Linea Investment Brochure

Linea House
Harvest Crescent, Ancells Business Park, Fleet GU51 2UZ
Reversionary South East Multi-Let Office
Investment Opportunity
Linea House
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Investment Summary
• Reversionary, high-quality multi-let office
investment in the south east, 38 miles from
Central London
• Comprehensively refurbished in 2010, providing
22,062 sq ft (2,049.54 sq m) of Grade A office
accommodation arranged over ground and two
upper floors
• ERV in Ancells Business Park of £18.00 per sq ft
with good prospects for further rental growth as
Fleet sits at a discount to adjoining towns
including Farnborough (£27.50 psf) and
Camberley (£22.00 psf)
• Excellent car parking ratio of 1:182
• Situated in the heart of Ancells Business Park,
one of Fleet’s premier office locations
• Strategically located in close proximity to J4A of
the M3 and Fleet Railway station
• One of the foremost office buildings within
Ancells Business Park
• 25% reduction in office stock in Fleet across
2014-2015 owing to residential development
conversions and lettings tightening office supply
INVESTMENT SUMMARY
Tenure & Tenancy
Proposal
• Freehold
• Offers are invited in excess of £3,450,000
(Three Million Four Hundred and Fifty Thousand
Pounds) for the freehold interest, subject to
contract and exclusive of VAT
• Fully let to 4 tenants: Verisk Analytics Ltd, Anite
Telecoms Ltd, Grass Roots Meetings & Events Ltd
and PRMA Consulting Ltd
• Total rent passing of £303,339 per annum,
equating to a low £14.05 per sq ft
• Attractive WAULT of 6.37 years to expiries and
2.21 years to breaks
• Guaranteed reversion in 2019 via a stepped rent
• A purchase at this level would reflect a net
initial yield of 8.31% after allowing for
purchaser’s costs of 5.80%, reflecting a low
capital value of £156 per sq ft
• Attractive guaranteed reversionary yield of
8.42% via the stepped rent in 2019. Potential for
earlier reversion via the open market rent
reviews to bring rents in line with ERV
A5
MAIDENHEAD
MAIDENHEAD
15
8
5
A312
HAMMERSMITH
4B
A102
M6
READING
READING
M4
NOCK
MARLBOROUGH
STAINES-UPONTHAMES
10
14
HEATHROW
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AIR
AIR
IRP
AIRPORT
13
BRACKNELL
1
11
A308
NEWBURY
KINGSTON-UPONTHAMES
2
A322
12
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WEYBRIDGE
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A232
3
A33
A243
M3
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WOKING
4
A217
10
A22
9
A339
4A
HOOK
A34
FARNBOROUGH
BASINGSTOKE
A331
M25
A3
6
FLEET
LOCATION
FARNHAM
ALDERSHOT
6
7
8
GUILDFORD
A31
A24
M23
A3
A303
Linea House
4A
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A 30
13
A3
27
OAD
FLEET R
BRAMSHOT
COTTAGES
FLEET RAIL
STATION
M ROAD
FLEET POND
4
1
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LANN
NEELS
Tesco Express
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2
The Falkners Arms
3
Caffe Lusso
4
Premier Inn
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FLEET TOWN
CENTRE
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Heathrow – 22 miles
Gatwick – 48 miles
Southampton – 43 miles
3 1 2
RO
AD
London Waterloo – 37 minutes
Reading – 41 minutes
Southampton - 54 minutes
NORTH HANTS
GOLF CLUB
BR
AM
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S ROAD
ANCELL
Communication
Central London – 38 miles
Guildford – 17 miles
Woking – 16 miles
Basingstoke – 16 miles
Reading – 16 miles
OT
M3
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Linea House is located in the heart of Ancells Business Park
which is one of Fleet’s principal office locations. The Park is
strategically positioned 1.5 miles north of the town centre
and 1 mile north of the mainline railway station, and
benefits from a range of retail and leisure amenities within
close proximity.
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Situation
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LANE
A number of international corporates operate their
headquarters from the area including: BAE Systems, Nokia,
Virgin Media, Sun Micro Systems, Anite Telecoms, Siemens
and BMW.
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The town is located in the heart of the Blackwater Valley,
which is a key commercial location in the south east of
9
England. The area is extremely affluent and is highly
sought after to both live and work. Fleet has been voted
the best place to live in the UK for the past 5 years by the
Halifax Quality of Life study. It is also popular with a
number of occupiers due to its proximity to Central
London, together with its skilled workforce, high-grade
housing stock, strong connectivity and good quality
schools.
Ancells Business Park is accessed from Ancells Road off
Minley Road, which is the main arterial route into the town
centre. Junction 4A of the M3 is situated approximately
2 miles to the east, providing direct access into London.
The Park comprises a number of high-quality selfcontained office buildings arranged in a secure landscaped
environment, which is home to occupiers including Anite’s
UK Headquarters, Regus and Rohde & Schwarz.
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Fleet is situated in close proximity to the M3, with excellent
connectivity to Central London via road and rail. It is
positioned 38 miles south west of Central London, 16 miles
south east of Reading and 16 miles west of Guildford.
DESCRIPTION
Linea House is a self-contained multi-let office building
providing approximately 22,062 sq ft of Grade A office
accommodation arranged in an ‘L’ shape over three
floors. The building is of steel frame construction,
externally clad with brickwork under a slate roof. In
2010, the building was comprehensively refurbished to
provide one of the best buildings on Ancells Business
Park.
The internal specification includes the following
features:
•
•
•
•
•
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Double height reception
Air conditioning
Fully accessible raised floors
Metal tiled suspended ceilings with LG7 lighting
2 x 8 passenger lifts
First Floor (Typical Floor)
Male and Female WCs on all floors
Disabled WC facilities on ground and second floors
Landscaped approach
The property benefits from 121 car parking spaces,
providing an excellent ratio of 1:182 sq ft.
Site
The property is situated on a site with an area of
approximately 1.31 acres (0.53 hectares).
121 car parking spaces,
providing an excellent
ratio of 1:182 sq ft
The plan is for indicative purposes only
ACCOMMODATION
The building has been measured in accordance with the RICS Code of Measuring Practice
(6th Edition) and provides the following net internal floor areas:
Demise
Area (sq m)
Area (sq ft)
Ground Floor
675.96
7,276
First Floor
680.76
7,328
Second Floor
648.44
6,980
2,005.16
21,584
Reception
22.00
237
Second Floor Corridor
22.36
241
2,049.52
22,062
Total
Overall Total
Tenure
The property is held freehold.
Tenancy
Demise
NIA
Tenant
(sq ft)
Current Rent
(pa)
Rent
(psf)
Lease Start Lease Expiry
Ground Floor
7,276 Grass Roots Meetings & Events Ltd
£90,263
£12.41
12/07/2012
08/07/2022 09/07/2018
09/07/2017 Tenant only break option (6 months’ notice)
First Floor
7,328 Anite Telecoms Ltd
£109,635
£14.96 08/08/2012 07/08/2022 08/08/2017
08/08/2017 Tenant only break option (6 months’ notice)
Second Floor
(Suite A)
2,885 Verisk Analytics Ltd
£45,291
£15.70
12/04/2013
11/04/2023
12/04/2018
12/04/2018
Second Floor
(Suite B)
4,095 PRMA Consulting Ltd
£58,150
£14.20
08/12/2015
07/12/2020
-
-
Total
21,584
£303,339
£14.05
6.37
(to expiry)
WAULT
Next
Review
Break Clause Comments
2.21
(to break)
WAULT
Tenant only break option (6 months’ notice)
The vendor proposes to top up the rent to the Year 3 stepped rent of
£58,150 pa. There is a further fixed uplift in Year 5 to £62,250 pa.
TENANT COVENANTS
Grass Roots Meetings & Events Ltd (1092681)
PRMA Consulting Ltd (05893400)
Grass Roots Group PLC was founded in 1980 and is regarded as the
world’s leading provider of employee and customer engagement
solutions. It specialises in employee solutions, customer engagement,
promotions and incentives, meetings and events. The company
headquartered in Tring, Hertfordshire with a network of offices in 10
countries with over 1,000 employees. It has featured in the Sunday Times
Top 100 Companies to work for in 2010, 2012 and 2014.
PMRA Consulting Ltd provide innovative and integrated solutions for
market access strategy, evidence generation, and value communication.
The company was founded in 2006 and is headquartered in the UK and
has two other offices in the US and Greece respectively.
D&B Rating: 2A1
D&B Rating: C2
Description
31 Dec 2014
(£000s)
31 Dec 2013
(£000s)
31 Dec 2012
(£000s)
Description
31 Aug 2014
(£000s)
31 Aug 2013
(£000s)
30 Apr 2012
(£000s)
4,573
26,261
17,825
15,329
Sales Turnover
n/a
6,338
Profit / (Loss) Before Taxes
2,162
(1,499)
(438)
Profit / (Loss) Before Taxes
n/a
179
167
Tangible Net Worth
3,781
925
2,487
Tangible Net Worth
n/a
794
752
Sales Turnover
Anite Telecoms Ltd (1721900)
Verisk Analytics Ltd (1924205)
Anite Telecoms Ltd is a leading supplier of test and measurement solutions
to the international wireless market. The company was originally founded in
1973 as Cray Electronics and changed its name in 1996 to Anite Group PLC.
In August 2015, the company was acquired by US electronics test and
measurement company, Keysight Technologies, in a deal worth £388
million. Its 500 staff work from offices in 15 countries across Europe, the
Americas, Asia and the Middle East.
Verisk Analytics is a leading data analytics and risk assessment
company serving customers in insurance, energy, healthcare, financial
services, government and risk management. The company’s parent
company, Verisk Analytics, Inc, is based in Jersey City, New Jersey and
is traded on the NASDAQ 100, with a network of over 40 offices across
the globe. In 2014, it generated revenues in excess of $1.7 billion.
D&B Rating: 5A1
D&B Rating: 4A1
Description
Sales Turnover
Profit / (Loss) Before Taxes
Tangible Net Worth
30 Apr 2014
(£000s)
30 Apr 2013
(£000s)
30 Apr 2012
(£000s)
64,982
76,366
70,382
Sales Turnover
8,813
23,517
17,427
Profit / (Loss) Before Taxes
62,523
65,575
47,680
Tangible Net Worth
Description
31 Dec 2014
(£000s)
31 Dec 2013
(£000s)
31 Dec 2012
(£000s)
6,287
5,695
4,835
1,911
1,413
906
20,954
352
(723)
FLEET OCCUPATIONAL MARKET
Fleet is one of the principal office locations in the Blackwater Valley
region, which comprises a number of established office centres such
as Farnborough, Camberley, Frimley, Hook and Aldershot. The area
benefits from an affluent and highly skilled catchment population, as
well as rental growth driven by occupiers priced out of Central
London. It is home to a number of major national and international
occupiers, including IBM, CSC, Fluor, Serco, Novartis, AON, Merrill
Lynch and QinetiQ.
Over the past two years, the Fleet office market has experienced a
significant reduction in the total level of stock and vacant supply.
During 2014 - 2015 alone there has been a 25% loss of the office stock
from alternative use development, including residential
development/PD. This squeeze on supply, combined with stronger
occupier demand, is having a positive effect on rental tones and
incentives being achieved.
Headline quoting rents for grade A space on Ancells Business Park are
currently at £18.00 per sq ft. These headline rent levels remain at a
significant competitive level against neighbouring Blackwater Valley
towns such as Farnborough (currently £27.50 per sq ft) and
Camberley (currently £22.00 per sq ft).
The current passing rents in Ancells Business Park are at historically
low levels with £26.50 per sq ft being achieved in 2001. As a result of
the increased letting activity in Fleet during 2015 and rent differential
compared with neighbouring towns, we fully expect there to be
opportunities for rental growth at the subject property.
The following represent some of the more notable leasing transactions in 2014/2015 in the Blackwater Valley:
Date
Property
Tenant
Area
(sq ft)
Lease Term
(years)
Rent
(psf)
Nov-15
Pinehurst II, Farnborough Business Park, Farnborough
Time Inc
30,000
10
£26.50
July-15
Fleet One, Ancells Business Park, Fleet
Bedrock Healthcare
4,500
10
£18.00
Break in year 5
July-15
Fleet One, Ancells Business Park, Fleet
Murata
4,600
10
£18.00
Break in year 5
May-15
Flagship house, Fleet
Adept Ltd
4,275
5
£16.25
Break in year 3
July-14
93 Fleet Road
Nexus
4,300
5
£16.00
Comments
Investment
Rationale
Close proximity to London
Affluent, established office location
in the Blackwater Valley
One of the best office buildings
in Ancells Business Park
22,062 sq ft (2,049.54 sq m) of
Grade A office accommodation
Fully income producing with zero
vacancy, underpinning the asset
being ‘best in class’
Guaranteed reversion in 2019
through the stepped rents
Potential to convert for residential
in the medium to long term
Passing off a low rent of
£14.05 per sq ft
Highly reversionary with an ERV
of £18.00 per sq ft
SOUTH EAST INVESTMENT MARKET
The South East investment market has gone from strength to
strength over the past 18 months, and is currently experiencing
strong investor appetite. The market has continued to thrive and is
driven by increased occupier demand, reduced vacant rates and
rental growth. The improvement in the occupational market is now
allowing investors to positively appraise assets based on evidence
and not just sentiment.
There is forecast for further rental growth and yield compression
in the South East markets, due to strengthening fundamentals,
while well-located, good quality property in secondary markets are
expected to have the best prospects for capital growth over the
medium term. In particular, investor demand is particularly strong
for high-quality multi-let properties, which offer asset
management initiatives and limited capital expenditure.
Improving office market, with
evidence of rental growth, shortening
incentives and reducing vacant levels
The following represent some of the more notable investment transactions in the South East:
Date
Property
Area
(sq ft)
Purchase
Price
Capital
Value (psf)
NIY
WAULT
Purchaser
(to break)
Sep-15
Omron House, Milton Keynes
23,062
£4,000,000
£173
7.68%
5.00
RBC Royal Bank
Aug-15
4 Tilgate Forest Business Park, Crawley
25,627
£6,830,000
£267
7.10%
7.00
Bromley Borough Council
Jul-15
4500 Parkway, Solent Business Park, Fareham
56,003
£10,000,000
£179
7.43%
5.80
Threadneedle
May-15
Lakeview West, Dartford
26,759
£7,450,000
£278
7.50%
2.83
CCLA
Nov-14
Newplan House, Epsom
23,100
£6,900,000
£299
6.25%
4.25
Cornerstone
PROPOSAL
We are seeking offers in excess of £3,450,000 (Three Million, Four Hundred
and Fifty Thousand Pounds) for the freehold interest, subject to contract and
exclusive of purchaser’s costs at 5.8%. A purchase at this level would reflect
anattractive net initial yield of 8.31% and a guaranteed reversionary yield
of 8.42% following the stepped rent in 2019. This reflects a low capital
value of £156 psf.
EPC Rating
VAT
Planning
The property has an EPC rating of C and a score of 63. A copy of the
EPC and recommendation report is available on the website below.
The property has been elected for VAT which will therefore be
chargeable on the sale price unless the transaction can be treated as a
Transfer of a Going Concern.
The property has planning consent for B1(a).
Web Access
www.cushmanwakefieldinvestmentsales.co.uk/cw/lineahouse
OUR TEAM
Cushman & Wakefield LLP
Rory Turner
Max Clynes
Chris Lewis
43/45 Portman Square
London W1A 3BG
E: [email protected]
T: +44 (0) 207 152 5205
E: [email protected]
T: +44 (0) 207 152 5710
E: [email protected]
T: +44 (0) 207 152 5554
Hurst Warne
Peter Richards
Victoria House, 18-22 Albert Street
Fleet, Hampshire GU51 3PD
E: [email protected]
T: +44 (0) 7803 078011
January 2016
MISREPRESENTATION ACT 1967
Cushman & Wakefield LLP (and their joint agents if appointed) for themselves and for vendors or lessors of this property whose agents they are, give notice that: (1) The particulars are produced in good faith, are set out as a
general guide only and do not constitute any part of a contract. (2) No person in the employment of the agent(s) has any authority to make or give any representation or warranty whatever in relation to this property. (3) This
property is offered subject to contract and, unless otherwise stated, all rents are quoted exclusive of VAT. (4) Nothing in these particulars should be deemed to be a statement that the property is in good condition or that any
services or facilities are in working order. (5) Unless otherwise stated, no investigations have been made regarding pollution or potential land, air or water contamination. Interested parties are advised to carry out their own
investigations if required.
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