Government let London office investment with fixed annual increases FINLAISON Furnival Street & 12-13 Took s Court HOUSE15-17 London EC4
INVESTMENT SUMMARY Government let office building with fixed annual rental uplifts of 2.5% per annum. Held freehold and let to The First Secretary of State for 20 years from June 2003 over 13 years unexpired. Core Midtown location. Newly constructed in 2003 and totaling 2,928.85 sq m (31,527 sq ft) of Grade A office accommodation. Current rental of 1,675,000 per annum exclusive. Offers sought in excess of 32,500,000. Net initial yield of 4.87%, an equivalent yield of 5.87% and a true equivalent yield of 6.08%, assuming purchaser s costs of 5.7625%.
21 20 14 17 18 20 25 LOCATION Midtown is one of the three core office locations in Central London, being strategically situated between the City and the West End. Midtown s transformation originated in the late 1980 s with the development of the former newspaper buildings around Fleet Street into world class offices, such as Goldman Sachs flagship at the former Daily Telegraph building. This pattern has continued over the past 10 years such that Midtown is a highly established headquarters location, with an occupier base across the financial, accounting, legal and professional sectors. Recent developments of note include:- Sainsbury s 30,658 sq m (330,000 sq ft) headquarters at Holborn Circus, formerly the Daily Mirror building. New Street Square, situated directly to the east of Furnival Street, totaling approximately 65,030 sq m (700,000 sq ft) of Grade A office accommodation completed in 2006 with approximately 23,226 sq m (250,000 sq ft) let to Deloitte and with other occupiers including Speechly Bircham and Taylor Wessing. The Rolls Building, Fetter Lane, totaling 25,083 sq m (270,000 sq ft) and where 17,187 sq m (185,000 sq ft) has been pre-let to Her Majesty s Courts Service as the new Supreme Court. Other occupiers in the area include BBC, EDF Energy, Lovells, Freshfields, Bird & Bird, Capgemini, Brewin Dolphin, Coutts and The Law Society, while the Royal Courts of Justice are situated a short distance south west of the property, on Fleet Street. COMMUNICATIONS The property benefits from excellent transport connections, including:- Chancery Lane underground station (Central line) situated approximately 70 metres directly north of the property. Farringdon station (Mainline, Circle, Metropolitan and Hammersmith & City lines) situated a few minutes walk to the north east of the property. City Thameslink (Mainline) situated a short distance to the east of the property. Crossrail The construction of Crossrail has now commenced with the 16 billion project anticipated for completion in 2017. It will provide an east/west link across central London, linking Shenfield in the east and Maidenhead in the west. Farringdon station is to be a new Crossrail station and the only central London station benefiting from both north/south and east/west train services. 25 atent 1 FB S un Alliance House ON ROW KINGSWAY Holborn LANCASTER PL THEOBALD S ROAD ALDWYCH TOOK S COURT Lincoln s Inn Fields 15 9 to 13 Gray s Inn HIGH HOLBORN 1 to 19 14 CLERKENW GRAY S INN ROAD CHANCERY LANE TOOK S CRT Printers Inn Court FURNIVAL ST HATTON GARDEN NEW FETTER LANE FETTER LANE FETTER LANE SITUATION Furnival Street runs directly south from High Holborn, opposite Waterhouse Square, home to Prudential. The subject property is situated on the west side of Furnival Street, opposite Norwich Street, and has a substantial return frontage to Took s Court, which leads into Cursitor Street to the south. The property is strategically placed between High Holborn to the north, New Street Square/Fetter Lane to the east, and the Royal Courts of Justice/Fleet Street to the south west. Farringdon FARRINGDON STREET NEW BRIDGE STREET HOLBORN VIADUCT NEWGATE STREET STRAND FLEET STREET LUDGATE HILL ST. PAUL S CHURCHYARD Temple 15 to 17 FURNIVAL STREET Chancery Lane Inner Temple Garden 35 34 32 31 30 2726 PH City Thameslink Old Bailey Blackfriars VICTORIA EMBANKMENT UPPER THAMES STREET RIVER THAMES 1 3 5 Central Markets St. Paul s Cathedral Barbican ALDERSGATE ST Barbican LONDON WALL St. Paul s FINLAISON HOUSE
LOCAL OCCUPIERS GOLDMAN SACHS FRESHFIELDS DELOITTE/ TAYLOR WESSING SPEECHLY BIRCHAM CAPGEMINI/ BREWIN DOLPHIN SAINSBURY PLC COUTTS ROLLS BUILDING/ SUPREME COURT THE LAW SOCIETY FINLAISON HOUSE PRUDENTIAL CHANCERY LANE LINCOLN S INN FIELDS
DESCRIPTION ACCOMMODATION The property was newly constructed in mid 2003 to the highest specification and provides Grade A office accommodation totaling 2,928.85 sq m (31,527 sq ft) arranged over lower ground, ground and four upper floors. The property is of steel frame construction with elevations of traditional brick with aluminium casement windows, incorporating stone surrounds, giving the property considerable presence. With elevations to Furnival Street to the east and to Took s Court to the north and west, the accommodation benefits from excellent natural light. The offices are accessed via a generous reception, off Furnival Street, which being level with the street complies with the most stringent DDA requirements. The regular, rectangular floors, which total between approximately 529 sq m (5,700 sq ft) and 547 sq m (5,900 sq ft) on the first to third floors, have floor to ceiling heights of approximately 2.55m (8 6 ) and are virtually column free. The specification includes:- 4 pipe fan coil air conditioning Fully accessible raised floors (120 mm) Perforated metal suspended ceilings with flush lighting Lighting level of 400 lux minimum Two 13 person passenger lifts serving all floors Male, female & disabled WC accommodation on all floors TYPICAL UPPER FLOOR The property provides the following net internal floor areas:- FLOOR AREA SQ FT SQ M 4th 3,798 352.83 3rd 5,703 529.81 2nd 5,886 546.81 1st 5,886 546.81 Ground 5,186 481.78 (incl. 688 reception) Basement 5,068 470.81 Total 31,527 2,928.85 TOOK S COURT TOOK S COURT FURNIVAL STREET LIFT LIFT
TENURE The property is held freehold. TENANCY The entire property is let to The First Secretary of State, on full repairing and insuring terms, for a term of 20 years from 24th June 2003 at a passing rental of 1,675,000* per annum exclusive, subject to fixed annual rental uplifts of 2.5% per annum, as set out in the occupational lease, and as follows:- DATE RENT PER ANNUM 24th June 2009 1,594,000 24th June 2010 1,634,000 24th June 2011 1,675,000* 24th June 2012 1,717,000 24th June 2013 1,760,000 24th June 2014 1,804,000 24th June 2015 1,849,000 24th June 2016 1,895,000 24th June 2017 1,942,000 24th June 2018 1,991,000 24th June 2019 2,041,000 24th June 2020 2,092,000 24th June 2021 2,144,000 24th June 2022 2,198,000 * The vendor will top up the rental income to the June 2011 level of 1,675,000 per annum exclusive.
MARKET COMMENTARY The central London investment market strengthened considerably in the latter part of 2009 as overseas purchasers in particular sought the superior income returns available from property compared to cash deposits and other asset classes. With the availability of high quality stock likely to remain limited and London the target for international investors, together with the re-emergence of UK funds, demand for prime opportunities will continue to outstrip supply. VAT The property is elected for VAT and it is proposed that the sale will be by way of a Transfer of a Going Concern. PLANNING The property is not listed, but is situated within the Chancery Lane Conservation Area. PROPOSAL Offers in excess of 32,500,000, subject to contract and exclusive of VAT, are sought for the freehold interest reflecting a net initial yield of 4.87% based on the June 2011 rent of 1,675,000 per annum exclusive, an equivalent yield of 5.87% and a true equivalent yield of 6.08%, assuming purchaser s costs of 5.7625%.