Palace-House-Brochure-FINAL-Mar
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PALACE HOUSE 3 CATHEDRAL STREET SOUTH BANK SE1 Prime long let freehold investment opportunity Contents INVESTMENT Summary 04 / 05 Location 06 / 13 Connectivity 14 / 15 Local Occupiers 16 / 19 Local DEVELOPMENT pIPELINE 20 / 21 Description 24 / 25 Specification 26 Accommodation 27 Floor Plans 28 / 29 Tenure and TENANCY 30 / 31 Covenant Information 32 Asset Management 33 SOUTH BANK MARKET 34 / 35 Contact & FURTHER INFORMATION 36 / 37 01-02 INVESTMENT SUMMARY Freehold. Located in the thriving South Bank district adjacent to Borough Market. London Bridge station is within a five minute walk from the property. Currently under refurbishment by Kaplan, the property comprises 45,012 sq ft (4,182 sq m) of accommodation arranged over ground and five upper floors. The accommodation includes 43,083 sq ft (4,002 sq m) of office and ancillary accommodation and a retail unit at part-ground and part-first floor extending to 1,929 sq ft (179 sq m). The office space is single let to Kaplan Estates Limited guaranteed by Kaplan UK Limited, a 5A1 rated company, for a term of 15 years expiring 31st August 2032, with a tenant option to determine on 31st August 2027. The overall passing rent of the office accommodation is £2,453,165.50 per annum (£57.76 per sq ft). The retail unit is let to Nero Holdings Limited t/a Caffè Nero for a term of 15 years from 11th June 2007 expiring 10th June 2022. The rent payable is subject to a minimum base rent of £150,000 per annum and an additional turnover rent (if applicable). Title includes St Mary Overie’s Dock and the surrounding walkways which are held leasehold from the Equitable Life Assurance Society (ELAS) for a term of 91.25 years at a peppercorn rent. The total rent passing is £2,603,165.50 per annum (£58.63 per sq ft overall). The weighted average unexpired lease term is 14.07 years to lease expiry and 9.36 to earliest break. Headline rents on the South Bank in excess of £70.00 per sq ft with very limited supply of stock coming forward. Asset management opportunities to better utilise the undercroft parking as retail or leisure use taking advantage of the heavy footfall from nearby Borough Market and longer term redevelopment potential. Offers are sought in excess of£55,400,000 , subject to contract and exclusive of VAT. A purchase price at this level reflects anet initial yield of 4.4% and a capital value of £1,231 per sq ft, assuming purchaser’s costs of 6.78%. PALACE HOUSE 04–05 IMAGES CLOCKWISE FROM BELOW: – SOUTHBANK CENTRE – CARAVAN (GREAT GUILDFORD ST) – CITY HALL AND TOWER BRIDGE The South Bank is home to a number of London’s most popular attractions including the London Eye, London Bridge and Borough Market as well as amenities along the river which attract SIGNIFICANT footfall. OVERVIEW Palace House is located on Cathedral Street in the thriving South Bank district of London adjacent to Borough Market and within a five minute walk of London Bridge which connects the South Bank to the City of London on the North Bank. Cathedral Street is an attractive cobbled pedestrianised street linking Montague Close and Clink Street. The property has a river frontage via St Mary Overie’s Dock, home to the Golden Hinde. CONNECTIONS The property benefits from excellent transport links. London Bridge station is within a five minute walk from Cathedral Street which provides access via the London Underground to Canary Wharf within six minutes, Bond Street in the West End within eight minutes and King's Cross within 11 minutes. The City and the Bank of England are a short walk across London Bridge. REGENERATION There has been significant investment into regenerating the South Bank and the success of schemes such as Sea Containers House (pre-let to Oglivy and Mather), South Bank Central (pre-let to WeWork and DNV) and 240 Blackfriars Road (let to UBM and Boodle Hatfield amongst others) has helped cement the area as one of London’s fastest growing districts and most culturally diverse. OCCUPIERS The area continues to attract a mix of occupiers, ranging from multinational corporations to occupiers from sectors including media & tech, professional services, the public sector, serviced offices and banking. Large future developments such as Bankside Quarter (Temasek, Native Land and Amcorp Properties), Elizabeth House (HB Reavis) and eventually the redevelopment of Colechurch House near London Bridge station will further enhance the locality and its surrounds. Strong occupational demand for South Bank has ensured it is one of London’s fastest growing sub-markets. The lack of prime Grade A space and continued shortage of supply ensures the South Bank now receives unprecedented interest from developers and occupiers alike as a consequence, particularly properties which are close to the river. LOCATION PALACE HOUSE 08–09 Borough Market With the earliest known records dating back to 1276, Borough Market is London’s Oldest Food Market. It has been trading on the current site since 1756 and this extraordinary heritage makes it one of the most exciting attractions south of the river. Borough Market is a source of British and International produce, and is London’s most renowned food and drink market. The market’s stalls, shops and restaurants reflect London’s status as a global city, with traditional British produce sitting alongside regional specialties from around the world. It attracts significant numbers of locals and tourists, especially on weekends and remains one of London’s most visited attractions. LOCATION PALACE HOUSE 10-11 St Mary Overie Dock and the Borough Golden Hinde YARDS St Mary Overie Dock is home to The Golden Hinde an English galleon best known for her circumnavigation of the globe between 1577 and 1580, captained by Designed by the award-winning practice SPPARC Architecture, the Sir Francis Drake. This is the one full size replica still 190,200 sq ft Borough Yards scheme is scheduled to open in early in existence in London, located within the tenure of 2020. In addition to office accommodation, Borough Yards will provide Palace House. Over 100,000 sq ft of new retail on more than 115,600 sq ft (10,740 sq m) of retail and leisure space. The Golden Hinde replica dates from 1973 and since Clink Street to include 35 retail The Office Group will occupy Thames House and an adjacent building, then she has travelled more than 140,000 miles taking a total of 68,500 sq ft (6,364 sq m), while the new building will (225,000 km). She has been in St Mary Overie Dock incorporate a 6,100 sq ft (567 sq m) Everyman cinema. since 1996 where she is open to the public hosting a units and 10 restaurants range of educational programmes. The project involves the redevelopment of former wine-tasting venue Vinopolis and neighbouring sites, which front onto the pedestrian path linking the Tate Modern to the west with Borough Market, London Bridge Station and The Shard, close by to its east. As part of the redevelopment, a new pedestrian lane (Dirty Lane) will create access from Park Street to Bank End. Borough Yards will re-introduce some of the area’s original Elizabethan street names, such as Clink Yard and Soap Yard, celebrating the site’s heritage. Winchester Palace Winchester Palace was one of the largest and most important buildings in medieval London. Founded in the 12th century by Bishop Henry de Blois, brother of King Stephen, it was built to house the bishops in comfort when they visited London. The remaining ruins which form part of the old Great Hall, some of which are incorporated into the fabric of the building of Palace House, were revealed in the 1980s and are protected by English Heritage. LOCATION PALACE HOUSE 12–13 CONNECTIVITY Palace House benefits from the following excellent transport connectivity; BANK KING’S CROSS 15 minutes ST PANCRAS CITY AIRPORT 19 minutes 24 minutes CANNON STREET MONUMENT 10 minutes 7 minutes BOND STREET CANARY WHARF 16 minutes 12 minutes Infrastructure Improvements London Bridge reopened in January 2018 marking the completion of P the £1bn redevelopment after more than five years of work. Since work began in 2013, London Bridge has been transformed by Network Rail as part of the government-sponsored Thameslink Programme, while remaining open for the 50 million passengers that use London’s oldest station each year. The vast new concourse, larger than the pitch at Wembley, unites all fifteen platforms for the first SOUTHWARK LONDON BRIDGE time and modern facilities make the landmark station fully accessible 9 minutes 3 minutes for all with step free access to every platform. There are two new entrances on Tooley Street, which will connect the north and south sides of the station, while the completion of the five new platforms will allow Cannon Street services to once again stop at London Bridge. The tracks through and around the station have been entirely remodelled to modernise the infrastructure and to allow more trains to travel through London, reducing delays and bringing more reliable journeys to more destinations than ever before. Throughout 2018 new WATERLOO GATWICK AIRPORT shops, cafés and leisure facilities will open, fuelling the reinvigoration 10 minutes 41 minutes of the area. BOROUGH 8 minutes Within 10 minutes of the property is London Waterloo Station. It is one of the busiest railway stations in Europe, providing more than half a million passenger journeys a day and 230 million a year. The station is currently being upgraded to enhance passenger capacity by 30%. This is to be done by rebuilding the former Waterloo International terminal, reconfiguring platforms and extending various platforms KEY to house longer trains with more cars.