gva.co.uk/4511

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DISPOSAL On behalf of the Joint LPA Receivers AD Rodger and R N Phillips

June 2012

High Yielding Secure

Modern Office

Investment

Telecom House

Station Road

Prudhoe

Newcastle upon Tyne NE42 6NJ

• Well located modern secure office investment totalling 30,645 sq ft on 2.34 acres adjacent to Prudhoe train station and

close to Newcastle.

• Let to BNS Telecom Group Ltd until May 2022. BNS is owned by Daisy Group plc.

• Strong tenant covenant with shareholders’ funds of £7.5M to the year ending 31 March 2011. Daisy Group Plc reported

a turnover of £266.3M and shareholders funds of £168.1M to year ending 31st March 2011.

• 5 yearly rent reviews to the greater of 3% p.a. compounded or RPI (minimum uplift in May 2012 to £411,542 p.a.).

• Excellent car parking provision of 149 spaces (1:205 sq ft).

• Potential to split site in the future to create two separate investments.

• Offers invited.

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Location & Situation

Prudhoe is the largest town in the borough of Tynedale with a population of over

12,000 and is located on the A695 which provides good access to Newcastle city

centre 10 miles to the east, the A1(M) 5 miles to the east providing access to the

north and south and A69 dual carriageway 1 mile to the north running east to

west linking Newcastle with Carlisle, Hexham and Corbridge.

The town is approximately 9 miles south west of Newcastle International Airport

with daily flights to many domestic and international destinations. The East Coast

mainline links Newcastle to London Kings Cross with a direct journey time of

approximately 2 hours 50 minutes. Prudhoe train station sits immediately adjacent

to the subject site with a journey time of 25 minutes into Newcastle city centre and

15 minutes into Hexham. An extensive bus service provides access to local areas.

Prudhoe is a significant commercial centre, predominantly based around the

industrial sector with the Low Prudhoe Industrial Estate and several national

occupiers including SCA Paper, Thompsons of Prudhoe, Jewson and MAC Tools.

The subject site enjoys a prominent position on Princess Way (A695) just off Station

Road being situated immediately adjacent to Prudhoe train station. Other

occupiers within the vicinity include Gulf petrol filling station and a public house to

the south and west of the subject site respectively, with a number of residential

dwellings to the south east.

Daisy Group plc is the main office occupier within the vicinity with other national

occupiers within the wider area including SAGE, Procter & Gamble, Santander,

Tesco Bank, Everything Everywhere and Hewlett Packard.

Description & Accommodation The property comprises a site extending to 2.34 acres (0.95 h.a.) upon which there

are two office buildings known as Telecom House and Telecom House Annex.

Telecom House is a high specification modern office building that was completed

in 2006. It is an excellent administrative office building on ground and 2 upper

floors, which also benefits from external landscaping. It was designed with an

impressive full height glazed atrium which acts as the central core of the building.

It has a full range of modern office amenities including a passenger lift, comfort

cooling throughout, raised floors, Category 2 lighting as well as male and female

toilets on each floor.

Telecom House Annex is a 1980s building located immediately opposite

Telecom House. The building is arranged on the ground and first floors and

provides a mixture of open plan and private offices. The building is

connected to Telecom House by an attractive landscaped walkway.

Amenities provided are central heating, a passenger lift, perimeter trunking

and acoustic ceilings.

There is a car parking provision of 149 spaces providing an excellent ratio of

1:205 sq ft.

A breakdown of the net internal area is provided in the table below:-

Description Sq Mtrs Sq Ft

Telecom House

Ground floor

1st Floor

2nd Floor

NIA

714.53

679.02

414.95

1,808.5

7,691

7,309

4,466

19,466

Telecom House Annex

Ground floor

1st Floor

NIA

504.23

534.34

1,038.57

5,427

5,752

11,179

Total NIA

2,847.07

30,645

Tenure Freehold.

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Tenancy Details The site is let in its entirety to BNS Telecom Group Ltd for a term of 15 years from the

29 May 2007 on full repairing and insuring terms at an initial rent of £355,000 p.a.

The lease provides for 5 yearly rent reviews to the greater of 3% per annum

compounded increases or in line with RPI increases, whichever is the greater. The

first rent review is due in May 2012 with a minimum uplift to £411,542 p.a., however

based on RPI this figure is projected to be slightly higher.

There is a further rent review in May 2017 when the rent will rise to a minimum of

£477,088 p.a.

Covenant Information BNS Telecom Group Ltd is a leading company in the resale of fixed and mobile

lines, minutes and data, traditional hardware in addition to IP telephony

hardware. BNS is one of the largest resellers for BT Wholesale. These services and

products are provided to over 200 companies worldwide.

For the year ending 31 March 2011 the company reported shareholders’ funds of

£7.5M.

Daisy Group Plc is an industry leading provider of unified communications to the

SME and mid market business sector in the UK, their principal activity being the

supply and maintenance of telecommunications services and systems.

For the year ending the 31 March 2011 the company reported a turnover of

£266.3M with shareholders’ funds of £168.1M.

Potential Asset Management The site is accessed from the south west, off Princess Way, with Telecom House to

the north west and Telecom House Annex to the south east of the site. Should the

tenant wish to vacate at lease expiry the site would lend itself to being split

without the necessity to create an additional entrance. This would allow for two

separate investments to be created such is the versatility of the site.

Energy Performance Certificates

Comparable Investment Evidence Although the economy remains challenging there remains investor

confidence in secure medium to long term income in the office sector and

this is supported by the following recent transactional evidence.

3 Admiral Way, Doxford International Business Park, Sunderland – 1990’s single

let office comprising circa 56,000 sq ft arranged over ground, 1st and 2nd

floors. The property is let to Barclays Bank Plc with a lease expiry in March

2023. The passing rent of £12.70 per sq ft is considered to be full with the

lease being subject to 5 yearly open market reviews. The investment was

transacted in October 2011 at £8.57M reflecting a net initial yield of 7.74%

and a capital value of £153 per sq ft.

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Nexus House, 33 St James’ Boulevard, Newcastle upon Tyne – city centre office

constructed in 2000 over ground and 4 upper floors totalling circa 29,000 sq ft. The

property is predominantly let to the Passenger Transport Executive for over 14

years and is subject to RPI linked 5 yearly uplifts. The investment was transacted in

August 2011 for £6.41M reflecting a net initial yield of 7% and a capital value of

£220 per sq ft.

VAT

The property has been elected for VAT.

Proposal

Offers invited.

For further information or an appointment to view please contact: Steven Cole

T: 0191 269 0520

E: steven.cole@gva.co.uk

gva.co.uk

gva.co.uk

GVA is the trading name of GVA Grimley limited, conditions under which particulars are issued by GVA Grimley Limited for themselves, for any joint agents and 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 only for the guidance of intending purchases or lessors and do not constitute, nor constitute part of, an offer or contract.

(ii) all descriptions, dimensions, references to condition and necessary permission for use and occupation, and other details, are given in good faith and are believed to be correct but any intending purchasers or tenants should not rely on

them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them.

(iii) no person in the employment of GVA Grimley Limited or any joint agents has any authority to make or give any representation or warranty whatever in relation to this property.

(iv) all rentals and prices are quoted exclusive of VAT

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