Medway Bridge House Riverside House

MEDWAY BRIDGE HOUSE RIVERSIDE HOUSE

MAIDSTONE, KENT ME14 1JP

Multi-let office investment prominently located in an affluent South East town-centre M1 M11

M25

A127 M25 LONDON SOUTHEND INVESTMENT M4 ON SEA DARTFORD SHEERNESS

A2 SUMMARY M3 GILLINGHAM CHATHAM A299 M20 A228 M2 A229 SITTINGBOURNE RAMSGATE J4 M26 J6 A3 M25 A249 CANTERBURY A20 J7 A20 • Modern, multi-let office buildings prominently DORKING A228 A26 A21 MAIDSTONE M20 located in the county town of Kent M23 ASHFORD A229 DOVER

TUNBRIDGE FOLKESTONE GATWICK WELLS A28 • Maidstone is situated approximately 32 miles A21 A23 A272 A259 to the South East of Central London and A24 16 miles to the east of Sevenoaks. A267 HASTINGS BRIGHTON • The property comprises two self-contained EASTBOURNE office buildings comprising 38,814 sq ft across ground and 4 upper floors • Exceptional town centre car-parking ratio of 1:266 sq ft • Multi-let to 4 tenants with a WAULT of 4.9 years to breaks and 8.96 years to expiries. • Allianz are the major occupier, accounting for 53% of the total income, having been in occupation of Medway Bridge House since the early 2000s. • Riverside House has recently been refurbished at a cost of c.£50 per sq ft • Passing rent of £601,648 per annum (£15.50 per sq ft) including rent guarantee on top floor of Riverside House • Offers in excess of £7,300,000 Subject to Contract. A purchase at this level reflects a Net Initial Yield of 7.73% allowing for purchasers costs of 6.63%, and a capital value of £188 per sq ft. • The property is not currently elected for VAT purposes, as such VAT is not applicable. M1 M11

M25

A127 M25 LOCATION LONDON SOUTHEND M4 ON SEA DARTFORD SHEERNESS

A2 Maidstone is situated approximately 32 miles south east of Central London, 16 miles east of M3 GILLINGHAM CHATHAM A299 Sevenoaks, 8 miles south of Chatham and 27 miles south west of Canterbury. M20 A228 M2 A229 SITTINGBOURNE RAMSGATE J4 M26 J6 A3 M25 A249 CANTERBURY The town is situated on the River Medway at the junction of the A20 with the A26, the A229 A20 J7 A20 DORKING A228 A26 and the A249. Junctions 5, 6 and 7 of the M20 Motorway are all within 2.5 miles distance of A21 MAIDSTONE M20 M23 ASHFORD Maidstone Town Centre giving rapid access to the M2, M26, M25 London Orbital Motorway, the A229 DOVER

TUNBRIDGE FOLKESTONE Dartford Crossing and Heathrow, Gatwick, Stansted and London City Airports. The Channel GATWICK WELLS A28 A21 Ports/Tunnel and Central London are all within approximately 1 hours drive of the town. A23 A272 A259 A24 Maidstone is both a county town and the principal administrative centre of Kent, with a A267 population of approximately 150,000.

HASTINGS BRIGHTON EASTBOURNE

A DEMOGRAPHICS 2 2 9 Maidstone has a large skilled labour force due to its central position locationally amongst the affluent surrounding Kent areas of Tonbridge, Sevenoaks, West Malling and Sittingbourne. With current unemployment at 0.8% and a workforce of c. 85,000 people, the dominant MAIDSTONE employment sectors are focused on Finance and Business services, ICT and administration accounting for about 25% of total jobs. J6 POPULATION The town has a total office stock of some 2,000,000 sq ft with a current availability at circa 2% 150,000 APPROX which is the lowest recorded since 2000. In the last 4 years some 500,000 sq ft of offices in Maidstone town centre have been converted to alternative uses. There is no office space currently

under construction across the Maidstone market therefore supply will become even tighter.

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G COMMUNICATIONS

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S Regular mainline train services connect Maidstone via its three stations to London Victoria,

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A Blackfriars, and London St Pancras with fastest journey times of approximately 53 minutes.

Ebbsfleet International Station is approximately 25 miles drive from the town, providing 4

trains per hour to London St Pancras with a journey time of just 18 minutes.

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N COUNTY ND N Medway Bridge House and Riverside House are located in a very prominent position overlooking R I

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the River Medway at the junction of the High Street with Fairmeadow in Maidstone Town D O A

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A O 2 I Centre. Fairmeadow is the A229 dual carriageway and forms part of the Town Centre gyratory

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E 2 S E K 0 system. There is excellent access to Junction 6 of the M20 via the A229 dual carriageway. A

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MAIDSTONE O R

W EMLIN WALK E BARRACKS FR E THE MALL T D Maidstone town centre benefits from both the Chequers Mall Shopping Centre and the

ST SHOPPING CENTRE A L R O EA T R RIVERSIDE Y S A T Fremlin Walk retail facility anchored by House of Fraser, with the pedestrianised Week Street RETAIL DW ME U HOUSE PARK C STREET G IN

K G W ETER’S ST ETER’S

T A linking these two centres. Close to the buildings is Earl Street which houses many of the P E B

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IG H towns restaurant offers. Y H IL L A

A W SH PLAC FO MEDWAY BRIDGE B NEY E RD IS ACE AV ROM R RO HOPS W AL EN E AD A P U YL There is also a significant quantity of offices in the town centre with occupiers including Kent HOUSE Y E T A20 T A W T RE E ER ST KNIGHTRID County Council, Maidstone Borough Council, Hidden Hearing, Invicta Law, MHA MacIntyre LAW

MAIDSTONE COURTS

A A26 WEST 2 AD C Hudson, Whitehead Monkton Solicitors and many professional firms. Other local office 2 RO O 9 GE L ID L

R E occupiers include ASB Law, Wilkins Kennedy Chartered Accountants and Towergate Insurance. B G N TO LOCKMEADOW E ENTERTAINMENT R CENTRE O A Maps not to scale. For indicative purposes only. D DESCRIPTION

Medway Bridge House and Riverside House comprise a RIVERSIDE HOUSE has recently been refurbished to a high MEDWAY BRIDGE HOUSE has the following specification: purpose built office development constructed in circa 1990 standard, including the following specification: Gas fired central heating and air conditioning on a self-contained site. Medway Bridge House comprises Gas fired central heating four storeys of office accommodation over undercroft parking, Suspended ceilings whilst Riverside House comprises five storeys with a surface Suspended ceilings Recessed lighting car park above the Medway Bridge House car park. LED lighting Raised access floors The buildings are constructed of steel frame under low pitch Raised access floors 87 undercroft on-site car parking spaces metal roofs to open plan specifications. Medway Bridge New lift Male and Female toilets in each core at each level House contains two 8 person passenger lifts, whilst Riverside New carpeting House has a single lift. Medway Bridge House comprises 19,718 sq ft of office 59 on-site car parking spaces accommodation over 4 floors, together with 87 car parking Male and Female toilets included within each demise spaces equating to a ratio of 1:227 sq ft. The tenant, Allianz, has recently committed to the fourth floor of the building Riverside House comprises 19,096 sq ft of accommodation and will be undertaking a fit-out, including provision of with 59 car spaces equating to a ratio of 1:324 sq ft. new air conditioning. Allianz already had leases of the three The ground floor is let to a Snap Fitness franchisee and is other floors. fully fitted out as a gym. The four upper floors are fitted out as offices with only the fourth floor currently not occupied. ACCOMMODATION

The property has previously been measured in accordance with the then RICS Code of Measuring Practice. Our client has opted out of measurements under RICS Property Measurement IPMS3 Office except for the upper floors of Riverside House.

SITE The property occupies a site of approximately 0.76 acres (0.31 hectares)

TENURE The entire property is held Freehold.

TENANCY MEDWAY BRIDGE HOUSE FLOOR NIA TENANT GUARANTOR COMMENCEMENT DATE TERM BREAK EXPIRY RENT PSF RENT REVIEW 1F 5,424 sq ft Allianz Management Services Ltd Allianz Holdings PLC 22.02.2018 10 years 21.02.2023 21.02.2028 £89,496 16.50 22.02.2023

2F 5,852 sq ft Allianz Management Services Ltd Allianz Holdings PLC 22.02.2018 10 years 21.02.2023 21.02.2028 £96,558 16.50 22.02.2023

3F 5,527 sq ft Allianz Management Services Ltd Allianz Holdings PLC 22.02.2018 10 years 21.02.2023 21.02.2028 £91,196 16.50 22.02.2023

4F 2,915 sq ft Allianz Management Services Ltd Allianz Holdings PLC 22.02.2018 10 years 21.02.2023 21.02.2028 £42,268 14.50 22.02.2023

19,718 sq ft £319,518

RIVERSIDE HOUSE GR 5,375 sq ft Enkay Investments Ltd (Snap Fitness Franchise) 08.05.2017 10 years NONE 07.05.2027 £80,625 15.00 08.05.2022

1F 3,776 sq ft Crowe Clark Whitehill LLP 01.09.2017 10 years 31.08.2022 31.08.2027 £112,530 15.00 01.09.2022 2F 3,726 sq ft Crowe Clark Whitehill LLP

3F 3,665 sq ft Questor Insurance Services Limited 01.10.2017 10 years 01.10.2022 30.09.2027 £54,975 15.00 01.10.2022

Includes 475 sq ft 4F 2,554 sq ft Vacant – 18 months rent, rates and service charge guarantee £34,000 15.00† restricted height

19,096 sq ft £282,130*

TOTAL 38,814 sq ft TOTAL RENT £601,648

*Assumes letting of 4FL Upper floors of Riverside House IMPS3 Office. †4th floor Riverside House comprises 2,079 sq ft at £15.00 psf plus 475 sq ft restricted height at £6.00 psf (average rent £13.31 per sq ft). COVENANT INFORMATION

Allianz Management Services Ltd / Allianz Holdings PLC Questor Insurance Services Limited Enkay Investments Ltd t/a Snap Fitness

Allianz Management Services Ltd (Reg. No: 03947280) is wholly Questor Insurance Services Limited (Reg No: 06201617) is Enkay Investments Ltd (Reg No: 09538577) is trading as Snap owned subsidiary of Allianz Holdings Plc is a general insurer an award winning independent provider of car hire excess Fitness started in 2015. It is a franchise gym fitness with over in the United Kingdom. It primarily offers motor, household, and other niche insurance products distributed in more 2,000 facilities open or in-development around the world. commercial property, business interruption and liability than 20 countries. The landlord holds a 6 month rent deposit. insurance products. 30th September 30th September 30th September 2017 – £000’s 2016 – £000’s 2015 – £000’s Their most recent financial results are as follows:

31st December 31st December 31st December Tangible Net Worth £270 £286 £220 2016 – £000’s 2015 – £000’s 2014 – £000’s Retained Profit / (Loss) Reserve £155 £171 £106 Sales Turnover £397,515 £384,651 £401,766 Total Assets £427 £413 £315 Profit / (Loss) Before Taxes £10,489 £15,462 £19,291 Tangible Net Worth (£167,808) (£119,487) (£132,093)

ALLIANZ Allianz Holdings PLC act as a Guarantor for Allianz Management Services Ltd and is the largest general insurers in the UK and part of the Allianz SE Group, the largest property and casualty insurer in the world. Allianz SE Group employs 142,000 employees worldwide, and in the UK employs over SNAP FITNESS 4,600 people across a network of 26 offices. Their most recent financial results are as follows:

31st December 31st December 31st December 2016 – £000’s 2015 – £000’s 2014 – £000’s

Sales Turnover £2,184,900 £1,685,800 £1,964,300 Profit / (Loss) Before Taxes £81,800 £61,900 £153,800 Tangible Net Worth £1,170,300 £1,100,000 £1,168,500

Crowe Clark Whitehill LLP

Crowe Clark Whitehill LLP (Reg No: OC307043) is a national audit, tax and advisory firm that is the eight largest global professional services network with 200 independent member firms operating from offices around the world. Their most recent financial results are as follows:

31st December 31st December 31st December 2017 – £000’s 2016 – £000’s 2015 – £000’s

Sales Turnover £69,776 £65,006 £61,358 Profit / (Loss) Before Taxes £16,513 £11,707 £14,844 Tangible Net Worth £14,708 £10,033 £8,513

QUESTOR INSURANCE SERVICES LTD CROWE CLARKE WHITEHILL OCCUPATIONAL SOUTH EAST OFFICE MARKET OVERVIEW INVESTMENT MARKET Investment volumes in the South East reached £3.6BN for 2017, The Maidstone office market has seen a significant change close to the record levels of £3.7BN achieved the previous year. over the past 4 years. In excess of 500,000 sq ft of existing 2018 has started buoyantly, with £636M of stock transacting, stock has been lost to Permitted Development for residential or held back only by a lack of stock being brought to the market, for leisure uses. Buildings such as Bishops Terrace (28,000 sq ft), particularly good quality town centre office buildings in tight Link House (21,000 sq ft), Concorde House (60,000 sq ft), Kent markets such as the subject property. Knight Frank expect the House (70,000 sq ft), Star House (25,000 sq ft) and Brenchley South East Office investment market to remain characterised House (70,000 sq ft) have been or are in the process of being by good levels of investor demand and a shortage of stock, converted into residential use. London House (30,000 sq ft) is which could see prime yields harden to below 5.00% NIY. now a Premier Inn. A schedule of comparables are listed below: As a result of this, together with an upturn in demand, the vacancy rate for offices in Maidstone has reduced significantly, to circa 2%. Schemes such as Turkey Mill (100,000 sq ft), Springfield House (16,000 sq ft) and Maidstone INVESTMENT COMPARABLES House (60,000 sq ft) are largely fully occupied and there is a distinct shortage of modern quality office space available to let. DATE ADDRESS TENANT PRICE PRICE PSF YIELD WAULT March 2018 Weald & Darenth House, Sevenoaks Multi-let £10.11M £252 8.00% 4.8 years The last 2 years has seen significant transactional activity, including the letting to Invicta Law of almost 13,000 sq ft at Feb 2018 Kingsgate, Redhill Multi-let £10.65M £248 7.66% 6.9 years Priory Gate, three lettings at Riverside House comprising Snap Nov 2017 Furness House, Redhill Multi-let £5.20M £195 7.74% 2.08 years Fitness (5,000 sq ft), Crowe Clarke Whitehill (7,500 sq ft) and Aug 2017 Abbey Gate, Reading Multi-let £14.83M £259 7.81% 3.8 years Questor Insurance (3,600 sq ft). Lettings have also taken place July 2017 Vandervell House, Maidenhead Multi-let £7.85M £313 7.78% 2.47 years in Maidstone House to Chubb (4,000 sq ft), KSS (3,500 sq ft) and Think Telecom (3,500 sq ft). We are of the opinion that prime office rents in Maidstone are in excess of £20 per sq ft. ALTERNATIVE USES EPC FURTHER INFORMATION We understand that residential values in Maidstone currently Medway Bridge House: D81 For further information or to arrange an inspection, stand in the region of £375 per sq ft. Further information Riverside House: C74 please contact the following: available on request. SERVICE CHARGE PROPOSAL Details of Service Charge available on request. Offers sought in excess of £7,300,000 (Seven Million Three Hundred Thousand Pounds). A purchase at this price would reflect an attractive net initial yield of 7.73%, after allowing VAT for usual purchase costs of 6.63%. This price equates to a low Our clients advise that the exemption to VAT has not been capital value of £188 per sq ft. Nick Threlfall waived and thus VAT is not applicable. Subject to Contract and Exclusive of VAT Telephone: 01634 668000 Mobile: 07860 504621 Email: [email protected]

Simon Rickards Telephone: 020 7861 1158 Mobile: 07787 844384 Email: [email protected] Alasdair Collins Telephone: 020 3826 0608 Mobile: 07532 380285 [email protected]

Important notice 1. Particulars: These particulars are not an offer or contract, nor part of one. You should not rely on statements by Knight Frank LLP & Watson Day in the particulars or by word of mouth or in writing (“information”) as being factually accurate about the property, its condition or its value. Neither Knight Frank LLP & Watson Day nor any joint agent has any authority to make any representations about the property, and accordingly any information given is entirely without responsibility on the part of the agents, seller(s) or lessor(s). 2. Photos etc: The photographs show only certain parts of the property as they appeared at the time they were taken. Areas, measurements and distances given are approximate only. 3.Regulations etc: Any reference to alterations to, or use of, any part of the property does not mean that any necessary planning, building regulations or other consent has been obtained. A buyer or lessee must find out by inspection or in other ways that these matters have been properly dealt with and that all information is correct. 4. VAT: The VAT position relating to the property may change without notice. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names. June 2018.

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