brochure

JESSOP HOUSE
JESSOP AVENUE, CHELTENHAM GL50 3SH
JESSOP HOUSE
PriME FrEEhold Multi lEt oFFicE inVEstMEnt
1 regent Arcade
5 Montpellier
9 st James house
2 Promenade
6 winston churchill Gardens
10 Festival house
3 royal crescent
7 cheltenham spa station
11 Quadrangle
4 imperial Gardens
8 waitrose supermarket
7
5
JESSOP HOUSE
4
10
11
P
3
1
2
PAGE 2 JESSOP HOUSE, CHEltEnHam, Gl50 3SH
9
8
6
inVEstMEnt
suMMAry
• Cheltenham is a significant commercial centre in the West of England, with an
affluent demographic.
• Modern, five storey office building totalling 68,395 sq ft NIA (6,535.78 sq m).
• Constructed in 2002.
• Freehold.
• High specification Grade A office building including four pipe fan coil air conditioning,
full access raised floors and 65 on site car parking spaces.
• Multi let to Vertex Mortgage Services Ltd, Attivo Group Ltd, Iress Portal Ltd &
Wiggin LLP.
• Average weighted unexpired lease term of approximately 6.42 years (6 years to
break). The vacant fourth floor space is subject to a two year rental guarantee.
• Rent passing £961,648 per annum.
• Seeking offers of £12,540,000 (Twelve Million Five Hundred and Forty Thousand
Pounds), subject to contract and exclusive of VAT, which reflects a net initial yield of
7.25%, after purchaser’s costs of 5.80%.
• Pricing at this level reflects a capital value of £183 per sq ft.
• The property is held in a Jersey Property Unit Trust and offers will be considered for
the JPUT.
SUBJECT TO CONTRACT AND EXCLUSIVE OF VAT.
PAGE 3 JESSOP HOUSE, CHEltEnHam, Gl50 3SH
location
The regency spa town of Cheltenham is located
in Gloucestershire on the edge of the Cotswolds.
The town is famous for its regency architecture,
shopping and festivals. The population of
Cheltenham is circa 115,000 persons and
draws on a strong regional catchment as well as
attracting a good tourist population.
The town is a major commercial centre and
the main employers include Chelsea Building
Society, Dowty Aerospace, Endsleigh Insurance,
Zurich Financial Services, UCAS and GCHQ
(Government Communications Headquarters).
Cheltenham is situated approximately 9 miles east of
Gloucester, 45 miles south of Birmingham, 40 miles
north east of Bristol and 110 miles west of London.
The town benefits from excellent transport links with
Junction 10 and 11 of the M5 located approximately
4 miles to the west of the town centre, providing
direct access to Bristol and Birmingham. The A417/9
dual carriageway provides easy access to the M4
motorway and London.
Cheltenham has a mainline railway station
offering regular train services to London
Paddington (1 hour 50 minutes), Bristol
(45 minutes) and Birmingham (40 minutes).
Bristol International Airport is situated 40
miles to the south of the town and is one of
the UK’s fastest growing airports providing
direct flights to over 100 domestic and
international destinations.
situation
Jessop House is situated on the south side of
Jessop Avenue to the west of the town centre.
The building fronts Jessop Avenue which leads
onto St James’ Square and the town centre via
Clarence Street. It is a short walk from the local
shops and amenities and a 10 minute walk from
Cheltenham Spa Rail Station.
Cheltenham’s three main office buildings are
located on Jessop Avenue. Adjacent to the
subject property is Festival House, which is let to
tenants including Aviva, Steinhoff (UK) Ltd and
Zenos and opposite is St James’ House which is
a 62,000 sq ft multi let office building.
At the end of Jessop Avenue a large site has been
developed to provide a mix of food, retail and
residential property. The development includes a
large Waitrose store, petrol station and car park
developed by the John Lewis Partnership. These
developments have helped provide a focus to the
west of Cheltenham’s town centre enhancing the
immediate area and establishing Jessop Avenue
as the town’s prime office location.
PAGE 4 JESSOP HOUSE, Cheltenham, GL50 3SH
JESSOP HOUSE
description
Jessop House is a modern office building
constructed in 2002. The property is of steel frame
construction and is arranged over ground and four
upper floors.
The property benefits from the following high
quality specification:
• Attractive full height, glazed reception area
• Four pipe fan coil air-conditioning
• Fully accessible raised floors
• Suspended ceiling with recessed lighting
Externally, the property benefits from a total of 65
on-site car parking spaces at both surface and
underground levels providing a car parking ratio of
1:1,052 sq ft which is exceptional for Cheltenham
town centre.
site
We understand the site extends to approximately
1.1 acres (0.45 hectares).
• Floor to ceiling height of 2.7m
tenure
• Three 10-person passenger lifts
The property is held freehold.
•Male, female and disabled WCs on each floor
• Shower facilities
ACCOMMODATION
We have been provided with the following approximate net internal floor areas:
Sq Ft
Sq M
Lower Ground Floor (Storage)
4,890
454.30
Ground Floor Reception Area
978
90.86
Ground Floor Office
14,107
1,310.50
First Floor Office
14,051
1,305.30
Second Floor Office
13,511
1,255.13
Third Floor Office
12,326
1,145.04
Fourth Floor Office
8,532
792.65
Total Area
68,395
6,353.78
Indicative floor plan, first floor shown.
PAGE 5 JESSOP HOUSE, Cheltenham, GL50 3SH
Tenancy
The property is multi-let to four tenants in accordance with the tenancy schedule, producing an income of £961,648 per annum.
The property has an average weighted unexpired lease term to expiry of approximately 6.42 years (6 years to break).
Demise
Tenant
Lease
Start
Lease
Expiry
Break
Option
Rent
Review
Rent
(pa)
Rent
(psf)
Comments
Part Basement,
Part Ground &
First Floor
Vertex Mortgage
Services Ltd
(Guarantor from
Vertex Group Ltd)
16/10/2013
06/01/2022
n/a
11/01/2017
£452,240
£17.74
Outside Act.
Service charge cap.*
Part
Second Floor
Attivo Group Ltd
29/05/2012
06/01/2017
06/01/2015
n/a
£79,878
£15.15
Outside Act. Service charge cap.
Rent deposit of £39,939.
Part
Second Floor
Iress Portal Ltd
01/01/2013
31/12/2017
31/12/2015
n/a
£115,830
£15.66
Outside Act. Service charge cap.
Schedule of Condition.
Third & Part
Fourth Floor
Wiggin LLP
29/08/2012
06/01/2022
n/a
11/01/2017
£261,560
£14.81
Rent topped up to full contracted
rent of £261,560 pa.
Outside Act. Service charge cap.
Part
Fourth Floor
Vacant
(refurbished)
£52,140
£16.50
Two year rental guarantee.
3,160 sq ft.
Total
£961,648
*First floor sublet to Iress (UK) Ltd from 13/03/2014 expiring 03/01/2022 at £197,640 pa. Outside Act. Service charge cap. Breaks on 30/09/2017 & 30/09/2020. Schedule of Condition.
PAGE 6 JESSOP HOUSE, Cheltenham, GL50 3SH
COVENANT INFORMATION
Vertex Mortgage Services Ltd
Established in 1996, Vertex is a leader
in Business Process and Customer
Management outsourcing, serving over 200
clients worldwide across many sectors.
The company has a FAME score of 91 out of 100
and achieves the highest rating of “secure”.
Iress Portal Ltd
Iress Portal Ltd is a software company
specializing in the development of software
systems and services for financial markets and
wealth management. The complany employs
1,340 people in 14 offices worldwide and
provides services to stockbrokers, financial
institutions and research analysts.
The company has a FAME score of 95 out of 100
and achieves the highest rating of “secure”.
Attivo Group Ltd
Founded in 1998, the Group now has
several subsidiary businesses specialising in
investment, pensions, wealth management,
property and all aspects of professional
independent financial advice. The Group
currently controls over £500m funds under
management, administration and advice.
The company has a FAME score of 83 out of
100 and achieves the highest rating of “secure”.
Wiggin LLP
Wiggin LLP is a UK media law firm focusing
exclusively on media with offices in London,
Cheltenham and Brussels. The firm is
consistently ranked by legal directories
Chambers and Partners and Legal 500 as one
of the top media firms in the UK.
The company has a FAME score of 90 out
of 100 and achieves the highest rating of “secure”.
occupational market
Overview
•The Cheltenham office market is extremely
tight with little availability of modern office
space in the town.
•There is latent demand from office occupiers within
the town however the majority cannot relocate
as often a suitable alternative does not exist.
•Jessop House is undoubtedly Cheltenham’s
best office building.
Supply
•Cheltenham has an estimated office stock
of 3 million sq ft.
•Vacancy in Cheltenham has fallen from the
peak of 17.5% in 2011 to 11.7% at the end
of 2013. It should be noted however that the
majority of the vacant stock within Cheltenham
comprises older, secondary buildings.
•Land supply is extremely limited. There
is currently no new office space under
construction and any significant future
development is likely to happen out of town.
Demand & Take Up
•Average annual take up in Cheltenham over
the last 5 years has been 80,000 sq ft.
•Over the last 5 years, Manufacturing,
Utilities and Distribution (MUD) have been
the key drivers of demand accounting for
approximately 40% of total take up.
•In any one year, most of the demand is
typically for space of less than 10,000 sq
ft with just a few transactions between
10,000 sq ft – 50,000 sq ft.
•Due to a lack of new supply, we do not
anticipate any significant changes in the
Cheltenham office market and would
expect future take up to be consistent with
previous years.
Competition
Competing buildings to Jessop House is limited
to just three buildings namely:
•Festival House (adjacent to Jessop House)
62,000 sq ft refurbished in 2011 and
quoting rents of £15.00 per sq ft.
•St James House (opposite Jessop House)
84,000 sq ft refurbished in 2000 and
achieving rents of £12.50 - £15.00 per sq ft.
•The Quadrangle
59,000 sq ft partially refurbished and
achieving rents of £12.50 per sq ft.
Jessop House has achieved the best rents
in the town however other recent deals of
note include:
Date
Property
Area
Tenant
Sandbourne
Systems Limited
A-Plan Insurance
Group Limited
March 14
St James House
9,323
Jan 14
Ellenborough House
6,404
June 12
Ellenborough House
10,893 Towergate Insurance
Rent (psf)
Lease Term
£15.50
10 years
£14.50
£14.50 (rear)
£12.50 (front)
10 years
(5 yr TBO)
10 years
(5 yr TBO)
PAGE 7 JESSOP HOUSE, Cheltenham, GL50 3SH
OFFICE INVESTMENT MARKET
capital allowances
Investor appetite for good quality regional offices continues to strengthen. A combination of relative value against the south east and
stronger occupational markets has resulted in yield compression for both prime and good secondary office investments.
Further information is available upon request.
In 2012, investment in South West offices totalled £146m. In 2013 this figure more than doubled to £324m, an increase of some
123% over the 12 month period.
VAT
Cheltenham has few modern office buildings for a town of its size and an extremely restricted land supply within the town centre.
Jessop House is well placed to take advantage of these market dynamics providing scope for future rental growth. Recent regional
investment transactions include:
Date
Area
Sq Ft
Property
Price
Yield
Comments
Q.6.50%
Interest believed to be at circa 6.00%. Built in 1992.
Multi let to 6 tenants for 6.4 years term certain.
The property is elected for VAT however we anticipate that the sale will be
treated as a transfer of a going concern (TOGC).
epc
Rating E-112.
PROPOSAL
Seeking offers of £12,540,000 (Twelve Million Five Hundred and Forty
Thousand Pounds), subject to contract and exclusive of VAT, which
reflects a net initial yield of 7.25%, after purchaser’s costs of 5.80%.
May 14
Royal Mead, Bath
24,668
Q.£7,000,000
March 14
Quadrangle, Cheltenham
59,260
£8,125,000
8.14%
Let to RBS plc for 5 years. 1970s office building.
March 14
The Paragon, Bristol
75,653
£29,450,000
5.93%
Multi let for a further 7 years term certain.
March 14
Alpha Tower, Birmingham
196,105
£14,000,000
6.00%
Multi let to 15 tenants with 3.75 years term certain.
Jan 14
Victoria Square House,
Birmingham
144,975
£42,000,000
6.56%
Multi let to 6 tenants. 4.9 years term certain.
For further information or to arrange an inspection, please contact
the following:
Jan 14
Capella, Glasgow
113,122
£43,100,000
5.50%
8 years WAULT. Multi let.
Dec 13
Portwall Place, Bristol
162,581
£51,590,000
6.90%
Multi let for a further 10 years term certain.
Dec 13
3-5 Morrison St, Edinburgh
82,282
£29,400,000
6.00%
8.85 years WAULT. Let to Franklin Templeton Global
Investors Plc and Sainsbury’s.
Steve Oades
T: 0117 917 4548
M: 07920 807 796
E: [email protected]
Tim Smither
T: 020 7861 1227
M: 07876 145 909
E: [email protected]
Dec 13
1 Hardman Street, Manchester 16,480
£7,050,000
5.50%
Let to Mediacom, 10 years term certain with fixed
increases in Year 5.
July 13
1 Brindleyplace, Birmingham
£29,950,000
6.31%
10 years term certain. Let to Deutsche Bank AG.
Nick Thurston
T: 0117 917 4536
M: 07752 375 002
E: [email protected]
Charles Hobart
T: 020 7861 1212
M: 07825 608 962
E: [email protected]
69,214
The property is held in a Jersey Property Unit Trust and offers will be
considered for the JPUT.
Further Information
IMPORTANT NOTICE (1) Particulars: These particulars are not an offer or contract, nor part of one. You should not rely on statements by Knight Frank LLP in the particulars or by word of mouth or in writing (“information”)
as being factually accurate about the property, its condition or its value. Knight Frank LLP has no authority to make any representations about the property, and accordingly any information given is entirely without
responsibility on the part of the agents, seller(s) or lessor(s). (2) Photos etc: The photographs show only certain parts of the property as they appeared at the time they were taken. Areas, measurements and distances
given are approximate only. (3) Regulations etc: Any reference to alterations to, or use of, any part of the property does not mean that any necessary planning, building regulations or other consent has been obtained.
A buyer or lessee must find out by inspection or in other ways that these matters have been properly dealt with and that all information is correct. (4) VAT: The VAT position relating to the property may change without notice.
Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Knight Frank LLP registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names.
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