Acorn Business Park - LSH Investment Sales

Investment Sale
Acorn Business Park, Killingbeck Drive, Leeds, West Yorkshire, LS14 6UF
To M1 Junction 46
York Road A64
High Yielding Business Park Investment Sale
To Leeds City Centre
Acorn Business Park, Killingbeck Drive, Leeds, West Yorkshire, LS14 6UF
Investment Summary
• High Yielding multi let business park investment
opportunity.
• Located directly off the A64 one of the main arterial
routes providing direct access to Leeds City Centre only
2.5 miles to the west.
• Acorn Business Park is situated adjacent to Killingbeck
Retail Park which is anchored by an ASDA supermarket
and tenants including McDonalds, B&Q, Carpetright
and Comet.
• The business park provides a total of 40,796 sq ft (3,790
sq m) of office accommodation arranged around 11
individual two storey office buildings together with the
larger Kernel House office building located opposite.
• The business park is multi let to 9 tenants with two
vacant units.
• The property produces a total income of £481,765
per annum, reflecting a modest rental level of only
£11.81 per sq ft.
• We are seeking offers in excess of £2,800,000 (Two
Million, Eight Hundred Thousand Pounds), subject
to contract, for the benefit of the freehold and long
leasehold interests. This reflects a Net Initial Yield of
16.26% after allowing for purchasers costs of 5.8%
and a low capital value of only £68.63 per sq ft.
www.lshinvestmentsales.co.uk
Acorn Business Park, Killingbeck Drive, Leeds, West Yorkshire, LS14 6UF
A646
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Acorn Business Park, constructed in the late 1980’s, is a campus-style
office development containing 16 self-contained detached twostorey office buildings. A number of the office buildings have been
“sold off” on long leases. The subject property therefore comprises
the controlling interest in 10 buildings plus Kernel House. In total
the subject property provides 40,796 sq ft (3,790 sq m) and 114 car
parking spaces. The office buildings comprise of:
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M62
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Cross Gates R
Description
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• Brick elevations beneath pitched slate tile roofs
M1
• Concrete floors & staircases throughout
M18
46
• Suspended ceilings with Category II lighting
• Gas fired centrally heated hot water radiators
Location
Situation
The property is located to the east of Leeds city centre approximately
198 miles (318 km) north of London and 44 miles (70 km) northeast of Manchester. The City of Leeds is strategically located close to
the intersection of the M1 and the M62 Motorways and in turn, the
wider National Motorway Network. The City has a district population
in excess of 715,000 and a catchment population in excess of 6
million, within a 60 minute drive.
Acorn Business Park is situated to the north of the A64 York Road,
some 2.5 miles (4 km) to the east of Leeds City Centre. York Road is a
busy arterial route which provides direct access into Leeds City Centre
to the west, and to Junction 46 of the M1 Motorway, approximately
2 miles (3 km) to the south-east via the A63/A6120.
• A number of units have incorporated comfort cooling air cassettes
(Tenant installations)
The immediate vicinity is characterised by a mixture of retail,
commercial and residential accommodation. The neighbouring
Killingbeck Retail Park is anchored by an Asda Supermarket and
petrol filling station with other occupiers including a McDonald’s
“drive thru”, and three retail warehouse units occupied by B&Q,
Carpetright and Comet. In addition, the Magistrates Court have
taken occupation of a building immediately adjacent to the Acorn
Business Centre and Killingbeck Court which is another small B1
office scheme recently completed to the East.
The property includes Kernel House which is located on a self
contained site to the north side of Killingbeck Drive with car
parking to the side and rear of the property. Kernel House
comprises a two storey office constructed in an L shape with
brick elevations beneath a pitched slate roof. Internally the
property comprises a similar specification to the other units on
Acorn Business Park with suspended ceilings, Category II
lighting and gas fired central heating system.
Leeds City station is the busiest railway station outside central
London providing direct rail access to London Kings Cross, with a
fastest journey time of 2 hours and 6 minutes.
The city is the location of one of the largest financial centres in England
outside London and also hosts the only subsidiary office of the Bank of
England in the UK. The financial sector is the region’s largest employer
and it is expected to provide 24% of the region’s additional jobs over the
next decade. The financial services and business sector currently employs
120,000 people, accounting for approximately 1 in 4 jobs. Major
employers within Leeds include Leeds Metropolitan University (3000),
Unison (2500), Arla Foods Plc (2000) and GE Capital Global (1800).
• Each property benefits from a spacious landscaped environment
with dedicated car parking spaces.
Site
The property occupies a site of approximately 0.92 ha (2.27 acres).
www.lshinvestmentsales.co.uk
Acorn Business Park, Killingbeck Drive, Leeds, West Yorkshire, LS14 6UF
Tenure
The property is held by way of both freehold, virtual freehold and
long leasehold interests as identified in the plan opposite and is
explained below:
© Crown Copyright 2012. All rights reserved. Not to scale.
• The area hatched in green (Kernel House) is held long leasehold for
a term of 125 years from 18th July 1989, at a peppercorn.
• The areas hatched in red are held freehold, unit 9 has been sold off
on a long lease.
• The areas in outlined in red are car parking spaces held virtual
freehold for a term of 999 years.
• Units 5, 6, 8, 11 and 14 are owned by third parties and do not
form part of the sale.
Tenancies
The property currently produces £481,765 per annum and is multi
let to 9 tenants by way of 10 Full Repairing and Insuring leases.
The average weighted unexpired term is 2.35 years to expiry.
Unit
Description
Tenant
Area (sq ft)
Lease Start
Lease Expiry
Rent (pa)
Rent (psf)
Unit 1
Leeds City Council
2,622
04/11/2004
03/11/2014
£38,500
£14.68
Unit 2
Arundel Williams & Surplice Ltd
1,609
29/09/2009
28/09/2019
£17,600
£10.94
Unit 3
Reg Vardy (TMG) Ltd
3,321
24/06/1988
23/06/2013
£48,150
£14.50
Not in Occupation
Unit 4
Daniels Chilled Foods Limited
4,132
31/03/2000
20/09/2014
£60,015
£14.52
Not in Occupation
Unit 7
Mayer Brown Ltd
1,542
01/03/2003
31/07/2013
£24,000
£15.56
Unit 10
Vacant
2,506
–
–
£0
£0.00
Unit 12
Specialist Computer Holdings Ltd
3,413
25/03/1989
24/03/2014
£50,000
£14.65
Unit 13
Right Management Ltd
2,468
01/03/1993
28/02/2018
£34,000
£13.78
Unit 15
Vacant
4,361
–
–
£0
£0.00
Unit 16
Crown Management Ltd
1,561
25/03/1989
24/03/2014
£23,250
£14.89
Not in Occupation
Kernel House
Steria Limited
13,261
18/07/1989
17/07/2014
£185,250
£13.97
Not in Occupation
Car Spaces
Right Management Ltd
–
01/03/1993
28/02/2018
£1,000
–
Unit 9
Sold Off
–
30/08/1991
17/12/2986
£0.00
£0.00
£481,765
£11.81
Total
40,796
There is a fully recoverable service and estate charge. Details can be provided upon request.
Comments
www.lshinvestmentsales.co.uk
Acorn Business Park, Killingbeck Drive, Leeds, West Yorkshire, LS14 6UF
Covenant
We have provided up to date accounts for each of the tenants. There
is no accounting information available for Leeds County Council, who
are a government body.
Unit
Tenant
Passing Rent %
1
Leeds City Council
7.99%
2
Arundel Williams
& Surplice Ltd
3.65%
3
Reg Vardy
(TMG) Ltd
9.99%
4
Daniels Chilled
Foods Limited
12.46%
7
Mayer Brown
Limited
4.98%
12
Specialist
Computer
Holdings Ltd
10.38%
13
Right
Management Ltd
7.27%
16
Crown
Management Ltd
4.83%
Kernel House
Steria Limited
38.45%
Year Ending
As shown with both Leeds City Council and an average Credit Safe
score of 82/100 across the remaining income, the property benefits
from good covenant security.
Turnover
Pre Tax Profit
Shareholder
Funds
n/a
n/a
n/a
n/a
31/12/2011
n/a
n/a
£60,809
31/12/2010
n/a
n/a
£67,109
30/09/2010
£253,727,000
£5,100,000
£99,855,000
30/09/2009
£269,688,000
£9,362,000
£99,479,000
31/12/2011
£121,055,000
£9,261,000
£29,911,000
31/12/2010
£131,324,000
£14,185,000
£23,456,000
31/12/2011
n/a
n/a
£1,845,151
31/12/2010
£5,473,451
(£78,469)
£2,270,187
31/12/2011
£2,486,963,000
£14,509,000
£146,056,000
31/12/2010
£2,238,425,000
£17,538,000
£139,518,000
31/12/2010
£25,473,000
(£384,000)
£15,603,000
31/12/2009
£34,932,000
£5,276,000
£15,087,000
31/03/2011
£650
n/a
£3,200
31/03/2010
£1,550
n/a
£2,550
31/12/2011
£484,733,000
£35,017,000
£20,044,000
31/12/2010
£488,577,000
£30,738,000
£86,580,000
Credit Safe
Rating
Government
54/100
96/100
95/100
96/100
95/100
78/100
45/100
98/100
Market Commentary
Leeds office take-up for 2011 finished at 281,454 sq ft for 2011 up 10%
on the total for 2010. Q1, 2012 has begun well with take-up for the
quarter totalling 56,021 sq ft. The vast majority of deals are for enquiries
up to 5,000 sq ft which accounts for 62% of total take-up with only 3
larger deals occurring during Q1, 2012. Indications are that for Q2 the
Leeds office market is expected to achieve a take up of circa 50,000 sq ft.
Historic headline rents in the out-of-town Leeds market peaked at
£20.00 per sq ft at White Rose Office Park in 2006, with rents on the
other major Leeds Business Parks ranging from £14.50 - £19.00 per sq
ft. The subject property achieved a rental peak of £15.56 per sq ft. Units
10 and 15 are available to let with agents quoting £12.00 per sq ft.
At the start of 2012 there is no office development under construction
and without a pre-let it is unlikely that there will be any development
of offices within the market during 2012. With the lack of any new
development it is likely that supply will diminish during 2012 and into the
start of 2013. Providing good prospects for growth off today’s rental levels.
www.lshinvestmentsales.co.uk
Acorn Business Park, Killingbeck Drive, Leeds, West Yorkshire, LS14 6UF
Asset Management
The property benefits from a number of asset management
opportunities that may enhance value, such as:
Contacts
Lambert Smith Hampton
6th Floor
3 Hardman Street
Spinningfields
Manchester M3 3HF
Lambert Smith Hampton
9 Bond Court
Leeds
LS1 2JZ
• Buy-in freehold interest of Kernal House.
Abid Jaffry
Adam Varley
• Alternative use for residential, leisure or retail subject to planning.
0161 242 7099
0113 887 6706
[email protected]
[email protected]
VAT
Ben Roberts
We understand that the property is elected for VAT.
0161 228 6411
• Lease re-gears, surrender and re-lets.
• Break up and individual sale of units.
• Refurb and re-let supported and funded by dilapidations receipts
from a number of “original” leases.
Energy Performance Certificates
Complete EPC’s for each unit are available in a separate PDF
document as an appendix to this brochure.
Proposal
We are seeking offers in excess of £2,800,000 (Two Million Eight
Hundred Thousand Pounds), subject to contract, for the benefit of
the freehold and long leasehold interests. This reflects a Net Initial
Yield of 16.26% after allowing for purchasers costs of 5.8% and a
low capital value of only £68.63 per sq ft.
[email protected]
Lambert Smith Hampton
United Kingdom House
180 Oxford Street
London W1D 1NN
Nick Lloyd
020 7198 2221 [email protected]
Further information on the property can be obtained from:
www.lshinvestmentsales.co.uk
Subject to Contract and Exclusive of VAT © Lambert Smith Hampton June 2012
Disclaimer: Lambert Smith Hampton Group Limited and its subsidiaries and their joint agents if any (“LSH”) for themselves and for the seller or landlord of the property whose agents they are give notice that: (i) These particulars are given and any statement about the property is made without
responsibility on the part of LSH or the seller or landlord and do not constitute the whole or any part of an offer or contract. (ii) Any description, dimension, distance or area given or any reference made to condition, working order or availability of services or facilities, fixtures or fittings, any
guarantee or warrantee or statutory or any other permission, approval or reference to suitability for use or occupation, photograph, plan, drawing, aspect or financial or investment information or tenancy and title details or any other information set out in these particulars or otherwise provided
shall not be relied on as statements or representations of fact or at all and any prospective buyer or tenant must satisfy themselves by inspection or otherwise as to the accuracy of all information or suitability of the property. (iii) No employee of LSH has any authority to make or give any
representation or warranty arising from these particulars or otherwise or enter into any contract whatsoever in relation to the property in respect of any prospective purchase or letting including in respect of any re-sale potential or value or at all. (iv) Price or rent may be subject to VAT and any
prospective buyer or tenant must satisfy themselves concerning the correct VAT position. (v) Except in respect of death or personal injury caused by the negligence of LSH or its employees or agents, LSH will not be liable, whether in negligence or otherwise howsoever, for any loss arising from
the use of these particulars or any information provided in respect of the property save to the extent that any statement or information has been made or given fraudulently by LSH. (vi) In the case of new development or refurbishment prospective buyers or tenants should not rely on any artists’
impressions or architects’ drawings or specification or scope of works or amenities, infrastructure or services or information concerning views, character or appearance and timing concerning availability or occupation and prospective buyers or tenants must take legal advice to ensure that any
expectations they may have are provided for direct with the seller or landlord and LSH shall have no liability whatsoever concerning any variation or discrepancy in connection with such matters.