GOVERNMENT LET OFFICE INVESTMENT O&G OXFORD & GLOUCESTER HOUSE 49-63 CHICHESTER STREET BELFAST BT1 4RA
Investment Summary Highly prominent office building located in Belfast City Centre. Significant frontage onto Chichester Street in close proximity to the Belfast Law Courts, Victoria Square Shopping Centre and Belfast City Hall. The properties comprise a total of 51,506 sq ft and benefit from 15no. on site car parking spaces. Site measures 0.33 acres approx. Let under two co-terminus leases to Department of Finance and Personnel for a term of 5 years from the 13 March 2014 expiring on the 12 March 2019 on full repairing and insuring terms, subject to a condition report. Tenant break clause 12 March 2017. The property currently produces a total income of 577,800 per annum excl of VAT. Buoyant office sector within Belfast attracting high levels of Foreign Direct Investment. Limited supply of quality office accommodation in the Belfast market leading to a supply and demand imbalance. Freehold title. We are instructed to seek offers over 5,750,000 (Five Million Seven Hundred and Fifty Thousand Pounds) excl of VAT for our client s interest. A purchase at this level would reflect an attractive net initial yield of 9.50% (costs at 5.80%) and a capital value of 111.63 per sq ft. Government tenant providing undoubted covenant strength.
Location Belfast is the capital of Northern Ireland and is ranked the 14th largest city in the United Kingdom and the 10th largest conurbation. The city is located approximately 103 miles north of Dublin and 70 miles south east of Londonderry. The city has a resident population of approx. 281,000 persons which represents 15.5% of Northern Ireland s total population of 1.81 million. The wider Belfast metropolitan area has a population extending to approx. 650,000 of the Northern Ireland population (c. 36%). The city benefits from four railway stations and the Belfast to Dublin train route has a journey time of approx. 1 hour 50 minutes. The two airports, George Best Belfast City and Belfast International, provide access to all major UK and international locations including America and mainland Europe. Over 60% of Belfast s total population are of working age. It is also a young city, with 18.6% of the population under 16 years old (2011 census). As of December 2014 the unemployment rate stands at 5.7%. Belfast has an excellent communications network. The M2 motorway provides access to the north towards Antrim and Londonderry and the M1 motorway provides access to the south and west of the province towards Lisburn and Dublin. BELFAST INTERNATIONAL AIRPORT BELFAST PORT GEORGE BEST BELFAST CITY AIRPORT BELFAST BELFAST CENTRAL STATION
Situation The property is situated in a highly prominent location with a significant frontage onto Chichester Street in a Belfast City Centre core location. The immediate area comprises a mix of well established office occupiers, Victoria Square Shopping Centre, anchored by House of Fraser, located opposite, Belfast Waterfront Hall and the Royal Courts of Justice and associated administrative buildings. O&G OXFORD & GLOUCESTER HOUSE 49-63 CHICHESTER STREET BELFAST BT1 4RA ULSTER BANK BELFAST CITY HALL ARTHUR STREET DANSKE BANK DONEGALL PLACE VICTORIA SQUARE SHOPPING CENTRE BAR LIBRARY HOUSE OF FRASER HIGH COURTS ANN STREET WATERFRONT HALL LAGANSIDE COURTS FIRST TRUST BANK
Property Description The property constructed in the early 1970 s comprises two interconnected office buildings arranged over ground and six upper floors, with secure onsite car parking. The building is of concrete frame construction with brick infill and feature marble cladding to the Chichester Street frontage. Heating throughout is by both gas and oil fired central heating serving radiators, which is supplemented by limited comfort cooling to some of the office space. Both buildings benefit from two independent foyer entrances with lift and staircase cores. Oxford House has two 8-person passenger lifts and Gloucester House has four 7 person passenger lifts. Some of the floors are linked internally. Oxford House benefits from modern upvc glazing throughout while Gloucester House is a mix of modern upvc and original singled glazed metal framed windows. Both buildings benefit from excellent and high levels of natural lighting. The offices are of a standard finish to include plaster painted walls and suspended tile ceilings incorporating lighting and carpeting. The property benefits from 15no. car park spaces (10 of which are tandem spaces) accessed via Seymour Street situated securely to the rear of the property.
Accommodation The property has been measured in accordance with the RICS Code of Measuring Practice (6th Edition) with net internal floor areas as follows: Floor Sq m Sq ft Oxford House - 49/55 Chichester St Ground 169.6 1825 First 266.2 2864 Second 266.2 2864 Third 266.2 2864 Fourth 266.2 2864 Fifth 266.2 2864 Sixth 158.4 1705 Total 1659 17850 Gloucester House - 57/63 Chichester St Ground 434.8 4679 First 498.4 5363 Second 498.4 5363 Third 498.4 5363 Fourth 498.4 5363 Fifth 498.4 5363 Sixth 201 2162 Total 3128 33656 Total net internal area 4787 51506 (all areas being approximate) Tenancy The properties are let under two co-terminus leases with rents totalling 577,800 pa based on the following terms. Oxford House Lease summary Tenant Rent Department of Finance and Personnel 195,300 pa Term 5 years from 13 March 2014, expiring 12 March 2019. Tenant option to determine 12 March 2017 (6 months notice) Repairs Full Repairing and Insuring, subject to a photographic condition report. Gloucester House Lease summary Tenant Rent Department of Finance and Personnel 382,500 pa Term 5 years from 13 March 2014, expiring 12 March 2019. Tenant option to determine 12 March 2017 (6 months notice) Repairs Full Repairing and Insuring, subject to a photographic condition report. Oxford House is occupied by the Department of Social Development and Department of Finance and Personnel. Gloucester House is occupied by Department for Employment and Learning. Both buildings have been occupied by various government departments since the early 1970 s.
Oxford House is occupied by the Department of Social Development and Department of Finance and Personnel. Gloucester House is occupied by Department for Employment and Learning. departments since the early 1970 s. O&G OXFORD & GLOUCESTER HOUSE 49-63 CHICHESTER STREET BELFAST BT1 4RA
Belfast Office Market Demand Total office take-up for the Belfast market in 2014 was recorded at 348,548 sq ft. The first half of 2015 has been relatively subdued in terms of office letting activity with 87,500 sq.ft transacted, however this is a similar trend to 2014 with significant activity anticipated Q3/Q4 2015. Lettings have been concluded to tenants including Rapid 7, PwC, Chain Reaction Cycles and Aviva. Jobs announcements continued at pace with Invest NI confirming it has secured almost 448 million of investment by businesses in the Belfast City Council area and that 5,544 new jobs were promoted in 2014/15. There are a number of high profile requirements outstanding and couple this with a number of high profile lease events in 2017, together with rising rents, this should kick start a new wave of development and refurbishment activity across the city. Supply There was approximately 905,000 sq ft of available accommodation in Belfast by H2 2015, down 63,000 sq ft over the last six months. The amount of Grade A continues to decline with just under 220,000 sq ft now available, and fragmented across multiple buildings restricting choice for larger requirements. Refurbishment of existing buildings will play an important role in delivering much needed quality stock to the market, bearing in mind the longer lead in times required for new build space. Rents Headline rents at the end of 2014 stood at 15.50 per sq ft and we expect this to continue to increase during the course of 2015 driven by high demand and the ever reducing supply of quality space. We anticipate Grade A Belfast rents increasing to 17-18 per sq. ft. in the near future and even with this modest increase, the city will still remain a highly competitive location compared to other UK cities. (Source: CBRE Research)
Investment Market During 2014 over 493 million has been invested directly in the commercial property market in Northern Ireland. This represents a very strong year performance and is more than the previous 5 years combined. Year to date 2015, there has been approximately 185 million of investment activity with a similar total volume of activity anticipated, as 2014. There has also been clear evidence of a greater depth of buyers in the market over recent months and a return of liquidity within the debt markets is seen as very positive. Prime yields in Northern Ireland have continued to contract over the last 6 months, particularly the office sectors as investors seek to capitalize on anticipated rental growth. Address Tenants Sq Ft Date Sold Purchaser Capital Value 29 Clarendon Road Belfast Net Initial Yield WAULT* Government 46,764 Aug 2015 NI Investor 142.30 psf 7.18% To expiry: 6.5 yrs Clare House, Airport Road West Belfast Department of Finance and Personnel 66,210 Mar 2015 Department of Finance and Personnel 120.82 psf 8.31% To expiry: 4.61 yrs Causeway Exchange, 1-7 Bedford Street Belfast Department of Finance and Personnel 89,000 Jan 2015 Department of Finance and Personnel 136.50 psf 8.09% To expiry: 4.19 yrs Oxford Exchange/ Laganside House, Oxford Street Belfast Secretary of State for the Communities and Local Government 33,658 Jan 2015 Department of Finance and Personnel 144.09 psf 8.00% To expiry: 6.78 yrs Victoria House, Gloucester Street, Belfast Multi Let 58,205 Sept 2014 F&C REIT 8,700,000 ( 149.47 psf) 7.93% To expiry: 9.59 yrs. To break: 4.04 yrs *WAULT: Weighted Average Unexpired Lease Term (Source: CBRE Research)
Proposal We are instructed to seek offers over 5,750,000 (Five Million Seven Hundred and Fifty Thousand Pounds) excl. of VAT for our client s interest. A purchase at this level would reflect an attractive net initial yield of 9.50% (costs at 5.80%) and a capital value of 111.63 per sq ft. EPC EPC Ratings as follows: Oxford House C58 Gloucester House C60 Title Freehold. Contact Details Certificates available on request. VAT The property has been elected for VAT, as such VAT will be payable on the purchase price. It is envisaged the transaction will be treated as a TOGC. Robert Ditty Capital Markets T: 028 9043 6917 M: 077 6213 7534 E: robert.ditty@cbre.com Joel Callaghan Debt and Structured Finance T: 028 90 436 922 M: 079 9002 3488 E: joel.callaghan@cbre.com Andrew Coggins Capital Markets T: 028 9043 6915 M: 074 6869 7290 E: andrew.coggins@cbre.com CBRE Imperial House Donegall Square East Belfast, BT1 5HD www.cbre.co.uk/ni These particulars are issued by CBRE on the understanding that any negotiations relating to the property are conducted through them. Whilst every care is taken in preparing them, CBRE for themselves and for the vendor/lessor whose agents they are, give notice that:- (i) the particulars are set out as a general outline for guiding potential purchasers/tenants and do not constitute any part of an offer or contract, (ii) any representation including descriptions, dimensions, references to condition, permissions or licenses for uses or occupation, access or any other details are given in good faith and are believed to be correct, but any intending purchaser or tenant should not rely on them as statements or representations of fact but must satisfy themselves (at their own expense) as to their correctness, (iii) neither CBRE, nor any of their employees have any authority to make any or give any representation or warranty in relation to the property. Note: All plans and photographs are for identification purposes only. Subject to contract. September 2015.