A RARE OPPORTUNITY TO ACQUIRE TWO SIGNIFICANT FREEHOLD PROPERTIES IN HIGH WYCOMBE TOWN CENTRE; COMBINING LONG TERM INCOME AND RE- DEVELOPMENT POTENTIAL CASTLE HOUSE, 71-75 DESBOROUGH ROAD, HIGH WYCOMBE HP11 2PR AND VALLEY WAREHOUSE, 77-83 DESBOROUGH ROAD, HIGH WYCOMBE HP11 2PR INVESTMENT SUMMARY An excellent opportunity to acquire a strategic town centre site, with good investment income and development potential. A combination of office and warehouse accommodation. Long term income to Safestore until 2027. Short term opportunity to obtain vacant possession of Castle House. Total income 195,500 per annum. A freehold opportunity. Offers are sought in excess of 2.75M (Two million five hundred thousand pounds), subject to contract and exclusive of VAT. A purchase at this level would reflect a net initial yield of about 6.75% and a capital value of about 73.00 per sq ft.
LOCATION High Wycombe is a busy commercial centre and historic market town, located approximately 30 miles to the west of London and accessed from 2 junctions of the M40 motorway (junctions 3 and 4). The town has excellent rail access to and from London Marylebone on the Chiltern Line, with a fastest journey time of less than 25 minutes. High Wycombe is therefore extremely well located, with easy access to Central London, Heathrow Airport and the other principal commercial locations in the region. SITUATION The properties are prominently situated on Desborough Road, opposite one of the entrances to Eden (shopping centre) at the rear of House of Fraser. The prominence of the properties is set to improve further over the next couple of years, once a planned southern relief road around the town centre is open. Planning permission for two link roads that will enable the relief road has recently been obtained and work is due to start this year. Desborough Rad form an integral part of the new road. The retail and leisure offer in High Wycombe was transformed in 2008 with the opening of Eden, totalling 850,000 sq ft of retail and leisure space. Occupiers include House of Fraser (140,000 sq ft), Marks & Spencer (102,000 sq ft), Cineworld and Hollywood Bowl. More information about the centre is available at www.edenshopping.co.uk. DESCRIPTION There are two adjoining properties that are available for sale freehold, although our client will consider selling the properties individually. Castle House, 71-75 Desborough Road, High Wycombe Castle House is a three storey office building with undercroft car parking totalling 16,379 sq ft (1,521.6 sq m), built in the early 1980 s. The property is highly visible on the corner of Desborough Road and Rutland Street and the specification includes air-conditioning, a passenger lift and suspended ceilings. The property is shown hatched red on the plan that appears later. Valley Warehouse, 77-83 Desborough Road, High Wycombe Valley Warehouse was originally constructed as a bus depot in the 1920 s, but since the late 1950 s has been used as a more general warehouse. Safestore currently occupies the property as a self-storage centre and has undertaken an extensive internal fit out in connection with this use. The original gross internal floor area is 21,225 sq ft (1,971.8 sq m), of which approximately 15,300 sq ft (1,421.4 sq m) is on the ground floor. Parking and loading facilities are at the front of the property. The property is shown hatched blue on the plan that appears later. 1
TENURE Both properties are freehold and the Land Registry Title plans are attached. TENANCIES The properties are currently let on the following terms. Castle House, 71-75 Desborough Road, High Wycombe Castle House is entirely let to Jupiter Hotels under the terms of a renewal lease from 2012, for a term expiring on the 4 th September 2017. The property was originally let to Jarvis Hotels before it went in to receivership, from 1997. The existing lease is excluded from Sections 24 28 of Landlord and Tenant Act 1954. The annual rent is 80,000 per annum, with a rent review due on 5 th September 2015. The tenant has a full repairing liability, limited by a Schedule of Condition dated July 2012 which is annexed to the lease. Valley Warehouse, 77-83 Desborough Road, High Wycombe Valley Warehouse was originally let to Safestore plc under the terms of a lease dated 11 th September 2002 for a term of 25 years from 13 th June 2002. Following a name change the current tenant is Spaces Personal Storage. The tenant was acquired by Safestore Holdings PLC in 2003. The Tenant has granted an Underlease of the whole of the premises to Safestore Limited (CRN. 5512707). The Parent Company of both the Tenant and Undertenant is Safestore Acquisition Ltd (CRN. 04835087) The current passing rent is 115,500 per annum. The lease is drawn on full repairing and insuring terms, with a Schedule of Condition attached to the lease that limits the tenant s repairing obligations. COVENANT INFORMATION Jupiter Hotels Jupiter Hotels is a new company that is a 50/50 joint venture between Patron Capital, the pan European institutional investor focused on property backed investments, and West Register, part of the Royal Bank of Scotland plc. Jupiter Hotels currently operates 26 Mercure branded hotels in the United Kingdom under a franchise agreement with Accor. Additionally, there are 5 properties managed under the brand Choice Hotels, of which 4 are 3 star and 1 is a 4 star Clarion Collection property. According to Dun & Bradstreet the company currently has a rating of 4A2. 2
Fiscal Non consolidated 31 Dec 2012 Fiscal Non consolidated 31 Dec 2011 Sales Turnover 62,620 15,860 Profit / (Loss) Before Taxes (1,350) (3,124) Tangible Net Worth 26,307 26,724 Net Current Assets Liabilities) (22,997) (21,764) Safestore Holdings PLC Safestore is the United Kingdom s largest self-storage group with 134 stores. They include 97 wholly owned stores in the United Kingdom, including 58 in London and the South East with the remainder in key metropolitan areas such as Manchester, Birmingham, Glasgow, Edinburgh, Liverpool and Bristol; together with 12 Space Maker stores under management in the United Kingdom and 25 wholly owned stores in the Paris region. Relative to the named tenant, the company structure for Safestore appears to be; 1. Safestore Holdings PLC (Ultimate parent co.) 2. Safestore Investments Ltd (immediate subsidiary) 3. Safestore Group Ltd (next subsidiary) 4. Safestore Acquisitions Ltd (next subsidiary) 5. There are 5 further subsidiaries below Safestore Acquisitions Ltd, including Safestore Personal Storage Ltd and Safestore Ltd. Safestore properties are typically held under either Spaces Personal Storage Ltd or Safestore Properties Ltd. Safestore Holdings Plc has been listed in the London stock exchange since 2007. Fiscal Consolidated 31 Oct 2013 Fiscal Consolidated 31 Oct 2012 Fiscal Consolidated 31 Oct 2011 Sales Turnover 96,100 98,836 95,060 Profit / (Loss) Before Taxes 48,600 (19,463) 8,547 Tangible Net Worth 345,900 243,385 275,159 Net Current Assets Liabilities) (16,600) (16,760) (23,383) Safestore Acquisitions Ltd Safestore Acquisitions Ltd has a 5A1 D&B rating and financial highlights appear in the following table. Fiscal Non consolidated 31 Oct 2013 (000's) Fiscal Non consolidated 31 Oct 2012 Fiscal Non consolidated 31 Oct 2011 Profit / (Loss) Before Taxes 90,874 4,356,506 3,821,305 Tangible Net Worth 267,570 246,696,345 242,339,839 Net Current Assets 68,975 78,243,289 59,011,944 3
DEVELOPMENT POTENTIAL The Delivery and Site Allocations Plan (DSA) was adopted by Wycombe District Council on the 16 th July 2013 and this document places a particular focus on delivery regeneration and improvement to High Wycombe Town Centre. Policy HWTC14 relates in part to the site in question and in combination with policy HWTC13 (relating to the former gas works development site further along Desborough Road), there is a particular development focus placed upon this part of the town centre as the Council wishes to see further generation beyond Eden to the west of the town centre. Taking in combination policies HWTC13 & 14 envisages intense mixed use redevelopment. The opening of the southern relief road will give the properties enhanced prominence and accessibility, underpinning the growth potential in value. There are opportunities to combine ownerships to create a much larger development site and indeed the adjoining owner to the Valley Warehouse has indicated a willingness to consider a sale. This property is shown hatched green on the plan that appears later. Further information about this opportunity is available upon request. VAT The purchase of the properties will be subject to VAT. INVESTMENT/DEVELOPMENT CONSIDERATIONS Strategically located properties in the heart of High Wycombe Town Centre, adjacent to Eden. An opportunity to purchase the properties together, or separately. Castle House provides an opportunity for a lease re-gear, or has redevelopment potential in 2017. Valley Warehouse provides long term income to an excellent covenant with an unexpired term of 13 years. The tenant has indicated a willingness to consider extending this term further. Total income 195,500 per annum. Freehold opportunity. PROPOSAL Offers are sought in excess of 2,750,000 (Two million seven hundred and fifty thousand pounds), subject to contract and exclusive of VAT. A purchase at this level would reflect a net initial yield of 6.75% and a capital value of about 73.00. 4
INVESTMENT SUMMARY An excellent opportunity to acquire a strategic town centre site, with good investment income and development potential. A combination of office and warehouse accommodation. Long term income to Safestore until 2027. Short term opportunity to obtain vacant possession of Castle House. Total income 195,500 per annum. A freehold opportunity. Offers are sought in excess of 2.75M (Two million five hundred thousand pounds), subject to contract and exclusive of VAT. A purchase at this level would reflect a net initial yield of about 6.75% and a capital value of about 73.00 per sq ft. FURTHER INFORMATION For further information please contact Michael Garvey mg@stuppleschandlergarvey.com DD 01494 460250 5
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10 Wider Site Desborough Road High Wycombe N 110 108 106 104 LB 17 Collins House Car Park 1 to 9 6 MENDY STREET El Sub Sta TCBs 8 7 Hall 22 WEST END ROAD 85 to 89 PH 14 to 23 1 to 13 DESBOROUGH ROAD 71 to 75 32 STREET 2 Buckingham House 28 RUTLAND 22 31 14 75.0m 27 25 17 9 0m 10m 20m 30m 3 1a 1 Ordnance Survey Crown Copyright 2014. All rights reserved. Licence number 100022432. Getmapping plc 2014. Plotted Scale - 1:1250 Prepared by Stupples Chandler Garvey for identification purposes only.