48-50 Well Street Hackney London E9 7PX. Marketing History

Transcription

1 48-50 Well Street Hackney London E9 7PX Marketing History June 2013

2 Appendices 1. Instruction Letter 2. Marketing Board Instruction Letter 3. Property Details: Well Street, from Landlord 14/10/ from Landlord 15/3/ Property Details: Mare Street, Property Details: Mare Street, Property Details: Arthaus, Richmond Road

3 Introduction This report confirms the marketing campaign that has been undertaken by Tarn & Tarn for the ground and first floor commercial accommodation which forms part of the mixed-use development at Well Street, E9. Tarn & Tarn are an established firm of estate agents and property consultants with extensive experience in dealing with the letting and sale of commercial properties in East London, including Hackney. The firm has experience in working on a wide range of commercial and residential properties putting us in a good position to view trends in demand for a variety of property uses and understand the requirements of business occupiers. In addition to disposals and acquisitions, Tarn & Tarn also provide a wide range of professional services within the Tower Hamlets and Hackney boroughs. We note below the following comments in respect of the subject property: Location The building is prominently located on the south side of Well Street, close to its junction with Mare Street. The new development is situated east of the popular London Fields area of Hackney. London Fields and Homerton Stations are within walking distance and there are numerous bus routes along Well Street and Mare Street. Local retail operators include Lidl, William Hill and a variety of independent retailers Accomodation Our firm was asked to market the commercial elements of this mixed-use development. The approximate measured floor area is: Floor Use Size Ground Floor Retail/Office/D1 817 ft 2 (76 m 2 ) 1 st Floor (a) Office (B1) 1,237 ft 2 (115 m 2 ) 1 st Floor (b) Office (B1) 1,905 ft 2 (177 m 2 ) Total - 3,959 ft 2 (368 m 2 ) Condition of the Property The property was offered in an excellent condition. Prior to marketing the office was fitted with new laminate flooring, new lighting, air conditioning and perimeter trunking, ready for a tenant to move straight into without any need for further works.

4 Marketing Strategy Our firm was instructed to market the three commercial units that form part of the ground and first floor of the subject property on the 1 st September 2011 (see appendices). Our instructions were to market the three units with a view to letting two units (the landlord s company, Polyteck, would occupy whichever unit we found hardest to let). Therefore the two first floor units were marketed in conjunction with a smaller 817 ft 2 unit. Enquirers were told that this unit could be used for B1/A1/A2/D1 uses, subject to planning. As per our firm s standard procedures, on instruction we erected a marketing board to the property (see appendices) and created detailed property particulars including its size (both in ft 2 and m 2 ), specifications, costs and description of the location and accommodation available (see appendices). As per our standard practice the property details were uploaded to our own website and a number of property portals including Primelocation, Findaproperty, Showcase and EACH. As we are very active and established commercial agents in the area we also have a large database of prospective tenants and purchasers and receive multiple enquiries from a diverse range of occupiers on a daily basis. We find the above methods of marketing are usually sufficient to dispose of our commercial instructions. We no longer market properties of this nature in local newspapers as we do not find them effective. Online marketing has superseded the need for printed advertisements. Marketing History Throughout the marketing period we received in the region of 20 enquiries. Due to the quality of the enquiries we did receive, this only translated into 12 viewings which unfortunately did not produce any lettings. After one and a half months of marketing the property without generating many viewings, the landlord requested a meeting in order to discuss the possibility of splitting up the largest unit into smaller units. The idea behind this was to try to appeal to the smaller types of business who typically rent B1 space in Hackney. In this meeting we discussed what the values would be for the units and we agreed that we thought that in principal the smaller units would generate at least the same, if not more rent than each unit would let as a whole. However, concerns were also raised over a couple of points. A significant amount of investment would be needed to convert the office into several smaller offices that would be attractive to a small one or two person creative firm. The landlord had very recently refurbished the space at considerable expense and was reticent to start converting this into smaller offices without being confident that the smaller units would rent well once constructed. With this in mind our firm arranged a viewing with a provider of serviced office accommodation for small creative and artistic individuals and businesses currently operating from a building in E2. The firm were looking to

5 take on more offices for this purpose but were not convinced that demand would extent to this location. Additionally, the landlord was advised that typically the smaller companies that we would be appealing to are usually unwilling to commit for a timeframe in excess of one year. A large amount of these companies appear to occupy space on licenses rather than full tenancies and in order to attract tenants having that level of flexibility is important. This would therefore create a significant amount of management work which the landlord understandably had concerns about. Towards the end of October 2011, we received enquiries from two large employment agencies which had recently been granted a contract by Hackney Council and needed office space for their own occupation. Relative to the other available space in the borough, 48 Well Street seemed to be the preferred building for both parties. Both firms were interested in taking space in the building and we agreed terms with one of these parties and instructed solicitors. For reasons that were never made clear to us, this firm subsequently aborted the transaction and by the time we went back to the other firm in early November 2011 they had found an alternative office. We remained sole agents on the property until March 2012 when the landlord instructed Fidens. Valuation & Suitability On instruction, the building had been recently built and the office units were newly fitted. The rent we quoted was based on per sq ft on the first floor and 20 per sq ft on the ground floor. Relative to other office the first floor space was very reasonably priced. At the time of marketing we were also advertising a variety of different sized B1 units in the Arthaus development on nearby Richmond Road, closer to London Fields. Here rents were being quoted in excess of 30 per sq ft (see appendices). Nonetheless we found that the small creative companies which make up a large amount of the Hackney office market were not put off by the price. The property details for this scheme have been included in the appendices. In terms of comparable evidence to justify values, details for the following have also been included for reference: Mare Street, 298, NIA 7,735 sq ft of B1 office space, marketed by Strettons at per sq ft. (December 2012) Mare Street, 23-47, NIA 778 9,887 sq ft of B1 office space, marketed by Currell at per sq ft (December 2012) Arthaus, Richmond road , NIA 230 3,638 sq ft of B1 office space, marketed by Tarn & Tarn at per sq ft (August 2011) Given that the Arthaus scheme, offered shell and core, was achieving nearly three times the rent per sq ft as we were quoting proves that the rental level was not the reason that neither our firm not the subsequent agents could achieve a

6 letting. Furthermore, given the cost of delivering these units in the first instance, to achieve any less than the quoted price would not be commercially viable. Conclusion In conclusion, we confirm that we were instructed as sole agents between September 2011 and March During that period we received two serious offers. Due to the proposed tenant aborting the transaction, we missed a very good opportunity to let office space which has otherwise proved impossible to let. Evidence has been provided which clearly demonstrates that the quoted rent of was fair representation of the market value and not a prohibitive factor. Arguably, splitting the units into smaller parts may well have made disposing of these units easier. This option was seriously considered and looked into. Ultimately our firm could not advise with confidence that reconfigured offices would let any faster than the larger offices due to the location of the building. Therefore the cost and risk of again reconfiguring the office could not be rationalised.

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