Freehold M25 Office Investment Jupiter House & Juniper House Warley Hill Business Park, The Drive, Brentwood CM13 3BE

Transcription

1 Freehold M25 Office Investment Jupiter House & Juniper House Warley Hill Business Park, The Drive, Brentwood CM13 3BE

2 Jupiter House Investment Summary Established M25 business park location Future market growth from Crossrail Two adjoining, self contained office buildings totalling 3, sq m (37,917 sq ft) providing a mix of unit sizes Recently refurbished to a modern specification to include air conditioning and raised floors Excellent car parking ratio 1:243 sq ft Fully let to a spread of tenants strong letting record AWULT to lease expiry 7.6 years / AWULT to break 3.5 years Total income 729,362 per annum equating to per sq ft overall a low base for future rental growth compared to other M25 office markets Freehold Seeking in excess of 9,192,000, subject to contract and exclusive of VAT Net initial yield of 7.50%, assuming standard purchaser's costs of 5.80% Juniper House

3 Stevenage Stansted A1(M) M1 Brentwood is an established office market and due to its excellent road and rail communications and proximity to Central London, it is one of the stronger eastern M25 markets. A130 Witham M11 Hatfield St. Albans Hemel Hempstead Brentwood Office Market Braintree Luton A12 Chelmsford Harlow There are three main office locations in Brentwood, namely intown by the railway station, outoftown leading west along London Road and on the Warley Hill Business Park. Brentwood has attracted a number of major office occupiers including Sky, BT, NHS Trust, Standard Life, BNY Mellon, Canon, The National Centre for Social Research, Equity Insurance, Ford Motor Company, Ford Credit and Countryside Properties. A414 M25 Amersham J27 A128 A12 Watford M25 Uxbridge M4 London City Stratford Basildon J29 A128 M25 A13 A127 J31 Slough M3 BRENTWOOD J28 M40 A130 Greenwich Heathrow A2 Croydon M25 The total office stock for Brentwood is around 1.1 million sq ft. There is currently approximately 60,000 sq ft of accommodation available (only 8,500 sq ft of Grade A available) representing a very low vacancy rate of 5.4 %. Gravesend M20 Rochester M2 Prime Rent ( psf) Location Brentwood benefits from excellent communications with junctions 28 and 29 of the M25 within 2 and 3 miles respectively from the subject property. In addition the A12 passes through Brentwood providing direct access to Central London. Brentwood mainline railway station provides services to London Liverpool Street Station, every 10 minutes, with a journey time of 33 minutes. All trains stop at Stratford (Jubilee and Central lines) and Stratford International Station. Essex and East London has benefitted from major investment and infrastructure improvements from the 2012 Olympics. In addition, Brentwood will have a station on the Crossrail line, linking Heathrow Airport in the west to Shenfield in the east. It is projected that the Shenfield to Paddington line will be open in May 2019 with 12 trains an hour running at peak times and providing a journey time of 44 minutes between Brentwood and Bond Street and 72 minutes to Heathrow Airport. Details can be found on Pa d Bo din nd gto To St n tt re e Li Crt t ve Ro rp a oo d ls tre et Brentwood is an affluent commuter town and one of the most established office locations in the north eastern sector of the M25. It is located approximately 24 miles north east of Central London and 12 miles south west of Chelmsford. Stratford Jupiter and Juniper House Brentwood Shenfield Heathrow Canary Wharf Not to scale. For indicative purposes only. Stansted, City and Southend airports are all within a 40 minute drive with Heathrow (56 miles west) and Gatwick (47 miles southwest) also readily accessible. Supply has historically been limited by restricted planning policies. This compares favourably with other office locations within Essex such as Chelmsford, Romford, Ilford and Harlow. The development pipeline is also limited. Office rents in Brentwood have reached 20 per sq ft. Prime rents in Brentwood are low in comparison to other M25 / Inner London locations. With the improved future communications afforded by Crossrail and the increasing focus of office occupation activity in East London and Stratford and the availability of new residential stock in these areas, we anticipate good prospects for future rental growth in the Brentwood market. The most recent letting in the town is the second floor at Kingsgate, 1 King Edward Road (9,500 sq ft) in November 2014 at 20 per sq ft to Chubb on a new 10 year lease with a review and tenant break in year 5. The space is similar in age and specification to that on the Warley Hill Business Park all were developed by Countryside Properties in the late 80s / early 90s.

4 South East Investment Market Demand remains high, particularly from investors looking to secure prime Grade A office buildings, let to institutional covenants in core South East / M25 office locations. Prime yields for south east offices currently stand between 5.00% and 5.25% NIY. As opportunities to secure quality assets remain scarce, combined with the weight of money actively looking to invest, it is expected that south east office yields will continue to harden for the foreseeable future. Key investment transactions are set out below: Transaction Date Address Tenant Term Certain Price NIY Sept 2014 Hunton House, Oxford Road, Uxbridge British Alcan Aluminum 9.2 years 10.75m 5.67% August Cambridge Science Park, Cambridge AstraZeneca 2 years 18.65m 6.36% August New London Road, Chelmsford Birketts LLP 9.5 years 4.725m 6.00% August 2014 Priory Place, New London Road, Chelmsford Multi let 10 years 16.98m 6.20% July 2014 Market House, Maidenhead Adobe Systems 9 years 39.00m 5.35% June 2014 Meridien House, 6974 Clarendon Road, Watford Multi let 4.9 years 19.00m 5.90% May 2014 The Lansdowne Building, Croydon Multi let 5.5 years 31.50m 6.50% April 2014 Hollywood House, Woking Multi let 4.0 years 15.02m 6.44%

5 AD N DO RO N LO A12 Brentwood A1023 BRENTWOOD T EE TR AL The Property LS NE LA E RIV ED TH ILL SC LE YH MA WA R M25 B186 O BR DARK LANE J28 S OK Situation The Property Jupiter House and Juniper House are situated on the Warley Hill Business Park, a key commercial location within Brentwood. The property is approximately one mile from Brentwood town centre and within walking distance from Brentwood mainline station. Warley Hill Business Park was developed by Countryside Properties and provides an attractive office environment with extensive landscaping and car parking. Neighbouring occupiers include; Swift Insurance (Arcadia House), Regus (Jubilee House), Shawbrook (Lutea House) and Countryside Properties (Warley House). Ford UK HQ is also based in Warley within a quarter of a mile of the subject property.

6 Description The property comprises two modern, self contained office buildings, Jupiter House and Juniper House, each providing good quality office accommodation on ground and two upper floors. The brick elevations incorporate double glazed windows under pitched tiled roofs. The buildings offer flexibility to be let as a whole or by floor. The accommodation in both buildings underwent an extensive refurbishment programme, which was completed between 2009 and 2011 to provide the following specification: Double glazing throughout New 3 pipe VRF air conditioning New suspended ceilings and Cat 2 lighting Raised floors with electrak system Refurbished lifts New carpets Refurbished WC accommodation Showers Externally, there is provision for 156 car spaces, (including visitor spaces), representing an attractive car parking ratio of 1:243 sq ft. The site area is hectares (1.78 acres). There is a service lift to both properties. Tenure The property is held freehold.

7 Tenancies and Accommodation The two buildings are let to five tenants, each on a floor by floor basis, producing a total current rent of 364,681 per annum which rises to 729,362 per annum due to stepped rental increases in the leases. The vendor will top the rent up to this level. All the leases are let on full repairing and insuring terms as summarised below: Jupiter House Jupiter House Floor Area Sq M Sq Ft Ground , Microdec Plc From: 24/08/2012 To: 23/08/ /08/2017 1st , FRP Advisory LLP From: 20/01/2012 To: 19/01/2022 2nd , Shawbrook Bank Ltd From: 16/04/2014 To: 25/04/2023 2, , Sub Total Leased Tenant Car Spaces* Lease Term Tenant Break Rent pa Juniper House Rent Per Sq Ft Next Rent Review Comment 136, /08/2017 Initial rent 68,466.50pa rising to 136,933pa from 24/8/2015. The vendor will 'top up' the rent to this level. If the tenant exercises its break it pays a break penalty of 34, If it does not break, the rent is a peppercorn for a year from the break date. 20/01/ , /01/2018 The rent in the 2nd and 3rd year of the term is 72, From 20/1/2015 it rises to 145,059pa. The vendor will 'top up' the rent to this level. If the break is not exercised the rent is reduced to 72, during the 7th year of the term. 26/04/ , /04/2018 Initial rent is 82,790pa rising to 165,580 from 16/4/2016. The vendor will 'top up' the rent to this level. 447, Rent Per Sq Ft Next Rent Review Comment Juniper House Floor Area Sq M Sq Ft Leased Tenant Car Spaces* Lease Term Tenant Break Rent pa Ground , Shawbrook Bank Ltd From: 26/04/2013 To: 25/04/ /04/ , /04/2018 Initial rent 42,655 pa rising to 85,310 pa from 26/07/2015. The vendor will 'top up' the rent to this level. There is a Schedule of Condition attached to the lease. 1st , Athona Limited From: 25/01/2013 To: 24/01/ /01/ , /01/2018 The rent in the 2nd and 3rd year of term is 46,000pa rising to 92,000pa from 25/01/2016. The vendor will 'top up' the rent to this level. 2nd , Vantage Insurance Services Ltd From: 02/11/2009 To: 01/11/ , Sub Total 1, , , TOTAL 3, , , *The leases state 142 car spaces. There are a total of 156 spaces on site, inclusive of visitors spaces. NB: There is an electricity sub station on site which is let for 99 years from 26 March 1986 at a peppercorn rent.. Under a Deed of Variation dated 18/2/2014 the rent is 52,240pa until 13/2/2016 then rises to 104,480pa from this date. The vendor will 'top up' the rent to this level.

8 Service Charge The service charge for the buildings (including the estate service charge and all utility costs), is as follows; Jupiter House (year ending 31st December 2014) and Juniper House (year ending 31st October 2014) was 107,846 ( 4.62 per sq ft) and 117,493 ( 8.05 per sq ft) respectively. The latter includes a boiler replacement. A management company exists for Warley Hill Business Park, which maintains the common parts to the estate (includes Lutea House and Arcadia House), including landscaping. The service charge budget for the Estate to 31 March 2015 is 16,390 reflecting 0.22 per sq ft. All service charges are fully recoverable from the tenants under the terms of their leases. Tenant Covenants Tenant Year End Turnover Profit / (Loss) Tangible Net Before Tax Worth Microdec Plc Nov ,170, ,285 2,915,124 2A 2 19% Established in 1983 and involved in the development of recruitment software for the recruitment industry. HQ at Brentwood and office in Australia. FRP Advisory LLP 30 April ,575,000 H2 20% Insolvency practitioners. Offices in 12 UK locations including London with 173 employees. Shawbrook Bank Ltd Dec ,295,000 5A 1 34% A private equity backed British bank specialising in the savings and lending markets. Stated to have lent over 1.9bn (as at 10 June 2014) to SMEs and consumers and raised more than 2bn in deposits since launch in Employ 400 staff across 10 offices. Athona Limited 31 July ,141 Vantage Insurance Services Ltd 31 Dec ,918,971 1,626,382 3,091,761 16,788, ,743,000 D&B Rating %age of Business Activity of total income A3 13% A recruitment agency established in 2003 providing staff to the medical, healthcare, nursing and educational markets. 2A 1 14% Formed in 1999, a privately owned, independent commercial and retail insurance broker and underwriting agency. Retail operations based in Brentwood with a HQ in the City of London.

9 Further Information EPC Ratings The EPC rating for both Jupiter House and Juniper House is C69 VAT The property is not elected for VAT. Proposal We are instructed to seek offers in excess of 9,192,000 subject to contract and exclusive of VAT, for our client s freehold interest, which based on the topped up rent of 729,362 per annum, reflects a net initial yield of 7.50%, assuming standard acquisition costs of 5.80%. Should you have any queries or wish to make an inspection, please contact: Saul Western DD: saul.western@bidwells.co.uk Darryl Stevenson DD: darryl.stevenson@bidwells.co.uk Bidwells 25 Old Burlington Street London W1S 3AN Tel: November 2014

10 IMPORTANT NOTICE RELATING TO THE MISREPRESENTATION ACT 1967 AND THE PROPERTY MISDESCRIPTIONS ACT 1991 Bidwells LLP act for themselves and for the vendors of this property, whose agents they are, give notice that: These particulars do not form part of any offer or contract and should not be relied upon as statements or representatives of fact. Bidwells LLP has no authority to make or give in writing or verbally any representation or warranties in relation to the property. Any areas of measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. No assumptions should be made that the property has all necessary planning, building regulation or other consents. Bidwells LLP have not carried out a survey, nor tested the services, appliances or facilities. Purchasers must satisfy themselves by inspection or otherwise. In the interest of Health & Safety, please ensure that you take due care when inspecting the property. Bidwells LLP is a limited liability partnership registered in England & Wales (registered number OC344553). Registered head office is Bidwell House, Trumpington Road, Cambridge CB2 9LD, where a list of members is available for inspection. bidwells.co.uk Cert No 8542 ISO 9001, ISO 14001