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INVESTMENT SUMMARY LOCATION DEMOGRAPHICS RETAILING IN KINGSTON GOAD SITUATION DESCRIPTION ACCOMMODATION TENURE TENANCIES SERVICE CHARGE RENTAL VALUE COVENANT VAT EPC PROPOSAL FURTHER INFORMATION

89/91 CLARENCE STREET & 2/6 CASTLE STREET KINGSTON-UPON-THAMES

PRIME RETAIL / OFFICE INVESTMENT BLOCK FOR SALE INVESTMENT SUMMARY LOCATION DEMOGRAPHICS RETAILING IN KINGSTON GOAD SITUATION DESCRIPTION ACCOMMODATION TENURE TENANCIES SERVICE CHARGE RENTAL VALUE COVENANT VAT EPC PROPOSAL FURTHER INFORMATION

INVESTMENT SUMMARY

Kingston-upon-Thames is one of the UK's most significant and renowned retail centres located in south west .

Freehold.

Rarely available retail and office block, occupying a prime position on Clarence Street, well positioned to take advantage of British Land and USS’s development of Eden Walk.

Excellent rental growth prospects given demand for the town.

59% of the income secured to the undoubted covenants of Starbucks Coffee Company (UK) Limited and Office Angels Ltd with an overall WAULT of 6.06 years.

Potential to convert the office accommodation to residential use, subject to planning.

The current rent is £312,800 per annum.

Our clients are seeking offers in excess of £4,950,000 (Four Million Nine Hundred and Fifty Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level would reflect a net initial yield of 5.60%, after allowing for purchaser’s costs of 6.59% and the service charge shortfall.

89/91 CLARENCE STREET & 2/6 CASTLE STREET, KINGSTON-UPON-THAMES PRIME RETAIL / OFFICE INVESTMENT BLOCK FOR SALE 2 INVESTMENT SUMMARY LOCATION DEMOGRAPHICS RETAILING IN KINGSTON GOAD SITUATION DESCRIPTION ACCOMMODATION TENURE TENANCIES SERVICE CHARGE RENTAL VALUE COVENANT VAT EPC PROPOSAL FURTHER INFORMATION

LOCATION

Kingston-upon-Thames is one of the UK’s leading commercial and retailing centres and is one of only six Royal Boroughs in and Wales. The town is located in the affluent south west area of , approximately 5 miles (8 km) south of Richmond, 11 miles (17.7 km) west of and HIGH M1 12 miles (19.3 km) south west of . WYCOMBE RICKMANSWORTH The town benefits from excellent communications, with it being in close proximity to the M25, M3 and A3. M40 The town benefits from a regular commuter rail service

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89/91 CLARENCE STREET & 2/6 CASTLE STREET, KINGSTON-UPON-THAMES PRIME RETAIL / OFFICE INVESTMENT BLOCK FOR SALE 3 INVESTMENT SUMMARY LOCATION DEMOGRAPHICS RETAILING IN KINGSTON GOAD SITUATION DESCRIPTION ACCOMMODATION TENURE TENANCIES SERVICE CHARGE RENTAL VALUE COVENANT VAT EPC PROPOSAL FURTHER INFORMATION

DEMOGRAPHIC PROFILE

Kingston has an estimated primary catchment population of 887,000, significantly above the regional centre average and ranking the town 13th out of the PROMIS centres on this measure. The estimated shopping population of Kingston is 467,000, ranking the town 15th out of the PROMIS centres, reflecting the dominance of Kingston across its densely populated catchment area.

The town also ranks 11th in terms of the volume of comparison retail spend available in the catchment area and is forecast to see significantly above average growth in that spending between 2015 – 2020.

Kingston has an affluent catchment population, with a 36% representation of ABC1 demographics. RETAILING IN KINGSTON

Kingston-upon-Thames is one of the UK’s most into The Bentall Shopping Centre, which comprises significant and renowned retail centres, arguably one approximately 600,000 sq ft of retail floor space and of the strongest high street shopping destinations trades over 4 floors. The other main managed shopping within the M25 outside of Central London. centre is Eden Walk, which comprises approximately 290,000 sq ft of retail floor space and is anchored by The town centre retail floor space in Kingston is Boots, Sainsbury’s and Habitat. estimated at 1.40m sq ft. Kingston ranks 16 on the base of its PMA retail score and 16 on the PMA fashion Primark is extending its store on Eden Street by score. The town’s high ranking on the PMA retail and approximately 59,000 sq ft, which will further fashion scores, reflects an extensive range of fashion strengthen Eden Street. and non-fashion retailers in the town. Key fashion retailers include Cos, H&M, Hollister, Primark, New In addition to this, Kingston Council has now granted Look, Monsoon and River Island, as well as upper middle permission for British Land and the Universities quality operators such as Karen Millen, Jigsaw, Reiss, Superannuation Scheme (USS) to commence a L.K.Bennett and Massimo Dutti. transformative redevelopment of the Eden Walk Shopping Centre. The southern end of Memorial Kingston offers two quality department stores in John Gardens, to the back of the centre, will also be Lewis and Bentalls, with variety stores including Marks reopened, providing improved links between Eden Walk & Spencer and Primark. and the rest of the town centre.

The main focus of prime retail activity in Kingston is The scheme will feature new stores, a dining terrace, a the pedestrianised Clarence Street, home to Marks & boutique cinema and a “sky” restaurant. The complex Spencer’s two stores and the main entrance to The will also include 385 residential flats, from studio Bentall Shopping Centre. The prime retailing extends apartments to three bedroom homes.

89/91 CLARENCE STREET & 2/6 CASTLE STREET, KINGSTON-UPON-THAMES PRIME RETAIL / OFFICE INVESTMENT BLOCK FOR SALE 4 5 N FURTHER INFORMATION PROPOSAL

VAT EPC VAT ALDI COVENANT PRIME RETAIL / OFFICE INVESTMENT BLOCK FOR SALE / OFFICE PRIME RETAIL STORE PRIMARK EXTENDED

VODAFONE

EDEN WALK SHOPPING CENTRE ITSU

89/91 CLARENCE STREET & 2/6 CASTLE STREET, KINGSTON-UPON-THAMES 89/91 CLARENCE STREET & 2/6 CASTLE STREET,

CENTRE

BENTALL INVESTMENT SUMMARY LOCATION DEMOGRAPHICS RETAILING IN KINGSTON GOAD SITUATION DESCRIPTION ACCOMMODATION TENURE TENANCIES SERVICE CHARGE RENTAL VALUE VALUE RENTAL CHARGE SERVICE TENANCIES TENURE ACCOMMODATION DESCRIPTION SITUATION GOAD KINGSTON IN DEMOGRAPHICS RETAILING LOCATION SUMMARY INVESTMENT purposes only For illustrative INVESTMENT SUMMARY LOCATION DEMOGRAPHICS RETAILING IN KINGSTON GOAD SITUATION DESCRIPTION ACCOMMODATION TENURE TENANCIES SERVICE CHARGE RENTAL VALUE COVENANT VAT EPC PROPOSAL FURTHER INFORMATION

SITUATION

The subject block, which is highlighted in green on the Goad plan, occupies a prime trading location at the junction of Clarence Street and Castle Street, adjacent to Uniqlo, whilst in close proximity to Pret A Manger, and Metro Bank. Castle Street forms a busy pedestrianised cut through from Fife Road and Kingston Railway Station and offers a mix of national occupiers and cafes / restaurants.

DESCRIPTION

The ownership comprises a retail parade of 5 shop units, fronting Clarence Street / Castle Street, primarily arranged over ground floor and basement, with three floors of self-contained offices above, accessed from two self-contained entrances on Castle Street.

ACCOMMODATION

We have been provided with a measured survey report, undertaken by CBRE Limited on behalf of our clients, which sets out the floor areas as detailed in the tenancy schedule below.

89/91 CLARENCE STREET & 2/6 CASTLE STREET, KINGSTON-UPON-THAMES PRIME RETAIL / OFFICE INVESTMENT BLOCK FOR SALE 6 INVESTMENT SUMMARY LOCATION DEMOGRAPHICS RETAILING IN KINGSTON GOAD SITUATION DESCRIPTION ACCOMMODATION TENURE TENANCIES SERVICE CHARGE RENTAL VALUE COVENANT VAT EPC PROPOSAL FURTHER INFORMATION

TENURE

Freehold.

TENANCIES

The property is let in accordance with the tenancy schedule set out below, producing a current gross rental income of £312,800 pax and a net rental income of £294,954 per annum exclusive after deduction of service charge shortfalls. The majority of the leases are let on effective, full repairing and insuring terms recoverable via a service charge, details of which are available from this office.

SERVICE CHARGE

Based on current budgets there is an anticipated service charge shortfall of £17,846 going forward due to service charge caps, with potential to reduce this figure following renegotiation of contracts. The historic service charge shortfall in part relates to amounts accrued in relation to a refurbishment of the common parts of the Clarence Street offices, which the purchaser may seek to carry out in the medium-term. At present, the total amount accrued for a refurbishment is £54,000. A further £20,000 is being accrued over the service charge year end 31 March 2017. Further information on the service charge will be available in the data room.

89/91 CLARENCE STREET & 2/6 CASTLE STREET, KINGSTON-UPON-THAMES PRIME RETAIL / OFFICE INVESTMENT BLOCK FOR SALE 7 INVESTMENT SUMMARY LOCATION DEMOGRAPHICS RETAILING IN KINGSTON GOAD SITUATION DESCRIPTION ACCOMMODATION TENURE TENANCIES SERVICE CHARGE RENTAL VALUE COVENANT VAT EPC PROPOSAL FURTHER INFORMATION

DESCRIPTION TENANT LEASE LEASE NEXT REVIEW ACCOMMODATION CURRENT ERV LANDLORD COMMENTS START EXPIRY (BREAK (SQ FT) RENT £ P.A. £ P.A. SHORTFALLS OPTION) (ITZA) (ITZA) 89/91 Starbucks Coffee 07/01/2008 06/01/2023 07/01/2018 Ground Floor - 1,237 £155,000 £155,000 Clarence Street ITZA - 883 (£172.25) (£172.25) Basement - 1,007 89a CG Milkshake Co. Ltd 25/07/2012 24/07/2022 25/07/2017 Ground Floor - 166 £20,000 £18,000 Mutual break clause 24/07/2017 and Clarence Street (LT: 24/07/17) ITZA - 166 (£116.00) (£100.00) rolling annual there after. Rental deposit Basement - 279 of £20,000 2 Castle Street Jin Sung Suh & 25/02/2009 19/05/2019 19/05/2015 Ground Floor - 136 £15,500 £15,500 Hyun S Suh ITZA - 136 (£102.00) (£102.00) t/a JOA First floor (Kitchen) - 181 4 Castle Street Rak-Kyu Park 19/05/2014 18/05/2019 19/05/2014 Ground Floor - 213 £15,500 £18,000 Rental deposit of £6,017.25. Original t/a Kokoro ITZA - 213 (£71.50) (£85.00) tenant Yoko Jewellery Company Limited 6 Castle Street Gerald O'Neill 20/05/2015 19/05/2025 20/05/2020 Ground Floor - 258 £17,500 £17,500 £624 Tenant to pay expenses in relation to t/a G&E Jewellers ITZA - 214 (£82.00) (£82.00) common parts. Rental deposit of £6,900 89-91 Office Angels Ltd 24/06/2015 23/06/2025 24/06/2020 First floor - 1,450 £30,000 £30,000 Clarence Street (T: 24/06/2020) (£20.75) (£20.75) 1st flr offices 89/91 JJ Horstman & JS 06/08/2015 05/08/2020 T: 06/08/2018 Second floor - 1,974 £47,800 £47,800 £17,222 Service charge cap of £18,000 Clarence Street Perry t/a Palmers Third floor - 701 (£17.90) (£17.90) 2nd/3rd flr offices Solicitors 4/6 Caroline Fitzpatrick 09/03/2012 08/03/2017 First floor - 330 £11,500 £17,200 New 5 year reversionary lease from Castle Street & Charlotte Adler Second floor - 522 (£13.50) (£20.00) 09/03/2017 in solictors at a rent of 1st/2nd offices Solicitors £17,200 p.a. Further details available from this office. TOTAL £312,800 £319,000 £17,846

89/91 CLARENCE STREET & 2/6 CASTLE STREET, KINGSTON-UPON-THAMES PRIME RETAIL / OFFICE INVESTMENT BLOCK FOR SALE 8 INVESTMENT SUMMARY LOCATION DEMOGRAPHICS RETAILING IN KINGSTON GOAD SITUATION DESCRIPTION ACCOMMODATION TENURE TENANCIES SERVICE CHARGE RENTAL VALUE COVENANT VAT EPC PROPOSAL FURTHER INFORMATION

RENTAL VALUE

It is our opinion that the estimated rental value as of today’s date would lie in the region of £319,000 per annum. The apportioned rental values are set out in the tenancy schedule. Prime Zone A rents are now at approximately £300 on Clarence Street, Kingston.

The principal office evidence relates to the Adeco reversionary lease effective May 2015 agreed at £20.75 per sq ft and the new reversionary lease to Fitzpatrick & Adler Solicitors, which has been agreed at circa £20.00 per sq ft.

The most salient rental evidence can be set out as follows:- a) 36 Clarence Street (Vodafone) Open market letting in June 2015, at a rent of £247,500 pa, which reflected a headline Zone A rent of £288 per sq ft. b) 22 Clarence Street (ITSU) Assignment of Arcadia’s leasehold interest to Itsu in March 2016 for a 9 month rent free period. The rent passing of £350,000 pax devalues to a Zone A rent of £311 per sq ft and the tenant was proposing significant works to the frontage to create double height glazing at a cost considerably in excess of the incentive received. c) 75/77 Clarence Street (Tiger) Open market letting June 2012 at a rent of £265,000 pax, which reflects a Zone A rent of £260 per sq ft. d) 11/13 Castle Street (Coral) Rent review March 2015, agreed at a rent of £61,000 per annum exclusive (increased from £57,500), which devalued to a ZA rent of £75 per sq ft, applying £5 to the 1st/2nd floors ancillary and £20 to the 1st and 2nd floor offices, less 10% for management.

89/91 CLARENCE STREET & 2/6 CASTLE STREET, KINGSTON-UPON-THAMES PRIME RETAIL / OFFICE INVESTMENT BLOCK FOR SALE 9 INVESTMENT SUMMARY LOCATION DEMOGRAPHICS RETAILING IN KINGSTON GOAD SITUATION DESCRIPTION ACCOMMODATION TENURE TENANCIES SERVICE CHARGE RENTAL VALUE COVENANT VAT EPC PROPOSAL FURTHER INFORMATION

COVENANT

Starbucks opened its first shop in 1971 and now has more than 15,000 stores in 50 countries. For more information, please go to www.starbucks.com.

Office Angels is part of the Adeco Group, the world’s leading provider of HR solutions, employing over 31,000 dedicated members of staff and operating across 5,500 offices in more than 60 countries worldwide.

The summary accounting information for Starbucks Coffee Company (UK) Limited and Office Angels Limited is set out below:-

STARBUCKS 27/09/2015 28/09/2014 29/09/2013 COFFEE COMPANY GBP GBP GBP (UK) LIMITED Turnover £405,641,634 £408,721,070 £399,405,183 Pre-tax £34,216,739 £1,056,196 -£20,465,123 profit Net Worth £57,705,649 £35,513,082 £43,838,060

Office 31/12/2015 31/12/2014 31/12/2013 Angels Limited GBP GBP GBP Turnover £79,038,000 £82,231,000 £87,940,000 Pre-tax £2,777,000 £3,366,000 £342,000 profit Net Worth £17,635,000 £15,602,000 £12,371,000

89/91 CLARENCE STREET & 2/6 CASTLE STREET, KINGSTON-UPON-THAMES PRIME RETAIL / OFFICE INVESTMENT BLOCK FOR SALE 10 INVESTMENT SUMMARY LOCATION DEMOGRAPHICS RETAILING IN KINGSTON GOAD SITUATION DESCRIPTION ACCOMMODATION TENURE TENANCIES SERVICE CHARGE RENTAL VALUE COVENANT VAT EPC PROPOSAL FURTHER INFORMATION

VAT PROPOSAL

We understand that the property is elected for VAT and We are instructed to seek offers for our client’s freehold 2026 was sold in November 2015 for £4,250,000, which therefore VAT will be payable on the purchase price. It is interest in excess of £4,950,000 (Four Million Nine reflected a net initial yield of 4.44%. The property was envisaged that the sale will be dealt with as a Transfer Hundred and Fifty Thousand Pounds) subject to contract let at a rent of £200,000 pa, which reflected a Zone A Of a Going Concern (TOGC). and exclusive of VAT. rent of £110 per sq ft.

A purchase at this level would reflect the following yield 2. 167/181 Clarence Street, Kingston profile after allowing for purchaser’s costs of 6.59% and Secondary retail investment comprising 5 retail the service charge shortfall. units with a WAULT of 8.05 years sold to Clearbell in December 2015 for £5.55m, which reflected a net initial Net initial yield - 5.60% yield of 6%. EPC Reversionary yield - 6.05% Equivalent yield - 5.98% 3. 40/40a Clarence Street, Kingston (North Face & EE) Copies of the EPC ratings and reports are available from True equivalent yield - 6.21% We have recently concluded the sale of the subject this office. two shop property to a Middle Eastern investor for The most recent transactions in Kingston can be set out £10,350,000, which reflects a net initial yield of 3.91%. as follows:- The property was let to EE and VF Northern Europe Services Limited t/a The North Face with a WAULT of 1. 86/88 Eden Street, Kingston (Halifax) 5.93 years. The rents devalued to £299.82 Zone A and Retail investment let to Bank of Scotland until May £281.72 Zone A respectively.

89/91 CLARENCE STREET & 2/6 CASTLE STREET, KINGSTON-UPON-THAMES PRIME RETAIL / OFFICE INVESTMENT BLOCK FOR SALE 11 INVESTMENT SUMMARY LOCATION DEMOGRAPHICS RETAILING IN KINGSTON GOAD SITUATION DESCRIPTION ACCOMMODATION TENURE TENANCIES SERVICE CHARGE RENTAL VALUE COVENANT VAT EPC PROPOSAL FURTHER INFORMATION

Messrs. Jackson Criss for themselves and for the vendors or lessors of this property whose agents they are For further information, please contact: to give notice that: (i) the particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract; (ii) all descriptions, dimensions, references to condition and necessary permissions for use and occupation, and other details are Philip Hay Brook Wannop given in good faith and are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the 020 7637 7100 020 7637 7100 correctness of each of them; (iii) no person in the employment of Messrs. Jackson Criss has any authority DESIGNED BY TCC to make or give any representation or warranty whatever in relation to this property. JC0090. June 2016. [email protected] [email protected]

89/91 CLARENCE STREET & 2/6 CASTLE STREET, KINGSTON-UPON-THAMES PRIME RETAIL / OFFICE INVESTMENT BLOCK FOR SALE 12