FREEHOLD OFFICE INVESTMENT FOR SALE. Strata House, Castle Street, Poole BH15 1BQ

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1 FREEHOLD OFFICE INVESTMENT FOR SALE Strata House, Castle Street, Poole BH15 1BQ

2 Investment Summary Prime grade A multi let office investment in the heart of the affluent coastal town of Poole, Dorset. Recent comprehensive refurbishment of the building to provide six flexible open plan suites finished to a high standard. 83% let to the national high street brand of Lush Ltd (Very Low Risk rating), who started and remain headquartered in Poole, employing over 3,000 people, alone, in the town. Weighted Average Unexpired Lease Term of 9.50 years to expiry and 5.36 years to breaks. Total rent passing of 130,877pa, equating to a low average 15 psf. Reversion to 148,196 pa ( 17 psf) based on recent evidence. Ideal lot size for private investors and property companies providing a profile of granular income in popular sized Grade A suites. Offers sought in excess of 2,050,000 (Two Million and Fifty Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level would equate to a net initial yield of 6.00%, a reversionary yield of 6.80% (allowing for purchasers costs of 6.29%) and a low capital value of 235 psf. 2 Strata House, Castle Street, Poole BH15 1BQ

3 A303 A36 A34 M3 Salisbury Winchester A3 A354 Blandford Forum A31 A35 Wareham Poole A36 A338 A31 A338 Bournemouth M3 Eastleigh M27 Southampton M27 Lymington Isle of Wight M275 A3(M) Portsmouth A27 A272 Location Poole is a large and affluent coastal town in south Dorset, part of the wider Poole and Bournemouth conurbation. Situated approximately 107 miles south west of London, it lies five miles west of Bournemouth and 36 miles south west of Southampton. Road and rail communications are excellent. The town is served by the A35, one of the main arterial routes along the south coast which provides links from Southampton in the east to Exeter in the west. The and A35 are the two main routes out of Poole. The leads to the A31 and onto the M27, M3 and linking Poole with London and the M25 together with the key ports of Southampton and Portsmouth. ROAD LINKS A35 M27 RAIL LINKS Bournemouth Southampton AIRPORT Bournemouth Airport Southampton PORT Southampton Portsmouth 1.5 mile 0.5 mile 33 miles 12 minutes 45 minutes 9 miles 35 miles 38 miles 58 miles Twin Sails Bridge Sunseeker International The Quay RNLI College Church Street ASDA Superstore W Quay Road Castle High Street Street High Street Lagland Street The Quay Poole Serpentine Road Lagland St Strata House Dolphin Square Shopping Centre Sainsbury s Green Road Poole's mainline railway station provides a direct and frequent service to London Waterloo in a fastest time of approximately two hours, while Bournemouth Airport is nine miles to the east and Southampton Airport 35 miles north east. Poole has a resident population of 150,600 (ONS estimate 2015). Unemployment at 3.8% is lower than the national average and the town benefits from several national employers having a significant presence, including Barclays, Lush, American Express, Siemens and Sunseeker. Situation Strata House occupies an island site in a prominent position on Castle Street in the heart of Poole old town. It is conveniently situated less than 100 metres from both Poole Quay and High Street, home to several popular waterfront restaurants and amenities. The property benefits from easy access to the via the Quay and thereon to the A35. Poole Railway Station is approximately a 5-minute drive, 12-minute walk, to the north. Strata House, Castle Street, Poole BH15 1BQ 3

4 Description Strata House is a detached, modern three storey office building of 8,719 sq ft on a site of approximately 0.2 acres. The building was comprehensively refurbished in 2013 to provide six suites surrounding a central core. Each suite is finished to a high standard and benefits from air conditioning, suspended ceilings with recessed lighting, 2.5 metre floor to ceiling height and self contained WC and kitchen facilities. A 6-person passenger lift serves all floors and the building benefits from 13 car parking spaces. The current service charge is running at a low 1.94 psf. More information is available on request. Tenure The building is held freehold. 4 Strata House, Castle Street, Poole BH15 1BQ

5 Tenancy The building is multi let in accordance with the tenancy schedule below, producing a current total rent of 130,877 pa. On the basis of current market conditions we believe the building is reversionary to a total rent of 148,196 pa based on 17 psf. Description Tenant Area Area Start Date End Date Rent Review Break Date Rent Passing ERV ERV Comments Sq Ft Sq M /PSF /PSF Ground Floor Suite 1 The TenderSpace 1, /03/ /03/ , , Stepped rent rising to Limited 20,000 pa in March To be topped up by vendor. Ground Floor Suite 2 Lush Limited 1, /04/ /04/ /04/ /04/ , , First Floor Suite 3 Lush Limited 1, /04/ /04/ /04/ /04/ , , First Floor Suite 4 Lush Limited 1, /09/ /09/ /09/ /09/ , , Second Floor Suite 5 Lush Limited 1, /04/ /04/ /04/ /04/ , , Second Floor Suite 6 Lush Limited 1, /04/ /04/ /04/ /04/ , , Total 8, , , Covenants Lush Ltd (83% of income) Lush is a successful and well known high street cosmetics group with 928 outlets in 48 countries and employing over 3,000 people in Poole alone.. In the year ending June 2016 the group (Lush Cosmetics Ltd) reported a 76% growth in pre tax profits to 43.2m. They are awarded a Very Low Risk rating. Full results for the tenant for the last three years are set out below. 30/06/16 30/06/15 30/06/14 Turnover 62,149,000 48,141,000 40,326,618 Pre-Tax Profit 6,160,000 14,887, ,262 Net Assets 50,389,000 49,963,000 37,892,796 The TenderSpace Limited (17% of income) TenderSpace is an online business focused on the real estate and construction industries providing a collaborative platform for professionals, project managers and contractors. They have been awarded a Low Risk rating. Strata House, Castle Street, Poole BH15 1BQ 5

6 Market Conditions Like much of the south coast market, recent years have seen a decline in the availability of quality office accommodation as stock has been lost to alternative uses. In late 2016, the Councils of Dorset, Bournemouth and Poole, along with the Dorset Local Enterprise Partnership published research suggesting there was pent up demand for quality office stock that was not generally available, particularly in the 1,000 to 5,000 sq ft range. Rents in the region are not at levels which justify speculative new build and as such pressure is likely to remain on the best space driving rental growth. Growth in rents in Poole has already been seen with the letting in May 2017 of a suite of approximately 7,800 sq ft in Merck House, Seldown Road to Carphone Warehouse at 17 psf, together with the letting of Suite 4 in Strata House to Lush also at 17 psf. Availability of small quality suites in Poole remains thin with only one building currently on the market within the 1,000 to 2,500 sq ft range and overall vacancy in the grade A category at around a low 1.1%. Investment Comparables VAT We understand the property has been elected for VAT and as such VAT will be payable on the purchase price EPC Copies of the EPC's can be provided on request Proposal We are instructed to seek offers in excess of 2,050,000 (Two Million and Fifty Thousand Pounds) subject to contract and exclusive of VAT A purchase at this level would equate to a net initial yield of 6.00%, a reversionary yield of 6.80% (allowing for purchasers costs of 6.29%) and a low capital value of 235 psf. Date Property Tenancy WAULT to Exp WAULT to Brk Price Yield Jul-17 New Bond House, Bristol Multi Let m 5.40% Jul-17 The Rotunda, Hertford Multi Let m 5.10% Jun- 17 New North House, Brentwood Multi Let 4.3m 5.33% Dec Lattimore Road, St Albans Single Let m 5.10% Dec-16 Blenheim House, Guildford Multi Let m 5.39% Dec-16 Kiln House, Newbury Single Let m 5.10% Nov-16 Whiteladies House, Bristol Multi Let m 6.08% 6 Strata House, Castle Street, Poole BH15 1BQ

7 Strata House, Castle Street, Poole BH15 1BQ 8

8 For further information please contact: Ken Morgan Matt Hunter Kevin Neun Strata House, Castle Street, Poole St Albans House 59/59 Haymarket London SW1Y 4QX aston rose.co.uk MISREPRESENTATION ACT These particulars are believed to be correct and, where practicable, reasonable steps have been taken to ensure their accuracy, however this cannot be guaranteed. They do not form part of any offer or other contract. The owner of this property does not make or give, representations or warranties in relation to this property. Aston Rose (West End) Limited and its employees do not accept any responsibility for information supplied to them by the owner or any third party. Any intending purchaser or lessee must satisfy itself by inspection or otherwise as to the correctness of the particulars. All measurements are approximate. The plans in these particulars are published for convenience of identification only, and although believed to be correct, their accuracy is not guaranteed and do not form part of any contract. SEPTEMBER 2017