HIGH YIELDING MULTI-LET OFFICE INVESTMENT OPPORTUNITY LINFORD WOOD BUSINESS CENTRE MILTON KEYNES

Transcription

1 HIGH YIELDING MULTI-LET OFFICE INVESTMENT OPPORTUNITY LINFORD WOOD BUSINESS CENTRE MILTON KEYNES

2 INVESTMENT SUMMARY Milton Keynes is one of Europe s fastest growing centres and is projected to become one of the top 15 largest towns by The town has easy access to the national motorway network (via the M1) and excellent rail services to the north and south of the country. The property is only three miles from both Milton Keynes Central station and the M1 motorway (junction 14). Five self-contained buildings on an attractive, landscaped campus with a total area of 10,993 m 2 (118,330 ft 2 ) and an excellent car parking ratio of 1:25 m 2 (1:266 ft 2 ). The property is held freehold. Let to 5 tenants and produces a rental income of 887,399 per annum which equates to a low overall base rent of only ( 113 per m 2 ) per ft 2. 94% of the income is rated by D&B as having a minimum risk of business failure. Offers are sought in the region of 7,000,000 (Seven Million Pounds), subject to contract and exclusive of VAT. A purchase at this level reflects an attractive net initial yield of 12% assuming purchasers costs of 5.8% and a low capital value of only 59 per ft 2. The yield on letting the vacant units improves to 16.5%. LINFORD WOOD BUSINESS CENTRE MILTON KEYNES 2

3 MILTON KEYNES Milton Keynes has become a major centre for industry and commerce over the past 30 years and is considered one of the UK s fastest growing centres, with three times the national average population growth. This has been driven by the Milton Keynes Partnership (MKP) Committee ( which was established to implement the delivery of this growth and plays a key role in ensuring infrastructure, jobs and community facilities in a coordinated fashion. Milton Keynes is the UK s 30th largest town and is the fastest growing urban area. It has an estimated population growth rate of 14.2% for (national average is 3.1%). It is projected that the town will double in size through sustainable growth by 2031 and become the UK s 10th largest centre. 7.5 million people live within an hour s drive of Milton Keynes. The Government plans to facilitate for 100,000 new jobs and 68,600 new homes in the area over the same period. The town has a highly diverse local economy and it is increasingly seen as a major regional centre. 75% of businesses in the town have their headquarters there. It has attracted a wide range of national and international occupiers including Foreign & Commonwealth Office, Network Rail, BP, EDS, Santander, British Telecom, Siemens, Cable & Wireless, Unisys, Deloitte, Volkswagen and Daimler Chrysler. The town centre offers excellent amenities which are centred around Centre:MK and Midsummer Place shopping centres. Together they comprise 156,072 m 2 (1.68 million ft 2 ) and make up one of the UK s largest shopping destinations with over 260 retailers and four major department stores (Debenhams, John Lewis, Mark & Spencer and House of Fraser). LINFORD WOOD BUSINESS CENTRE MILTON KEYNES 3

4 LOCATION AND COMMUNICATIONS Road Milton Keynes is located approximately 52 miles north-west of Central London, 73 miles south-east of Birmingham and three miles west of the M1 motorway. The town benefits from its location midway between London and the Midlands with easy access provided to the M1 motorway, at junctions 13 and 14, and the A5 trunk road. The M6 and M40 motorways are also within easy reach of the town. The M1 has been widened between junctions 10 and 13 from three to four lanes. There have also been improvements made to junctions 13 and 14. M25-33 miles Heathrow Airport - 56 miles M1-3 miles Birmingham Airport - 64 miles M6-35 miles Stansted Airport - 73 miles M40-32 miles Gatwick Airport - 90 miles Luton Airport - 22 miles The road layout in Milton Keynes is designed to accommodate high levels of car usage which combined with highly functional land use planning has led to commercial and industrial uses being segregated from residential areas enhancing access around the town. Public transport is constantly being improved and it is recognised that it plays a major role in the town s future. Rail Milton Keynes is well served by London Midland, Virgin and South Central rail companies, with trains running every 10 minutes to London Euston, and a fastest journey time of 30 minutes. To the north, trains run every 20 minutes direct to Birmingham (1 hour), Manchester and Glasgow. South Central also provides an hourly service to East Croydon, running via West London and connecting with services to Brighton. Glasgow Edinburgh Newcastle Between the three operators, six trains per hour head north and eight per hour south from the station. The town is therefore within convenient business travelling distance of Britain s commercial heartlands in the Midlands and the South East. Manchester M1 Leeds A 130 million major upgrade of the railway station has been put in place including two extra tracks and another platform to allow more Inter-City trains to stop. Air Luton Airport is approximately 22 miles south-west of the town, which offers frequent flights to many domestic and international locations. London Heathrow, London Gatwick and Birmingham International Airports are also within easy reach of the town. Birmingham London East Midlands Milton Keynes Luton Stansted City Heathrow Gatwick LINFORD WOOD BUSINESS CENTRE MILTON KEYNES 4

5 A422 TO NORTHAMPTON & THE NORTH MONKS WAY M1 MONKS WAY A422 LINFORD WOOD BUSINESS PARK PORTWAY A TO LUTON & LONDON B4034 TO M1 (JUNCTION 15), M45, M6, COVENTRY & BIRMINGHAM PORTWAY A509 MILTON KEYNES TONGWELL STREET MILTON KEYNES CENTRAL A5 TOWN CENTRE MARLBOROUGH STREET B4034 STANDING WAY A421 A4146 TO M1 (JUNCTION 9), LUTON & LONDON A5 STANDING WAY A421 SITUATION Linford Wood is an established office campus location in Milton Keynes situated approximately one mile north of the town centre and three miles west of the M1 (junction 14) via the A422 dual carriageway. Regular buses run from Linford Wood to a wide range of key destinations including Milton Keynes Central railway station and the town centre. The area has attracted a number of companies with their regional headquarters including Motor Insurer s Bureau, Computacenter and Hays Distribution Services. Sat Nav reference MK14 6NJ. LINFORD WOOD BUSINESS CENTRE MILTON KEYNES 5

6 DESCRIPTION Linford Wood Business Centre was constructed between 1984 and 1990 and comprises five self-contained buildings with a total floor area of (10,993 m 2 ) 118,330 ft 2. The buildings are arranged around a central car park on an attractive, landscaped campus with a total site area of approximately 3.4 hectares (8.4 acres). The buildings offer the flexibility to be let as a whole, on a floor by floor basis or in smaller suites such that they can service a wide range of occupational requirements. Internally, the general specification includes: Raised floors 4 pipe fan coil air conditioning Suspended ceilings with recessed lighting Male, female and disabled WC s Much of the accommodation has recently been refurbished including the following areas: Carina - Part ground and first floors Cygnus - The whole building Gemini - Part ground and part first floors Scorpio - The whole building Externally, there are 445 car parking spaces providing an overall car parking ratio 1:26 m 2 (1:266 ft 2 ). LINFORD WOOD BUSINESS CENTRE MILTON KEYNES 6

7 SPECIFICATION CARINA CYGNUS 3A 3B 3E, 3F, 3G & 3H 3C & 3D Ground Floor First Floor Ground Floor First Floor GEMINI LIBRA 2A 2B 2A 2B 2C & 2D 2C & 2D Ground Floor First Floor Ground Floor First Floor SCORPIO Fully Refurbished Moderately Refurbished Requires Refurbishment Ground Floor First Floor For illustrative purposes only LINFORD WOOD BUSINESS CENTRE MILTON KEYNES 7

8 TENURE The property is held freehold. LIBRA CARINA GEMINI SCORPIO CYGNUS LINFORD WOOD BUSINESS CENTRE MILTON KEYNES 8

9 TENANCY SCHEDULE The property is currently let to 5 tenants in accordance with the tenancy schedule set out below and produces a rental income of 887,399 per annum which equates to a low overall base rent of only ( 113 per m 2 ) per ft 2. Unit Carina Tenant Accommodation Lease Details Current Income Floor ft 2 Start End Review Break pa per ft 2 Comments 3A Vacant Ground 1, B Vacant Ground 3, Unit became vacant on 29/09/ C & 3D Mirus IT Solutions Ltd Ground 6,219 13/04/ /04/ /04/ , F, 3E, 3G & 3H Cygnus Whole Gemini 2A 2B 2C & 2D Vacant First 11, Renesas Electronics (Europe) GmbH Vacant SMA Solar UK Ltd Vacant Total 23,262 52,275 Ground 11,062 First 11,705 01/06/ /03/ , Total 22, ,570 Ground 2,405 First 2,748 Ground 2,609 First 2,962 Ground First 5,693 5, Tenant only break option requiring 6 months written notice. 22 demised car parking spaces. 12 months rent free. The vendor will top up the rent free period. 85 demised car parking spaces. 19/07/ /07/ /07/ /07/ , demised car parking spaces Libra Whole Scorpio Whole Miscellaneous Substation Substation Wayleave (UG Cable) British Telecommunications Plc IMServ Europe Ltd East Midlands Electricty Board East Midlands Electricity Board Western Power Distribution (East Midlands) plc Total 22,088 51,417 Ground 11,438 First 11,344 24/06/ /06/ , Total 22, ,000 Ground 13,650 21/04/ /04/ , First 13,781 Total 27, ,130 Ground - 24/06/ /06/ First - 08/02/ /02/ Second - 15/05/ /05/ Total , ,399 Tenant not in occupation. 80 demised car parking spaces break option has been removed by negotiation. Rent free period from 24/06/2011 until 23/06/2012. The vendor will top up the rent. 100 demised car parking spaces. Currently holding over. Terms agreed with Central Networks. 21 year FRI lease at a peppercorn ( 50 commuted sum from 24/09/2011). The property has been measured by Plowan Craven on a net internal basis in accordance with the Code of Measuring Practice (6th edition). LINFORD WOOD BUSINESS CENTRE MILTON KEYNES 9

10 COVENANT INFORMATION British Telecommunications Plc 31% of the income BT are one of the largest telecommunications service companies in the world which has operations in more than 170 countries. Further information can be found at Date 31/03/ /03/ /03/2009 Sales Turnover 20,076,000,000 20,859,000,000 21,313,000,000 Profit / (Loss) Before Taxes 1,959,000,000 1,303,000, ,000,000 Tangible Net Worth 17,724,000,000 12,129,000,000 14,346,000,000 Net Current Assets (Liabilities) ( 1,925,000,000) ( 3,616,000,000) ( 3,264,000,000) D&B rating of 5A1 IMServ Europe Ltd 31% of the income IMServ was founded in 1992 and today are one of the UK s leading providers of carbon and energy solutions. They have over 50% of the energy data collection market and collect over 80 billion units of electricity consumption data annually. Further information can be found at Date 31/03/ /03/ /03/2009 Sales Turnover 29,633,000 25,351,000 23,678,000 Profit / (Loss) Before Taxes 1,559,000 5,059,000 6,291,000 Tangible Net Worth 21,790,000 20,293,000 15,236,000 Net Current Assets (Liabilities) 21,340,000 19,729,000 14,345,000 D&B rating of 4A1 LINFORD WOOD BUSINESS CENTRE MILTON KEYNES 10

11 Renesas Electronics (Europe) GmbH 26% of the income Renesas Electronics Europe is a wholly owned subsidiary of Renesas Electronics Corporation (TSE: 6723), the world s leading supplier of microcontrollers and a premier supplier of advanced semiconductor solutions. There are four dedicated business groups serving the region s key markets: automotive, communications & consumer, industrial and mobile platforms. Further information can be found at Date 31/03/ /09/ /03/2008 Net Sales or Gross Results 522,373, ,593, ,089,000 Balance Sheet Total 239,708, ,572, ,122,000 Current Assets 231,190, ,988, ,522,000 D&B rating of 5A1 Mirus IT Solutions Ltd 6% of the income A computer services company providing IT support in Milton Keynes, Northampton and surrounding areas. Their services include consultancy, disaster recovery planning, software licensing, wireless security and support services. Further information can be found at Date 31/10/ /10/ /10/2008 Tangible Net Worth 342, , ,073 Net Current Assets (Liabilities) 389, , ,898 D&B rating of B1 LINFORD WOOD BUSINESS CENTRE MILTON KEYNES 11

12 SMA Solar UK Ltd 6% of the income SMA develops and manufactures the industry s most efficient inverters for photovoltaic systems of any size, power class and grid specification. Due to the organisation becoming incorporated in November 2010, the first set of accounts is not due to be field until August SERVICE CHARGE Occupiers pay a service charge for the upkeep and maintenance of the estate common areas. Based on the total budget for the year ending 31 December 2011, the overall charge equated to 1.83 per ft 2. The budget for the year ending 31 December 2012 is in the process of being finalised. CAPITAL ALLOWANCES Capital Allowances may be available by way of separate negotiation. LINFORD WOOD BUSINESS CENTRE MILTON KEYNES 12

13 VAT The property is elected for VAT however it is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC). INVESTMENT CONSIDERATIONS The buildings offer the flexibility to be let as a whole, on a floor by floor basis or in smaller suites. The property can service a wide range of occupational requirement sizes. Much of the accommodation has recently been refurbished reducing the need for future capital expenditure. Large site area of approximately 3.4 hectares (8.4 acres). Recent lettings in Carina and Gemini demonstrates occupational demand. Opportunity to enhance and extend the income profile. Let the vacant units to improve the running yield. LINFORD WOOD BUSINESS CENTRE MILTON KEYNES 13

14 PROPOSAL Offers are sought in the region of 7,000,000 (Seven Million Pounds), subject to contract and exclusive of VAT. A purchase at this level reflects an attractive net initial yield of 12% assuming purchaser s costs of 5.8% and a low capital value of only 59 per ft 2. The yield improves to 16.5% on letting the vacant units. CONTACTS Noel Lander Simon Verrall Claire Mills noel.lander@eu.jll.com simon.verrall@eu.jll.com claire.mills@eu.jll.com Crown Copyright All rights reserved. Promap licence number Jones Lang LaSalle licence number This plan is 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. Misrepresentations Act 1967 & Declaration Jones Lang LaSalle for themselves and for the vendors of this property whose agents they are give notice that: a) the particulars are set out as general outline only for the guidance of intending purchasers and do not constitute, nor constitute part of, an offer or contract; b) all descriptions, dimensions, references to condition and necessary permissions for use and occupation and other details are given in good faith and are believed to be correct, but any intending purchaser should not rely on them as statements or representations of fact but should satisfy themselves by inspection or otherwise as to the correctness of each of them; c) no person in the employment of Jones Lang LaSalle has any authority to make or give any representation or warranty whatever in relation to this property. Subject to Contract Exclusive of VAT February 2012