THE DEVONSHIRE WORKS

DIVISION STREET / CARVER STREET, , S1 4GF

FREEHOLD CITY CENTRE RETAIL | LEISURE | OFFICE INVESTMENT AND DEVELOPMENT OPPORTUNITY THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

Investment Summary

• Highly prominent mixed use building at the junction of Division Street and Carver Street, within ’s vibrant Devonshire Quarter. • The property is in close proximity to John Lewis, which is Sheffield’s premier department store, and close to the proposed New Retail Quarter site. • The property is also strategically positioned mid-way between University of Sheffield and Sheffield Hallam University. • The property consists of eight retail and leisure units at basement and ground floors, with offices and studios above over first, second and third floors. The property also benefits from dedicated car parking. • Freehold interest. • Total net internal area of 5,159.05 sq m (55,532 sq ft), comprising 2,053.05 sq m (22,099 sq ft) of basement and ground floor retail/leisure space, together with 3,106 sq m (33,433 sq ft) of upper floor space. • Current gross rental income of £527,027 per annum (£437,316 per annum net after deduction of landlord’s shortfalls). • Owing to the diverse range of tenants and spread of income, the property has produced a stable level of income over a number of years. • The basement and ground floor retail/leisure units represent approximately 80% of the net income receivable, with a weighted average unexpired lease term (WAULT) for the this element alone of 15.70 years. • Rare opportunity to acquire a large, core city centre site of 0.66 acres. • Scope to improve income through lettings of the vacant upper floors. • Alternatively the upper floors offer potential for a major development opportunity, subject to planning. • We are instructed to seek offers in excess of £4,950,000 (Four Million Nine Hundred and Fifty Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level would reflect an attractive net initial yield (including rental guarantees in respect of Parkhead House) of 8.37% after allowing for usual purchaser’s costs of 5.80%. THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

Location TO BARNSLEY A57 WAY Sheffield is England’s fourth largest city and the commercial, PARK administrative and retail centre of , with an UNIVERSITY TO J33 M1 OF SHEFFIELD NE L LA EO urban area population of approximately 640,000. The city is AD PO RO L B D located 150 miles (240 km) north of London, 33 miles (53 S

T E

DEVONSHIRE WORKS R km) south of Leeds and 38 miles (61 km) east of Manchester E E T GAT

REET and benefits from its central location within the UK. ST WEST DEL

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The city enjoys excellent access to the national motorway A61 - RING ROAD

ARU network, with Junctions 31 to 34 of the M1 on the eastern AD fringe of the city, approximately 4 miles (6.5 km) from the DIVISION STREET city centre. The M1 provides direct access to points north PROPOSED RING RO NEW RETAIL SHEFFIELD (Leeds, Barnsley and Wakefield) and south (Nottingham, HALLAM QUARTER SITE UNIVERSITY A61 - Milton Keynes and London). In addition, the M18, accessed W TRAM O TO MANCHESTER at Junction 32 of the M1 provides direct access to the TRAIN Humberside Ports. The A57 and M67 provide access to TO CHESTERFIELD BUS Manchester, approximately 38 miles (61 km) to the west. CHARTER R Sheffield Mainline Station provides direct services to the WALKABOUT following UK cities with approximate fastest journey times as HO CITY below: LLY STR TO UNIVERSITY OF SHEFFIELD HALL SOYO • London (St Pancras) - 127 minutes • Manchester - 50 minutes E TO W

E • Leeds - 40 minutes E DEVONSHIRE WORKS CAR T

STFIELD WEST STREETTESCO • Birmingham - 65 minutes ROC

CA V

• Nottingham - 45 minutes ER YATES

K M

JOHN INGHAM STRE ASK BR COSTA T STRE SAINSBURY’S Manchester, East Midlands, Leeds-Bradford International and ELDON TER LEWIS

I Doncaster Robin Hood Airports are located 47 miles (75 km), ISION STREE D G RAC DIV E

T E 53 miles (85 km), 45 miles (72 km) and 27 miles (44 km) STREET NOSH ST respectively and are all within 1 hours drive of the city. All E R provide a range of national, European and international STARBUCKS EET services. EET

DEVONSHIRE THE FORUM GREEN PROPOSED TO TRAIN STATION NEW RETAIL QUARTER SITE THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

ECONOMY

Sheffield has successfully transformed it’s economy from a city dominated by its The city’s image has also been radically reshaped with a series of high profile manufacturing base, to a service led economy. Major employers include HSBC, improvements to the built environment, whilst also benefitting in recent years Santander, Halifax and Aviva. Outside of the financial sector, large offices have also from a growth in cultural and tourist attractions including The Millennium been established by private sector companies including WANdisco, Nabarros, Gardens, The English Institute of Sport and The PWC, Plusnet, Irwin Mitchell and Sky. Despite the legacy of Sheffield’s steel and cutlery trades expressing itself in the Sheffield is a major educational centre with a student population of approximately physical landscape of the city, Sheffield is also England’s greenest city with more than 63,000 spread over two universities, with the city having one of the country’s 200 parks, woodlands and gardens. It the only city within the UK to have a national highest student retention rates. Both universities have been successful in recent park within its boundary, with approximately one third of the city lying within the years, having increased both their student numbers and capital investment. Peak District National Park, which attracts approximately 10 million visitors each year. THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

SITUATION

Devonshire Works occupies a prominent position in the heart of the city centre at the junction of Division Street and Carver Street. It is situated within the city’s Devonshire Quarter, which is centred around Devonshire Green - the largest open public park in the city centre. It also lies adjacent to the Central Business District and on the edge of the city’s retail core, just a short distance from John Lewis at Barker Pool. Division Street has established itself as a predominantly residential mixed use location, with a vibrant mix of specialist retail, leisure and entertainment facilities. The area has been subject to public realm improvements which have improved the connection between the quarter and the Heart of the City, to the extent that it has become recognised as an urban village. The property is broadly equidistant between the city’s two universities and is conveniently located for access to public transport, with West Street supporting numerous bus routes as well as the City Hall tram stop, which provides a direct link to the Sheffield mainline railway station. THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

DESCRIPTION

Supported on an island site, the property comprises a substantial former Mesters floors. The property is arranged in a horseshoe around a central shared car works, together with a more recently constructed section fronting Division Street, parking/circulation area. consisting of retail and leisure units at ground floor level with frontages onto Parkhead House is the front block on the corner of Division Street and Carver Division Street and Carver Street, together with office and studio accommodation Street. It provides large open plan floor plates running the length of the Division above, over first, second and third floors. Street frontage, and typically appeals to established businesses seeking large Fronting Division Street are four high profile retail units, let to Costa Coffee, O2, floorplates in the heart of the city centre. Alpha House is the central block William Hill and Sa-Kis – a local high end clothing retailer, while Carver Street is overlooking Carver Street and provides a variety of smaller office suites either side more leisure oriented, consisting of two nightclubs, a bar and two retail units. of a central corridor. Similarly, within Carver House, which is the block to the rear, smaller offices and studio space are provided for smaller start-up companies. The upper floors are arranged over three interconnecting blocks known as Parkhead House, Alpha House and Carver House, each of which benefits from its The entire site extends to approximately 0.66 acres in total. own dedicated entrance, with lifts in each block providing access between the THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

RETAILING IN SHEFFIELD

Sheffield is an extensive and attractive retailing centre providing approximately 1.56 million sq ft of retail floor space which serves a primary catchment population of around 637,000 (Source: PROMIS). Prime retailing extends along a linear pitch centred around Fargate, from High Street in the north-east down to . The city is well represented by many of the major national multiples including, Marks & Spencer, Primark, Debenhams, H & M, Boots, Topshop, New Look, River Island, TK Maxx, Waterstone’s, WH Smith and John Lewis, which is the city’s premier retail destination opposite the City Hall at Barker Pool. Division Street provides a link between Barkers Pool and Devonshire Green and is a vibrant mixed use location, with a number of sympathetically converted former industrial buildings now housing independent retailers and leisure operators, together with a growing residential population. The City Centre Masterplan aims to enhance the central retail core and increase the scale of economic activity in the city centre. There are a number of key developments in the city centre that are set to change the city’s retail landscape and which will re-focus the core around a more compact area. These are described in more detail below: • The Moor – this retail area is undergoing significant changes as part of a long term redevelopment plan. Sheffield City Council has developed a high quality public realm at the Moor Head, following which the new £17m purpose built indoor markets opened in 2013. Aberdeen Asset Management, with their partner Ashcroft, have secured planning permission to redevelop a 55,000 sq ft retail block at the junction with Furnival Gate (Phase 3) and are currently on site with a new cinema and retail unit for Primark (Phase 2), which is due to complete during 2016. • New Retail Quarter (formerly known as Sevenstone) – is the creation of a new retail area in the city centre in and around Barkers Pool/Cambridge Street, combining new and refurbished buildings and new streets. Hammerson brought their development agreement with the Council to an end in 2012, thus providing an opportunity for another development partner to progress the scheme. A revised masterplan has been designed, which aims to incorporate Fargate and providing a retail offering focussed around a new John Lewis on the site of the former fire station. THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

TENURE

Freehold.

TENANCIES

The property is let by way of 24 leases (plus car parking leases) in accordance with the tenancy schedule below. In summary the property currently produces a total gross passing rent of £527,027 per annum (including rental guarantees in respect of Parkhead House). After deduction of landlord’s shortfalls the net rent is £437,316 per annum.

Demise Tenant Area Sq ft Lease Lease Rent Review Rent £ pa Comments (NIA) Term Expiry Pattern Division Street 40 - 44 Division Street Costa Ltd 2,561 10 years from 03/02/2018 5 yearly £65,000 04/02/2008 38 Division Street Talk Direct (Leeds) Ltd 1,043 10 years from 23/12/2016 5 yearly £22,000 24/12/2006 36 Division St William Hill 783 20 years from 12/01/2034 5 yearly £21,000 Landlord redevelopment break on 20 Jan 2020, 13/01/2014 with rolling annual breaks thereafter until 10th year. Tenant break on 12 Jan 2024. 32 - 34 Division Street S Razaq t/a Sa-kis 1,824 20 years from 24/09/2027 5 yearly £52,000 25/09/2007 Carver Street 20 - 22 Carver Street Concept Seasons Ltd 1,627 15 years from 31/05/2028 5 yearly £35,500 01/06/2013 Entrance, basement (part) Late Night Bars Ltd 5,602 25 years 5 yearly £40,000 In occupation under licence. and 16 - 18 Carver Street t/a Beg Borrow & Steal from completion New 25 year lease agreed on stepped rent. and Paris £40,000 pa in year 1, £45,000 pa in year 2, £50,000 pa in year 3 and £55,000 pa in year 4. OMV rent review thereafter. 6 Carver Street W P Lincoln 1,266 3 years 26/01/2025 Annual £20,000 Stepped rent, rising to £22,000 pa in year 2 and t/a Freshmans from 27/01/2015 £24,000 pa in year 3. 2 - 8 Carver Street Stonegate Pub Company Limited t/a Popworld 7,393 50 years 28/09/2045 5 yearly £95,000 from 29/09/1995 THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

Demise Tenant Area Sq ft Lease Lease Rent Review Rent £ pa Comments (NIA) Term Expiry Pattern Parkhead House 1st Floor Lifeskills Solutions 3,140 6 years 17/07/2017 3 yearly £21,980 Limited from 18/07/2011 2nd Floor Vacant 4,850 £24,250 Vendor to provide 12 month rent, rates and service charge guarantee. Rooms 1 & 10, 3rd Floor Terms agreed with 564 2 years from - £2,700 pa inclusive of service charge and Watermade Ltd completion utilities. Room 2 3rd Floor Terms agreed with 697 1 year from - £6,273 pa inclusive of service charge and Rachel Olney completion utilities. Rooms 3, 4 & 8 3rd Floor Vacant 2,781 £14,000 Vendor to provide 12 month rent, rates and service charge guarantee. Rooms 5, 6 & 7 3rd Floor Terms agreed with 748 1 year from £5,984 pa inclusive of service charge and Go Fundraise completion utilities. Alpha House 10 Carver Street & Sheffield Area 4,549 3 years None £38,000 Holding over. New 5 year lease agreed at Suites G35a, 127-146 Youth Association from 01/04/2008 £38,000 pa (all inclusive). Suites 229 prt-234 Cruse Bereavement Care 680 5 years None £4,420 Holding over. from 01/08/2006 Suites 227-229 J Beaumont 436 3 years 31/07/2015 None £2,500 All inclusive rent. from 01/08/2012 Suites 343-346 Dumpling Design Ltd 276 6 months None £2,000 Holding over. All inclusive rent. from 01/10/2012 Suites 245-247 Atum Studios - 202 2 years 30/04/2016 None £1,616 Rent includes service charge. Mr M Pearce from 01/05/2014 Suite 347-349 Dig Deep (Africa) 616 1 year None £1,750 Holding over. from 05/02/2013 Suites 333-334 Terms agreed with 340 2 years - £2,250 pa inclusive of service charge and Louise Glover from completion utilities. Suites 335-336 Louise Glover 360 2 years 22/09/2016 None £2,380 All inclusive rent. t/a Rag and Bone from 23/09/2014 Suites 339-341 Shafiq Shafi and 414 3 years 25/05/2017 None £1,800 Stepped rent. £1,800 pa in year 1, £2,400 pa in Gary Neville from 26/05/2014 year 2, £3,000 in year 3. Rent includes service charge. Suites 248-250 Paul Wells Associates 598 3 years 31/07/2017 None £5,400 Rent includes service charge. Rent increases to from 01/08/2014 £6,000 pa on 01/08/2015. THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

Demise Tenant Area Sq ft Lease Lease Rent Review Rent £ pa Comments (NIA) Term Expiry Pattern Alpha House Cont’d Suite 251 Ian Rawlings 210 3 years 30/11/2017 None £1,650 All inclusive rent. Tenant option to break at any from 01/12/2014 time on 3 months’ notice. Suite 342 Terms agreed with 340 2 years from £2,160 pa. All inclusive rent. Tenant option to Marula Molina completion break at first anniversary. Suites 224 - 226 Vacant 540 Suite 244 Vacant 219 Suites 252-254 Vacant 461 Suites 329-330 Vacant 560 Suite 331 Vacant 206 Suite 332 Vacant 240 Carver House Suites 255-263 Universal Utilities Ltd 1,359 1 year None £9,000 Holding over. Service charge cap agreed at from 30/03/2013 £4,200 pa. New 5 year lease agreed at £9,000 pa. Suites 377-386 The Musical Works 1,139 1 year None £6,000 Holding over. from 01/09/2013 Suites 271-277 C & L Middleton 1,110 3 years 30/04/2017 None £4,285 All inclusive rent. Rent increases to £6,500 pa from 01/04/2016. Suites 176-183 Gemma Hopkins 1,293 3 years 17/03/2016 None £11,637 t/a A Pole New Adventure from 18/03/2013 Suites 166-170 Liam Smith & Amber 583 2 years 18/04/2015 None £4,664 Savage t/a Vulgar from 19/04/2013 Sheffield Suites 147-165 Keavey & Risdale 1,556 2 years £3,000 All inclusive rent. Tenant option to break at 9th from 01/02/2015 month on 2 months’ notice. Suites 154 & 158 Vacant 1,556 Suites 171-175 Vacant 613 Suites 366-372 Vacant 1,386 THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

Demise Tenant Area Sq ft Lease Lease Rent Review Rent £ pa Comments (NIA) Term Expiry Pattern Car Parking 2 spaces Mitchell & Butlers - Licence. 2 spaces Mitchell & Butlers - Licence. 1 space Voluntary Action Sheffield £1,100 Licence. 2 spaces Late Night Bars £1,600 Licence. 2 spaces Sheffield Trainers Ltd £2,000 Licence. 1 space Seasons Clothing £1,300 Licence. 1 space let Sa-Kis Retail Limited £1,300 Licence. 3 spaces YASY £3,600 Licence. 1 space Heather Nicholls £720 Licence. 3 spaces Jim Lobley £2,400 Licence. 2 spaces Dumpling Design £1,375 Licence. 1 space L Smith & A Savage £800 Licence. TOTALS 55,532 Gross rent £527,027 Net rent £437,316

INCOME PROFILE SERVICE CHARGE

• The property provides an attractive blend of short and long term income, There are three separate service charges in operation for Parkhead House, thereby creating opportunities to improve the tenant mix and generate rental Alpha House and Carver House. For the year to September 2014 the total budget growth. was £100,617.45. A number of leases are inclusive of service charge. Further information is available upon request. • Approximately 80% of the current net income receivable is secured to recognised retail / leisure brands within the ground floor units. There are currently two directly employed (part time) caretakers at Devonshire Works. The employment of these employees will be transferred as part of the sale • The weighted average unexpired term (WAULT) in respect of the basement / under the TUPE regulations. ground floor units is 15.70 years. • The vendor is proposing to offer rent guarantees in respect of the vacant office accommodation within Parkhead House. THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

COVENANTS

Whilst the property is let to a variety of tenants, from national high street multiples to local independents, the diverse range of businesses offer excellent income diversification. For reference we highlight below the most recent accounting information for a number of the key tenants:

Costa Ltd William Hill plc Costa is the UK’s largest and fastest growing coffee shop brand and a wholly William Hill is one of the largest bookmakers in the United Kingdom. It is listed owned subsidiary of Whitbread PLC. on the London Stock Exchange and is a constituent of the FTSE 250 Index. As of 2 August 2013, it was listed as having a market capitalisation value of £4.07bn. They have been awarded a FAME QuiScore Rating of ‘87 - Secure’. They have been awarded a FAME QuiScore Rating of ‘86 - Secure’.

Year ending Turnover Pre-tax Shareholders Net tangible Year ending Turnover Pre-tax Shareholders Net tangible profit funds assets profit funds assets (£000’s) (£000’s) (£000’s) (£000’s) (£000’s) (£000’s) (£000’s) (£000’s) 28/02/2014 633,427 100,449 321,333 318,767 31/12/2013 1,486,500 257,000 1,023,300 230,500 28/02/2013 552,959 93,927 248,020 244,045 31/12/2012 1,276,900 277,700 1,022,400 168,500 28/02/2012 458,596 62,624 176,890 174,254 31/12/2011 1,136,700 187,400 887,800 152,100

Talk Direct (Leeds) Ltd Stonegate Pub Company Limited Talk Direct (Leeds) Ltd is an O2 Franchise operating 14 successful stores across Stonegate is a leading hospitality and pub group. The company has over 620 pubs Yorkshire/Nottinghamshire, a Call Centre to manage its database and and bars, across the UK, and operate a wide variety of formats: from high-street approximately 150 FTE led by vastly O2 experienced personnel and were also pubs and traditional country inns to local community pubs, student pubs and awarded ‘2013 Mobile Industry Award Best Franchisee’. late-night bars and venues. Brands include Yates’s, Slug and Lettuce, Missoula Montana, The Living Room and Scream. They have been awarded a FAME QuiScore Rating of ‘91 - Secure’.

Year ending Turnover Pre-tax Shareholders Net tangible Year ending Turnover Pre-tax Shareholders Net tangible profit funds assets profit funds assets (£000’s) (£000’s) (£000’s) (£000’s) (£000’s) (£000’s) (£000’s) (£000’s) 31/03/2014 19,466 2,558 2,143 3,227 30/09/2013 470,272 (10,172) 153,638 366,569 31/03/2013 14,937 243 2,584 1,187 30/09/2012 484,263 14,573 180,404 377,657 31/03/2012 8,376 1,256 2,589 1,094 30/09/2011 264,671 (24,447) 170,701 373,485 THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

ASSET MANAGEMENT / DEVELOPMENT OPPORTUNITIES

The upper floors currently provide offices and studios ranging in size, aimed at providing space for a variety of businesses, from small suites for start-up businesses to larger suites for grow on space and more established businesses. Whilst the opportunity exists to grow the income by letting the vacant accommodation, this space would be suitable for redevelopment and has the potential for conversion for a variety of uses, subject to planning. We would comment that all leases contain Landlord redevelopment clauses. In this respect, permitted development rights allowing for a change of use from Offices B1(a) to Residential C3 were introduced for a period of three years from 30 May 2013 to 30 May 2016, thus simplifying the process in the event that residential conversion is pursued. The floor plans below show the layout ROCKINGHAM LANE of the upper floors. KEY

- Parkhead House

- Alpha House CARVER PLACE DIVISION STREET - Carver House

For identification purposes only.

FIRST FLOOR PLAN CARVER STREET

ROCKINGHAM LANE ROCKINGHAM LANE CARVER PLACE CARVER PLACE DIVISION STREET DIVISION DIVISION STREET

CARVER STREET CARVER STREET SECOND FLOOR PLAN THIRD FLOOR PLAN THE

DIVISION STREET / CARVER STREET, SHEFFIELD, S1 4GF DEVONSHIRE WORKS

EPC PROPOSAL

The property has three EPC’s. Copies of certificates are available upon request. We are instructed to seek offers in excess of £4,950,000 (Four Million Nine Hundred and Fifty Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level would reflect an attractive net initial yield (including rental VAT guarantees in respect of Parkhead House) of 8.37% after allowing for usual purchaser’s costs of 5.80%. The property is elected for VAT and it is envisaged that the sale will be treated as a Transfer of a Going Concern (TOGC). This can be calculated by capitalising the income derived from the basement / ground floor units at 8.75%, whilst attributing a capital value to the upper floors of £35.00 per sq ft.

CONTACT DATA ROOM For further information or to arrange an inspection please contact: Further information is available upon request.

Nick Wales Rebecca Farnsworth Alastair Bird Knight Frank LLP Knight Frank LLP Knight Frank LLP 7th Floor 9 Bond Court 55 Baker Street Fountain Precinct Leeds London Balm Green LS1 2JZ W1U 8AN Sheffield, S1 2JA Tel: 0114 272 9750 Tel: 0113 297 2420 Tel: 020 7861 1232 Mob: 07767 291353 Mob: 07776 342 315 Mob: 07768 257316 [email protected] [email protected] [email protected]

Subject to Contract & Exclusive of VAT 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. 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. March 2015. Designed & produced by www.thedesignexchange.co.uk Tel: 01943 604500.