GRADE A OFFICE INVESTMENT LET TO UNDOUBTED COVENANT OF BELIEVE HOUSING LIMITED 0191 261 2361 FOR 15 YEARS avisonyoung.co.uk/15309

SPECTRUM 4 SPECTRUM BUSINESS PARK, SR7 7TT

BUSINESS PARK SAT NAV BUSINESS PARK @spectrumbizpark SR7 7TT www.spectrumbusinesspark.co.ukBUSINESS PARK Executive Summary - 15 years to Believe Housing Limited

• Let on an agreement to lease to Believe Housing • Personal concessionary passing rent of £208,321 Ltd, an undoubted covenant, and social housing per annum (£5.95 per sq ft) which changes provider to . It manages, throughout the term finishing in year £243,373 maintains, administers and develops, what was per annum (£6.95 per sq ft). A higher rent is until 2015, Durham County Council’s social housing reserved under the lease which if assigned portfolio, comprising approximately 18,500 homes increases the passing rent to £418,393 per annum located across the whole of (£11.95 per sq ft) • A detached 3 storey Grade A office completed • We are instructed to invite offers of £2.95 million in 2008, extending to 3,253 sq m (35,012 sq ft) (Two Million Nine Hundred and Fifty Thousand with 129 car parking spaces Pounds) for our client’s freehold interest. A purchase at this level will reflect a net initial yield on the • Located on a site extending to 0.856 hectares concessionary rent of 6.65% in Years 2-9 6.08% (2.117 acres) with 129 car parking spaces rising from Year 10- 7.2% and Year 12- 7.47% and • Situated in an area benefitting from significant from Year 13 onwards 7.75% commercial development and well placed for retail • Yields have been calculated net of purchase costs and leisure facilities taken at 6.4%. On a capital value basis, this figure • 15 year full repairing and insuring lease without reflects a very low rate of £85 per sq ft break option, which is expected to commence in December 2019 following the completion of Landlord’s works to renew air conditioning

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BUSINESS PARK Seaham SR7 7TT Location

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BUSINESS PARK A1

A1068

Ashington Newbiggin- by-the-Sea Morpeth A189

LocationA1 Blyth Cramlington

Seaham is an attractive coastal NEWCASTLE INTERNATIONAL A1 AIRPORT A19 town located in County Durham, Tynemouth approximately 15 miles south east South Shields A69 TYNE of , 10 miles NEWCASTLE TUNNEL UPON TYNE east of Durham and 20 miles north A1 Gateshead A1018 of . The town benefits A19 from excellent road communications A194(M) A692 with the A19 dual carriageway located 65 A1231 Washington approximately 1.5 miles to the west, Stanley 64 A19 providing easy access to the main 63 Chester- le-Street conurbations in the region. The A1(M), A1(M) Houghton- le-Spring SEAHAM the region’s other main other arterial A167 A690 A691 A182 route, is situated 7 miles to the west. Sea front walkway

62 A19 Easington Durham

61 A167

Hartlepool A1(M)

Sedgefield A19 Seaton Carew A689 60 A689 Bishop A689 Auckland

Redcar Newton A167 Aycliffe

59 MIDDLESBROUGH Stockton- A167 on-Tees 58 Transport links A66 Guisborough A67 A19 A66(M) 57 INTERNATIONAL AIRPORT A1(M) BUSINESS PARK BUSINESS PARK

BUSINESS PARK The local demographic provides an excellent source of available labour, with over 1.1 million Location people living in the recruitment catchment that occupiers at Spectrum can draw from.

Seaham benefits from its own railway station, which forms part of the regional network and connects with Sunderland and Newcastle Central Stations. These in turn connect to the East Coast main rail line passing between and Edinburgh and the Tyne & Wear Metro system.

The town is conveniently situated between two airports, with Newcastle International Airport positioned approximately 25 miles to the north west and Teesside International Airport approximately 25 miles to the south.

Rail Metro

Newcastle International Airport Teesside International Airport

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BUSINESS PARK Seaham is one of Durham County Council’s Location key employment sites with support from Business Durham.

Seaham has benefitted from significant commercial regeneration in the last few years with the opening of Byron Place Shopping Centre, a scheme anchored by a 42,000 sq ft foodstore with other occupiers including an Argos, Wilkinsons, Subway, Farm Foods, Greggs, Specsavers, Home Bargains and a newly completed Costa.

Asda Food Store Byron Place

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BUSINESS PARK The workforce in this catchment area is young Location with 15.5% of the total available workforce being in the 16-24 year old age bracket.

Approximately 1.5 miles to the west lies Dalton Park outlet shopping centre, the North East region’s prime outlet shopping facility comprising over 300,000 sq ft of retail and leisure space. Occupiers include M & S, Next, Nike, Adidas, Holland & Barratts, Starbucks and McDonalds.

Phase 2 of the Dalton Park development was completed in Q1 2017 by Bowmer and Kirkland. The development includes a six screen Cineworld cinema, Frankie & Benny’s, Pizza Express, Prezzo, KFC. The development also includes a family public house.

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BUSINESS PARK Private service sector organisations are the Location principal employers in the area.

Seaham is served by a good range of leisure facilities. Immediately north west of the town centre is Hotel and Spa, a 5 star hotel complex set in a 37 acre estate. The town boasts two popular golf clubs, Seaham Harbour Club and Sharpley Country Golf Club, both within 2 miles of Spectrum Park.

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BUSINESS PARK Major employers in Seaham include Res Q, Northumbrian Water, UMi, Seaham Harbour Dock, Location DWP, Durham County Council and Andrew James Worldwide.

Foxcover Distribution Park, Seaham’s most modern high specification industrial estate is situated 300 yards to the west. The development extends to 620,000 sq ft of mainly distribution space constructed in the mid to late 2000’s with units ranging from 30,000-132,000 sq ft. The estate benefits from full occupation. Major occupiers include Interserve, Yearsley Group, Metromail, Robertson Group, Sofa Workshops and Lightweight Containers. Foxcover Distribution Park Seaham Harbour, a working port facility, has recently been refurbished and redeveloped by Seaham Harbour Dock Company and Durham County Council. A £3.2M scheme to upgrade the North Dock completed in 2013 and included the creation of a flagship building “The Waterside” comprising 12 commercial units, floating pontoons to accommodate 77 leisure craft, reinstatement of the dock gates, refurbishment of the slipway and improved public access.

The nearby retail and leisure facilities and marina together with beaches, sea front walkways and a selection of new tourist shops Seaham Harbour Seaham Harbour Commercial Units overlooking a green, collectively provide an attractive working environment. www.seahammarina.com.

Most recently in Q1 2019 planning permission has been granted to JV Partners, Tolent and Home Group to construct a 1,500 unit residential development with complimentary buildings on a site immediately south of Spectrum Park. The scheme will be built over a 10 year period and increase the critical mass, transport links and employment attraction of the subject area. Sea front walkway

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BUSINESS PARK Situation

VivaRail To A19 & Dalton Park Retail Outlet Kiddie Products MRC Global A182 Brewery DWP

1st & 2nd floors Andrew James Worldwide To Town Centre Ground lets to EDBS 7 UNDER OFFER 3 RES Q & Shopping Centre Orbis A182 6 UMI & GREAT ANNUAL SAVINGS 8 DURHAM COUNTY COUNCIL 4 BELIEVE HOUSING

Sunderland to Teesside 5 NORTHUMBRIAN WATER Railway Link

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BUSINESS PARK Situation

Spectrum 4 is located to the north west corner of Spectrum Housing Business Park, approximately ½ mile south of Seaham town centre and the Byron Place Shopping Centre. The building Proposed benefits from unobstructed views toward the sea and marina retail convenience Potential 330 area. The park has immediate access to the A182 highway linking units car parking spaces with the A19 dual carriageway, 1.5 miles to the west. NORTHUMBRIAN WATER 5 The adjacent half acre site, formerly used as a bus turning circle is now in the ownership of the Developer of the Park and is being DURHAM COUNTY COUNCIL 8 marketed for retail food units aimed at serving the occupiers BELIEVE HOUSING 4 on the park.

Ground lets to EDBS 1st & 2nd floors 6 UNDER OFFER Spectrum Business Park is served by good bus connections

UMI & GREAT to Seaham, Sunderland, Teesside and the wider area with the 7 ANNUAL SAVINGS X6, X7, 60, 202 and X21 routes all stopping at the business park. RES Q 3 Schedule times are provided on Spectrum’s web site.

The business park was constructed between the mid 2000’s and 2010 and alongside the adjoining Lighthouse View estate, comprises nine Grade A out of town office buildings, providing

Andrew James a total of 35,767 sq m (385,000 sq ft) of accommodation, DWP ranging in size from 2787 to 6584 sq m (30,000 to 70,878 sq ft). Tenants include Durham County Council, DWP, James Andrew Worldwide, Res Q, Northumbrian Water, Great Annual Savings, EDBS, Room 501 Publishing Company, Sitex Orbis, Kidd MRC Transmark and national support organisation UMi. Further information is provided on the park’s website, www.spectrumbusinesspark.co.uk

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BUSINESS PARK Description

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BUSINESS PARK Landlord’s works being undertaken prior to tenant fit out Description

The property comprises a detached Grade A office building constructed in approximately 2008 over three floors situated on a total site extending to checking 2.117 acres (0.856 Hectares). The site cover by footprint is approximately 12.5% of net developable area. The building is of frame construction clad in composite panelling incorporating double glazed tinted windows. The building is surmounted by insulated metal sheet roofs.

The property is designed in a rectangular shape with central enlarged entrance and reception area leading to passenger lift, stairs, male, female and disabled WC’s as well as shower and cleaning facilities.

Internal specifications include the following:- • New ceiling mounted fan coils providing heating and cooling; • Raised access floors with 225mm void; • Suspended ceiling incorporating LE3 lighting; • Excellent 3M finished floor to ceiling height; • Eight person passenger lift

The building, although let to a single tenant, is capable of being let floor by floor or in separate wings. The property allows separate control of heating and cooling to each wing. There is extensive riser space allowing easier fit out and external areas for additional plant.

Estate roads on the park are adopted. The demise of each building extends to the roads and paths and therefore there are very few common areas.

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BUSINESS PARK Accommodation

Spectrum 4 Spectrum 4 provides the following net internal floor areas.

Floor (car parking) NIA sq m NIA sq ft

Ground Floor 1,065 11,462

First Floor 1,094 11,775

2nd Floor 1,094 11,775

Total 3,253 35,012 Tenure Freehold.

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BUSINESS PARK Tenancy

The entire property is pre-let to Believe Housing Ltd by way of an agreement to lease documents and new lease 15 years without break to commence from completion of Landlord’s works anticipated to occur in December 2019. The lease will be drawn on full repairing and insuring terms and reserve a rent of £418,393 per annum (£11.95 per sq ft) subject to an upward only review at Year 10 to market rent.

Whilst Believe Housing Ltd remain a tenant a personal discounted stepped rent has been documented by side letter and will apply as follows: -

Year 1 £208,321 per annum (£5.95 per sq ft)

Years 2-9 £190,815 per annum (£5.45 per sq ft)

Years 10-11 £225,827 per annum (£6.45 per sq ft)

Year 12 £234,580 per annum (£6.70 per sq ft)

Years 13-15 £243,373 per annum (£6.95 per sq ft)

If the reserved rent increases on rent review, the discounted rent increases proportionately.

The staggered concessionary rent varies between £5.45 and £6.95 per sq ft. This level compares very favourably with rents passing at Doxford International Business Park , Sunderland (£10.50 - 13.00 per sq ft) and offices at Rainton Bridge, Sunderland where transactions have been agreed at between £12.50 and 13 .00 per sq ft.

It is anticipated there will be a full 15 years unexpired on the lease at the time of sale. The property will be sold off the concessionary rent. Landlord’s works being undertaken prior to tenant fit out

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BUSINESS PARK Covenant

Believe Housing limited were registered in April 2019 under the The tenant has moved from a single floor in Spectrum 6 into whole Co-operative and Community Benefit Act 2014 ( registration No 8076). of Spectrum 4 showing strong commitment to the park. The property The company was previously known as County Durham Housing Group is to be used as its HQ with maintenance work moving in house. Limited, a non-profit making company which derived from Durham The consolidated accounts of County Durham Housing Group Limited County Council. which are effectively the latest accounts for Believe Housing limited The four constituent parts of the group,Durham Housing, Dale and are provided below. Further information can be provided on request. Valley Housing, Durham City Homes and East Durham Homes now act as a single social housing provider under the name of Believe housing limited. Believe Housing now manage, maintain, administer and develop, what was until 2015, Durham County Council’s social Housing portfolio comprising approximately 18,500 homes located across the whole of county Durham.

Year Ending Turnover Operating Surplus after Tax Tangible Fixed Assets Cash in the Bank

April 2018 £67.6M £24.7M £162.5M £29.5M

April 2017 £68.3M £11.6M £146.3M £14.86M

As part of the reorganisation Durham County Council have the right to have a minimum of two employees on the board of Believe Housings limited. We consider the company provide a undoubted covenant with strong links to Durham county Council.

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BUSINESS PARK Market Commentary

The office environment and facilities at Spectrum Business Park Demand for well let out of town properties having leases of 10 years have significantly improved over the years since the properties were or longer to undoubted covenants remains very strong as investors look developed and this has been reflected in the significant take up over to secure income producing assets. this period. These facilities include a new ASDA Supermarket, Shopping Spectrum 8 situated on the subject park comprising 30,000 sq ft and let centre, new housing and redeveloped marina with updated beach and to Durham County Council for 12.5 years at £358,000 per annum (£11.95 walkways. The last three years approximately 150,000 sq ft has been let. per sq ft) was marketed by Avison Young (then GVA) in Q2 2018. Offers Most recent occupiers taking space include Andrew James Worldwide, were received in excess of the asking level of £5.2 million (£173 per Northumbrian Water, Aspen Wolf Recruitment along with Res Q. sq ft). This property is very comparable to the subject building in size, specification and lease length. However the subject property offers the opportunity to buy at a significantly lower capital value per sq ft.

Landlord’s works being undertaken prior to tenant fit out

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BUSINESS PARK Additional Information

Environmental Warranties Proposal The buildings were designed by Ryder We are instructed to seek offers of £2.95 million The whole of Spectrum Business Park was Architecture, with the main contractor being (Two Million Nine Hundred and Fifty Thousand formerly part of the Colliery site Mansell, (now Balfour Beatty) and sub- Pounds) for our client’s freehold interest with which closed in 1991. As part of the National contractor NG Bailey. A package of design and the benefit of a lease to Believe Housing Ltd. Coalfields programme, run by English construction warranties will be assigned to A purchase at this level will reflect the following Partnerships, the entire site was reclaimed by the purchaser. net yield profile : - Durham County Council in 1997. Reclamation works involved the removal of all potentially VAT Year 1 6.65% contaminated materials from the previous Years 2-9 6.08% activities on site and re profiling of the site The property is VAT registered. Subject to the areas to create developable plots. tax status of the purchaser it is expected that Years 10-11 7.20% a transaction will be treated as a Transfer of a Subsequently the A182 South Seaham Going Concern and therefore purchase costs Year 12 7.47% Link Road was created to provide rapid will be at the normal rate of 6.44%. Years 13-15 7.75% connectivity to the A19 and the development land at Spectrum was brought forward Capital Allowances by the North East’s regional development No capital allowances are available. Standard purchaser costs being deducted agency, One North East (Now HCA). Full site at 6.44%. investigation reports undertaken by ARC. EPC This price reflects a very low capital value Environmental are available on request. The building benefit from the excellent EPC of £85 per sq ft. rating of ‘B’. A new EPC will be issued on completion of Landlord’s works.

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BUSINESS PARK Seaham SR7 7TT Connect with Spectrum www.spectrumbusinesspark.co.uk @spectrumbizpark

Further Information

0191 261Further 2361 Information avisonyoung.co.uk/15309

Simon Beanland Jamie Sim Direct Dial: 0191 269 0512 Direct Dial: 0191 269 0062 Email: [email protected] Email: [email protected]

Avison Young is the trading name of GVA Grimley Limited. © 2019 GVA Grimley Limited 1) Avison Young hereby gives notice that the information provided (either for itself, for any joint agents or for the vendors lessors of this property whose agent Avison Young is )in this brochure is provided on the following conditions: 2) 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. 3) 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. 4) No person in the employment of Avison Young, 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. 5) All prices quoted are exclusive of VAT. 6) Avison Young shall have no liability whatsoever in relation to any documents contained within the brochure or any elements of the brochurewhich were prepared solely by third parties, and not by Avison Young. which were prepared solely by third parties, and not by Avison Young.Designed by www.creativestreakdesign.co.uk. Ref 1517. BUSINESS PARK BUSINESS PARK

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