SOVEREIGN HOUSE PRIME LEEDS CITY CENTRE OFFICE/LEISURE INVESTMENT 1-2 SOUTH PARADE PRIME LEEDS CITY CENTRE OFFICE/LEISURE LEEDS INVESTMENT LS1 5QL
09 14 08 03 HEADROW BRIGGATE 01 PARK ROW 02 05 10 11 12 04 06 07 13 LEEDS STATION 01 Law Courts 05 Zurich 09 FD Arena 12 Trinity Shopping Centre 02 Park Square 06 Walker Morris 10 Deloitte UBS 13 Wellington Place 03 Town Hall 04 Bank of England 07 DLA 08 The Light 11 Pinsent Masons Barclays 14 Victoria Gate
INVESTMENT SUMMARY Multi-let prime office and leisure investment in the heart of Leeds office and leisure cores. Highly prominent corner building with three frontages onto South Parade, Park Row and The Headrow. Attractive Grade II listed building extending to 36,291 sq ft (3,371.52 sq m) over basement, ground and five upper floors. Let to four tenants with an attractive AWULT of 6.7 years to expiry and 6.5 years to lease breaks. Strong tenant occupier profile including Hays, the renowned Bierkeller and Shooters Bar. Currently producing 518,646 pa, reflecting a low average rent of 14.15 psf (including guarantee) and 14.48 psf on the office and leisure accommodation respectively. Excellent asset management potential to enhance the income and unexpired term. Freehold. Offers are sought in excess of 6,650,000 (Six Million, Six Hundred and Fifty Thousand Pounds) subject to contract and exclusive of VAT, reflecting a net initial yield of 7.31%, assuming purchaser s costs of 6.64%, with strong reversionary potential in December 2017 and a low capital value of 183 psf.
LOCATION Leeds is the principal commercial and financial centre of Yorkshire. It forms one of the UK s largest conurbations and is the 3rd largest city in the UK with a population of 751,500 (Census 2011) and an estimated catchment of 2.2 million within a 30 minute drive. Leeds is one of the country s top retail and leisure destinations ranking 4th of the PMA centres and is one of the Big 6 UK regional offices centres ranking 3rd behind Manchester and Birmingham (PMA). The opening of Leeds Trinity and Leeds Arena in 2013 and Victoria Gate last year has reinforced the city s reputation as the dominant retail/ leisure destination within its extensive catchment. The city is the 2nd largest financial and legal services centre and is home to 30 national and international banks, 150 legal firms including Addleshaw Goddard, Eversheds and DLA Piper and 200 accountancy firms including Deliotte, KPMG and PWC. The city is located in the heart of the UK and highly accessible being approximately 35 miles (56 km) north of Sheffield, 44 miles (71 km) north east of Manchester and 194 miles (312 km) north of London and benefits from excellent transport links as follows: A58 HALIFAX BRADFORD HUDDERSFIELD CONNECTIVITY ROAD M62 M606 A658 LEEDS BRADFORD AIRPORT A6036 A650 A642 DEWSBURY The M621 motorway links the city to the M1 and M62 motorways, 7 miles (12 km) to the south and A1 (M) 10 miles (16 km) to the east, which link the city to London, the Midlands, Manchester, Liverpool and Hull. A660 A6120 LEEDS M62 RAIL M621 M1 A63 A650 A64 M1 WAKEFIELD A638 A58 M1 A1(M) CASTLEFORD M621 A1(M) PONTEFRACT A628 Leeds train station is the busiest in the country by passenger numbers (38 million a year) outside of London and serves as Yorkshire s hub to the rest of the UK. The fastest train time to London Kings Cross is 2 hours 15 minutes. The new HS2, High Speed Rail link, will reduce travel times to London to 1 hour 28 minutes. A638 AIR A64 A63 M62 A19 A19 SELBY A19 A19 A1041 Leeds Bradford Airport lies 7 miles (11 km) to the north west of Leeds city centre. The airport serves over 75 destinations.
PARK ROW UPR BASINGHALL ST BUTTS CT SITUATION Sovereign House is exceptionally located in a highly prominent corner position in the centre of Leeds within the traditional office and prime retail/leisure core. Trinity Leeds, The Light leisure scheme, the main retail areas and the train/bus stations are within a few minutes walk. BROWNS There are a number of restaurant and bar operators nearby on South Parade, Greek Street and Park Row, including San Carlos, Gaucho, Sukhothai and Stockdales of Yorkshire. In addition, Leeds newest luxury boutique hotel, Dakota Deluxe, opened in May 2017 on Greek Street which further strengthens the area. GALLERY HOUSE MERRION CENTRE A64 (M) SAN CARLO FOUNTAIN HOUSE PHEONIX HOUSE GAUCHO GREAT GEORGE ST LEEDS ART CATHERDRAL MERRION ST LEEDS ART GALLERY THE HEADROW THE LIGHT ALBION ST ST JOHN S CENTRE GRAND THEATRE & OPERA HOUSE PARK SQUARE ST PAUL S ST PARK PL YORK PL PARK SQ E PARK CROSS ST KING ST E PARADE S PARADE BEDFORD ST GREEK ST RUSSELL ST ALBION ST THE CORE LANDS LANE ALBION PLACE COMMERCIAL ST BRIGGATE THE HEADROW VICTORIA QUARTER GEORGE ST VICA R LN LEEDS KIRKDALE MARKET THE ALCHEMIST CARLUCCIOS RBS J D WETHERSPOON QUEBEC ST WELLINGTON ST CITY SQUARE BOAR LN KIRKGATE WAGAMAMA PRI NCESS SQUARE LEEDS STATION BISHOPGATE ST CALL LN THE CALLS GUSTO SANTANDER
DESCRIPTION Sovereign House is an attractive Grade II listed former banking hall originally built in 1864 for The Bank of England. The property extends to 36,291 sq ft over basement, ground and five upper floors. It provides a bar over the basement, ground and first floor and offices over second to fifth floors. The bar is very well established and configured to provide three different brands: Bierkeller (a German beer hall) in the basement, Around the World Bar on the ground floor and Shooters Sports Bar on the first floor. The tenant has recently taken additional ground floor accommodation and gained listed building consent to extend and reconfigure. The offices have their own dedicated entrance off South Parade with a communal lobby area providing access to two passenger (eight person) lifts which were new in 2012. The offices are well configured and provide regular modern floor plates which offer excellent flexibility with potential to let on a floor by floor basis or through subdivision. WCs are provided on each floor. The vacant fifth floor offices have recently benefited from refurbishment including: New air conditioning Suspended ceiling Lighting Carpet and decoration throughout FIFTH FLOOR FOURTH FLOOR SECOND FLOOR ACCOMMODATION The property has been measured in accordance with the RICS Code of Measuring Practice 6th Edition. The office and leisure areas have been measured on a NIA and GIA basis respectively. Floor Use Sq Ft Sq M Basement Leisure 4,331 402.36 Ground Floor Leisure 5,348 496.84 First Floor Leisure 6,208 576.74 Second Floor Office 6,072 564.10 Third Floor Office 6,298 585.10 Fourth Floor Office Suite A 2,639 245.17 Fourth Floor Office Suite B 2,442 226.87 Fifth Floor Office 2,953 274.34 TOTAL 36,291 3,371.52 PLANNING FIFTH FLOOR
PLANNING Sovereign House is Grade II listed and lies within the Leeds City Centre Conservation Area. Sports Cafe 2008 (Leeds) Limited were granted planning permission (Ref: 16/00155/FU) in February 2016 to reconfigure the ground and first floor and to expand their ground floor bar area. Plans can be provided upon request. TENURE Sovereign House is held Freehold. A copy of the registered title is available on request. SERVICE CHARGE A service charge is administered by our client. The service charge budget for the current financial year ending 31 December 2017 is 242,563. Further details are available on request. EPC Sovereign House has an EPC rating of D(76). A copy can be provided on request.
TENANCY Sovereign House is let to four tenants with an attractive weighted unexpired lease term of 6.7 years (6.5 years to breaks). UNIT TENANT AREA (SQ FT) LEASE START LEASE BREAK LEASE EXPIRY RENT REVIEW RENT ( PA) RENT ( PSF) COMMENTS Basement, ground and first floor Sports Café 2008 (Leeds) Limited BST: 4,331 GF: 5,348 1F: 6,208 Total: 15,887 26/4/2004 25/4/2029 26/4/2019 230,000 14.48 Two co-terimnus leases. The tenant has recently taken a supplemental lease for 1,050 sq ft of ground floor space at 28.57 psf. Schedule of condition relating to the basement vaults. Second & third floor Hays Specialist Recruitment (Holdings) Limited Guarantor: Hays Specialist Recruitment Limited 2F: 6,072 3F: 6,298 Total: 12,370 28/11/2003 27/5/2019 178,128 14.40 Part fourth floor (Suite A) Tube Approach Limited 2,639 18/12/2012 17/12/2022 18/12/2017 26,260 9.95 Service charge cap of 17,032.65 pa + RPI. The lease is contracted outside S24-28 of the 1954 L&T Act. December 2017 break notice passed. Part fourth floor (Suite B) MacIntosh James & Partners Limited 2,442 27/9/2015 27/9/2018 26/9/2020 39,963 16.36 Service charge cap of 17,760.69 pa + RPI. The lease is contracted outside S24-28 of the 1954 L&T Act. Fifth floor Vacant 2,953 44,295 15.00 Vendor to provide an 18 month rent and service charge guarantee. TOTAL 36,291 518,646
TENANT INFORMATION Sports Cafe 2008 (Leeds) Limited Sports Cafe 2008 (Leeds) Limited is a wholly owned subsidiary of The Burning Night Group. They are a successful and growing bar group which focuses on large premises located in major city centres such as Leeds, Liverpool, Manchester and Cardiff that house multiple concept bars in one site. These brands include Bierkeller, Shooters Bar, and Around The World Bar. Sports Cafe 2008 (Leeds) Limited report abbreviated accounts only which can be provided upon request. Their ultimate parent company, Burningnight Limited, reported a turnover of 17.38m, operating profits of 493k and a net worth of 3.16m for the year ended 31st July 2016. Hays Specialist Recruitment (Holdings) Limited Hays Specialist Recruitment (Holdings) Limited and, their guarantor, Hays Specialist Recruitment Limited are a wholly owned subsidiary of Hays Plc. Hays Plc is a substantial FTSE 250 listed global specialist recruitment and human resources group. The group employs 9,214 people in 33 countries globally. MacIntosh James & Partners Limited MacIntosh James & Partners Limited are independent wealth managers providing services to private clients. They provide overall financial planning advice including asset management, retirement planning, tax planning and protection advice. For the year ended 31st December 2015 MacIntosh James & Partners Limited, reported abbreviated accounts showing a net worth of 557k. Tube Approach Limited Tube Approach Limited is also a wholly owned subsidiary of The Burning Night Group. Their demise on the fourth floor is the head office for The Burning Night Group and all their bars they own and manage. Tube Approach Limited report abbreviated accounts only which can be provided upon request. Hays Specialist Recruitment (Holdings) Limited report abbreviated accounts only which for the year ended 24th June 2016 showed sharedholders funds of 8.49m. Their ultimate parent company, Hays Plc, report a turnover of 4.23bn, pre-tax profits of 173.00m and shareholders funds of 457.80m for the year ended 30th June 2016.
OCCUPATIONAL MARKET OVERVIEW LEISURE OFFICE The opening of Trinity Shopping Centre and Leeds Arena in 2013 and Victoria Gate in 2016 has cemented Leeds as one of the country s top leisure and retail destinations. Sovereign House occupies a highly prominent position in the area known for many of Leeds s best restaurants and bars. Greek Street and the surrounding streets including Park Row and South Parade are home to some of the City s most popular bars/restaurants including Stockdales of Yorkshire, San Carlos, Gusto, The Alchemist and Gaucho. The Light, the main leisure based scheme within Leeds, sits in close proximity to Sovereign House on the north side of The Headrow. Demand from restaurant and bar operators has been very strong in recent years in Leeds with new concepts opening including Gaucho on Park Row and Gusto on Greek Street. The 2016 letting to Bills restaurant on the corner of Albion Street and Albion Place reflected a rent of 50 psf. Within The Light on The Headrow rents of 35 per sq ft have been achieved. Leeds is one of the Big 6 UK regional office centres and has proved particularly popular with financial services and legal firms. It is regarded as one of the most important UK legal centres outside of London. Sovereign House sits in the heart of the traditional office core. 2017 is expected to be a record year for Leeds offices. In the first half of the year, take up was 239,732 sq ft and there are a further 500,000 sq ft of active lease requirements including from HMRC and the Government s Property Unit, which are expected to boost take up in 2017 towards 800,000 sq ft. Furthermore, a new benchmark prime office rent of 30.00 psf was set in May 2017 at 6 Queen Street with a 46,000 sq ft letting to Burberry. Demand for alternative uses, including residential and student accommodation, has continued to remove secondary office stock from the market and resulted in driving rents forward on refurbished space.
ASSET MANAGEMENT Sovereign House offers a purchaser numerous asset management opportunities including: Letting the vacant fifth floor offices. Seek lease re-gear with the existing office tenants who have shown interest. Low rents offer the opportunity to enhance the income, including: - The upcoming Tube Approach rent review in December 2017. - Rent review in 2019 of leisure parts. Longer term the building may afford the potential for alternative uses subject to the necessary consents. VAT We understand the property is elected for VAT purposes. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC). INVESTMENT RATIONALE Exceptional location within Leeds city centre. Highly prominent position on the corner of The Headrow, Park Row and South Parade. Prime leisure pitch offering strong trading prospects as evidenced by the existing ground floor tenant taking additional space at 28.57 psf. Attractive Grade II listed building providing flexible and well configured modern floor plates. Excellent potential for rental growth with the average office rental reflecting only 14.15 psf (including guarantee) and 14.48 psf for the leisure space. Strong tenant occupier profile. Attractive yield profile and low capital value. PROPOSAL Our client is seeking offers in excess of 6,650,000 (Six Million, Six Hundred and Fifty Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level would reflect an attractive net initial yield of 7.31%, after allowing for purchaser s costs of 6.64%, and a low capital value of 183 psf.
FURTHER INFORMATION SIMON MARTIN simon.martin@joinercummings.co.uk JOHN BLACKWELL john.blackwell@joinercummings.co.uk Tel: 020 7409 7828 Disclaimer Notice Messrs Joiner Cummings for themselves and (and their joint agents where applicable) for the vendors or lessors of this property whose agents they are give notice that; (i) the particulars are set out as a general outline for the guidance of the intending purchasers and do not constitute part of an offer or contract; (ii) all descriptions, dimension 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 are given without responsibility and any intending purchasers or tenant should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of them; (iii) all plant, machinery, equipment, services and fixtures and fittings referred to in these particulars were present at the date of preparing these particulars, they have not however been tested and therefore we give absolutely no warranty as to their condition, operation or fitness for the purpose of an intending occupier or purchaser; (iv) no investigations have been undertaken by Joiner Cummings in respect of asbestos, issues concerning pollution and potential land, building, air or water contamination and any intending purchasers or tenant must satisfy themselves by inspection; (v) unless otherwise stated, all prices rents and other charges are quoted exclusive of Value Added Tax (VAT) and any intending purchaser or tenant must satisfy themselves as to the incidence of VAT in respect of any transaction; (vi) no person in the employment of Joiner Cummings has any authority to make or give any representations or warranty whatever in relation to this property; (vii) no responsibility can be accepted for any expenses incurred by intending purchasers in inspecting properties which have been sold, let or withdrawn. The date of this publication is October 2017. 01732 897799 createwithimpact.com (E5810/WH)