Bernard Myers House

BERNARD MYERS HOUSE

4-6 HAVIL STREET | LONDON | SE5 7RU Building exterior INVESTMENT CONSIDERATIONS ￭ Freehold student accommodation property constructed in 2006. 121 en-suite rooms arranged predominantly as 6 bedroom cluster flats and 2 accessible studios. ￭ The property benefits from a nominations agreement with University of the Arts London for a further 18 years, subject to a mutual break at the end of the 2015/16 academic year. The agreement is for at least 97% of bedrooms. ￭ The asset is under-pinned by direct let rents which would be in the order of 15% higher than those currently passing under the nomination agreement. ￭ Located within close proximity to Kings College London and University of the Arts London campuses and a range of transport links. ￭ Planning permission for student accommodation in London Borough of Southwark remains challenging to secure which insulates values, drives rental growth and creates barriers to entry to the sector. ￭ Rare opportunity for representation in London, which, with a total of 41 universities, forms the largest concentration of higher education in Europe. ￭ Within London, only 62,351 (21%) students have access to purpose built student accommodation. There are 303,105 full time students in London (HESA 11/12). ￭ London is home to four of the world’s leading 75 institutions: University College London (4th), Imperial College London (5th), King College London (19th) and London School of Economics and Political Science (68th). (2013/14 QS World University Ranking). ￭ Forecast gross rent of £924,405 for the 2013/14 academic year and net rent of £715,305. ￭ We are instructed to seek offers in excess of £10,800,000 for the freehold interest in the Property, which reflects a net initial yield of 6.25% assuming purchaser’s costs of 5.80%.

Typical Kitchen LOCATION SITUATION London is the capital city of the United Kingdom, with excellent inter-city and international travel links. The Bernard Myers House is situated in Zone 2, within the London Borough of Southwark, south east London. The M25, which encircles the city, connects directly to routes to the North (M1, M11, M40), West (M4), South (M3, property is located on Harris Street, a predominantly residential street, with Southwark College to the north. M23) and East (M2, M20) of the country. The city is supported by eight main railway stations including Kings Cross St Pancras, which connects directly to mainland Europe via the Eurostar network. The property is well situated for a number of universities, including the University of the Arts London (Camberwell College of Arts & College of Communication), King’s College London (Denmark Hill Campus) The city is supported by several major international airports including Heathrow (17 miles), Gatwick (30 miles) and London Southbank University. and Stansted (37 miles). All are easily accessible via public transport, namely coach services and express train The nearest underground station to Bernard Myers House is Oval (Northern Line), which lies 1.4 miles (20 min routes. Heathrow is also linked directly to the London underground network via the Piccadilly Line (journey walk) to the west, whilst Denmark Hill Overground Station is a 15 minute walk to the south. time from Oval Underground Station approximately 66 minutes). The Property is also serviced by several bus routes; the 343 runs directly past the site, providing access up to London is the largest metropolitan area in the European Union and in demographic terms its population rate Elephant and Castle and on to New Cross; the 12 runs directly to Oxford Circus Station and the 36 to Hyde increased from 7,172,091 to 8,173,900 between 2001 and 2011; an increase of 14%. During this period the Park and Paddington Station (Source: Transport for London). population of Southwark increased from 244,861 to 288,300; an increase of 17.7%.

London is expected to remain at the forefront of the UK recovery given its concentration of service sectors companies. Growth output in London (nominal GVA) 2007 – 2011 was 12.40%, far out-stripping other UK ELEPHANT & CASTLE REGENERATION regions. In labour market terms, 374,000 jobs created in the UK between 2013 and 2018 are forecast to be Elephant & Castle is currently undergoing a major 15-year physical regeneration programme, led by within London, which equates to approximately 1 in every 4 jobs (ONS). Southwark Council and its commercial partner Lend Lease.

The master-planned redevelopment is budgeted at £3 billion and covers 170 acres. A large amount of post World War II social housing is to be demolished, including the Heygate Estate, to make way for up to 2,988 new homes (over 600 of which will be affordable).

On top of this, developments in Elephant & Castle will deliver:

￭ 7,000 new jobs (created on site construction and in new commercial space).

￭ Over £2.5 million invested in local employment and training.

￭ Central London’s largest new park in 70 years with a minimum area of 2 acres.

￭ Up to 50,000 sq ft of community space for uses such as a crèche, art gallery, museum, Council Chambers, library, community meeting rooms and provision for a new health facility of up to 5,000 sq ft.

￭ Up to 50,000 sq ft of leisure facilities for uses such as a gym, music hall and cinema.

￭ Retail floorspace including over 50 new shops.

￭ 50,000 sq ft of office and workspace.

￭ £2.6 million towards local transport improvements for pedestrians, cyclists and motorists. Typical Kitchen

95 Valan House

105 TRAVEL TIMES

147

1 DISTANCE/METHOD 13 117 2 LOCAL UNIVERSITIES PH AND JOURNEY TIME od rho hbou University of the Arts g ng ei si University of the Arts KCL London KCL N ou (College of H ce (Camberwell College) (Denmark Hill) South Bank (Guy’s Campus) ffi O 2.6m Communication)

Distance (miles) 0.4 miles 1.1 miles 1.5 miles 1.7 miles 2.2 miles 127 33 131 LB 133 135 18 minutes 29 minutes HAR Walking / Bus 7 minutes 16 minutes 16 minutes (bus) (bus) (bus) R

I 2.8m S 156

S 15

6a T 160 R EET Cycling 2 minutes 6 minutes 13 minutes 14 minutes 15 minutes PO

Source: Transport for London (TFL) Southwark College Camberwell Centre

ESS FROM OVAL FROM DENMARK HILL o 22 JOURNEY TIME (MINUTES) JOURNEY TIME 1 t UNDERGROUND STATION TO: OVERGROUND STATION TO: s House d Myer Bernar Play 4 to 6 Area Waterloo 6 minutes Clapham High Street 4 minutes

El Sub Sta 16

6 Elephant & Castle 8 minutes Wandsworth Road 6 minutes W o 24 ard 1 t

se St

ou 7 H 1 ll acy Bdy Rumba C 19 oleby 1 to London Bridge 11 minutes Clapham Junction 14 minutes Path ouse P Rill H

a 28

12 th 24

14 Embankment 19 minutes Canada Water 12 minutes 29 13 Close

allow

B 24

12 6 Piccadilly Circus 19 minutes Shoreditch High Street 24 minutes

13 32 16 157 Oxford Circus 21 minutes Hoxton 24 minutes

30 44

14 Bank 22 minutes Stratford 33 minutes

12 6 AD RO TON ING ELM

165 Victoria 23 minutes Highbury & Islington 36 minutes 1

2.6m 68 160

1 Paddington 30 minutes Camden Town 49 minutes

Not to scale - For indicative purposes only 70 Source: Transport For London (TFL) 1

158 173

156

1 52 1

0m 42 10m 20m 30m 11 9

DISTANCE/METHOD LOCAL UNIVERSITIES ROOM TYPE NUMBER OF BEDS SIZE (M2) BED SIZE AND JOURNEY TIME DESCRIPTION Bernard Myers House is a 2006 purpose built student accommodation block of part 3, 4 and 5 storeys. The University of the Arts scheme provides 123 en-suite bedrooms: 121 cluster bedrooms arranged predominantly as 5 bedroom flats University of the Arts KCL London KCL (College of and 2 accessible self contained studio units. All rooms include a 4ft bed, en-suite bathroom, desk, wardrobe (Camberwell College) (Denmark Hill) South Bank (Guy’s Campus) Classic Studio 2 20 ¾ Communication) and storage facilities. Each room has a data point for a wired internet service. Each flat benefits from a shared kitchen and lounge area. Distance (miles) 0.4 miles 1.1 miles 1.5 miles 1.7 miles 2.2 miles The ancillary facilities on-site include; management office, laundry and vending machines. The Property is Classic En-suite 121 12.5 ¾ secured by gated entrances, digital CCTV coverage as well as out of hours duty manager cover. There is a 18 minutes 29 minutes Walking / Bus 7 minutes 16 minutes 16 minutes (bus) cycle store for 44 bicycles. (bus) (bus) Total 123

Cycling 2 minutes 6 minutes 13 minutes 14 minutes 15 minutes

Source: Transport for London (TFL)

FROM OVAL FROM DENMARK HILL FLOOR PLANS JOURNEY TIME (MINUTES) JOURNEY TIME UNDERGROUND STATION TO: OVERGROUND STATION TO:

Waterloo 6 minutes Clapham High Street 4 minutes

Elephant & Castle 8 minutes Wandsworth Road 6 minutes

London Bridge 11 minutes Clapham Junction 14 minutes

Embankment 19 minutes Canada Water 12 minutes

Piccadilly Circus 19 minutes Shoreditch High Street 24 minutes

Oxford Circus 21 minutes Hoxton 24 minutes GROUND FLOOR PLAN Not to scale - For indicative purposes only

Bank 22 minutes Stratford 33 minutes

Victoria 23 minutes Highbury & Islington 36 minutes

Paddington 30 minutes Camden Town 49 minutes

Source: Transport For London (TFL) Building Exterior Building Exterior LONDON STUDENT MARKET The capital has experienced significant growth in student numbers over the past 10 years recording a full time With a total of 41 universities, London has the largest concentration of higher education in Europe. According student population growth rate of 34% (HESA – based on available data) during this period. Over the same to the 2013/2014 QS World University Ranking, London is home to four of the world’s leading 75 institutions: period, the international student population has increased by 61%. Just 21% of full time students currently have University College London (4th), Imperial College London (5th), King College London (19th) and London School access to purpose built student accommodation. of Economics and Political Science (68th). UNIVERSITY OF THE ARTS LONDON (UAL) UAL is a world-leading university for teaching and research in the fields of art, design and communication.

UNIVERSITY PROFILE 41 UNIVERSITIES STUDENT NUMBERS With over 20,000 further and higher education students spread through 14 sites around central London, it is Europe’s largest arts university. The five component colleges became six when Wimbledon College of Art Total 612,715 joined in 2006, bringing an international reputation in theatre design and the UK’s largest school of theatre. Full-time 303,105 UAL’s Camberwell College of Arts has established a reputation for high quality teaching in art and design. UG FT 225,980 75% of FT Specialist areas in fine art include Book Arts, Drawing, Painting, Photography, Printmaking and Sculpture. Student Numbers (HE) PG FT 77,125 25% of FT Design areas include Graphic Design, Illustration and 3D Design. On top of this Camberwell is a world centre Total International 106,285 for conservation. EU 36,435 34% of International Non-EU 69,850 66% of International UAL received Privy Council approval for university status in 2003 and in the last 5 years of available figures, there has been a 13% increase in full time students and a 38% increase in international students. University 36,126 58% Purpose Built Student Direct Let (Private) 26,225 42% KING’S COLLEGE LONDON (KCL) Accommodation (PBSA) KCL is one of the oldest and largest of London University’s colleges. It is Europe’s largest centre for the Total PBSA 62,351 education of doctors, dentists and other healthcare professionals and home to six Medical Research Council

Supply / Demand Dynamics Supply vs Demand 62,351 / 303,105 21% centres. Once known primarily for science, KCL now excels in a wide range of subjects in nine schools of study. Four language schools were rated as internationally outstanding in the latest research assessments. *Source: HESA 2011/12 / Savills KCL’s Denmark Hill Campus houses the Institute of Psychiatry, as well as further medicine and dentistry courses.

LONDON SOUTH BANK UNIVERSITY STUDENT NUMBERS (HE) FOR SELECTED UNIVERSITIES ACROSS LONDON The main South Bank campus is in Southwark, near the Elephant and Castle roundabout. It includes the Centre TIMES GUARDIAN for Efficient and Renewable Energy in Buildings, a unique teaching, research and demonstration resource for TOTAL UNIVERSITY BOROUGH TOTAL FULL TIME UG FT PG FT RANKING RANKING low carbon technologies, and the UK’s first inner city green technology research centre. The University now INT. 2013 2013 trains 40% of London’s nurses and is ranked first for occupational therapy, second for mental health nursing, University adult nursing, diagnostic radiography, and therapeutic radiography in NHS London’s quality assessments. Camden / of the Arts, 17,300 15,715 13,925 3,375 7,110 60 53 Southwark London LONDON BOROUGH OF SOUTHWARK SUPPLY / DEMAND PROFILE The three main universities within Southwark are King’s College London (Guy’s & St Thomas Hospital Campus London and Denmark Hill), London South Bank and the University of the Arts (London College of Communication and South Bank Southwark 23,350 13,190 18,275 5,075 2,055 111 104 University Camberwell Campus). Students attending the three main universities in the Borough are likely to provide the primary demand Kings College Southwark 26,460 19,215 15,755 10,705 6,660 22 31 for student accommodation. There are 26,120 full time students currently studying within the Borough London (Source: HESA 11/12 and University admission office). There are 7,379 purpose built bed spaces in Southwark. 2,519 (34%) of those beds are provided by the University of Westminster 21,500 15,460 16,665 4,840 5,420 95 93 private sector and 4,860 (65%) are provided by universities. The existing stock represents a provision level of Westminster 28% within the Borough. *Source: HESA 2011/12 There are 1,852 bed spaces within the planning pipeline in Southwark. STUDENT SUPPLY / DEMAND IN SOUTHWARK LOCAL PRIVATE RENT COMPARABLES TABLE

TERM RENT OPERATOR HALL AGE ACCOMMODATION LENGTH PER WEEK 19% (WEEKS)

Single En-suite 40 £167 Julian Markham House 2004 10% (Noms to KCL) 65% UNITE Studio 40 £199

Moonraker Point Single En-suite 51 £211.77 7% 2012 (Noms to KCL) Studio 51 £273.75

Standard Plus 51 £165

Large 51 £170 ￭ University Beds ￭ Private Beds ￭ Planning Pipeline ￭ HMO’s / With Parents

Recent Studio Standard 51 £205 University of the Camberwell Campus, extensive Source: HESA 2011/12, University Admission Offices, Local Planning Authority Portal / Savills Arts Peckham Road rebuild and refurbishment Studio Standard Plus 51 £220

Studio Large 51 £230

Studio Extra Large 51 £254

Standard En-suite 51 £179.50

Premium En-suite 51 £187.50 (Double Bed)

51 £199.50

Collegiate AC Academic House 2013 Standard Studio

44 £209.50

51 £250

Premium Studio

42 £250 Typical Bedroom LOCAL PRIVATE RENT COMPARABLES TABLE PLANNING IN THE LONDON BOROUGH OF SOUTHWARK INCOME Planning permission was granted on 28 June 2005 under case number TP/2229-H for ‘Construction of a There is a nomination agreement with the University of the Arts London (UAL) expiring at the end of the TERM part 3, 4 and 5 storey block for student accommodation only.’ 2030/31 academic year for at least 97% of the bedrooms. Under the agreement the University pays weekly RENT OPERATOR HALL AGE ACCOMMODATION LENGTH PER WEEK rents at £148.10 for en-suite bed spaces and £192.79 for studio units, for a fixed term contract of 51 weeks. This (WEEKS) The London Borough of Southwark takes a cautious view with regard to student residential proposals and amounts to a gross rent of £905,586 for the 2013/14 academic year. Either party may give written notice to the this reflected in their proposed CIL charge of £400 per sqm within the central areas of the Borough (due other at any time of its desire to terminate this agreement at the end of the 2015/16 operating year. Rent under Single En-suite 40 £167 for adoption late 2013 / early 2014). the nomination agreement is reviewable annually and is to the higher of a 3% increase in prior rent passing or an Julian Markham House 2004 indexed rent, a sum calculated in accordance with the following formula: (AxB)/Cx1.01 where A = rent payable (Noms to KCL) In addition, the Council’s view is that student residential schemes are taking sites away from the delivery prior to the review date; B = the RPI figure published in July 14 months before the review date; C = the RPI UNITE Studio 40 £199 of affordable housing and as a result the Council will require 35% of the rooms to be provided for figure in July 26 months before the review date. affordable housing. Moonraker Point Single En-suite 51 £211.77 2012 The projected sundry income is £18,819 for 2013/14. (Noms to KCL) Studio 51 £273.75 It is therefore considered challenging to secure new permissions for student accommodation in the The nomination agreement is subject to a service level agreement and we are of the opinion that the asset can Borough and in our view, such barriers to entry will insulate the value of existing stock and drive rental Standard Plus 51 £165 be managed at a per bedroom rate of £1,700 per annum which equates to £209,100. growth. Student housing development is also increasingly being priced out in competition against residential developers. The net rent for 2013/14 is therefore projected to be £715,305. Large 51 £170 We are of the opinion that if the bedrooms were direct let to students the estimated rental value for en-suite cluster bedrooms and studios would be in the order of £170 per week and £200 per week respectively, which Recent Studio Standard 51 £205 under-pins the value of the asset. University of the Camberwell Campus, extensive Arts Peckham Road rebuild and The latest financial accounts date for the University of the Arts London was on 31st July 2010, where a tangible refurbishment Studio Standard Plus 51 £220 net worth of £160,056,000 and turnover of £211,905,000 was recorded. The University has an undisclosed financial strength and a risk indicator of 1, which represents a minimum risk of business failure.

Studio Large 51 £230

BEDROOM BEDROOMS TERM RENT PER WEEK OCCUPANCY RENT Studio Extra Large 51 £254

Cluster 121 51 £148.10 97% £886,507 Standard En-suite 51 £179.50

Premium En-suite Studio 2 51 £192.79 97% £19,075 51 £187.50 (Double Bed)

Sundry Income £18,819 51 £199.50

Collegiate AC Academic House 2013 Standard Studio Total Gross Income £924,405 44 £209.50

51 £250 Management Costs -£209,100

Premium Studio

42 £250 Total Net Income £715,305 Typical Bedroom TENURE The property is held Freehold.

EPC The Energy Performance rating for the property is C (66).

DATA ROOM Please register at www.savills.com/bernardmyershouse for more information

SDLT There may be the potential to claim Multiple Dwellings Relief and we would advise seeking the appropriate professional advice in this regard.

VAT No VAT is chargeable on this transaction.

PROPOSAL We are instructed to seek offers in excess of £10,800,000 for our client’s freehold interest in the Property, which reflects a net initial yield of 6.25%, assuming full purchaser’s costs of 5.80%.

CONTACTS Marcus Roberts James Hanmer Will Hyslop Lizzie Whetman [email protected] [email protected] [email protected] [email protected] M: 07807 999 187 M: 07967 555 897 M: 07812 965 456 M: 07807 999 174

Viewing: Strictly by appointment with Savills. 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. Savills (UK) Ltd 2: Any areas, measurements or distances are approximate. The text, 33 Margaret Street photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all London W1G 0JD necessary planning, building regulation or other consents and Savills 020 7499 8644 have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise. 10/13 303722 savills.co.uk