New England House Northumberland Road, Newcastle Upon Tyne NE1 8JW
> CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT New England House Northumberland Road, Newcastle Upon Tyne NE1 8JW
INVESTMENT SUMMARY
• Well located city centre office and retail building situated immediately off Newcastle’s prime retail thoroughfare and close to the Haymarket Metro and University campuses. • The building was constructed in the early 1980’s and subsequently refurbished, extending to a total of net internal area 21,339 sq ft over ground and 4 upper floors. • The property features modernised common areas, refurbished offices and WC’s, 2 passenger lifts and an attractive central courtyard. • Multi let to 6 tenants including Secretary of State for Defence and Reed Employment Ltd with an average weighted unexpired lease term to expiry of 2.93 years and to break options of 2.33 years. • Producing a gross income of £237,868 p.a. or after deductions for ground rent and void costs including empty rates charges, service charge and insurance shortfall, £111,309 p.a. Fully let estimated rental value £289,830 p.a. • Long leasehold for 127 years from the 14 March 1980 at a passing rent of £20,800 p.a. subject to review. • Opportunity to enhance value through restructuring leases and letting vacant space. • Value underpinned by conversion of upper floors to student or private residential accommodation, subject to obtaining necessary consents. • Offers sought of £2.1M (Two million, one hundred thousand pounds) reflecting a gross yield of 10.8% or triple net initial yield of 5.04%. The reversionary yield on letting the vacant offices is approximately 13.0%.
CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT A9
A882
(A9)
(A895)
A9 A99
STORNOWAY
A9
A9 A835
Fraserburgh
(A92) Elgin A98 A90
BENBECULA A87 A9 (A856) A96 A941 INVERNESS
Peterhead Inverness
A90(A952)
A9 A82 A95 A96
(A850)
A87
A87 ABERDEEN A887
A9 Aberdeen BARRA A87 A93 A93
A90
A86 A830
A82
Fort William A92
A9 A93
A90
Montrose
A82 Forfar
A90 Arbroath A92
Dundee
A90 DUNDEE A85 A85 Perth 11 10 A92 9 (A914) A91 St Andrews M90 A84 A9 A91 8 7 6 Glenrothes 11 A91 A82 Buckhaven 5 A83 10 A977 Alloa 4 Stirling A92 Kirkcaldy A811 M9 8 Cowdenbeath Dunfermline 3 3 A985 M90 Helensburgh 8 7 2 M80 2 Grangemouth 1 5 6 Bo'ness Dunoon Alexandria 5 Gourock 4 Falkirk 4 M9 3 Dumbarton 2 A1 A80 Cumbernauld Greenock 1 EDINBURGH EDINBURGH Port Kirkintilloch 31 1 Glasgow 1 Clydebank 3 2 Musselburgh 30 3 3 Livingston M80 M73 Dalkeith GLASGOW 26 A78 15 11 29 27 25 Airdrie 4 Johnstone 24 20 GLASGOW 5 Bonnyrigg M8 1 6 M8 Paisley A8 A71 A68 5 Hamilton Motherwell A702 6 A73
East Kilbride A703 A7 Berwick-upon-Tweed Larkhall 7 A737 A77 Carluke A83 8 A697
Kilwinning M74 Ardrossan A721 9 10 Kilmarnock Irvine A72 Galashiels A1 A71 A71 11 A78 12 A702 Troon A76 PRESTWICK Prestwick 13 Ayr A74(M) 14 A70 14 A68 New England House A77 A697 Northumberland Road, Newcastle Upon Tyne NE1 8JW A74 A1068
A1
A7
A77 16 A701 Morpeth A76
17 A696 A1 Blyth 18 A68 Dumfries A74(M) 19 NEWCASTLE 20 Ponteland A19 Whitley Bay Gosforth Tynemouth A75 NEWCASTLE South Shields LOCATION A69 A69 Jarrow CARLISLE Gateshead Newcastle upon Tyne is the regional capital of the North East located A689 Stranraer A75 44 A68 A75 A1 SUNDERLAND 105 miles (168km) south of Edinburgh and 85 miles (137km) north of 43 Carlisle A963 65 Washington York. The city has a population of approximately 280,000 and forms A692 64 42 Consett Stanley 63 Houghton le Spring the heart of the wider Tyneside conurbation with a population A691 extending to in excess of 1,075,000. A19 A596 62 Durham Peterlee The city is the largest retailing, leisure and office centre in the Brandon A167 M6 61 North East and has an international draw as a business, education
A68 and tourism centre. Major occupiers in the city include Sage Group, 41 Hartlepool A66 Spennymoor A1(M) Npower, Barclays Bank, BskyB and Procter & Gamble. Workington Penrith 40 Bishop Auckland A689 60 A19 A689 Appleby-in- Redcar Westmorland The city is also a major public sector hub, not just for local and 59 MIDDLESBROUGH regional government but also for national operations including, most Whitehaven A688 notably, the Department for Work and Pensions and HM Revenue & Darlington Customs. TEESSIDE 57 Whitby A591 A66 56
A19 The city is served by excellent road communications with easy A685 A595 38 access to the A1M and A19 main dualled carriageways serving the A172 region and linking to the national road network. A171
Northallerton Kendal 37 A1 Newcastle is situated on the main East Coast line with fastest Scarborough journey times to London Kings Cross of 2 hours 37 minutes and to M6 Edinburgh of 1 hour 25 minutes. The Tyne & Wear conurbation is also A170 36 served by the Tyne & Wear Metro system, Newcastle being the only A590 A170 Ulverston city outside London to benefit from an underground rail network. A165 A590 A65 60 stations connect Sunderland to the south east and Newcastle
A168 A19 Ripon Airport to the north west via all major suburbs. 35 Barrow-in-Furness A64 Bridlington Morecambe Newcastle Airport is situated 7 miles to the north west of the city 34 A683 A61 A1(M) (A166) Heysham Lancaster centre and deals with in excess of 4.46M passengers annually A614 Knaresborough A165 travelling to 74 destinations. Airlines serving the airport include British A166 M6 A65 Harrogate A59 Airways, Air France, FlyBe, EasyJet and Emirates. United Airlines have
33 A59 2 8 Skipton A6 York recently confirmed direct flights will commence to New York from Ilkley A59 Fleetwood A614 May 2015. A61 A64 Otley (A163) A65 A6068 LEEDS & A1035
Tadcaster A19 Yeadon BRADFORD A58 A585 Clitheroe Keighley A650 14 Bingley A1079 Beverley A165 13 Colne 12 Nelson Shipley Blackpool A59 3 32 Padiham LEEDS Garforth 4 M55 1 Selby A614 CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT 10 BRADFORD M621 A164 Preston M65 8 Burnley A63 A63 HULL 1 47 A1 38 31 7 43 A 1 6 Accrington 0 M62 Blackburn 4 27 1 A63 30 Halifax 26 Castleford 37 Lytham St Anne's Todmorden A646 30 A59 29 9 Batley M62 41 A645 Leyland 28 Dewsbury 31 32 36 Goole Darwen Rawtenstall Brighouse 25 33 34 8 24 40 Wakefield Pontefract Southport 23 A58 M18 M6 A15 A160 A570 Chorley Rochdale 39 1 22 M62 Huddersfield Hemsworth A638 6 Immingham A59 38 Thorne Bury M66 21 M181 A61 Grimsby 27 M61 Bolton 2 A62 5 Scunthorpe 5 Ormskirk 20 1 A565 19 38 Skelmersdale 6 A58 3 2 M180 Standish M1 M180 3 Cleethorpes Formby 5 37 4 4 A58 4 4 3 5 3 17 37 M58 Wigan M6015 1 14 25 36 36 A46 7 Kirkby 24 3 6 23 A159 5 MANCHESTER 35 1 3
4 A1(M) A15 22 M62 6 Rotherham A16 LIVERPOOL 3 11 A631 2 9 1 A631 1 9 34 4 5 M62 34 2 7 M60 33 32 34 Gainsborough 5 SHEFFIELD Louth 3 20 6 Holyhead Prestatyn Bebington 7 31 A41 A6 Rhyl 4 MANCHESTER Llandudno 11 M5610 Colwyn Bay M53 Retford A46 12 19 M1 5 A156 A16 Conwy 8 A61 A1 9 Abergele Ellesmere 30 A57 A158 A5 A55 Port 10 14 Flint A34 Buxton 16 Chesterfield Bangor A55 M6 Macclesfield Lincoln 12 A470 18 29 A523 A53 A515 A158 A5 Chester A6 A55 17 Mansfield Matlock
A494 Crewe Leek 28 A15 Newark- A17 A52 A483 16 A500 on-Trent A5 Nantwich A38 27 STOKE-ON-TRENT A470 A607 A52 Ashbourne A46 A17 Newcastle- 26 A1121 Boston A487 15 Under-Lyme A52 A1 A52 A5 A50 NOTTINGHAM A53 A34 A52 A16 A148 A5 Uttoxeter DERBY 25 Grantham A52
A470 A494 A17
A15 Oswestry A50 A607 A51 24 A148 14 EAST A151 A515 MIDLANDS Spalding Stafford King's A140 A38 A17 A5 Lynn
A1101 A470 23 Newport 13 A42 A47 East A607 A606 A458 M6 M1 A1 A16 Dereham A1065 NORWICH A5 A47 22 A16 A47 7 6 5 12 Cannock 11 Stamford A10 A458 Wisbech Norwich Downham Swaffham Great Yarmouth M54 11 A606 A1139 A1122Market 2 M42 LEICESTER A146 A487 A483 M6(T) A47 A470 A47 A6003 21 A47 Peterborough WOLVERHAMPTON 10 March A143 M69 A43 A11 A6 A489 8 7 A134 9 2 Lowestoft M6 1 1 6 5 8 A140 M1 Market A10 2 A427 A605 Harborough Corby A141 A143 A470 BIRMINGHAM A6116 3 A487 20 3 BIRMINGHAM Thetford A44 6 2 A1066 A1165 Aberystwyth A1 M6 Ely A483 M42 1 Kettering A142 5 19 A11 M5 COVENTRY A508 4 4 A43 A470 Huntingdon Mildenhall A143 2 18 A14 Stourport- 1 3 A45 on-Severn Bromsgrove A448 16 St Ives M42 M45 17 A10 A449 M40 Leamington Wellingborough Rushden A14 A14 5 Warwick Spa A12 Redditch A140 A6 A441 A435 A14 Newmarket 15 14 Northampton A44 Droitwich 13 Daventry A45 A428 14 Bury M5 16 St Neots 13 St Edmunds A44 A428 Cambridge A483 6 12 Stowmarket A442 A46 Worcester 12 15 A14 Stratford A43 A428 11 7 A11 A134 A487 upon Avon A429 Bedford A4112 A4103 M1 M11
A509 A470 A508 A46 A5 10 A483 Great A10 A438 A438 Newport Biggleswade Haverhill Ipswich Malvern A44 Banbury A6 Evesham Pagnell A505 9 A438 11 Sudbury 14 A14 A43 Milton A1 Royston A134 Hereford 8 A422 A421 Saffron 1 A44 Keynes 13 Walden A12 10 A505 A46 Letchworth A131 Felixstowe A470 2 9
A40 A479 A465 Tewkesbury A43 9 Harwich M50 Leighton 12 Hitchin M5 10 A5 A120 A44 Buzzard 8 A120 A49 4 3 10 M1 Braintree A40 A40 GLOUCESTERSHIRE M40 A1(M) Stevenage STANSTED Luton Colchester Carmarthen Cheltenham Dunstable 11 7 A602 A133 A40 11 Bicester 8 Gloucester A41 Bishop's A120 A40 9 A483 A48 10 A10 A34 LUTON Welwyn Stortford A130 A40 A40 A470 Abergavenny A40 A436 Garden A131 9 6 Aylesbury City Ware Witham A12 Clacton-on-Sea A417 A40 Kidlington 5 A465 Witney Tring Hertford M11 Merthyr A429 Hemel A4076 Ammanford 12 St Milford A40 A41 4 Harlow A477 Tydfil A40 Hempstead A4042 Oxford 8 Albans Hatfield Maldon Haven A413 Chelmsford 49 13 Stroud A40 M10 3 Hoddesdon 7 Berkhamsted 7 A478 A48 1 2 A465 Aberdare 8 A418 Thame A414 48 M5 A419 Cirencester 7 A4010 22 Pontypool A449 A477 Amersham 20 M4 24 25 26 A12 A130 Llanelli 47 46 45 19 M25 Pembroke A420 5 44 Neath Abingdon High Watford Swansea 43 Cwmbran 6 18 Barnet Enfield 5 5 Wycombe 4 Chigwell 42 Chepstow 17 A10 14 A419 M11 28 Rayleigh 41 2 Didcot M40 Beaconsfield A12 Brentwood 4 2 A127 40 25 M48 A433 3 M1 A406 4 A470 26 24 1 2 29 Port 39 Pontypridd 27 23 Marlow A127 Basildon Southend-on-Sea Newport 1 A41 Caerphilly 28 21 A40 Harrow Talbot 38 M4 22 1 Swindon M25 A13 30 29 SECOND SEVERN Henley- Uxbridge A406 CITY 36 M4 16 Maidenhead A13 CROSSING OPEN M49 16 A429 Canvey Island 37 32 17 15 on-Thames Slough LONDON 35 SUMMER 1996 M4 30 34 33 19 17 7 6 18 A346 4 2 1 Woolwich Porthcawl Bridgend 1 M4 18 A34 3 31 Tilbury CARDIFF LYNEHAM 19 2 Windsor A4 Sheerness M32 Chippenham 14 M5 3 M4 Reading Richmond A205 Dartford Gravesend Clevedon 14 13 A329(M) 13 HEATHROW A20 A2 2 Margate A46 A350 12 A2 Rochester Herne 20 BRISTOL 10 Bracknell 1 Kingston Staines Swanley 1 Bay Barry 11 upon Thames Gillingham A28 A4 Newbury 2 A38 Melksham A299 Weston- A37 11 Sutton A232 Chatham SittingbourneWhitstable Ramsgate Bath Croydon 4 A253 super-Mare 21 3 4 5 Faversham A28 BRISTOL Devizes Camberley Epsom M20 3 A36 A34 M25 M25 2 10 A22 3 4 A249 6 7 A338 A33 4 Woking 9 5 6 M2 Canterbury A23 A2 A339 A24 M26 7 Trowbridge 9 5 Leatherhead 7 M25 Sevenoaks A228 8 A3 A2 A361 Basingstoke 5 6 Maidstone 8 A21 Deal 6 M3 Aldershot Dorking A26 Burnham-on-Sea 22 Redhill Oxted Ilfracombe Reigate M20 A28 A256 Minehead Frome Andover 7 Guildford Tonbridge Farnham A22 Warminster A31 A229 A361 A24 M23 A2 8 Godalming 9 CHANNE GATWICK L Dover A36 9 East Ashford 10 TUNNEL A303 A303 Alton Grinstead Tunbridge Wells A20 23 A361 A264 10 A39 A34 Crawley A21 13 A338 M20 11 12 Bridgwater M3 A2070 Folkestone Barnstaple A37 A31 A264 24 Haslemere 11 Hythe A3 A26 9 Horsham A22 Salisbury Winchester Crowborough A259 M5 A303 A350 10 Taunton 11 Haywards Bideford A36 25 Heath A361 A354 A272 A358 Romsey 12 Petersfield A23 Uckfield A39 13 26 A303 Eastleigh Yeovil 14 A21 Lydd/Ashford A3088 4 A338 2 3 4 5 A386 A24 A22 A377 27 A26 A259 1 7 1 A303 A283 8 Hastings Tiverton SOUTHAMPTON A3(M) A27 Lewes A31 9 3 Hailsham A259 M27 10 Havant A27 Ringwood 11 Chichester A27 SHOREHAM Brighton A27 28 Hythe 5 Bexhill- A30 12 A31 Fawley Fareham 12 Littlehampton on-Sea A37 Hove A350 A22 A354 Worthing Newhaven Gosport A338 Eastbourne M5 A30 Seaford A348 Lymington Portsmouth Bognor A31 Exeter Bridport A35 Regis 29 A35 New Milton Cowes Ryde 30 Dorchester Poole Christchurch Sidmouth Bournemouth Newport A395 A30 31 A376 Sandown
A39 A380 Exmouth Shanklin A388 Dawlish Weymouth A30 Teignmouth A38 Newton Abbot
Bodmin A38
Newquay A386 Torquay A392 A385 Paignton A30 Saltash PLYMOUTH A391 Plympton Brixham St Austell Torpoint
Fowey A390 Truro A30 St Ives Redruth Camborne A39
Penzance A394 Helston Falmouth New England House Northumberland Road, Newcastle Upon Tyne NE1 8JW
St James’ Park
Old Eldon Square
Monument Metro Station
B1307
Eldon Square
Monument Mall Haymarket Metro Station
SUBJECT PROPERTY
Northumberland Street University of Newcastle Upon Tyne
Northumbria University Northumberland Road
B1307
Newcastle Civic Centre
Newcastle City Hall
CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT New England House Northumberland Road, Newcastle Upon Tyne NE1 8JW
REGIONAL ECONOMY & NEWCASTLE CITY CENTRE
The North East economy has performed strongly within the last 3 years with per capita GVA Northumbria Police Authority have recently completed a £37M refurbishment and growing an average of 2.7% p.a. This figure exceeds both London and England as a whole redevelopment of the former Network Rail Office to provide a state of the art new (Source:NELEP). Police Headquarters immediately to the south west of the city centre.
Newcastle’s reputation as an expanding and vibrant centre has been emphasised by a number Further recent investment has been undertaken by Newcastle City Council on the refurbishment of ongoing and recently completed developments and refurbishment schemes. These include of the entrances and foyer areas of Newcastle Central Station at a cost of £8.6M. Works are due the development of Phase 1 of the Stephenson Quarter situated to the south of the Central to complete in April 2005. railway station and comprising a 250 bedroom Crowne Plaza Hotel, 35,000 sq ft Grade A office and a 380 space multi-storey car park all due for completion in Quarter 2 2015. Future phases Approximately 2 years ago Intu completed its extension of Eldon Square Shopping Centre, the will include another 300,000 sq ft of offices, 160 residential apartments, restaurant, specialist city’s main covered shopping facility, adding a further 450,000 sq ft by introducing a new anchor retail and public area. Debenhams department store and mall which is now fully let. The centre extends to 1.3M sq ft of prime retail and leisure space. Newcastle has been designated as one of the six UK Science Cities. Science Central, a 22 acre site to the west side of the city centre has commenced development, backed by Newcastle The city is home to two leading universities. Newcastle University has approximately 23,000 City Council and Newcastle University. Phase 1 has recently completed, comprising site students and offers in the region of 200 undergraduate degrees. The university is a member infrastructure and the Core building, a hub for small and medium enterprises extending to of the elite Russell Group and one of the UK’s top 20 research institutions. Northumbria 37,600 sq ft (3,500 sq m), within which Newcastle University are taking space. Construction University has approximately 33,000 students from more than 100 countries. Northumbria is due to start on the Living Lab, a 10,000 sq ft (929 sq m) property to be utilised as offices, University has recently invested £160M and expanded its extensive city centre campus. Both laboratory, workshop, R&D and engineering accommodation, and a 165,000 sq ft (15,300 sq m) Newcastle University and Northumbria University campuses are situated within 0.3 miles of offices development spread over 4 buildings situated to the south-east corner of the site. the subject property.
CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT New England House Northumberland Road, Newcastle Upon Tyne NE1 8JW
B131 B
1 A16 6 7 0 8 (A1 0 , A O 69 C , A S LA 6 Town Moor B R 96 E O MONT RD ) R
N
E
R
D D R D NPORT A1 O 67(M Royal Grammar SM ) JE 8 School 5 L CLAREMONT RD RR 0 A TE 1 ND K A R PA University of T Newcastle E RD WIND RR SOR TE R Dental upon Tyne R E T
Hospital AS S TA R B RD P EC FORD O DONC D K D NDY M R R R 7 SA T A Medical D 130 I L Y V B L AND LE School T S T O LM S E JESMON N R H GR Castle Leazes R D A D C N RI E A L T R T The property is well located, H C 1 S HARDSON RD A 6 A E I Museum of 7 M
( H R E M R Antiquities C O G University of D ) T D Royal Victoria C I Northumbria I R V at Newcastle Infirmary B ST D ICK T situated immediately off N S K Civic R WARW E L A S E A R Centre D U N W R R Q S A O
O G B R F N A N University of Y PI I Y ER B ST K Newcastle D S N SA T PL Newcastle’s prime retail upon Tyne ’S T MARY O S ST TH J P R D
T O O E O D RT O T HN A L MAS ST K C S R L E R VINE LN K N AD A A A T PL O R ND Z O T M LEY LD S E D E R C
Y RI E T S R A O I R P T
D R H LLEGE D thoroughfare TERRAC H H
Leazes Park O U NORTHUMBERLAND S B M
SO B P L T S E T E S E E N T A R A University of S E ST Z L Z RR C A R TE E E Northumbria ON
RAN A S N ST S S N U T
D R P E THE PROPERTY at Newcastle N D D M
P L R N O I
St James Park K N A S S C L UNIO R T A Newcastle United L C 1 D
8 A 9 0 FC T F ALBE T ST 0 L S R
P 6 Y 1 R Y IDGE ST
R EW BACK BR B BE C N W R DGE WAY A E I R BR T P A193 NEW BRIDGE ST S C EW A R N R WELLIN SQUA RE A
G ATE WH WG Y LO L AL E G A N GT S L T L SON Y L
T S N L S N O E E T T P
E R E S SITUATION N T N P S N D ST W CK ST I I O T LG W T S G S S Grainger E B A RK R OR L MA W ST I L T Market T I E G E E S M RN OU New England House is situated with frontage to both Northumberland W S B T S EL O NUN ST T M T E S G 186 T ID A Road and Ridley Place, located immediately off Northumberland CORPO S RATION ST R G B R B FR R GRANGER A IA A H E I R MONK G Y Street, Newcastle’s prime retail thoroughfare, approximately 0.6 miles T B I H R T I S F S G H A L G T 18 A1 N N M CL 6 C 86 W O KT OT ITY north of Newcastle Central Station. The property is equidistant from O T H BR RD L Y M O A L K A E T T D D ID C S S the city’s two universities. Access to the property via public transport Y E C E A H T S L QUAY S N A S T O M R N S E is excellent with the Haymarket Hub Metro station and main city R I T E C ) G T H W S N O D SQ ( C Discovery D OL D centre bus station located within 0.2 miles. A larger NCP public car A LI O L Gateshead R N T G 0 R O W O Museum R A 60 O S T A O S G 1 Millennium Bridge L Y B V N R N E park is situated diagonally opposite on Northumberland Road. E E O L T T B U A ST Y LLE R E O W A EVI I ID BLANDF L N D S B Y C G A W ES E U TM Q OR A LA N Central 1 Northumberland Road and Ridley Place feed off the pedestrian flows D 6
7 GATESHEAD QUAYS Station H D R IG E S R R BR O from Northumberland Street and provide a natural connection to OUTH H A Centre I L I
L D G E W VE G E for Life T OUTH SH Northumbria University’s campus to the east. The location provides S ORGE S E
A ST L
S H E
Y T B
R T T R
S S O A
F I Q an attractive position for a number of retailers, recruitment agencies,
E S T D G
U
T T G L M D L
S E A E E A R BA S R
J D TH N R B1 O W D
OR K E L R travel and estate agencies, restaurants and public houses. Tenants in T R
F 30 K
OO S V C Y A
S O S
W E 7 F O K S I T N TH A W E the immediate vicinity include Santander Bank, Primark, Boots, O L C H A S H D
R D TSB Bank, William Hill, Subway, Mike Rogerson Estate Agency, H 5 T E I 69 S QUEEN ELIZABETH II AT G A G A L H 16 P (METRO) BRIDGE L S 7 Pattinson’s Auctioneers, Yorkshire Building Society and Starbucks. E T GA Y RD N TESH A W L RD E N R E R A S L LW E EV E D D I A P L CH 4 H AR A 6 I T 8 W TH
R P H E 1 L 08 L A Y U
IG CO F 2 H
T S D N R O S S EL K N N
A B W T I B E H HI B S O A T P R G
S P H R CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT E T R R S E D T ST R T
N E N R K L U V AR 84 P
B A 4
R 1 18
E R A
N G A
N L
I U K M S A ST 6 D ON 0 R KS S AC 8 D T’ J 2 R R W E E B K H S T A U ST C S
4 T LE 18 S A A AR H 1
C 6
D 84 7 S 1 H T R A H I G M G I A H E H
H S W E N G E T A ST D L B S L B R I K V 1 ’S 4 W IC T 2 ARW R 8 E P B R H ST T I H A N IG U C LE H C O C E T D A X
R T AN S S C W W O RD M T D D R R A O N SO R H R T A EW 2 S H
K 8 N R S 0 R A D 6 BE D A 1 0 5 B
4 18 A New England House Northumberland Road, Newcastle Upon Tyne NE1 8JW
The property extends to a total of net internal area 21,388 sq ft over ground and 4 upper floors.
DESCRIPTION
The property comprises an early 1980’s 5-storey building of steel frame and brick construction under flat, felt-covered roofs. The building has frontage and access from both Northumberland Road and Ridley Place and benefits from an attractive open central courtyard.
The ground floor provides retail units to both frontages with 4 floors of offices (part floor on top level) set out in 7 wings on either side of the building. The wings are connected by a central service core with landing and passenger lifts to the east side of property and a separate fire escape stairway to the west side. The layout provides excellent natural light and ideal shape and design for continued office use or potential conversion to residential student or private accommodation.
A part programme of refurbishment has been undertaken by our client including modernisation of common parts and refurbishment of offices and WC’s. Specifications include:
• Carpet covered floors • Suspended ceilings with recessed lighting • Perimeter electric trunking and radiator heating • 2 +8 person passenger lifts • Male and Female WC’s positioned on alternative floors • Seating and cycle racks positioned in open central courtyard
CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT New England House Northumberland Road, Newcastle Upon Tyne NE1 8JW
ACCOMMODATION
The property has a total NIA of 21,339 sq ft (1,982.38 sq m) as detailed below:
Floor Unit / Part Use Areas (NIA) Sq ft Sq m Ground 10 Ridley Place Retail 966 89.74 12 Ridley Place Retail 766 71.16 10 & 10a Northumberland Rd Retail 1,450 134.71 First Front Offices 1,700 157.93 Rear Offices 2,607 242.19 Ridley Place Wing Offices 950 88.26 Second Northumberland Road Wing Offices 2,817 261.69 Ridley Place Wing Offices 2,610 242.47 Third Northumberland Road Wing Offices 2,817 261.69 Ridley Place Wing Offices 2,238 207.91 Fourth Northumberland Road Only Offices 2,418 224.63 Totals 21,339 1,982.38
TENURE
The property is held on a 127 year lease from 14th March 1980, at a rent passing of £20,800 with 5 yearly reviews. The ground rent is calculated on a basis proportional to the ERV at the review date.
The lease permits use of the property as an office block with shops, showrooms and premises and as ancillary thereto, canteen, storage and car parking facilities, or other uses on obtaining landlord’s consent which is not to be unreasonably withheld.
CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT New England House Northumberland Road, Newcastle Upon Tyne NE1 8JW
TENANCIES
The property is let in accordance with the schedule below:
Demise Tenant Start Date Expiry Rent pa Break Comment £/sq ft Zone A Retail 10 Ridley Place TUI UK Retail Ltd 30/04/10 29/04/15 £40,000 - ERV estimated at £32,000 pax (£32.50/sq ft Zone A). (£41.41 psf) ZA 12 Ridley Place Secretary of State for Defence 16/07/12 15/07/21 £23,500 16/07/15 Tenant has confirmed that they will not activate their (£32.41 psf) ZA break in exchange for 2 months’ rent free period, which will be covered by the vendor’ 10 & 10a Northumberland Rd Qian Liu & Shi Wei Wang 27/07/12 26/07/27 £55,000 - Used as a restaurant. (£37.93 psf) ZA Sub Total £118,500 pax Office 1st Floor Front Reed Employment Plc 20/09/07 19/02/17 £17,850 - (£10.50 psf) 1st Floor Rear Reed Personnel Services Plc 20/02/07 19/02/17 £33,900 - (£13.00 psf) 1st Floor Ridley Place Reed Specialist 29/11/10 19/02/17 £10,868 - Recruitment Ltd (£11.44 psf) 2nd Floor N’land Rd Vacant - - - - ERV £33,800 pax (£9.50/sq ft).
2nd Floor Ridley Place Vacant - - - - ERV £24,795 pax (£9.50/sq ft).
3rd Floor N’land Rd Vacant - - - - ERV £26,761.50 pax (£9.50/sq ft).
3rd Floor Ridley Place Mental Health Concern 17/10/12 16/10/15 £11,750 - Lease contracted out ERV £21,261 pax (£9.50/sq ft). (£5.25 psf) 4th Floor Invivo European Marketing 08/07/14 07/07/19 £45,000 - Lease contracted out. 9 month rent free period granted (£12.39 psf) from commencement. Rent inclusive of service charge. Sub Total £119,368 p.a TOTAL £237,868 p.a. (ERV £289,830 p.a.)
CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT New England House Northumberland Road, Newcastle Upon Tyne NE1 8JW
Multi let to 6 tenants including Secretary of State for Defence and Reed Employment Ltd
COVENANT
We have undertaken Creditsafe reports on each company where available and provide the following financial information for each occupier for guidance purposes in the table below
Name Year End Turnover PTP Shareholder’s Creditsafe Funds Rating
Invivo European 31/12/2013 - - £550,157 73/100 Marketing Research Ltd (Very Low Risk)
Mental Health Concern 31/03/2014 £16.21M £43,600 £10.69M 89/100 (Very Low Risk)
Reed Employment Ltd 30/06/2013 £449,000 £9.00M £24.89M 50/100 (Moderate Risk)
Reed Specialist 30/06/2013 £833.32M £1.45M £14.10M 65/100 Recruitment Ltd (Low Risk)
TUI UK Retail Ltd 30/09/2013 £206.66M -£5.33M -£107.97M 45/100 (Moderate Risk)
The Secretary of State for Defence is part of the Government and is therefore an undoubted covenant.
CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT New England House Northumberland Road, Newcastle Upon Tyne NE1 8JW
OCCUPATIONAL MARKET
The Newcastle city centre office market is marked by tightening supply of prime, high quality stock, principally due to a lack of speculative development throughout the Credit Crunch and subsequent recession. At current take-up levels, there remains approximately 9 months of grade A supply within city centre areas. With a backdrop of limited supply and little new development, take up across Newcastle city centre remains buoyant at over 268,000 sq ft in 2013 with 250,729 sq ft reported so far this year.
The secondary sector is starting to benefit from overspill demand from occupiers unable to acquire Grade A space and is resulting in improved take up for better quality secondary stock. The secondary market is also being reduced through residential conversion as developers capitalise on relaxed planning regulations and availability of the Government’s Business Premises Renovation Allowance (BPRA) scheme. Five substantial Grade B buildings have been removed from the market in the last 3 years for conversion to hotel use. Accordingly availability of prime and good quality secondary stock remains restricted.
Headline office rents for prime stock have regained their peak at £21.50 per sq ft after falling during the recession with schemes centres around Grey Street and new developments of Time Central and Central Square attracting the market share of ‘blue-chip’ tenants. Secondary rents in the city centre average around £12 per sq ft for refurbished centrally located buildings.
Evidence of lettings for similar offices are provided in the table below:
Property Tenant Size Lease Rent Comments Sq Ft Sq Ft
Clayton House, West Marketing Ltd 1,345 5 years £10 Refurbished period building Newcastle March 2014 located in an inferior position
52-58 Leazes Park Road Stark Hartley Atkinson 1,895 1 year £12.66 No incentives August 2014
1st Floor Shakespeare House, CK21 Consultants LLP 1,595 5 years £10.75 Inferior location situated away Hood Street May 2014 from main office and retail area.
1st Floor Melbourne House First Secretary of State 6,477 2 years £12.71 Lease extension, includes 17 September 2013 parking spaces
LV7 East Hadrian House British Gas Nu Heating Ltd 4,167 10 years £13.48 Break on 1 August 2018 August 2013
There is currently only 1 vacant retail unit on Ridley Place and no vacant units on Northumberland Road. Following a recent uptake of 4 units on Northumberland Street there are now no vacant units in the subject section of the street.
We consider the ERV for Northumberland Road is £40 per sq ft Zone A and for Ridley Place £38 per sq ft (down from £45 per sq ft Zone A at its peak). The refurbished offices have an estimated rental value of around £9.50 per sq ft. Based on the aforementioned rates our fully let estimated rental value for the property is £289,830 p.a. before deduction of ground rent.
CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT New England House Northumberland Road, Newcastle Upon Tyne NE1 8JW
INVESTMENT MARKET
Office investments in Newcastle city centre are sought after as investors seek attractive initial yields and to invest in locations with good rental growth prospects. The table below provides details of the latest investment sales in the city centre:
Address Tenants Date Purchaser Purchase Price £ Capital Value Comments (NIY%) (£ per sq ft) 1 St James’ Gate Watson Burton Baker Tilly June Aviva £18M £292 2004 build Grade A building situated in a fringe 2014 7.25% location with a downsizing main tenant paying above market rent. WAULT 9 years
Metropolitan House, Nigel Frank International May Private individual £1.3M £108 Secondary refurbished offices situated in inferior Collingwood Street 2014 8% leisure pitch. Producing £110,620 pa with 3 year WAULT
52-60 Grey Street NRG Fitzgeralds April M & G £3.865M £234 Redevelopment behind period façade. Includes 2014 6.97% ground floor public house and adjoins existing ownership of Lloyds Court
Central Square South, PWC February Standard Life £22M £239 Approximately 65% of the property is let to Orchard Street Eversheds 2014 7.71% Eversheds whose lease is expiring in August 2016. Eversheds wish to remain in one floor and currently have 45,000 sq ft available to let. AWULT 4.4 years at the time of sale
Time Central, Muckle LLP December Orchard Street IM £24.68M £296 Superior building constructed in 2007 and let to Gallowgate Brewin Dolphin 2013 6.14% 2 strong tenants with AWULT of 9.7 years
Stephenson Quarter, Newcastle City Council April Aviva £19.75M N/A Forward funding of 35,000 sq ft office building and Forth Street 2013 4.28% 300 space car park on a 35 year lease with fixed uplifts. Annuity style deal
Trinity Gardens and Newcastle City Council September Standard Life £50M N/A Prime Grade A office building and 500 space Stockbridge House Bond Dickinson 2010 6.72% multi-storey car park. WAULT of 8.5 years Deloitte RBS St James’ Place
CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT New England House Northumberland Road, Newcastle Upon Tyne NE1 8JW
ALTERNATIVE RESIDENTIAL USE EPC
The proximity of the property to both university campuses and the shallow, rectangular shaped EPCs available on request. floors arranged in wings give the property clear potential (subject to obtaining the necessary consents) for conversion to residential student apartments. This is further aided by good natural light from both road and the central courtyard elevations and dual means of fire escape. VAT
Assuming the ground floor remains in retail and restaurant use this leaves upper floor space of The property has been elected for VAT and it is envisaged that the transaction will be treated as approximately 19,370 sq ft for alternative use. Student rents pertaining in the central Newcastle a TOGC. area for good quality bedrooms with en-suite facilities in clusters with common living room/ dining areas range between £100 and £120 per room per week. PROPOSAL
ASSET MANAGEMENT Offers are sought of £2.1M (Two million, one hundred thousand pounds) exclusive of VAT reflecting a net initial yield of 10.8% or triple net yield after deduction for outgoings and ground The property provides a number of potential asset management initiatives to increase value, rent of 5.04%. The reversion yield on letting the vacant offices estimated at 13.0%. which we have highlighted below:
• Let vacant offices FURTHER INFORMATION • Restructuring existing leases to extend term certain Luke Symonds • Undertake an early lease renewal with the Mental Health Concern or take back property and DD: 0191 2690095 gva.co.uk/8474 let at market rent E: [email protected] Central Square, Forth Street, • Complete modernisation of common parts Newcastle Upon Tyne Simon Beanland NE1 3PJ • Investigate buying in freehold interest DD: 0191 2690512 E: [email protected] 0191 261 2361 • Look at conversion of upper parts to residential student apartments.
SERVICE CHARGE
The service charge budget up to December 2015 allocates £1.65 per sq ft to the retail units and £4.41 per sq ft to the upper floor offices. The letting to Invivo Marketing over the fourth floor areas is inclusive of service charge. GVA is the trading name of GVA Grimley limited, conditions under which particulars are issued by GVA Grimley Limited for themselves, for any joint agents and for the vendors or lessors of this property whose agents they are, give notice that: (i) the particulars are set out as a general outline only for the guidance of intending purchases or lessors and do not constitute, nor constitute part of, an offer or contract. (ii) all descriptions, dimensions, references to condition A full schedule of apportionments is available on request. and necessary permission for use and occupation, and other details, are given in good faith and are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them. (iii) no person in the employment of GVA Grimley Limited or any joint agents has any authority to make or give any representation or warranty whatever in relation to this property. (iv) all rentals and prices are quoted exclusive of VAT
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January 2015. Designed and produced by Creativeworld Tel: 01282 858200.
CENTRALLY LOCATED RETAIL AND OFFICE INVESTMENT