sign in sign up
<<
Home , Blaydon, Newburn, South Shields, Tyneside

The Waterfront NewburnFOR Riverside, SALE , NE15 8NZ

View Prime Industrial and Office Park Investment Video INVESTMENT SUMMARY

• An opportunity to acquire a prime industrial and office park,prominently situated on the banks of The close to . • Excellent communication links sitting adjacent to the A1, and providing rapid access to Newcastle International Airport, Newcastle Central Station, the ports of Tyne & Tees and The Intu Metrocentre shopping complex. • Total site area of approximately 19.54 acres (7.91 Ha) with a low site cover of just 23.5%. • Three modern office buildings and an industrial estate extending to approximately 257,587 sq ft, split 47% office accommodation and 53% industrial by floor area. • Very strong tenant base including NHS Property Services Ltd, Intrinsic Financial Services Ltd, MacFarlane Group UK Limited and Euro Car Parts Limited. • An average weighted unexpired lease term of approximately 3.43 years to expiry (2.79 years to break). • 19,527 sq. ft. Office void and 11,978 sq. ft. Industrial void subject to generous rent, rates, and service charge guarantee. • Held by way of several long leasehold interests with between 131 and 138 years unexpired at a peppercorn rent. • Very modest rental tones and significant value add potential. • The total passing rent for the property (including guarantees) is £2,241,683.34 per annum with circa 40% secured to NHS/Government organisations. • Offers are invited for the whole in excess of £23,294,000 reflecting an attractive 9.01% NIY, 9.78% RY and a low blended capital value of just £90 psf. • Offers are also invited for the constituent Office and Industrial elements in isolation, further details contained herein. SITE

KINGFISHER BOULEVARD

THEThe Quadrant QUADRANT

B1 Quadrant House

D D D D

D B1 D

D

D

D A1

D

B2 A1 H B2

UNIT H D UNIT G El Sub Sta

B3B3

A2 A2

Additional Warehouse Space

D B4 C3

B4 C1 C2 C3 El Sub Sta C1

WATERFRONT 4 The Waterfront

Shelters NURSERYNursery

D1 D2 D2

D1 Post

D Shelters

D

Bernicia House

RIVERSIDERiverside House HOUSE

Post

Sloping masonry Waterfront Industrial Waterfront Offices D

Indicative Site Boundary Nursery (sold off long leasehold) N

Post El Sub Sta INCOME PROFILE

Other Tenants NHS Property Services 35% £610,813.82 27.24% £806,620 35.98%

Income by Top 10 Tenants use Type by Income Euro Car Parts £40,300 1.80% TOTAL INCOME Hawdon Contract 65% Services Limited £2,241,683.34 £43,000 2.24%

Survey & Marketing Services Limited £58,052 2.58%

Newcastle upon Tyne NHS FT £73,862.50 3.29% MacFarlane Industrial Offices Isos Housing £183,000 8.16% £80,000 3.57% Intrinsic Financial Services £106,912 4.77% M. Markovitz Limited Positive Solutions £127,261 5.68% Highly diverse income profile with £111,862 4.99% a wide spread of exposure in terms of property type and industry sectors. OCCUPANCY PROFILE

9% 16%

Proven demand with 47,812 sq ft of lettings Offices Industrial (7 transactions) secured in the last 12 84% 91% months alone, despite Covid-19 disruption.

12%

Whole Portfolio 59% of income secured to long term occupiers 88% of the park (10 years+)

Occupied Vacant Newbiggin- by-the-Sea Morpeth A189

A1 Blyth

Cramlington Transport links Road

LOCATION NEWCASTLE Newcastle upon Tyne is located approximately 97 miles north INTERNATIONAL A1 AIRPORT of Leeds and 105 miles south of Edinburgh with drive time of 1 A19 hour 40 minutes and 2 hours 20 minutes respectively. The city is well connected to the wider region and national Motorway ABERDEEN TYNE Network via the A1(M) and A19 linking north to south, and the M90 NEWCASTLE TUNNEL UPON TYNE A69 linking to Carlisle and the M6 to the west.

GLASGOW EDINBURGH A74(M) A1 A1 Rail A1018 M6 A19

CARLISLE The city is a major transport hub and key stop on the East NEWCASTLE A194(M) Coast mainline, with Newcastle having direct rail services to A19 Riverside M6 Kings Cross in 2 hours 50 minutes and Edinburgh A1(M) A692 LEEDS A1231 M62 65 MANCHESTER within 1 hour 30 minutes. Newcastle Central station is also the M1 Washington A19 A690 main interchange for the metro, the rail network M6 M1 64 A1(M) Stanley which runs throughout . The PETERBOROUGH 63 supports 60 stations throughout Tyne and Wear extending ConsettWales M1 Chester- M5 M40 A1(M) as far as Newcastle International Airport to the east, and M11 le-Street A690

M4 BRISTOL M4 LONDON A1(M) Houghton- Sunderland to the south east.

M20 le-Spring M3 A167 DOVER Seaham M5 SOUTHAMPTON PORTSMOUTH A691 A182 Air Newcastle International Airport is situated 7 miles north west 62 Easington of the city centre and serves in excess of 4.8 million passengers Newcastle upon Tyne is the commercial and administrativeDurham capital of the North East. The city has a annually to 80 destinations worldwide. The airport operates population of approximately 280,000 people (census 2011) with the wider conurbation of flights via 18 scheduled airlines including Emirates, British extending to approximately 1.1 million people, making it the 7th largest in the UK. Peterlee Airways, Air France, and Easyjet. Newcastle International is the leading airport in the north east benefitting from regular flights Home to 67,000 companies, 3 major ports, five world class universities61 and a growing skilled workforce throughout the UK, European and international destinations. of 1.2m, the North East offers a diverse and rapidly growing economy.

Highlights include: • The fastest growing Energy economy in the UK • Home to the fastest growing IT and Digital with a world class reputation for excellence in oil clusters in the UK outside London, with major and gas, subsea technology, marine engineering investors in the sector including Sage, Accenture, and offshore renewables. Ubisoft and Atom Bank. • A centre for healthcare excellence with world • A leading centre for with strong leading medical science facilities and over 250 rail, automotive, food and pharmaceutical companies operating in the sector. clusters. Major investors including GSK, MSD, • A rapidly growing Business and Professional Hitatchi, Nissan, Caterpillar, Greggs and Gestamp. Services sector, employing over 130,000 people and generating around 25% of the regions wealth. SITUATION

Newburn Riverside is one of the region’s leading business parks situated on a 227 acre (92 Ha) site strategically situated on the banks of the Tyne, just 3 miles west of Newcastle city centre and with almost immediate access onto the A1.

The Waterfront comprises a 19.54 acre (7.91 Ha) site and forms the southern A69 portion of the Newburn Riverside. Situated off Kingfisher Boulevard, which links directly with the A69/A6085 and connects to the A1 just 0.6km to A69 A191 & Carlisle the east, the park benefits from attractive river views on 3 sides as well as A1 Morpeth excellent accessibility and amenity offered by its urban fringe location. & North A186 Immediately to the west Homes England are expected to deliver a further WESTGATE ROAD 1,250 homes, a new primary school, community and health facilities along with A1 retail and leisure provision which will add further vibrancy to the area. This is currently in for outline planning permission with . A6085 The Waterfront A191 B1311 Ryton B6317 NEWCASTLE Newburn Scotswood UPON TYNE

Blaydon A695 SCOTSWOOD ROAD Bridge Newcastle A695 City Centre A69 A695 A1 RIVER TYNE A6085 A1

B6317 A694

INTU METROCENTRE

HEXHAM RD

A1(M) Sunderland D A O R R E & South T A W T N DEWE

River Derwent

ELLISON ROAD Bernicia House North East Ambulance Trust (Owner Occupied) Stella House NHS Business Services Authority (Owner Occupied) THE WATERFRONT Homes England Currently in planning process for 1,250 residential Residential led dwellings, educational and community faciltiies. development

Riverside House

Waterfront 4 Unit G

Unit H

D Units

D Units C Units A Units

The Quadrant

Immediate access to A1 WATERFRONT INDUSTRIAL

Prime Multi-Let Industrial Investment INVESTMENT SUMMARY

The Waterfront Industrial Estate, Newburn Riverside, Newcastle Upon Tyne NE15 8NZ

• A modern multi-let industrial estate totalling 135,801 sq ft comprised • 1 vacant unit measuring 11,978 subject to generous 12 month rent, of 4 terraces and 2 detached units. rates and service charge guarantee. • Unit sizes ranging from 1,700 sq ft up to 34,866 sq ft. • Held by way of three long leasehold interests with between 132 • Let to a very diverse tenant base with notable tenants including and 135 years unexpired at a peppercorn rent. Macfarlane Group, Euro Car Parts, M. Markovitz Limited, Isos • The total passing rent (including guarantees) is £782,359 per annum Housing Ltd and Pajunk Medical Products Ltd. reflecting alow average rent of just £5.59 psf. • Total site area of approximately 10.18 acres (4.12 Ha) with a low site • Offers are invited in excess of £10,862,000 reflecting an attractive cover of just 31%. 6.75% NIY, 6.98% RY and a low blended capital value of just £80 psf. • An average weighted unexpired lease term of approximately 4.34 years to expiry (3.23 years to break). DESCRIPTION

Riverside Industrial Estate comprises four terraces of modern industrial units of varying sizes ranging from 1,700 sq ft up to 14,808 sq ft, along with two standalone solus units G (34,866 sq ft) and H (22,238 sq ft). The units are of steel portal frame construction with shallow pitch roofs and having metal clad elevations. The industrial estate has the benefit of a generous 297 space parking provision reflecting a parking ratio of 1/457 sq. ft.

Specification of the terrace units includes: Unit G benefits from: Unit H benefits from: • Approximately 10% office accommodation • A two-bay warehouse • A minimum eaves height of 6 metres • Eaves heights ranging from 5 metres to 6 metres • A minimum eaves height of 11 metres • Large yard area • Floor loadings to 35kN/sq m • Large yard area • 2 electric roller shutter doors • Full height electric loading doors • 2 electric roller shutter doors • Dedicated car parking • Sodium lighting • 3 dock levellers • On site CCTV • Spacious shared yard areas • Dedicated car parking • Dedicated car parking facilities • On site CCTV

The ownership also includes a nursery building which is let to Mid-Counties Co-operatives on a long lease. Further details included within the tenancy schedule. TENANCY & ACCOMMODATION SCHEDULE INDUSTRIAL

Size Car Lease Lease Break Passing Rent Passing Description Tenant Rent Review ERV PA ERV PSF Comments (Sq Ft) Parking Start Expiry Option PA Rent PSF

Used as secure store. Electricity but no other Survey & Marketing Unit A1(a) 1,700 2 06/09/13 05/9/23 6/09/18 - £9,500.00 £5.59 £9,775.00 £5.75 services, offices or WC. Let on same terms as GF West Services Ltd in The Quadrant. 06/09/2018 break not exercised.

5,343 Sqft GF, 609 Sq ft FF. 6 months notice on break. Unit A1 SIT UK Limited 5,952 8 01/12/17 30/11/22 - 30/11/20 £35,000.00 £5.88 £37,200.00 £6.25 ERV applies full rate over whole.

2,690 sq ft gf, 350 sq ft FF open mezz. ERV applies Unit A2 Optimum Sports Ltd 3,049 4 24/01/20 23/01/25 - 24/01/25 £20,840.00 £7.28 £20,055.00 £7.00 half rate to open mezz. Rent deposit of £6,252. No Security of Tenure.

5,798 sf GF, 886 sq ft FF. ERV applies full rate over Unit B1 Euro Car Parts Limited 6,675 8 05/12/18 04/12/28 05/12/23 04/12/24 £40,300.00 £6.04 £41,718.75 £6.25 whole. General parking rights but 8 allocated. Lease subject to schedule of condition.

Pajunk UK Medical 3,421 sq ft GF, 420 sq ft FF. ERV applies half rate to Unit B2 3,841 4 05/09/19 07/11/22 - - £21,365.00 £5.88 £25,417.00 £7.00 Products Ltd open mezz. Lease subject to schedule of condition.

4,552 sq ft GF, 1,042 sq ft FF. ERV applies £6.25 psf Sirius Technologies Unit B3 5,594 7 28/9/20 27/09/26 - - £29,500.00 £5.70 £31,075.00 £6.25 but assumes reduced 420 sq ft as built FF at full rate. Limited 12 months at half rent to be topped up by vendor.

6,693 sq ft GF, and 887 sq ft open FF LL mezz. Hawdon Contract Unit B4 7,580 8 18/10/16 17/10/21 - - £43,000.00 £6.02 £44,603.00 £6.25 Excludes 4,383 sq ft tenants mezz. ERV assumes half Services Ltd rate on open mezz.

4,721 sq ft GF, 1,989 sq ft FF. ERV applies £6.25 psf but assumes reduced 600 sq ft as built FF. Did not Pajunk UK Medical 08/11/2017 Unit C1 6,710 17 08/11/12 07/11/22 - £33,000.00 £4.92 £33,256.00 £6.25 activate 2018 break. Includes 17 car parking spaces in Products Ltd (outstanding) total, 8 in front of terrace C and 9 allocated adjacent to terrace B.

4,704 sq ft GF, 710 sq ft FF. ERV applies full rate over Citron Hygiene UK whole. Initial 6 months rent free to be topped up Unit C2 5,414 8 28/09/20 27/09/30 - 28/09/25 £34,500.00 £6.37 £34,487.18 £6.37 Limited by vendor. There is an additional 6 month rent free period should the tenant not trigger their break.

4,780 sq ft GF, 443 sq ft FF. ERV assumes half rate on open mezz. Rent deposit of £8,568.42 held. Inc. Vimto (Out of Hours) Unit C3 5,223 9 03/11/17 02/11/22 - 03/11/20 £30,000.00 £5.74 £32,643.75 £6.25 18 car park spaces in total, 9 in front of terrace C and Limited 9 allocated adjacent to terrace B. Lease subject to schedule of condition.

Vacant - 12 Month RR&SC 10,236 sq ft GF, 1,668 sq ft FF. ERV applies full rate Unit D1 11,978 - - - £71,868.00 £6.00 £71,868.00 £6.00 Guarantee over whole.

Continued on next page TENANCY & ACCOMMODATION SCHEDULE INDUSTRIAL

Size Car Lease Rent Break Passing Rent Passing Description Tenant Lease Start ERV PA ERV PSF Comments (Sq Ft) Parking Expiry Review Option PA Rent PSF

13,675 sq ft GF, 1,306 sq ft FF. ERV and stated floor area excludes 2,055 sq ft FF tenants extension with reinstatement. Unit D2 Isos Housing Ltd 14,981 37 26/03/12 25/03/27 26/03/22 26/03/22 £80,000.00 £5.34 £89,886.00 £6.00 Tenant receives 24 months’ at half rent if TBO on 26/03/22 not activated – 6 months’ notice required. Lease subject to SC Cap.

Unit G, Newburn Reversionary lease. In occupation since Macfarlane Group UK Limited 34,866 61 16/07/18 15/07/25 1 7/07/2 3 - £183,000.00 £5.25 £209,196.00 £6.00 Phase III 2003.

Unit H, Newburn 9 months rent free to be topped up by M. Markovitz Limited 22,238 20 01/09/20 31/08/25 - - £127,261.00 £5.72 £127,869.00 £5.75 Phase III vendor. ERV applies full rate over whole.

17 of these spaces are in Quadrant car Parking licence NHS Property Services Ltd N/A 28 27/11/18 19/03/23 - - £12,600.00 £450 £0.00 £0 park. Either party can terminate on 1 months notice.

NHS Business Services Either party can terminate on 1 months Parking licence N/A 17 13/11/19 12/11/21 - - £6,800.00 £400 £0.00 £0 Authority (Stella House) notice.

North East Ambulance Either party can terminate on 1 months Parking licence Service NHS Foundation Trust N/A 9 22/10/15 21/10/20 - - £3,825.00 £425 £0.00 £0 notice. (Bernicia House)

Within the lease there is a right to park in 8 spaces. Plus up to 22 outside of the Nursery - LLH Mid-Counties Co-operative Ltd N/A 9 24/10/04 14/10/54 - - £0.00 Peppercorn £0.00 N/A demise. (There are 9 marked spaces within the lease demise / title).

Nursery - Parking Right to park, as granted under Nursery Mid-Counties Co-operative Ltd N/A 21 24/10/04 14/10/54 - - £0.00 Peppercorn £0.00 N/A Right lease.

Parking Vacant / Unallocated - 20 ------

Parking Ratio Total Industrial 135,801 297 £782,359.00 £5.59 £809,049.68 £5.96 1 / 457

WAULT to Break 3.23 years WAULT to Expiry 4.34 years INDUSTRIAL COVENANT OVERVIEW

Unit A1 – SIT UK Ltd t/a Peach - CRN [610491] Unit B1 – Euro Car Parts Limited - [CRN: 02680212] Experian Credit Risk Score – Below Average Risk Experian Credit Risk Score – Low Risk Provider of private prosthetic healthcare and mobility products in the UK Euro Car Parts provides automotive accessories and parts across and . Peach are a subsidiary of Ability Matters Group and act as a the UK & Ireland to both tradespeople and consumers. The company retail location for mobility products and daily living aids. employs over 12,000 across 300+ branches, 14 hubs and 4 national distribution centres. Year Ending 31.10.2018 31.10.2017 31.10.2016 Year Ending 31.12.2018 31.12.2017 31.12.2016 Turnover £632,737 £687,737 £681,199 Pre Tax Profit (£34,393) (£36,450) (£52,002) Turnover £1.056 billion £1.018 billion £0.988 billion Shareholder’s Fund £70,283 £97,797 £131,459 Pre Tax Profit £53.3 million £55.8 million £81.1 million Shareholder’s Fund £155.1 million £370.7 million £327.7 million

Unit A1(a) – Survey and Marketing Services Ltd - CRN [02384662] Experian Credit Risk Score – Below Average Risk Unit B2 / C1 – Pajunk UK Medical Products - [CRN: 04112014] Experian Rating – Very Low Risk Marketing and research company that provides sector insight for a range of private sector clients - clients include Dyson, P&G, Oral-B and Newcastle Pajunk is a worldwide leading producer of medical systems for Regional University. They occupy both industrial and office suites on Newburn Anaesthesia, Neurology, Laparoscopy, Biopsy and dental medicine. The Riverside. units at Newburn Riverside act as distribution hubs for their products.

Year Ending 31.12.2018 31.12.2017 31.12.2016 Year Ending 31.12.2018 31.12.2017 31.12.2016 Turnover - - - Turnover - - - Pre Tax Profit - - - Pre Tax Profit - - - Shareholder’s Fund £140,539 £195,235 £76,632 Shareholder’s Fund £1.311 million £1.272 million £1.230 million

Unit A2 – Optimum Sports Limited - CRN [12337156] Unit B4 – H.C.S (North East) Limited - [CRN: 06275694] Optimum Sports Limited is a cricket clothing and accessory retailer based in Experian Credit Risk Score – Below Average Risk the North East, they currently trade from one physical retail location alongside Hawdon Contract Services are providers of “white goods” such an online business. The unit at Newburn Riverside is to act primarily as a as refrigerators, washing machines and freezers for local social distribution hub. housing suppliers.

Year Ending 31.12.2018 31.12.2017 31.12.2016 Year Ending 30.06.2018 30.06.2017 30.06.2016 Turnover - - - Turnover - - - Pre Tax Profit - - - Pre Tax Profit - - - Shareholder’s Fund - - - Shareholder’s Fund £575,111 £363,761 £199,047 INDUSTRIAL COVENANT OVERVIEW

Unit C3 – Vimto (Out of Hours) Limited - [CRN: 08795779] Unit H – M. Markovitz Limited - [CRN: 00627513] Experian Credit Risk Score – Very Low Risk Experian Credit Risk Score – Very Low Risk Supplier of packaged, frozen and post-mix soft drinks including equipment M. Markovitz is a Builder and Plumbers merchants that operates across 23 locations nationwide. and ingredients for slush machines, coffee machines and ice cream shakes. As well wholesale supplies services they also supply civil engineering works as well as a specialist insultation and drylining division. 2018 saw a 11.3% increase in revenues to £40.1million. Year Ending 30.06.2018 30.06.2017 30.06.2016 Year Ending 31.12.2018 31.12.2017 31.12.2016 Turnover £40.05 million £35.18 million £28.67 million Pre Tax Profit £12.98 million £10.58 million £9.974 million Turnover £40.147 million £36.058 million £31.463 million Shareholder’s Fund £39.00 million £28.61 million £20.07 million Pre Tax Profit £1.062 million £0.961 million £1.057 million Net Assets £7.220 million £6.424 million £5.696 million

Unit D1 – Isos Housing t/a Karbon Homes - [IP031208] Unit C2 - Citron Hygiene UK Limited - [CRN: 02672361] Karbon Homes is one of the largest housing associations in the North East of England owning or managing over 26,000 properties across the North Citron Hygiene is a specialist hygiene services company, providing managed hygiene solutions East and . It has over 760 employees with approximately 60,000 and consumable items to businesses of all sizes across the UK. The group currently operates tenants living across its homes. across Canada and the United States and incorporates subsidiaries such as Cannon Hygiene, 1st Class Hygiene and CSS Washrooms. The Toronto based Citron Hygiene bought the Admiral Year Ending 31.03.2017 31.03.2016 31.03.2015 Cleaning Services Ltd business in Q1 2019 as an expansion into the European market. Turnover £83.51 million £80.14 million £68.15 million Pre Tax Profit - - - Year Ending 31.03.2017 31.03.2016 31.03.2015 Shareholder’s Fund £145.3 million £133.4 million £116.4 million Turnover £83.51 million £80.14 million £68.15 million Pre Tax Profit - - - Shareholder’s Fund £145.3 million £133.4 million £116.4 million

Unit G – Macfarlane Group UK Limited – [CRN: 01630389] Experian Credit Risk Score – Very Low Risk Unit B3 – Sirius Technologies Limited – [CRN: 01630389] Macfarlane Group is a UK wide supplier in the packaging and labels sector, with over 85% Chemical engineering company that works alongside chemical of the group’s sales coming from packaging distribution. The firm also offers the design and manufacturers and chemists to produce premium coatings. manufacturing of bespoke protective packaging and the design and printing of self-adhesive Current projects include Polyzane Protect for specialist ceramic and resealable labels. coatings and Sterex a multi-stage disinfectant and Bio-Barrier system. Year Ending 31.12.2018 31.12.2017 31.12.2016 Turnover £178.8 million £157.2 million £142.7 million Pre Tax Profit £9.453 million £7.944 million £6.251 million Shareholder’s Fund £12.49 million £6.735 million £3.807 million INDUSTRIAL MARKET

BACKDROP Rents The industrial market has seen record take-up figures Historic industrial take-up has led to constrained supply with new Grade A take up for unit sizes of 10,000 in recent years across the North East. After a quiet sq. ft. plus transacting at headline rents of £6.50 per sq. ft. Incentive packages have tightened and are now April due to lockdown, activity has gathered significant typically 3 – 6 months rent free given for every 5 years term certain. Smaller suite sizes are able to charge momentum since mid-May and this is converting into premiums as the line blurs between trade counter and industrial space. Larger requirements in the region what is expected to be a busy H2 for the North East remain unsatisfied due to the lack of suitable buildings, this has led to speculative development and design industrial market. and build becoming a viable option for developers for the first time since the economic downturn of 2008. So far, 2020 has been the joint best year for take-up on record with nearly 3.0 million sq. ft. transacted in the region. The number of deals between Q1 – Q3 2020 Key Lettings (12) remains in line with the 10 year average, despite the disruption caused by Covid-19, demonstrating robust Date Building Tenant Size (Sq Ft) Headline Rent (psf) demand. The headline grabbing deal was closed by Amazon who secured planning permission for over 2 Aug 2020 5B Follingsby Park, Gateshead Whistl 21,317 £5.25 million sq. ft of distribution space at Follingsby Max, Mar 2020 15 Princes Park, Enjoy UK Ltd 13,290 £6.02 Gateshead. The deal took Amazon’s Big Box footprint across the region to 5.8m sq. ft, illustrating the growing Dec 2019 Wayfarer Road, Sunderland Onyx Scientific 28,190 £5.04 importance of the North East as a base for e-commerce operations for national and local distribution purposes. Nov 2019 Unit B, Infinity Park IQA Group 16,184 £6.14 Supply of stock remains severely constrained with only a Oct 2019 Unit 4 Court, Team Valley Palintest 17,782 £6.22 couple of Grade A buildings (50,000 sq. ft.+) remaining Network Rail Sep 2019 Unit 5 Queensway, Team Valley 28,496 £6.02 available to let across the entire region. Infastructure

It is worth noting these figures track only 50,000 sq ft+ Aug 2019 19C, Follingsby Park, Gateshead Lookers plc 5,597 £5.75 buildings and agents are reporting a flurry of deals across all size ranges. Having had over a decade with virtually June 2019 18a, Follingsby Park, Gateshead Finning 5,221 £5.85 no notable speculative development in the region there May 2019 15D, Follingsby Park, Gateshead Kite Packaging 13,655 £5.95 remains a severe shortage of quality of any size and significant rental growth is evident in almost all sub- May 2019 5 Earlsway Trade Park, Team Valley HQBS Ltd 1,913 £7.50 regional markets. May 2019 4 Earlsway Trade Park, Team Valley Karm Design Ltd 1,911 £7.50

April 2019 Unit 8, Princes Park, Team Valley I-Choose 6,081 £6.00

Jan 2019 1&2 Dukesway Central, Team Valley It’s All Good 44,803 £6.92 * Take-up figures for deals 50,000 sq. ft. plus only Strong tenant demand, three lettings secured in Q3 2020 INVESTMENT MARKET

The industrial sector is anticipated to see prolonged and sustained performance, with short term political and economic disruption counteracted by an increased on-shoring of manufacturing alongside an exponential rise in the growth trajectory of online business, with increased demand for online retail post Q1 2020. Consequently, the sector remains a key focus of investor demand, attracted by strong fundamentals of restricted supply, comparably low capex requirements, high occupational demand and rising rents which is driving yield compression. We set out below recent comparable regional multi-let industrial investment transactions.

Area Term Certain Avg Rent £ PSF Date Property Tenant Sale Price NIY Notes (Sq Ft) (years) (psf) CV

Q2 2020 Vaughan Park, Tipton 81,198 Multi-Let 4.04 £6.93 £9,000,000 5.85% 111 5 unit modern scheme.

Parkway Trading Estate, Trafford Q4 2019 108,176 Multi-Let 5.03 £5.43 £10,490,000 5.25% 97 11 unit scheme. Largely 1970's, built. Park, Manchester

Q4 2019 South Moons Moat, Redditch 141,571 Multi-let 3.52 £5.11 £11,200,000 6.05% 79 17 unit scheme, 1980's built.

Gwaelod y Garth Industrial Estate, Q4 2019 49,920 Multi-let 4.13 £5.08 £3,780,000 6.30% 76 6 units in 3 terraces, 1980's built. Cardiff

Oxford Street Inndustrial Estate, 3 terraces let to 4 tenants. Q3 2019 114,964 Multi-let 10.89 £4.96 £8,100,000 6.60% 70 Wolverhampton 1980's built.

Q1 2019 Cannon Industrial Park, Milton Keynes 191,998 Multi-let 2.65 £5.59 £18,090,000 5.01% 94 29 unit scheme, 1980's built.

Q1 2019 Apollo Park, Crewe 169,000 Multi-let 8.36 £6.67 £19,800,000 5.33% 117 5 unit newbuild scheme.

Denbigh Hall Industrial Estate, Milton Q4 2018 183,729 Multi-let 1.80 £5.13 £15,350,000 5.75% 84 21 unit scheme, 1980'S built. Keynes

Lineside Industrial Estate, Q4 2018 207,360 Multi-let 3.00 £5.43 £21,075,000 5.00% 102 22 unit scheme. 1970'S built. Littlehampton

Title Service Charge The property is held via three long leasehold interests with between 132 The property is subject to a service charge with the 2020 budget reflecting and 135 years unexpired at a peppercorn rent. Further information available an average of £0.39 psf. This is inclusive of the estates charge which is in the dataroom. currently budgeted at £0.20 psf. The Nursery service charge is currently budgeted at £1.59 psf including estates charge. Further information available on request. PROPOSAL

Offers are invited in excess of £10,862,000 reflecting an attractive6.75% NIY, 6.98% RY and a low blended capital value of just £80 psf. WATERFRONT OFFICES

Grade A, BREEAM Excellent Office Park INVESTMENT SUMMARY

The Waterfront Offices, Newburn Riverside, Newcastle Upon Tyne NE15 8NZ

• 3 Modern Grade A offices totalling121,786 sq ft. • 8 vacant suites totalling 19,527 sq ft subject to generous 24 month rent, • Let to a very diverse tenant base with notable tenants including rates and service charge guarantee. NHS Property Services, Positive Solutions Limited, Intrinsic • Total site area of approximately 9.17 acres (3.71 Ha) with a low site Financial Services Ltd and Newcastle Upon Tyne NHS cover of just 14%. Foundation Trust. • Held by way of three long leasehold interest with between 131 • Newburn Riverside is home to a healthcare hub comprised of a and 137 years unexpired at a peppercorn rent. plethora of NHS departments and Trusts. In addition to the subject • Low passing rents with significant asset management potential. property, The North East Ambulance Trust is headquartered in Bernicia House, and Stella House, the home of the NHS Business Services • The total passing rent (including guarantees) is £1,459,324.34 per Authority both sit adjacent, both of which are owner occupied and annum reflecting alow average rent of just £11.98 psf. further anchor the location. • Offers are invited in excess of £12,432,000 reflecting an attractive • An average weighted unexpired lease term of approximately 2.95 years 11.00% NIY, 12.23% RY and a low blended capital value of just £102 psf. to expiry (2.56 years to break). DESCRIPTION

The office element consists of three standalone office buildings constructed The specification has been finished to a good standard, typically to include: in phases since 2002 and are known as The Quadrant, Riverside House, and • Impressive atrium entrance areas Waterfront 4. A fourth office known as Bernicia House has been sold off • Full raised access floors to the North East Ambulance Service who owner occupy the building. All three remaining buildings in the ownership have received BREEAM (Building • Fully air conditioned with the exception of The Quadrant Research Establishment Environmental Assessment Method) Excellent ratings • 2.7m finished floor to ceiling height for their environmental performance and sustainability. • Double glazing. All offices have glazed/brick elevations and provide three floors (ground, • Category II light fittings first and second) of quality open plan accommodation arranged in two • 2 x 13 person passenger lift wings around a central double height reception. The accommodation has the • Male and female WCs on each floor together with disabled WCs flexibility to be split on either a wing-by-wing or on a floor-by-floor basis. • Generous 536 space parking provision (Waterfront 4 1:231 sq ft, Riverside House 1:271 sq ft, Quadrant 1:167 sq ft) TENANCY & ACCOMMODATION SCHEDULE WATERFRONT OFFICES

RIVERSIDE HOUSE

Size Car Lease Lease Break Passing Rent Description Tenant Rent Review Rent PA ERV PA ERV PSF Comments (Sq Ft) Parking Start Expiry Option PSF / Per Space

Ground Floor Intrinsic Financial Services 8,070 31 29/01/15 05/02/24 - £106,912.00 £12.01 £104,910.00 £13.00 Did not activate 2019 break. South Ltd

Suite 1, Vacant - 24 Month RR&SC Ground Floor 836 - - - - - £10,868.00 £13.00 £10,868.00 £13.00 - Guarantee West

Suites 2 & 3 Vacant - 24 Month RR&SC Ground Floor 862 - - - - - £11,206.00 £13.00 £11,206.00 £13.00 - Guarantee West

Suite 4&5, Vacant - 24 Month RR&SC Ground Floor 3,533 - - - - - £45,929.00 £13.00 £45,929.00 £13.00 - Guarantee West

Suite 6, Ground Floor Belt Technologies Europe 1,222 4 01/03/18 29/02/28 01/03/23 - £13,917.00 £11.39 £15,886.00 £13.00 Rental deposit of £4,175.10. West

Vacant - 24 Month RR&SC Suite 7 1,129 - - - - - £14,677.00 £13.00 £14,677.00 £13.00 - Guarantee

First Floor Positive Solutions 8,264 37 06/08/04 05/02/24 - - £111,862.00 £13.05 £111,564.00 £13.50 - South (Financial Services) Ltd

Occupied by four NHS departments First Floor NHS Property Services including Newcastle and Gateshead West (North 8,264 31 20/03/13 19/03/23 - - £103,416.00 £12.51 £111,564.00 £13.50 Limited Clinical Commissioning Groups. Lease Wing) subject to schedule of condition.

Occupied by North of England NHS Property Services Second Floor 15,271 53 20/03/13 19/03/23 - - £179,424.00 £11.75 £206,158.50 £13.50 Commissioning Support Group. Lease Limited subject to schedule of condition.

Parking Vacant / Unallocated 19 ------

Total Building 47,451 175 £598,211.00 £12.61 £632,762.50 £13.34

Coninued on next page TENANCY & ACCOMMODATION SCHEDULE WATERFRONT OFFICES

THE QUADRANT

Size Car Lease Lease Rent Break Passing Rent Description Tenant Rent PA ERV PA ERV PSF Comments (Sq Ft) Parking Start Expiry Review Option PSF / Per Space

Ground Floor South Newcastle upon Tyne Hospitals T.B.O. Subject to 6 months & Part 1st Floor 5,189 23 03/10/19 02/10/29 - 03/10/24 £64,862.50 £12.50 £67,457.00 £13.00 NHS Foundation Trust notice. (Suite 1)

Ground Floor West Survey & Marketing Services 4,046 16 06/09/13 05/09/23 06/09/18 - £48,552.00 £12.00 £52,598.00 £13.00 - (North Wing) Ltd

Ground Floor Vacant - 24 Month RR&SC 353 - - - - - £4,765.50 £13.50 £4,765.50 £13.50 - Meeting room Guarantee

Vacant - 24 Month RR&SC First Floor South 5,294 - - - - - £71,469.00 £13.50 £71,469.00 £13.50 - Guarantee

Currrently arranged as Suites 2-8, First Vacant - 24 Month RR&SC 3,135 - - - - - £42,323.00 £13.50 £42,323.00 £13.50 7 small suites ranging from Floor West Guarantee 425-487 sq ft each.

Second Floor Centre Vacant - 24 Month RR&SC 4,385 - - - - - £59,197.50 £13.50 £59,197.50 £13.50 - & South Guarantee

3 month break penalty. Second Floor West Eque Limited 2,487 10 23/08/19 22/08/24 - 23/08/22 £32,331.00 £13.00 £33,574.50 £13.50 No security of tenure.

Tenant has occupied since The Quadrant, 2010. 6 months notice for Feel Good Food Limited 950 3 23/11/17 22/11/27 23/11/22 23/11/22 £9,833.34 £10.35 £12,350.00 £13.00 Retail 8 Tenant Break. Rent paid monthly in advance.

Either party can terminate or Newcastle Upon Tyne Hospitals 1 month Parking licence N/A 20 10/12/19 Rolling - £9,000.00 £450 £0.00 £0 reduce spaces giving 1 months NHS Foundation Trust notice notice.

Either party can terminate or 1 month Parking licence NHS Property Services Limited N/A 67 27/11/18 19/03/23 - £26,800.00 £400 £0.00 £0 reduce spaces giving 1 months notice notice.

Parking Vacant / Unallocated - 12 27/11/18 ------

Total Building 25,839 151 £369,133.34 £12.52 £343,734.50 £13.30

Coninued on next page TENANCY & ACCOMMODATION SCHEDULE WATERFRONT OFFICES

WATERFRONT 4

Size Car Lease Lease Rent Break Passing Rent Description Tenant Rent PA ERV PA ERV PSF Comments (Sq Ft) Parking Start Expiry Review Option PSF / Per Space

NHS Property Services Occupied by NHS Trust Development, NHS Ground Floor 16,211 62 20/03/13 19/03/23 - - £161,460.00 £9.96 £210,743.00 £13.00 Limited England and NHS Property Services.

NHS Property Services First Floor 16,139 62 20/03/13 19/03/23 - - £161,460.00 £10.00 £217,876.50 £13.50 Occupied by Health Education (North East). Limited

Lease subject to a Schedule of Condition NHS Property Services Second Floor 16,146 62 20/03/13 19/03/23 - - £161,460.00 £10.00 £217,971.00 £13.50 Occupied by NHS England and Public Limited Health England.

Parking Lease - Intrinsic Financial Spaces go with First Floor South letting at N/A 19 06/08/04 05/02/24 - - £7,600.00 £400.00 - - Overspill 19 Services Ltd Waterfront 4.

Parking Vacant / unallocated N/A 5 ------

Total Building 48,496 210 £491,980.00 £9.99 £646,590.50 £13.33

WATERFRONT OFFICES TOTAL

Offices Total 121,786 536 £1,459,324.34 £11.98 £1,623,087.50 £13.33 Parking Ratio 1:227 sq ft

WAULT to Break 2.56 years WAULT to Expiry 2.95 years OFFICES COVENANT OVERVIEW

NHS Property Services Survey and Marketing Services Ltd – CRN [02384662] NHS Property Services Ltd is the property manager for the NHS’ estate Experian Credit Risk Score – Below Average Risk which comprises over 3,000 properties across England. The tenancies at Marketing and research company that provides sector insight Newburn Riverside have previously been let to various Trusts that have for a range of private sector clients - clients include Dyson, P&G, subsequently been incorporated into the NHS Property Services portfolio. Oral-B and . They occupy both industrial and office suites on Newburn Riverside. Newcastle upon Tyne Hospitals NHS Foundation Trust The Trust is one of the most successful in the county and provides a Year Ending 31.12.2018 31.12.2017 31.12.2016 wide range of specialist and general services from 6 sites with 1.72 million Turnover - - - patient contacts each year. Pre Tax Profit - - - Shareholder’s Fund £140,539 £195,235 £76,632 Intrinsic Financial Services Limited t/a Quilter Financial Planning - [CRN 05372217] Experian Credit Risk Score – Very Low Risk Positive Solutions (Financial Services) Ltd t/a Quilter Financial Planning Intrinsic Financial Services Limited and Positive Solutions (Financial Belt Technologies Inc. - [IDN: 043509851] Services) Ltd, both now known as Quilter Financial Planning, are part of Belt Technologies design and manufacture metal belting and the Quilter plc group which is listed on the London and Johannesburg conveyor systems for a wide range of applications and used in Stock Exchanges. The company provides financial planning services to a variety of industries including food processing, robotics, solar businesses and affluent clients and is one of the UK’s leading financial panel production and automated assembly lines. The company advice firms. We set out below a summary of the latest accounts for Quilter has two offices, one in North America with Newburn Riverside Financial Planning Limited. acting as the head office for Europe, Asia, Africa and Oceania.

Year Ending 31.12.2019 31.12.2018 31.12.2017 Turnover £96,859 million £79.09 million £77.27 million Pre Tax Profit (£34,369 million) (£17.01 million) (£16.07 million) Shareholder’s Fund £276.1 million £169.2 million £147.1 million Eque2 Limited – CRN [08179642] Experian Credit Risk Score – Below Average Risk Feel Good Food Limited – CRN [06527721] Eque2 provides software solutions for clients working within Experian Credit Risk Score – Very Low Risk construction, housebuilding and contracting. They are located Feel Good Food is a local company that provides event and wedding in 5 offices around the country including Manchester, Glasgow, catering as well as providing café and deli facilities for the businesses on site. Surrey and Berkshire.

Year Ending 30.04.2018 30.04.2017 30.04.2016 Year Ending 29.04.2019 29.04.2018 29.04.2017 Turnover - - - Turnover £15.35 million £12.96 million £11.42 million Pre Tax Profit - - - Pre Tax Profit £1.513 million £0.652 million £0.078 million Shareholder’s Fund £2,742 £1,821 £132 Shareholder’s Fund £2.939 million £0.741 million £0.231 million OFFICE MARKET City Centre V Out of Town Take Up Out of Town - Take Up V Number of Transactions

1,000,000 800,000 150

750,000 600,000 120 Out of town Office Market 500,000 400,000 80 Out of town take-up dominates the North East as a region and on average has accounted for 74% of regional take-up for the 250,000 200,000 40 last 5 years. This trend is exacerbated by the constrained Grade 0 0 0 A supply in Newcastle city centre, which currently only has 1 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020 year built supply based on 5 years average take up. Limited H1 Only H1 Only City Centre Out of town Sq Ft Transactions supply has led to an increase in city centre headline rents pushing more occupiers, regional and national, to the region’s out of town business parks. Total take up in the North East stood at 874,431 sq ft in 2019, of which 760,500 sq. ft. was for Recent lettings out of town office space. The table below sets out recent lettings across Newcastle’s primary business parks: The amount of out of town office space let in the North East Size Headline has reached a 10 year high with over 760,000 sq. ft. let across Date Building Tenant (Sq Ft) Rent (psf) the region – the average letting size for 2019 stood at c 6,000 sq. ft. Small suites remain in demand as occupiers look to H1 2020 Neon, Quorum Business Park Ramboll 2,456 £16.50 modern out of town accommodation with dedicated car H1 2020 Neon, Quorum Business Park NRG 9,481 £16.00 parking spaces – a feature that is increasingly hard to find H1 2020 Neon, Quorum Business Park SSCL 35,000 £16.00 in the city centre. H1 2020 CBS, Cobalt Northern Gas & Power 8,000 £14.00 The out of town market is dominated by two main business H2 2019 13A, Cobalt Business Park Neutron 4,985 £16.25 parks located in North Tyneside, Quorum Park and Cobalt H2 2019 The Quadrant, Newburn Riverside Eque limited 2,487 £13.50 Business Park, with occupiers looking west of the city centre to schemes such as Newburn Riverside and The Watermark H2 2019 Neon, Quorum Business Park Xerox 2,084 £16.50 for its proximity to the A1 (M) and accessibility to labour pool H2 2019 The Lightbox, Quorum Business Park Utility Alliance 11,465 £9.50 south of the Tyne. Part Ground / Part First, Quadrant, Newcastle upon Tyne, H2 2019 5,189 £13.50 Newburn Riverside NHS Foundation Trust Rents H1 2019 Unit 2, , The Watermark Synergi 2,100 £10.50 Prime headline out of town office rents currently stand at H1 2019 Neon, Quorum Business Park Histocyte Laboratories 2,558 £16.00 £16.50 psf with incentive packages typically reflecting 12-18 H1 2019 3.2, Cobalt Business Park Victims First 6,500 £10.00 months’ rent free for every 5 years term certain, depending upon suite size and tenant covenant. This offers a significant H2 2018 Honeycomb, The Watermark Mediaworks UK Ltd 10,188 £13.50 and increasing discount against the city centre market, H2 2018 Neon, Quorum Business Park Contec IAS UK Limited 681 £16.02 where prime headline rents currently stand at £24.50 psf H2 2018 Neon, Quorum Business Park Thingco 681 £16.02 for Grade A refurbished space and are shorty to be established at £26-£27 psf for newbuild Grade A at Newcastle Helix. INVESTMENT MARKET

Demand for regional business parks remains strong as investors are attracted by the appeal of comparably high yielding returns from secure and diverse income profiles. Late in the property cycle the sector is one of the few that can offer genuine double-digit ungeared returns and is seeing strong investment from overseas capital as well as private investors, UK based property companies, local authorities and REITs. We set out below a sample of recent investment transactions.

Area Term Certain Avg Rent £ PSF Date Property Tenant Sale Price NIY Notes (Sq Ft) (years) (psf) CV

Under Global Reach, Celtic Gateway Business 61,641 Multi-let 5.25 (4.03) £13.02 Q £9,356,000 8.00% £151 Fully let Offer Park, Cardiff

Q2 2020 Q1 & Q2 Imperial Park, Newport 92,060 Multi-let 7.99 £14.37 £15,000,000 8.19% £162 Fully let

Q3 2020 Waterside Business Park, Swansea 68,535 Multi-let 4.50 £10.07 £5,530,000 11.70% £81 Fully let

Q1 2020 Kings Court, Birmingham Business Park 51,503 Multi-let 4.25 £17.56 £9,700,000 6.60% £188 23% vacant, no RG

Q4 2019 Ridgeway Office Park, Denton 36,856 Multi-let 2.71 £14.70 £6,000,000 8.87% £163 Fully let

Q3 2019 Evo Park, Nottingham 110,163 Multi-let 2.44 £8.42 £7,500,000 9.86% £68 15% vacant with RG

Q4 2018 Lawnswood Business Park, Leeds 146,176 Multi-let 4.60 £15.91 £26,500,000 8.30% £181 10% vacant with RG

Q3 2018 Hercules Park, Cheadle 35,204 Multi-let 7.40 £13.45 £5,125,000 8.67% £146 Fully let

Q3 2018 Stratford Court, Solihull 30,694 Multi-let 2.30 £14.05 £6,100,000 6.87% £199 20% vacant with RG

Portfolio of 5 buildings on park. Q2 2018 Centre Park, Warrington 36,502 Multi-let 3.20 £13.10 £4,530,000 10.44% £124 7% vacant, no RG

Q4 2017 Lichfield South, Lichfield 42,943 Multi-let 7.10 £18.65 £10,500,000 7.00% £245 12% vacant with RG

Title Service Charge The property is held via three 150 year long leasehold titles with between 132 A separate service charge regime is in place for each building. The average rate and 134 years unexpired and subject to a peppercorn rent. Further information as per the 2020 budget is £7.47 psf. This is inclusive of the estates charge which is available in the dataroom. is currently budgeted at £0.21 psf. Further information is available on request. PROPOSAL

Offers are invited in excess of £12,432,000 reflecting an attractive 11.00% NIY, 12.24% RY and a low blended capital value of just £102 psf

PURCHASE RATIONALE

• A rare opportunity to acquire a leading mixed-use business park strategically located adjacent to the A1 and just 3 miles west of Newcastle City Centre.

• Built in phases from 2001 to 2008 the park provides sought after modern high specification industrial units of varying sizes and BREEAM excellent Grade A office accommodation.

• The ownership offers a diverse income stream underpinned by a wide range of local, regional, national and NHS covenants.

• Low passing rents offer significant rental growth prospects against a backdrop of falling availability, limited development pipeline and a highly constrained city centre market.

• Strong occupier demand as demonstrated by recent and on-going letting activity.

• Attractive high yielding income profile with significant reversionary potential.

• Low capital value psf offering significant discount to build cost.

EPC All EPCs and recommendation reports are available in the dataroom.

VAT The property has been elected for VAT and therefore it is anticipated the sale will be treated as a TOGC.

Anti-money laundering In order to discharge its legal obligations, including under applicable anti-money laundering regulations, C&W will require certain information of the successful bidder. In submitting a bid, you agree to provide such information when Heads of Terms are agreed. PROPOSAL

Offers are invited for the whole in excess of £23,294,000 reflecting an attractive 9.01% NIY, 9.78% RY and a low blended capital value of just £90 psf. Alternatively, offers are invited for the office and industrial elements as per below. Waterfront Offices - Offers in excess of £12,432,000 reflecting an attractive11.00% NIY, 12.23% RY and a low blended capital value of just £102 psf. Waterfront Industrial - Offers are invited in excess of £10,862,000 reflecting an attractive 6.75% NIY, 6.98% RY and a low blended capital value of just £80 psf. OUR TEAM

Further Information Access to the property and dataroom is available to named parties upon request.

Peter Atkinson Gagan Jagpal Richard Turner T: 0191 223 5715 T: 0191 223 5709 T: 0191 223 5720 M: 07718 251 493 M: 07702 681 760 M: 07747 008 415 E: [email protected] E: [email protected] E: [email protected]

Disclaimer Cushman & Wakefield hereby give notice that the information provided in this brochure is provided on the following conditions: (1) The particulars are set out as a general outline only, for the guidance of intending purchasers and/or lessees and do not constitute an offer or contract, or part of an offer or contract. (2) All descriptions, dimensions and references to this property’s condition and any necessary permission for use and occupation, and any other relevant details, are given in good faith and are believed to be correct. However, any intending purchasers or tenants should not rely on them as statements or representations of fact but satisfy themselves of their correctness by inspection or otherwise. (3) No person in the employment of Cushman & Wakefield, or any joint agents, has any authority to make or give any representation or warranty whatsoever in relation to the property or properties in this brochure. (4) All prices quoted are exclusive of VAT. (5) Cushman & Wakefield shall have no liability whatsoever in relation to any documents contained within the brochure or any elements of the brochure which were prepared solely by third parties, and not by Cushman & Wakefield. Subject to Contract and Exclusive of VAT. October 2020. In order to discharge its legal obligations, including under applicable anti-money laundering regulations, C&W will require certain information of the successful bidder. In submitting a bid, you agree to provide such information when Heads of Terms are agreed.

Designed & produced by www.creativestreakdesign.co.uk Ref: CSD1645