MAYFAIR COURT AND CHANCELLORS COURT MANCHESTER

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1 MAYFAIR COURT AND CHANCELLORS COURT MANCHESTER On the Instructions of MAYFAIR COURT AND CHANCELLORS COURT PG. 1

2 EXECUTIVE SUMMARY We are pleased to offer a rare opportunity to acquire two well let modern apartment schemes located in the vibrant South Manchester neighbourhood of Fallowfield a few minutes from the University of Manchester s Owens Park Campus. Mayfair Court and Chancellors Court provide a total of 150 self-contained apartments at the heart of Fallowfield centre in configurations of 1 5 bedroom flats with onsite car parking and valuable commercial income from tenants such as Wetherspoons and Starbucks. The apartments are predominantly let to returning undergraduates, post graduates, young professionals and key workers. The properties offer scope for asset management and value enhancement which could include selective refurbishment, the provision of onsite amenities for residents and further exploitation of Fallowfield s reputation as a location of choice. Estimated gross income for 2015/16 is 1,587,863 per annum based on an average residential occupancy of 90%. The properties have the potential to command an estimated gross rent of 1,750,000 if fully let. Offers in excess of 17,250,000 are required subject to contract. The properties are also available separately. MAYFAIR COURT AND CHANCELLORS COURT PG. 2

3 LOCATION Greater Manchester is the UK s most significant student destination outside of London, home to four universities the University of Manchester, Manchester Metropolitan University, the University of Salford and the University of Bolton.

4 SITUATION Fallowfield is a popular student, graduate and young professional area just 3 miles from Manchester City Centre and two miles south of the University of Manchester and Manchester Metropolitan University Campuses. The University of Manchester s Owens Park, which is to undergo a 200m facelift, is located in Fallowfield and is home to 1,000 students. Once redeveloped the campus will provide state of the art accommodation, reinforcing Fallowfield as the go-to destination for student life. A number of Hospitals including Withington and The Christie are close by with Manchester Royal Infirmary a short bus ride away, making the location popular with medical workers. Wilmslow Road (B5117) links Fallowfield with Manchester City Centre to the north and the main University of Manchester and Manchester Metropolitan University campuses. Wilmslow Road is one of the busiest bus routes in Europe, with average waiting times less than 90 seconds during peak times. The area has a vibrant nightlife boasting popular bars, cafes, restaurants and supermarkets with Rusholme s Curry Mile just 5 minutes walk away. Occupiers include Starbucks, Nandos, McDonalds, Sainsbury s, Wetherspoons, Vodka Revolution, Subway and Tesco coupled with numerous specialist food and retail outlets. Fallowfield forms part of the popular south Manchester residential market with East and West Didsbury, Withington and Chorlton but has the advantage of average residential rents below the City Centre (37%) and surrounding locations (15%) providing obvious rental growth potential. Average Apartment Rents Area 1 Beds 2 Beds 3 Beds 4 Beds 5 Beds City Centre 830 1,163 1,941 2,750 - Didsbury ,056 1,504 Chorlton ,298 - Fallowfield ,223 Source: MAYFAIR COURT AND CHANCELLORS COURT PG. 4

5 SITUATION MAYFAIR COURT AND CHANCELLORS COURT PG. 5

6 SITUATION TO THE UNIVERSITIES AND MANCHESTER CITY CENTRE WILBRAHAM RD WILBRAHAM RD DOMINOS THE FONT PAPA JOHNS QUEEN OF HEARTS WILMSLOW RD UNIVERSITY OF MANCHESTER OWENS PARK CAMPUS ARMITAGE CENTRE OWENS PARK LADYBARN HOUSE STUDENT ACCOMODATION VODKA REVOLUTION MOSELEY RD CHANCELLORS COURT MAYFAIR COURT NANDOS SAINSBURY S MCDONALDS THE FRIENDSHIP INN WILMSLOW RD MAYFAIR COURT AND CHANCELLORS COURT PG. 6

7 MANCHESTER STUDENT ACCOMMODATION MARKET The University of Manchester. main campus is located on Oxford Road south of the City Centre and is currently ranked 30th by the QS World University rankings. The University s reputation and resources means it is likely to benefit from the recent removal of student number controls. The University of Manchester is a member of the Russell Group, research intensive institutions, with the UK s largest full-time student population over three times the national average. The University s The University of Manchester s fulltime student population totalled 33,770 in 2013/14 and is the largest full-time student population in the UK. The University s proportion of postgraduate students at 24% (7,975) is significantly higher than the UK average of 18%, reflecting the institution s research intensive nature. Manchester Metropolitan University. Manchester Metropolitan University (MMU) is a post-1992 institution and is the largest campus-based undergraduate University in the UK. MMU has been engaged in a 350m investment programme over the past decade, which has rationalised its number of campuses from seven to two in Crewe and its main campus, Birley Fields in Manchester City Centre. Manchester Metropolitan s full-time student population totalled 26,985 in 2013/14. The make-up of the University s full-time student population is largely undergraduate in its composition (91%). MAYFAIR COURT AND CHANCELLORS COURT PG. 7

8 MANCHESTER STUDENT ACCOMMODATION MARKET BUS ROUTES Supply Student Accommodation Supply Beds Provided University of Manchester 9,035 Manchester Metropolitan University 3,978 Private Accommodation 10,121 Total 23,134 Future Development Unlike a number of major student cities across the UK, the Manchester planning pipeline for purpose-built student accommodation has been restrained since Manchester City Council has been explicit in stating that further accommodation will not be encouraged. CITY CENTRE 41, 42, 42A, 43, 44, 141, 142, 143, 157, X41, X57 CHORLTON, STRETFORD & WEST MANCHESTER 168 LEVENSHULME, REDDISH & EAST MANCHESTER 168 WITHINGTON, DIDSBURY & SOUTH MANCHESTER 41, 42, 42A, 43, 44, 141, 142, 143, 157, X41, X57 MAYFAIR COURT AND CHANCELLORS COURT PG. 8

9 DESCRIPTION - MAYFAIR COURT MAYFAIR COURT AND CHANCELLORS COURT PG. 9

10 DESCRIPTION - MAYFAIR COURT Mayfair Court Constructed in 2003, Mayfair Court is located on Wilmslow Road and provides two blocks, both arranged over five storeys around central courtyards. At basement level accessed to the rear is a car park providing 80 spaces. To the ground floor, fronting Wilmslow Road are 3 retail units occupied by Starbucks, JD Wetherspoons and Homes 4 U. Accommodation Mayfair Court provides one, two and three bedroom apartments which are spacious and well specified with a mix of bathrooms and en suite facilities. The three bedroom apartments are duplexes. Each block benefits from a passenger lift providing access to all floors including basement level. Flat Schedule Flat Size No. of Flats 1 Bed 2 2 Beds 72 3 Beds 6 Total 80 Internal Specification The bedrooms provide contemporary fixtures, fittings and furnishings including desk, chair, bedside table and wardrobe. Bathrooms comprise bath with shower over, WC and sink unit, with en-suites comprising shower, WC and sink. Communal kitchen areas incorporate wall and base units, oven, hob, hood and fridge-freezer. The lounge areas comprise sofas and coffee table. Furniture varies dependant on size of the apartment. Each flat benefits from an intercom system to the ground floor entrance. Tenure Freehold MAYFAIR COURT AND CHANCELLORS COURT PG. 10

11 DESCRIPTION - MAYFAIR COURT Tenancies Mayfair Court is let on mainly 12 month Assured Shorthold Tenancy agreements. Tenants are responsible for all utilities. Unit 1, Mayfair Court is let to JD Wetherspoon for a term of 30 years commencing 7 December 2003 at a rent of 90,000 per annum. The lease is subject to 5 yearly upwards only rent reviews to open market rent and is drawn on effectively Full Repairing and Insuring terms. There is a tenant only break clause in year 15, subject to 6 months written notice. Unit 2, Mayfair Court is let to Starbucks Coffee Company (UK) Limited for a term of 10 years commencing 4 February 2005 at 33,000 per annum. The lease is drawn on Full Repairing and Insuring terms. This was surrendered and the residue re-granted to Touchstone Corporate Property Services Limited on 17 July The lease is drawn on Full Repairing and Insuring terms. Financial Information Rental Income Residential Rental Income Commercial Actuals Budget 2014/ /16 648, , , ,000 Other Income 4,684 5,000 Totals 828, ,492 Rental Income N/A 900,920 If fully let Operational Expenses 230, ,855 Unit 3, Mayfair Court is let to Touchstone Corporate Property Services on a 15 Year lease from 1 June 2003 at a rent of 30,000 per annum. The original lease was granted to Opal Property Services Limited. MAYFAIR COURT AND CHANCELLORS COURT PG. 11

12 DESCRIPTION - CHANCELLORS COURT MAYFAIR COURT AND CHANCELLORS COURT PG. 12

13 DESCRIPTION - CHANCELLORS COURT Chancellors Court Chancellors Court is located opposite Manchester University s Owens Park Campus and provides 6 blocks arranged over four storeys comprising 70 flats with a total of 190 rooms. Externally the property surrounds a large gated courtyard providing 70 car parking spaces. Accommodation Chancellors Court provides two, three, four and five bedroom, spacious apartments with separate bathrooms. Larger apartments have two bathrooms with the remainder having one bathroom and separate WC s. The four and five bedroom duplex flats have feature staircases and glass brick walls creating a contemporary living environment. Flat Schedule Flat Size No. of Flats 2 Beds 48 3 Beds 6 4 Beds 4 5 Beds 12 Total 70 Internal Specification The bedrooms provide contemporary fixtures and furnishings including desk, chair, bedside table and wardrobe. Bathrooms comprise bath with shower over, WC and sink unit. Communal kitchens and lounge areas incorporate wall and base units, oven, hob, hood and fridge-freezer. The lounge areas comprise sofas, coffee table, dining table and chairs. Each apartment has the benefit of a separate gas fired combination boiler serving radiators and providing hot water. MAYFAIR COURT AND CHANCELLORS COURT PG. 13

14 DESCRIPTION - CHANCELLORS COURT Tenure The property is held Freehold. Tenancy Overview Chancellors Court is let on mainly 12 month Assured Shorthold Tenancy agreements. Tenants are responsible for all utilities, with Wi-Fi included in the rent. A ground and first floor office suite is let to Enterprise Care Group under a lease that expires in January 2017 at a rent of 16,968 per annum without review. The lease is contracted out of the Landlord and Tenant Act Financial Information Rental Income Residential Rental Income Commercial Actuals Budget 2014/ /16 588, ,403 15,551 16,968 Other Income 5,704 6,000 Totals 609, ,371 Rental Income N/A 848,148 If fully let Operational Expenses 211, ,942 MAYFAIR COURT AND CHANCELLORS COURT PG. 14

15 DESCRIPTION - MAYFAIR COURT & CHANCELLORS COURT Tax We understand the properties are not elected for VAT purposes. Planning We understand that the properties have consent for their existing use but purchasers will need to satisfy themselves on the current position. EPC s EPC s can be viewed via the data site Tenant Financial Information Tenant J D Wetherspoon Plc Starbucks Coffee Co (UK) Ltd Touchstone Commercial Property Services Enterprise Care Group Dun & Bradstreet Rating 5A1 5A1 2A1 E4 Combined bed spaces 4 bed 3 bed 5 bed 1 bed 2 bed Bed spaces Mayfair Court & Chancellors Court 1 bed 2 2 bed bed 36 4 bed 16 5 bed 60 Total 354 MAYFAIR COURT AND CHANCELLORS COURT PG. 15

16 ASSET MANAGEMENT INITIATIVES & INVESTMENT CONSIDERATIONS Asset Management Initiatives We believe there are a number of asset management opportunities including: Exploit Fallowfields existing student popularity and growing demand from professionals and young families. Capitalise on current low rents and rental growth potential with selective refurbishment; Use certain underutilised courtyards and basement carpark areas for additional resident s amenities such as leisure space, common areas and storage; Potential lease and nominations agreements with the major institutions especially University of Manchester located nearby; Potential lease and nominations agreement with the NHS; Extending the leases to Wetherspoons and Starbucks. Investment Considerations Manchester remains a key target for property investment in the UK and has a strong profile internationally. There is a shortage of investable purpose built student and private rented accommodation stock in Manchester. Mayfair Court and Chancellors Court provide a total of 150 selfcontained apartments at the heart of the Fallowfield centre in configurations of 1 5 bedroom flats with onsite car parking. There is valuable commercial income from tenants such as Wetherspoons and Starbucks. Both properties provide highly affordable accommodation when compared to prime average rents in Manchester City Centre and adjoining residential areas and are suitable to be run wholly as either private rented stock or direct let student accommodation. The low rental base provides real potential for selective refurbishment to units and to provide further on site amenities. Proposal The properties provide a total rental income of 1,587,863 per annum. The potential gross rent if fully let is estimated at 1,750,000 per annum. Offers in excess of 17,250,000 (Seventeen Million Two Hundred and Fifty Thousand Pounds) are required subject to contract. The properties are also available separately. Interested parties can request access to the data site upon signing of a non-disclosure agreement. Contact Mike Mitchell Cushman & Wakefield 1 Marsden Street Manchester, M2 1HW Tel: mike.mitchell@cushwake.com Simon Lowe Cushman & Wakefield 1 Marsden Street Manchester, M2 1HW Tel: simon.lowe@cushwake.com Sophie Magee Cushman & Wakefield 1 Marsden Street Manchester, M2 1HW Tel: sophie.magee@cushwake.com MAYFAIR COURT AND CHANCELLORS COURT PG. 16

17 MAYFAIR COURT AND CHANCELLORS COURT MANCHESTER MISREPRESENTATION ACT: Cushman & Wakefield Copyright Cushman & Wakefield gives notice that: These particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute any part of an offer or contract. Details are given without any responsibility, and any intending purchasers, lessees or third parties should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise as to the correctness of each of them. No person in the employment of Cushman & Wakefield as any authority to make any representation or warranty whatever in relation to this property. Purchase prices, rents or other prices quoted are correct at the date of publication and, unless otherwise stated, exclusive of VAT. Intending purchasers and lessees must satisfy themselves independently as to the incidence of VAT in respect of any transaction relating to this property. Date: September 2015 MAYFAIR COURT AND CHANCELLORS COURT PG. 17