RARE ST JAMES’S FREEHOLD HEADQUARTERS OFFICE BUILDING
3 CONTENTS
Investment Summary 8
St James’s 12
Connectivity 14
Location 16
Description 20
Specification 25
Accommodation 26
Floor Plans 28
Tenure 33
Tenancy Schedule 34
Tenant Covenants 36
Occupational Market 40
Investment Market 42
Investment Considerations 44
Further Information 45
Contact 46
5 6 7 INVESTMENT SUMMARY
Extremely rare St James’s freehold trophy asset prominently situated on St James’s Street, less than 50 metres from the Ritz Hotel;
Redeveloped in 1999, the property has recently undergone extensive refurbishment, completing in 2018;
Cassini House provides 51,348 sq ft of Grade A office accommodation arranged over lower ground, ground and six upper floors.
Well configured 7,000 sq ft floorplates benefitting from excellent levels of natural light throughout;
Let to three established occupiers, Artemis Investment Management, Mitsui Fudosan and Shore Capital Stockbrokers, with a WAULT to lease expiries of 10.33 years and 8.25 years to tenant break options;
Artemis are the principal occupier in the building, accounting for 58% of the income, benefiting from their own dedicated self-contained reception and internal staircase serving all of their upper floors;
Total passing rent of £5,019,085 per annum, equating to a highly reversionary average rent of £100.58 per sq ft;
Well timed rent reviews between 2023 and 2025 offering an excellent opportunity to capture the reversionary rent in a rising leasing market;
Offers are invited in excess of £135,000,000, subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 3.48% (after the deduction of purchaser’s costs at 6.80%) and a low capital value of £2,629 per sq ft.
9 CITY OF LONDON
CANARY WHARF THE SHARD
CENTREPOINT THE LONDON EYE
SOUTHBANK TOTTENHAM COURT ROAD CHARING CROSS LEICESTER SQUARE
TRAFALGAR SQUARE
PICCADILLY CIRCUS
REGENT STREET ST JAMES’S SQUARE ST JAMES’S PARK
SAVILE ROW JERMYN STREET
PICCADILLY THE MALL
BOND STREET
THE RITZ
MAYFAIR
GREEN PARK
GREEN PARK ST JAMES’S
St James’s is steeped in history and globally renowned for its exclusive retailers, numerous luxury hotels, including The Ritz, Duke’s Hotel and the Stafford, as well as prestigious member’s clubs including Boodle’s, White’s and the Royal Automobile Club. In addition, a wealth of world-class restaurants are on offer including Quaglino’s, Café Murano, The Wolseley and Avenue.
Occupiers are drawn to the prestige and associated wealth of the immediate area with major corporate institutions and boutique firms situated in close proximity. Notable local occupiers include, amongst others, Warburg Pincus, Temasek and Edmond de THE WEST END OF LONDON Rothschild. IS ONE OF THE WORLD’S MOST EXCLUSIVE Continuing the theme of opulence, the capital’s most exclusive shopping and art galleries can be found in OFFICE LOCATIONS AND ST JAMES’S IS the immediate vicinity, with Jermyn Street, Bond Street, Savile Row and Regent Street all within walking distance. CONSIDERED THE JEWEL IN THE CROWN. Furthermore, St James’s benefits from an abundance of green space with St James’s Park to the south and Green Park to the west.
These features combine to ensure that St James’s remains one of London’s most sought after corporate locations offering global appeal to occupiers and landlords alike.
12 13 KING’S CROSS ST PANCRAS PADDINGTON INTERNATIONAL To Heathrow Via Heathrow Express BAKER STREET EUSTON To Paris Via Eurostar
NOTTING TOTTENHAM Key HILL GATE BOND STREET COURT ROAD
Bakerloo Central OXFORD CIRCUS Circle GREEN PARK To Heathrow Via District HIGH STREET Piccadilly Line Hammersmith & City KENSINGTON MINUTES WALK Jubilee Metropolitan PICCADILLY CIRCUS LEICESTER BANK Northern MINUTES WALK SQUARE To London City Piccadilly Airport Via DLR Victoria DLR Elizabeth Line Eurostar SOUTH VICTORIA CHARING WATERLOO LONDON National Rail KENSINGTON To Gatwick Via Gatwick Express CROSS BRIDGE CONNECTIVITY Underground MINUTES WALK MINUTES WALK
St James’s transport connectivity across the capital is excellent with Green Park (Victoria, Piccadilly and Jubilee lines), Piccadilly Circus (Piccadilly and Bakerloo lines), Leicester Square (Northern and Piccadilly lines) and Charing Cross (Mainline Rail, Northern and Bakerloo lines) stations all within easy walking distance. These stations provide fast and easy access to the remainder of the London Underground network, including the Elizabeth Line, together with the capital’s principal mainline stations and Heathrow and Gatwick airports. In addition, numerous bus routes run along Piccadilly, linking Mayfair and Soho to the north via Regent Street, and Victoria to the south via Whitehall.
14 15 GOLDEN
SQUARE E N V A
Y LOCAL AMENITY R
U T E S W A L K B I N U I N G S 5 M T Clubs & Hotels Restaurants & Bars F A LEICESTER H 1. Army & Navy Club 1. 45 Jermyn Street S SQUARE 1 2. Boodle’s 2. Avenue
11 PICCADILLY
R 3. Brown’s Hotel 3. Boulestin E CIRCUS G 4. Carlton Club 4. Café Murano B E O N T 5. Dukes Hotel 5. Caviar House & Prunier N S D T 6. East India Club 6. Chutney Mary R E E BERKELEY S T 4 W 11 12 7. Naval & Military Club 7. Franco’s T A SQUARE H R T 8. Oxford & Cambridge Club 8. Hide E A E E 8 R Y 9. Reform Club 9. Langan’s M 3 T L 6
O A 10. Royal Automobile Club 10. Le Caprice 7 11 R O K 11. The May Fair 11. Rowley’s P E
L T 12. The Ritz 12. Saint Jacques 1 T 4 E A E C 13 13. The Stafford 13. Sake No Hana R T E S T 14. White’s Club 14. The Ritz E MAYFAIR N E Y R 6 15. The Wolseley M 9 1 T TRAFALGAR R S E 13 SQUARE 11 J ST JAMES’S I Culture 16. Wiltons 6 Y I L 8 13 S L 7 E 5 I 1 14 D 10 R 1. BAFTA A L Retail C A CHARING C H 2. Christie’s I C P 3 4 15 CROSS 3. Clarence House 1. Alfred Dunhill 5 16 14 11 14 4. Criterion Theatre 2. Berry Bros. & Rudd 15 7 16 10 3. Crockett & Jones 3 5. Grosvenor Gallery 4 5 ST JAMES’S 4. Daks 6 6. Her Majesty’s Theatre 14 S 9 12 T SQUARE 5. Davidoff W 7. Insitute of Contemporary Arts 2 J 15 H 6. De Beers A 9 8. Jermyn Street Theatre T 14 I M 13 2 5 E T 7. Fortnum & Mason E 9. Martyn Gregory E 7 E 10 9 R S T H 8. Hackett S 8 10. Moretti Fine Art GREEN PARK ’ S G A 9. Harvie & Hudson N 17 1 L 11. Royal Academy of Arts 8 I S K 9 10 7 L T 16 2 12. St. James’s Palace 10. Hawes & Curtis R E 13. Theatre Royal Haymarket 11. Hilditch & Key L 12 E L 13 4 A T 14. White Cube Mason’s Yard 12. Lock & Co. Hatters M 8 6 2 L 5 12 L 15. David Gill Gallery 13. Paxton & Whitfield 3 A P 10 14. Pink
2 15. Sharps Pixley Offices 16. Turnbull & Asser 15 H L O 1. Anglo American L A R 2. BAE Systems M S E E GREEN PARK H 3. Blackstone T
ST JAMES’S PALACE G 4. BP U 12
A 5. Brewin Dolphin R 6. Carlyle Group D
S 7. Cinven
3 ST JAMES’S PARK R 8. Citi O 9. Credit Suisse A HORSE GUARDS
D PARADE 10. Edmond De Rothschild 11. HSBC Private Bank 12. Permira Advisers 13. Rio Tinto 14. Rolex 15. St James’s Place Wealth Management C O N S T I T U T I O N H I L L 16. Temasek 17. Warburg Pincus & Co
16 17
The elegant Portland stone façade ensures a commanding presence on the west side of St James’s Street with additional frontage to Arlington Street to the rear. The building is arranged over lower ground, ground and six upper floors with typical floors extending to approximately 7,000 sq ft. Access to the building is via an impressive contemporary reception area with additional access and car lift entrance on Arlington Street.
DESCRIPTION
CASSINI HOUSE WAS DEVELOPED IN 1999 AND COMPREHENSIVELY REFURBISHED IN 2018, DELIVERING 51,348 SQ FT (4,770 SQ M) OF HIGH-QUALITY GRADE A OFFICE ACCOMMODATION.
20 22 23 SPECIFICATION
Cassini House was subject to a major refurbishment programme, completing in 2018 to an exceptionally high quality, ensuring the exacting standards of modern occupiers are completely satisfied. Well configured, efficient and flexible upper floorplates range in size from 6,067 sq ft to 7,233 sq ft, serviced by three passenger lifts and one goods lift. Both male and female WC facilities are available within the common areas on each floor. Additional tenant facilities include basement car parking spaces, bike storage and shower facilities. Each tenant has undertaken extensive fit out works ensuring the office space is presented in the best possible light. In general, a combination of open plan areas together with meeting rooms, reception area and kitchen/dining facilities have been created benefitting from the following specification:
Remodelled reception and common areas Four-pipe fan coil air conditioning 2.6m clear floor to ceiling heights Full access raised floor New shower facilities in the basement Bike racks and lockers 3 x 16 person passenger lifts 1 x 8 person goods lift 1 x car lift 24-hour security
24 25 ACCOMMODATION SCHEDULE
Floor Use NIA Sq Ft NIA Sq M
Sixth Office 6,067 563.6
Fifth Office 6,757 627.7
Fourth Office 6,896 640.7
Third Office 7,121 661.6
Second Office 7,233 672.0
First Office 7,067 656.5
Ground Office 5,673 527.0
Ground Reception 1,448 134.5
Lower Ground Office 3,086 286.7
Total 51,348 4,770.3
The property has been measured by Hollis, in accordance with the RICS Code of Measuring Practice (6th Edition).
A reliance letter is available in the data room.
26 FLOOR PLANS
G 6th
7,121 sq ft 6,067 sq ft 661.5 sq m 563.6 sq m ST JAMES’S STREET
LG 4th Typical Upper 3,086 sq ft 6,896 sq ft 286.7 sq m 640.7 sq m
Key
Office Reception Parking / Ancillary
Lift N Core 28 Not to scale. Indicative only. 29 TENURE
The property is held freehold.
N
T E E R T S S ’ S M E A J T S
T E E R T S NO T GN I L R A
BENNET STREET
57
58 59
P A R K P L A C E
Not to scale. Indicative only. This plan is based upon the Ordnance Survey Map with the sanction of the controller of H.M. Stationary Office. Crown Copyright reserved.
31 TENANCY SCHEDULE
Floor Use Tenant Net Internal Area (sq ft) Lease Start Lease Expiry Rent Review Break Option Rent (£ pa) Rent (£ psf) Comments
Tenant break option subject to 6 months notice and 6th Office Mitsui Fudosan (UK) Limited 6,067 11-Feb-20 10-Feb-30 11-Feb-25 11-Feb-25 £643,102 £106.00 12 months rent free if not exercised. Tenant break option subject to 9 months notice and 5th Office Shore Capital Stockbrokers Limited 6,757 12-Mar-19 11-Mar-29 12-Mar-24 11-Mar-24 £714,485 £105.74 12 months rent free if not exercised. Includes 1 car parking space. Tenant break option subject to 9 months notice and 4th Office Shore Capital Stockbrokers Limited 6,896 12-Mar-19 11-Mar-29 12-Mar-24 11-Mar-24 £729,080 £105.73 12 months rent free if not exercised. Includes 1 car parking space.
3rd Office Artemis Investment Management LLP 7,121 22-Dec-17 24-Mar-33 25-Mar-23 £763,250 £107.18
2nd Office Artemis Investment Management LLP 7,233 22-Dec-17 24-Mar-33 25-Mar-23 £782,118 £108.13 Includes 1 car parking space
1st Office Artemis Investment Management LLP 7,067 01-Sep-17 24-Mar-33 25-Mar-23 £709,000 £100.33 Includes 1 car parking space
Ground Office Artemis Investment Management LLP 5,673 22-Dec-17 24-Mar-33 25-Mar-23 £523,400 £92.26 Includes 1 car parking space
Ground Reception 1,448
Lower Ground Ancillary Artemis Investment Management LLP 3,086 22-Dec-17 24-Mar-33 25-Mar-23 £154,650 £50.11 Includes 1 car parking space
Lower Ground Car Park 7 Car Spaces
Total 51,348 £5,019,085 £100.58
RENT BY TENANT THE PROPERTY IS LET TO THREE HIGH-QUALITY OCCUPIERS WITH A WEIGHTED AVERAGE UNEXPIRED LEASE TERM OF 10.33 YEARS TO LEASE EXPIRIES Mitsui Fudosan (UK) Limited % AND 8.25 YEARS TO THE TENANT BREAK OPTIONS. 13 LET AT A REVERSIONARY RENT OF £100 PER SQ FT Shore Capital Stockbrokers Ltd 29% OVERALL, ARTEMIS INVESTMENT MANAGEMENT LLP Artemis Investment Management LLP % ACCOUNT FOR 58% OF THE OVERALL INCOME. 58
32 33 Mitsui Fudosan (UK) Limited
Mitsui Fudosan is one of Japan’s largest listed property companies with global operations spanning three continents and total assets worth around £38 billion. Mitsui Fudosan has been operating in the UK since 1990 and has developed over 3.6 million sq ft with notable recent projects including The Television Centre W12, One Angel Court EC2, 6 Hanover Square W1 and 8-10 Moorgate EC2. Mitsui Fudosan have a credit safe rating of 93 and a Dun & Bradstreet rating of 5A 1.
TENANT Shore Capital Stockbrokers Ltd Shore Capital is a financial services group which specialises in COVENANTS equity capital market activities, alternative asset management and principal finance. It has offices in Guernsey, London, Liverpool, Edinburgh and Berlin. In 2020 the company turned over £36.6 million in terms of revenue, an increase of 67% on the previous financial year, which reflected a net profit of £7.2 million before tax. Shore Capital have a credit safe rating of 93 and a Dun & Bradstreet rating of 4A 2.
Artemis Investment Management LLP
Artemis Investment Management LLP is a UK–based fund management business, offering a range of funds, which invest in the UK, Europe, the US and around the world. Artemis is owned by its UK-based management team and Affiliated Managers Group (AMG), an American international investment management company headquartered in Massachusetts, with $37.9 billion under management. In 2019 Artemis employed 168 employees, turned over £179.4 million in revenues, which reflected a net profit of £22.3 million. Artemis have a credit safe rating of 92 and a Dun & Bradstreet rating of 5A 1.
34 36 37 OCCUPATIONAL MARKET
Recent Leasing Transactions Address Date Floor Tenant NIA (Sq Ft) Rent (Psf)
20 St James’s Street, SW1 Q2 2021 8th Veriton 4,222 £120.00
Medici Courtyard, W1 Q1 2021 3rd Lexington Partners 9,023 £115.00
6 Duke Street, SW1 Q1 2021 6th QuadReal 2,821 £117.50
18 Hanover Square, W1 Q1 2021 1st Confidential 16,500 £121.00
1 Berkeley Street, W1 Q1 2021 4th – 6th Waypoint Capital 34,534 £122.00
33 Davies Street, W1 Q4 2020 5th Troy AM 5,045 £115.00
Devonshire House, W1 Q4 2020 5th - 7th Bain Capital 48,582 £117.00
20 St James's Street, SW1 Q3 2020 3rd Harrison Street 6,540 £112.50 Smithson Plaza, Q1 2020 5th Cranemere International Limited 3,609 £125.00 25 St James’s Street, SW1 Smithson Plaza, Q4 2019 11th Greyhound Capital Europe LLP 3,595 £160.00 25 St James's Street, SW1 The Marq, 32 Duke Street, SW1 Q4 2019 2nd – 3rd Millennium Capital Management 6,575 £112.50
21 St James's Square, SW1 Q3 2019 1st – 6th Cinven Partners LLP 51,278 £120.00
18 Hanover Square, W1 Q1 2019 2nd – 4th Glencore PLC 53,916 £116.00
18 Hanover Square, W1 Q2 2018 5th – 8th KKR LLP 57,198 £115.00
St James’s is renowned as London’s most prestigious corporate address attracting a wealth of global corporations. The success of the sub-market is testament to the continued investment by the Crown Estate, and their long-term vision to improve the quality of the offices and the public realm on their Estate. Occupiers are focused on quality Grade A accommodation that offers additional wellbeing benefits for employees and St James’s has seen a number of recent transactions from occupiers attracted by the abundance of Royal Parks that sit alongside best in class new developments. New occupiers include the private equity firm Cinven and investment management firm, Harrison Street Partners, who join more established tenants including Rolex, BAE Systems and Rio Tinto. With a significant number of listed buildings, the supply of new developments remains restricted in St James’s and with strong demand, the return of rental growth in the sub-market is widely forecast from 2022 onwards.
38 INVESTMENT MARKET
Recent Freehold Investment Transactions Address Date Price Net Initial Yield Capital Value Psf Income Duration
Cassini House, SW1 Available £135.0m 3.48% £2,629 10 years
1 St James’s Square, SW1 8 St James’s Square, SW1 Under Offer £230.0m 3.30% £3,700 3 years
21 St James’s Square, SW1 Q4 2020 £187.5m 3.65% £3,055 11 years
1 St James’s Square, SW1 Q4 2020 £250.1m 4.20% £2,413 2 years
The Clarges Estate, W1 Q4 2020 £177.0m 3.52% £2,720 7 years 8 St James’s Square, SW1 64 St James’s Street, SW1 Q4 2020 £36.0m - £2,645 Vacant Possession
23 Savile Row, W1 Q3 2019 £277.0m 4.14% £2,798 6 years
Despite considerable ongoing uncertainty in the wake of the Covid-19 pandemic, acutely constrained availability for high-quality investment opportunities and a relative discount when compared against other core European markets has ensured that Central London has once again demonstrated its resilience with a near record quarterly The Clarges Estate, W1 64 St James’s Street, SW1 turnover of £5.1 billion recorded in the final quarter of 2020. In the midst of a widening pricing gap between prime and secondary real estate and increased scrutiny of covenant security, trophy freehold assets, such as Cassini House, offering investors secure income in a low interest and uncertain economic environment have remained particularly attractive and sought after. Set against recent transactions, Cassini House is a compelling proposition, let off a reversionary rental base, attractive initial yield and comparably low capital value per sq ft.
21 St James’s Square, SW1 23 Savile Row, W1 Cassini House, SW1
40 41 ASSET LEVEL CONSIDERATIONS MARKET LEVEL CONSIDERATIONS
Prime yields in London are some of the London Yield Arbitrage highest available in any gateway city around the world and provides in excess of 75 bps 75BPS+ Freehold 51,348 sq ft arbitrage over gateway European cities. Rare, freehold trophy asset located in an area dominated by estate freeholders.
Core Income Low Capital Value Per Sq Ft 3.50% 2.75% years per sq ft 4.50% London’s Berlin 10.33 £2,629 New York West-End 3.40% Let to three established occupiers, Artemis Cassini House’s low passing rent offers an attractive 2.80% Tokyo Investment Management, Mitsui Fudosan and discount to other recent, rack-rented investment 2.75% Hong Kong Shore Capital, with a WAULT to lease expiries of transactions in Mayfair and St James’s, which have Paris 10.33 years and 8.25 years to tenant break options. transacted at over £3,000 per sq ft.
Rent Performance Review Refurbished Brexit Risk Premium Over Risk Free Assets 2023-2025 £140per sq ft Deal Signed >250BPS Well-timed rent reviews between 2023 and Recently undergone a comprehensive With the trade agreement signed by the UK and The prime West End yield provides a substantial 2025 offering an excellent opportunity to refurbishment, at a cost of £140 per sq ft, delivering EU on 24th December 2020, it is expected that UK premium over 10 year Government Gilts at 0.84% capture the reversionary rent in a rising the asset to an excellent Grade A specification and yields will become more aligned with Europe. (June 2021). leasing market. removing the need for further capital expenditure.
Covid Vaccination Forecast GDP Growth Accretive Debt Reversionary 66million+ Mid-2022 >200BPS per sq ft £100 The UK has led the vaccine Given the success of the vaccine Anticipated margin below 2.0% Low overall passing rent of £100.58 per sq ft with rollout with over 66 million rollout and the removed threat of is highly accretive to a leveraged recent local market evidence over £120 per sq ft. vaccinations now administered. a no-deal Brexit, the UK economy buyer and translates to very is expected to return to pre- attractive cash-on-cash returns. Covid-19 levels by mid-2022.
42 43 FURTHER INFORMATION
DEBT TERMS
With the tenants’ outstanding covenant strength and secure income stream, the investment is highly suitable for debt. Further details of debt terms are available in the data room.
CAPITAL ALLOWANCES
Further information available upon request.
PLANNING
The property is not listed and lies within the St James’s Conservation Area.
EPC
The property has an EPC rating of C. Full EPCs are available in the data room.
VAT
The property is elected for VAT. It is anticipated that the sale will be treated as a TOGC.
DATA ROOM
Available upon request.
AML REGULATIONS
In order to discharge our legal obligations, including under applicable anti-money laundering regulations, we will require certain information of the successful bidder. In submitting an offer you agree to provide such information when Heads of Terms are agreed.
44 45 OFFERS ARE INVITED IN EXCESS OF £135,000,000, FOR THE FREEHOLD INTEREST, SUBJECT TO CONTRACT AND EXCLUSIVE OF VAT. A PURCHASE AT THIS LEVEL REFLECTS A NET INITIAL YIELD OF 3.48% (AFTER THE DEDUCTION OF PURCHASER’S COSTS AT 6.80%) AND A LOW CAPITAL VALUE OF £2,629 PER SQ FT.
For further information, or to arrange an inspection, please contact:
Anthony Barnard Rob Hayes +44 7979 260 553 +44 7768 051 723 [email protected] [email protected]
James McCluskey Simon Ewart Perks +44 7951 766 421 +44 7921 750 073 [email protected] [email protected]
Tim Pierce Charlie van der Gucht +44 7773 258 844 +44 7967 007 104 [email protected] [email protected]
CHINA DESK Austin Xu +44 7773 613 841 [email protected]
Important Notice: Knight Frank, RX London, 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 Knight Frank nor RX London have tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise. June 2021.
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