Clerkenwell London EC1 Freehold Investment Opportunity with Significant Development Potential Executive Summary
Located in the heart of Clerkenwell close to A rare opportunity Farringdon Station to acquire a prime Freehold Comprises 21,491 sq ft (1,996.6 sq m) of offices over freehold asset with basement, ground and 3 upper floors short term income Let to Trace Group Limited until 23rd September and exceptional 2022, who have been in occupation since 1989 Current rent passing of £712,880 which equates value-add potential. to a low overall rent of £33.17 per sq ft The rent is subject to fixed uplifts Positive pre-application responses for an exciting new build office scheme Offers are invited in excess of £14,000,000 (fourteen million pounds) for the freehold interest, subject to contract and exclusive of VAT A purchase at this level reflects a net initial yield of 4.77%, assuming purchaser’s costs of 6.79%, a capital value of £651 per sq ft on the existing accommodation and £366 per sq ft on the proposed development scheme 2 / 3
Located in the heart of Landmarks 1 20 Fenchurch Street (Walkie Talkie) Clerkenwell with excellent 2 30 St Mary Axe (Gherkin) 3 110 Bishopsgate transport connections 4 Barbican 5 Guildhall 6 Smithfield Market 7 St Paul’s Cathedral 8 22 Bishopsgate 9 The Shard 10 Tower 42
224–232 Liverpool Street Moorgate St John St. Barbican Farringdon East Cannon Street St Paul’s Farringdon
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Farringdon is founded upon a rich heritage of creativity
Located within Farringdon’s Clerkenwell village, the area has a rich heritage, from the Order of St John who founded what is today the St Johns Ambulance service, to the licensing of 35 Shakespeare’s plays and the birthplace of the English dictionary.
Today, Farringdon is regarded as the Europe’s pre-eminent centre of innovation where creative, media and technology firms reside amongst Michelin star restaurants, bustling markets and independent cafés and bars.
London is the tech capital of Europe, and St John Street sits at the epicentre of London’s ‘Golden Triangle’ of tech and creative enterprise.
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Creativity and innovation are fundamental pillars of London’s Complementing the vibrant office market is the excellent economic future and Clerkenwell is a defined area that drives retail and leisure amenity which has been transformed over economic growth and networks of knowledge. the last ten years. Leather Lane and Exmouth markets have developed to become amongst London’s premier daily food This highly sought after location offers a hub for technology and markets providing office workers with an unparalleled choice creative industries, at the cutting edge of their trade, alongside of cuisines. highly creative fields like architecture, design, theatre production, advertising and marketing. New restaurants are opening regularly adding to some firm London favourites, including Granger & Co, Modern Pantry, Pizza Pilgrims and Hix, which are all well established in the area. Unrivalled Connections
Over 140 trains per hour through the Farringdon interchange
Perhaps one of London’s most central locations, Farringdon is just a short walk from the City, a tube ride into the West End and just three minutes by overground rail to St Pancras International, with Eurostar services to Europe.
Opened in 1863, Farringdon Station claims to be the oldest underground metro station in the world, but perhaps more impressive is the estimation that by 2021, a quarter of England’s population will be able reach Farringdon within 45 minutes.
Station Connections Travel Times (Mins)
Farringdon 8
Angel 9
Old Street 14
Kings Cross St Pancras 13
Liverpool Street 15
Journey Times from The Building. Source TfL
New Farringdon ticket hall for the Elizabeth Line (CGI)
Elizabeth Line (Crossrail) Stratford
Tottenham Liverpool Reading Paddington Bond Street Court Road Farringdon Street Whitechapel 10 To Shenfield mins
59 8 4 2 224–232 2 5 Canary Wharf mins mins mins mins mins mins St John St. To Abbey Wood
Heathrow 8 mins 31 mins Journey Times from Farringdon Station. Source crossrail.co.uk
Connectivity is set to be further improved in 2020 by the opening The new Farringdon Station western ticket hall will be of the new Elizabeth Line (Crossrail), which can be accessed 500 metres from St John Street. from the nearby Farringdon station. Elizabeth Line services will be fully integrated with London’s existing transport network The Elizabeth Line will provide fast access to a large number and will bring an extra 1.5 million people to within a 45 minute of stations across the capital, with the journey times from journey time of the capital. Farringdon to Canary Wharf and Bond Street being reduced to 8 and 4 minutes respectively. Farringdon will provide a major interchange between Crossrail, Thameslink, London Underground and National Rail services. Local Developments 6 / 7
Current & future developments
Herbal House, Spectrum, The Smithson, 10 Back Hill EC1 160 Old Street EC1 6-9 Briset Street EC1
Status Completed Q1 2018 Status Completed Q2 2018 Status Completion Q3 2018 Developer Allied London & Aerium Developer Great Portland Estates Developer Savills IM Architect Buckley Gray Yeoman Architect Orms Architect Tate Hindle Scheme 115,000 Ft² mixed use Scheme 153,000 Ft² of Grade A office Scheme 47,900 Ft² of Grade A development comprising offices, accommodation office accommodation retail and residential
The Ray, The Farmiloe Building, Farringdon East, 119 Farringdon Road EC1 St John Street EC1 EC1
Status Completion Q1 2019 Status Completion Q2 2019 Status Completion Q2 2019 Developer Viridis Real Estate Developer Aberdeen Standard Developer Helical Architect Allford Hall Monaghan Morris Architect AWW Architect PLP Architecture Scheme 100,000 Ft² development Scheme 63,400 Ft² development Scheme 75,000 Ft² of Grade A office and including 90,000 Ft² of of Grade A offices retail accommodation Grade A offices
100 St John Street, Farringdon West, Museum of London - EC1 EC1 West Smithfield, EC1
Status Completion Q3 2019 Status Completion Q4 2019 Status Completion 2022 Developer Aberdeen Standard Developer HB Reavis Developer City of London Architect AWW Architect John Robertson Architects Architect Stanton Williams and Asif Khan Scheme 31,000 Ft² development Scheme 207,000 Ft² of Grade A offices Scheme 269,000 sq ft of Museum of Grade A offices and 25,000 Ft² of retail of London and restaurant The Existing Building
Originally constructed in the 1950s as a light industrial building and was converted to office accommodation in the early 1990s
The building is of concrete frame construction under a flat roof with brick cladding and solid floors.
The property provides approximately 21,491 sq ft (1,996.6 sq m) of net internal office and ancillary accommodation arranged over ground and three upper floors. Additionally there is a basement which houses plant and machinery and ancillary space.
To the rear accessed from Agdon Street there is a loading bay at ground level which currently provides parking for up to four cars. 8 / 9
Specification
The office specification includes:
Comfort cooling
Perimeter heating
Suspended ceilings with integrated lighting
Two service cores
1 x 8 person passenger lift
1 x goods lift The Existing Building
Accommodation Ground Floor 5,875 Sq Ft / 545.8 Sq M
Floor Use Sq Ft (NIA)* Sq M (NIA)*
3rd Office 4,724 438.9
2nd Office 5,410 502.6
1st Office 5,398 501.5
Ground Office 5,806 539.4
Storage 69 6.4
Basement Storage 84 7.8
Total 21,491 1,996.6
*Loading bay (4 car parking spaces)
Floor Core
Plans for indicative purposes only. Not to scale.
Typical Upper Floor 5,410 Sq Ft / 502.6 Sq M 3rd Floor 4,724 Sq Ft / 438.9 Sq M 10 / 11
Library Brunswick Museum Estate
Brunswick Tenancy Court
The property is let in it’s entirety to Trace Group Limited on a 15 year lease from 24th September 2007. The lease is inside Skinner Street the security of tenure and compensation provisions of the Landlord and Tenant Act 1954 Part II. From 24th September 2019 the passing rent is £712,880 per annum. The rent is
Skinner Street subject to fixed uplifts equivalent to 3% per annum. Partridge This will show the following yield profile. 224-232 Court
Year Rent (pa) Rent (psf) Running yield*
Agdon Street Sep-19 £712,880 £33.17 4.77%
Sep-20 £734,267 £34.17 4.91% Paramount Building Woodbridge Street Sep-21 £756,295 £35.19 5.06%
*Assuming a net purchase price of £14m.
Tenant’s Covenant
Established in 1974, Trace Group Limited (02388822) specialises in business software solutions for the financial, insurance, reinsurance and property markets and provides payroll services.
The company has an Experian Delphi score of 100 out of 100, demonstrating very low risk. The May 2018 accounts show it has a tangible net worth of £10,263,562 and a turnover of £26,718,440.
The Vendor is willing to assign a guarantee provided by Santander UK Plc up to an aggregate amount of £625,000 should Trace Group Limited not comply with its lease obligations. Development Potential
The proposals include the demolition of the existing building and New build pre- its replacement with a Grade A office-led development with retail application meetings and/or café uses at ground floor. Details of the development potential may include; have been positively Demolition and re-build to provide an eight storey building received by the London arranged over lower ground, ground and six upper floors Terraces at fourth, fifth and sixth floors totalling 4,386 sq ft
Borough of Islington Improved office reception
Efficient floorplates
Improved A1 and/or A3 retail frontage and positioning
Floor to ceiling heights of 2.7m and ground floor retail of 3.9m
Secure ground floor cycle storage (52 racks) and associated showers/changing facilities
Creation of an additional 16,664 sq ft (1,548.1 sq m) of net lettable area, with office floorplates ranging from approximately 1,518 sq ft on the sixth floor to 6,350 sq ft on the first to third floors
Requirement for Affordable Office floorspace equating to approximately 5% of the total amount of office floorspace proposed
Proposed Development with an indicative score of 71% equating to a BREEAM rating of ‘Excellent’
Further information on the scope for a new build scheme can be found on the data room. 12 / 13
A professional team, lead by SCR Architects, has assessed the redevelopment potential for 224-232 St John Street.
Discipline Consultant
Architecture | Urban Design SCRa
Planning Consultant Iceni Planning
Heritage Consultant Donald Insall Associates
Archaeology Consultant MOLA
Draft Construction Management Systra
Structural Engineering WSP
BREEAM Assessment WSP
Cost Consultant Core Five
Building Services and Sustainability WSP
Accessible Design Consultant Systra Development Potential
Accommodation
Floor Use NIA* GIA* Terrace
Sq Ft Sq M Sq Ft Sq M Sq Ft Sq M
6th Office 1,518 141 2,670 248 1,136 105.5
5th Office 2,917 271 3,864 359 2,863 266
4th Office 5,662 526 6,490 603 388 36
3rd Office 6,350 590 7,179 667 – –
2nd Office 6,350 590 7,179 667 – –
1st Office 6,350 590 7,179 667 – –
Ground Office 2,842 264 5,900 548 – –
Retail 451 42 – – – –
Lower Ground Office 5,715 531 7,190 668 – –
Total 38,155 3,545 47,651 4,427 4,386 302
*All figures are approximate only, based on preliminary sketch layouts and should not be relied upon for costing or marketing purposes. All figures are subject to detailed design development. See data room for further information.
Floor Reception Retail Terrace Core
Plans for indicative purposes only. Not to scale.
Brick
Brick 14 / 15
Lower Ground Floor 5,715 Sq Ft / 531 Sq M Ground Floor 2,842 Sq Ft / 264 Sq M
Typical Upper Floor 6,350 Sq Ft / 590 Sq M Fourth Floor 5,662 Sq Ft / 526 Sq M
Fifth Floor 2,917 Sq Ft / 271 Sq M Sixth Floor 1,518 Sq Ft / 141 Sq M Tenure
The property is held Freehold.
Planning
224-232 St John Street is not Listed, but lies within the Clerkenwell Green Conservation Area of the London Borough of Islington.
EPC
The property has an EPC of D-83.
VAT
The property is elected for VAT. It is anticipated that the sale of the property will be treated as a Transfer of a Going Concern (TOGC) so that VAT will not be payable on the purchase price.
Data room Contact
Further information is available on the data room, For further information or to arrange access to which can be provided upon request. a viewing, please contact:
Mike Pope 020 3440 9807 [email protected]
Proposal John Morton 020 3440 9810 Offers are invited in excess of £14,000,000 (fourteen [email protected] million pounds) for the freehold interest, subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 4.77%, assuming purchaser’s costs of 6.79%, and a capital value of £651 per sq ft on the existing accommodation and £366 per sq ft on the proposed development scheme.
MISREPRESENTATION ACT 1967. IMPORTANT: These particulars do not constitute either the whole or any part of an invitation, offer or contract in relation to the property described in the particulars. Gryphon Property Partners, nor its Directors, employees and agents, have authority to make or give any representation or warranty, express or implied, on behalf of any party in relation to the property. Whilst the particulars are given in good faith, intending purchasers must satisfy themselves independently as to the accuracy of all matters on which they intend to rely. All negotiations are subject to contract. September 2019.
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