Data Centre TalkTalk Business, Breckland, Linford Wood Milton Keynes, Buckinghamshire MK14 6LB

Transcription

1 Milton Keynes Data Centre TalkTalk Business, Breckland, Linford Wood Milton Keynes, Buckinghamshire MK14 6LB INVESTMENT OPPORTUNITY Freehold Data Centre sale and leaseback

2 Investment summary Fully fitted freehold data centre totalling 65,574 sq ft (6,092 sq m) Gross Internal Area. Well located just off the A422 and close to Milton Keynes town centre. Let on a new 25 year FRI lease. Strong covenant of TalkTalk Communications Limited guaranteed by TalkTalk Telecoms Group Plc. IT investment of circa 20m in the facility with a further 9m of planned investment to facilitate new customer service platforms. Freehold. Annual rent of 980,000 per annum. 5 yearly rent reviews linked to RPI (2-4%). Offers sought in excess of 14,250,000 (Fourteen Million Two Hundred and Fifty Thousand Pounds) reflecting a net initial yield of 6.50% assuming standard purchasers costs of 5.8%.

3 DERBY NOTTINGHAM Location BIRMINGHAM LEICESTER PETERBOROUGH NORTHAMPTON CAMBRIDGE NORWICH Milton Keynes is in the county of Buckinghamshire and is well located 53 miles north west of London, 67 miles south east of Birmingham, 20 miles south of Northampton and mid-way between Oxford and Cambridge. The town benefits from excellent transport links being accessed from Junctions 13 and 14 of the M1 motorway. The A5 and A421 dual carriageways provide It is now home to over 200,000 people with further growth forecast to take the population to in excess of 350,000 over the next 10 to 15 years. Over the last decade, over 1 billion has been committed to infrastructure, architecture and retail amenity improvement and the town is ranked in the latest Centre for Cities publication as one of the top five growth locations in the country. Location Northampton London Birmingham Train Station London Euston Distance by Car 20 miles 53 miles 67 miles Time 34 minutes NEWPORT SWANSEA CARDIFF EXETER PLYMOUTH BRISTOL SWINDON BOURNEMOUTH OXFORD SOUTHAMPTON MILTON KEYNES READING LUTON GATWICK PORTMOUTH LONDON HEATHROW BRIGHTON STANSTED FELIXSTOWE HARWICH DOVER FOLKESTONE access to the M40 motorway to the west. Renowned for its excellent grid pattern road network, most of which are dual carriageway, congestion is minimised and multiple roundabout junctions keep traffic flowing. Milton Keynes has become one of the fastest growing and most successful urban areas in the United Kingdom since its designation as a New Town in Although New Town status ended in 1992, Milton Keynes has continued to grow at a rapid pace. Major occupiers in Milton Keynes include Volkswagen, Mercedes Benz, Coca Cola, Tesco, TK Maxx, Amazon, Waitrose, Daimler, Royal Mail, Chrysler, House of Fraser, Cadbury and John Lewis. Birmingham Manchester Airport Luton Heathrow Stansted 40 minutes 98 minutes Distance by Car 20 miles 55 miles 62 miles HAVERSHAM WOLVERTON A5 Monks Way V8 STANTONBURY Data Centre Dantsteed Way M1 MILTON KEYNES MILTON KEYNES CENTRAL B4034 PENNYLAND A509 NEWPORT PAGNELL Monks Way Dantsteed Way M1 WILLEN WILLEN LAKESIDE PARK MIDDLETON J14 LOUGTON A5

4 Situation The TalkTalk data centre is situated on a self-contained and independently accessed site. It is in an established commercial / B1 location, on the edge of Milton Keynes town centre. The building is situated off Monks Way, the A422. Plan for indicative purposes only

5 Description Overview Two storey purpose built office and data centre totalling 65,574 sq ft (6,092 sq m) GIA. Original building constructed in the 1980 s around a steel frame. Building is made up of technical rooms, office stores, service areas and plant rooms. Technical floor area provision comprises 10 data halls and a fibre room. The total site area measures approximately 2.08 hectares (5.15 acres). Accommodation The property has a gross internal area (GIA) of 65,574 sq ft (6,092 sq m). The net technical area (data hall) comprises 16,576 sq ft (1,540 sq m). Floor Plans: Available on request.

6 Specification The property was initially designed and built as an office and data centre and has since been upgraded to meet modern requirements. Upon lease expiry, the tenant is required to yield up the premises in accordance with the Minimum Technical Performance Criteria. The property has been designed and built to deliver the following: Two independent High Voltage (11 kv) incoming supplies (rated at 4MVA each) supporting main 11 kv dual bus switchboard comprising HV switches, oil filled 2500 kva transformers and LV Distribution boards Diverse supply. Agreed site capacity from the Distribution Network Operator is 2.7MVA. 4 standby diesel generator systems (2.2MVA each) installed as two systems of N+1 to support full building load in the event of mains power failure. 3 x 72 kw DC rectifier systems each one arranged in a 2N arrangement, giving a total DC capacity of 216 kw. Climate control and cooling systems providing controlled environment conditions for the technical floor areas on the assumption of a maximum IT design load of 1500 kva with internal temperature of 22oC +/- 3oc. Uninterruptible power supplies (UPS) with a design load of: 1 static double-conversion UPS system comprising 6 x 250 kva expandable to 500 kva modules giving 1000 KVA (800 kw) tech load 2N (N+1) configuration. 1 static double-conversion UPS system comprising 5 x 100 kva modules giving technical load of 400 KVA (360 kw) on each stream (assuming 0.9 PF). Including all necessary switch gear and battery backup required to deliver 10 minutes at full load operation. All systems and services designed and installed to support these criteria. Water/leak detection systems installed to relevant technical areas. Automatic fire detection system with smoke smoke/heat detectors and manual call points at all emergency exists and routes. Central fire alarm control with VESDA/VIEW detection systems and double knock FM200 gas protection systems to the technical areas. Security systems comprising comprehensive CCTV cameras and controlled access systems including recording and monitoring facilities. Provision of BMS systems to cover power, plant and business critical systems supporting the technical function of the building. All business critical systems installed to N+1. Further specification details can be provided on request.

7 Tenure The property is held Freehold. Tenancy On completion, the building will be let to TalkTalk Communications Limited with TalkTalk Telecoms Group Plc as guarantor. The lease will be for an unbroken term of 25 years from completion, drawn on full repairing and insuring terms, subject to Minimum Technical Performance Criteria. The initial rent will be 980,000 per annum, reflecting a low base of 59 per sq ft of technical area. The rent will be reviewed 5 yearly and linked to the annual movement in RPI, collared at 2% and capped at 4%. Assuming long term average RPI growth at 3% per annum, the total contracted rent is 33.65M and the rental uplifts will provide the following yield profile: Year Rent Running Yield , % ,136, % ,317, % ,526, % ,769, %

8 Covenant TalkTalk started as part of The Carphone Warehouse Group PLC and during the last ten years has become one of the UK s leading telecoms companies. In 2007, TalkTalk bought AOL s UK broadband business and then bought Tiscali s UK operations in 2010, bringing with it its portal and TV services. In 2010, TalkTalk demerged from The Carphone Warehouse and became an independent company. TalkTalk took over the Milton Keynes site as part of its acquisition of Tiscali. TalkTalk has significantly upgraded the technical infrastructure on site to improve resilience and reduce operating costs. Milton Keynes has become a key site in Talk Talk s program of network consolidation and service expansion. It is now a key point of presence within its core southern network and will support project Thunder the launch of Talk Talk s mobile network provision in 2016 and onwards. It already hosts a number of service platforms for Talk Talk s customers, including television. Talk Talk are committed to developing and investing heavily in their IT/Customer platforms from this facility over the next 10 years. It will become the key hub in the development of service options and new services for its customers. Occupational tenant: Guarantor: TalkTalk Communications Limited TalkTalk Telecom Group Plc Year Turnover Pre-Tax Profit Shareholders Funds 31/03/2014 1,165,150,000-12,950, ,744,000 31/03/2013 1,059,089,000-20,903, ,683,000 31/03/2012 1,017,551,000-42,332, ,347,000 Year Turnover Pre-Tax Profit Shareholders Funds 31/03/2014 1,795,000,000 32,000, ,000,000 31/03/2013 1,727,000,000 31,000, ,000,000 31/03/2012 1,670,000, ,000, ,000,000

9 Investment summary Location Situation Description & Accommodation Specification Tenure & Tenancy Covenant Gallery Data Centre Market Further Information

10 Data Centre Market Data centres are designed to provide business continuity for critical business IT platforms. Data Centres represent substantial long term strategic investments and business critical infrastructure to their users. The increase in use of smart computer devices, internet shopping and the development of cloud services has strengthened the demand for data storage. Cisco has reported that Global IP traffic has increased fivefold over the past five years, and predicts that it will increase threefold over the next five years. Overall, it is anticipated that IP traffic will grow at a compound annual growth rate of 23% from 2015 to This growth in data and security requirements means that this data needs to be stored and maintained for a considerable number of years. Although the data centre real estate market is relatively small, its importance is high and this is only likely to increase as both companies and individuals rely more and more on data on a daily basis. Users are increasingly relying on and developing Cloud services to meet certain IT functionality. This means the functionality is hosted in someone else s data centre and servers. However, there will always be certain data sensitivities, security issues and operational network requirements of businesses and governments which preclude cloud use. The future of the data centre sector is bright. Data demand is forecast for continual and substantial growth. It will continue to be boosted by increasing regulation, requiring data to be stored securely and for longer, and corporates and individuals increasing reliance on data and IT services to develop/offer services and manage their businesses and day to day lives. Interpretation of data centre rents varies considerably depending on the basis of occupation which can range from fully fitted FRI, through to shell and core through to service models such as colocation. Location is a key rental consideration and London continues to dominate the market. The market is moving from a rental analysis based on price per sq ft against technical area provision towards a price per KW reflecting the IT load capabilities of the facility/requirement. Fully fitted FRI data centre rents in London have in the past achieved close to 200 per sq ft against technical area provision. They have fallen back and can now be argued to be closer to 100 per sq ft. Regional rents show a discount from London levels. Tenant Location Technical Provision (sq ft) I n i t i a l Rent per Sq Ft IT Load Capacity (KW) TalkTalk Birmingham 9, TalkTalk Elmdon 10, Unisys Milton Keynes 17, BT Cardiff 24, MMC Bedford 12, Mercer Exeter 8, Atos Andover 25,

11 Further Information & Inspection arrangements EPC The EPC certificate can be provided on request. For further information or to arrange an inspection please contact: VAT We are advised that the property is not elected for VAT. Proposal Offers are sought in excess of 14,250,000 (Fourteen Million Two Hundred and Fifty Thousand Pounds). A purchase at this level would reflect a Net Initial Yield of 6.50%, subject to contract and exclusive of VAT, assuming standard purchasers costs of 5.80%. Important: Alder King for themselves and for the vendors of this property, whose agents they are, give notice that: 1. The particulars contained herein are for guidance purposes only and do not constitute either part or whole of an offer or contract. 2. All descriptions, dimensions, references to condition and necessary permissions for use and occupation are given in good faith and are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact, and must satisfy themselves as to their correctness. 3. No person in the employment of Alder King has any authority to make or give any representations or warranties whatsoever in relation to these properties. 4. No responsibility can be accepted for expenses incurred by intending purchasers in inspecting and considering the properties which are offered. Under the Control of Asbestos Regulations 2006 (CAR 2006), the owner or tenant of the property, and anyone else who has control over it and/or responsibility for maintaining or repairing it, may be under a statutory obligation to detect and manage any asbestos or asbestos related compounds contained within the property. Failure to comply with the CAR 2006 is an offence and could adversely affect the value of the property. The detection and management of asbestos and asbestos related compounds is beyond the scope of our expertise and does not form part of the services that we have agreed to provide in respect of the property. Accordingly: 1. Alder King do not accept any responsibility for, and you should not place any reliance on us in respect of, the detection and/or management of any asbestos and/or asbestos related compounds contained in the property. 2. We strongly recommend that you obtain advice from specialist environmental consultants in respect of asbestos related issues. June 2015, Subject to contract & exclusive of VAT. Designed and produced by /15