 51,132 sq ft to occupy the North Building, whilst the South Building was refurbished and re-let. The base specification includes the following: - VAV air-conditioning - Full access raised floors - Male and female WCs on both floors - Shower facilities and disabled toilets - Lift - Car parking ratio of 1:285 sq ft The North Building is in an original condition, not having benefited from significant refurbishment since it was built. The landlord will have a substantial dilapidations claim against the tenant at lease expiry in Detailed refurbishment plans for the north building have been worked up by the vendor. Further details are available on request. The South Building comprises Grade A office space, refurbished by the landlord in 2001/2, and extensively fitted out by the tenant in 2004 and 2007, with associated upgrade and replacement of M&E including: - Replacement of boilers - Replacement of chiller - LG7 compliant lighting - BMS upgrade - 4 pipe fan coil air-conditioning - Suspended metal tile ceiling

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10 ACCOMMODATION The property has been measured in accordance with the RICS Code of Measuring Practice (6th Edition) and comprises a total net internal floor area of 93,570 sq ft (8,692.8 sq m). Typical Floor plan For indicative purpose only and not to scale. The breakdown of the floor areas is as below: North Building FLOOR SQ M SQ FT Reception ,055 North Building Ground offices 2, ,567 First offices 2, ,510 Total 4, ,132 South Building FLOOR SQ M SQ FT Reception Ground 1, ,856 First 1, ,673 Total 3, ,438 SOUth Building Externally there are a total of 328 car spaces split between North and South Buildings as follows: North Building South Building 178 car spaces 150 car spaces SITE The site area extends hectares (4.589 acres). N

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12 2 TENURE Freehold. Lake El Sub Sta Horse Ride Ordnance Survey Crown Copyright All rights reserved. Licence number Plotted Scale - 1:1392 0m 25m

13 TENANCIES The property is let to 2 tenants on full repairing and insuring terms and currently produces a total income of 2,545,506 per annum in accordance with the tenancy schedule below. Tenant Demise Size (sq ft) Lease Start Lease Expiry Next Rent Review Rent ( ) Rent ( psf) Hasbro UK Ltd North Building 51,132 11/06/ /09/ /06/2013 1,518, * Gilead Sciences Europe Ltd South Building 42,438 01/05/ /04/2017 n/a 1,027, * The Hasbro lease expires in September Hasbro Inc. stand as surety to Hasbro UK Ltd. Gilead Sciences Inc. stand as guarantor to Gilead Sciences Europe Ltd. *Assuming 50% rate on receptions. TENANT BACKGROUND/FINANCIALS Hasbro Founded in 1923, Hasbro is a global company providing entertainment products from a range of world class brands. Hasbro s products include toys and games, television programming, motion pictures and video games. The company looks to service its target market through leveraging its range of well-known brands, of which there are more than 1,500 in number and include Transformers, Littlest Pet Shop, Nerf, Playskool, My Little Pony, GI Joe, Magic: The Gathering and Monopoly. Hasbro products are sold by over 500,000 stores worldwide, and the company produces circa 2,000 new products each year. Hasbro UK Limited has a Dun & Bradstreet rating of 5A1 with a minimum risk of business failure. A financial summary of Hasbro UK Limited to December 2010 can be found in the table below. HASBRO UK LIMITED Fiscal Consolidated GBP 26 Dec 2010 (000 s) Fiscal Consolidated GBP 27 Dec 2009 (000 s) Fiscal Consolidated GBP 28 Dec 2008 (000 s) Sales Turnover 132, , ,315 Profit / (Loss) before taxes 6,311 5,652 9,755 Tangible Net Worth 40,244 36,387 32,324 Net Current Assets (Liabilities) 37,045 34,446 29,740 Hasbro Inc., the parent company and guarantor to the lease, is an investment grade entity with a Fitch rating of BBB+. Further information can be found at Gilead Sciences Gilead Sciences is a biopharmaceutical company focusing on the research, development and commercialisation of innovative therapeutics in new areas of medical need. More specifically the company targets the advance of treatments for patients suffering from life-threatening diseases. Gilead was founded in 1987 in Foster City, California. The company has expanded rapidly over the past twenty-five years, with annual total revenues now anticipated to exceed $9.0 billion, operations spanning three continents (North America, Europe and Asia Pacific) with approximately 4,600 employees. Gilead has its European HQ at Stockley Park. The office provides central support services for the majority of Gilead s operations outside of the United States and Canada with the following functions based at the property: General Management, Finance, Human Resources, Regulatory, Safety, Information Technology, Legal, Medical Affairs and EU Commercial Compliance. Gilead Sciences Europe Limited has a Dun & Bradstreet credit rating of 2A1 indicating a minimum risk of business failure. A financial summary of Gilead Sciences Europe Limited to December 2010 can be found in the table below. GILEAD SCIENCES EUROPE LIMITED Fiscal Consolidated GBP 31 Dec 2010 (000 s) Fiscal Consolidated GBP 31 Dec 2009 (000 s) Fiscal Consolidated GBP 31 Dec 2008 (000 s) Sales Turnover 39,505 36,996 37,309 Profit / (Loss) before taxes Tangible Net Worth 4,249 7,422 6,821 Net Current Assets (Liabilities) 977 1,726 1,468 Gilead Sciences Inc, the parent company, and guarantor to the lease, is an investment grade company with a Standard & Poors rating of A-. Further information can be found at

14 THE STOCKLEY MARKET Supply In total, Stockley Park comprises approximately 1.74 million sq ft of office space. Assuming deals currently under offer go through we estimate the park s current vacancy rate is approximately 161,500 sq ft or 9.3% of the park total, a historically low figure. Of this approximately 59,000 sq ft is landlord space and 102,500 sq ft is tenant space. Grade A vacancy is only 42% of available space. Demand There is currently demand for 400,000 sq ft through named enquiries seeking office accommodation in Heathrow, including BP, Gartner, Centrica, Enterprise, Merck and Network Appliance. Take Up Average take up per annum on Stockley Park in the last 10 years has been approximately 95,000 sq ft per year. Taking this into account Stockley Park has only 18 months of available supply. The past 12 months has seen take up of 141,177 sq ft, with a further 61,000 sq ft currently under offer. A schedule of recent deals is outlined below. PROPERTY DATE TENANT TERM RENT AREA (sq ft NIA) 4 The Square Nov-12 Hasbro 10 years Under offer at ,000 5 Longwalk Road Sep-12 IMG 15 years ,459 Rents Prime rents at Stockley Park peaked in 2000 at 35 per sq ft and troughed at 25 in The recent letting of 5 Longwalk to IMG indicates that rents at the park are currently in the region of 26.75/ per sq ft for Grade A refurbished space. This compares to 30 in Maidenhead, 45 in Chiswick and 30 in Uxbridge. The Outlook A lack of supply means prospects for rental growth at Stockley Park are excellent in the short to medium term. The development vacuum of recent years has led to a lack of true Grade A office availability. Speculative refurbishments at Stockley Park will prove a catalyst for driving rental levels forward. In light of strong property fundamentals, existing tenant mix, strategic location and a high quality employee catchment area, there continues to be a significant demand for office space at Stockley Park. Over the last 18 months employment in the ICT sector has risen by twice the national average, the M4 corridor containing a particularly high ICT concentration. The combination of these characteristics will ensure that the park remains a key UK business location. 1 The Square Jun-12 Almirall 10 years (5 year break) 1 Roundwood Avenue Jan-12 World Vision 10 years (5 year break) 1 The Square Dec-11 Grass Valley 10 years (5 year break) 1 The Square Dec-11 Coats 8 years (3 year break) 3 Furzeground Way Nov-11 Toshiba 10 years (5 year break) , , , , ,276

15 THE STOCKLEY PARK INVESTMENT MARKET Since the start of 2011 investment transactions at Stockley Park have totalled circa 100m at an average lot size of 20.7m. From these transactions it is clear that traditional institutional, overseas and opportunity fund investors continue to be attracted to Stockley Park, as demonstrated by CarVal, LaSalle Investment Management, RREEF, Aberdeen and IM Properties. The deals highlighted below range from a refurbished 10- year deal to short income and speculative refurbishments. Those investors that have purchased vacant possession and asset management opportunities have been encouraged by low rental levels, a lack of prime Grade A stock on the park and the reputation of Stockley Park as a location. The opportunity to reposition assets to deliver Grade A stock to a market benefitting from significant occupier demand is both rare and attractive, having the potential to deliver both rental growth and prime exit yields. We have included a current opportunity, 5 Longwalk, in our schedule below as an example of a sale of a Grade A refurbished building, recently let on a 15 year term to IMG, demonstrating the scope of opportunity that exists to generate a similar product and enhanced value from assets such as Two Roundwood Avenue. Stockley Park Investment Transactions PROPERTY DATE VENDOR PURCHASER TENANT UNEXPIRED TERM PRICE ( ) PRICE ( psf) NIY 5 Longwalk Nov-12 Schroders *Currently on market IMG Worldwide Inc 15 years 41.26m % 1,3 & 5 Roundwood Jul-12 USS CarVal Multi-let 3 years 24m % 2 Longwalk Road Feb-12 IVG CarVal Vacant m Furzeground Way Nov-11 Invista LaSalle IM Multi-let 4 years 21.81m % 1 Longwalk Road May-11 CBREGI RREEF Celgene Ltd 10 years 26.40m % 4 Longwalk Jan-10 USS Aberdeen Canon Europe 9.5 years 14.90m % Other South East Investment Transactions PROPERTY DATE VENDOR PURCHASER TENANT UNEXPIRED TERM PRICE ( ) PRICE ( psf) NIY Chiswick Green Nov-12 BAM Prupim (under offer) Viasat 15 years m % Network House, Maidenhead Nov-12 Castlemore Private Investor Volvo 15 years 9.04m % Lucidus, Watford Sep-12 DTZIM British Steel PF Multi-let 5.7 years 13.90m % Market House, Maidenhead Sep-12 Shepherd Developments Gatehouse Adobe 10.4 years 34.25m % Marlow International Jul-12 Avestus London & Stamford Multi-let 6.9 years 50.15m % 220 & 230 Cambridge Science Park Jul-12 Schroders L&G Multi-let 10.6 years 22.20m % Unilever House, Leatherhead Jun-12 SWIP & Orchard Street London & Stamford Unilever 11.2 years 61.15m % 1 Forbury Square, Reading May-12 Aviva Canada Life Multi-let 6.1 years 11.56m % Costain House, Maidenhead Apr-12 Aviva Private Investor Costain Ltd 12.3 years 14.70m %

16 On behalf of: TWO Roundwood avenue Stockley Park Heathrow UB11 1AF Capital Allowances Further information available on request. Energy performance certificates Two EPCs are shown. The first relates to the whole property and reflects the unrefurbished nature of the north building. The second relates solely to the south building. VAT We understand that the sale will be treated as a Transfer of a Going Concern for VAT purposes. Proposal Offers are sought in excess of 20,000,000 (Twenty Million Pounds). A purchase at this price would reflect an attractive net initial yield of 12.03%, after allowing for usual purchaser s costs of 5.8%, and a capital value of only 214 per sq ft. SUBJECT TO CONTRACT AND EXCLUSIVE OF VAT. Further Information For further information or to arrange an inspection, please contact the following: Richard Talbot-Williams E: richard.talbot-williams@bnpparibas.com T: Paul Griffiths E: paul.griffiths@bnpparibas.com T: Charlie Ingham E: charles.ingham@bnpparibas.com T: Energy Performance Certificate Non-Domestic Building 2 Roundwood Avenue Stockley Park UXBRIDGE UB11 1AZ This certificate shows the energy rating of this building. It indicates the energy efficiency of the building fabric and the heating, ventilation, cooling and lighting systems. The rating is compared to two benchmarks for this type of building: one appropriate for new buildings and one appropriate for existing buildings. There is more advice on how to interpret this information on the Governments website Energy Performance Asset Rating More energy efficient A B C D E F G Over 150 Less energy efficient Technical Information Main heating fuel: Natural Gas Building environment: Air Conditioning Total useful floor area (m2): 9306 Building complexity (NOS level): 4 Building emission rate (kgco2/m2: Certificate Reference Number: Net zero CO2 emissions This is how energy efficient the building is. Benchmarks Buildings similar to this one could have ratings as follows: If newly built Is typical of the existing stock Energy Performance Certificate Non-Domestic Building Gilead Sciences Europe Ltd 2 Stockley Park, Roundwood Avenue UXBRIDGE UB11 1AZ Certificate Reference Number: This certificate shows the energy rating of this building. It indicates the energy efficiency of the building fabric and the heating, ventilation, cooling and lighting systems. The rating is compared to two benchmarks for this type of building: one appropriate for new buildings and one appropriate for existing buildings. There is more advice on how to interpret this information on the Governments website Energy Performance Asset Rating More energy efficient A B C D E F G Over 150 Less energy efficient Technical Information Main heating fuel: Natural Gas Building environment: Air Conditioning Total useful floor area (m2): 4248 Building complexity (NOS level): Net zero CO2 emissions This is how energy efficient the building is. Benchmarks Buildings similar to this one could have ratings as follows: If newly built Is typical of the existing stock Misrepresentation Act 1967: BNP Paribas Real Estate Advisory for themselves and for the vendor(s) or lessor(s) of this property whose agents they are, give notice that: 1. These particulars do not constitute, nor constitute any part of, an offer or contract. 2. None of the statements contained in these particulars as to the property are to be relied on as statements or representations of fact. 3. Any intending purchaser or lessee must satisfy himself by inspection or otherwise as to the correctness of each of the statements contained in these particulars. 4. The vendor(s) or lessor(s) do not make or give and neither BNP Paribas Real Estate Advisory nor any person in their employment has any authority to make or give, any representation or warranty whatever in relation to this property. Finance Act 1989: Unless otherwise stated all prices and rents are quote exclusive of VAT. Property Misdescriptions Act 1991: These details are believed to be correct at the time of compilation but may be subject to subsequent amendment. All maps and plans are published for the convenience of identification only and although believed to be correct is not guaranteed and it does not form any part of any contract. November Tayler Reid Design no