NEW INDUSTRIAL FACILITY FOR OIL STATES INDUSTRIES (UK) LTD

Transcription

1 FORWARD COMMITMENT INVESTMENT OPPORTUNITY 15 YEAR LEASE TERM NEW INDUSTRIAL FACILITY FOR OIL STATES INDUSTRIES (UK) LTD ABERDEEN GATEWAY BUSINESS PARK, GATEWAY DRIVE, ABERDEEN AB12 3GW

2 EXECUTIVE SUMMARY Forward commitment opportunity in Aberdeen. Substantial new warehouse and office facility in established Business Park. Pre-let to Oil States Industries UK Ltd (D&B rating 5A1). Very secure long term income 15 year FRI lease from September Initial rent of 384,660 per annum (subject to measurement). Competitive headline rental rates: Offices per sq ft, Warehouse 9.00 per sq ft. Guaranteed rental growth 5 yearly reviews to higher of OMRV or 2.75% pa compound. Offers over 5,725,000, exclusive of VAT. Net initial yield of 6.33%. 1

3 ABERDEEN Aberdeen is Scotland s third largest city with a population of approximately 225,000 and a regional catchment population of over 500,000. It is the administrative capital of the North East of Scotland and benefits from two universities, an expanding international harbour and airport, seven major research institutes, together with world renowned food, fisheries and agricultural research establishments. Located 120 miles north of Edinburgh, Aberdeen is one of Scotland s biggest success stories. As the centre of Europe s oil and gas industry, the city and the surrounding region is a key engine of the Scottish and UK economies. Inverness A9 M90 In recent years the city has outperformed the rest of Scotland in terms of economic growth, productivity and business birth rates. Numerous surveys have rated Aberdeen as having the best quality of life in the country. Aberdeen has strong communication links with the rest of Scotland, the UK and Europe. The A90 trunk road links Aberdeen with the Scottish motorway network, making Edinburgh and Glasgow accessible in just over 2 hours. The city is also linked to major towns and cities throughout the UK by rail and air travel. Aberdeen International Airport, which lies to the north west of the city, provides frequent daily services to the principal UK cities and direct flights to Europe. The Airport is currently undergoing major construction works to accommodate the increase in passenger numbers and separately it accommodates the world s busiest commercial Heliport. Glasgow A96 A90 Aberdeen Dundee Edinburgh Manchester Birmingham London TRAVEL TIMES A90 and new by-pass Aberdeen Airport Aberdeen City Centre Aberdeen Harbour ROAD 1 min 10 mins (estimated new road) 8 mins 8 mins TRAVEL TIMES Dundee Edinburgh Glasgow CAR 1hr 2hr 20mins 2hr 30mins TRAIN 1hr 10 mins 2hr 30mins 2hr 35mins TRAVEL TIMES Manchester Birmingham London TRAIN 6hrs 6hrs 50 mins 7 hrs PLANE 1hr 1hr 1hr 15 mins 2

4 ABERDEEN GATEWAY BUSINESS PARK Proposed Aberdeen Western Peripheral Route (Bypass) A96 River Dee Lang Stracht North Anderson Dr N Deeside Rd River Don A90 A90 King Street Wellington Rd (A956) Union Street Altens Business Area A90 Findon Junction for A956 Aberdeen Gateway is an 18.2 hectares (45 acres) mixed use Business Park developed by the JW Muir Group plc. Aberdeen Gateway is located to the south side of the city and is the natural extension to Altens Industrial Estate providing a prime location with space to grow for expanding companies. The Park lies alongside the main southern access point into Aberdeen city centre and Aberdeen Harbour, close to the A90 junction with the A956, which will also give access to the new Aberdeen Western Peripheral Route. This is scheduled for completion Q and will substantially improve links to the Airport and also the north of Aberdeen. Development at Aberdeen Gateway commenced in 2007 and it has successfully attracted a number of high profile occupiers, including Total, National Oilwell Varco, Hydrasun and Ensco. A location map is provided showing Aberdeen Gateway s close proximity to the city s arterial road network. Further information is available at 3

5 PROPOSED DEVELOPMENT The site is located on the south side of Gateway Drive, in the heart of the Business Park and will provide a new bespoke warehouse facility with a three storey office building, together with 75 car parking spaces, built on a site of approximately hectares (1.50 acres). SPECULATIVE OFFICE UNDER CONSTRUCTION ENSCO NOV ROSS SURVIVAL UNDER CONSTRUCTION TETRA TOTAL E&P UK LTD CORETRAX When complete the building will have the following specification: INDUSTRIAL Steel portal frame construction with composite roofing and panel system Floor loading of 35.0 kn/m 2 9.0m floor to underside of haunch Capacity for 20 tonne crane Electric roller shutter door OFFICE Raised access floors (145mm void) Floor to ceiling height of 3.0m VRF cooling & heating system High frequency lighting 8 person DDA compliant passenger lift SPECIAL PIPING MATERIALS DSA TEST FACILITY A full specification pack will be made available to bidders. HYDRASUN 4

6 ACCOMMODATION The target total gross internal floor area of the development will be approximately 2, sq m (23,015 sq ft). This is broken down as follows: DESCRIPTION SQ M SQ FT Warehouse ,985 Warehouse Office ,030 Office 1, ,000 TOTAL 2, ,015 Yard Area 1, ,500 Offices TENURE The property is held on a Heritable title, equivalent of English Freehold. TENANCY The development has been pre-let to Oil States Industries (UK) Ltd on a new full repairing and insuring lease for 15 years from the date of practical completion (estimated to be September 2015). The initial rent shall be 384,660 per annum, subject to measurement, and is subject to rent reviews every 5 years to the higher of market rental value or 2.75% per annum compound. The tenant will benefit from a rent-free period of 3 months from the date of entry. Warehouse 5

7 RENTAL ANALYSIS The agreed rent, subject to measurement, has been calculated as follows: DESCRIPTION SQ FT RENT (PER SQ FT) RENT (PER ANNUM) Warehouse 5, ,865 Warehouse Offices 1, ,420 Offices 16, ,000 Yard Area 18, ,375 TOTAL RENT 384,660 As illustrated by the rental growth charts on the following page, these rates are comfortably below the headline rents achieved elsewhere in the city for industrial and out of town office space. COVENANT INFORMATION Oil States Industries (UK) Ltd is an oil and gas services company, specialising in the manufacturing of deepwater production products and subsea pipelines. Oil States operates in four market segments Offshore Oil & Gas, Land Oil & Gas, Defence and General Industry. Headquartered in Texas, Oil States is a global company with 1,700 employees based in 11 countries worldwide. Further information is available from The tenant, Oil States Industries (UK) Ltd, has a D&B rating of 5A1 and a summary of the key figures from their last 3 years accounts is provided below: YEAR 31/12/ /12/ /12/2011 Turnover 81,983, ,513,000 65,240,000 Pre-Tax Profit 15,951,000 22,037,000 18,423,000 Shareholder Funds 79,623,000 79,412,000 68,503,000 6

8 OCCUPATIONAL PROPERTY MARKET Viewed over the past 10 years, occupier demand for office and industrial property in Aberdeen has been strong as a direct consequence of high activity levels in the North Sea Oil and Gas industry. This sheltered the city from the worst effects of the UK economic downturn following the 2008 banking crisis. Despite the recent oil price fall, long term lettings are still occurring as occupiers continue to expand and improve the quality of their premises. Local developers and landlords have been the main benefactors as there has been significant rental growth in the city in recent years, due to the acute shortage of quality space. The first graph illustrates the growth in headline rental rates for industrial space, excluding the office element which is valued separately in Aberdeen. The second graph illustrates the growth in headline rental rates for out of town office space. Unlike many other UK Centres office rental growth has naturally occurred in out-oftown areas in addition to the city centre. Pre-let headline rates for out of town Grade A office space are now at psf, substantially higher (62%) than the rate agreed for the office section of the property. Headline rents Industrial (excluding offices): CAPITAL ALLOWANCES The purchaser will have the benefit of all capital allowances at the date of sale. Further information will be made available upon request. RENT CONSTRUCTION WARRANTIES Collateral warranties will be provided by the main contractor, the design consultants and all sub-contractors involved in the major work packages within the Development. In addition, a collateral warranty will be provided from the contractor involved in the initial infrastructure works carried out at the development (the majority of which works have now been adopted). A letter of reliance will be provided in relation to the site investigations carried out in relation to the site. ENERGY PERFORMANCE CERTIFICATE Based on the agreed specification, the development will have an Energy Performance Rating of B. Headline rents Out of town (offices): RENT YEAR

9 INVESTMENT PROPERTY MARKET With high levels of occupier activity fuelled by a robust local economy, Aberdeen has caught the interest of investors in recent years. UK Funds and international equity investors have been active in the market, with several new entrants acquiring property in recent years. Yields hardened in 2014 following an improvement in overall market sentiment. In the office and industrial sectors there has been significant activity during the past two years. We have listed some relevant transactions in the table below: Date Property Purchaser Price NIY Tenant Comments Dec 14 Unit 3A International Way, ABZ, Kirkhill Private Trust 4.1m 5.83% SPX New 15 year lease with guaranteed rental uplifts. Dec 14 Gateway Drive, Aberdeen Gateway Ignis 29.78m 5.90% Total New 20 year lease with guaranteed rental uplifts. Oct 14 Gateway Drive, Aberdeen Gateway Ignis m 6.20% Tetra New 20 year lease with guaranteed rental uplifts. Sep 14 Peregrine Road, Westhill AAM 9.80m 6.13% Forum New 15 year lease with guaranteed rental uplifts. Sep 14 Raiths House, Kirkton Drive, Raiths Ignis 22.35m 6.35% Weatherford Existing lease with 12 years unexpired. Sep 14 Arctic House, Kirkton Drive, Raiths NHV 3.50m 5.54% Reel Existing lease with 10 years unexpired. Jul 14 Unit Z3B, Badentoy Crescent, Badentoy Park Friends First 2.875m 6.45% Downhole Products New 15 year lease with guaranteed rental uplifts. Jul 14 Phase 2, Prime Four, Kingswells AAM m 5.82% OneSubsea New 15 year lease with guaranteed rental uplifts. Jun 14 Moss Road, Aberdeen Gateway Ignis 7.361m 6.50% Ensco New 15 year lease with guaranteed rental uplifts. Jun 14 Badentoy Avenue, Badentoy Park L&G m 6.25% Ramco New 20 year lease with guaranteed rental uplifts. 8

10 PRICING AND YIELD PROFILE For further information, please contact the joint agents: We are instructed to seek offers in excess of 5.725m, exclusive of VAT. A purchase at this level reflects an attractive net initial yield of 6.33%, after allowing for purchaser s costs of 6.13%. With rental uplifts in the lease, based on the price quoted the yield is guaranteed to increase to a minimum of 7.25% (2020), 8.30% (2025). Ken Shaw e: ken.shaw@ryden.co.uk t: Ryden 25 Albyn Place Aberdeen AB10 1YL t: f: Eric Shearer e: eric.shearer@knightfrank.com t: Chris Ion e: chris.ion@knightfrank.com t: Knight Frank 4 Albert Street Aberdeen AB25 1XQ t: f: March 2015 (i) Messrs Ryden LLP and Knight Frank for themselves and for vendors or lessors of this property whose agents they are give notice that: the particulars are set out as a general outline only for the guidance of intended purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract; (ii) all descriptions, dimensions, reference to condition and necessary permissions for use and occupation, and other details are given without responsibility and any intending purchasers or tenants should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them; (iii) no person in the employment of Messrs Ryden LLP and Knight Frank has any authority to make or give any representation or warranty whatever in relation to this property. 9