ONE FETTER LANE
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ONEFETTER LANE, LONDON EC4
PRIME MIDTOWN FREEHOLD MIXED USE REFURBISHMENT OPPORTUNITY ONE FETTER LANE ONE FETTER LANE
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EXECUTIVE SUMMARY
Freehold.
Prominent corner building in a prime Midtown location on the junction of Fetter Lane and Fleet Street, within close proximity of City Thameslink, Farringdon and Chancery Lane stations.
24,056 sq ft (2,234.9 sq m) of office, retail and ancillary accommodation arranged over lower ground, ground and six upper floors.
Multi-let to one office tenant and four retail tenants producing a total rent of £1,199,000 per annum (£49.84 per sq ft overall).
Low passing office rent of only £46.98 per sq ft compared to prime Midtown rents in excess of £75.00 per sq ft.
Highly reversionary retail income accounting for c.23% of the overall income, with average rents of £152 Zone A, with rents on Fleet Street in excess of £200 Zone A.
Opportunity to increase the net lettable area of the building by 3,306 sq ft (307.1 sq m) subject to obtaining the necessary consents.
Weighted Average Unexpired Lease Term to earliest determination of approximately 0.5 years on the office space and 9.35 years on the retail accommodation.
Offers are sought in excess of £21,000,000 for the freehold interest subject to contract and exclusive of VAT. This reflects a net initial yield of 5.35% and a capital value of £873 per sq ft on the existing area and £767 per sq ft on the proposed area, assuming 6.75% purchaser’s costs.
Applying a yield of 4.50% to the existing retail income this pricing equates to £776 per sq ft on the existing office area and £664 per sq ft on the proposed office area. ONE FETTER LANE ONE FETTER LANE
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LOCATION
THE PROPERTY IS PROMINENTLY SITUATED ON THE CORNER OF FETTER LANE AND FLEET STREET. THE CITY CORE IS LOCATED LESS THAN A 10 MINUTE WALK TO THE EAST, WITH CLERKENWELL AND COVENT GARDEN EQUIDISTANT TO THE NORTH EAST AND WEST RESPECTIVELY.
Fleet Street is one of the key arterial routes linking the Framestore, Skype, Amazon, Saatchi & Saatchi, City and the West End. It forms part of the ceremonial WeWork and Deloitte Digital are some of the occupiers EUSTON route through Central London from St Paul’s and is who have taken occupation of nearby schemes in synonymous with both the press and legal sector. recent years. The property, on the corner of Fetter Lane, is ideally The property benefits from excellent surrounding situated for access to the Royal Courts of Justice, the transport infrastructure situated a short walk from City Law Society, Middle and Inner Temples and Lincoln’s OLD STREET Thameslink National Rail and Chancery Lane (Central Inn. Line) Underground Stations. Farringdon National The adjacent street of Chancery Lane has seen large Rail and Underground station is approximately a 10 scale redevelopment projects including Derwent minute walk to the north- west and will benefit from London’s 40 Chancery Lane (HQ of Saatchi and The Elizabeth Line by mid-2020. It is estimated that Saatchi), Aberdeen’s The Cursitor Building and Viridis’ the new rail line will bring an extra 1.5 million people to 28 Chancery Lane. Traditionally associated with the within 45 minutes of Central London. SHOREDITCH HIGH STREET legal sector, Midtown now attracts a hugely diverse occupierRUSSELL base, including those from the technology, SQUARE media and telecommunication (TMT) sector.
GOODGE CONNECTIVITY STREET BARBICAN
FARRINGDON EASTERN TICKET HALL 1 Fetter Lane benefits from the following FARRINGDON excellent transport connectivity
MOORGATE CHANCERY LANE HOLBORN LIVERPOOL STREET M 0
70
4 800 5 M 0 TOTTENHAM M London Underground COURT ROAD National Rail
Elizabeth Line ST PAUL’S OXFORD 35 CIRCUS 0M
BOND STREET CITY Piccaddily Line THAMESLINK MARBLE ARCH 5 BANK Metropolitan Line M 0 0 0 50 M COVENT Hammersmith & City Line GARDEN District Line
Circle Line MANSION Central Line TEMPLE BLACKFRIARS HOUSE
LEICESTER CANNON SQUARE STREET MONUMENT
PICCADILLY CIRCUS
CHARING CROSS
GREEN PARK EMBANKMENT
LONDON BRIDGE
SOUTHWARK WATERLOO WATERLOO EAST HYDE PARK CORNER
KNIGHTSBRIDGE BOROUGH EUSTON
OLD STREET GREA
T E ASTER
EET N FARRING STR ST W OLD REET OBURN P
DON R
CITYROA
LAC OAD E SHOREDITCH HIGH STREET
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RUSSELL SQUARE COMME ONE FETTER LANE ROAD ONE FETTER LANE CLERKENWELL
6 7 RCIA
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SO
U LOCAL T ET HAMPTO OCCUPIERS GRAY’S INN ROA FARRINGDON HEOBALD’S ROAD H FARRI N T GOODGE A ALDER STREET R T O T ET BARBICAN W 7 ON E NGDON TR S SE SGATE GA OU RH D E RD T 2 AR ROA H D E C L STR IE N HF 1 London School of Economics Y 11 IT D SM EET ST WeWork Y WA 6 E 2 R W U B MOORGATE 3 Covington & Burling LLP N HOLB ORN 4 Saatchi & Saatchi BLOOMS HIGH HOLBOR 8 12 GATE CHANCERY LONDON WALL LIVERPOOL 5 Framestore LANE STREET SHOPS HOLBORN 9 NE 6 Skype N 4 HOLBORN BI
C LA FARRI 7 Lastminute.com H VIAD 18 A 10 HOLBOR N 13 UC 8 Sainsbury’s LINCOL N’S IN N C T FIELD S E 14 NGDO HIGH R 9 Lego Y FETTER LA 5 19 TOTTENHAM 17 MOORGATE D STREET 10 Bird & Bird NSTREET OXFOR COURT ROAD N E 2 11 De Beers 20 C GRESHAM STREET HARI 12 Amazon
KINGSWAY 21 NG CR 13 Deloitte 14 OXFORD 1 ST PAUL’S T 22 CIRCUS 14 Goldman Sachs FLEE T STR EET THREADNEEDLE STREE OSS 15 Hachette BOND STREET 2 ROAD 16 Unilever 3 CITY 17 Metro Bank THAMESLINK MARBLE ARCH YCH 25 BANK DW 18 Merrill Lynch L K A ING 19 AXA COVENT CANNON GARDEN WI 24 20 London Stock Exchange STREE L L QUEEN VICTORIA STRE T IA 21 Ropes and Gray LLP STRAND ET M MIDDL E TEMPL E 16 ST 22 Lewis Silkin LLP NS MANSION CECHURCH STREET GARDE R A 23 15 HOUSE EE 23 Nesta GR UPPER THAMES T NT LEICESTER 24 Jones Day LLP VICTORI A EMBANKME STREET CANNON BLACKFRIARS STREET SQUARE 25 Gartner UK Limited TEMPLE MONUMENT
E PICCADILLY CIRCUS LOWE R WATERLOO B EGENT STR R THAMES STREE AND T R ST
HWARK BRIDG
EET RIDGE RIDGE SOUT B
CHARING CROSS
LONDON
GREEN PARK EMBANKMENT
LONDON BRIDGE
SOUTHWARK WATERLOO WATERLOO EAST HYDE PARK CORNER
KNIGHTSBRIDGE BOROUGH FETTER LANE FETTER LANE ONE 4 7 6 8 9 5 ONE 2 3 1 10 12 11 ONE 8 9
LOCAL DEVELOPMENTS
MIDTOWN IS ONE OF LONDON’S MAJOR SUB-MARKETS AND HAS BEEN SUBJECT TO SIGNIFICANT DEVELOPMENT ACTIVITY IN RECENT YEARS, WITH A PIPELINE TO SUGGEST THIS WILL CONTINUE.
MIDTOWN HAS RECENTLY WITNESSED AN UNPRECEDENTED TREND OF TECHNOLOGY, MEDIA AND TELECOMMUNICATIONS (TMT) OCCUPIERS MOVING IN FROM LONDON’S TECHNOLOGY HUB SHOREDITCH AND CHOOSING TO OCCUPY HIGH QUALITY SPACE WITHIN THE AREA.
1 2 3 7 8 9 20 Farringdon Street Plumtree Court Stonecutter Court Farringdon West Charterhouse Place Smithfield Quarter HB Reavis National Pension Service Greycoat/Ivanhoe Cambridge HB Reavis Helical Bar and Ashby Capital (2019) City of London Corporation 86,000 sq ft multi-let office 827,000 sq ft development let to 240,000 sq ft of office and retail 138,000 sq ft office development, 165,000 sq ft office development, with 270,000 sq ft redevelopment for the development Goldman Sachs accommodation with ground floor retail and amenity 30,000 sq ft of ground floor retail new site of the Museum of London Completed Completed 2022 (estimate) accommodation accommodation 2022 2020 2021
4 5 6 10 11 12 28 Chancery Lane Morley House Hotel 17 Charterhouse Street Fleet Street Estate Fleet House, New Bridge Street Ludgate London Viridis Shiva Hotels / ICG Longbow M&G Investments City of London Corporation City of London Corporation Greycoat/Goldmans 100,000 sq ft office and retail 120,000 sq ft 191-room hotel 145,000 sq ft office development, 27 World class fraud and cybercrime court 51,000 sq ft of new development 105,000 sq ft refurbishment comprising development. Framestore have let the development residential apartments and 6,690 sq ft and new headquarters for the City of comprising office and retail office and retail accommodation entire office accommodation 2021 of warehouse office accommodation London Police accommodation 2020 Completed let to De Beers 2025 (estimate) 2022 (estimate) 2020 ONE FETTER LANE ONE FETTER LANE
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DESCRIPTION
1 FETTER LANE WAS COMPLETED IN 1988 AND PROVIDES APPROXIMATELY 24,056 SQ FT (2,234.9 SQ M) OF OFFICE, RETAIL AND ANCILLARY ACCOMMODATION ARRANGED OVER LOWER GROUND, GROUND AND SIX UPPER FLOORS.
The office space, totalling The office floor plates range The ground and lower ground floors 19,584 sq ft (1,819.4 sq m) including from 3,100 - 3,929 sq ft with the benefit from prominent frontage reception and BMA, offers an exception of the 6th floor which to Fleet Street and Fetter Lane, institutional specification which comprises 663 sq ft. The floors experiencing high levels of footfall includes; raised floors, recessed benefit from good natural light at the junction of these two major fluorescent lighting, double glazing, from all sides and generous floor to thoroughfares. suspended ceilings and VAV air ceiling heights ranging from 2.4 - conditioning. 2.65m throughout with slab to slab heights of 3.25m. The double height office reception fronts onto Fetter Lane and provides two lifts linking the ground to fifth floors.
SPECIFICATION
The current specification of the office space can be summarised as follows:
Substantial double height entrance hall Generous finished floor to ceiling heights ranging from 2.4 - 2.65m throughout with slab to slab heights of 3.25m
Male and female WCs VAV Air conditioning Suspended Ceilings Raised Floors Two 10 person lifts providing access to the office space ONE FETTER LANE ONE FETTER LANE
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ACCOMMODATION FLOOR PLANS
The property has been independently measured by Plowman Craven in accordance with the RICS Code of GROUND FLOOR SECOND FLOOR Measuring Practice and provides the following Net Internal Areas:
FLOOR USE NIA SQ FT NIA SQ M 6th Office 663 61.6 5th Office 3,114 289.3 4th Office 3,592 333.7 3rd Office 3,919 364.1 2nd Office 3,929 365.0 1st Office 3,525 327.5 Ground Retail 2,065 270.0 Ground Reception 473 43.9 Ground Office 356 33.1 Ground Storage 13 1.2 Lower Ground Retail 1,276 118.5 Lower Ground Ancillary 1,131 105.1
TOTAL 24,056 2,234.9
IPMS3 areas are available in the online dataroom.
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TENANCY t
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N The Property is multi-let to one office tenant and four The total passingChambers rent on the office accommodation E FW CW FW retail tenants producing a total rent of £1,199,000 per is £920,000 per annum (£46.98 per sq ft). Embassy T
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The retail units are multi-let to four tenants;f Tossed,
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W of Poland
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Locke Lord LLP took a lease over the whole of the Cards Galore, Smilepod and an independent sandwich R
E V F Mitre Court office accommodation expiring 14 November 2019; shop producingr a total passing rent of £279,000 per U a
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c B B 1 i they have sublet the entire space to Avanta Fetter annum and a WAULTs of 9.35 years to expiry. u
i T l d a mple Church 2 i Lane with a co-terminus lease expiry. n y 1 g l o (St Mary's) r PH
TENANT ADDRESS FLOOR AREA ITZA LEASE LEASE RENT RENT RENT COMMENTS (SQ FT) (SQ FT) START EXPIRY REVIEW (£PA) (£PSF)
1 Fetter Lane 1st-6th 18,742
Reception Ground 356 The Avanta underlease is drawn outside the security provisions of the Locke Lord (UK) LLP 29-Sep-13 14-Nov-19 - 920,000 46.98 Landlord and Tenant Act 1954. The Locke Lord lease has been drawn inside (sub-let to Avanta Fetter Lane) BMA Ground 473 the security provisions of 1954 Act.
Storage Ground 13
The lease has been drawn inside the security provisions of the Landlord and Smilepod Limited 176 Fleet Street Unit 1 1,332 56 1-Aug-16 31-Jul-26 1-Aug-21 47,500 35.66 Tenant Act 1954. The tenant is not in occupation. Parent company guarantee from Tossed Limited. The first 12 months following completion of the assignment dated 28 September 2018 to be at 26-Nov-23 Zest Food Limited (t/a Tossed) 176 Fleet Street Unit 2 2,065 730 26-Nov-13 25-Nov-28 110,000 53.27 half rent. Reversionary lease signed from 26 November 2028 expiring 25 26-Nov-28 November 2033. The leases have been drawn outside the security of tenure provisions of the Landlord and Tenant Act 1954. Maria Del Soccoro Rubiera Iglesias, The lease has been drawn inside the security of tenure provisions of the Alfonso Rubiera Iglesias and 175 Fleet Street Unit 3 304 277 13-Feb-15 12-Feb-25 13-Feb-20 44,000 144.74 Landlord and Tenant Act 1954. Alberto Rubiera Iglesias Sweet Ventures Limited The lease has been drawn inside the security provisions of the Landlord and 173 Fleet Street Unit 4 771 528 25-Dec-14 24-Dec-24 25-Dec-19 77,500 100.52 (t/a Cards Galore) Tenant Act 1954.
London Electricity Board 1 Fetter Lane Lower Ground 04-Nov-88 03-Nov-48 Transformer Chamber. Rent of 0.5p payable if demanded.
Accommodation Totals 24,056 1,199,000 49.84 ONE FETTER LANE ONE FETTER LANE
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ASSET MANAGEMENT REFURBISHMENT AND EXTENSION
TREHEARNE ARCHITECTS HAVE UNDERTAKEN A FEASIBILITY STUDY TO ASSESS THE REFURBISHMENT POTENTIAL OF 1 FETTER LANE, WHICH IS AVAILABLE IN THE ONLINE DATA ROOM.
The key proposed works for a refurbishment and extension of the existing building include the following;
Consolidation of the plant on the 6th floor; Building out the existing 6th floor and creation of a communal roof terrace totalling 2,815 sq ft (261.5 sq m) on top of the existing building; In-filling of terracing on the upper floors overlooking Crane Court to the rear of the property;
Creation of an additional 3,306 sq ft (307.1 sq m) of net lettable office area; Conversion of the existing Building Manager’s Accommodation and Storage on the ground floor to bicycle storage and shower facilities, with access off Crane Court; Removal of toilet cubicles on the upper office floors to extract additional net lettable area.
The table below shows the area gains proposed under Option 2 in the Feasibility Study which is available in the online dataroom.
FLOOR EXISTING NIA (SQ FT) PROPOSED NIA (SQ FT) Office Retail Office Retail Roof Terrace (2815) 6 663 3,367 5 3,114 3,515 4 3,592 3,913 3 3,919 3,913 2 3,929 3,913 1 3,525 3,913 CGI of proposed redevelopment Ground (Reception) 356 356 Ground (BMA) 473 Ground (Storage) 13 Ground (Retail) 2,065 2,065 Lower Ground 2,407 2,407
Total 19,584 4,472 22,890 4,472 Grand Total 24,056 27,362
ONE FETTER LANE ONE FETTER LANE
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MARKET FURTHER COMMENTARY INFORMATION
OCCUPATIONAL PLANNING EPC The Midtown office leasing market remains one of Central London’s strongest performing sub-markets. The property is located in the City of London. It The property has an EPC rating of C. A copy of the is not listed, but is situated within the Fleet Street certificate is available upon request. With a vacancy rate of less than 2.5% and availability of only 1.0m sqft at the start of 2019, prime rents in Midtown Conservation Area. have remained relatively stable since mid-2017 at historic highs of around £75.00 per sq ft. Some recent leasing transactions of note include the following: VAT DATA ROOM PROPERTY SIZE TENANT TERM RENT DATE OF COMMENTS (SQ FT) (BREAK) (£PSF) TRANSACTION The property is elected for VAT and VAT will therefore Further information can be found on the online data be payable on the purchase price. It is anticipated that room. Please contact the vendor’s agents to request 20 Red Lion Court, WC1 3,067 Confidential 10 years £70.00 Q2 2019 the transaction will be treated as a Transfer of a Going access. Break-down as Concern. follows; 8th - £90 The Bureau, 90 Fetter Lane, 23,778 AB InBev 15 years £77.00 Q4 2018 psf; 7th - £85 psf; EC4 6th - £75 psf; 5th - £75 psf Berkeley 20 Farringdon Street, EC4 7,110 Partnership 10 years £75.00 Q4 2018 LLP PROPOSAL Imperial House, 15-19 6,622 Playbuzz 5 years £74.00 Q2 2018 Kingsway, WC2 St Andrews House, 18-20 5,640 Thrings LLP 10 years £67.50 Q2 2018 St Andrews Street, EC4 OFFERS ARE SOUGHT IN EXCESS OF £21,000,000 FOR THE FREEHOLD INTEREST IN THE PROPERTY, SUBJECT TO CONTRACT AND EXCLUSIVE OF VAT.
THIS REFLECTS A NET INITIAL YIELD OF 5.35% AND A CAPITAL VALUE OF £873 PER SQ FT ON THE EXISTING AREA INVESTMENT AND £767 PER SQ FT ON THE PROPOSED AREA, ASSUMING 6.75% PURCHASER’S COSTS. Investor demand for Midtown assets remains strong, particularly from international investors, as exemplified by APPLYING A YIELD OF 4.50% TO THE EXISTING RETAIL INCOME THIS PRICING EQUATES TO £776 PER SQ FT ON Korea’s National Pension Service’s £1.2bn acquisition of Goldman Sachs’ HQ at Plumtree Court in Q3 2018 which THE EXISTING OFFICE AREA AND £664 PER SQ FT ON THE PROPOSED OFFICE AREA. demonstrates the strong appetite for Midtown from both occupiers and investors. Prime Midtown yields remain broadly in line with that of the City at 4.00% - 4.25% for best in class product. Some recent vacant possession comparables in the Midtown and City markets include the following: CONTACTS
PROPERTY SIZE TENURE TENANCY ACHIEVED (CAP VAL PURCHASER (SQ FT) PROFILE PRICE (£PSF) Paxton House, 30 Artillery 12,487 Freehold 0.5 years £11,100,000 £889 GMS Estates Lane, E1
12 Roger Street, WC1 17,798 Freehold 0.5 years £12,850,000 £722 Clearbell Chris Room Matt Millman Usbourne +44 (0)20 7588 4433 +44 (0)20 7588 4433 Vacant Publishing [email protected] [email protected] 1 Frying Pan Alley, E1 25,172 Freehold £20,800,000 £826 Possession (Owner Occupier) Marsha Rabinovich Andrew Lister Private Hong 222 Bishopsgate, EC2 23,065 Freehold 1.1 years £21,100,000 £915 +44 (0) 20 7588 4433 +44 (0)20 7588 4433 Kong Investor [email protected] [email protected] Short term 314-320 Grays Inn Road, WC1 20,410 Freehold £17,000,000 £833 Precis Holdings income DISCLAIMER: Allsop LLP on its behalf and for the Vendors or Lessors of this property, whose Agents they are, give notice that: These particulars are set out as a general outline only for guidance to intending Purchasers or Lessees, and do not constitute any part of an offer or contract. Details are given without any responsibility and any intending Purchasers, Lessees or Third Parties should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise as to the correctness of each of them. No person in the employment of Allsop LLP has any authority to make any representation or warranty whatsoever in relation to this property. Unless otherwise stated, all prices and rents are quoted exclusive of VAT. June 2019 ONE FETTER LANE
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