St Michael's Rectory 16Pp.Indd

ST. MICHAEL’S RECTORY

London EC3

Rare and Historic City Investment Opportunity -02- Executive Summary

Opportunity to acquire a rare, highly attractive period building in a unique setting;

Freehold;

Prime City location, 100 metres from the Bank of England and surrounded by many of the City’s iconic landmarks;

3,650 sq ft NIA (3,763 sq ft IPMS 3) of office and ancillary accommodation arranged over lower ground, ground and four upper floors;

Multi-let tenancy allowing short-term vacant possession / redevelopment;

Passing rent of £64,950 per annum, equating to a very low £17.79 per sq ft NIA overall. Prime City rents are currently £70.00 per sq ft, with sub-5,000 sq ft floorplates achieving levels in excess of this;

Outstanding future asset management potential upon attaining vacant possession, either as an office refurbishment or exploring alternative uses such as residential;

Offers are invited for the freehold interest of this extremely rare City of London property, subject to contract and exclusive of VAT.

-03- Canary Wharf

The Gherkin

Leadenhall Tower 42 Willis Fenchurch Building Building Street Station

Lloyd’s of London

20 Gracechurch Street

Royal Exchange

Bank of England

Bank Station

-04- Location

St Michael’s Rectory is located in the heart of the City of London, the world’s leading financial and insurance centre.

London is widely regarded as the ‘Gold Bullion’ of international property markets, benefitting from a combination of stable government, secure legal framework, long leases and efficient regulation. This has created one of the most liquid, transparent and sophisticated real estate markets worldwide. The Tower of Tower security that the market offers in global terms has London Bridge resulted in prime Central London property attracting 20 Fenchurch unprecedented levels of interest from around the globe. Street St Michael’s Rectory is primely located just off Cornhill, one of the City’s premier addresses and only 100 metres from The Bank of England. Tenants in the nearby vicinity include global institutions, such as Bloomberg, Blackrock, UBS, Rothschild, Aviva and Smith and Williamson.

Being in the heart of the City market, St Michael’s Rectory is surrounded by some of the world’s most iconic structures. These include the Royal Exchange, Leadenhall Market, Monument, St Paul’s Cathedral, Lloyd’s of London and the City tower cluster.

The property itself is situated on St Michael’s Alley,

Monument an extremely historic and attractive location, which also Station includes the 961 year old St Michael’s Church and the historic Jamaica Inn wine bar, site of the first city coffee house in 1652.

Cannon Street Station

Bloomberg Place

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Developer: Stanhope / Mitsui Fudosan Developer: Sydell Group / Soho House Developer: NTT Urban Development Size: 316,000 sq ft offices Size: 252 suite 5* hotel with private Size: 99,640 sq ft offices Status: Completion 2016 members’ club and leisure Status: Completion 2016 Status: Completion 2016

4. 22 Bishopsgate, EC2 5. Bloomberg Place, EC4 6. 40 Leadenhall Street, EC3

Developer: AXA/Lipton Rogers Developer: Bloomberg / Stanhope Developer: TIAA Henderson / AIMCo Size: 1.2 million sq ft, 62 storeys, Size: 663,000 sq ft offices / retail Size: 910,000 sq ft offices / retail offices/retail Status: Completion due Q4 2017 Status: Planning permission granted Status: Planning permission granted

Communications

St Michael’s Rectory benefits from exceptional transport links with the West End, Canary Wharf and beyond, being easily accessible via the following:

Bank Station (100 metres) Liverpool Street (500 metres)

Central, Northern, Waterloo & City Underground lines Central, Circle, Hammersmith & City and Metropolitan and DLR services. Underground lines. National rail services. Bank station is one of London’s most inter-connected London Overground line. transport hubs. It allows direct access to the West Crossrail from 2018. End and Canary Wharf in 8 minutes and 14 minutes respectively. The station is currently undergoing Crossrail (Elizabeth line) significant upgrade capacity works in order to modernise the station. This is in addition to the Crossrail is Europe’s largest infrastructure project major redevelopment at the Bank/Monument providing a new high speed rail link underneath Central interchange, which will provide a new step free London and the suburbs beyond. entrance to the station and direct access to the Waterloo & City Line. In 2018, Crossrail will arrive in Central London and St Michael’s Rectory lies a short walk from both the Monument (300 metres) Moorgate and Liverpool Street Crossrail stations. The Crossrail project will provide: District and Circle Underground lines as well as direct access to Bank station. • 40 stations across London and the South East.

• An extra 1.5 million people brought to within 45 Cheshunt Fenchurch Street (300 metres) minutes of Central London. Alexandra P alace National rail services. • 10% increase in London’s rail capacity, cutting Tu rnpike La ne

journey times. Proposed Crossrail tw o Cannon Street (400 metres) Tottenham • 200 million passengers will be carried annually. Seven Sisters Hale

District and Circle Underground lines. Dalston Junction Hackney National rail services. Angel Euston King’s Cross St. P ancras Stratford Shenﬁeld Tottenham Court Road Hayes & Ealing Bond LIVERPOOL Victoria Harlington Hanwell Broadway Street Farringdon STREET Cheshunt Reading King’s Road Chelsea Alexandra P alace Clapham Junction Tu rnpike La ne Southall West Acton Paddington Tottenham MOORGATE Whitechapel Proposed Crossrail tw o Tottenham Ealing Main Line Court Road Tw ickenha m Tooting Broadway Seven Sisters Hale Abbey Kingston Dalston Junction Hackney Forest Harold Wimbledon Wood Stratford Gate Ilford Goodmayes Romford Wood Shenﬁeld Canary Angel HEATHROW Euston King’s Cross St. P ancras -07- Hayes & Ealing Bond Wharf Maryland Manor Seven Chadwell Gidea Brentwood Tottenham Court Road Taplow Slough Iver Harlington Hanwell Broadway Street FARRINGDON Whitechapel Park KingSurbitons Heath Park Shepperton Victoria Maidenhead Burnham La ngleySurfaceW lineest Southall West Acton Paddington TOTTENHAM Liverpool Custom Abbey Motspur Park King’s Road Chelsea Drayton Ealing Main Line COURT ROAD Street House Wood Clapham Junction Tw ickenha m Tooting Broadway Tu nne l Isle of Woolwich Heathrow Kingston Dogs Hampton Court Wimbledon Portal (tunnel entrance and exit) Surbiton Chessington South Shepperton Surface line Motspur Park

Tu nne l Hampton Court Portal (tunnel entrance and exit) Chessington South Epsom Tu nne l Epsom Tu nne l Description

St Michael’s Rectory is a rare and historic self-contained period office building. This is the first time an interest in the site has been brought to the market since the 17th century.

The property boasts a rich history. Designed by acclaimed architect Charles Herbert Reilly, the property was constructed in 1913-14 and replaced the earlier rectory and vestry, which dated from the late 17th century.

The property provides 3,650 sq ft NIA of office accommodation arranged over lower ground, ground and four upper floors. The principal entrance is accessed via St Michael’s Alley and across the churchyard of St Michael’s Church, over which access rights are reserved. The property provides exceptional natural light and generous floor-to-ceiling heights throughout. Floorplates are typically between 600 and 750 sq ft NIA.

The base specification generally comprises the following:

• Generous floor-to-ceiling heights of up to 3.4 metres • Perimeter trunking • Single and double glazing • Cat II compliant lighting • Male and female WCs

-08- Accommodation

The property has been measured by Plowman Craven in accordance with both the RICS Code of Measuring Practice (6th Edition) providing net internal areas, and the RICS Property Measurement (1st Edition) providing IPMS 3 areas. The property comprises the following approximate floor areas:

Floor Use Net Internal Area IPMS 3 sq ft sq m sq ft sq m

4th Offices 570 52.9 579 53.8 3rd Offices 678 63 699 65.0 2nd Offices 724 67.3 749 69.6 1st Offices 768 71.4 802 74.5 Ground Offices 168 15.6 177 16.4 Lower Ground Offices / Storage 742 68.8 757 70.2

TOTAL 3,650 339 3,763 349.5

Please note that the above area schedule excludes the reception which comprises approximately 194 sq ft.

Existing Floor Plans N

First Floor

Third Floor For indicative purposes only. Not to scale. -09- Tenure

Freehold. N

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-10- Tenancy

St Michael’s Rectory is multi-let to five tenants. Part of the second floor is currently vacant. All leases either benefit from mutual rolling break options or are holding over, such that vacant possession could be obtained in the short-term.

The annual rent is £64,950, equating to a very low £17.79 per sq ft overall. With prime City rents currently £70.00 per sq ft, the property is considered highly reversionary.

Floor Current occupier Area Lease Start Break Expiry Rent Comments (sq ft)

4th, 3rd, Davies Battersby 1,664 01/02/2008 31/07/2013 31/01/2023 £26,000 Tenant holding 2nd (part) Limited (break operated over. Inside the by Landlord) L&T 1954 Act

2nd (part) Vacant 308 - - - - -

1st Muse Publishing 768 13/05/2015 Mutual 12/05/2018 £19,450 Outside the L&T Ltd (rolling: 3 1954 Act months’ notice)

Ground PCC 168 02/04/2014 Mutual - £0 Outside the L&T (part) (licence) (rolling: 4 1954 Act lower ground only weeks’ notice) included in title

Lower Easy Broking 742 19/06/2014 Mutual 30/07/2017 £19,500 Outside the L&T Ground Online Limited (rolling: 9 1954 Act months’ notice)

Passageway Universities - 17/01/2003 - 16/01/3002 Peppercorn Inside the L&T Superannuation 1954 Act Scheme Limited

Total 3,650 £64,950

-11- Asset Management Planning Potential

St Michael’s Rectory offers an exceptional opportunity to St Michael’s Rectory is located in the local planning authority obtain vacant possession in the short-term and to reposition of the City of London. the property either through refurbishment of the office accommodation or change of use to residential, subject to The property is not listed but lies within the Bank all necessary consents. Conservation Area.

With recent lettings of sub-3,000 sq ft floorplates exceeding the Prime London City rent of £70.00 per sq ft, the property is highly reversionary and could be unlocked through a comprehensive refurbishment to provide exceptional, unique office accommodation.

Alternatively, it may be possible to secure a change of use to residential (Class C), in order to provide up to 5 exclusive 1 bed flats. The vendor has engaged with the City of London regarding a change for use to residential and preliminary discussions have proved encouraging.

Molyneux Kerr Architects have provided the following floorplans to illustrate the potential layout of a conversion to residential use:

Proposed Floor Plans N

Third Floor

Fourth Floor For indicative purposes only. Not to scale. -12- -13- City of London Market Commentary

Leasing Market

Confidence in the City of London remains robust with a number of larger occupiers such as Wells Fargo, the FT and Pacific Life all committed or under offer on office accommodation in the City.

The City continues to experience a lack of supply with availability at 7.32 million sq ft, 22% below the long-term average. This has led to the low vacancy rate of 6.2%. There is only 8.78 million square feet of space under construction in the City, 47% of which is already pre-let. Therefore, there is only 4.63 million sq ft of speculative space under construction with a total current quarterly take-up of 1.2 million sq ft.

The prime rent remained unchanged at £70.00 per sq ft for the third consecutive quarter.

The following are some examples of recent nearby letting transactions:

Property Demise Term Rent (psf)

One Carey Lane, EC2 5th floor – 2,284 sq ft 10 yrs / 5 yr break £79.47 7 Birchin Lane, EC3 8th floor – 1,275 sq ft 10 yrs £75.00 6 Dowgate Hill, EC4 4th floor – 2,458 sq ft 10 yrs £71.50 32 Cornhill, EC3 1st floor – 1,420 sq ft 5 yrs £71.00 2-4 Idol Lane, EC3 4th floor – 2,686 sq ft 5 yrs £66.00

Investment Market

Central London is one of the most liquid, transparent and secure real estate markets in the world. With historically low interest rates, vacancy rates and high occupational demand, the City of London market provides superior returns over other asset classes.

The following are some examples of recent comparable investment transactions:

Property Area Tenancy Price Capital (sq ft NIA) Value (psf)

176-178 Bermondsey Street, SE1 3,460 Vacant Possession £4,100,000 £1,185 76 Cannon Street, EC4 9,294 Offices vacant, retail let £7,600,000 £818 206-210 Bishopsgate, EC2 1,443 Vacant Possession £1,650,000 £1,143 29 Lincoln’s Inn Fields, WC2 13,367 Vacant Possession £13,700,000 £1,025 10-11 Lincoln’s Inn Fields, WC2 12,306 Vacant Possession £11,550,000 £939 7-8 Philpott Lane, EC3 4,274 Vacant Possession £5,200,000 £1,217 9 St Thomas Street, SE1 8,200 Vacant Possession £8,900,000 £1,085

-14- Further Information

VAT

We understand the property has not been elected for Value Added Tax (VAT) and therefore VAT will not be payable on the purchase price.

Dataroom

Access to an online dataroom containing the following information is available on request.

• Title Information • Occupational legal documentation • Plowman Craven Measured Survey • Colliers International Building Survey • Groundsure Environmental report • Energy Performance Certificate

EPC

The property has an EPC rating of F.

Proposal

Offers are invited for the freehold interest, subject to contract and exclusive of VAT.

-15- Contact

Christopher King Oliver Sadler

T +44 (0) 207 861 1318 T +44 (0) 207 861 1324 M +44 (0) 7918 561703 M +44 (0) 7786 552344 E [email protected] E [email protected]

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. Neither Knight Frank LLP nor any joint agent has any 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. None of the services or appliances have been tested and no warranty is given or is to be implied that they are in working order. 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. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names.

Date of particulars: September 2016. Designed & produced by www.tlgd.co.uk