PRIME WEST END FREEHOLD INVESTMENT 02 | 03
Exceptional mixed-use asset in the heart of London’s West End
Executive Summary
• Freehold
• Super prime position on Charlotte Street, Fitzrovia’s most sought-after corporate and leisure address
• Excellent transport connectivity, within 500m of imminent Crossrail services at Tottenham Court Road
• Prominent corner building comprising 16,749 sq ft of Grade A offices and 7,867 sq ft of prime restaurant accommodation
• Fully let to one office tenant and two restaurants for a weighted unexpired term of 10.2 years
• The office element (73% of income) is let on an unprotected lease to Knotel until October 2029, at a reversionary rent of £75 per sq ft
• The offices benefit from exceptional natural light, efficient floorplate configuration and outdoor terracing on first and fifth floors
• The prominent restaurant units (27% of income) are occupied by ‘1947 London’ and ‘Six by Nico’ until June 2027 and June 2037 respectively
• Offers are invited in excess of £36,500,000, subject to contract and exclusive of VAT
• This reflects a net initial yield of 4.43%, assuming full purchaser’s costs, and a capital value of £1,483 per sq ft
33-41 CHARLOTTE STREET | FITZROVIA W1 04 | 05
hyde park
st james’s bond street
SOHO Oxford Circus marylebone COVENT GARDEN
TOTTENHAM COURT ROAD
TOTTENHAM COURT ROAD
FITZROVIA
GOODGE STREET bloomsbury
33-41 CHARLOTTE STREET | FITZROVIA W1 06 | 07
Charlotte Street
The property is prominently located in the heart of London’s West End, within the energetic and characterful submarket of Fitzrovia.
Populated by an abundance of Charlotte Street’s proximity to cobbled side-alleys, wide streets Oxford Street, the cultural hub of and open squares, Fitzrovia is heavily Soho and the desirable residential influenced by its bohemian past, areas surrounding Regent’s Park has boasting an attractive blend of seen it evolve from its aristocratic modern and historic architecture. origins into one of London’s most desirable destinations for restaurant Notable landmarks include Regent’s / bar operators, office occupiers and Park, the British Museum and the tourists alike. iconic BT Tower, while more recent developments include Fitzroy Place and Rathbone Place, headquarters to Estée Lauder and Facebook respectively.
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Description
The property comprises the freehold interest in 33-37, 39 & 41 Charlotte S t r e e t .
Occupying a prominent corner position, The offices benefit from exceptional the property features two restaurant units levels of natural light throughout, efficient at basement / ground floor level (7,867 sq configuration and are well suited to both ft) and 16,749 sq ft of office space on the single and multiple tenancy. first to fifth floors. The freehold interest also includes the The offices, which are accessed via a corner retail unit at 33-37 Charlotte Street reception off Rathbone Street, are linked (Roka) and four self-contained flats at 41 by 1 x 8-person passenger lift and two Charlotte Street, albeit these have been staircases. sold off on long leasehold interests.
Title & Tenure
46 4 2
ET E 4 R 0
ST E 43 G OD 3 13
GO PH 8
5 4
3
6
1
4
9 3
1
5
7
3
o
t
3 3 C h a rl o t te Pl a c e
9 7 51 to 9 4 Bank PH
47
3 0 to
3
0m 5m 10m15m
5 4 4 Note: Reproduced from the Ordnance Survey Map with the Freehold permission of the Controller of H.M. Stationery Office. © Crown copyright licence number 100024244 Savills (UK) Ltd. Residential sold off until 2126 Note: Published for the purposes of identification only and although believed to be correct accuracy is not guaranteed. Restaurant (ROKA) sold off until 2998
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THE OFFICES BENEFIT FROM EXCEPTIONAL NATURAL LIGHT AND EFFICIENT CONFIGURATION
33-41 CHARLOTTE STREET | FITZROVIA W1 12 | 13
Accommodation
The property provides the following net internal areas:
Offices Floor Use NIA (Sq Ft) NIA (Sq M)
5 2,001 185.9
4 2,987 277.5
3 Office 2,468 229.2
2 3,033 281.8
1 6,260 581.5
Sub-total 16,749 1,555.9
Six By Nico
Floor Use NIA (Sq Ft) NIA (Sq M)
G Trading 2,366 219.8
G Ancillary 429 39.9
G Outside Seating 111 10.3
LG Ancillary 961 89.3
Sub-total 3,867 359.3
1947 London
Floor Use NIA (Sq Ft) NIA (Sq M)
G Ancillary 84 7.8
LG Main Trading 3,681 342.0
LG Additional Stores 235 21.8
Subtotal 4,000 371.6
TOTAL* 24,616 2,286.9
* In addition, the freehold title includes four residential flats and a restaurant, all of which have been sold off on long leasehold interests (see Tenancy Schedule)
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Lower ground Ground floor EE T ET RE
ROKA (Sold Off)
CHARLOTTE STR ROKA (Sold Off) CHARLOTTE ST
SERVICE YARD
RATHBONE STREET RATHBONE STREET
1947 LONDON SIX BY NICO OFFICE ENTRANCE
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first floor typical upper floor
TERRACE
OFFICES RESIDENTIAL (SOLD OFF)
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FITZROVIA’S VACANCY RATE TENANCIES stands at only 3.1%, well below the long-term Rent PA Demise Sq Ft Tenant Review Expiry Comments (PSF) average of 4.8% - Outside 1954 L&T Act - Open Market Rent Review 33 Camcorder Ldn £1,256,175 - 12 months’ rent guarantee provided by Office 16,749 25.10.2024 24.10.2029 Limited: t/a Knotel (£75) Knotel Inc - Rent deposit of £251,235 held until 14.10.2021, or earliest assignment or determination of lease - Lease held on assignment from Azzurri Restaurants Ltd (with AGA) Six by Nico £298,000 - Rent deposit of £89,400 Retail A 3,867 07.06.2022 06.06.2037 (Fitzrovia) (£77.06) - 10 year reversionary lease from 07.06.2027 with an upward only day one rent review - Lease held on assignment from Hart Samarkand £170,000 Bros Ltd (with AGA) Retail B 4,000 Restaurant Ltd t/a 30.01.2018 06.06.2027 (£42.50) - Rent deposit of £153,000 1947 London - 2018 rent review outstanding Tavola Calda - Sub-let to Robata Restaurants Ltd (t/a Retail C - Peppercorn - 31.05.2998 Limited ROKA) until 01/10/2028 4 x Private Residential - £1,000 24.09.2026 23.09.2126 - Rent doubles every 25 years Individuals Transformer London Power - £0 - 07.11.2100 - Chamber Networks Plc Occupiers TOTAL 24,616 - £1,725,175
33 Camcorder Ldn Limited Six by Nico Samarkand Restaurants Ltd (trading as Knotel) (Fitzrovia) (trading as 1947 London) Knotel’s business strategy of leasing Six by Nico was established by award- 1947 London is an award winning on a floor-by-floor basis positions it winning Scottish chef Nico Simeone restaurant focussed on high-end well to prosper in current times, in 2017, and now operates across Indian cuisine, operated by the where security and self-control are the UK. owners of the renowned Chai highly valued. Thali group. The business revolves around a fixed With over 4 million sq ft across over ‘six course’ tasting menu concept, Chef Krishna Negi, the protégé of 200 locations in London, the USA, which changes every six weeks. Michelin-starred Vineet Bhatia, has Berlin, Paris, São Paolo and Rio de created a menu which nods to recipes Janeiro, Knotel is established on a Fitzrovia is the latest opening of the that evolved out of the 1947 Partition. global scale. widely acclaimed concept, following an extreme success with their other www.1947london.com Knotel now operates in 10 countries, restaurants. with international markets comprising 40% of its revenue and growing. www.sixbynico.co.uk London has been a particular success story for the business, which currently operates out of 27 buildings within the Capital (over 500,000 sq ft).
www.knotel.com
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OFFICE OCCUPATIONAL MARKET
The West End’s geographically constrained boundaries, Competition for Grade A accommodation within the coupled with a scarcity of available space, continue to submarket has remained robust, as was evidenced in May drive the occupational market and this imbalance has 2020, with Exane pre-letting the 5th to 7th floors at Oxford manifested itself in low vacancy levels and historically House, 1 Newman Street for £100 per sq ft, and Netflix’s strong rental performance. recent decision to occupy 87,150 sq ft on Berners Street at £87.50 per sq ft. Fitzrovia provides a particularly acute illustration of this dynamic; the vacancy rate stands at only 3.1%, well below The imminent arrival of Crossrail, a severely constrained the long-term average of 4.8% and down from 3.3% a year development pipeline and the area’s continued attraction earlier. to the buoyant TMT sector is expected to further fuel the Fiztrovia occupational market’s outperformance of other West End submarkets.
Date Address Tenant Sq Ft Floor Rent psf Term
Q4-20 Copyright Building, Berners Street, W1 Netflix 87,150 Whole £87.5 17
Q2-20 Oxford House, 1 Newman Street, W1 Exane 38,064 5 - 7 £100 15
Q2-20 25 Golden Square, W1 Roxor Games 66,000 Entire c.£90 Confidential
Q1-20 42 Great Marlborough Street, W1 Mediaforce 7,354 1 - 4 £90 10
Apollo Global RESTAURANT OCCUPATIONAL MARKET Q4-19 1 Soho Place, W1 89,017 1 - 4 £93 15 Management
Home to over 65 Michelin starred restaurants, London has Over recent years, operators have competed to capitalise Q4-19 19-22 Rathbone Place, W1 Be Spoke 12,041 3 - 4 £79 10 (5) become one of the food capitals of the world and Fitzrovia on the area’s rich heritage and rare level of exposure has been a leading growth area within the sector. to numerous demand sources, including Oxford Street- related tourists, nearby University students, office occupiers and an affluent local residential population. Q2-19 1 Soho Place, W1 G Research 102,600 5 - 10 £95 15 Fitzrovia has benefitted from a plethora of new F&B openings in the West End, including the likes of Arros QD, Norma by Ben Tish, YOPO and Salt Yard, and Charlotte Union Street is widely acknowledged as being the sector’s centre Q2-19 26-37 Seymour Mews, W1 15,769 2 - 5 £92 10 Bancaire Privee of gravity. Fitzrovia IS SET Restaurant rents have appreciated accordingly, and have established themselves at over £100 per sq ft on the prime Q2-19 66 Newman Street, W1 Workpad 14,122 Whole £82 20 to outperform all pitches today.
other West End This remains discounted to its rival submarket, Soho, where rents stand at up to £160 per sq ft, providing long submarkets in terms term room for further rental growth. Q2-19 14-16 Great Portland Street, W1 The Wing 10,527 Whole £85 10 of rental growth
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Fitzrovia has been one of the most SOUGHT- Investment Market AFTER submarkets, experiencing 10 The strong occupational conditions outlined above, Whilst 2020 has been a challenging year for the transactions so combined with the macro-economic factors of historically commercial property investment market, we have low interest rates, weak Sterling and credit availability at witnessed a ‘flight to quality’ and pricing for core, well- far in 2020 increasingly attractive rates have continued to encourage located buildings has proved resilient. investors to deploy their capital into the West End market. As illustrated in the table below, Fitzrovia has proved These favourable investment conditions have been a particular focal point for investment of this nature, underpinned by London’s historic and enduring strengths, highlighting its enduring appeal to both UK and not least its transparent legal system, deep pool of international investors: skilled labour, high tourism figures, locational / linguistic advantages and exceptional transport connectivity.
Tenure Date Address WAULT Tenant(s) Price NIY PSF (Gearing)
127 Charing Cross Road, Available 1.0 Multi-let FH Q. £56.50M 3.50% £1,409 WC2
Yalding House, 152-156 U/O 5.0 Multi-let LH (5.75%) Q. £43.0M 4.30% £1,491 Great Portland Street, W1
Vacant offices, Q3-20 2&4 Soho Place, W1 - LH £40.5M - £2,201 pre-let theatre
Q3-20 1 New Oxford Street, WC1 7.8 Multi-let FH Q.£180.0M 4.02% £1,647 1 New Oxford Street, WC1 | Q.£180.0M | 4.02% | £1,647 per sq ft
Q3-20 44 Whitfield Street, W1 2.1 Multi-let FH £19.5M 4.51% £1,621
Maple + Midford, 4-8 Maple BenevolentAI Planning EPC Q2-20 4.7 FH £32.0M 4.31% £1,567 Street, W1 Ltd
Newman LLH Q3-19 66 Newman Street, W1 20.0 £29.5 M 4.18% £1,850 Offices Ltd (£2,000) The property lies within the London Borough of Camden. Available on request. It is not Listed, but sits within a Conservation Area. Q3-19 21 Poland Street, W1 6.8 Multi-let FH £14.4 M 4.17% £1,662 VAT Data Room
The property has been elected for VAT, and it is intended Further technical and legal information relating to the that the transaction will be treated as a transfer of a going property will be made available in a secure data room, concern (TOGC). accessible on request.
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P r o p o s a l
Offers are invited in excess of £36,500,000 for the freehold interest in the property.
This reflects a net initial yield of 4.43%, assuming standard purchaser’s costs, and a capital value of £1,483 per sq ft.
Further Information
For further information or to arrange an inspection, please contact:
Jonathan O’Regan James Purdon 020 7409 8179 020 7409 5920 07840 284 629 07780 708 182 [email protected] [email protected]
William Post Savills (UK) Limited 020 3107 5490 33 Margaret Street 07807 999 984 London [email protected] W1G 0JD
Important Notice Savills, their clients and any joint agents give notice that: 1. They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact. 2. Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Savills have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise. Designed and Produced by Savills Marketing: 020 7499 8644 | October 2020
33-41 CHARLOTTE STREET | FITZROVIA W1