The Heights Lowlands Road, Harrow HA1 3AW. Greater London Multi-Let Offi ce Investment Opportunity

Transcription

1 The Heights Lowlands Road, Harrow HA1 3AW Greater London Multi-Let Offi ce Investment Opportunity

2 To Pinner To Watford Headstone Road St George s Shopping & Leisure Centre Morrison s Supermarket A312/A404 Interchange The Heights Lowlands Road, Harrow St Ann s Shopping Centre A312 A404 Lowlands Road Bus Station Harrow-on-the-Hill Station Metropolitan Line National Rail (Chiltern services) To London Executive Summary Prime multi-let Greater London office investment with 101 car parking spaces. Located within the commercial and retail centre of Harrow. Excellent communications via the M40, M25 & M1 motorways. Situated adjacent to Harrow-on-the-Hill train and underground station providing services into Central London with a fastest journey time of only 15 minutes. High quality office building with air conditioning, raised floors and suspended ceilings. Ground, lower ground and four upper floors comprising total accommodation of 3, sq m (39,045 sq ft). WAULT of 3.45 years to expiries and 3.02 years to breaks. Multi-let producing 622,582 per annum inclusive of vendor rent guarantee of 38,550 per annum. Low average passing rent of only per sq ft offering excellent rental growth potential. Excellent car parking ratio of 1:373 sq ft (101 spaces). Freehold. Reversionary with an ERV of approximately 865,978 per annum ( per sq ft). We are instructed to seek offers in excess of 8,340,000 (Eight Million, Three Hundred and Forty Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 7.00% after acquisition costs of 6.67%. This reflects a low capital value of approximately 228 per sq ft. 2 The Heights, Lowlands Road, Harrow HA1 3AW

3 A41 A1(M) Location M25 M25 A1 WATFORD Harrow is a major commercial and retail centre in the affluent north west London borough of Harrow. The borough borders Hertfordshire to the north and the London boroughs of Ealing, Barnet and Hillingdon. Central London is 12 miles south east, and Wembley is 3 miles to the south. BARNET EDGWARE The Heights M Lowlands Road, Harrow A406 NORTHWOOD HARROW BRENT CROSS RUISLIP M40 WEMBLEY A406 A40 UXBRIDGE A1 M25 A41 CENTRAL LONDON M4 A4 HEATHROW RICHMOND A316 M3 The town has excellent communications with easy access to the M40 and M25 motorways, whilst the M1 is only 4 miles to the east. Rail communications into Central London are provided via Harrow-on-the-Hill railway station, which provides a regular service to London Marylebone every 30 minutes, with a fastest journey time of 15 minutes. London Underground services to Baker Street via the Metropolitan Line are also available with a journey time of 18 minutes. Heathrow airport is 11 miles to the south west. The town centre has excellent shopping, amenity and recreational facilities. There are two shopping centres, St George s and St Ann s, with retailers including Primark, Boots, H&M and a Vue Cinema. Situation The Heights is situated on Lowlands Road on the south west side of the town centre in an established commercial area. The property is adjacent to Harrow-on-the-Hill station. Description The property was constructed in the early 1990 s and comprises a high quality office building arranged over ground and four upper floors. The building benefits from air conditioning, raised floors and suspended ceilings with recessed lighting. The floor plates are arranged around a central core which has two 10 person passenger lifts serving all levels. Male and Female toilets are located on each floor and toilet facilities for the disabled are located on the second and fourth floors. The entrance hall is marble clad and has a full height atrium above. Basement and surface parking is provided for a total of 101 cars (1:373 sq ft). The Heights, Lowlands Road, Harrow HA1 3AW 3

4 Accommodation The property has been measured in accordance with the guidelines as described in the Sixth Edition (September 2007 of the Code of Measuring Practice, published by the RICS: LEVEL USE SQ M SQ FT Ground Floor Offices ,478 First Floor Offices ,575 Second Floor Offices ,575 Tenure The property is held Freehold. Tenancies The property is let in accordance with the tenancy schedule producing an annual current income of 622,582 per annum inclusive of a rent guarantee for the Ground Floor Front Right Suite. This reflects an average rent of only per sq ft based on the NIA, providing excellent opportunities for rental growth. Third Floor Offices ,460 Fourth Floor Offices ,569 SUB-TOTAL: 3, ,657 Ground Floor Reception ,084 Lower Ground Floor Storage/Ancillary TOTAL: 3, ,045 The plan sets out the approximate position of the property and is for identification purposes only. We make no warranty, express or implied nor accept any responsibility for its accuracy or completeness. Site Typical floor plan The site fronts Lowlands Road and benefits from an extensive frontage. It is adjoined by other office buildings, with the railway station almost immediately behind the building. The site totals approximately 0.61 acres (0.25 hectares). 4 The Heights, Lowlands Road, Harrow HA1 3AW

5 Tenancy Information The property is multi-let and currently produces a total rent of 622,582 per annum inclusive of a vendor rent guarantee on the Ground Floor Front Right, as set out in the schedule below. Our ERV is based on assumed refurbished accommodation. The highest rent achieved in Harrow recently is per sq ft. UNIT AREA (SQ M) AREA (SQ FT) TENANT LEASE START DATE LEASE EXPIRY DATE BREAK CLAUSE NEXT RENT REVIEW RENT (PA) RENT ( PSF) ERV ( PA) ERV ( PSF) L&T ACT 1954 COMMENT Ground Floor Front Right ,542 Vacant - vendor 12 month rent guarantee N/A N/A N/A N/A 38, , N/A Note 1. Ground Floor Rear Right ,514 RCN Publishing Company Ltd 01/05/ /06/2020 N/A N/A 40, , Inside 7 car parking spaces. Note 2. Ground Floor Left ,422 Richard Hodkinson Consultancy Ltd 01/08/ /07/ /08/ /08/ , , Outside 10 car parking spaces. Note 3. First Floor ,575 RCN Publishing Company Ltd 01/05/ /06/2020 N/A N/A 130, , Inside 20 car parking spaces. Note 4. Second, Third & Fourth Floors 2, ,604 Metsa Wood UK Ltd (not in occupation) 19/08/ /03/2019 N/A 25/03/ , , Inside 60 car parking spaces. Note 5. TOTALS 3, , , , *Floor area above excludes ground floor reception of (1,084 sq ft) and lower ground storage/ancillary of sq m (304 sq ft). Note 1. Note 2. Note 3. Vendor to provide 12 month rent guarantee. Service charge capped at 20,240 pa + RPI uplift each year. Lease guaranteed by the Royal College of Nursing of the United Kingdom. Service charge capped at 8.50 psf + RPI uplift each year. Tenant only break option on not less than 6 months notice. Note 4. Note 5. Service charge capped at 60,480 pa + RPI uplift each year. Lease guaranteed by the Royal College of Nursing of the United Kingdom. Tenant not in occupation. Sublet as follows: 2nd floor - the Royal Bank of Scotland until 18/03/2019. Part 3rd floor - Hussein Alibhai and other individuals until 31/01/2019. Part 3rd floor - Harrow Primary Care Trust until 25/02/ th floor - Harrow Primary Care Trust until 25/02/2019. Lease guaranteed by FinnForest OY. The Heights, Lowlands Road, Harrow HA1 3AW 5

6 Covenant Information Provided below is summary account information for the tenants: Royal College of Nursing of the United Kingdom The lease to RCN Publishing Company Ltd is guaranteed by the Royal College of Nursing of the United Kingdom. Metsa Wood UK Ltd (58% of income) Guaranteed by FinnForest OY. RCN Publishing Company Ltd (27% of income) Guaranteed by the Royal College of Nursing of the United Kingdom. Richard Hodkinson Consultancy Ltd (9% of income) Vacant - rental guarantee (6% of income) COMPANY NO. RC /03/ /03/ /03/2006 Turnover 87,554,000 82,587,000 76,658,000 Pre-Tax Profits 14,429,000 7,746,000 1,279,000 Shareholders Funds 37,136,000 29,949,000 38,389,000 Richard Hodkinson Consultancy Ltd Richard Hodkinson Consultancy Ltd is an independent energy and environment consultancy working from planning application stage through to handover. COMPANY NO /08/ /08/ /08/2013 Turnover 1,608,505 1,317,184 1,295,415 Pre-Tax Profits 111, , ,791 We have undertaken individual covenant reports for each tenant which we have set out below. RCN Publishing Company Ltd (Guaranteed by the Royal College of Nursing of the United Kingdom) RCN Publishing Company Ltd is a wholly owned subsidiary of the Royal College of Nursing of the United Kingdom, the world s largest organisation for nurses. RCN Publishing produces one weekly, eight monthly and two quarterly nursing publications. COMPANY NO /12/ /12/ /12/2012 Turnover 14,257,634 10,683,717 13,478,233 Pre-Tax Profits 910,741 1,052,559 1,410,290 Shareholders Funds 3,676,391 3,505,274 3,947,419 Shareholders Funds 531, , ,927 Metsa Wood UK Ltd (Guaranteed by FinnForest OY - further information on request) Metsä Wood provides premium-quality wood products for construction, industrial and distribution customers. Metsä Wood is part of Metsä Group, a unique Finnish co-operative comprising some 116,000 forest owners with 5.2 million hectares of forest land under its control (about 46% of all private forests in Finland) and 9,500 employees globally across 20 countries. COMPANY NO /12/ /12/ /12/2012 Turnover 170,469, ,237, ,193,000 Pre-Tax Profits 1,999,000 3,299,000 10,977,000 Shareholders Funds 30,064,000 37,613,000 38,090,000 6 The Heights, Lowlands Road, Harrow HA1 3AW

7 Service Charge The service charge budget for the year commencing 01/01/2016 equates to approximately per sq ft. Planning The property is located within the London Borough of Harrow and benefits from a B1 planning consent. The property is not listed and does not fall within a conservation area. Value Added Tax The vendor has elected to waive their exemption to charge VAT. Assuming the purchaser complies with HMRC procedures, we understand the purchase can be treated as a transfer of a going concern and thus outside the scope of VAT. Data Room A data room has been set up to provide details of all the property and legal information which is deemed relevant to the sale. This includes the following: Title information. Occupational leases. Service charge information. Measured survey. EPC. Marketing details. Asset Management Opportunities Low average passing rent of only per sq ft offering excellent rental growth potential. Most recent office letting for refurbished accommodation in Harrow has recently completed at per sq ft. Use dilapidations on phased lease expiries to refurbish accommodation. Opportunities to regear leases with tenants and sub-tenants to create direct lease relationships. Flexible floorplates providing opportunities to subdivide accommodation to suit occupational market conditions. Let the newly refurbished vacant accommodation of 1,542 sq ft to create new rental tone. Explore higher value alternative uses including conversion to residential subject to necessary planning consents. Proposal We are instructed to seek offers in excess of 8,340,000 (Eight Million, Three Hundred and Forty Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 7.00% after acquisition costs of 6.67%. This reflects a low capital value of approximately 228 per sq ft. The Heights, Lowlands Road, Harrow HA1 3AW 7

8 Further Information For further information or to arrange an inspection, please contact:- Rob Tudor Tel: BSC (Hons) MRICS Mob: Director Lee Evans Tel: BSC (Hons) MRICS Mob: Associate Hugh Faith Tel: BSC (Hons) Msc MRICS Mob: Associate Subject to contract and exclusive of VAT Misrepresentation Act 1967 Tudor Toone Ltd, for itself and for the vendors of this property, hereby give notice that: These particulars do not constitute, nor constitute any part of, an offer or contract. Tudor Toone Ltd and its members accept no legal responsibility for any statement or representation whether written, oral or implied or whether contained in any advertisement particulars or other matters issued or any correspondence entered into by them and whether made in any antecedent present or subsequent enquiries or negotiations. Neither Tudor Toone Ltd nor their principals, members, agents, servants or representatives have any authority whatsoever to make or give any representation or warranty whatsoever whether written or implied in relation to this property. Any intending purchaser must satisfy himself by inspection or otherwise as to the correctness of any antecedent present or subsequent statements or representations, and should not rely upon the same unless he has satisfied himself accordingly. Unless otherwise stated all prices and rents are quoted exclusive of value added tax (VAT). Any intending purchasers or lessees must satisfy themselves independently as to the incidence of VAT in respect of any transaction. Subject to contract & exclusive of VAT. Tudor Toone Ltd is a limited company registered in England and Wales (registered number ). Registered office: 41/43 Maddox Street London W1S 2PD. Details prepared July 2016.