Pacific House Hazelwick Avenue, Three Bridges, CRAWLEY, Rh10 1Ex

Energy House & Pacific House hazelwick avenue, three bridges, CRAWLEY, rh10 1ex

fully let office investment with potential for conversion to residential. Investment Summary

> Two Prime South East office buildings totalling 39,638 sq ft > Current rent of £679,000 per annum equating to a low average rent > Well located in Three Bridges, a major suburb of Crawley within 5 miles of of £17.13 per sq ft Gatwick Airport > 151 car park spaces providing an excellent ratio of 1:263 per sq ft > Situated within 500m of Three Bridges Station, with frequent fast train services > Potential to re-gear leases or convert to residential to provide 60 apartments to Central London, Gatwick Airport and the South Coast under permitted development > Excellent local amenities including a 24 hour Tesco supermarket, Lidl and Iceland > Large site affording the potential for future extension and nearby Town Centre > Offers are sought in excess of £7,500,000 (Seven Million Five Hundred Thousand > Fully let to EDF Energy and UK Power Networks with a WAULT of 3.61 years to Pounds) subject to contract and exclusive of VAT reflecting a net initial yield of expiry and 1.95 years to break 8.50% assuming standard purchasers costs. > Tenants are committed to location, EDF also occupy an adjoining building

Pacific House Energy House EDF Energy plc UK Power Networks 13,373 sq ft 26,265 sq ft Break 25/3/2019 Expiry 21/8/2020 Expiry 25/3/2024

fully let office investment with potential for conversion to residential. Location/Situation

Crawley is a key office location in the South West M25 region being the closest Reasons to invest in Three Bridges: significant commercial centre to Gatwick Airport (3 miles away). Located 32 > Affluent neighbourhood within Crawley miles south of London and 23 miles north of Brighton, the town lies adjacent > Unrivalled connectivity to Gatwick Airport to the M23 (between Junctions 10 and 11), providing excellent road access to > Excellent train links, being on the London/Brighton mainline the M25 and the south coast. > Fast and frequent journeys to London Victoria (36 min), London Bridge (39 min) and Croydon (23 min) Three Bridges is a major suburb of Crawley and an important business location > Highly affordable commercial rents within the town lying 1.5 miles east of the town centre. Three Bridges train > Strong demand for residential/PD conversions near to station station (located 500M to the South) is on the London to Brighton mainline, > Respectable local amenity including Tesco Extra, Tennis Club, Football Club and town centre retail providing direct access to Gatwick Airport, London Victoria, London Bridge > Good accessibility to M23 and M25 by car and the South Coast. > Frequent bus services to Crawley. Energy and Pacific House are situated on the eastern side of Hazelwick Avenue in an established office location. The location is enhanced by the proximity of To M25 A240 A24 A232 South many local retail and leisure amenities, including a 24-hour Tesco superstore d R Croydon k c 10 A217 i w and nearbyA3 retail facility housing Lidl and Iceland opposite the station. A21 t a G

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A24 Energy & Pacific House are located 500 meters Barns Green Nutley Billingshurst Nuthurst from Three Bridges train station. Description

Energy House and Pacific House comprise two well configured office buildings situated on a 0.63 hectare/ 1.55-acre site. The buildings were developed in the late 1980’s under planning consent CR/595/85. Energy House totals 26,265 sq ft over ground and three upper floors and Pacific House totals 13,373 sq ft over ground and three upper floors. The buildings both benefit from recent upgrades and provide well specified office accommodation as follows: > Dedicated reception area > 800k lift to all levels (Energy House 2 x lifts) > Fully accessed raised floors > LED or fluorescent lighting > Suspended ceilings > Double glazing > Air conditioning > Male and female WCs on each floor and Disabled WC on ground floor. The tenant of Pacific House has recently completed an internal redecoration, including new ceilings in some areas and kitchen areas as well as re-painting/decoration. The buildings share a large car park located to the front and rear of the properties, a total of 151 parking spaces are provided (Energy House 100 spaces and Pacific House 51 spaces) providing a ratio of 1:263 per sq ft.

Comprises two well configured office buildings on a 0.63 hectare/1.55 acre site. Accommodation:

The property has been measured in accordance with the RICS Code of Measuring Practice 6th Edition and provides the following Net Internal Area:

Sq ft Sq m

Reception 455 42.3 Ground 6,080 564.8 First 6,188 574.8 Second 6,774 629.3 Third 6,768 628.8

ENERGY HOUSE ENERGY Total 26,265 2,440.1

Sq ft Sq m

Reception 366 34 Ground 3,201 297.3 First 3,269 303.7 Second 3,269 303.7 Third 3,269 303.7

PACIFIC HOUSE PACIFIC Total 13,373 1,242.4

Total 39,638 3,682 Tenancy:

Energy and Pacific are fully let to two tenants UK Power Networks (67% of income) and EDF Energy PLC (33% of income) producing a rental income of £679,000 per annum equating to an average rental of £17.13 per sq ft. The property has an weighted average unexpired term of 3.61 years to expiry and 1.95 years to break.

Building Tenant Area Car Spaces Rent Passing Rent Passing Lease Start Lease Break Lease Expiry Next RR Comments (sq ft) (£ pa) overall (£ psf)

Energy House UK Power Networks Services (South East) 26,265 100 453,000 17.25 22/08/2005 21/08/2020 Tenant not required to replace roof covering Guarantor UK Power Networks Holdings Ltd or Air Conditioning system on expiry

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Ten Pacific House EDF Energy PLC 13,373 51 226,000 16.90 25/03/2014 24/03/2019 24/03/2024 24/3/2019 T break on 9m notice - 6m rent free if Scout Hall not exercised Total 39,638 151 679,000 17.13

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UK Power Networks Services (South East) – Tenant of Energy House EDF Energy PLC – Tenant of Pacific House UK Power Networks is a distribution network operator for electricity covering EDF Energy is an integrated energy company in the United Kingdom, South East England, the East of England and London. It manages three licensed with operations spanning electricity generation and the sale of gas and distribution networks (Eastern Power Networks PLC, South Eastern Power electricity to homes and businesses throughout the United Kingdom. It Networks PLC and London Power Networks PLC) which together cover an area employs 14,908 people and handles 5.7 million customer accounts. of 30000 square kilometres and approximately eight million customers. EDF Energy PLC - Tenant 31/12/2016 31/12/2015 UK Power Networks Services 12 months to 15 months to Turnover £6,191,900,000 £7,600,800,000 (South East) - Tenant 31/03/2017 31/03/2016 Pre-Tax Profit (£59,800,000) (£353,300,000) Turnover £1,300,000 £2,000,000 Net profit (loss) (£28,100,000) (£363,900,000) Pre-Tax Profit £700,000 £6,200,000 Shareholders’ Funds £2,697,300,000 £2,971,300,000 Net profit (loss) (£300,000) £4,500,000 Shareholders’ Funds £239,300,000 £239,600,000 EDF Energy Customers (trading as EDF Energy) is wholly owned by UK Power Networks Holdings Ltd – Guarantor the French state-owned EDF (Électricité de France) and was formed in UK Power Networks Services (South East) immediate parent company is UK 2002 following the acquisition and mergers of SEEBOARD Plc (formerly the South Eastern Electricity Board), London Electricity Plc (formerly Power Networks Services Holdings Ltd, and the ultimate parent (and guarantor the London Electricity Board or LEB), SWEB Energy Plc (formerly the to the lease) being UK Power Networks Holdings Ltd. South Western Electricity Board) and two coal-fired power stations and a UK Power Networks Holdings Ltd 12 months 15 months to combined cycle gas turbine power station. - Guarantor to1/04/2017 1/04/2016 In 2009, EDF Energy took control of the UK nuclear generator, British Turnover £1,702,300,000 £2,041,900,000 Energy, buying share capital from the government. This made EDF Pre-Tax Profit £542,300,000 £679,100,000 Energy one of the UK’s largest generators, as well as the largest Net profit (loss) £447,000,000 £564,600,000 distribution network operator. Shareholders’ Funds £1,466,400,000 £1,382,300,000 Excellent security of income from major corporates UK Power Networks and EDF Energy. Residential Market Commentary:

Energy and Pacific House offer the potential for change of use to 60 residential apartments providing a combination of 1 bedroom and 2 bedroom apartments. > Permitted development consent has been granted under application reference CR/2018/0110/PA3 and CR/2018/0107/PA3 > Outstanding links to Central London, Croydon, Gatwick and the South Coast > Excellent local amenities including a 24 hour Tesco supermarket, Lidl, Iceland and nearby Town Centre of Three Bridges and Crawley > Nearby office conversions including Ocean House have achieved excellent sales rates reflecting between £350 per sq ft to £490 per sq ft depending on size, with strong demand and 50% being reserved on launch. > Potential for higher density or entire redevelopment of the site. Commercial Market Commentary:

Crawley is home to several professional firms including PWC, Irwin Mitchell, RSM and Grant Thornton. In the outer Crawley market tenants are more diverse including engineering, mineral exploration, travel companies, aeronautics and defence and medical technology companies, including Thales, EDF, UK Power, Elekta, Virgin, Amey, Rockwell Collins and Varian. A key driver for these tenants is the proximity to Gatwick Airport. The wider Crawley and Gatwick market has a current built total office stock of approximately 4.8 million sq ft. Along with the wider South East occupational market, Crawley/Gatwick has witnessed a consistent level of take-up and diminishing supply which is likely to continue to drive increasing rental values moving forward. The ten year take-up average in Crawley/ Gatwick is approximately 120,000 sq ft, peaking in 2015 which saw almost 350,000 sq ft of take-up, dominated by the pre-lets to Virgin and Elekta. The dominant deal unit size nevertheless is within the 5,000 to 15,000 sq ft bracket, save for these large pre-lets. Current prime rents in the area are circa £24.50 per sq ft, below is some example letting transactions:

Property Date Area (sq ft) Tenant Term (Break) Headline Rent

Astral Towers, Crawley Jun 17 1,372 sq ft IAGO Solutions 5 years (3 year break option) £22.50 psf

St Johns House, Crawley Mar 17 9,789 sq ft Grant Thornton 10 years (5 year break options) £22.00 psf

Origin 1, Crawley Jan 17 8,034 sq ft TUI Travel 10 years (5 year break option) £24.00 psf

First Point, Gatwick Jun16 8,152 sq ft HSBC 10 years (5 year break option) £24.50 psf Change of use to Residential

Second/Third Floor Energy House 1 bed - 2 person ENERGY HOUSE - 40 Residential Units

No of Units Total Area Average area sq ft sq ft 2 bed - 3 person

Ground 10 5,630 563

1 bed/2 persons 5 2,433 487

2 bed/3 persons 3 1,841 614 2 bed - 4 person

FLAT 15 FLAT 16 FLAT 18 FLAT 20 [45m2] FLAT 13 FLAT 11 [61m2] [45m2] [45m2] [46m2] [45m2] 1 BED 2 BED 1 BED 1 BED 2 bed/4 persons 2 1,356 678 First Floor 1 BED 1 BED

First Floor 10 5,630 563 FLAT 15 FLAT 16 FLAT 18 FLAT 20 [45m2] FLAT 13 FLAT 11 [61m2] [45m2] [45m2] [46m2] [45m2] 1 BED 2 BED 1 BED 1 BED 1 bed/2 persons 5 2,433 487 1 BED 1 BED

FLAT 14 FLAT 19 [63m2] [63m2] 2 BED 2 BED 2 bed/3 persons 3 1,841 614 FLAT 12 FLAT 17 [55m2] [55m2] 2 BED 2 BED 2 bed/4 persons 2 1,356 678 FLAT 14 FLAT 19 [63m2] [63m2] 2 BED 2 BED FLAT 12 FLAT 17 Second Floor 10 6,017 602 [55m2] [55m2] 2 BED Void 2 BED 1 bed/2 persons 5 2,433 487

2 bed/3 persons 1 657 657

2 bed/4 persons 4 2,928 732 Ground Floor

Third Floor 10 6,017 602 FLAT 5 FLAT 6 FLAT 8 FLAT 10 [45m2] FLAT 3 FLAT 1 [61m2] [45m2] [45m2] [46m2] [45m2] 1 BED 2 BED 1 BED 1 BED 1 bed/2 persons 5 2,433 487 1 BED 1 BED

2 bed/3 persons 1 657 657 FLAT 5 FLAT 6 FLAT 8 FLAT 10 [45m2] FLAT 3 FLAT 1 [61m2] [45m2] [45m2] [46m2] [45m2] 1 BED 2 BED 1 BED 1 BED 2 bed/4 persons 4 2,928 732 1 BED 1 BED FLAT 4 FLAT 9 [63m2] [63m2] 2 BED 2 BED FLAT 2 FLAT 7 Grand Total 40 23,293 [55m2] [55m2] 2 BED 2 BED

FLAT 4 FLAT 9 [63m2] [63m2] 2 BED 2 BED FLAT 2 FLAT 7 [55m2] [55m2] 2 BED Entrance 2 BED Change of use to Residential

Pacific House First, Second & Third Floor

PACIFIC HOUSE - 20 Residential Units

FLAT 9 1 bed - 2 person FLAT 19 No of Units Total Area Average area FLAT 6 FLAT 16 [62m2] [66m2] [62m2] [66m2] sq ft sq ft 2 BED 2 BED 2 BED 2 BED

Ground 5 3,014 603 2 bed - 4 person 2 bed/4 persons 2 1,335 667

FLAT 8 FLAT 18 1 bed/2 persons 3 1,679 560 [50m2] [50m2] FLAT 10 1 BED FLAT 7 FLAT 20 1 BED FLAT 17 [50m2] [56m2] [50m2] [56m2] 1 BED 1 BED 1 BED 1 BED First Floor 5 3,057 611

2 bed/4 persons 2 1,378 689

1 bed/2 persons 3 1,679 560

Second Floor 5 3,057 611 2 bed/4 persons 2 1,378 689 Ground Floor 1 bed/2 persons 3 1,679 560

Third Floor 5 3,057 611

FLAT 4 FLAT 1 FLAT 14 FLAT 11 2 bed/4 persons 2 1,378 689 [62m2] [62m2] [62m2] [66m2] 2 BED 2 BED 2 BED 2 BED Entrance 1 bed/2 persons 3 1,679 560

Grand Total 20 12,185

FLAT 3 FLAT 13 [50m2] [50m2] FLAT 5 1 BED FLAT 2 FLAT 15 1 BED FLAT 12 [50m2] [56m2] [50m2] [56m2] 1 BED 1 BED 1 BED 1 BED EPC:

Energy House = E122 Pacific House = D76 VAT: The property is elected for VAT, it is envisaged the transaction will be treated as a TOGC. Data Room:

Access to a data room is available for interested parties, the contents include:

> Title information > Lease information > Service Charge > Existing Plans > Residential Plans > Permitted Development information Proposal: Offers in excess of £7,500,000 (Seven Million Five Hundred Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 8.50% and a capital value of £190 per sq ft after deducting full purchaser’s costs.

fully let office investment with potential lease re-gear or conversion to residential Investment Considerations: Further information

> Excellent accessibility to the national motorway network via the M23 and Gatwick Airport 5 miles away. > 500 metres from Three Bridges Station providing frequent fast journey times to London of approximately 35 minutes. Peter Flanders [email protected] > Diverse local amenities including 24-hour Tesco, Lidl and Iceland. John Blackwell > Two well configured buildings, suitable for single let or multi let [email protected] occupation as well as conversion to residential. Tel: 020 7409 7828 > Both buildings are fully occupied, thus good potential for future occupation beyond current lease break and expiry dates as well as opportunities to re-gear leases. > Low rental base of £17.15 per sq ft offering potential for growth. > Strong tenant covenant profiles. > Prior approval consent granted for 60 apartments. > Attractive yield profile. > Crawley is a well established and bouyant office market.

Disclaimer Notice Messrs Joiner Cummings for themselves and (and their joint agents where applicable) for the vendors or lessors of this property whose agents they are give notice that; (i) the particulars are set out as a general outline for the guidance of the intending purchasers and do not constitute part of an offer or contract; (ii) all descriptions, dimension references to condition and necessary permissions for use and occupation and other details are given in good faith and are believed to be correct, but are given without responsibility and any intending purchasers or tenant should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of them; (iii) all plant, machinery, equipment, services and fixtures and fittings referred to in these particulars were present at the date of preparing these particulars, they have not however been tested and therefore we give absolutely no warranty as to their condition, operation or fitness for the purpose of an intending occupier or purchaser; (iv) no investigations have been undertaken by Joiner Cummings in respect of asbestos, issues concerning pollution and potential land, building, air or water contamination and any intending purchasers or tenant must satisfy themselves by inspection; (v) unless otherwise stated, all prices rents and other charges are quoted exclusive of Value Added Tax (VAT) and any intending purchaser or tenant must satisfy themselves as to the incidence of VAT in respect of any transaction; (vi) no person in the employment of Joiner Cummings has any authority to make or give any representations or warranty whatever in relation to this property; (vii) no responsibility can be accepted for any expenses incurred by intending purchasers in inspecting properties which have been sold, let or withdrawn. The date of this publication is April 2018. 01732 897799 | createwithimpact.com (E5810/WH)