Dearne House, Cortonwood Business Park, Rotherham, S73 0UF
Grade A Regional HQ Office building let to Royal Mail with an unexpired term certain of 9.83 years
Dearne House, Cortonwood Business Park, Rotherham, S73 0UF
Investment Summary • Passing rent of £414,030 per annum, equating to £8.01 per sq ft • Grade A regional HQ office investment opportunity • Rent reviewed in November 2024 to the higher of Open Market Rental • Located in the Dearne Valley in South Yorkshire Value or RPI with a collar of 2.00% and a cap of 4.00% per annum • Well connected to the wider regional economy, with the Northern compounded Powerhouse cities of Manchester, Leeds, Sheffiled and Hull all within a • Freehold 1hr 10 minute drive time • We are instructed to seek offers in excess of £5,975,000, subject to • Adjacent to Cortonwood Retail and Shopping Parks contract and exclusive of VAT. A purchase at this level would reflect • 51,671 sq ft of Grade A office accommodation arranged over a Net Initial Yield of 6.50% and a capital value of £116 per sq ft. Ground, First and Second Floors. • At the RPI indexed rent review in November 2024, at the collar of • 4.2 acre site providing 360 on site car parking spaces providing an 2.00% and the cap of 4.00% per annum compounded, this would excellent car parking ratio of 1:144 sq ft provide a minimum reversion to 7.18% and a maximum reversion to 7.92% • Let in its entirety to the undoubted covenant of Royal Mail Group Limited with a remaining term certain of 9.83 years
Dearne House, Cortonwood Business Park, Rotherham, S73 0UF
Location
The property is located within the Dearne Valley, approximately 6 miles to the south –east of Barnsley and 7 miles north east of Rotherham.
The Dearne Valley is close to the geographical centre of the Northern Powerhouse region with Sheffield, Leeds, Manchester and Hull all within a drive time of 1 hr 10 mins. The nearest mainline station is at Doncaster with a fastest journey time to London Kings Cross of approximately 90 minutes.
The Dearne Valley Parkway (A6195) provides a direct dual carriageway link to junction 36 of the M1 motorway approximately 4.5 miles to the west. In addition, the A1(M) is situated approximately 10 miles to the east via the A6195 and A635, which in turn connects to the M18 and M62 motorways.
The subject property is very well located for numerous international airports, being approximately 45 miles from Manchester Airport, 38 miles from Leeds Bradford Airport, 50 miles from Humberside Airport, 50 miles from East Midlands Airport and 18 miles from Robin Hood Doncaster Sheffield Airport
Destination Distance Time
Sheffield 15 miles 25 minutes Leeds 30 miles 55 minutes
Manchester 40miles 1 hour 10 minutes
London 174 miles 3 hours 34 minutes
Situation
The Dearne Valley was a former coal mining area of South Yorkshire, which was regenerated via the Dearne Valley Enterprise Zone in the 1980s and 1990s. As part of a program of regeneration, high quality road links to the M1 were built and transformational projects such as the Robin Hood Airport undertaken.
The Dearne Valley has since developed into an important business location for South Yorkshire including office / call centre and industrial developments and Cortonwood Retail Park which has been developed over numerous phases .
Dearne House, Cortonwood Business Park, Rotherham, S73 0UF
Cortonwood Retail and Business Parks
Dearne House was the first building constructed as part of a mixed use development comprising industrial, retail and call centre uses, accessed directly from the A6195 Dearne Valley Parkway.
The original Cortonwood Retail Park comprises over 200,000 sq ft of retail warehouse accommodation. Including B&Q, Boots, Asda Living and Sport Direct, with a Morrisons Supermarket adjacent.
The park was extended in 2016/2017 to provide a further 120,000 sq ft of modern retail warehouse accommodation with tenants including M&S, JD Sports, New Look, River Island and H&M.
To the north east of Dearne House is a small estate of modern industrial accommodation.
Site Area Dearne House occupies a site area of approximately 4.2 acres, as shown on the site plan below (for indicative purposes only).
Cortonwood Retail Park
Dearne House, Cortonwood Business Park, Rotherham, S73 0UF
Dearne House Dearne House is a purpose built call-centre arranged over three floors comprising ground, first and second floor accommodation.
The building is arranged in two wings, either side of a central core, which provides a reception area at ground floor and staircases and passenger lifts, along with WC accommodation and meeting rooms on upper floors.
The ground floor provides meeting rooms, staff café and gym. The upper floors provide open plan office accommodation.
The building is of steel frame construction with reinforced concrete floors under a dual pitched roof incorporating Plastisol finished Kingspan composite panels. There are two external fire escapes covered with sheet steel cladding.
The external elevations of the building are a combination of aluminium framed double glazed curtain walling, prefinished composite type wall cladding and aluminium framed double glazed windows.
Externally the property provides 360 car parking spaces at a ratio of 1:144 sq ft. The site area is 4.2 acres secured via palisade fencing and access is via a secure barrier entry system.
Specification
The property provides the following Grade A specification:
• Full access raised floors
• Four pipe fan coil air conditioning
• Suspended ceilings
• 3 passenger lifts (2 in the atrium and 1 in the south wing)
• Male Female and disabled WC’s
• Shower facilities
• Staff cafeteria
• 360 car parking spaces at a ratio of 1:144
Dearne House, Cortonwood Business Park, Rotherham, S73 0UF
Dearne House, Cortonwood Business Park, Rotherham, S73 0UF
Accommodation Tenure
The property has been measured in accordance with the RICS Code of Measuring Practice Freehold (6th Edition) and provides the following net internal floor areas: Tenancy
Floor Sq M Sq Ft The property is let to Royal Mail Group Limited on full repairing and insuring terms via a current lease from 01 November 2014 to 31 October 2024 and a subsequent reversionary lease until 24 Ground (Office) 1,646 17,729 December 2029, giving a current unexpired term of 9.83 years.
Ground (Reception) 90 964 The current passing rent is £414,030, which was fixed from 01 November 2019 as part of the reversionary lease. First 1,532 16,489 The rent will be reviewed on 01 November 2024, in accordance with the RPI index or the high- Second 1,532 16,489 er of OMV, subject a cap of 4.00% per annum compounded and a collar of 2.00% per annum compounded. Total 4,800 51,671
Floor Plan
Upper Floor plan, not to scale for indicative purposes only
Dearne House, Cortonwood Business Park, Rotherham, S73 0UF
Covenant Information Investment Market
Royal Mail is a British institution dating back to the 1500s, which today is a globally recognised UK Brand. Unexpired Area Price Price Date Address Term Tenant(s) Yield In 2018, Royal Mail handled delivery of 13 billion letters and (Sq Ft) (m) psf (Years) 1.3 billion parcels in the UK alone and, through its GLS and Parcelforce subsidiaries, provides an extensive range of B2B and B2C services in Europe and North America. Tallents House, Royal Mail Group Q4 2019 94,323 10.7 £11.55 £122 6.09% Edinburgh Limited Royal Mail Group Limited’s immediate parent company, Royal Mail Plc, was listed on the London stock Exchange in 2013. Blakeney Way, Kingswood Veolia ES (UK) Q4 2019 40,139 9.9 £10.948 £273 6.49% Dearne House provides Royal Mail’s only call centre operation which services exclusively Lakeside, Limited business customers. This ranges from servicing sole traders through to teams dedicated to its Cannock largest corporate customers. Royal Mail Sorting Warehouse, Royal Mail Group Royal Mail Group Limited is rated as a 5A1 covenant by Dun and Bradstreet, denoting a Q4 2019 215,745 10.6 £25.4 £118 5.26% minimal risk of business failure. It has the following recent financial highlights: Cultins Road, Limited Edinburgh
Pre-Tax Profit (in Shareholder’s Capita House, Year to Date Turnover (in 000s) Employees Q4 2019 Brookfields Park, 135,938 18.5 Capita Plc £24.35 £189 6.60% 000s) Funds (in 000s) Rotherham
31.03.2019 £7,748,000 £186,000 £3,991,000 138,873 Cheadle Royal Dow Chemicals Q3 2019 Business Park, 26,037 15 £5.3 £203 6.00% (Forward Funding) 25.03.2018 £7,608,000 £6,000 £3,813,000 138,002 Cheadle Royal
26.03.2017 £7,651,000 £146,000 £4,554,000 138,693 Witham Park Anglian Water Q1 2019 58,126 13.44 £8.97 £154 6.43% Lincoln Services Limited Occupational Market The Lakes Shoosmiths Services Q4 2018 Bedford Raad, 49,882 12.8 £15.70 £315 5.90% The Dearne Valley office market is characterised by call-centres, with operations run by Ltd Capita for customers including O2, BMW, TfL, Thames Water, as well as Web Help TSC, E-ON, Northampton Royal Bank of Scotland and NHS 111 service. Passing rents for similar buildings in the Dearne Valley range from £10 psf to £15 psf. Discovery House, Q4 2018 25,184 19.4 Capita Plc £6.545 £260 5.50% As such, at £8.00 psf, the passing rent at Dearne House is one of the lowest call centre rents in Nottingham the Dearne Valley area.
16 Europa View, Q3 2017 Sheffield Business 21,000 25 SIG Plc £5.65 £269 5.50% Park, Sheffield
Dearne House, Cortonwood Business Park, Rotherham, S73 0UF
Energy Performance Certificate The property has an EPC rating of D87 Certificates are available upon request.
VAT The property is elected for VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).
Finance Avison Young’s Debt Broking team have approached the lending market for indicative terms on this opportunity. Full terms can be obtained via the data room.
For further information on debt financing please contact:
Alastair Carmichael—[email protected]
Rachael Roxburgh—[email protected]
Proposal We are instructed to seek offers in excess of £5,975,000, subject to contract and exclusive of VAT.
A purchase at this level would reflect a Net Initial Yield of 6.50% and a capital value of £116 per sq ft.
At the RPI indexed or the higher of OMV rent review in November 2024, at the collar of 2.00% and the cap of 4.00% per annum compounded, this would provide a minimum reversion to 7.18% and a maximum reversion to 7.92%.
Subject to Contract
February 2020
Dearne House, Cortonwood Business Park, Rotherham, S73 0UF
Further Information For further information, or to arrange access to the data room or an inspection
please contact the sole agents:
James Yates Mark Frampton 0113 280 8090 020 7911 2181 07983586654 07769 931761 [email protected] [email protected]
Dom Knowles Daniel Tiernan 0113 280 8064 020 7911 2517 07983395371 07951 716043 [email protected] [email protected]
Property ref February 2020
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