GASPE H(JY[JSE JERSEY 66-72 ESPLANADE, ST HELIER, JERSEl飞JE2 3QT PRIME GRADE A MULTI-LET OFFICE INVESTMENT
GASPE H(JY[JSE JERSEY
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INVESTMENT SUMMARY Opportunity to purchase Jersey s most impressive and well specified office building Prime multi let investment located in St Helier s town centre Gaspé House is situated on the Esplanade, Jersey s premier office location Modern, Grade A office accommodation arranged over ground and five upper floors, totalling 164,298 sq ft (15,263.8 sq m) Constructed in 2016 with a BREEAM rating of Excellent Multi let to four high profile tenants including Royal Bank of Canada, which accounts for 54% of income, Deloitte LLP, Collas Crill and First Names Group Royal Bank of Canada undertake wealth management services from Gaspé House with RBC Wealth Management being the World s fifth largest wealth manager by assets under management Long unexpired lease term of 14.54 years to breaks and 21.03 years to expiry Passing rent of 5,636,279 per annum, equating to 34.43 per sq ft on the office accommodation Three yearly upwards only rent reviews with a number of fixed increases Freehold Jersey is the largest of the Channel Islands and is well served by regular flights to the UK and Europe Jersey s strong economy is dominated by the financial services sector and has seen significant growth in recent years 5
Ipswich Oxford Cardiff Bristol London Mainland UK Canterbury Plémont Brighton Exeter St Mary A9 JERSEY A12 St Clair Bouley Bay A8 Rozel Manor A2 Le Pulente A13 St Aubin St Helier Grouville Le Hocq A4 Amiens Guernsey Le Havre Rouen Jersey Caen France Paris Maps not to scale. For indicative purposes only. LOCATION SITUATION Jersey is the largest of the Channel Islands, situated 14 miles off the north west coast of France and 85 miles from the south coast of England. The island is well served by sea and air links to both the UK and Europe. Jersey Airport is located 5 miles from St Helier and provides regular services to the UK, France and Switzerland. Journey times from London Gatwick and London City airports are 1 hour and 1 hour 15 minutes respectively. Ferry services from the UK to Jersey operate regularly, with a fastest journey time of 4 hours 30 minutes from Poole. The island has a total population of approximately 102,700, which has increased by nearly 13% over the past 10 years. Forecasts indicate the population will rise to over 115,000 by 2025. Jersey is a Crown Dependency and is therefore self-governing and operates within its own financial and legal systems, with its own Courts of Law. Jersey s local economy revolves largely around the finance and professional advisory industries. Gaspé House is located on the south coast of Jersey, in the heart of St Helier, the island s capital. St Helier is the financial centre of the island with a majority of businesses locating there. The property fronts The Esplanade, Jersey s prime financial business district office location, with Patriotic Street and Kensington Place running either side of the property. The Esplanade is home to a number of high profile financial institutions and professional advisors, to include HSBC, Citibank, UBS, Lloyds, BNP Paribas, Ogier, PwC and KPMG. Gaspé House occupies an extremely prominent location on the waterfront, with views across the harbour and out to Elizabeth Castle, and in close proximity to Liberty Wharf and Waterfront retail and leisure schemes. 6
THE ECONOMY Jersey is a renowned financial centre with a strong and prosperous economy. Financial services dominate the economy, employing nearly 22% of the working population and contributing to more than 40% of GDP. As a result, there are 32 registered banks on the island. Total banking deposits on the island is estimated at 108 billion, with the net asset value of funds totalling approximately 220 billion, and the total value of funds under investment management standing at 22 billion. The Jersey Financial Services Commission is responsible for the regulation, supervision and, within its legal remit, the development of the financial services industry on the island. Further information is available at www.jerseyfsc.org. Aside from financial services, the island is reliant on tourism, which accounts for over 20% of GDP. The island attracts over 700,000 visitors per annum, with the majority coming from the UK and mainland Europe. BBC Jersey St Aubin s Rd West Park People s Park Westmount Road ST AUBIN S ROAD Lewis Street ELIZABETH PLACE Parade Gardens Great Union Road Garden Lane Victoria Street Vauxhall Street Beresford Street ESPLANADE Les Jardins de la Mer Gloucester St Seaton Pl ESPLANADE Jersey Opera House St Helier s Town Hall The Cenotaph Street Du maresq New Street Don Street C Radisson Blu Waterfront Hotel Waterfront Retail and Leisure Waterfront Gardens Castle Street Commercial Street Esplanade LA ROUTE DE LA LIBERATION Broad Str et Liberty Wharf Mulcaster Street Royal Square Jersey Museum & Art Gallery Fort Regent Regent Road La Chasse Jersey Harbours New North Quay LA ROUTE DU FORT 7 Maps not to scale. For indicative purposes only.
THE ESPLANADE, ST HELIER, JERSEY For indicative purposes only. Boundary for indicative purposes only. 8
GASPÉ HOUSE INTERNATIONAL OCCUPIERS ON THE ESPLANADE Royal Bank of Canada Deloitte First Names Group Collas Crill HSBC Carey Olsen Schroders Aberdeen CVC Capital Intertrust Aztec Citibank Lloyds KPMG PWC Canaccord JTC Group JFSC SG Hambros UBS BNP Paribas EY Applebys BDO Ogier 9
DESCRIPTION Gaspé House provides 164,298 sq ft (15,263.8sq m) of Grade A office accommodation arranged over ground and five upper floors. The property was constructed in 2016 and is Jerseys most high profile and spectacular office building. There are 40 secure car parking spaces and 102 bicycle spaces located on the rear of the ground floor. Internally, the property benefits from a Grade A specification throughout, including: VRF / Two pipe fan coil air conditioning Suspended ceilings with LG7 compliant lighting Fully accessible raised floors Nine 13 person passenger lifts One 33 person goods lift Floor to ceiling height glazing BREEAM Excellent rating Male, female and disabled WC s with shower facilities on each floor Shower facilities on ground floor 40 car parking spaces and 102 cycle bays Features include: Substantial reception with concierge desk Private taxi and limousine drop off and waiting area Glazed atrium Substantial balcony on the fifth floor 10
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ACCOMMODATION The property has been measured and floor areas agreed between the landlord and tenants and documented in the leases as follows; Floor Tenant Net Internal Area Sq Ft Sq M Fifth RBC 18,030 1,675.0 Fourth RBC 34,607 3,215.1 Part Third RBC 28,701 2,666.4 Part Third Vacant 5,634 523.4 Second FNG 37,288 3,464.2 Part First Collas Crill 20,325 1,888.3 Part First Deloitte 10,671 991.4 Ground RBC 9,042 840.0 Total 164,298 15,263.8 14
GROUND FLOOR PLAN TYPICAL UPPER FLOOR PLAN 15
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TENANCIES The property is multi-let to four tenants with a weighted average unexpired lease term of 21.03 years to expiries and 14.54 years to breaks. The passing rent is 5,636,279 per annum, equating to 34.43 per sq ft on the office accommodation. The leases are subject to 3 yearly upward only open market rent reviews. Tenant Floor Area (sq ft) Current Rent (per annum) Passing Rent (per sq ft) Car Parking Spaces** Royal Bank of Canada Services (Channel Islands) Ltd Guaranteed by Royal Bank of Canada (Channel Islands) Ltd Ground, Part Third, Fourth & Fifth 90,380 3,027,474 34.00 30 Deloitte LLP Part First 10,671 371,814 34.00 3 Collas Crill Group Services (Jersey) Ltd Guaranteed by Collas Crill Group Ltd First Names Management (Jersey) Ltd Guaranteed by First Names Group Ltd Part First 20,280 + 45 Store 726,143 35.47 2 Second Floor 37,243 + 45 Store 1,319,293* 35.00 5 Vacant Part Third 5,634 191,556 34.00 - Total 164,298 5,636,279 34.43 40 ** 3,000 per car parking space 18
TENURE The property is held freehold. Lease Start Lease Expiry Break Option Next Rent Review Comments 28/10/2016 27/10/2037 27/10/2031 28/10/2019 3 yearly upward only open market rent review. There is a full rental breakdown of areas available upon request. 30/09/2016 29/09/2025-30/09/2019 3 yearly upward only open market rent review. 01/12/2017 30/11/2038-01/12/2020 3 yearly upward only open market rent review, with minimum uplift to 37.00 per sq ft at first review. 29/06/2018 (anticipated) 28/06/2046 (anticipated) 28/06/2033 28/06/2039 28/06/2042 (anticipated) 28/06/2021 Agreement for Lease signed on 30/06/2017. Lease due to complete on 29/06/2018. 3 yearly upward only open market rent review, with minimum uplift to 37.00 per sq ft at first review. *The passing rent is subject to final confirmation between the landlord and tenant. - - - - 18 month rent, rates and service charge guarantee from the vendor. 19
COVENANT STRENGTH Tenant s accounts can be made available to interested parties upon request. Royal Bank of Canada Services (Channel Islands) Ltd Guaranteed by Royal Bank of Canada (Channel Islands) Ltd 54% of annual income Royal Bank of Canada is a multinational financial services company, which has approximately 80,000 employees serving more than 16 million clients with operations in 37 countries. RBC Wealth Management is the world s fifth largest wealth manager by assets, with 4,800 financial consultants, advisors, private bankers and trust offers, and circa C$929 billion assets under administration. World Economic Forum named RBC among the most sustainable large organisations in the world. First Names Management (Jersey) Ltd Guaranteed by First Names Group Ltd 23% of annual income First Names Group is an independent provider of trust, real estate and corporate services operating globally. First Names (Jersey) Limited is a member of Nexia International, a worldwide network of independent accounting and consulting firms. Further information can be found at: www.firstnames.com Further information can be found at: www.rbc.com 20
Collas Crill Group Services (Jersey) Ltd Guaranteed by Collas Crill Group Ltd 13% of annual income Collas Crill is one of the leading offshore law firms, with offices based in Jersey, Guernsey, London, Singapore, British Virgin Islands, Hong Kong and Cayman. The company was formed in 2011 with the merger of two of the Channel Islands most longestablished names, Collas Day in Guernsey and Crill Canavan in Jersey, to form the Channel Islands newest and most innovative full service law firm. Deloitte LLP 7% of annual income Deloitte in Jersey delivers audit, corporate finance and tax services to a broad range of locally and internationally based clients bringing together expertise, knowledge and insight from a broad range of disciplines to meet the needs of their clients wherever they are in the world. Further information can be found at: www.deloitte.com Further information can be found at: www.collascrill.com 21
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JERSEY OCCUPATIONAL MARKET Jersey s total office stock is over 3 million sq ft, of which the majority is concentrated in St Helier. Demand for space within the prime business district has continued, with take up in 2017 exceeding the 5 year average of 100,000 sq ft. With a majority of developments agreeing pre-lets, few are speculatively developed, and the availability of Grade A office stock in Jersey is limited, resulting in continued rental growth in the short and medium term. Occupational demand remains strong and we anticipate further pre-lets being announced during 2018. Historically the island has had a very low vacancy rate and this currently stands at less than 5.0%. However, an estimated 80,000 sq ft of office stock is functionally or locationally obsolete and does not provide the quality of accommodation required by modern occupiers. Prime rents now stand in the region of 35.00 per sq ft plus for 15 year lease terms, as demonstrated in the table below. The preletting at Jersey International Finance Centre (JIFC) is expected to achieve 36.00 per sq ft. For lettings below 10,000 sq ft rents now stand at 40.00 per sq ft, as demonstrated at recent lettings at the Jersey International Finance Centre (JIFC). Date Property Area (sq ft) Tenant Lease Term (Break) Rent ( psf) Jan-18 Building 4, JIFC 2,596 Foundation Services Ltd 21 years 40.00 Aug-17 Building 4, JIFC 3,676 ED Capital 15 years 40.00 Jul-17 Building 4, JIFC 24,000 BNP Paribas (15 years) 35.00 May-17 Building 4, JIFC 3,296 Laing O Rourke 15 years 40.00 ( 42.00 fixed uplift) May-17 27 Esplanade 29,600 JTC Group 15 years 34.00 ( 35.00 fixed uplift) Apr-17 Building 4, JIFC 16,500 UBS 25 years (15 years) Nov-16 Building 5, JIFC 35,000 Sanne 24 years (15 years) 34.50 36.00 (anticipated) Oct-16 Gaspé House, 66-72 Esplanade 90,380 Royal Bank of Canada 21 years (15 years) 34.00 Sep-16 Gaspé House, 66-72 Esplanade 10,700 Deloitte 9 years 34.00 Jersey s prime office market has witnessed considerable activity over the past few years. The Esplanade has become the location of choice for companies within the finance sector, which has resulted in significant development activity in recent years, to include: 44 Esplanade, 37 Esplanade, Gaspé House (66-72 Esplanade) and 27 Esplanade, all of which have attracted pre-lettings during construction. The development of the Jersey International Finance Centre by the Jersey Development Corporation is the first of the Masterplan for the JIFC extending to 600,000 sq ft of offices, 350 residential units, together with ancillary, retail, restaurants, leisure and parking, which will further enhance the immediate location. 24
JERSEY INVESTMENT MARKET Jersey s office market has continued to perform well over the past year, as investors continue to be attracted by the strong investment fundamentals; good covenant strengths, appealing long lease structures, a stable economy, 3 yearly upwards only rent reviews and fixed rental uplifts. Jersey has attracted a range of institutional and international buyers, including Standard Life Investors, Valad Europe and Apache Capital. We have detailed some recent investment transactions in the Channel Islands below: Date Property Tenant (Term Certain) Dec-17 37 Esplanade, St Helier, Jersey Multi Let (10.0 years) Nov-17 Royal Bank Place, St Peter Port, Guernsey Royal Bank of Scotland International (10.0 years) Aug-17 Royal Chambers, St Peter Port, Guernsey Multi Let (14.0 years) Sep-16 Liberation House and Windward House, Esplanade, St Helier, Jersey Multi-let (7.0 years) Aug-16 13/14 Esplanade, St Helier, Jersey Appleby Global (17.5 years) Jul-15 Glategny Court, St Peter Port, Guernsey Multi-let (15.0 years) Jun-15 Mar-15 Martello Court & Dorey Court, Admiral Park, St Peter Port, Guernsey Trafalgar Court, Admiral Park, St Peter Port, Guernsey Multi-let (10.0 years) Multi-let (12.0 years) Mar-15 Ogier House, St Helier, Jersey Ogier (6.0 years) Price NIY Purchaser 45.00m 6.65% Sidra Capital 26.00m 6.75% A consortium of private buyers 46.50m 6.75% Channel Islands Property Fund 34.00m 7.50% (SPV) Channel Islands Property Fund 10.75m 6.75% Comprop 44.00m 6.60% (SPV) 49.50m 7.00% (SPV) 61.38m 6.50% (SPV) Channel Islands Property Fund Brockton Capital Stenprop 27.0m 7.50% Standard Life 25
Jerseys premier commercial and residential developer DANDARA Dandara was established in 1988 from the desire to provide innovative homes and commercial properties, which would offer the highest quality design, durability or quality. Dandara have been instrumental in transforming the Esplanade and have undertaken in excess of 500,000 sq ft of high quality office space developments in recent years. Today Dandara is one of the UK s largest independent property development companies, with over 10,000 customers and more than 100 industry awards for design and quality. Aside from Gaspé House the principal developments undertaken by Dandara are: 37 ESPLANADE Location: Esplanade, St Helier, Jersey Size: 88,000 sq ft Developed: 2012 Principal Tenants: PWC, KPMG, Brevin Howard, Canaccord Genuity, Volaw and First Names Group. The investment of 37 Esplanade was sold by Savills in December 2017. 27 ESPLANADE Location: Esplanade, St Helier, Jersey Size: 71,000 sq ft Developed: 2017 Principal Tenants: First letting 30,000 sq ft JTC Group. Pre-let agreements for further 11,000 sq ft 5-6 ESPLANADE Location: Esplanade, St Helier, Jersey Size: 48,000 sq ft Developed: Under construction Principal Tenants: Scheme developed speculatively with strong interest to pre-let shown from local institutions HSBC HOUSE, THE ESPLANADE Location: The Esplanade, St Hellier, Jersey Size: 55,000 sq ft Developed: 2002 Principal Let in its entirety to HSBC Tenants: 26
SERVICE CHARGE The service charge budget for 2017 was 4.00 per sq ft and is expected to remain the same for 2018. Full service charge information is available upon request. GOODS AND SERVICES TAX (GST) PARISH AND ISLAND OCCUPIER RATES Occupier rates are very low in Jersey compared to the United Kingdom. The 2017 assessment was circa 1.82 per sq ft. This is a significant benefit to occupiers when assessing overall occupation costs. VAT is not applicable in Jersey. Goods and Services Tax (GST) may be applicable. All figures quoted in this brochure are exclusive of GST and we would recommend that perspective purchasers make their own enquiries as to the liability. 27