248 ROAD & 1B HOLLYWOOD ROAD

CHELSEA I SW10 9HT

PRIME FREEHOLD RETAIL & OFFICE INVESTMENT

INVESTMENT SUMMARY

• Located in a prominent position in one of the most affluent Boroughs in the country.

• Multi let office and retail building with two frontages arranged over 4 floors totalling approximately 1,413 sq m (15,215 sq ft) with 13 basement car spaces.

• Freehold

• Currently produces a rental income of £662,476 pa, assuming a guarantee on the vacant unit, which will provide the opportunity for a reversion going forward.

• The building is not listed or in a Conservation Area, providing the longer term possibility of converting the offices to residential and increasing the building size, subject to planning.

• AWULT to expiry 6.5 years (3.7 years to the breaks).

• Seeking offers in excess of £13,500,000 (Thirteen Million Five Hundred Thousand Pounds) subject to contract and exclusive of VAT.

• Net Initial Yield of 4.60% rising to 4.93% assuming a reversion of £710,616 pa and purchasers costs of 6.72%.

• Capital value of £824 per sq ft on the upper levels. LOCATION

The property is situated within the prestigious London Borough of Kensington and Chelsea. The Borough is home to numerous museums and the world renowned department stores such as Harrods and Harvey Nichols, as well as playing host to popular events such as the Chelsea Flower Show. runs parallel to the Kings Road and serves an affluent residential catchment with a mixture of multiple retailers and office occupiers. The immediate area is a popular London destination adjoining The Chelsea Design Quarter, being home to Chelsea Football Club and the medical establishments of The Royal Marsden and Chelsea & Westminster Hospitals.

QUEEN’S GATE CROMWELL ROAD Gloucester SLOANE ST Road South A4 GLOUCESTER RD Kensington

SL EARL’S OA A3218 NE AVE Earl’s COURT Sloane Court ONSLOW GDNS Square

A3216

W ROAD ARWICK ROAD

FULHAM ROAD SYDNEY ST OLD BROMPTON RD DRAYTON GDNS THE

BOLTONS OLD CHURCH ST

REDCLIFF GDNS

A3218 ROAD West KING’S Brompton HOLLYWOOD RD ROYAL HOSPITAL RD

BEAUFORT OAKLEY ST

STRE EDITH GROVE CHELSEA EMBANKMENT ET

A3220 Albert CHEYNE WALK Bridge Stamford Bridge Fulham Battersea Broadway Bridge

FULHAM ROAD Battersea A3220 OAD LOTS RD Park S R

KING’

SITUATION & TRANSPORT

The property is situated on the north side of Fulham Road, directly opposite the 430 bed Chelsea and Westminster Hospital. The supermarket occupies a prime retailing location in this stretch of Fulham Road. It serves an affluent local population and the pedestrian traffic generated by the hospital who employ over 6,000 staff and have considerably more patient/visitors each year. Nearby amenities include Boots, Carluccio’s, Starbucks, Pizza Express, Virgin Active Health Club and Post Office. The property benefits from excellent communications being within walking distance of a number of London underground stations including Fulham Broadway (District line), Earls Court (District and Piccadilly lines), Gloucester Road (Circle, District and Piccadilly lines), (District and London Overground) and (Circle, District and Piccadilly lines). The proposed Crossrail 2 includes a station on Kings Road which will only enhance the connectivity.

18

VERNEY HOUSE

4

5 6 13 14 15 16 17 19 1 2 3 7 8 9 10 11 12

29 28 30 31

25 26 27 20 21 22 23 24

32

CHELSEA AND WESTMINSTER HOSPITAL

1. Naya Hair 12. Rossopomodoro Italian Restaurant 23. Pret a Manger 2. Os Barbers 13. Le Pain Quotidien Baker & Cafe 24. Pizza Express 3. Richer Sounds 14. Yumenoki Japanese Restaurant 25. Le Pascalou 4. Post Offi ce 15. Ryman Stationery 26. Orange Elephant Bar & Restaurant 5. Rosa’s Th ai Cafe - Th ai Restaurant 16. Aglio e Olio Italian Restaurant 27. Luigi’s Delicatessen 6. Dental Surgery 17. Th e Kings Arms Public House 28. Gail’s Baker 7. Carluccio’s Italian Restaurant 18. Virgin Active Health Club 29. Wyndham House Butchers 8. Boots Chemist 19. Caff è Nero 30. Goat Bar & Restaurant 9. Anytime Fitness Health Club 20. Post Offi ce 31. Hache Restaurant 10. Holland & Barrett Health Food 21. Subway Sandwich Bar 32. Suksan Th ai Restaurant 11. Feng Sushi Japanese Restaurant 22. Starbucks Coff ee Shop

Gloucester Natural South Victoria Earls Court Earls Court Kensington Road History Kensington Hyde & Albert Village Chelsea FC Palace Fulham Road Museum Park Museum Harrods

West Brompton Fulham Gas Works King’s Chelsea & Lots Road Imperial Chelsea Development Site Road Westminster Power Station Wharf Harbour Hospital Development

DESCRIPTION

Verney House comprises a mid terraced building with extensive retail frontage onto Fulham Road and a self contained office entrance on the west side of Hollywood Road. The offices are arranged as seven units over ground and two upper floors around an enclosed courtyard. They are generally open plan; the majority have been refurbished in recent years having new carpets, LED lighting, comfort cooling and exposed services. At basement level there is a self-contained car park with access off Hollywood Road for 13 car spaces which are let to various occupiers. The retail unit fronting Fulham Road is fitted out as a supermarket with freezer and storage facilities to the rear. The unit is serviced from the front.

FLOOR PLANS

OFFICE SPACE RETAIL SPACE CAR PARKING SPACES

GROUND FIRST FLOOR SECOND FLOOR MEZZANINE FLOOR

down UNIT 5 Fire down Exit up down Lift

Fire Lift Lift Exit Motor Room COURTYARD Void UNIT 6

UNIT 1

UNIT 3 UNIT 3 Freezer Void up up

down down

UNIT 8 Void Freezer up

down

UNIT 2 UNIT 4 UNIT 4

Void

FULHAM ROAD FULHAM ROAD FULHAM ROAD FULHAM ROAD Eaves Storage down down

Lift BAY up up 2 Void UNIT 5 UNIT 5 BAY 1

BAY ROAD HOLLYWOOD Ramp to

14 ROAD HOLLYWOOD ROAD HOLLYWOOD Basement Car Park Entrance

BAY 3 BAY SECOND FLOOR THIRD FLOOR 12 BAY 4 BAY CAR PARK / BASEMENT 11 BAY 5

UNIT 7 up down UNIT 7

BAY BAY BAY BAY BAY 10 9 8 7 6 Fire Exit HOLLYWOOD ROAD HOLLYWOOD HOLLYWOOD ROAD HOLLYWOOD

BASEMENT GROUND FLOOR Car Park Ramp to Ramp Basement

FULHAM ROAD

TENANCY

Areas Lease Terms Rent ERV Unit Level Tenant sq m sq ft Start Expiry Breaks Next Review £pa £p sq ft £pa £p sq ft Comments

1 1st Rear Mirandra Khadr 100.43 1,081 30/06/17 29/06/22 29/06/20 - £49,726 £46.00 £49,726 £46.00 Outside L&T Act. Rent t/a Yellow Stone 6m MBO deposit held Finance £12,431.50 + VAT.

2 1st Front Stage 3 Systems 193.52 2,083 17/11/17 16/11/22 17/11/20 - £97,735 £45.00 * £97,735 £45.00 * Outside L&T Act. Europe Ltd 6m TBO Includes car spaces 5 & 6. Service charge cap @ £13,539.50 + VAT + RPI. Rent deposit of £48,867.50 + VAT.

3 2nd & Mez Vacant 212.00 2,282 £102,690 £45.00 £102,690 £45.00 12 Month Guarantee. Rear

4 2nd & Mez The Incorporated 238.76 2,570 09/10/14 31/03/21 - - £85,435 £33.24 £115,650 £45.00 Outside L&T Act. TBO on Front Trustees of the 9/10/17 not Chelsea & implemented. Review on Westminster 9/10/17 was to RPI. Health Charity Separate car park lease - see below.

5 2nd & Mez The Ideas 137.40 1,479 19/03/16 21/05/26 22/05/21 22/05/21 £61,180 £40.01 * £68,555 £45.00 * Outside L&T Act. Hollywood Rd Network Public 6m TBO Includes car space 2. Relations Ltd

6 1st Alexandra Public 75.62 814 29/07/16 28/07/21 - - £36,500 £44.84 £36,630 £45.00 Outside L&T Act. Rent Hollywood Rd Relations Ltd deposit held £21,800.

7 Ground & Veere Grenney 123.19 1,326 20/11/16 24/05/26 19/11/18 20/11/21 £57,500 £38.84 * £65,670 £45.00 * Outside L&T Act. Lower Grd Associates Ltd & 2023 Includes car spaces Hollywood Rd 6m TBO 11, 12, 14.

8 Ground Europa Foods Ltd 332.59 3,580 12/04/17 11/04/32 12/04/27 12/04/22 £157,960 £44.12 £157,960 £44.12 Inside L&T Act. t/a Tesco Express 6m TBO Europa acquired by Tesco in 2004.

Basement Chelsea & 23/01/18 22/01/23 Annual - £7,750 £1,550 £10,000 £2,000 Outside L&T Act. Westminster MBO 3m Car Spaces 1, 7, 8, 9 Hospital NHS & 10. Service charge Foundation cap @ £750 + RPI.

Basement Vacant Parking £6,000 £2,000 £6,000 £2,000 12 Month Guarantee. Car Spaces 3 & 4.

1,413.52 15,215 £662,476 £710,616

* Devaluation allowing for car space rentalised at £2,000 per space

PLANNING TENURE The property is located in the Royal Borough The property is held freehold, as outlined in red. There is of Kensington and Chelsea. It is not listed or a small element to the rear, coloured blue, which is situated within a Conservation Area. subject to a 125 year lease and used by the owners to the rear as car parking. VAT The property is elected for VAT and it is

therefore expected that any sale be treated by

way of a Transfer of a Going Concern (TOGC). 1

1b EPC’s 1a

2

Energy Performance Certificates have been 1 prepared for each element and all ratings are E 240

or above. Further details can be provided on 242 request. 244 246

SERVICE CHARGE 248 A fully recoverable service charge regime is in place for the building with a budget for the year ending 31st March 2018 of £75,984 pa, FULHAM ROAD equating to just over £5.00 per sq ft on the management areas for the whole building.

TENANT PROFILES

Europa Foods Ltd (Company No. 00658774) Tesco acquired Europa Foods, via the purchase of the parent company Adminstore Ltd in 2004 as part of their early drive into the convenience format store. The ultimate parent company is Tesco plc who now has over 1.700 Express stores and a group turnover for the year ending 25th February 2017 of £55.9m.

The Incorporated Trustees of the Chelsea & Westminster Health Charity (Charity No. 1067412) The charity aims to attract new funds, receive, invest, disburse and administer efficiently all current and future charitable assets for the improvement of healthcare and for the benefit of patients and staff at the Chelsea and Westminster Hospital and the community served by the Hospital. They have been a tenant of this building for over 15 years.

The Ideas Network Public Relations Ltd (Company No. 03757732) The Ideas Network is a PR company representing a range of clients. They have been a tenant of this building for over 17 years.

Yellowstone Finance - Mirandra Khadr Yellowstone Finance is a business advisor and broking firm. A rent deposit is held equivalent to 3 months rent.

Stage 3 Systems Europe Ltd (Company No. 08543310) The company is part of the international Stage 3 Systems Group that provides logistic software for the marine shipping industry. At the year end 31st May 2017 they had total assets of £355,034. The group has offices in Singapore, Vancouver and here in London. A rent deposit is held equivalent to 6 months rent.

Alexandra Public Relations Ltd (Company No. 08424084) Alexandra Public Relations is an international press and public relations agency based in Paris and London with a global expertise in high range lifestyle. For the year ending 30 September 2016 they had Shareholders Funds of £350,121. A £21,900 rent deposit is held.

Veere Grenney Associates Ltd (Company No. 03254330) Veere Grenney Associates is a London based interior design company who at their last year end accounts on 30 September 2016 had current assets of £4.279m. They have been in the building for over 17 years. MARKET COMMENTARY

ANALYSIS OF INCOME The property provides an AWULT of 6.5 years to the lease expiry and 3.7 years to the breaks, with just under a quarter of the income secured against Tesco. Combined with the Chelsea and Westminster income, this rises to 37% of the total rent; providing an attractive mix of solid income and shorter leases for income enhancement.

RENTAL LEVELS The property currently produces a total rent of £662,476 pa assuming a 12 month rental guarantee on the vacant floor and car spaces. Recent lettings in the building equate to around £45.00 psf and applying this rate to the office accommodation and £2,000 pa to the car spaces produces a reversion of £710,616 pa.

INVESTMENT MARKET Investors continue to be drawn to the central London investment market with £12.8bn of assets traded here in 2017. Real estate offers a compelling story and remains a favoured sector enhanced by the yield arbitrage, currency levels and continuing rental growth. The London market offers a resilient story being a global Capital attracting overseas investors who see the city as low risk and providing attractive long term performance.

INVESTMENT COMPARABLES

Date Address Price NIY Comments

Dec 2017 Chelsea Reach £12.80m 4.00% Industrial and office. 78-89 Lots Rd, SW10 0RN 69 year leasehold

Dec 2017 Dial House, £23.0m 4.05% Multi let office. Freehold Burston Street, SW15 6AR Dec 2016 Units 1-13 Elysium Gate, £15.95m 4.20% Multi let office. Freehold SW6 4LZ

Nov 2016 One King Street, £34.5m 4.85% Multi let office. Freehold 1-15 King Street W6 9HR

July 2016 140-140A £2.55m 4.25% Retail and residential. Fulham Road, SW10 9PY Freehold

Feb 2015 246 Fulham Road, £2.60m 3.98% Restaurant and residential. SW10 9NA Freehold ASSET MANAGEMENT The property is located in The Royal Borough of Kensington & Chelsea, one of the most prestigious and expensive residential areas in the country. Over the last 10 years the Borough has seen an over 150% increase in residential values with the average residential price per unit now over £2m and new schemes achieving sales in excess of £2,000 per sq ft. This property is not Listed or in a Conservation Area and long term would lend itself to conversion to residential while also improving the density, subject to planning.

PROPOSAL We are instructed to seek offers in excess of £13,500,000 (Thirteen Million Five Hundred Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level would produce a net initial yield of 4.60%, assuming standard purchase costs of 6.72% and a rental top up on the vacant element, which rises to 4.93% based on a rental value of £45 per sq ft. This produces an attractive CV per sq ft of only £824 on the upper parts.

FURTHER INFORMATION For further information, access to the data room or to arrange an inspection of the property please contact:

Tim Morgan Andrew Taylor T – 020 7318 1933 T – 020 7318 1934 M – 07775 654 795 M – 07811 946 001 E – [email protected] E – [email protected] Martin’s Properties Holdings Ltd. 36 Walpole Street Chelsea London SW3 4QS 020 7730 5092 martins-properties.co.uk [email protected]

For any issues that are not being resolved to your satisfaction please refer your concerns to Richard Bourne on 0207 881 0111 or email [email protected].

SUBJECT TO CONTRACT

MISREPRESENTATION ACT 1967

DISCLAIMER - Messrs Hoddell Stotesbury Morgan Limited (9050701) trading as HSM, for themselves and for the vendors 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 purchasers and do not constitute, nor constitute part of, an offer or contract; (ii) all descriptions, dimensions, references to conditions and necessary permissions for use and occupation, and other details are given in good faith and are believed to be correct but any intending purchaser should not rely upon them a statement or representations of fact but should satisfy themselves by inspection or otherwise as to the correctness of each of them; (iii) no person in the employment of HSM has any authority to make or give any representation or warranty whatever in relation to this property. (iv) unless otherwise stated all rents or prices quoted are exclusive of VAT which may be payable in addition. (v) HSM has not made any investigations or otherwise of any issues concerning pollution and potential land, building, air or water contamination. Prospective purchasers must undertake their own enquiries and satisfy themselves in this regard. Date: April 2018