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INVESTMENT OPPORTUNITY Victoria House PearsonFOR Court, SALE Business Park, Stockton-on-Tees TS17 6PT

High Yielding Multi-Let out of Town Office Investment INVESTMENT SUMMARY

• High yielding multi-let office investment on Teesdale • WAULT of 3.39 years to expiry (2.08 to break). Business Park, widely regarded as the prime office location • Annual rent roll of £214,115. for the Tees . • Significant interest in the vacant first floor suite. • Modern purpose built office building totalling1,888 sq m (20,321 sq ft) over 4 floors with extensive parking provision • Strong asset management potential through regearing of 87 spaces reflecting an attractive ratio 1:230 sq ft. current leases and letting vacant suite. • Multi let to a strong tenant line-up including Turner & • Offers in excess of £1,550,000 subject to contract and Townsend, Interbulk Tankcontainers and The British exclusive of VAT. A purchase at this level reflects a net initial Red Cross Society. yield of 13.02% and a reversionary yield of 13.66% after deduction of purchaser’s costs of 6.12%. MORPETH

A1(M) Location A696 Newcastle Airport Stockton-On-Tees is a regional centre situated A68 LOCATION A19 Tynemouth approximately 30 miles south of Newcastle and 2 miles Port of Tyne west of . The A66 dual carriageway links South Shields A69 NEWCASTLE the town with the A1(M) situated approximately 12 miles HEXHAM UPON TYNE to the west, and the A19 connecting the Business Park A68 GATESHEAD 65 SUNDERLAND to the wider region. Local train services via Thornaby A1(M) 63 Station connect Stockton on Tees to the East Coast ABERDEEN Scotland Chester-le-Street Mainline at , connecting to London Kings A690 Cross (2 hours 20 minutes) and Edinburgh (2 hours). 62 DURHAM GLASGOW Daily scheduled flights operate to various UK and EDINBURGH A167 A181 A689 A1 61 European destinations from both Airport (5 M6 A690 CARLISLE A69 NEWCASTLE miles to the west) and Newcastle International Airport. MIDLESBROUGH A19 A66 A19 60 A688 A689 A1(M) Teesport The town is located within The , a highly LEEDS MANCHESTER A68 M1 regarded region with a diversified economy. The LIVERPOOL SHEFFIELD 59STOCKTON M1 A688 M6 -ON-TEES 58 MIDDLESBROUGH region is home to a variety of leading companies, A1(M) Darlington BIRMINGHAM A1046 operating in the service industry and growing global Wales A66 A66 M1 A1(M) 57 A171 M40 M11 A1046 markets including renewable energy, petrochemicals

BRISTOL A66 M4 LONDON 56 Durham Tees and engineering. The area is the second largest centre Valley Airport A178 in Western Europe for the petrochemical sector and A19 A1027 the advanced engineering that supports it, with 1400 A1(M) companies directly involved, or in the supply chain.

A684 A19 A1027 North A1046 North Rd Situation A178 Haverton Hill Rd Middlesbrough T e is an established in town e s Hartington Rd B r A19 business park bounded by the and is the id A139 g e A A66 widely regarded as the Tees Valley’s prime office p A177 Teesway p A1046 ro ac location. Victoria House is located off Yale Crescent, A19 h Rd A1032 B6541 Newport RdMIDDLESBROUGH occupying a prominent canal side position, situated in Marston Rd Borough Rd A1046 close proximity to park amenities including Sainsbury’s A1305 Heywood St Teesside Crofton Rd University Local and Nunthorpe Day Nursery. Thrornaby Station STOCKTON-ON-TEES B6541 and local bus routes are within a five minute walk.

B1272 A1305 River Tees Notable occupiers on the Teesdale Business Park include B1032 Bank, the NHS and HMRC. Both Stockton Queen’s Stockton Rd Campus Albert Park A172 College and are located on the B6541 West Lane Hospital Business Park, with the latter further investing Princeton Dr A19 Victoria House South Thornaby A66 in their Queens Campus facility to create an International A1130 B1032 Foundation College. A135 Teesside Shopping Park A1 10 miles

A1130 John Snow College

Queens Campus

Millennium Bridge

Victoria House The property is situated 2.5 miles north east of Newcastle city centre on Benton Park Road (A191) in South Gosforth, which is one of the city’s most popular and affluent suburbs. Benton Park Road is in close proximity to the popular residential suburbs of Gosforth and High Heaton and is a main arterial route between Newcastle city centre and the commuter district of Longbenton.

The surrounding area is primarily residential in nature with Promis identifying Gosforth as a pocket of affluence on Newcastle’s northern fringe. Nearby occupiers include Majestic Wine and Sainsbury’s Local.

South Gosforth and Longbenton Metro stationsSITUATION are both within 10 minutes walking distance providing rail links to Newcastle city centre and the rest of the North East. DESCRIPTION

Victoria House comprises a four storey purpose built office building extending to 1,887.8 sq m (20,321 sq ft) and benefits from the following specification; - Double height glazed entrance atrium - Recently refurbished common areas including shower facilities - Male, Female and WC’s on each floor - Suites fitted out to tenants individual specification however incorporate suspended ceilings, integrated cat II lighting and carpets throughout. - 87 parking spaces comprising 67 at Victoria House along with a further 20 nearby off Sorbonne Close.

Parking 87 standard spaces.

Tenure Freehold.

TENANCY

Size (NIA) Lease Demise Tenant Term Break Rent Review Rent Rent psf Comments sq m sq ft Start Expiry

Service charge cap of £12,634.89 reviewed annually by RPI. Landlord Ground Floor The British Red Cross 10 years 228 2,459 10/10/2016 09/10/2026 10/10/2021 10/10/2021 £22,000 £8.95 to top up the rent free. Schedule East Society of condition attached to the lease. Landlord to top up rent free

Ground Floor PrisWM Limited t/a 10 years 238.1 2,558 29/09/2013 28/09/2023 29/09/2018 29/09/2018 £33,500 £13.10 Fixed uplift from 29/9/2018 West Prismatical Limited

First Floor Vacant - 178.18 1,919 ------West

First Floor Unitel Direct Ltd 5 years 286.2 3,080 21/02/2013 20/02/2018 - - £22,725 £7.38 Subject to a schedule of condition East

Second Floor Turner & Townsend 5 years 287 3,090 28/03/2012 31/03/2017 - - £44,515 £14.41 East Group Ltd 3 days

Second Floor West Interbulk 9 years 430.59 4,635 19/11/2008 23/03/2019 - - £76,875 £16.59 (Tankcontainers) Ltd 4 months Third Floor West

Third Floor Interbulk 3 years Lease to run co-terminus with part 214.74 2,311 02/10/2015 23/03/2019 - - £14,500 £6.27 East (Tankcontainers) Ltd 5 months 2nd and part 3rd floor

Total 1,888 20,321* £214,115

*Total area includes shower facilities on the 2nd floor extending to 24.86 sq m (267 sq ft) GROUND FLOOR ENTRANCE The British Red Cross Society Turner & Townsend Group Ltd The British Red Cross Society is the United Company Number: 03154484 Kingdom body of the worldwide network Turner & Townsend is an independent International Red Cross and Red Crescent professional services company specialising in Movement. The society was formed in 1870 and programme management, project management, focuses on providing help for people in crisis, cost management and consulting across the both in the UK and Overseas. Today the charity property, infrastructure and natural resources employs approximately 3,500 people UK wide. sectors covering 36 countries through 87 offices.

Further information is available at www.redcross.org.uk 30.09.2015 30.09.2014 30.09.2013 Turnover £36,648,000 £40,566,000 £43,200,000 PrisWM Limited t/a Prismatical Limited Pre Tax Profit £2,158,000 £378,000 £3,500,000 Company Number: 08245318 Shareholder’s Fund £19,935,000 £18,208,000 £16,423,000 Prismatical Limited trade as Prismatic Thinking and specialise in two areas providing strategic Further information is available at www.turnerandtownsend.com advice recruitment and employee motivation and Prismatic Wealth providing independent financial Interbulk (Tankcontainers) Limited advisory services in areas such as Tax Planning, Company Number: 01171859 Life Planning, Estate and Retirement Planning. InterBulk is one of the world’s largest operators of tank containers for the movement of liquids 31.03.2015 31.03.2014 31.03.2013 and Europe’s leading provider of intermodal Turnover - - - ‘bag-in-box’ containers for the movement of dry Pre Tax Profit - - - bulk products. Shareholder’s Fund £6,618 £1,610 £100 31.03.2016 31.03.2015 31.03.2014 Further information is available at www.prismatical.co.uk Turnover - - - Pre Tax Profit - - - Unitel Direct Ltd Shareholder’s Fund £321,709 £300,147 £175,352 Company Number: 06936290 Further information is available at www.interbulkgroup.com Unitel Direct are an independently owned telecom, broadband and internet advertising company. Founded in 2009, Unitel provide services such as web design, Ecommerce web design, telephone and broadband packages and Internet marketing including search engine optimisation.

31.03.2016 31.03.2015 31.03.2014 Turnover - - - Pre Tax Profit - - - COVENANT Shareholder’s Fund £321,709 £300,147 £175,352

Further information is available at www.uniteldirect.co.uk OCCUPATIONAL MARKET

Teesdale Business Park forms the prime office pitch for the Tees Valley conurbation which has a population of 666,000 people. Since its inception in the mid 1990’s, Teesdale has attracted over 700,000 sq ft of development and a range of high profile occupiers including Serco, Barclaycard, Santander, Atkins, Turner & Townsend, Johnson Matthey and the NHS. We set out below a schedule of recent transactions on Teesdale Business Park:

Rent Address Tenant Date Term Size (sq ft) (Psf)

Progress Johnson £165,000 Feb 15 10 years 14,150 sq ft House Matthew PLC (£11.66 psf)

Scotswood £26,290 Support IT (UK) Mar 15 10 years 2,400 sq ft House (£10.95 psf)

Tower DTA Consulting £18,000 July 15 10 years 1,546 sq ft House Engineers (£11.64 psf)

Redheugh £13,200 Arup April 14 5 years 1,115 sq ft House (£11.83 psf) INVESTMENT MARKET

Property Date Price NIY Comments

Multi- let to tenants including Aecom, Sanlam Private Investments and III Acre, Under Offer £3.68m (Q) 10.50% (Q) Sopra Steria. WAULT of 5.09 years to expiry. Annual rent of £411,710 Teesdale Business Park increasing annually.

Multi-let to a strong tenant mix including British Polythene, Five Rivers Tower House, Marketing £1.149m (Q) 11.00% (Q) Childcare and Marston Group, with a total rent roll of £133,775 per annum. Teesdale South Business Park, Stockton WAULT of 4.3 years to expiry (3.3 years to break).

Onyx House, Teesdale Modern, high specification office building located at Portrack Lane, Stockton. August 2016 £1.3m 10.40% Business Park Fully let to Onyx Group at £146,000 per annum, expiring 15tj June 2019.

Two modern, three storey detached office pavilions let to Siemens Plc and Ashmore and Progress House, October 2015 £3.25m 10.70% Johnson Matthey Plc with a WAULT of 6.84 years to lease expiry and 3.27 Teesdale Business Park years to the first break option. Passing rent of £370,803.

Teesdale House, Westpoint Road, Fully let to NHS Property Services Limited on FRI terms from 29 January Teesdale Business Park, June 2015 £1.55m 9.72% 2013 until 25 June 2023. Break in Year 5. Stockton on Tees

Dunedin House, Thornaby, 62% let to tenant’s including Secretary of State and RBS. August 2014 £4.75m 8.54% Stockton on Tees Extending to 98,268 sq ft.

Teesdale House, Westpoint Road, Let to the NHS with 9.5 years to expiry at a passing rent of £159,440, Teesdale Business Park, April 2014 £1.305m 11.55% 4.5 years to break. Stockton on Tees

VAT EPC The property is elected for VAT. It is proposed the sale be EPCs and Recommendation reports are available treated as a transfer of a going concern (TOGC). upon request. INVESTMENT CONSIDERATIONS

- Prominent building on prime regional office park providing 20,321 sq ft of modern accommodation. - Entrance atrium and common areas have recently undergone extensive refurbishment. - Excellent parking ratio at a rate of 1:230 sq ft. - Opportunity to improve WAULT through continuing discussions with Turner & Townsend regarding a lease regear and commence talks with Unitel Direct. - Strong reversionary potential though letting of vacant suite. - Purchase price underpinned by low capital value psf.

PROPOSAL

Our client is seeking offers in excess of £1,550,000 (One Million Five Hundred and Fifty Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 13.02% after deduction of purchaser’s costs of 6.12%. OUR TEAM

Katy Paxton Gagan Jagpal Peter Atkinson Tel: 0191 223 5752 Tel: 0191 223 5709 Tel: 0191 223 5715 Email: [email protected] Email: [email protected] Email: [email protected]

DTZ Debenham Tie Leung Limited (the “Agents”) give notice to anyone who may read these particulars as follows: (1) These particulars are prepared for the guidance only of prospective purchasers. They are intended to give a fair overall description of the property only and do not constitute any part of an offer or contract. (2) Any information contained in these particulars (whether in the text, plans or photographs) is given in good faith but should not be relied upon as being a statement or representation of fact or that the property is in good condition or otherwise nor that any services or facilities are in good working order. (3) The photographs appearing in these particulars show only certain parts and aspects of the property at the time when the photographs were taken. Certain aspects may have changed since the photographs were taken and it should not be assumed that the property remains precisely as displayed in the photographs. Furthermore no assumptions should be made in respect of parts of the property which are not shown in the photographs. Any areas, measurements or distances referred to herein are approximate only. (4) Where there is reference in these particulars to the fact that alterations have been carried out or that a particular use is made of any part of the property this is not intended to be a statement that any necessary planning, building regulations or other consents have been obtained and these matters must be verified by any intending purchaser. (5) No person in the employment of the Agents has any authority to make or give any representation or warranty whatsoever in relation to this property. (6) This property is offered subject to contract and unless otherwise stated all rents are quoted exclusive of VAT. (7) Unless otherwise stated, no investigations have been made by or on behalf of the Agents regarding pollution, or potential land, air or water contamination. Interested parties are advised to carry out their own investigations as required. November 2016

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