INVESTMENT OPPORTUNITY Tyne River House TheFOR Watermark, Gateshead, SALE NE11 9SZ High Yielding Single Let Office Investment INVESTMENT SUMMARY • Located on The Watermark Business Park, Gateshead’s • Freehold premier out of town office location. • Tenant has committed circa £2.35 million to the building through an • Tyne River House comprises a modern 2,786 sq m (29,999 sq ft) extensive refurbishment and fit out, comprising a new VRF heating and purpose built stand-alone office building with extensive parking cooling system, lighting, suspended ceilings and speedgate turnstiles. provision (1:269 sq ft). • Annual rent of £423,080 (£14.10 psf). • Excellent transport connections sitting adjacent to the bus and rail • We have been instructed to seek offers in excess of £3,610,000 for our interchange and a two minute drive to A1 junction 71, providing clients’ freehold interest. A purchase at this level reflects an attractive rapid access to the wider region. NIY of 11.00% and a low capital value of £120 psf assuming purchasers • Fully let to Teleperformance Limited on a new 10 year FRI lease costs of 6.509%. from 15 November 2016 with approximately 9.76 years remaining (4.76 to break). 2 A1 ALNWICK ASHINGTON MORPETH A1(M) LOCATION A696 A68 Newcastle Airport A19 TYNEMOUTH Port of Tyne Tyne River House is located on the NEWCASTLE A69 SOUTH A69 UPON TYNE Watermark Business Park which lies within SHIELDS the Metropolitan Borough of Gateshead. GATESHEAD Gateshead has a population of 200,500 Tyne River SUNDERLAND people extending to 1,075,000 people in House Intu the wider Tyneside conurbation. The town A68 Metrocentre Port of Sunderland ABERDEEN 65 A19 is situated immediately south of Newcastle Team Valley upon Tyne, 98 miles north of Leeds and 106 Trading Estate miles south of Edinburgh. CHESTER-LE-STREET 63 GLASGOW The Watermark Business Park is located EDINBURGH A1(M) to the north of Gateshead between the A1 M6 62 Port of Seaham south bank of the River Tyne and the Intu CARLISLE A69 NEWCASTLE GATESHEAD Metrocentre. Tyne River House benefits MIDDLESBROUGH A66 from excellent transport links to the regional A19 DURHAM road network as a result of its proximity to A1(M) YORK LEEDS MANCHESTER Newcastle City centre and the Metrocentre. M1 LIVERPOOL SHEFFIELD A181 The A1 Western bypass bounds the A689 A167 61 Metrocentre to the west, whilst the Blaydon M6 M1 A1(M) A690 A19 HARTLEPOOL Bridge to the west of The Watermark directly BIRMINGHAM A688 Port of Hartlepool connects Gateshead to Newcastle. M1 A1(M) M40 M11 The area of Gateshead is well served by 60 BRISTOL M4 LONDON public transport with Newcastle Central, A688 A689 a main station on the East Coast Mainline connecting the city to London in 2 hours A68 and 50 minutes, and Edinburgh in 1 hour 30 59 minutes. Tyne & Wear benefits from excellent A688 MIDDLESBROUGH transport connections via its Metro system, 58 which comprises 60 stations throughout DARLINGTON Newcastle, Gateshead, Sunderland, North A171 A66 and South Tyneside. The system is the A66 second largest in the UK behind the London 57 Durham Tees Valley Airport Underground. Newcastle International Airport, A66 provides daily scheduled flights to both 56 domestic and international locations. SCOTCH A19 CORNER 3 A1(M) A684 A19 DENTON ROAD WESTGATE ROAD A1 Tyne River House A1 NORTH SCOTSWOOD ROAD TH E W AT ERM E WA ARK RIVERSID Y A1 River Tyne S 1 C 14 O T R S IV A1 W E O R O S Y D I A V D W I E E MANDALE WAY A694 E W W D I Metro A S Y B I Retail River Derwent G ASDA D Park R E H PINETREE WAY ID A Metro S ND G Y D N R Park West I IVE L L O H Marriott Hotel CO IKEA LL AY Intu IERY ROAD MARCONI W Metrocentre ROAD C D LO G ST U C HEXHAM RD N .M N K G IC WELLINGTON O H S M L IG AE T L O R ’S I W L NEWCASTLE AY N L MARKET LANE CITY CENTRE R T R S O O (1.3 miles) T A N A O D A694 FR D D A A1 O R R E T A W A184 T EN DEW MARKET LANE ELLISON ROAD SITUATION A1 SOUTH The property is located on the Watermark Business Park in Gateshead on the Due to the scale of the Metrocentre development, connectivity to the local area south bank of the River Tyne. The Watermark scheme, developed in 2002 is unrivalled and has seen extensive investment in recent years. The A1, which by City and Northern, comprises 220,000 sq ft of modern, out of town office bounds the Metrocentre to the west, has recently undergone an extensive accommodation. The park was built in three phases of which the subject £61 m upgrade, whilst both Bus and Rail services run every 8 – 12 minutes to property forms the larger footprint buildings. The two other phases comprise Newcastle and the wider area. smaller, self-contained office buildings at Bankside, Keel Row and Staithes, offering accommodation ranging from 750 sq ft – 4,000 sq ft. The Watermark is prominently situated close to the Intu Metrocentre, the largest shopping centre in Europe. The centre features over 300 shops, 60 restaurants, an extensive neighbouring retail warehouse offering and IMAX cinema. 4 Team Valley Trading Estate A1 South A1 J71 Intu Metrocentre A1 Bus and Rail A1 North interchange A1114 Riverside Way The Watermark Tyne River House A1114 Riverside Way Unrivaled amenities and transport connections River Tyne 5 DESCRIPTION Tyne River House comprises a self-contained purpose built Grade A office building extending to 2,786 sq m (29,999 sq ft) over ground, first and second floors. The building benefits from an impressive specification following a £2.35m refurbishment. The refurbishment comprised £1.6m of landlord’s Category A works carried out by the tenant in lieu of a rent free period along with £750,000 of Category B works. In addition to the refurbishment, the tenant has committed £340,000 on new furnishings throughout the entire building. Following the works, the specification of Tyne River House now includes: - Impressive full height glazed atrium and reception - New high specification VRF heating and cooling system - 2 x 8 person passenger lifts - WCs and shower facilities on each floor - Suspended ceiling and recessed lighting - Fully accessible raised floors with 219 additional floor boxes installed - Frosted Privacy glass Typical Floor Plan - Flexible L shaped configuration allowing for WC's future subdivision - Butterfly speed gate turnstile entry systems Void Room - Dedicated training and meeting facilities Comms - New canteen and amenity space Comms WC's 6 Person Room Meeting Room Externally the building occupies a Store generous site extending to 1.64 acres Breakout Area Cleaners with 120 car parking spaces equating to a parking ratio of 1 : 269 sq ft. 6 Person Meeting Room 6 ACCOMMODATION We understand the property provides the following net internal floor areas: Floor sq m sq ft Ground 947.8 10,202 First 929.8 10,009 Second 909.3 9,788 Total 2,786.90 29,999 7 TENANCY Tyne River House is let entirely to Teleperformance Limited on a new 10 year lease commencing 15th November 2016, at an annual rent of £423,080, reflecting £14.10 per sq ft. The tenant has an option to determine the lease on 15th November 2021 subject to no less than 90 days prior written notice. The lease is subject to an upward only rent review on the 15th November 2021. Upon commencement of the lease, the tenant was granted a rent free period of 43 months, in return for a comprehensive refurbishment of the entire building. The tenants works are defined in the Licence to Alter dated 15th November 2016. This rent free is to be ‘topped up’ by the vendor. TENURE The property is held freehold, a copy of the Registered Title and associated Title plans are available upon request. 8 The tenant has committed circa £2.35m to the building through a comprehensive refurbishment 49 TENANT’S COVENANT Teleperformance Limited Teleperformance Limited forms part of the global Teleperformance brand established in 1978. Worldwide, the company employs 190,000 people across 65 countries from 311 sites. In the UK, Teleperformance employs 8,000 people from 11 offices. They are the international frontrunner in outsourced omnichannel client liaison management, providing a wide range of business solutions for clients in multiple industries including retail, telecommunications, utilities and healthcare. Services provided encompass customer care, customer acquisition, social media, technical support, accounts receivable and back office. From Tyne River House, Teleperformance operate the UK customer contact center for a leading global technology company. 31/12/2015 31/12/2014 31/12/2013 Turnover £181,183,000 £174,523,000 £154,962,000 Pre Tax Profit £8,742,000 £9,301,000 £7,350,000 Shareholder’s Fund £43,555,000 £35,549,000 £28,396,000 10 OCCUPATIONAL MARKET Supply and Availability The North East region provides a diverse range of accommodation ranging in size and quality to appeal to numerous occupiers, attracted by the relatively low occupational costs, accessibility of skilled workforce and high quality working environment. While Newcastle city centre comprises the principal in town office accommodation in the region, the out of town office market is made up of a handful of business parks throughout Tyne & Wear which continue to satisfy the demand further bolstered by severely constrained city centre supply. Due to the high demand for accommodation, the shortage of supply historically noted in Newcastle city centre has moved outward, with prime locations such as Cobalt Business Park now at 78% capacity (1,194,328 sq ft occupied) with only 337,148 sq ft remaining.