89/91 CLARENCE STREET 2/6 CASTLE STREET KINGSTON-UPON … · 89/91 clarence street & 2/6 castle street kingston-upon-thames prime retail / office investment block for sale investment

89/91 CLARENCE STREET & 2/6 CASTLE STREET KINGSTON-UPON-THAMESPRIME 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-ThamesisoneoftheUK'smostsignificantandrenownedretailcentreslocatedinsouthwestLondon.

Freehold.

Rarelyavailableretailandofficeblock,occupyingaprimepositiononClarenceStreet,wellpositionedtotakeadvantageofBritishLandandUSS’sdevelopmentofEdenWalk.

Excellentrentalgrowthprospectsgivendemandforthetown.

59%oftheincomesecuredtotheundoubtedcovenantsofStarbucksCoffeeCompany(UK)LimitedandOfficeAngelsLtdwithanoverallWAULTof6.06 years.

Potentialtoconverttheofficeaccommodationtoresidentialuse,subjecttoplanning.

Thecurrentrentis£312,800perannum.

Ourclientsareseekingoffersinexcessof£4,950,000(FourMillionNineHundredandFiftyThousandPounds)subjecttocontractandexclusiveofVAT.Apurchaseatthislevelwouldreflecta net initial yield of 5.60%,afterallowingforpurchaser’scostsof6.59%andtheservicechargeshortfall.


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

LOCATION

Kingston-upon-ThamesisoneoftheUK’sleadingcommercialandretailingcentresandisoneofonlysixRoyalBoroughsinEnglandandWales.ThetownislocatedintheaffluentsouthwestareaofGreaterLondon,approximately5miles(8 km)southofRichmond,11miles(17.7 km)westofCroydonand12miles(19.3 km)southwestofCentralLondon.Thetownbenefitsfromexcellentcommunications,withitbeingincloseproximitytotheM25,M3andA3.ThetownbenefitsfromaregularcommuterrailservicetoLondonWaterloo,withafastestjourneytimeofapproximately20minutes.

LondonHeathrowAirportislocatedapproximately12 miles(19.3 km)westofthetownandLondonGatwickAirportislocated17 miles(27.3 km)tothesoutheast,enablingeasyaccesstoadiverserangeofdomesticandinternationalflights.

J16/J1A

A355

A437

A412

A 4020

A408

A4180

A4

A

312

A413

L ONDON RD A4 BAT H RD

J15/J4B

A308

A4155 A40

94

A 4094

A33

0

A30 A308

A308

A31

6

A4

06

A406

A1

A1

A1

A406

A41

A41

A4

1

A5

A4 A4 A4

A3

A214

A3

A3

A205 A205

A40 A40

A 40

A40

J16/1A

J15/4B

A332

A30

A308

A329

River Tha mes

CENTRALLONDON

KINGSTONUPON

THAMES

WIMBLEDON

MITCHAM

CLAPHAM

BATTERSEA

HOUNSLOW

FELTHAM

BRACKNELL

ASCOT VIRGINIAWATER

WINKFIELD

FIFIELD

BRAY

MAIDENHEAD

HIGHWYCOMBE

EGHAM STAINES

SLOUGH

WINDSOR

OLDWINDSOR

HEATHROW AIRPORT

HARROW

WATFORDRICKMANSWORTH

HAMMERSMITH

EALINGHAYES SOUTHALL

GREENFORD

RICHMOND

TWICKENHAM

TEDDINGTON

PUTNEY

CHISWICK

UXBRIDGE

M25

M25

M25

M40

M40

M4A404(M)

M4

M4

M1

M1

M3

M4

M4



DEMOGRAPHIC PROFILEKingstonhasanestimatedprimarycatchmentpopulationof887,000,significantlyabovetheregionalcentreaverageandrankingthetown13thoutofthePROMIScentresonthismeasure.TheestimatedshoppingpopulationofKingstonis467,000,rankingthetown15thoutofthePROMIScentres,reflectingthedominanceofKingstonacrossitsdenselypopulatedcatchmentarea.

Thetownalsoranks11thintermsofthevolumeofcomparisonretailspendavailableinthecatchmentareaandisforecasttoseesignificantlyaboveaveragegrowthinthatspendingbetween2015 – 2020.

Kingstonhasanaffluentcatchmentpopulation,witha36%representationofABC1demographics. RETAILING IN KINGSTON

Kingston-upon-ThamesisoneoftheUK’smostsignificantandrenownedretailcentres,arguablyoneofthestrongesthighstreetshoppingdestinationswithintheM25outsideofCentralLondon.

ThetowncentreretailfloorspaceinKingstonisestimatedat1.40msqft.Kingstonranks16onthebaseofitsPMAretailscoreand16onthePMAfashionscore.Thetown’shighrankingonthePMAretailandfashionscores,reflectsanextensiverangeoffashionandnon-fashionretailersinthetown.KeyfashionretailersincludeCos,H&M,Hollister,Primark,NewLook,MonsoonandRiverIsland,aswellasuppermiddlequalityoperatorssuchasKarenMillen,Jigsaw,Reiss,L.K.BennettandMassimoDutti.

KingstonofferstwoqualitydepartmentstoresinJohnLewisandBentalls,withvarietystoresincludingMarks&SpencerandPrimark.

ThemainfocusofprimeretailactivityinKingstonisthepedestrianisedClarenceStreet,hometoMarks&Spencer’stwostoresandthemainentrancetoTheBentallShoppingCentre.Theprimeretailingextends

intoTheBentallShoppingCentre,whichcomprisesapproximately600,000sqftofretailfloorspaceandtradesover4floors.TheothermainmanagedshoppingcentreisEdenWalk,whichcomprisesapproximately290,000sqftofretailfloorspaceandisanchoredbyBoots,Sainsbury’sandHabitat.

PrimarkisextendingitsstoreonEdenStreetbyapproximately59,000sqft,whichwillfurtherstrengthenEdenStreet.

Inadditiontothis,KingstonCouncilhasnowgrantedpermissionforBritishLandandtheUniversitiesSuperannuationScheme(USS)tocommenceatransformativeredevelopmentoftheEdenWalkShoppingCentre.ThesouthernendofMemorialGardens,tothebackofthecentre,willalsobereopened,providingimprovedlinksbetweenEdenWalkandtherestofthetowncentre.

Theschemewillfeaturenewstores,adiningterrace,aboutiquecinemaanda“sky”restaurant.Thecomplexwillalsoinclude385residentialflats,fromstudioapartmentstothreebedroomhomes.



VODAFO

NE

ITSU

ALDI

EXTENDED PRIMARK

STORE

EDEN WALK SHOPPING CENTRE

BENTALLCENTRE

N

Forillustrativepurposesonly



SITUATIONThesubjectblock,whichishighlightedingreenontheGoadplan,occupiesaprimetradinglocationatthejunctionofClarenceStreetandCastleStreet,adjacenttoUniqlo,whilstincloseproximitytoPretAManger,andMetroBank.CastleStreetformsabusypedestrianisedcutthroughfromFifeRoadandKingstonRailwayStationandoffersamixofnationaloccupiersandcafes/restaurants.

DESCRIPTIONTheownershipcomprisesaretailparadeof5shopunits,frontingClarenceStreet/CastleStreet,primarilyarrangedovergroundfloorandbasement,withthreefloorsofself-containedofficesabove,accessedfromtwoself-containedentrancesonCastleStreet.

ACCOMMODATION Wehavebeenprovidedwithameasuredsurveyreport,undertakenbyCBRELimitedonbehalfofourclients,whichsetsoutthefloorareasasdetailedinthetenancyschedulebelow.



TENURE Freehold.

TENANCIES Thepropertyisletinaccordancewiththetenancyschedulesetoutbelow,producingacurrentgrossrentalincomeof£312,800paxandanetrentalincomeof£294,954perannumexclusiveafterdeductionofservicechargeshortfalls.Themajorityoftheleasesareletoneffective,fullrepairingandinsuringtermsrecoverableviaaservicecharge,detailsofwhichareavailablefromthisoffice.

SERVICE CHARGEBasedoncurrentbudgetsthereisananticipatedservicechargeshortfallof£17,846goingforwardduetoservicechargecaps,withpotentialtoreducethisfigurefollowingrenegotiationofcontracts.ThehistoricservicechargeshortfallinpartrelatestoamountsaccruedinrelationtoarefurbishmentofthecommonpartsoftheClarenceStreetoffices,whichthepurchasermayseektocarryoutinthemedium-term.Atpresent,thetotalamountaccruedforarefurbishmentis£54,000.Afurther£20,000isbeingaccruedovertheservicechargeyearend31March2017.Furtherinformationontheservicechargewillbeavailableinthedataroom.



DESCRIPTION TENANT LEASE START

LEASE EXPIRY

NEXT REVIEW (BREAK OPTION)

ACCOMMODATION (SQ FT)

CURRENT RENT £ P.A. (ITZA)

ERV £ P.A. (ITZA)

LANDLORD SHORTFALLS

COMMENTS

89/91 ClarenceStreet

StarbucksCoffee 07/01/2008 06/01/2023 07/01/2018 GroundFloor- 1,237 ITZA - 883 Basement - 1,007

£155,000 (£172.25)

£155,000 (£172.25)

89aClarenceStreet

CGMilkshakeCo.Ltd 25/07/2012 24/07/2022 25/07/2017 (LT: 24/07/17)

GroundFloor-166ITZA-166Basement-279

£20,000 (£116.00)

£18,000 (£100.00)

Mutualbreakclause 24/07/2017 androllingannualthereafter.Rentaldepositof £20,000

2CastleStreet JinSungSuh&HyunSSuht/aJOA

25/02/2009 19/05/2019 19/05/2015 GroundFloor - 136 ITZA - 136 Firstfloor(Kitchen) - 181

£15,500 (£102.00)

£15,500 (£102.00)

4 CastleStreet Rak-KyuParkt/aKokoro

19/05/2014 18/05/2019 19/05/2014 GroundFloor - 213 ITZA - 213

£15,500 (£71.50)

£18,000 (£85.00)

Rentaldepositof£6,017.25.OriginaltenantYokoJewelleryCompanyLimited

6 CastleStreet GeraldO'Neillt/aG&EJewellers

20/05/2015 19/05/2025 20/05/2020 GroundFloor - 258 ITZA - 214

£17,500 (£82.00)

£17,500 (£82.00)

£624 Tenanttopayexpensesinrelationtocommonparts.Rentaldepositof£6,900

89-91 ClarenceStreet 1st flroffices

OfficeAngelsLtd 24/06/2015 23/06/2025 24/06/2020 (T: 24/06/2020)

Firstfloor-1,450 £30,000 (£20.75)

£30,000 (£20.75)

89/91 ClarenceStreet 2nd/3rdflroffices

JJHorstman&JSPerryt/aPalmersSolicitors

06/08/2015 05/08/2020 T: 06/08/2018 Secondfloor - 1,974 Thirdfloor - 701

£47,800 (£17.90)

£47,800 (£17.90)

£17,222 Servicechargecapof £18,000

4/6CastleStreet1st/2ndoffices

CarolineFitzpatrick&CharlotteAdlerSolicitors

09/03/2012 08/03/2017 Firstfloor - 330 Secondfloor - 522

£11,500 (£13.50)

£17,200 (£20.00)

New5yearreversionaryleasefrom09/03/2017insolictorsatarentof£17,200p.a.Furtherdetailsavailablefromthisoffice.

TOTAL £312,800 £319,000 £17,846



RENTAL VALUEItisouropinionthattheestimatedrentalvalueasoftoday’sdatewouldlieintheregionof£319,000perannum.Theapportionedrentalvaluesaresetoutinthetenancyschedule.PrimeZoneArentsarenowatapproximately£300onClarenceStreet,Kingston.

TheprincipalofficeevidencerelatestotheAdecoreversionaryleaseeffectiveMay2015agreedat£20.75persqftandthenewreversionaryleasetoFitzpatrick&AdlerSolicitors,whichhasbeenagreedatcirca£20.00persqft.

Themostsalientrentalevidencecanbesetoutasfollows:-

a) 36 Clarence Street (Vodafone) OpenmarketlettinginJune2015,atarentof£247,500

pa,whichreflectedaheadlineZoneArentof£288persqft.

b) 22 Clarence Street (ITSU) AssignmentofArcadia’sleaseholdinteresttoItsu

inMarch2016fora9monthrentfreeperiod.Therentpassingof£350,000paxdevaluestoaZoneArentof£311persqftandthetenantwasproposingsignificantworkstothefrontagetocreatedoubleheightglazingatacostconsiderablyinexcessoftheincentivereceived.

c) 75/77 Clarence Street (Tiger) OpenmarketlettingJune2012atarentof£265,000

pax,whichreflectsaZoneArentof£260persqft.

d) 11/13 Castle Street (Coral) RentreviewMarch2015,agreedatarentof£61,000

perannumexclusive(increasedfrom£57,500),whichdevaluedtoaZArentof£75persqft,applying£5tothe1st/2ndfloorsancillaryand£20tothe1stand2ndflooroffices,less10%formanagement.



COVENANTStarbucksopeneditsfirstshopin1971andnowhasmorethan15,000storesin50countries.Formoreinformation,pleasegotowww.starbucks.com.

OfficeAngelsispartoftheAdecoGroup,theworld’sleadingproviderofHRsolutions,employingover31,000dedicatedmembersofstaffandoperatingacross5,500officesinmorethan60countriesworldwide.

ThesummaryaccountinginformationforStarbucksCoffeeCompany(UK)LimitedandOfficeAngelsLimitedissetoutbelow:-

STARBUCKS COFFEE COMPANY (UK) LIMITED

27/09/2015 28/09/2014 29/09/2013

GBP GBP GBP

Turnover £405,641,634 £408,721,070 £399,405,183

Pre-taxprofit

£34,216,739 £1,056,196 -£20,465,123

NetWorth £57,705,649 £35,513,082 £43,838,060

Office Angels Limited

31/12/2015 31/12/2014 31/12/2013

GBP GBP GBP

Turnover £79,038,000 £82,231,000 £87,940,000

Pre-taxprofit

£2,777,000 £3,366,000 £342,000

NetWorth £17,635,000 £15,602,000 £12,371,000



VATWeunderstandthatthepropertyiselectedforVATandthereforeVATwillbepayableonthepurchaseprice.ItisenvisagedthatthesalewillbedealtwithasaTransferOfaGoingConcern(TOGC).

EPCCopiesoftheEPCratingsandreportsareavailablefromthisoffice.

PROPOSALWeareinstructedtoseekoffersforourclient’sfreeholdinterestinexcessof£4,950,000(FourMillionNineHundredandFiftyThousandPounds)subjecttocontractandexclusiveofVAT.

Apurchaseatthislevelwouldreflectthefollowingyieldprofileafterallowingforpurchaser’scostsof6.59%andtheservicechargeshortfall.

Net initial yield - 5.60%Reversionary yield - 6.05%Equivalent yield - 5.98%True equivalent yield - 6.21%

ThemostrecenttransactionsinKingstoncanbesetoutasfollows:-

1. 86/88 Eden Street, Kingston (Halifax) RetailinvestmentlettoBankofScotlanduntilMay

2026wassoldinNovember2015for£4,250,000,whichreflectedanetinitialyieldof4.44%.Thepropertywasletatarentof£200,000pa,whichreflectedaZoneArentof£110persqft.

2. 167/181 Clarence Street, Kingston Secondaryretailinvestmentcomprising5retail

unitswithaWAULTof8.05yearssoldtoClearbellinDecember2015for£5.55m,whichreflectedanetinitialyieldof6%.

3. 40/40a Clarence Street, Kingston (North Face & EE) Wehaverecentlyconcludedthesaleofthesubject

twoshoppropertytoaMiddleEasterninvestorfor£10,350,000,whichreflectsanetinitialyieldof3.91%.ThepropertywaslettoEEandVFNorthernEuropeServicesLimitedt/aTheNorthFacewithaWAULTof5.93 years.Therentsdevaluedto£299.82ZoneAand£281.72ZoneArespectively.



Messrs.JacksonCrissforthemselvesandforthevendorsorlessorsofthispropertywhoseagentstheyaretogivenotice that: (i) theparticularsaresetoutasageneraloutlineonly for theguidanceof intendingpurchasersorlessees,anddonotconstitute,norconstitutepartof,anofferorcontract;(ii)alldescriptions,dimensions,referencestoconditionandnecessarypermissionsforuseandoccupation,andotherdetailsaregiveningoodfaithandarebelievedtobecorrectbutanyintendingpurchasersortenantsshouldnotrelyonthemasstatementsorrepresentationsoffactbutsatisfythemselvesbyinspectionorotherwiseastothecorrectnessofeachofthem;(iii)nopersonintheemploymentofMessrs.JacksonCrisshasanyauthoritytomakeorgiveanyrepresentationorwarrantywhatever inrelationtothisproperty. JC0090. June2016.DES

IGN

EDB

YTC

C Forfurtherinformation,pleasecontact:

Philip Hay Brook Wannop020 7637 7100 020 7637 7100

[email protected] [email protected]



mailto:[email protected]

mailto:[email protected]

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89/91 CLARENCE STREET 2/6 CASTLE STREET KINGSTON-UPON … · 89/91 clarence street & 2/6 castle street kingston-upon-thames prime retail / office investment block for sale investment