Victoria House, 49 Clarendon Road, Watford, WD17 1HP

Prominent multi-let office investment in Watford town centre Victoria House | 49 Clarendon Road

Investment Summary

• Watford is a recognised major office centre in the north west sector of the M25, benefitting from excellent transport connections. • Comprising a total of 2,028.45 sq m (21,834 sq ft), arranged over ground and three upper floors. • Multi let to 7 tenants, with 4 vacant suites. • AWULT of approximately 2.9 years to breaks and 3.6 years to expiries on the let accommodation. • Current rent passing of £441,823 per annum, including rental top ups, which equates to a low average rent of £217.81 per sq m (£20.24 per sq ft). • Various asset management opportunities to enhance the rental income through letting the recently vacant suites, re-gearing leases and improving the specification of the building. • Excellent town centre car parking provision of 92 spaces, providing a ratio of 1:22.0 sq m (1:237 sq ft). • Freehold. • We have been instructed to seek offers in excess of £5,500,000 (Five Million, Five Hundred Thousand Pounds). • A purchase at this price would reflect a net initial yield of 7.54% and a potential reversionary yield of 8.5% based on current ERV, assuming purchasers costs of 6.6%. • A low capital value of £2,711 per sq m (£252 per sq ft).

Prominent multi-let office investment in Watford town centre Watford Junction

M1 1 2

Holiday Inn 3

4 5

12 Victoria House 49 Clarendon Road 6

11 7

9 10 8

A411

M25 Jury’s Inn Sainsburys

Occupiers nearby

1 T K Maxx 4 TK Maxx 7 NHS Professionals | Corona Energy | McGinley 10 HM Revenue & Customs | Mapeley Estates Ltd

Watford Junction

Denmark St Clarendon Rd Woodford Rd

Alexandra Rd Communications A412 Holiday The Inn Watford benefits from extensive transport communications: Avenue Essex Rd

St Johns Rd Road St Johns Rd Estcourt Rd Sotheron Rd

Hyde Rd A411 The town has excellent motorway connections; Junction 19 of the M25 is 6 km (4 miles) to the A411 Albert Rd N Beechen Grove north west and this provides access to the rest of the national motorway network. Junction 5 49 Clarendon Rd of the M1 is 3 km (2 miles) to the north east which provides a direct route southbound into Central London. The M1 northbound offers access to Luton, 25km (18 miles), and the North of Sainsbury’s England.

Jury’s Inn Rickmansworth Rd Rail

A4178 Intu Watford Watford is served by three mainline stations; Watford Junction, Watford North and Watford Exchange Rd High Street. At peak times, ten trains per hour run from Watford Junction to London Euston, with a fastest journey time of 16 minutes.

London Overground services run from both Watford Junction and Watford High Street with Luton Stansted St. London Underground services provided from Watford tube station on the Metropolitan Line. Hemel Albans Hempstead M1 A414 These lines provide direct links to Euston, Kings Cross and Liverpool Street Stations. Potters M25 Bar A1 (M) The Croxley Rail Link is due for completion in 2020, with works having commenced earlier in M25 2016. This will extend the Metropolitan Line from Croxley to Watford Junction via Watford High Watford A1 Junction M1 Barnet Street. Watford A41 Air

M25 A1 Watford is located within close proximity to a number of international airports. London Luton M40 A41 Airport is 30 km (19 miles) to the north, approximately a 25 minute drive from the town centre. A40 London Euston Heathrow Airport is 35 km (22 miles) to the south with a drive time of approximately 30 London minutes. Gatwick Airport is situated 96 km (60 miles) to the south and can be accessed via the M4 M4 A4 M25, with an approximate journey time of 70 minutes. London Stansted Airport is 75 km London Heathrow (46 miles) to the north east with an approximate journey time of 50 minutes. Victoria House | 49 Clarendon Road

Situation Description The property is located in a prominent position on the west side of Clarendon Road, Watford’s Victoria House, constructed in the early 1980s, comprises an office building providing total prime office pitch. Clarendon Road is home to a number of global occupiers, attracted by the accommodation of approximately 2,028.45 sq m (21,834 sq ft). The accommodation is transport links and amenities of the town. KPMG, ACI Worldwide, TK Maxx, Ralph Lauren and arranged in a T shape layout, providing the opportunity to easily sub-divide the floors. the Inland Revenue all have offices on Clarendon Road. Internally, the accommodation is arranged over ground and three upper floors with floor A short walk to the south of the property is the town centre and the Intu Watford Shopping plates of circa 650 sq m (7,000 sq ft) on the first, second and third floors. The ground floor Centre, anchored by John Lewis and Marks & Spencer. contains a reception and lift lobby. The office floor space is finished with suspended ceilings and lightweight partitions. Carpeted raised floors are provided throughout. Sanitary facilities Watford’s major mainline railway station, Watford Junction, is located at the northern end of comprise separate male and female WCs on each floor. There are two 8 person passenger lifts Clarendon Road, less than five minutes walk from the property. providing access to all floors. Kitchen accommodation is located in the common areas on the 1st and 2nd floors.

The property benefits from 92 on site car parking spaces providing a generous ratio of 1:22.0 sq m (1:237 sq ft).

Specification

• Landlord comfort cooling to the refurbished suites. • Gas fired central heating to un-refurbished suites, with tenant comfort cooling. • Ground floor manned reception. • Suspended ceilings. • LG7 lighting included in the recently refurbished offices. • Two 8 person passenger lifts. • Onsite security/FM presence.

5 Prominent multi-let office investment in Watford town centre Victoria House | 49 Clarendon Road

Accommodation Plan The property has been measured in accordance with International Property Measurement Standards (IPMS.3) and the RICS Code of Measuring Practice (6th Edition) and provides the following areas: 7 7 a 70.1m

Gresham House

4 6

M Area (IPMS.3) Area (NIA) O N

M O Vicarage Floor Sq M Sq Ft Sq Ft U TH

Ground Floor Reception 44.99 484 484 D Wilton Court

1 1

1 5

First Floor 679.77 7,317 7,109

4 Second Floor 664.91 7,157 6,952

Third Floor 699.84 7,533 7,289 1

9 Victoria House

4 0 Total 2,089.51 22,491 21,834 Estcourt Road

Cambridge House 7

Site 4 We have calculated a site area of approximately 0.259 hectares (0.64 acres).

8 MD & C House Edward Hyde Building

B H 5

E E 4 Tenure E N CHE G

O N V Freehold G E RO 71.6m

0m V 10m 20m 30m El Sub Sta E 71.8m

6 Prominent multi-let office investment in Watford town centre Victoria House | 49 Clarendon Road

Tenancy

Area Tenant Demise Sq Ft Sq M Lease Start Term Lease Expiry Break Next Review Current Rent Per Sq Ft Comments Reception 484 44.99 Annual capped RPI linked S/C of Part First Floor Mai Day Recruitment Services Ltd 820 76.14 23/09/2015 5 22/09/2020 £17,952 £21.89 £7,096.36, a current budgeted shortfall Front North of £363.07 per annum. Part First Floor International Trade Corporation Ltd 1,088 101.05 09/12/2015 5 08/12/2020 08/12/2018 £27,300 £25.09 Front Middle

Part First Floor 12 months rent, rates and service charge Vacant (Rent Guarantee) 1,527 141.86 1 £30,540 £20.00 Front South top up to be provided by the landlord.

Part First Floor Wilsonart Ltd 1,683 156.36 25/03/2013 5 24/03/2018 £30,276 £17.99 An initial rent deposit of £30,276. Rear South Part First Floor Hays Specialist Recruitment Ltd 1,992 185.07 25/03/2013 9 24/03/2022 24/03/2019 25/03/2018 £35,766 £17.95 Rear North Part Second Floor 12 months rent, rates and service charge Vacant (Rent Guarantee) 1,521 141.33 1 £30,420 £20.00 Front North top up to be provided by the landlord.

Service charge cap of £9.50 per sq ft Part Second Floor Procap Services Ltd 1,878 174.46 09/01/2015 5 08/01/2020 £41,600 £22.15 increasing annually by 50p per sq ft. An Front South initial rent deposit of £12,480.

Part Second Floor Lease guaranteed by CH Robinson CH Robinson Worldwide (UK) Ltd 1,852 172.08 12/10/2016 5 11/10/2021 11/10/2019 £46,675 £25.20 Rear North Europe BV.

Part Second Floor 12 months rent, rates and service charge Vacant (Rent Guarantee) 1,700 157.95 1 £34,000 £20.00 Rear South top up to be provided by the landlord.

Part Third Floor Heads of terms agreed. 5 year lease with Under Offer 1,502 139.54 TBC 5 £37,550 £25.00 Front North tenant break at end of year 3.

Part Third Floor Drop & Collect Ltd 1,907 177.17 18/03/2014 5 17/03/2019 £36,119 £18.94 Lease guaranteed by paypoint PLC. Front South Part Third Floor Drop & Collect Ltd 3,880 360.44 18/03/2014 5 17/03/2019 £73,625 £18.98 Lease guaranteed by paypoint PLC. Rear

Totals 21,834 2,028.45 £441,823 £20.69

All leases are contracted outside the Landlord and Tenant Act 1954. Current rent free periods will be topped up by the vendor from completion. Service Charge The service charge budget for year ending 31 December 2016 is £199,450 per annum. There is a total vendor service charge shortfall of approximately £363 for 2016, excluding voids. Further information is available on request. The current service charge budget includes instructed roof works, the cost of which are recoverable under the service charge over a 3 year period. 7 Victoria House | 49 Clarendon Road

Covenant Information

C.H. ROBINSON WORLDWIDE (UK) LIMITED (D&B Rating 1A2) HAYS SPECIALIST RECRUITMENT LIMITED (D&B Rating 5A1) INTERNATIONAL TRADE CORPORATION LIMITED (D&B Rating 2A1)

C.H. Robinson Worldwide (UK) Limited (Company No. 01383545) are known to be one of the Hays Specialist Recruitment Limited (Company No. 00975677) is a global specialist recruiter, International Trade Corporation Limited (Company No 02572443) is registered by the Ministry of foremost freight forwarders with offices across the UK and Worldwide. Their London International known to be the market leader in the UK. They recruit professionals with the correct skill set across overseas Indian affairs for worldwide International Recruitment. The began recruiting for the major Office resides in Berkshire. a wide range of industries. They are operational in both the private and public sectors, helping to steel companies in the Middle East and then branched into recruiting for other industries including find roles for permanent and temporary positions. Hospitality, Catering, IT, Medical, Finance and Heavy Industries. Their current UK headquarters is at Victoria House in Watford.

Fiscal Non Fiscal Non Fiscal Non Non Consolidated Non Consolidated Non Consolidated Non Consolidated Non Consolidated Non Consolidated Consolidated Consolidated Consolidated GBP GBP GBP GBP GBP GBP GBP 31 Dec 2014 GBP 31 Dec 2013 GBP 31 Dec 2012 26 Jun 2015 (000s) 30 Jun 2014 (000s) 31 Dec 2012 31 Mar 2015 31 Mar 2014 31 Mar 2013

Sales Turnover 10,716,633 6,139,008 3,767,174 Sales Turnover 1,365,633 1,316,544 1,478,280 Tangible Net Worth 3,589,007 2,897,346 3,329,914 Pre Tax Profit/ Pre Tax Profit/ (169,402) (264,475) 103,300 49,055 17,547 (5,682) Net Current Assets (Loss) (Loss) 3,548,274 2,839,024 3,269,669 (Liabilities) Tangible Net Worth 736,000 1,179,231 1,423,391 Tangible Net Worth 97,129 56,095 41,297

Net Current Assets Net Current Assets (81,476) 541,704 1,221,913 69,678 17,972 (5,620) (Liabilities) (Liabilities)

DROP & COLLECT Limited (D&B Rating N2) WILSONART LIMITED (D&B Rating 3A1) MAI DAY RECRUITMENT SERVICES LIMITED (D&B Rating D3)

Drop & Collect Limited (Company No. 06593233) is a parcel service that enables the sending Wilsonart UK (Company No. 08190104) design and develop decorative surface solutions for Mai Day Recruitment Services (Company No 02773937) are a recruitment service which also and collection of parcels seven days a week to stores nearby. Their store network is made up residential and commercial projects. These projects can include making worktops, breakfast bars, provides consultancy services. They are there to assist in ensuring that the recruitment process of over almost 6,000 newsagents, convenience stores, supermarkets and petrol stations. Their splashbacks and upstands for kitchens or creating solid surface solutions for a many commercial runs smoothly from the initial stages of recruitment right through to successful completion. They Headquarters are registered to Victoria House in Watford. applications. reside in Victoria House, Watford.

Fiscal Non Fiscal Non Fiscal Non Fiscal Non Fiscal Non Fiscal Non Consolidated GBP Consolidated GBP Consolidated GBP Fiscal Non Consolidated Fiscal Non Consolidated Consolidated Consolidated Consolidated 31 Mar 2015 31 Mar 2014 31 Mar 2013 GBP 31 Dec 2014 GBP 31 Dec 2013 GBP 31 Jan 2015 GBP 31 Jan 2014 GBP 31 Jan 2013

Sales Turnover 46,059,413 34,092,797 17,752,803 Sales Turnover 39,392,318 43,832,365 Tangible Net Worth 70,221 60,740 14,868 Pre Tax Profit/ Pre Tax Profit/ 2,634,206 1,783,543 (1,928,528) 1,287,633 879,671 Net Current Assets (Loss) (Loss) 59,936 57,491 4,813 (Liabilities) Tangible Net Worth (7,499,625) (10,094,846) (11,809,072) Tangible Net Worth 10,462,719 8,365,548

Net Current Assets Net Current Assets 3,155,707 876,555 (216,646) 14,597,271 13,683,852 (Liabilities) (Liabilities)

PROCAP SERVICES LIMITED (D&B Rating N3)

ProCap Services Limited (Company No. 08350657) is a UK commercial photography company who specialise in product photography. Their customers include online and high-street retailers auction site sellers, distributors and manufacturers.

Fiscal Non Consolidated Fiscal Non Consolidated GBP 31 GBP 31 Dec 2014 Dec 2013

Tangible Net Worth (35,182) (49,888)

Net Current Assets (95,443) 253,438 (Liabilities)

8 Prominent multi-let office investment in Watford town centre Victoria House | 49 Clarendon Road

Market Overview Investment Transactions Watford is the leading town in the North West M25 region with an estimated total office A schedule of recent investment transactions with short income profiles are shown below: stock for 2015 of 5.1 million sq ft making it similar in size to the Maidenhead, Staines and Chertsey office markets. In town, the prime office location is Clarendon Road which runs Date Address Tenant Term Certain Price Net Initial Yield from the main retail element of the town centre to Watford Junction Railway Station. U/O Kings Court, Stevenage Multi let 4.10 Q.£8,000,000 Q.7.30% Clarendon Road has a range of office stock and is home to major occupiers including KPMG, 35 Perrymount Road, U/O Multi let 3.30 £6,620,000 8.06% TK Maxx, The Inland Revenue and ACI Worldwide. Haywards Heath

September 2016 Wellington House, Uxbridge Multi let 2.60 £4,400,000 7.37% Watford’s current availability stands at around 7.5% and the majority of this is located in March 2016 Century Court, Bracknell Multi let 1.20 £5,100,000 6.83% business parks out of town. In the town centre there are limited Grade A options available to

Crabtree Business Village, let and space has recently been lost to changes of use to hotels and residential as evidenced January 2016 Multi let 3.80 £4,300,000 6.72% Egham along Clarendon Road. Rental growth and reduced incentives are now evident and this is Randalls Research Park, January 2016 Multi let 1.30 £6,045,000 5.95% predicted to continue. Leatherhead

Key Office Transactions

Rent Date Company Address Size Sq ft (£/psf/annum) Comments Term: TBC The Junction, Clarendon Road, Aug 16 Ricoh Europe 6,700 £30.00 Break: TBC ERV Watford Rent Free: TBC We are of the opinion that the ERV for the property is currently in the order of £500,000 Term: 10 years Veale Wasbrough May 16 45 Claredon Road, Watford 11,000 £27.50 Break: 5 years per annum, based on £20 per sq ft for un-refurbished suites, £25 per sq ft for refurbished Vizards LLP Rent Free: 9 months suites and taking into consideration recent rents within the buildings and local market Term: 15 years Smith & Nephew Building 5, Croxley Green Jan 16 60,171 £23.25 Break: n/a Plc Business Park, Watford Rent Free: 36 months evidence. Grade A rents in Watford are now quoting and achieving £30 per sq ft.

Term: 10 years The Internet Nov 15 38 Edward Hyde Building, Watford 6,878 £21.00 Break: 5 years Group Ltd Rent Free: 12 Months Term: 10 years Egale 1, 80 St Albans Road, Sep 15 Myers Clark 5,000 £22.50 Break: 5 years Watford Rent Free: 18 Months

Building 6, Suites 4, 6 and 8, Term: 10 years Servest Group Sep 15 Croxley Green Business Park, 9,589 £19.50 Break: 5 years Ltd Hatters Lane, Watford Rent Free: 12 months

Term: 10 years Egale 1, 80 St Albans Road, Aug 15 Designer Group 5,000 £22.50 Break: 5 years Watford Rent Free: 6 Months This letting is in addition to the 27,000 sq ft Wickes 19 Colonial Way, July 15 Wickes 15,260 £21.00 letting in 2013. The original Watford lease has been regeared to run until December 2028. 9 Prominent multi-let office investment in Watford town centre VAT We understand the property will be treated as a Transfer of a Going Concern for VAT purposes. EPC The property has an EPC Rating of D (93). Asset Management Opportunities There are numerous asset management opportunities including:

• Letting of the recently vacant suites. • Increasing rents in line with the ERV of the property. • Re-gearing current leases to remove breaks and improve income streams. • Increasing the net lettable accommodation through reconfiguration or adding additional floors. • In the medium to long term, subject to obtaining the necessary planning consents, the property would lend itself to alternative uses due to its excellent town centre location. Further Information • Redevelopment as offices with increased massing on the site. For further information or to arrange an inspection, please contact: Proposal We have been instructed to seek offers in excess of £5,500,000 (Five Million, Five Hundred Thousand Pounds). A purchase at this price would reflect a net initial yield of 7.54%, assuming Andrew Mitchell Graham Steel Nick Masters purchasers costs of 6.6%. 0207 544 2242 0207 544 4292 0207 544 2016 07901518749 07792004773 07718270755 [email protected] [email protected] [email protected] A purchase at this price reflect a capital value of £2,711 per sq m (£252 per sq ft).

thinkcapitarealestate.uk/victoriahousewatford

Capita Property & infrastructure Ltd (“CPI”), trading as Capita, for itself and as agent for the vendors or lessors (the “Seller”) of this property, gives notice that (1) These particulars do not constitute any part of an offer or a contract (2) Whilst every attempt has been made to ensure accuracy, this cannot be guaranteed and, therefore (save as set out at (6) below), (a) all statements and descriptions in these particulars as to this property are made without responsibility or liability on the part of CPI or the Seller, (b) no such statements or descriptions are to be relied on as statements or representations of fact (c) all measurements are approximate and no responsibility is taken for any error, omission or misstatement and (d) any intending purchasers or lessees must satisfy themselves by inspection or otherwise as to the correctness of each of the statements, particulars (3) The Seller does not make or give, and neither CPI nor any of its employees or agents makes or gives nor has any authority to make or give, any representation or warranty whatsoever in relation to this property. (4) Unless otherwise stated, all prices and rents are quoted exclusive of VAT and no statement is made as to the incidence of VAT. (5) No liability is accepted and no representation is made by either CPI or the Seller in respect of the presence, condition, adequacy or usability of any telecommunications or computer systems or equipment at the property, any software loaded thereon, or any related cabling or infrastructure. (6) Nothing herein shall exclude any liability which either the Seller or CPI would otherwise have for any fraudulent concealment or for any statements made fraudulently by it, its employees or agents. © Capita June 2016.