PRIME RETAIL & OFFICE INVESTMENT
31 Stockwell Street Glasgow G1 4RZ INVESTMENT SUMMARY
• Rare opportunity to acquire a well located, high quality, seven storey, Grade B listed building offering office and retail accommodation extending to 192,945 sq ft (17,925 sq m).
• Granite House offers fully refurbished Grade B office accommodation to a high specification with large floor plates and at a discount to the competition.
• High profile tenants including; Clydesdale Bank, House of Fraser, Tesco, Poundland and Specsavers. 73% of the existing rental income provided by tenants with an Experian credit rating of Very Low risk or Low risk.
• Passing rents are significantly below recent deals in the building with the rental tone moving from £13.00 sq ft to £15.50 sq ft in the last 18 months. Current quoting rents remain low at £16.50 sq ft, with further growth expected.
• Asset management potential including planning permission for an additional two storey, c50,000 sq ft roof top extension.
• Low capital value of £171per sq ft.
• All major transport hubs are within a 10 minute walk of the building. This includes Queen Street, Central and Argyle Street train stations, bus links, car parking facilities and the subway.
• Total current passing rent of £2,551,091 per annum
• Offers in excess of £33,000,000 (Thirty Three Million Pounds Sterling), subject to contract and exclusive of VAT are invited for the Absolute Ownership of the property. A purchase at this level would represent a net initial yield of 7.27% after allowing for purchasers costs based on LBTT.
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL LOCATION
5 Sauchiehall Street
4 Buchanan Bus Station
Glasgow Central Station 3
Queen Street Station Buchanan Street UNIVERSITY OF STRATHCLYDE 2 A C F E St Enoch Subway Station B S G CITY OF GLASGOW 10 COLLEGE 1 9 Argyle Street8 H 7 I ST ENOCH 6 D ROOF TOP Argyle Street Station J CINEMA DEVELOPMENT MERCHANT CITY K
CANDLERIGGS QUARTER DEVELOPMENT STRATHCLYDE SITE UNIVERSITY TECHNOLOGY & INNOVATION CENTRE
Trongate
Major Retail & Amenities Neighbouring Occupiers
1 St Enoch Shopping Centre 6 Marks & Spencer A Brodies, Grant D AXA PPP Healthcare Limited H Glasgow City Council 2 Princes Square Shopping Centre 7 River Island Thornton, Deloitte, ACCA E Edrington I Inland Revenue 3 Buchanan Street 8 TK MAXX B Ernst & Young, Maclay F Clydesdale Bank, J Garment Factory 4 Buchanan Galleries 9 Topman Murray & Spens News International K Catapult, University of Glasgow 5 Sauchiehall Street 10 Debenhams C Network Rail G Glasgow City Chambers
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL St Enoch Centre – Rooftop Cinema Development • The current proposals introduce a new 9 screen cinema and restaurants in the place of the current BHS TRONGATE DEVELOPMENTS • This will add an exciting leisure destination to 190 Trongate the area, ensuring it becomes a 24/7 location The distinctive turreted Grade A listed • It will attract new brands and the latest building has been a feature of Trongate concepts, complementing the existing shopping since it was built in 1903 and at one time centre facilities housed the Royal Bank of Scotland. It has ST ENOCH ROOF TOP CINEMA DEVELOPMENT • Planning permission granted recently been redeveloped to include • 8 serviced apartments • 1,161 sq ft retail unit at ground floor level
190 TRONGATE
CANDLERIGGS QUARTER DEVELOPMENT SITE
Candleriggs Quarter Development This is potentially one of biggest city centre developments in a generation and involves the redevelopment of a plot left largely derelict since the closure of the Goldberg's department store in 1990. TRONGATE SERVICED APARTMENTS The developer has applied for planning consent. It involves: Trongate Serviced Apartments • 132 high quality apartments • 9 storey building comprising retail • 435 new flats for rental at ground floor level and 28 one and • 586 rooms of student accommodation two bedroom apartments • 123 room hotel • Planning permission granted • Over 60,000 sq ft of retail accommodation
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL A 5 TIGE E R TI T GE L S I R
U N
O G U H B S A 5 R & R 1 S ESTA - A URA R L NT 5 E G ) LO C E E ADI S N H G N R T R T E O N 5 O P E T 1 O 4 S S ) - 5 L GA S L 1 A & Y F CA E SIN T T O SITUATION L S L I I E C K I N A Y U C R A R T S C INO A & A E BA & R V M R S S I R R 4 X ( U A T A X S Y O E C T G M ) X D Y D E O W S A N S I O N R C . R E I S S M A O T D S D D O TH C N G C K G U E S E N E O N O TR S T S R L R A T B A N L I C 44 T M E T T F E The property is situated on the corner of Stockwell Street and Trongate within the heart of the city centre. Stockwell - R D L 48 C P T N R & P O S S IS P IL T P E O P O S E A R 3 T R 6 S P O E T C O I S T E T 3 P X 4 E D X N V S S 2 2 I E 6 E R R A - B ( O 3 1 Street links to Trongate and the east end of Argyle Street with the city’s prime retail facilities in close proximity, E 2 R L E 2 B O - E T ( N L S S G 6 A T U 22 W T C O 3 N R E H 1 A 8 E 1 - I 2 N B 0 C - R I including the St Enoch Shopping Centre and Buchanan Street. L O 1 B 4 1 E U NT P 61 (PE - 63 ( DES EXC TRIA O EP N P 53 T LO S ON 4 - R - 5 AD LY 12 O 5 IN ) E G 6 H 47 .00 V N - AM AC S 5 E 1 - 8 AN E .0 T T E 0 D A C N E S 4 M ) 3 ) N F L N E D O F S A R Y F A Z O A R S C O R 2 T F 9 R S T - E C O 3 A O 5 O T N O S F Y 1 E W 8 V G I E 8 O T T O - A K T 2 1 N C D 3 9 O R 0 H L - ) G C E 2 E This area is rapidly improving as an office location as C The location benefits from being near to the University D I 7 O H E N F O S S A Y 1 L 8 A R 6 S T 1 O U 9 R L F T - A 1 V O S 2 I 8 H 1 B 4 O S& 1 E 7 O V 8 T H A D I S 13 - I P D 1 & - 82 O E T R 17 R U 1 R 7 M 6 E T S A A L A 1 A 1 S FL occupiers seek value outside the more traditional office N U R V P P C of Strathclyde Technology and Innovation Centre and R H C E L T O 2 O 3 I E D B - 1 ( 9 N W G A H H C N E L A A T S F D A N U T E F S E C D A Y C R O O E T A R Y E E T W R R O K L G P I G V V O core. 110 Queen Street (400m away) is one of the best 2 C I K E L Scottish Enterprise International Technology and A R N ( P T B R H E N S U E T A S A S S A N C L U S Y M R A E H B A C 1 T R X 7 R R P C 9 S T E O T U E 1 Y D 77 T B P S N A T Grade A office buildings in the city and has achieved rents N 17 Renewable Energy Zone. S U D E 7 A N W N S L O E S I P K D S 1 I O E 7 A T 5 L E U N R S G N A R N 1 E Q U O E 67 E NT D P O T C E O I S W L I of £30.00 sq ft. This followed the highly successful G1 X T S & P S T ) F D O E R N S S A F L E I E H A 7 D A R E O C O NT E C V R R 8 N A G O N C N R C S O The close proximity to both Central and Queen Street E 1 A U O O S E A B S S U I A L SE E C E D H A S R C T development at George Square which previously achieved V T ES O N F IC T T , C E X HE T S A A W E A E E S R RT I H EA & L E L S M I TR P V E S A S OK D G T T C E A O E S 5 TL N R N AN N U B U D & I T 3 O railway stations, other public transport hubs, ample car E D ) R 5 S E O CH T AR E C R 3 I S T TY O R T SHO P U S the highest rents in the city. Similarly, 100 Queen Street D E B P R O A 2 N IT O O L I L ( I SH R F A H H C E C H F AR C UR T T F Y C NI O T T W A UR UN S D C parking and numerous retail and leisure facilities make E & A 7 V E TIO O A LE N 1 E C S & N F T T G has achieved rents of £28.50 sq ft. CH RICA S AR L 2 S 9 S ER IT I V Y 2 PH IC S L 1 O A E HO X NE ARE P TE OPT L A A LE IO L PH NS G T ON this location extremely popular amongst occupiers. 3 E S
S 2 E M E - A ILLE AR R S V E T M S 1 ACA R AT 8 U 2 N O ER W T O IA 2 B U A Other key developments in the immediate vicinity of S LS TLET T E K 7 B P C 2 I O E W A C ILL V RG C IAM R OS H R E X IL XTR L E N A E BE O ( T S Granite House include the new 9 screen rooftop cinema E TING CA OFF TAL T 9 NE ICE S OG 2 W UE C SMA T SH S TN RT OWR R OOM 1 at the St Enoch Centre and the Candleriggs Quarter EE 3 C 3 L O T 3 EN S TRA E NCE D 5 HA development (both within 150m of the building). These 3 IR BY HA MIN IRDR STE ESS R 9 ING 3
- will further enhance the current offering that includes 7 UNDE E ) 3 R 0 OFF R S 4 E (B R O R U S T O E S 1 UN S 4 DE the Merchant City just to the north, providing an O O R OF F L N ER Y L F Y T ) 3 4 U E L ND I I ER OFF R A ER T abundance of bars and restaurants. E E T I R S
3 ( T
N
A
T C T L N A
E N 1 V O 1 A 8 S C R
E G A B N I V R S A 1 S 1 B 6 E S R
- Y D 1 L R 1 L I
4 A A 1 H P 12 (100) (ESTIMATED)
0102030 40 m
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL
SAUC HIEHALL STREET
BUCHANAN BUS STATION CONNECTIVITY RENFREW STREET
REET
T
S
R Buchanan VE M8 BATH STREET Galleries HANO Granite House benefits from a core city centre location that H
WEST REGENT STREET ORT BATH STREET N affords easy access to Glasgow’s excellent transport network PITT STREET
EET EET WEST GEORGE STREET R QUEEN ST T
S E and allows connectivity across the country. DOUGLAS STREET WEST CAMPBELL STREET ST STATION E
R
T BLYTHSWOOD STREET S J19 ELD STR NILE
ICK T
R Rail ST VINCENT STREETENFI E D BOTHWELL STREET R
WES
FRE University of Glasgow has the biggest suburban rail network outside of London. H George GEORGE STREETStrathclyde WELLINGTON ST Square ORT Two mainline railway stations, Glasgow Central and Glasgow J19 WATERLOO C N OCHRA S GO NE S TREET RDON STRE TREET ET EET ET
Queen Street, are less than a 10 minute walk from Granite House R E University of
ST INGRAM S Merchant Strathclyde, and provide services to all major UK cities. Glasgow Queen Street TREET Quarter The Technology CENTRAL & Innovatione STREET Station is undergoing major renovation works which includes the STATION Centre Princes P ELL EEN
HOPE STREET ION STREET ION Square STREET QU
electrification of the Edinburgh Glasgow rail-line N BUCHANAN STR U
MITCH P (July 2017), which will reduce journey times to 42 minutes. ARG YLE S TREET P Pedes GLASSFORD trian P Air S St Enoch recinct HIGH STREET Shopping ARGYLE CANDLERIGGS
Centre STREET T Glasgow Airport, Edinburgh Airport and Prestwick Airport offer TRONGATE flights to over 130 destinations worldwide. Glasgow Airport is BROOMIELAW P P Glasgow Tradeston CL approximately 9 miles west of the city and a 15 minute drive from YD LONDON RO Airport Bridge E STRE ELL STREE 15 mins W P the city centre. Edinburgh International Airport to the east and ET
TOCK AD River Clyde S Prestwick Airport to the south west are also approximately a 45 SALT MARKET minute drive away. Dundee Oban Perth Road Crieff St. Andrews The M8 motorway dissects Glasgow and is easily accessed from A84 A9 Granite House. The motorway provides direct access to Edinburgh M90 A82 Stirling N to the east, Glasgow Airport to the west and links to Kirkcaldy the M80 heading north to Aberdeen and Inverness, with the M74 Edinburgh Glasgow M80 M9 Airport heading south to Carlisle and England. Airport Edinburgh A78 Glasgow A720 Bus M8 M77 A721 Peebles 22 bus operators run services across the city, including frequent A68 A83 services to Glasgow International Airport. Buchanan Bus Station Irvine A72 is within a 15 minute walk and offers links to rest of the UK. Prestwick Kelso Airport A7 Ayr M74 Subway A76 A1 Three stations are available in the city centre, with the closest A77 being St Enoch station about 5 minutes walk from Granite House. It provides a link to key leisure, business and cultural areas in the A696 west end. Services are available up to every four minutes, with a Dumfries journey time of 10 minutes across the city. A75 Stranraer Carlisle
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL GLASGOW
Glasgow is the largest city in Scotland, the commercial capital of the country and the administrative centre for the West of Scotland. It has a population of over 600,000 and a wider regional catchment of approximately 2.3 million. It is a truly key regional city and one of the UK’s ‘Big Six’ office markets.
Glasgow is Scotland’s centre of employment and an economic powerhouse, generating £18 billion in gross value each year. The city is home to an impressive list of blue chip companies and major global organisations across numerous sectors including Clydesdale Bank (a major occupier of Granite House), Morgan Stanley, Lloyds Banking Group, RBS, KPMG, Scottish Power, Scottish & Southern Energy and City Deal Education John Lewis. In total there are nearly 17,000 companies based in Glasgow. Glasgow secured the first city deal from the UK government Greater Glasgow has a superb education base and boasts Glasgow has been recognised for its strategy to attract investment for £1bn worth of infrastructure investment in 2014. Glasgow 5 universities and 3 super colleges educating some 130,000 and was named second best large city in Europe for its Foreign Direct & Clyde Valley aim to leverage a further £3.3bn of private students from 135 countries, ranking third in the UK in terms Investment Strategy in fDi Magazine's European Cities and Regions of investment into this infrastructure fund. of number of students. Employers are attracted by the level the Future 2016/2017 rankings. of qualifications job applicants have achieved, with almost The Glasgow and The Clyde Valley City Deal is an agreement 40% of Glaswegians having NVQ3 and above. This is higher It is also: between the UK Government and the eight local authorities than any other comparable city. across Glasgow and Clyde Valley to invest in the area in order • UK’s top retail destination outside of London to stimulate economic growth. This infrastructure will support • ‘Must See Destination for 2016’ - National Geographic Traveller growth in the life sciences sector, programmes to help the • The SSE Hydro was the world’s third busiest entertainment unemployed and help small to medium sized enterprises venue in 2015 grow and develop. • ‘World’s Friendliest City’ - Rough Guide 2014
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL SPECIFICATION
Granite House is an outstanding Grade B listed property set over seven floors and a basement level. The building offers mixed use accommodation, with retail accommodation over ground floor with office space to all upper levels. The general building specification includes: • Large floor plates up to 31,250 sq ft, easily sub divided • Building CCTV and on-site security • 24 hour access • Building EPC – D, individual floors EPC – C • Secure car parking • Manned reception foyer (8.00am to 6.00pm) • Equality Act 2010 compliant • Secure bike storage • Storage rooms available • Wi-Fi • Granite House has chosen to be part of City Fibre project to give Granite House its own dedicated 1GB Fibre in 2017
There is currently a full refurbishment program in place for the atrium of the building including the replacement of two lifts, the creation of a café, break out area, new reception and entrance. These works will further enhance the buildings offering and improve its prospects for further rental growth. The newly refurbished office specification is: • Fully raised access flooring with floor depth in excess 250mm • New LG7 compliant LED Lighting • Suspended ceiling system with integral lighting • VRF HVAC system • New dedicated male and female toilets with full height tiling, IPS system, flooring and Equality Act lighting • Busbar Power system for floor boxes • Shower provision is available and can be provided with identified locker locations for suites above 10,000 sq ft • Provision for kitchen and pop ups within suite Computer generated image Computer generated image
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL TENANCY SCHEDULE
GRANITE HOUSE - OFFICE ACCOMMODATION
Description Tenant Area (ft²) Current Rent pa Current Rent psf Lease Start Lease Expiry Next RR Comments
Rooftop Suite Connect Property Management Ltd 600 £9,425 £15.71 1- Sep 16 31 Aug 21 Schedule of condition relating to windows. Landlord only developers break ‐ ‐ ‐ option. S/C cap (£4.00 sq ft) no current shortfall 5th Floor Clydesdale Bank plc 31,237 £406,081 £13.00 29 Sep 14 28 Sep 24 29 Sep 19 Schedule of condition relating to window. S/C cap (£3.09 sq ft - RPI linked) ‐ ‐ ‐ ‐ ‐ ‐ until August 2019 - current shortfall of £5,575 pa 4th Floor (Academy North) Clydesdale Bank plc 10,046 £137,931 £13.69 26 Aug 15 11 Jul 17 Schedule of condition relating to windows & floor ‐ ‐ ‐ ‐ S/C cap (£3.50 sq ft - RPI linked) no current shortfall 4th Floor (Suite 2) Clydesdale Bank plc 1,365 £17,745 £13.00 26 Aug 15 11 Jul 17 Schedule of condition relating to windows & floor ‐ ‐ ‐ ‐ S/C cap (£3.50 sq ft - RPI linked) no current shortfall 4th Floor (Middle Rear) Vacant 2,094 - - Fully refurbished space 4th Floor (Suite 3) Vacant 3,114 - - Fully refurbished space 4th Floor (South) House of Fraser 13,649 £177,437 £13.00 31 Mar 16 31 Mar 26 31 Mar 21 Rent is £94,359 until 30/03/18. Vendor to provide rental top up until this date. ‐ ‐ ‐ ‐ ‐ ‐ Tenant only break option 31/03/2023. 9 months rent free if not triggered. Schedule of condition relating to windows. S/C cap (£3.50 sq ft - RPI linked) no current shortfall 3rd floor (North Suite 2 & 1A/1B) Clydesdale Bank plc 9,985 £154,768 £15.50 16 Feb 15 28 Sep 24 16 Feb 22 Tenant only break option 28/09/2020 & 28/09/2022. Schedule of condition ‐ ‐ ‐ ‐ ‐ ‐ relating to windows. S/C cap (£3.75 sq ft - RPI linked) no current shortfall 3rd Floor (South) House of Fraser 11,679 £151,827 £13.00 24 Jul 15 30 Mar 26 31 Mar 21 Rent: is £37,956 until 23/07/17 . Vendor to provide rental top up until this date. ‐ ‐ ‐ ‐ ‐ ‐ Tenant only break option 31/03/2023. 9 months rent free if not triggered. Schedule of condition relating to windows. S/C cap (£3.50 sq ft - RPI linked) no current shortfall 3rd Floor (Suite 1) Ingeus UK 9,769 £152,500 £15.61 19 May 11 31 Dec 18 Rent is £142,500 until 18/05/2017. Vendor to provide rental top up until this ‐ ‐ ‐ ‐ date. Schedule of condition relating to windows. S/C cap (£3.96 sq ft - RPI linked) no current shortfall 2nd Floor (North & Mid) Clydesdale Bank plc 17,878 £277,109 £15.50 19 Oct 15 28 Sep 24 19 Oct 20 Rent is £259,231 until 19/10/18. Vendor to provide rental top up until this date. ‐ ‐ ‐ ‐ ‐ ‐ Tenant only break option 19/10/2018, 28/09/2020 & 28/09/2022. Schedule of condition relating to windows. S/C cap (£3.50 sq ft - RPI linked) no current shortfall 2nd Floor (South) Vacant 14,000 - - Fully refurbished space
1st Floor (Suite A) Buckingham Wealth Ltd 1,633 £24,500 £15.00 4 Apr 16 3 Apr 21 ‐ ‐ ‐ ‐ 1st Floor (177 Trongate) The Glasgow Housing Association (GHA) 3,848 £47,813 £12.43 30 Nov 13 29 Nov 18 ‐ ‐ ‐ ‐ 1st Floor (Suite 1) East Kilbride Specsavers Ltd 1,999 £28,028 £14.02 1 Oct 08 30 Sep 18 ‐ ‐ ‐ ‐ 1st Floor (South) Utilita Energy 14,000 £217,000 £15.50 23 Dec 16 22 Dec 26 23-Dec-21 Rent free period until 22/09/2017. Vendor to provide rental top up. ‐ ‐ ‐ ‐ Tenant only break option 22/12/2021. 6 months penalty if triggered First years S/C capped at £23,940 and so a shortfall of £18,691 year one only. S/C Cap [£3.50 sq ft – CPI linked) thereafter 1st Floor (Suite 2) Vacant 1,382 - -
Gr Kiosk Caffeine Scene - £1,200 N/A 14 Dec 15 18 Jul 17 Mutual break option on 3 months notice ‐ ‐ ‐ ‐
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL TENANCY SCHEDULE (Continued)
GRANITE HOUSE - RETAIL ACCOMMODATION TRONGATE Description Tenant Area (ft²) Current Rent pa Current Rent psf Lease Start Lease Expiry Next RR Comments 173 Trongate The Glasgow Housing Association 2,564 £105,000 £40.95 18 Jun 09 29 Nov 18 ‐ ‐ ‐ ‐ 175 Trongate Tesco Stores Ltd 4,662 £197,477 £41.98 2 May 08 1 May 23 1 May 18 Rent steps to £197,477 in 01/05/2018. Vendor to provide top up. ‐ ‐ ‐ ‐ ‐ ‐
187a Trongate Poundland Ltd 5,613 £142,500 £25.39 10 Oct 03 9 Oct 23 10 Oct 18 ‐ ‐ ‐ ‐ ‐ ‐ 187b Trongate & 17 Stockwell St Specsavers Optical Superstores Ltd 8,680 £105,000 £12.10 30 Apr 92 29 Apr 27 6 months rent free period from 28/05/2017. Vendor to provide top up. Tenant ‐ ‐ ‐ ‐ only break option 28/08/2021.
GRANITE HOUSE - RETAIL ACCOMMODATION STOCKWELL STREET Description Tenant Area (ft²) Current Rent pa Current Rent psf Lease Start Lease Expiry Next RR Comments 19 Stockwell Street Imran Abdulah 316 £10,000 £31.65 29 Aug 08 28 Aug 17 Lease continuing beyond expiry until either party serves at least 1m notice. ‐ ‐ ‐ ‐
21 Stockwell Street Vacant 1,405 - - 25/27 Stockwell Street William Hill Organisation 1,554 £45,750 £29.44 6 Jan- 93 5 Jan 18 ‐ ‐ ‐ ‐ 29 Stockwell Street Shakil Ahmad 735 £22,500 £30.61 1 Jan 93 31 Dec 19 ‐ ‐ ‐ ‐ 35 Stockwell Street Minster Mcfarlane Ltd 1,059 £26,500 £25.02 1 Jul 16 30 Jun 26 Rent increases as follows: 01/7/2017: £23,500. 01/7/2018: £25,000. ‐ ‐ ‐ ‐ 1-Jul-21 01/7/2020: £26,500. Vendor to provide a top up.S/C shortfall of £889 for 2017. Tenant only break option 01/07/2021
37/39 Stockwell Street Under offer 1,808 £33,273 £18.40 All three units are under offer to a tenant with a strong covenant. Vendor to provide 2 year rent, rates and service charge guarantee 41 Stockwell Street Under offer 911 £16,765 £18.40 43 Stockwell Street Under offer 1,628 £29,961 £18.40
GRANITE HOUSE - RETAIL ACCOMMODATION OSBORNE STREET Description Tenant Area (ft²) Current Rent pa Current Rent psf Lease Start Lease Expiry Next RR Comments 18c Osborne St Alaa Badry 267 £13,000 £48.69 30 Oct 02 29 Oct 17 ‐ ‐ ‐ ‐
118 A & B Osborne St Vacant 2,754 - -
Granite House Area (ft²) Current Rent pa WAULT to Break (years) WAULT to Expiry (years) TOTAL 182,234 £2,551,091 4.37 6.49
NOTE: Service Charge Caps: The current service charge budget equates to £3.27 sq ft for the office accommodation. Service charge caps detailed above range between £3.50 - £3.75 sq ft, ensuring capacity for future PPM work. There are only three service charge cap shortfalls detailed above. Utilita’s ends 23/12/2017 and the Clydesdale Bank 5th floor ends in August 2019.
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL TENANT COVENANT
Granite House benefits from a strong tenant line-up with an 73% of the passing rent secured against tenants with Experian credit rating of low risk or better.
Tesco Stores Ltd 27% Level 1 Tesco is the largest supermarket chain in the UK, with over 3500 stores and 310,000 staff. Income secured against tenants with Low risk Tesco Stores Ltd (00519500) has an Experian credit rating of 83 which represents a Low risk. or Very Low risk
Level 2 2014 2015 2016 73% Income secured against tenants with Below Turnover £42,547,000,000 £42,278,000,000 £39,843,000,000 Average risk or poorer Pre-tax profit £1,696,000,000 -£3,727,000,000 -£231,000,000 Net worth £3,038,000,000 -£98,000,000 £1,077,000,000
Utilita Energy Limited Poundland Utilita Energy (04849181) is an electricity and gas provider and a market leader Poundland (02495645) is a British variety store chain which was acquired in September 2016 in pay-as-you-go smart meter energy. They have an Experian credit rating of 100 which by Steinhoff Europe AG for £610 million. It has an Experian credit rating of 92 which represents a Very Low risk. represents a Very Low risk and has a net worth of £20.5 million and a turnover of £1.21 billion, at the financial year to 31 December 2016. 2014 2015 2016 2014 2015 2016 Turnover £75,753,761 £144,048,359 £253,582,000 Turnover £997,803,000 £1,111,526,000 £1,214,818,000 Pre-tax profit £1,795,563 £10,543,917 £24,362,000 Pre-tax profit £41,017,000 £45,922,000 £34,653,000 Net worth - £1,887,541 £3,524,646 £16,244,000 Net worth £96,235,000 £93,866,000 £20,520,000
Clydesdale Bank Clydesdale Bank plc (SC001111) is a commercial bank in Scotland founded Specsavers in Glasgow in 1838. It was divested from National Australia Bank in early 2016 and its holding company (CYBG plc) trades on the London and Sydney stock exchanges. It has an Experian Specsavers Optical Superstores Ltd (01721624) is a global optical retail chain. The credit rating of 100 which represents a Very Low risk. partnership has an Experian credit rating of 100 which represents a Very Low risk.
2014 2015 2016 2014 2015 2016 Turnover - - - Turnover £392,606,000 £433,826,000 £673,564,000 Pre-tax profit -£216,000,000 -£308,000,000 -£352,000,000 Pre-tax profit £18,533,000 £20,398,000 £28,776,000 Net worth £2,505,000,000 £3,193,000,000 £2,965,000,000 Net worth £73,847,000 £54,568,000 £53,648,000
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL ACCOMMODATION
The floor areas set out below have been provided by the vendor and are based upon the RICS Code of Measuring Practice (Sixth Edition).
Level Use NIA Area (Sq ft) (sq m)
6 Office 1,311 121.79
5 Office 31,237 2,901.99
4 Office 30,268 2,811.97
3 Office 31,433 2,920.20
2 Office 31,878 2,961.54
1 Office 22,862 2,123.93
G Retail 33,956 3,154.59
Basement 10,000 929.02
Total 192,945 17,925.03
However, the property will be measured by Plowman Craven to confirm these areas and to also provide areas in line with the International Property Measurement Standards (IPMS 3).
These areas will be provided during marketing and a reliance upon them can be provided to the purchaser.
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL FLOOR PLANS
GROUND FLOOR SECOND FLOOR
VACANT
VACANT
UNDER OFFER VACANT
CLYDESDALE BANK VACANT
UNDER OFFER VACANT
GHA TESCO POUNDLAND SPECSAVERS PHONE SHOP WILLIAM HILL NEWS SMART MINSTER HAIRDRESSING ALLY’S BARBERS
FIRST FLOOR THIRD FLOOR
BUCKINGHAM WEALTH
GHA
UTILITA
VACANT
GHA SPECSAVERS BUCKINGHAM WEALTH UTILITA POUNDLAND VACANT CLYDESDALE BANK INGEUS HOUSE OF FRASER
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL FLOOR PLANS
FOURTH FLOOR SIXTH FLOOR
VACANT
VACANT
CLYDESDALE BANK VACANT HOUSE OF FRASER
CONNECT PROPERTY MANAGEMENT
FIFTH FLOOR
Note: Floor plans have been provided for identification purposes only and are not to be relied upon as a true reflection of the existing floor plates. CLYDESDALE BANK
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL OCCUPATIONAL MARKET
Glasgow’s office market has performed well over the last 12 months, despite external market challenges. Overall take up levels have exceeded the long term averages, with the occupational market being underpinned by a number of significant transactions.
Take up in 2016 was strong, both within Glasgow city centre and out of town markets. Within the city centre in 2016 take-up totalled 655,807 sq ft, the best performing year since 2007. The largest completed deal was the pre-let of 154,814 sq ft pre-let to Morgan Stanley at Bothwell Exchange, 122 Waterloo Street.
The strong occupier market and the lack of city centre office development means Grade A office availability at the end January 2016 was 180,985 sq ft, the lowest level since Q1 2015. In addition there is no speculative office development capable of being completed before the end of 2019 meaning prime rents could soon exceed £30.00 per sq ft.
Address Date Tenant Area Rent (psf) (sq ft)
St Vincent Plaza Mar 2017 Wood Group 17,249 c£25.00
St Vincent Plaza Feb 2017 Mott MacDonald 34,515 £25.00
100 Queen Street Sep 2016 Edrington Group 29,900 £28.50
Cuprum Jun 2016 AXA 52,000 £20.00
Tay House Apr 2016 Regus 29,000 Undisclosed
Bothwell Exchange Mar 2016 Morgan Stanley 154,750 Undisclosed
110 Queen Street Mar 2016 ACCA 55,750 £29.00
9 George Square Jan 2016 Expedia 7,200 £24.50
St Vincent Plaza Jan 2016 Registers of Scotland 17,249 £24.00
Occupier confidence remains strong, and requirements led by lease events have been largely unaffected by Brexit. There are occupier requirements in the market looking for good quality, Grade B offices, particularly those who require a central location and larger floor plates.
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL 2-4 BLYTHSWOOD SQUARE 1 ATLANTIC QUAY & 1/3 ATLANTIC QUAY Granite House leads the competition
Quoting Quoting £20-£25.00 £25.00 sq ft sq ft Quoting 9 GEORGE SQUARE 180 WEST GEORGE STREET £16.50 sq ft
Quoting Quoting £21-£23.00 £28.00 sq ft sq ft
THE GARMENT FACTORY 100 QUEEN STREET
Granite House offers good quality Grade B office accommodation but at a considerable discount to its competitors. It is further enhanced by the low business rates payable (c£3.50 sq ft) and a very competitive service charge (£3.27 sq ft). Quoting Quoting £27.50 £22.00 sq ft sq ft
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL INVESTMENT MARKET
Transactional volumes, returns & yields The UK saw a total of £48.9bn invested in UK commercial property in 2016, which was 27% below the previous year, but still 10% above the 10 year average. This UK’s decision to vote to leave the European Union of course influenced this, but the market enters 2017 with growing momentum. This has been highlighted in the £16bn of transactions recorded in Q4 2016, an increase of 83% when compared with the same period in 2015.
Average office yields in the UK contracted to 6.24% in 2016 and pricing is expected to be robust as occupational markets remain under supplied, buildings are lost to alternative uses (particularly residential) and the returns that can be derived from alternative investment asset classes remain benign.
The regions, particularly the cities of Glasgow and Edinburgh remain highly attractive to a host of domestic and international investors, as evidenced by a number of key regional transactions. Prime office yields in the UK’s most popular regional towns are currently circa 5%, with capital prices now exceeding £550 sq ft, most notably in Manchester and Birmingham.
The table below sets out a list of relevant local and regional office transactions demonstrating the strength of the UK’s office investment markets and the modest yield and capital price by which Granite House is being offered to market.
Address Date Purchaser Price N.I.Y Capital WAULT Value sq ft Toronto Square, Exchanged JP Morgan £22.20m 5.67%* £252 2.93 Leeds Zenith Building, Manchester Feb 2017 AM Alpha £22.95m 7.07% £309 2.40
2 & 3 Exchange Place, Jan 2017 HSBC Private £36m 5.86% £399 7.83 Edinburgh Client 201 Deansgate, Jan 2016 Aviva £29.15m 5.20%** £348 4.10 Manchester No 1 Capital Quarter, Cardiff Oct 2016 Private Investor £20.85m 6.69% £267 6.02
No 1 The Square, Sep 2016 Canal and Rivers £15.40m 6.30% £314 4.30 Bristol Trust The Grosvenor Building, Jun 2016 UBS Asset £17.85m 6.90% £316 6.37 Glasgow Management 1 East Parade & 8 St Pauls U/O Schroders £13.85m 6.31% £204 2.80 Street, Leeds *circa 33,198 sq ft vacant **circa 15,000 sq ft vacant
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL GRANITE HOUSE: AN OUTSTANDING INVESTMENT OPPORTUNITY
The property provides an opportunity to acquire a high quality mixed use investment in one of the UK’s ‘Big 6’ office markets. Why invest in Granite House? • An asset located in the heart of Glasgow city centre. • A very modest capital value, both in relation to the Glasgow and wider regional office markets. • Category B listed ensuring no vacant rates are payable. • A diverse income stream, secured against a strong tenant line up at an average passing office rent of £14.08 sq ft, considerably lower than its competition and 53% below prime rents within Glasgow city centre. • An opportunity to re-gear leases and drive rental growth through rent reviews. • Generation of immediate rental reversion through the letting of the fully refurbished vacant office accommodation. • Rents have increased from £13.00 sq ft to £15.50 sq ft in the last 18 months and currently quoting £16.50 sq ft, with further growth expected. • Planning permission for a 2 storey c50,000 sq ft rooftop extension of Grade A office space.
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INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL Foreign investment will continue to gather pace
INVESTMENT RATIONALE Investors continue to target UK commercial real estate and as such the UK Offices have significantly outperformed the IPD all property index accounted for 22% of all European commercial property investment in 2016. Despite a revival in the final quarter of the year, foreign investment into the UK actually fell in 2016. However, this needs to be set against continued growth for UK commercial real estate: a consistently performing asset class seven consecutive years where the UK has dominated European cross border investment. The UK commercial property investment market continues to be viewed as a safe haven for investment, particularly in light of continuing global political and CROSS BORDER INVESTMENT VOLUMES BY COUNTRY economic instabilities. UK commercial real estate has continued to perform strongly and consistently when compared with other asset classes. 50,000,000,000 By way of example, over the last five years IPD has outperformed the FTSE 100 and Bloomberg Commodity Index. The office sector has also significantly 45,000,000,000 outperformed the wider IPD all property index. 40,000,000,000
35,000,000,000
FIVE YEAR TOTAL RETURNS BY ASSET CLASS 25,000,000,000 Investment volumes (£) volumes Investment 90% 12,500,000,000
86%
45% 0 UK Germany France Poland Other
23% 2014 2015 2016 2017 to date
0% Total return (5 years) return Total -23% Whilst investment fell in 2016 across the UK, Scotland bucked this national trend, with foreign investment into the region actually increasing by 50% year on -45% year. Looking ahead, we anticipate the inflow of foreign capital will continue to IPD All Property IPD All Offices FTSE 100 Bloomberg Commodity Index gather pace as investors look to target the drop in Sterling post Brexit. Commercial real estate returns: yield margin vs bonds & gilts
Whilst we have seen limited and recent inflationary pressure, interest rates remain at historically low levels. As such corporate bond and gilt rates are following suit, meaning real estate returns and associated income yields continue to look exceptionally attractive to investors, which we believe will continue for UK commercial real estate throughout 2017.
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL SERVICE CHARGE
The service charge Budget for 2016 was £520,000 and the end of year reconciliation is being finalised, however the annual spend was less than the budget for the year. The service charge budget for 2017 totals £537,813, This equates to £2.65 - £3.27 sq ft for the office accommodation and £2.41 sq ft for the retail.
Granite House currently has a service charge shortfall of £101,867. £25,463 pa of this is due to three service charge caps: - Utilita 1st floor suite. This was part of the incentive package, this expires on 22/09/2017 upon which there will be no shortfall. Total Shortfall for 2017 is £18,691 - Clydesdale Bank 5th floor (until 01/08/2019) - £5,883 for 2017 - Minster Mcfarlane - £889.39 for 2017 The remainder of the shortfall is due to vacancy. Full details can be provided on request.
BUILDING SURVEY Full details can be provided on request.
VAT The property has been elected for VAT and therefore VAT will be chargeable on the purchase price. However it is anticipated the sale will be dealt with as a Transfer of a Going Concern (TOGC).
EPC The property has an EPC rating of D with individual floor rating of C. Full EPCs can be provided upon request.
TENURE The property is held Absolute Ownership (Scottish equivalent of English Freehold).
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL PROPOSAL We are instructed to seek offers in excess of £33,000,000 (Thirty Three Million Pounds Sterling) subject to contract and exclusive of VAT for the Absolute Ownership in the property. A purchase at this level would represent a net initial yield of 7.27%, after allowing for standard purchaser’s costs based on Land & Buildings Transaction Tax.
CONTACT AND FURTHER INFORMATION
For further information and to arrange an inspection please contact Cushman & Wakefield. The vendor has set up a data room to which access can be arranged.
Jason Winfield Tel: +44(0) 207 152 5920 Email: [email protected]
David Davidson Tel: +44 (0) 141 223 8767 Email: [email protected]
Richard Wadham Tel: +44(0) 207 152 5923 Email: [email protected]
Stuart Low Tel: +44 (0) 141 223 8797 MISREPRESENTATION ACT: Cushman & Wakefield gives notice that: These particulars are set out as a general outline only for the guidance of 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, Email: [email protected] but must satisfy themselves by inspection or otherwise as to the correctness of each of them. No person in the employment of Cushman & Wakefield as any authority to make any representation or warranty whatever in relation to this property. Purchase prices, rents or other prices quoted are correct at the date of publication and, unless otherwise stated, exclusive of VAT. Intending purchasers pod-creative.com by produced and Designed and lessees must satisfy themselves independently as to the incidence of VAT in respect of any transaction relating to this property. Date of publication March 2017.
INVESTMENT SUMMARY LOCATION SPECIFICATION TENANCY SCHEDULE ACCOMMODATION
PRINT OCCUPATIONAL MARKET INVESTMENT MARKET OPPORTUNITY FURTHER INFORMATION PROPOSAL