WATERSIDE HOUSE 170 PRIESTLEY ROAD SURREY RESEARCH PARK GUILDFORD GU2 7RQ PRIME SOUTH EAST HEADQUARTERS OFFICE INVESTMENT

Transcription

1 WATERSIDE HOUSE 170 PRIESTLEY ROAD SURREY RESEARCH PARK GUILDFORD GU2 7RQ PRIME SOUTH EAST HEADQUARTERS OFFICE INVESTMENT

2 INVESTMENT SUMMARY uildford is an established south east office n G location, with excellent access to Central and Greater London, with trains into London Waterloo taking approximately 34 minutes urrey Research Park is widely regarded as one n S of the leading centres in the UK and Europe for technology, science, health and engineering and provides offices for approximately 110 companies igh specification Grade A office building providing n H 59,991 sq ft (5,573 sq m), a comprehensive refurbishment was completed in November 2012 et in its entirety to BAE Systems Applied n L Intelligence Ltd UK, the subject property is used as the Head Office full repairing and insuring lease for term in n A excess of 15 years expiring 24th March 2027, providing 8.60 years term certain AE Systems Applied Intelligence Ltd are owned n B by BAE Systems PLC, one of the world s largest defence companies ross rental income of 1,292,000 per annum n G exclusive, equating to per sq ft overall ong Leasehold from the University of Surrey for n L 125 years from 4th November 1992 at a current rent of 112,740 per annum. The November 2017 rent review is currently outstanding he forecasted rent for the outstanding n T November 2017 rent review equates to circa 139,867 per annum, this would provide a net income of 1,152,133 per annum Offers are sought in excess of 17,300,000 (Seventeen Million, Three Hundred Thousand Pounds) for the long leasehold interest, subject to contract and exclusive of VAT. A purchase at this level reflects an attractive Net Initial Yield of 6.24% and a capital value of 288 per sq ft after allowing for acquisition costs of 6.74%.

3 LOCATION M40 AMERSHAM HIGH M1 WYCOMBE M25 WATFORD Guildford is the main commercial and administrative centre in Surrey and is recognised as one of the strongest office centres in the south east of England. The town is located approximately 53 km (33 miles) south west of Central London, 72 km (45 miles) north east of Portsmouth, 10 km (6 miles) south of Wokingham and 43 km (26 miles) south east of Reading. The town is a popular commuter base, with established transport connections. Communications to Guildford are excellent with the A3 running through the town, which links it to junction 10 of the M25 motorway and in turn provides access to the national motorway network. Guildford railway station is located in the town centre, 4 km (2.50 miles) to the east. Direct trains to London Waterloo run approximately every half hour with a fastest journey time of 34 minutes. Guildford continues to attract major national and multi-national tenants, which include BAE Systems, Electronic Arts, Avaya, Allianz Cornhill Insurance, BOC Gasses, Philips and more recently, occupiers including WSP, Smith & Williamson and Enstar. Due to the constrained supply in the town centre most of these tenants are located in out-of-town locations, such as, Surrey Research Park. 38 ANDOVER 36 SOUTHAMPTON OCKENHURST A303 A343 NEWBURY A343 M27 M3 WINCHESTER ISLE OF WRIGHT BASINGSTOKE A31 SOUTHAMPTON READING M4 A33 FARNHAM A31 ALTON PETERSFIELD A322 M3 FARNBOROUGH A3 (M) CHICHESTER PORTSMOUTH SLOUGH M4 HEATHROW BRACKNELL WOKING TWICKENHAM GUILDFORD A3 A272 PORTSMOUTH A3 HORSHAM EPSOM CROYDON LEATHERHEAD M25 A24 REIGATE A22 M23 GATWICK CRAWLEY A272 LONDON CITY LONDON A23 BRIGHTON ENGLISH CHANNEL LEWES A22 N The town s renowned knowledge based economy and highly-skilled workforce is also demonstrated by a distinctly low unemployment rate of 2.3%, in comparison to the national average of 4.2% (Source: Office of National Statistics). Connections Distance Time Central London 33 miles 1 hour Woking 7 miles 20 mins Leatherhead 18 miles 22 mins Reading 26 miles 45 mins Heathrow Airport 24 miles 30 mins Gatwick Airport 30 miles 35 mins M25 (Junction 10) 13 miles 16 mins By Train Waterloo Station Portmouth Time 34 mins 58 mins

4 RESEARCH PARK OFFICE (Surrey Technology Centre) HOSPITAL A L D ERSH O T RO AD GUILDFORD & GODALMING BYPASS MIDLETON ROA D SITUATION - SURREY RESEARCH PARK The property is situated off Priestly Road, the main service road on the Surrey Research Park. The property is located 4 km (2.50 miles) west of Guildford town centre and just to the north of the A3 dual carriageway. Access to the Surrey Research Park is via the Hospital/Research Park exit of the A3 via Egerton Road and Gill Avenue. FARNHAM ROAD WALNUT TREE CLOSE A3 WOODBRIDGE ROAD TO LONDON & M25 LADYMEAD STOKE ROAD A3 TO PORTSMOUTH & A31 A31 CATHEDRAL GUILDFORD STATION GUILDFORD A A3100 YORK ROAD HIGH STREET A281 CHERTSEY ST The Surrey Research Park has been developed during the course of the last 30 years by the University of Surrey and comprises approximately 28 hectares (70 acres) of landscaped business park space providing offices for circa 110 companies. The Park provides 31 buildings and approximately 635,000 sq ft (58,993 sq m) of space in a major centre of excellence and in low density setting. An additional total of 73,000 sq ft (6,781 sq m) of new accommodation is planned within the Park. The Surrey Research Park is widely regarded as one of the best examples of science parks in the United Kingdom with a highly proactive track record. Today the companies on the park employ more than 3,200 highly qualified staff, helping to create local jobs, diversify the economy and generates up to 625m of economic activity for the regional economy ever year. Since the Park opened in 1984, it has generated more than 92m of funds for the University which have been reinvested in scholarships. Occupiers within the Park benefit from a high quality working environment with 24 hour security. Nearby amenities include the 168 room Holiday Inn hotel, Caper and Berry Cafe and the Surrey Sports Park, all of which are within walking distance from the subject property. The property is situated in a picturesque lakeside position at the northern edge of the Park just off Priestley Road.

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6 DESCRIPTION The property comprises a Headquarters Building providing office and laboratory accommodation arranged over ground, first and second floor levels. The building is of steel frame construction with brick elevations, a pitched slate roof and double glazed aluminium encased windows. There is a separate outbuilding and generator compound located on the north eastern boundary. Internally there is an impressive full height atrium, which serves as an informal meeting area and refreshment space. The building provides two core areas positioned either side of the atrium each with a separate service area, WC s, staircase and lifts. The accommodation is designed to provide for open plan space albeit the existing tenant has subdivided the space for their own purposes, particularly at ground floor level. The building underwent an extensive refurbishment that was completed in November The landlord provided a contribution of 4,000,000 towards the works with the additional costs funded by the tenant. The current specification can be summarised as follows: Open plan office space Raised floors Full height atrium Suspended ceilings LG7 lighting Two passenger lifts Male, female and disable WC s on each floor VRF air conditioning Level access loading bay 227 car parking spaces (1:264 sq ft) Staff Cafeteria - used by the surrounding BAE offices

7 SITE TYPICAL FLOOR PLAN The site area extends to circa 1.41ha (3.49 acres). SERVICE CHARGE For the year ending July 2018 the estimated estate service charge is 0.52 per sq ft ( 5.64 per sq m), this is recharged in full to the tenant. Further information is available on request. ACCOMMODATION The subject property provides the following areas: Description NIA (sq ft) NIA (sq m) Ground Floor Reception All maps and plans are for indicative purposes only. Ground Floor Offices 27,023 2, First Floor Offices 25,904 2, Second Floor Offices/Storage 3, Out Building (GIA) 2, Total 59,991 5,573.30

8 TENURE The property is held on a long leasehold basis from the University of Surrey (Title Number SY631098). The Headlease is from the 4th November 1992 for a term of 125 years, expiring in November 2117 (circa 99 years unexpired). The Headlease is subject to a Deed of Variation dated 13th June The current ground rent payable is 112,740 per annum, the Headlease is subject to five yearly rent reviews. The November 2017 review is currently outstanding (further information is provided in the data room). The ground rent payable is forecasted to increase to circa 139,867 per annum on settlement of the November 2017 rent review. The freehold is owned by the University of Surrey under Title Number SY TENANCY The property is let in its entirety to BAE Systems Applied Intelligence Limited (formerly Detica Ltd) for a term in excess of 15 years expiring 24th March 2027, providing circa 8.60 years term certain. The full repairing and insuring lease is subject to five yearly upward only rent reviews, the March 2017 rent review is currently outstanding. COVENANT BAE Systems Applied Intelligence Ltd (company number ) is an international business and technology consulting company who specialise in cyber security and resilience services by collecting, managing and manipulating information. BAE Systems Applied Intelligence Ltd are owned by BAE Systems PLC, a British multinational defence company and are one of the world s largest defence companies. BAE Systems PLC employs a skilled workforce of approximately 83,400 people in over 40 countries and reported an operating profit of 1,489m in 2017, they are listed on the FTSE 100. BAE Systems plc, has singled out cyber security as an important area for future growth of the business due to increasing high demand from government and commercial customers globally. BAE have further strengthened their Applied Intelligence platform with a number of acquisitions, most notably SilverSky for 144.4m in The size of the military and civil cyber-security market grew from $3.5bn in 2004 to $120bn in 2017, and the market is expected to expand by 12-15% per annum in the next three years. BAE Systems Applied Intelligence Limited (Formerly Detica Ltd) Company no Dec-16 Dec-15 Dec-14 Turnover 385,256, ,277, ,138,000 Pre-Tax Profit - 53,421,000-17,222,000 9,152,000 Shareholder fund - 40,941,000 12,695,000 32,183,000 Effective 1st January 2018, BAE has restructured its Applied Intelligence division to focus on three core business units: Government; Financial Services; and Technology & Commercial. The restructuring has enabled a greater focus on customer needs and higher levels of operational efficiency resulting in the business already achieving a much improved first half performance in A goodwill impairment of 384m was taken in 2017 reflecting the future level and timing of expected returns from the business. The gross rental income is 1,292,000 per annum ( per sq ft overall). The forecasted ground rent at the outstanding November 2017 rent review equates to circa 139,867 per annum, this would provide a net income of 1,152,133 per annum. The tenant break option on 24th March 2022 has been removed subject to 18 months half rent until February 2019, this is to be topped up by the vendor.

9 GUILDFORD OCCUPATIONAL MARKET Guildford is one of the predominant office centres in the south east of England supporting a diverse range of occupiers within the fields of IT, Telecoms, Finance, Pharmaceuticals and Administration. Guildford has traditionally been the administrative centre for the wider region, housing a number of public sector organisations including Guildford Borough Council and more recently the Highways Agency. Whilst no new office space completed in Guildford during 2017, opportunities to provide new Grade A supply in Guildford will mainly come from the refurbishment of existing stock. The first half of 2018 saw the completion of 34,000 sq ft of refurbished town centre space at London Square and at Guildford Business Park, Building 2 was comprehensively refurbished to provide 82,000 sq ft of Grade A space which completed in June Opportunities to develop space in the town centre remain limited due to constrained supply. Town centre headline rents are in excess of 33 per sq ft, while in the out-of-town market headline rents generally range from per sq ft. New headline rents are starting to be achieved within Guildford Business Park, with the refurbishment of Building 2 expected to drive headline rents further with quoting headline rents now reaching 35 per sq ft. INVESTMENT MARKET The volume of south east office transactions in Q2 of 2018 was 595m a rise of approximately 9% compared with the same period of The most active investors have included Institutions, Local Authorities and the remaining spread between Property Companies and Private Investors. Recent transactions include the following. Date Town Address Area sq ft Under Offer Jun-18 Feb-18 Feb-18 Unexpired Term Tenant Tenure Price Price per sq ft Yield % Staines Future House 69, Let to Future Electronics Freehold 33,130, Q.5.75% Langley Oxford Warrington Dec-17 Leatherhead Axis One Hurricane Way 2600 Oxford Business Park Renaissance House Lakeside Focal Point Guildford Road 56, Travelport International Freehold 19,330, % 81, Let to British Gas Freehold 35,040, % 40,494 8 Let to the Secretary of State Freehold 10,500, % 22,500 8 Let to Toshiba and Cililion Freehold 8,000, % Sep-17 Heathrow 4, World Business Centre 145, Let to Amadeus Freehold 47,248, %

10 EPC An EPC is available on request. VAT The property is elected for VAT purposes and therefore VAT will be payable by the purchaser, unless the sale is structured as a TOGC. PROPOSAL We are instructed to seek offers in excess of 17,300,000 (Seventeen Million, Three Hundred Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level reflects an attractive Net Initial Yield of 6.24% and a capital value of 288 per sq ft, after allowing for acquisition costs of 6.74%. FURTHER INFORMATION For further information, access to the data-room and to arrange an inspection, please contact the sole agents: Mark Beaumont mark.beaumont@gva.co.uk Mathew Rogers mathew.rogers@gva.co.uk James McFeely james.mcfeely@gva.co.uk Francis Sutherland francis.sutherland@gva.co.uk 65 Gresham Street London EC2V 7NQ GVA hereby gives notice that the information provided (either for itself, for any joint agents or for the vendors lessors of this property whose agent GVA is in this brochure is provided on the following conditions: (1) The particulars are set out as a general outline only, for the guidance of intending purchasers and/or lessees and do not constitute an offer or contract, or part of an offer or contract. (2) All descriptions, dimensions and references to this property s condition and any necessary permission for use and occupation, and any other relevant details, are given in good faith and are believed to be correct. However, any intending purchasers or tenants should not rely on them as statements or representations of fact but satisfy themselves of their correctness by inspection or otherwise. (3) No person in the employment of GVA, or any joint agents, has any authority to make or give any representation or warranty whatsoever in relation to the property or properties in this brochure. (4) All prices quoted are exclusive of VAT. (5) GVA shall have no liability whatsoever in relation to any documents contained within the brochure or any elements of the brochure which were prepared solely by third parties, and not by GVA. GVA: September 2018 Produced by Barbican Studio