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Home , Crawley, Gatwick Diamond

PRIME SOUTH EAST OFFICE INVESTMENT OPPORTUNITY

CHURCHILL COURT, , , RH10 9LU

INVESTMENT SUMMARY

• Crawley is the main centre of industry, commerce and employment between and the South coast • Excellent communications to and Central London with direct rail services to London Victoria, London Bridge and London Blackfrairs, with a fastest journey time of 32 minutes • Situated within Manor Royal Business District the largest business park of the Area and one of the south east’s premier mixed activity employment hubs • The property comprises a prominent refurbished Grade A office building arranged over ground and first floor totalling 27,309 sq ft (2,537 sq m) • A new 15 year full repairing and insuring lease to Crawley Churchill Court Centre Limited from 24th July 2018, subject to 5 yearly upward only open market rent reviews and a tenant break option in year 10 • Guarantee from Regus PLC, reported shareholders equity of £826.9m (2017) • Current passing rent of £682,201.50 per annum equating to £25.50 per sq ft with half rent on reception. • 100 car parking spaces, providing a car park ratio of 1:279 sq ft • Freehold • Offers sought in excess of £9,840,000 reflecting an attractive Net Initial Yield of 6.50% after purchaser’s costs of 6.69% and a low capital value of £360 per sq ft.

CHURCHILLCOURTCRAWLEY.COM CITY PLACE

ASTRAL TOWERS

VIRGIN ATLANTIC TRAINING

EDWARDS M54 LOCATION M6 M6 Toll BIRMINGHAM M69 M1 Crawley A1(M) M6 Crawley is one of the principal commercial from being served by three mainline stations, Crawley A14 Station in the town centre 1.8 miles (2.90 km), centres in West . The town is 1.2 miles (1.93 km) to the south and Gatwick Airport 3.3 miles stragically located 31.9 miles (51.33 km) (5.31 km) to the north. All three stations provide frequent south of Central London, 22.3 miles and direct services to London Victoria, London Bridge and London Blackfriars. (35.89 km) north of and 27.1 The Crawley Regeneration scheme has recently secured miles (43.61 km) south east of . £31.412m an investment package of infrastructure improvements and physical regeneration designed to Crawley offers excellent communications via Road, Rail and support significant increases in new homes, business M50 M40 investment and employment growth. The continued M5 Air. The town is located within 2 miles of the M23 (Junctions 9 to 11). This provides direct access to Gatwick Airport, economic growth and investment has developed Crawley Brighton and the South Coast as well as CentralA1(M) London into the main centre of industry, commerce and employment and the M25 (Junction 7) to the north. Crawley benefits betweenM11 London and the South Coast.

M40 M25 M4 LONDON BRISTOL READING M25 HEATHROW M4 M2 Margate

A3

Guildford M5 M3 A24 A31 M23 M20 Ashford DOVER GATWICK A21 A3 A22 FOLKESTONE CRAWLEY Petersfield A272

SOUTHAMPTON A23

A27 A27 A27 Brighton Newhaven

CHURCHILLCOURTCRAWLEY.COM GATWICK

Gatwick Airport is located just 3.3 miles (5.31 km) north of the subject property and is one of the world’s busiest airports.

Gatwick Airport has the most efficient single runway in the world handling over 40 million passengers per year, flying to 220 destinations in 90 countries worldwide, the largest number of destinations than any other UK airport. Gatwick Airport is forecasted to increase passenger numbers to nearly 53 million by 2023.

Transformation

Gatwick Airport is currently half way through a £2.5bn investment programme to improve passengers’ experiences and overall airport efficiency. The total investment since 2009 will reach £3.14bn with £1.11 billion of this will be invested over the next 5 years and nearly 20% being invested in 2018/19 alone. Gatwick’s total national employment footprint in 2016 equates to 85,000 jobs and is estimated to have GDP contribution into the Gatwick Diamond of £2.3bn.

OVER 45 AIRLINES SERVING APPROXIMATELY 200 DESTINATIONS IN OVER 90 COUNTRIES

GATWICK SOUTH TERMINAL 4 MINUTES BY CAR 11 MINUTES BY TRAIN

BY FASTWAY 10 - EVERY 6 MINUTES. FASTWAY BUS OPERATING 24 HOURS A DAY. SERVING GATWICK AIRPORT AND BUS STOP WITHIN 50 METRES OF CHURCHILL COURT

CHURCHILLCOURTCRAWLEY.COM SITUATION

Churchill Court 3 occupies a prominent position within Manor Royal, fronting the Manor Royal/Gatwick Road roundabout.

The property benefits from excellent transport connections Y T being 1.6 miles (2.57 km) west of Junction 10 of the M23, which FLEMING WA AIRPOR can be easily accessed via the A2011. D TWICK

A GA

O R

Manor Royal is the biggest business district in the Gatwick MANOR ROYAL K A C USINESS I W area and one of the south east’s premier mixed activity T DISTRICT A employment hubs providing close to 10 million sq ft of G

G

A

commercial space across an area of 240 heactares and home MANOR ROYAL T

W

I to more than 600 business generating over 30,000 jobs. In C

K

R

March 2018 it was announced a further £2.6m will be invested O

A to improve the business district over the next 5 years including D A

improved infrastructure. H A A E L Manor Royal is located to the north of the town near to W I C A K Gatwick Airport, the area is devoted to offices and light R O A D industry and was designed for industry as part of the Crawley A WLEY new town project. Major occupiers within Manor royal include: CRA Holidays, Deloitte LLP, BOC Edwards, Camelot Chilled Foods, G4S, Airways, and Unliever Foods The property benefits from access to the Fastway Bus Services located 50 metres away.

BY FASTWAY 10 - EVERY 6 MINUTES. 1.5 MILES TO CRAWLEY TOWN CENTRE FASTWAY BUS OPERATING 24 HOURS A DAY. SERVING 2 MILES TO JUNCTION 10 OF THE M23 GATWICK AIRPORT AND BEWBUSH 10 MILES JUNCTION 7 OF THE M25 FASTWAY 20 - EVERY 20 MINUTES. 25 MILES TO BRIGHTON SERVING BROADFIELD, THREE BRIDGES 36 MILES TO CENTRAL LONDON AND CITY PLACE BUS STOP WITHIN 50 METRES OF CHURCHILL COURT

RAIL TIMES FROM THREE BRIDGES

KINGS CROSS BRIGHTON HAYWARDS HEATHTHREE BRIDGES GATWICK AIRPORTEAST COYDON LONDON BRIDGE ST PANCRAS

29 MINS 14 MINS 9 MINS 4 MINS 20 MINS 35 MINS 66 MINS

13 MINS 12 MINS 11 MINS 3 MINS 3 MINS

HORSHAM LITTLEHAVEN IFIELD CRAWLEY

CHURCHILLCOURTCRAWLEY.COM CGI FOR INDICATIVE PURPOSES ONLY SPECIFICATIONS The site The site area extends to circa 1.55 acres (0.629 hectares)

The property has been comprehensively refurbished and provides the following specification: • Architecturally designed entrance & reception • 8 person passenger lift • New male and female W.Cs • New shower facilities • New windows and curtain wall glazing • Full CAT A back to frame refurbishment • VRF air-conditioning system • Full access raised floors • Metal pan suspended ceiling with LED lighting • EPC B rating • Capable of an occupational density of 1:8 per sq m • Floor to ceiling height of 3m on ground floor • Floor to ceiling height on 2.75m on first floor • 100 car parking spaces at 1:279 sq ft

In addition Regus will be spending in excess of £1m on their fit out, a general arrangement proposed floor plan can be found opposite: (Contractor, Engineers and Consultant warranties are available)

Accommodation

A measured survey was undertaken by Malcolm Hollis dated 10th June 2016 and provides the following areas: Tenure

DESCRIPTION IPMS 3 SQ FT IPMS 3 SQM NIA SQ FT NIA SQM The property is held freehold.

FIRST FLOOR 14,460 1,343.40 13,333 1,238.80

GROUND FLOOR Tenancy 13,488 1,249.40 13,976 1,298.40 (INCLUDING RECEPTION) The property is let in its entirety to Crawley Churchill Court Centre Limited on a full repairing TOTAL 27,908 2,592.80 27,309 2,537.20 and insuring lease for a term of 15 years commencing 24th July 2018. The lease is subject to a tenant only break option in year 10 and 5 yearly upwards only open market rent reviews. The passing rent is £682,201.50 per annum which equates to £25.50 per sq ft + VAT Car parking (half rent on reception). The lease is subject to 15 months rent free, this is to be topped-up by the vendor. The property benefits from 100 on-site car parking spaces at Regus PLC have entered into a rent Guarantee Deed providing the following: surface level providing a ratio of 1:279 sq ft. Years 1-5 : Up to 18 months rent Years 5-10 : Up to 15 months rent Years 10-15 : Up to 6 months rent In addition the rent guarantee and the rent payable is subject to VAT.

CHURCHILLCOURTCRAWLEY.COM PRIOR TO LETTING CGI FOR INDICATIVE PURPOSES ONLY

CGI FOR INDICATIVE PURPOSES ONLY CGI FOR INDICATIVE PURPOSES ONLY

CHURCHILLCOURTCRAWLEY.COM Covenant Investment Market

Crawley Churchill Court Ltd is a newly formed SPV a subsidiary of Umbrella Holdings, the The volume of south east office transaction in Q2 of 2018 was £595m a rise of approximately 9% company is wholly owned by IWG plc. compared with the same period of 2017. The most active investors have included Institutions, Local Authorities and the remaining spread between Property Companies and Private Investors. IWG are the largest provider of flexible workspace in the world and operate under a number of well-known brands including; Regus, Spaces, No.18, Open Office, Basepoint and Signature. Recent transactions of note, include the following: First established in 1989 by June 2018 the company had grown to 3,211 locations in 1,070 worldwide cities and towns. TOWN ADDRESS SIZE SQ UNEXPIRED LEASE TERMS TENURE PRICE PRICE PER DATE YIELD % In the UK, IWG plc, are seeking to expand, investing £230m IWG will open 275 new business FT TERM SQ FT centres adding 6.7m sq ft to their existing flexible office portfolio. Let to Future Staines Future House 69,052 9.5 years Freehold £33,130,000 £480 Under Offer Q.5.75% Electronics 2017 (£M) 2016 (£M) 2015 (£M)

TOTAL REVENUE 2,352.3 2,233.4 1,927 Volvo UK HQ, Let to Volvo Car 22,827 9.5 years Freehold £12,060,000 £528 Jul-18 5.30% Norreys Drive UK Limited PROFIT AFTER TAX 114 138.8 119.9 Axis One, Travelport Langley 56,833 9.1 years Freehold £19,330,000 £340 Jun-18 5.65% SHAREHOLDERS’ EQUITY 727 742.0 583.7 Hurricane Way International

Focal Point, Let to Toshiba During 2018 IWG have continued to perform well with total revenue at H1 2018 22,500 8 years Freehold £8,000,000 £356 Dec-17 6.10% of £1.2 bn which will continue to increase as their new centres open. Guildford Road and Cililion As part of the letting, Regus plc who have Headquarters in Luxembourg have provided Let to a guarantee as outlined above. Regus plc reported the following results: Secretary of State for Hounslow Eaton House 36,110 10 years Freehold £8,300,000 £230 Oct-17 5.65% Communities 2017 (£M) 2016 (£M) 2015 (£M) and TOTAL REVENUE 2,341.7 2,233.4 1,927 Clarendon 27,884 10 years Let to Salmon Freehold £14,500,000 £520 Aug-17 5.60% PROFIT AFTER TAX 131.60 141.2 119.9 Works

Let to Arrow SHAREHOLDERS’ EQUITY 826.9 739.1 583.7 Electronic KAO ONE 126,509 15 years Freehold £28,390,000 £224 Jul-17 5.50% and Raytheon Regus have a good understanding of the Crawley office market as they already operate from Systems the Pinnacle, opposite Crawley Station. The company wanted to operate a separate centre on Let to Regus Lakeside House, Virtual Uxbridge 72,667 9.5 years (Heathrow £26,500,000 £365 Jun-17 5.60% Manor Royal to appeal to office occupiers looking to be located outside of the town centre. Stockley Park Freehold Stockley Park) 1 Furzeground Uxbridge Way, Stockley 71,129 10 years Let to Regus Freehold £26,500,000 £373 Jun-17 5.60% Park Growth of The Serviced Office Market Crawley Market Commentary Abbott House, Let to Abbot Maidenhead Vanwall 76,628 9 years Freehold £35,357,000 £461 May-17 5.56% Labatories Serviced office take-up across the UK continued to grow Whilst the proximity of Gatwick Airport has made it a Business Park in 2017 with full year figures standing at 2.9 million sq ft, hub for airport related occupiers the town’s excellent reflecting a 157% increase on 2016 and representing nearly road and rail links to London has made Crawley a highly Let to Hitachi Staines Hitachi House 20,000 10 years Freehold £10,100,000 £519 Jan-17 5.06% 20% of office take-up in central London. desirable location for both national and global businesses. Capital UK Much of this activity falls out of town in particular within The regional market outside of London and the M25 Manor Royal which over the last few years has witnessed saw unprecedented growth levels with serviced office numerous re-developments to office use with the majority operator’s take-up totalling close to 450,000 sq ft of major occupiers being located here. In comparison the reflected a year on year increase of 406%. town centre is led mainly by smaller unit churn from the Financial & Business Service sectors. A change in the way we work, ever-improving technology and the shift in workplace culture are just some of the Crawley appeals to a wide catchment area including those drivers evolving the way we do business, this has been relocating from Central and as well as reflecting in the real estate market by a rise in demand for companies based in the southern counties where supply is flexibility for a business. constrained, the town offers a significant rental discount from the Western Corridor and other key M23 Centre of The serviced office sector is now ranked as the seventh Brighton and . largest subsector of the UK real estate market. Headline rents for out of town Crawley have now reached £27 per sqft with the letting in 2018 at 3 City Place, the occupier relocated from Horsham. National Occupiers that are now present within Crawley include Nestle, BDO, HBOS and Novo Nordisk. CHURCHILLCOURTCRAWLEY.COM PRIOR TO LETTING EPC

An EPC Rating of B

VAT

The property is elected for VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC)

Proposal

We are instructed to seek offers in excess of £9,840,000 subject to contract and exclusive of VAT.

A purchase at this level reflects an attractive Net Initial Yield of 6.50% and a capital value of £360 per sq ft after allowing purchaser costs of 6.69%

FOR FURTHER INFORMATION, ARRANGE ACCESS TO THE DATA ROOM OR INSPECTION PLEASE CONTACT THE SOLE AGENTS:

James McFeely Mathew Rogers 020 7911 2750 020 7911 2726 07825 113276 07940 706011 [email protected] [email protected] 65 GRESHAM STREET LONDON EC2V 7NQ

WWW.GVA.CO.UK/14488

MISREPRESENTATION ACT 1967 Clearbell give notice that: these particulars are set out as a general outline only, for the guidance of intending purchasers or lessees and do not constitute, nor constitute part of, an offer or contract; all descriptions, dimensions, references to condition and necessary permission for use in occupation and other details are given without responsibility, and any intending purchasers or tenants should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise as to the correctness of each of them. All floor areas and measurements are approximate. All space planning is indicative only and may require alterations to the building design. Designed and produced by Inhabit Agency 020 7280 0930 (September 2018) inhabitagency.com