Linea House Harvest Crescent, Ancells Business Park, Fleet GU51 2UZ Reversionary South East Multi-Let Office Investment Opportunity
Linea House CEN TRA L LON DO N M3
Investment Summary Reversionary, high-quality multi-let office investment in the south east, 38 miles from Central London Comprehensively refurbished in 2010, providing 22,062 sq ft (2,049.52 sq m) of Grade A office accommodation arranged over ground and two upper floors INVESTMENT SUMMARY ERV in Ancells Business Park of 18.00 per sq ft with good prospects for further rental growth as Fleet sits at a discount to adjoining towns, including Farnborough ( 27.50 psf) and Camberley ( 22.00 psf) Excellent car parking ratio of 1:182 Situated in the heart of Ancells Business Park, one of Fleet s premier office locations Strategically located in close proximity to J4A of the M3 and Fleet Railway Station One of the foremost office buildings within Ancells Business Park 25% reduction in office stock in Fleet across 2014-2015, owing to residential development conversions and lettings tightening office supply Tenure & Tenancy Freehold Fully let to 4 tenants: Verisk Analytics Ltd, Anite Telecoms Ltd, Grass Roots Meetings & Events Ltd and PRMA Consulting Ltd Total rent passing of 303,339 per annum, equating to a low 14.05 per sq ft Attractive WAULT of 6.37 years to expiries and 2.21 years to breaks Guaranteed reversion in 2019 via a stepped rent Proposal Offers are invited in excess of 3,450,000 (Three Million, Four Hundred and Fifty Thousand Pounds) for the freehold interest, subject to contract and exclusive of VAT A purchase at this level would reflect a net initial yield of 8.31% after allowing for purchaser s costs of 5.80%, reflecting a low capital value of 156 per sq ft Attractive guaranteed reversionary yield of 8.42% via the stepped rent in 2019. Potential for earlier reversion via the open market rent reviews to bring rents in line with ERV
A5 M6 OCK MARLBOROUGH RUGELEY ROAD LOCATION A303 A34 M4 NEWBURY A339 BASINGSTOKE 6 11 A33 HOOK READING 4A 10 FLEET MAIDENHEAD FARNHAM 4 A31 8 KINGSTON-UPON- THAMES STAINES-UPON- THAMES BRACKNELL A322 M3 FARNBOROUGH A331 3 ALDERSHOT A3 2 WOKING A3 13 12 5 4B 14 15 A312 HEATHROWH A AIRPORT 10 GUILDFORD 1 A308 WEYBRIDGE A243 9 A24 M25 HAMMERSMITH A217 8 M23 7 A232 A22 6 A102 Fleet is situated in close proximity to the M3, with excellent connectivity to Central London via road and rail. It is positioned 38 miles south west of Central London, 16 miles south east of Reading and 16 miles west of Guildford. The town is located in the heart of the Blackwater Valley, which is a key commercial location in the south east of England. The area is extremely affluent and is highly sought after to both live and work. Fleet has been voted the best place to live in the UK for the past 5 years by the Halifax Quality of Life study. It is also popular with a number of occupiers due to its proximity to Central London, together with its skilled workforce, high-grade housing stock, strong connectivity and good quality schools. A number of international corporates operate their headquarters from the area including: BAE Systems, Nokia, Virgin Media, Sun Micro Systems, Anite Telecoms, Siemens and BMW. Situation Linea House is located in the heart of Ancells Business Park which is one of Fleet s principal office locations. The Park is strategically positioned 1.5 miles north of the town centre and 1 mile north of the mainline railway station, and benefits from a range of retail and leisure amenities within close proximity. Ancells Business Park is accessed from Ancells Road off Minley Road, which is the main arterial route into the town centre. Junction 4A of the M3 is situated approximately 2 miles to the east, providing direct access into London. The Park comprises a number of high-quality selfcontained office buildings arranged in a secure landscaped environment, which is home to occupiers including Anite s UK Headquarters, Regus and Rohde & Schwarz. Communication Central London 38 miles Guildford 17 miles Woking 16 miles Basingstoke 16 miles Reading 16 miles London Waterloo 37 minutes Reading 41 minutes Southampton - 54 minutes Heathrow 22 miles Gatwick 48 miles Southampton 43 miles BLACKBUSHES ROAD MINLEY ROAD ELVETHAM ROAD M3 NORTH HANTS GOLF CLUB FLEET RAIL STATION FLEET ROAD FLEET TOWN CENTRE 4 A3013 KINGS ROAD Linea House AVONSDALE ROAD ANCELLS ROAD 3 1 FLEET POND 2 BRAMSHOT COTTAGES WOOD LANE GUILDFORD ROAD BRAMSHOT LANE LANE BRAMSHOT A327 A327 FLEET ROAD 4A KENNELS LANE 1 Tesco Express 2 The Falkners Arms 3 Caffe Lusso 4 Premier Inn
DESCRIPTION Linea House is a self-contained multi-let office building providing approximately 22,062 sq ft of Grade A office accommodation arranged in an L shape over three floors. The building is of steel frame construction, externally clad with brickwork under a slate roof. In 2010, the building was comprehensively refurbished to provide one of the best buildings on Ancells Business Park. The internal specification includes the following features: Double height reception Air conditioning Fully accessible raised floors Metal tiled suspended ceilings with LG7 lighting 2 x 8 passenger lifts Male and Female WCs on all floors Disabled WC facilities on ground and second floors Landscaped approach The property benefits from 121 car parking spaces, providing an excellent ratio of 1:182 sq ft. First Floor (Typical Floor) Site The property is situated on a site with an area of approximately 1.31 acres (0.53 hectares). 121 car parking spaces, providing an excellent ratio of 1:182 sq ft The plan is for indicative purposes only
ACCOMMODATION The building has been measured in accordance with the RICS Code of Measuring Practice (6th Edition) and provides the following net internal floor areas: Demise Area (sq m) Area (sq ft) Ground Floor 675.96 7,276 First Floor 680.76 7,328 Second Floor 648.44 6,980 Total 2,005.16 21,584 Reception 22.00 237 Second Floor Corridor 22.36 241 Overall Total 2,049.52 22,062 Tenure The property is held freehold. Tenancy Demise NIA (sq ft) Tenant Current Rent (pa) Rent (psf) Lease Start Lease Expiry Next Review Break Clause Comments Ground Floor 7,276 Grass Roots Meetings & Events Ltd 90,263 12.41 12/07/2012 08/07/2022 09/07/2018 09/07/2017 Tenant only break option (6 months notice) First Floor 7,328 Anite Telecoms Ltd 109,635 14.96 08/08/2012 07/08/2022 08/08/2017 08/08/2017 Tenant only break option (6 months notice) Second Floor (Suite A) 2,885 Verisk Analytics Ltd 45,291 15.70 12/04/2013 11/04/2023 12/04/2018 12/04/2018 Tenant only break option (6 months notice) Second Floor (Suite B) 4,095 PRMA Consulting Ltd 58,150 14.20 08/12/2015 07/12/2020 - - The vendor proposes to top up the rent to the Year 3 stepped rent of 58,150 pa. There is a further fixed uplift in Year 5 to 62,250 pa. Total 21,584 303,339 14.05 6.37 (to expiry) WAULT 2.21 (to break) WAULT
TENANT COVENANTS Grass Roots Meetings & Events Ltd (1092681) Grass Roots Group PLC was founded in 1980 and is regarded as the world s leading provider of employee and customer engagement solutions. It specialises in employee solutions, customer engagement, promotions and incentives, meetings and events. The company is headquartered in Tring, Hertfordshire with a network of offices in 10 countries with over 1,000 employees. It has featured in the Sunday Times Top 100 Companies to work for in 2010, 2012 and 2014. D&B Rating: 2A1 Description 31 Dec 2014 31 Dec 2013 31 Dec 2012 Sales Turnover 26,261 17,825 15,329 Profit / (Loss) Before Taxes 2,162 (1,499) (438) Tangible Net Worth 3,781 925 2,487 Anite Telecoms Ltd (1721900) Anite Telecoms Ltd is a leading supplier of test and measurement solutions to the international wireless market. The company was originally founded in 1973 as Cray Electronics and changed its name in 1996 to Anite Group PLC. In August 2015, the company was acquired by US electronics test and measurement company, Keysight Technologies, in a deal worth 388 million. Its 500 staff work from offices in 15 countries across Europe, the Americas, Asia and the Middle East. D&B Rating: 5A1 Description 30 Apr 2014 30 Apr 2013 30 Apr 2012 Sales Turnover 64,982 76,366 70,382 Profit / (Loss) Before Taxes 8,813 23,517 17,427 Tangible Net Worth 62,523 65,575 47,680 PRMA Consulting Ltd (05893400) PMRA Consulting Ltd provide innovative and integrated solutions for market access strategy, evidence generation, and value communication. The company was founded in 2006 and is headquartered in the UK and has two other offices in the US and Greece respectively. D&B Rating: C2 Description Description 31 Aug 2014 31 Dec 2014 31 Aug 2013 31 Dec 2013 30 Apr 2012 Sales Turnover n/a 6,338 4,573 Profit / (Loss) Before Taxes n/a 179 167 Tangible Net Worth n/a 794 752 Verisk Analytics Ltd (1924205) Verisk Analytics is a leading data analytics and risk assessment company serving customers in insurance, energy, healthcare, financial services, government and risk management. The company s parent company, Verisk Analytics, Inc, is based in Jersey City, New Jersey and is traded on the NASDAQ 100, with a network of over 40 offices across the globe. In 2014, it generated revenues in excess of $1.7 billion. D&B Rating: 4A1 31 Dec 2012 Sales Turnover 6,287 5,695 4,835 Profit / (Loss) Before Taxes 1,911 1,413 906 Tangible Net Worth 20,954 352 (723)
FLEET OCCUPATIONAL MARKET Fleet is one of the principal office locations in the Blackwater Valley region, which comprises a number of established office centres such as Farnborough, Camberley, Frimley, Hook and Aldershot. The area benefits from an affluent and highly skilled catchment population, as well as rental growth driven by occupiers priced out of Central London. It is home to a number of major national and international occupiers, including IBM, CSC, Fluor, Serco, Novartis, AON, Merrill Lynch and QinetiQ. Over the past two years, the Fleet office market has experienced a significant reduction in the total level of stock and vacant supply. During 2014-2015 alone there has been a 25% loss of the office stock from alternative use development, including residential development/pd. This squeeze on supply, combined with stronger occupier demand, is having a positive effect on rental tones and incentives being achieved. Headline quoting rents for grade A space on Ancells Business Park are currently at 18.00 per sq ft. These headline rent levels remain at a significant competitive level against neighbouring Blackwater Valley towns such as Farnborough (currently 27.50 per sq ft) and Camberley (currently 22.00 per sq ft). The current passing rents in Ancells Business Park are at historically low levels with 26.50 per sq ft being achieved in 2001. As a result of the increased letting activity in Fleet during 2015 and rent differential compared with neighbouring towns, we fully expect there to be opportunities for rental growth at the subject property. The following represent some of the more notable leasing transactions in 2014/2015 in the Blackwater Valley: Date Property Tenant Area (sq ft) Lease Term (years) Nov-15 Pinehurst II, Farnborough Business Park, Farnborough Time Inc 30,000 10 26.50 Rent (psf) Comments July-15 Fleet One, Ancells Business Park, Fleet Bedrock Healthcare 4,500 10 18.00 Break in year 5 July-15 Fleet One, Ancells Business Park, Fleet Murata 4,600 10 18.00 Break in year 5 May-15 Flagship house, Fleet Adept Ltd 4,275 5 16.25 Break in year 3 July-14 93 Fleet Road Nexus 4,300 5 16.00
Investment Rationale Close proximity to London Affluent, established office location in the Blackwater Valley One of the best office buildings in Ancells Business Park 22,062 sq ft (2,049.54 sq m) of Grade A office accommodation Fully income producing with zero vacancy, underpinning the asset being best in class Guaranteed reversion in 2019 through the stepped rents Potential to convert for residential in the medium to long term Passing off a low rent of 14.05 per sq ft SOUTH EAST INVESTMENT MARKET Highly reversionary with an ERV of 18.00 per sq ft Improving office market, with evidence of rental growth, shortening incentives and reducing vacant levels The South East investment market has gone from strength to strength over the past 18 months, and is currently experiencing strong investor appetite. The market has continued to thrive and is driven by increased occupier demand, reduced vacant rates and rental growth. The improvement in the occupational market is now allowing investors to positively appraise assets based on evidence and not just sentiment. There is forecast for further rental growth and yield compression in the South East markets, due to strengthening fundamentals, while well-located, good quality property in secondary markets are expected to have the best prospects for capital growth over the medium term. In particular, investor demand is particularly strong for high-quality multi-let properties, which offer asset management initiatives and limited capital expenditure. The following represent some of the more notable investment transactions in the South East: Date Property Area (sq ft) Purchase Price Capital Value (psf) NIY WAULT (to break) Purchaser Sep-15 Omron House, Milton Keynes 23,062 4,000,000 173 7.68% 5.00 RBC Royal Bank Aug-15 4 Tilgate Forest Business Park, Crawley 25,627 6,830,000 267 7.10% 7.00 Bromley Borough Council Jul-15 4500 Parkway, Solent Business Park, Fareham 56,003 10,000,000 179 7.43% 5.80 Threadneedle May-15 Lakeview West, Dartford 26,759 7,450,000 278 7.50% 2.83 CCLA Nov-14 Newplan House, Epsom 23,100 6,900,000 299 6.25% 4.25 Cornerstone
PROPOSAL We are seeking offers in excess of 3,450,000 (Three Million, Four Hundred and Fifty Thousand Pounds) for the freehold interest, subject to contract and exclusive of purchaser s costs at 5.8%. A purchase at this level would reflect an attractive net initial yield of 8.31% and a guaranteed reversionary yield of 8.42% following the stepped rent in 2019. This reflects a low capital value of 156 psf. EPC Rating The property has an EPC rating of C and a score of 63. A copy of the EPC and recommendation report is available on the website below. VAT The property has been elected for VAT which will therefore be chargeable on the sale price unless the transaction can be treated as a Transfer of a Going Concern. Planning The property has planning consent for B1(a). Web Access www.cushmanwakefieldinvestmentsales.co.uk/cw/lineahouse
OUR TEAM Cushman & Wakefield LLP 43/45 Portman Square London W1A 3BG Rory Turner E: rory.turner@cushwake.com T: +44 (0) 207 152 5205 Max Clynes E: max.clynes@cushwake.com T: +44 (0) 207 152 5710 Chris Lewis E: chris.lewis@cushwake.com T: +44 (0) 207 152 5554 Hurst Warne Victoria House, 18-22 Albert Street Fleet, Hampshire GU51 3PD Peter Richards E: peter.richards@hurstwarne.co.uk T: +44 (0) 7803 078011 January 2016 MISREPRESENTATION ACT 1967 Cushman & Wakefield LLP (and their joint agents if appointed) for themselves and for vendors or lessors of this property whose agents they are, give notice that: (1) The particulars are produced in good faith, are set out as a general guide only and do not constitute any part of a contract. (2) No person in the employment of the agent(s) has any authority to make or give any representation or warranty whatever in relation to this property. (3) This property is offered subject to contract and, unless otherwise stated, all rents are quoted exclusive of VAT. (4) Nothing in these particulars should be deemed to be a statement that the property is in good condition or that any services or facilities are in working order. (5) Unless otherwise stated, no investigations have been made regarding pollution or potential land, air or water contamination. Interested parties are advised to carry out their own investigations if required. Production by PlusArt 0115 972 4000