ONE PENRHYN ROAD Kingston-Upon-Thames

ONE PENRHYN ROAD Kingston-upon-Thames | KT1 2BT

Freehold, super-prime, purpose built student accommodation investment 02 | ONE PENRHYN ROAD Kingston-upon-Thames ONE PENRHYN ROAD Kingston-upon-Thames | 03

INVESTMENT CONSIDERATIONS

Freehold, super-prime, purpose built student accommodation investment 115 studio bedrooms offering 121 beds, each complete with en-suite bathroom facilities and kitchen Fully occupied for 2014-15 on a direct let basis High quality build and specification with substantial and stylish communal areas Hugely sought after market town to invest in (across all real estate sectors), located on the south-west fringes of London, with a renowned retail centre Excellently situated at edge of Kingston University’s Penrhyn Road and Knights Park campuses and a short distance to the town centre Extremely challenging planning environment in Kingston-upon-Thames, restricting delivery pipeline and insulating values Supply and demand imbalance with only 15% of full-time students able to access purpose built student accommodation The property is underpinned by residential use. Sales of studio units, whilst larger than most student bedrooms, have averaged £261,000 in Kingston-upon-Thames over the last 12-months, which is above One Penrhyn Road capital values Savills are instructed to seek offers in excess of £25,000,000 (Twenty Five Million Pounds) for the freehold title in the property, which reflects a blended net initial yield of 5.30% increasing to 5.54% for the 2015-16 academic year, based on usual purchaser’s costs 04 | ONE PENRHYN ROAD Kingston-upon-Thames

LOCATION

Kingston-upon-Thames is one of the UK’s most OXFORD CIRCUS CITY OF affluent conurbations and a major commercial and LONDON WEST END retailing centre. It is the premier retail destination ST PAUL’S HYDE GREEN CATHEDRAL LONDON of South West London providing a diverse retail PARK PARK EYE THE KENSINGTON LONDON SHARD WATERLOO offer from high street multiples to boutiques to ROYAL BUCKINGHAM THE ALBERT PALACE HOUSES OF O2 international stores. HALL PARLIAMENT CANARY BATTERSEA WHARF CHELSEA POWER STATION FULHAM KEW CHELSEA GARDENS HARBOUR BATTERSEA CLAPHAM JUNCTION

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The town is located four miles south-west of Richmond and 10 miles south-west of London and is easily accessible via the A3 dual carriageway and M25 motorway. Kingston-upon-Thames train station provides services to locations including Wimbledon, Clapham Junction and London (Waterloo). Kingston is served by 6 trains per hour from London Waterloo, with the fastest journey time of 25 minutes. Kingston town centre is served by 40 bus routes, providing a frequent service to all parts of the Borough and other parts of Greater London. Heathrow is located 10 miles away and can be directly accessed by a bus service in 40 minutes.

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06 | ONE PENRHYN ROAD Kingston-upon-Thames

KINGSTON UNIVERSITY

Knights Park Campus

Kingston University was founded as Kingston Technical The University of Kingston has reported the following Institute in 1899 and was granted university status under the consolidated financial performance: Further and Higher Education Act 1992. The University is a thriving seat of higher education and has 6.4 applicants per £’000s 31 July 2014 31 July 2013 31 July 2012 available place, demonstrating student demand. Income 205,463 202,686 203,330 The University has four campuses: The Penrhyn Road and Knights Park campuses are located around 0.2 miles south Expenditure (193,975) (192,145) (192,476) and south-east of the town centre; whilst Kingston Hill and Roehampton Vale campuses are located between two – three Surplus 11,488 10,541 10,854 miles north-east of the town centre. Some 9,212 students (48% of total students as per 1 December 2014 Student Net Assets 158,347 155,849 131,347 Census Summary) study at Penrhyn Road, which is the University’s main campus. As part of a £123 million redevelopment programme to Purpose Built Student Housing in revitalise its estate, Kingston University has added three Kingston-upon-Thames new buildings to its campuses to enhance its academic facilities including the £20 million John Galsworthy Building, There are 2,999 purpose built student accommodation which incorporates lecture theatres, flexible teaching space, bedrooms in Kingston-upon-Thames, a figure which includes IT suites and a ‘Knowledge Centre’ for students doing 2,349-beds of University accommodation and 650-beds of coursework, and the £26 million Business School opened in privately built stock. 2012. Nearly £80 million remains to be spent in the next three Based on the HESA 2012-13 data of a full time population of years including the addition of a £55 million landmark tower 19,545, this equates to only c.15% of full-time students being on Penrhyn Road, which will serve as the main reception point able to access such accommodation, which is significantly for all of the University’s campuses. lower than the UK average and illustrates a severe supply and Kingston recently won two major contracts with NHS London demand imbalance within the city. which has given the University a key role in training nurses There are only 942 beds with planning permission in the town and physiotherapists in London, and is estimated to increase and it is uncertain whether all of these bedrooms are capable student numbers by 6%. of being delivered. Currently 130 are under construction. The University was also awarded £1.85 million of Should all of these bedrooms be delivered, the supply ratio Government-funding for a project aimed at encouraging would move to 20%. students to remain in higher education and undertake Kingston University has previously communicated a postgraduate studies in science, technology, engineering and requirement for an additional 2,500 bedrooms for their mathematics. students, which at present have not been built. The latest University prospectus reports that 21,614 students were enrolled at the University in December 2013 with a non- UK student population of 3,891 made up of 154 nationalities. This reflects an international student body of some 18%, which is above the UK average. ONE PENRHYN ROAD Kingston-upon-Thames | 07

DESCRIPTION

One Penrhyn Road practically completed in September 2014 and is arranged over ground and up to four upper floors. The property is of concrete frame construction with double glazed windows, predominantly brick elevations and a flat roof. There is vehicular access from Penrhyn Road leading to a small car park for two cars, refuse store and emergency exit access and egress. Entrance is via the building reception located at the front of the property, allowing on site staff to monitor access. The building reception leads to a stylish common room area which includes televisions, seating, study areas and pool table. There are 121 beds within the property, arranged as 109 single studios and 6 twin studios. Average room sizes for single studios range between 18.3 sq m and 23.9 sq m for different categories of rooms and for twin studios the average room size is 21.9 sq m. All bedrooms benefit from a high specification including 3/4 sized beds, en-suite bathrooms and a large desk. Kitchen facilities include a fitted fridge, freezer and microwave with premium studios also containing a fitted oven. The bedrooms are rented on an all-inclusive basis, encompassing all utility bills and 30MB broadband and WiFi in all rooms and communal areas. There is also an on-site laundry room and secure internal bicycle storage area. 08 | ONE PENRHYN ROAD Kingston-upon-Thames

ACCOMMODATION

An accommodation schedule is set out below:

Room Type Average Area (sqm) Number of Beds

Twin 21.9 12

Classic 18.4 3

Premium 1 18.3 25

Premium 2 18.8 69

Premium 3 21.7 6

Premium 4 23.9 6

Total 121

Sample Floor Plan - Third Floor

Not to scale - for identification purposes only ONE PENRHYN ROAD Kingston-upon-Thames | 09 10 | ONE PENRHYN ROAD Kingston-upon-Thames ONE PENRHYN ROAD Kingston-upon-Thames | 11

INCOME Student Accommodation The property is fully let for the 2014-15 academic year with an average contract length of 46.6 weeks. The gross student income for the current academic year is £1,518,182, with summer income forecast to be £49,504. Including £7,500 ancillary income, the total 2014-15 gross income is therefore £1,575,186. CRM, the largest third party manager of student accommodation, has provided a budget of £1,768 per bed per annum, equating to £213,961 for 2015-16 academic year. A summary of the 2015-16 forecast income is shown in the table below:

Total Number Contract 2015-16 Rent Total Gross Bedroom Type of Beds Length (weeks) Per Week Rent*

Twin 12 51 £175 £106,029

Classic Type 1 3 51 £249 £ 37,716

Premium 1 25 51 £259 £326,923

Premium 2 69 51 £279 £971,983

Premium 3 6 51 £299 £90,579

Premium 4 6 51 £329 £99,667

Total Gross Income £1,632,897

Sundry Income at £1.25 per bed per annum £ 7,714

Operating and Management Costs at £1,768 per bed per annum -£213,961

Total Net Income 2015-16 £1,426,650

Note: *The above gross rent figures assume a 1% occupancy void. Commercial Within the demise of the property, there is also a vacant ground floor suite with permission for D1 use. There are agreed terms to let this space to a dentist for a term of 15 years, with no breaks. The rent is agreed at £40,000 per annum with open market upward only rent reviews every 5 years. A rent-free period of 6 months and a rent deposit of £16,000 have been agreed with the tenant. Total Income Therefore, the total net income for 2014-15 is £1,401,225 with the forecast for the 2015-16 academic year £1,466,650. 12 | ONE PENRHYN ROAD Kingston-upon-Thames

Tenure VAT Freehold interest. VAT will apply. However, provided the buyer complies with the relevant conditions, the sale of the property should Planning qualify as a transfer of a going concern (TOGC). Under planning decision notice 13/12022/FUL full planning Capital Allowances consent was granted. Minor material amendments to the planning consent were approved under decision notice There is an unclaimed pool of capital allowances for the 14/12389/FUL. Further information can be provided on property and these can be acquired subject to negotiation. request. Further details available on request. The planning regime in Kingston-upon-Thames is SDLT exceptionally restrictive against new student accommodation permissions, and currently, there is only permission for 942 Payable at 4%. Multiple Dwellings Relief on the student new student bedrooms. In addition, an introduction of the element of the property will not be available. However, the Community Infrastructure Levy, which is stated at £220 per Jersey domiciled company is also available to purchase, sqm for student accommodation in the January 2014 draft subject to negotiation, and details of this can be provided on charging schedule, would make development even more request. challenging. Dataroom Savills believe that the restriction on new student development will enhance rental growth and insulate values Please register at www.savills.com/onepenrhynroad of existing schemes in the town. for further information. EPC The EPC rating for property is A. The EPC certificate is available upon request.

Proposal Savills are instructed to seek offers in excess of £25,000,000 (Twenty Five Million Pounds) for the freehold title in the property. The yield profile at this level is shown below:

Purchasing Net Initial Reversionary Value Costs Yield 2014-15 Yield 2015-16 Student Accommodation 5.80% £24,370,000 5.28% 5.53% Dentist Surgery 5.80% £630,000 6.00% 6.00% Total / Blended Yield £25,000,000 5.30% 5.54%

Contacts: Marcus Roberts James Hanmer Lizzie Whetman Head of Student Investment Director Associate +44 (0) 20 7016 3799 +44 (0) 207 016 3711 +44 (0) 20 7016 3863 +44 (0) 7807 999 187 +44 (0) 796 755 5897 +44 (0) 7807 999174 [email protected] [email protected] [email protected]

Important Notice Savills, their clients and any joint agents give notice that: 1.They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact. 2. Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Savills have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise. Designed and produced by Savills Marketing: 020 7499 8644 | February 2015