401 KING STREET HAMMERSMITH W6

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3 3 INVESTMENT SUMMARY PROMINENT FREEHOLD CORNER PROPERTY, 0.45 ACRE SITE HAMMERSMITH IS A WELL-ESTABLISHED OFFICE, RETAIL, LEISURE AND RESIDENTIAL DESTINATION PROVIDING EXCELLENT CONNECTIVITY OFFICE AND RETAIL ACCOMMODATION TOTALLING 24,566 SQ FT (2,282.3 SQ M) ARRANGED OVER GROUND AND THREE UPPER FLOORS WITH 23 CAR PARKING SPACES TO THE REAR TENANTS INCLUDE QANTAS AIRWAYS LIMITED AND JOURNEY LATIN AMERICA LIMITED TOTAL PASSING RENT OF 766,026 PER ANNUM. THIS REFLECTS A VERY LOW AVERAGE PASSING RENT OF PER SQ FT OFFICE BLOCK DATE OF MARCH 2019 ALLOWING FOR A POTENTIAL REFURBISHMENT / EXTENSION INCLUDING THE ADDITION OF A FOURTH FLOOR OPPORTUNITY TO DEVELOP THE CAR PARK SITE TO THE REAR OF THE PROPERTY WE ARE INSTRUCTED TO INVITE OFFERS IN EXCESS OF 14,350,000 (FOURTEEN MILLION THREE HUNDRED AND FIFTY THOUSAND POUNDS) SUBJECT TO CONTRACT AND EXCLUSIVE OF VAT. THIS REFLECTS 5.00% NIY AND A VERY LOW CAPITAL VALUE OF 584 PER SQ FT. 3

4 4 LOCATION & SITUATION The property is located on King Street, which connects Hammersmith town centre with Chiswick High Road. The London Borough of Hammersmith and Fulham is a well-established office, retail, leisure and residential destination. The area is undergoing major regeneration through significant investment from internationally renowned developers including Legal & General, Bell Hammer, AXA, Eastern & Oriental, Kier and Investec. Attracted by high-quality office product, lower occupancy costs and excellent transport links, there has been a recent trend of occupiers from central London relocating to Hammersmith. The area s transport links and extensive retail and leisure amenities have attracted major corporate occupiers such as L Oreal, Walt Disney, Sony Ericcson, Harrods, Fox International, Shazam, Virgin Media and Dunnhumby 401 King Street holds a prominent corner position on the southern side of King Street at its junction with St Peter s Square. Euston WESTWAY A404 WESTWAY A404 MARYLEBONE ROAD Paddington PORTLAND RD. BAYSWATER UXBRIDGE ROAD Shepherd s Bush HOLLAND PARK AVE. Notting Hill Gate BAYSWATER ROAD EDGWARE ROAD OXFORD STREET Bond Street REGENT ST. Stamford Brook KING STREET GOLDHAWK ROAD CASTELNAU Goldhawk Road Ravenscourt Park Hammersmith A4 HAMMERSMITH GROVE FULHAM PALACE RD. HOLLAND ROAD WARWICK ROAD FINBOROUGH ROAD LILLIE ROAD OLD BROMPTON RD. FULHAM ROAD NEW KING S ROAD Earls Court South Kensington A4 FULHAM ROAD Hyde Park KENSINGTON HIGH ST. KING S ROAD CHELSEA EMBANKMENT River Thames Hyde Park Corner PARK LANE Oxford Circus CHISWICK M4 Heathrow Airport 20 minutes by car 40 minutes by tube Great West Road KENSINGTON Kensington Olympia FULHAM KNIGHTSBRIDGE CHELSEA BELGRAVIA MAYFAIR Green Park Sloane Square Victoria NINE ELMS LANE PICCADILLY Green Park St James s Park THE MALL Embankment VAUXHALL BRIDGE RD. Vauxhall

5 5 Earl s Court HAMMERSMITH 10 & 12 Hammersmith Grove Westfield London The London Automotive Factory Lyric Square The Ark SHEPHERD S BUSH ROAD The Foundry The Aircraft Factory Kings Mall Hammersmith Bridge A4 Ravenscourt Park KING STREET The Clockwork Building St Peter s Square 5

6 6 COMMUNICATIONS Situated just 4 miles west of London s West End and 10 miles east of Heathrow International Airport, Hammersmith serves as a key arterial route in and out of London via the A4. HAMMERSMITH STATION OFFERS 4 Underground Lines 17 Bus Routes Elizabeth Line (Crossrail) connecting from Paddington Station 2018 PADDINGTON 12 mins KING S CROSS 24 mins HAMMERSMITH & CITY LINE CIRCLE LINE Heathrow Express connecting from Paddington Station CENTRAL LINE WHITE CITY 11 mins SHEPHERD S BUSH 15 mins LIVERPOOL STREET 34 mins HEATHROW AIRPORT 30 mins via Paddington Express & Piccadilly Line VICTORIA 16 mins The property is served by a number of London Underground stations providing onwards access to central and Greater London. Stamford Brook (District Line) is situated approximately 300 metres to the north, whilst Ravenscourt Park (District Line) is located approximately 600 metres east of the property. Hammersmith Station, approximately 0.75 miles east of the property, serves as a major interchange on the London Underground network (Hammersmith & City, District and Piccadilly Lines). PICCADILLY LINE DISTRICT LINE EALING BROADWAY 14 mins HAMMERSMITH EARLS COURT 5 mins DISTRICT LINE WESTMINSTER 18 mins PICCADILLY LINE DISTRICT LINE MONUMENT 28 mins Rail communications are supplemented by Hammersmith bus station, which provides access to 17 bus routes. WIMBLEDON 26 mins Not to scale, indicative only

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9 9 DESCRIPTION The property occupies a 0.45 acre (0.18 hectare) site and comprises a three-storey red brick clad retail and office building constructed in The property was comprehensively refurbished in 2009 to provide the following: New reception Two new 10-person passenger lifts New WCs on all floors Reconditioned air conditioning (3 pipe VRF fan coil system) Combination of under floor trunking and fully accessible raised floors Suspended ceilings with LG7 compliant lighting Attractive roof terrace on third floor The building is predominantly B1 Office use arranged over the ground and three upper floors. The office accommodation totals 23,000 sq ft (2,136.8 sq m) providing typical floor plates of approximately 7,000 sq ft. The floor plates are L shaped with the main staircase and core at the junction of the L. There are two additional cores at each end of the L containing fire exits. There are two retail units, totalling 1,566 sq ft (145.5 sq m), which front the southern side of King Street. The two units are currently occupied by a single tenant. The property benefits from 23 uncovered car parking spaces to the rear of the property. 9

10 10 ACCOMMODATION ACCOMMODATION SCHEDULE FLOOR USE NIA (SQ FT) NIA (SQ M) Third Office 4, Second Office 6, First Office 6, Ground Office 5, Ground Retail (Units 1 & 2) 1, TOTAL 24,566 2,282.3

11 11 EXISTING FLOOR PLANS GROUND FLOOR PLAN Office: 5,215 sq ft / sq m Retail: 1,566 sq ft / sq m TYPICAL UPPER FLOOR PLAN Office: 6,833 sq ft / sq m King Street King Street 393 St Peter s Square St Peter s Square Car Park Sub Station Morrow & Lorraine Morrow & Lorraine Floor plans not to scale, indicative only 11

12 39 37 S T PETER 'S SQUARE 360a to Court 383 to a S QUAR E S ' to a a 12 TENURE & TENANCY TENURE Freehold. El Sub Sta 407 Wes tcroft KING STREET King Street 5 to 38 Entwistle Terrace Black Lion Mews El Sub Sta to 8 ST PETER 'S VILLAS ST PETER 'S S T PE T E R Not to scale, indicative only

13 13 TENANCY SCHEDULE DEMISE USE AREA SQ FT TENANT NAME PASSING RENT RENT PSF TERM START TERM END RENT REVIEW BREAK OPTION (LANDLORD) 1954 ACT COMMENTS Third Floor Office 4,036 Ultima Media Limited 161, /03/ /03/ /3/2019 Outside Second Floor Office 6,916 Journey Latin America Limited 212, /12/ /03/ Inside Inclusive of five car parking spaces. Tenant break option 24/3/2018 (not exercised). Inclusive of five car parking spaces. Assignment from Qantas. First Floor Office 6,833 Qantas Airways Limited 207, /12/ /03/ Inside Inclusive of five car parking spaces. Ground Floor Office 5,215 Qantas Airways Limited 150, /12/ /03/ Inside Inclusive of five car parking spaces. Ground Floor Retail (Units 1 & 2) 1,566 Marble Arch Paints Limited 35, /01/ /01/ /01/ Inside Inclusive of one car parking spaces rent review outstanding. Electricity Sub-Station Site - - London Power Networks Limited 10-29/04/ /04/ Inside TOTAL 24, ,026 TENANTS COVENANTS QANTAS AIRWAYS LIMITED 46.72% of the contracted income Founded in 1920 in Queensland, Qantas is now Australia s main domestic and international airline providing services to 36 countries over Australia, New Zealand, Asia-Pacific, the Americas, Europe and South Africa. The airline s headquarters are in Sydney, and their domestic network serves over 55 destinations. Qantas Group s key business is passenger transport via the two airline brands Qantas and Jetstar. JOURNEY LATIN AMERICA LIMITED 27.68% of the contracted income Since 1980 Journey Latin America has been the UK s leading expert in travel to Latin America. The travel company has won an array of awards over the years including The Times Travel Awards 2017, Conde Nast Traveller Reader s Awards 2017 and Best Website, The Travel Marketing Awards Journey Latin America Limited has a Dun & Bradstreet rating of 2A 1. ULTIMA MEDIA LIMITED 21.03% of the contracted income Ultima Media s parent company is Suddeutscher Verlag, which is one of Germany s largest media companies focusing on newspapers, journals and books. Ultima Media publishes online and on paper to provide coverage of the automotive industry. Ultima Media Limited has a Dun & Bradstreet rating of 1A 1. THE ARCH HARDWARE LTD / MARBLE ARCH PAINTS LIMITED 4.57% of the contracted income The Arch Hardware Ltd is an independent business that was founded over 12 years ago. The business offers a range of hardware products for building, electrical works, plumbing, and decorating. Marble Arch Paints Limited has a Dun & Bradstreet rating of H3. Qantas Airways Limited has a Dun & Bradstreet rating of O (undisclosed). 13

14 14 THE HAMMERSMITH & CHISWICK OFFICE OCCUPATIONAL MARKETS Hammersmith is one of London s fastest growing sub-markets, supported by the Greater London Plan endorsing development around the communication nucleus of Hammersmith Broadway. Rental levels in Hammersmith and Chiswick range from 30 to 59 per sq ft. Grade A vacancy rates remain low at 3.4%, which is above the 5-year average of 3.1%. This is largely a result of the recent delivery of 566,000 sq ft. of Grade A stock from recent developments including: The Foundry, 1 Lyric Square, 245 Hammersmith Road and Kings House, 174 Hammersmith Embankment. Development immediately proximate to the 401 King Street is restricted with new office stock typically delivered by way of refurbished existing buildings. Hammersmith is experiencing the benefits of the movement of occupants from the core West End as they become increasingly foot-loose and more cost-sensitive. There is currently significant demand for sub-5,000 sq ft floorplates in the area. KEY OFFICE LEASING COMPARABLES DATE PROPERTY FLOOR AREA (SQ FT) TENANT RENT (PSF) TERM (YEARS) Dec-17 The Clockwork Building, 45 Beavor Lane, W6 3rd 2,777 Vosaio Travel Dec-17 The Clockwork Building, 45 Beavor Lane, W6 5th 3,842 Cult Wines Dec-17 One King Street, W6 5th 5,764 Insulet Corp Dec-17 Smith Square, W6 3rd 5,500 Yoobic Oct Hammersmith Grove, W6 6th & 7th 24,938 Perform Media Group Sep Hammersmith Grove, W6 1st, 2nd & 3rd 52,837 WeWork Jan-17 Colet Court, 100 Hammersmith Road, W6 Ground 5,305 Gambit Research LLP Jan-17 1 Queen Caroline Street, W6 2nd (Part) 8,239 BTS

15 15 INVESTMENT MARKET COMMENTARY Following the recent uncertainty surrounding the UK s decision to leave the EU, central London s commercial property investment market has recovered quickly. Overseas wealth continues to be deployed in the capital buoyed by the favourable sterling-us Dollar currency rates, with yields in the West End remaining at all-time lows in Q Investor appetite has continued to favour those assets with long income and/or strong rental growth potential. Investors are increasingly shifting their focus from core West End locations to fringe locations such as Hammersmith, seeking higher returns and value add opportunities. Consequently, in line with the wider London market, Hammersmith is characterised by strong competition and yield compression. Hammersmith has seen a significant amount of investment activity over the course of the past two years, with a number of transactions highlighted in the table below: OFFICE INVESTMENT COMPARABLES DATE ADDRESS TENURE AREA (SQ FT) PRICE NIY CAP VAL (PSF) Dec-17 Thames Wharf Studios, Rainville Road, W6 FH 46,706 Confidential (quoting 40.0m) 5.25% 856 Dec Shepherds Bush Road, W6 FH 12, m 5.64% 753 Dec Hammersmith Grove, W6 LLH 170, m 5.25% 994 Sep Hammersmith Grove, W6 LLH 122, m 4.93% (1.80 % costs) 994 Apr-17 The Aircraft Factory, 100 Cambridge Grove,W6 FH 77,502 c. 625m (exchanged) c. 6.25% c. 806 Mar-17 The Warwick Building, Kensington Village, W14 vfh 79, m 5.20% 712 Nov Hammersmith Grove, W6 LLH 122, m 5.33% 843 Nov-16 One King Street, W6 FH 36, m 4.85% 934 Jun Hammersmith Road, W6 FH (50% stake) 121,000 (50%) 137.5m n/a 1,136 May Hammersmith Road, W6 FH 66, m 4.69%

16 16 DEVELOPMENT OPPORTUNITY OFFICE EXTENSION Potential Configuration Morrow & Lorraine Architects have considered potential extension schemes increasing the massing by circa 7,000 sq ft from the existing 24,566 sq ft to circa 31,500 sq ft of commercial accommodation. Indicative Office Extension Scheme Not to scale, indicative only The scheme could include the following: Third floor extension Additional fourth floor for B1 office use Light/medium refurbishment of current office accommodation Remodelled ground floor to include an enlarged reception External terraces to the first, third and fourth floors Potential to create a larger ground floor unit for enhanced A1/A3 use. Morrow & Lorraine

17 17 INVESTMENT CONSIDERATIONS ALTERNATIVE COURTYARD OPPORTUNITY Additionally there is the opportunity to develop the large rear car park site for a possible commercial or residential scheme (subject to obtaining the necessary consents). The scheme below shows three mews houses: PROMINENT FREEHOLD CORNER PROPERTY OCCUPYING A 0.45 ACRE SITE LOW SITE COVERAGE OF 65% FLEXIBLE OFFICE FLOORPLATES RANGING BETWEEN APPROXIMATELY 4,000-7,000 SQ FT - READILY DIVISIBLE 23 CAR PARKING SPACES TO THE REAR OF THE PROPERTY New Build Mews Houses REVERSIONARY INCOME. VERY LOW AVERAGE PASSING RENT OF PER SQ FT. THE MOST RECENT LETTING WITHIN THE BUILDING ACHIEVED PSF IN 2015 BUILDING REFURBISHED IN 2009 TO INCLUDE TWO NEW 10 X PASSENGER LIFTS, NEW WCS, NEW RECEPTION AND RECONDITIONED AIR-CONDITIONING Morrow & Lorraine RENTS ON GROUND, FIRST AND SECOND FLOORS SET AT A LOW POINT IN THE RENTAL CYCLE (2009) AND ARE THEREFORE SIGNIFICANTLY REVERSIONARY OFFICE BLOCK DATE OF MARCH 2019 ALLOWING FOR A POTENTIAL REFURBISHMENT / EXTENSION INCLUDING THE ADDITION OF A FOURTH FLOOR OPPORTUNITY TO DEVELOP THE CAR PARK SITE TO THE REAR OF THE PROPERTY TO PROVIDE ADDITIONAL COMMERCIAL ACCOMMODATION OR A RESIDENTIAL SCHEME Morrow & Lorraine 17

18 18 FURTHER INFORMATION VAT The property is elected for VAT. It is anticipated that the transaction is to be treated as a transfer of going concern (TOGC). EPC Full EPCs are available in the dataroom. PLANNING The property is situated within the London Borough of Hammersmith & Fulham and sits within the St. Peter s Square Conservation Area. The building is not listed. DATA ROOM Please contact Allsop for password protected access to the data. PROPOSAL We are instructed to invite offers in excess of 14,350,000 (Fourteen Million Three Hundred and Fifty Thousand Pounds) subject to contract and exclusive of VAT based on adjusted purchasers costs of 6.73%. This reflects 5.00% NIY and a very low capital value of 584 per sq ft. Mark Ibbotson T +44 (0) E mark.ibbotson@allsop.co.uk Nick Pemberton T t +44 (0) E nick.pemberton@allsop.co.uk Victoria Barron T +44 (0) E victoria.barron@allsop.co.uk Misrepresentation Act: 1. Allsop LLP on its own behalf and on behalf of the vendor/lessor of this property whose agent Allsop LLP is, gives notice that: (a) these particulars do not constitute in whole or in part an offer or contract for sale or lease; (b) none of the statements contained in these particulars as to the property are to be relied on as statements or representations of fact; and (c) the vendor/ lessor does not make or give, and neither Allsop LLP nor any of its members or any person in its employment has any authority to make or give, any representation or warranty whatsoever in relation to the property. The only representations, warranties, undertakings and contractual obligations to be given or undertaken by the vendor/lessor are those contained and expressly referred to in the written contract for sale or agreement for lease between the vendor/lessor and a purchaser or tenant. 2. Prospective purchasers or tenants are strongly advised to: (a) satisfy themselves as to the correctness of each statement contained in these particulars; (b) inspect the property and the neighbouring area; (c) ensure that any items expressed to be included are available and in working order; (d) arrange a full structural (and where appropriate environmental) survey of the property; and (e) carry out all necessary searches and enquiries. Allsop is the trading name of Allsop LLP. January 2018.