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RARE ST JAMES’S FREEHOLD HEADQUARTERS
OFFICE BUILDING
3
CONTENTS
Investment Summary 8
St James’s 12
Connectivity 14
Location 16
Description 20
Specification 25
Accommodation 26
Floor Plans 28
Tenure 33
Tenancy Schedule 34
Tenant Covenants 36
Occupational Market 40
Investment Market 42
Investment Considerations 44
Further Information 45
Contact 46
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Extremely rare St James’s freehold trophy asset prominently situated on St James’s Street, less than 50 metres from the Ritz Hotel;
Redeveloped in 1999, the property has recently undergone extensive refurbishment, completing in 2018;
Cassini House provides 51,348 sq ft of Grade A office accommodation arranged over lower ground, ground and six upper floors.
Well configured 7,000 sq ft floorplates benefitting from excellent levels of natural light throughout;
Let to three established occupiers, Artemis Investment Management, Mitsui Fudosan and Shore Capital Stockbrokers, with a WAULT to lease expiries of 10.33 years and 8.25 years to tenant break options;
Artemis are the principal occupier in the building, accounting for 58% of the income, benefiting from their own dedicated self-contained reception and internal staircase serving all of their upper floors;
Total passing rent of £5,019,085 per annum, equating to a highly reversionary average rent of £100.58 per sq ft;
Well timed rent reviews between 2023 and 2025 offering an excellent opportunity to capture the reversionary rent in a rising leasing market;
Offers are invited in excess of £135,000,000, subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 3.48% (after the deduction of purchaser’s costs at 6.80%) and a low capital value of £2,629 per sq ft.
INVESTMENTSUMMARY
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GREEN PARK
ST JAMES’S PARK
THE MALL
ST JAMES’S SQUARE
GREEN PARK
BOND STREET
MAYFAIR
SAVILE ROW
REGENT STREET
PICCADILLY CIRCUS
PICCADILLY
LEICESTER SQUARE
CITY OF LONDON
THE SHARD
SOUTHBANK
CHARING CROSS
TRAFALGAR SQUARE
THE LONDON EYE
CANARY WHARF
CENTREPOINT
TOTTENHAM COURT ROAD
THE RITZ
JERMYN STREET
St James’s is steeped in history and globally renowned for its exclusive retailers, numerous luxury hotels, including The Ritz, Duke’s Hotel and the Stafford, as well as prestigious member’s clubs including Boodle’s, White’s and the Royal Automobile Club. In addition, a wealth of world-class restaurants are on offer including Quaglino’s, Café Murano, The Wolseley and Avenue.
Occupiers are drawn to the prestige and associated wealth of the immediate area with major corporate institutions and boutique firms situated in close proximity. Notable local occupiers include, amongst others, Warburg Pincus, Temasek and Edmond de Rothschild.
Continuing the theme of opulence, the capital’s most exclusive shopping and art galleries can be found in the immediate vicinity, with Jermyn Street, Bond Street, Savile Row and Regent Street all within walking distance. Furthermore, St James’s benefits from an abundance of green space with St James’s Park to the south and Green Park to the west.
These features combine to ensure that St James’s remains one of London’s most sought after corporate locations offering global appeal to occupiers and landlords alike.
THE WEST END OF LONDON IS ONE OF THE WORLD’S MOST EXCLUSIVE
OFFICE LOCATIONS AND ST JAMES’S IS CONSIDERED THE JEWEL IN THE CROWN.
ST JAMES’S
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KING’S CROSS ST PANCRASINTERNATIONALPADDINGTON
TOTTENHAMCOURT ROADBOND STREET
NOTTING HILL GATE
HIGH STREETKENSINGTON
LEICESTERSQUARE BANK
EUSTON
VICTORIASOUTHKENSINGTON
CHARINGCROSS
WATERLOO LONDONBRIDGE
OXFORD CIRCUS
BAKER STREET
PICCADILLY CIRCUS
GREEN PARK
To Heathrow Via Heathrow Express
To Heathrow Via Piccadilly Line
3 MINUTES WALK
To Gatwick Via Gatwick Express18 MINUTES WALK
To Paris Via Eurostar
To London City Airport Via DLR
6 MINUTES WALK
15 MINUTES WALKCONNECTIVITY
St James’s transport connectivity across the capital is excellent with Green Park (Victoria, Piccadilly and Jubilee lines), Piccadilly Circus (Piccadilly and Bakerloo lines), Leicester Square (Northern and Piccadilly lines) and Charing Cross (Mainline Rail, Northern and Bakerloo lines) stations all within easy walking distance.
These stations provide fast and easy access to the remainder of the London Underground network, including the Elizabeth Line, together with the capital’s principal mainline stations and Heathrow and Gatwick airports. In addition, numerous bus routes run along Piccadilly, linking Mayfair and Soho to the north via Regent Street, and Victoria to the south via Whitehall.
Key
Bakerloo Central Circle District Hammersmith & City Jubilee Metropolitan Northern Piccadilly Victoria DLR Elizabeth Line
Eurostar National Rail Underground
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1. 45 Jermyn Street2. Avenue3. Boulestin4. Café Murano5. Caviar House & Prunier 6. Chutney Mary7. Franco’s8. Hide 9. Langan’s10. Le Caprice11. Rowley’s12. Saint Jacques13. Sake No Hana14. The Ritz15. The Wolseley 16. Wiltons
1. BAFTA2. Christie’s3. Clarence House4. Criterion Theatre5. Grosvenor Gallery6. Her Majesty’s Theatre7. Insitute of Contemporary Arts8. Jermyn Street Theatre9. Martyn Gregory10. Moretti Fine Art 11. Royal Academy of Arts12. St. James’s Palace13. Theatre Royal Haymarket14. White Cube Mason’s Yard15. David Gill Gallery
1. Alfred Dunhill2. Berry Bros. & Rudd3. Crockett & Jones4. Daks5. Davidoff6. De Beers7. Fortnum & Mason8. Hackett9. Harvie & Hudson10. Hawes & Curtis11. Hilditch & Key12. Lock & Co. Hatters13. Paxton & Whitfield14. Pink15. Sharps Pixley16. Turnbull & Asser
1. Anglo American2. BAE Systems3. Blackstone4. BP5. Brewin Dolphin6. Carlyle Group7. Cinven8. Citi9. Credit Suisse10. Edmond De Rothschild11. HSBC Private Bank12. Permira Advisers 13. Rio Tinto14. Rolex15. St James’s Place Wealth
Management16. Temasek17. Warburg Pincus & Co
1. Army & Navy Club2. Boodle’s3. Brown’s Hotel4. Carlton Club5. Dukes Hotel6. East India Club7. Naval & Military Club8. Oxford & Cambridge Club9. Reform Club10. Royal Automobile Club11. The May Fair12. The Ritz13. The Stafford14. White’s Club
LOCAL AMENITY
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P I C C A D I L L Y
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C HA L R E S I I S T R E E T
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C O N S T I T U T I O N H I L L
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GREEN PARK
LEICESTERSQUARE
PICCADILLYCIRCUS
CHARINGCROSS
ST JAMES’SMAYFAIR
ST JAMES’S PARK
HORSE GUARDSPARADE
ST JAMES’S PALACE
TRAFALGARSQUARE
GREEN PARK
BERKELEYSQUARE
ST JAMES’SSQUARE
GOLDENSQUARE
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Restaurants & Bars
Culture
Retail
Offices
Clubs & Hotels
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The elegant Portland stone façade ensures a commanding presence on the west side of St James’s Street with additional frontage to Arlington Street to the rear.
The building is arranged over lower ground, ground and six upper floors with typical floors extending to approximately 7,000 sq ft. Access to the building is via an impressive contemporary reception area with additional access and car lift entrance on Arlington Street.
CASSINI HOUSE WAS DEVELOPED IN 1999 AND COMPREHENSIVELY
REFURBISHED IN 2018, DELIVERING 51,348 SQ FT (4,770 SQ M) OF HIGH-QUALITY GRADE A OFFICE ACCOMMODATION.
DESCRIPTION
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SPECIFICATION
Cassini House was subject to a major refurbishment programme, completing in 2018 to an exceptionally high quality, ensuring the exacting standards of modern occupiers are completely satisfied. Well configured, efficient and flexible upper floorplates range in size from 6,067 sq ft to 7,233 sq ft, serviced by three passenger lifts and one goods lift. Both male and female WC facilities are available within the common areas on each floor. Additional tenant facilities include basement car parking spaces, bike storage and shower facilities.
Each tenant has undertaken extensive fit out works ensuring the office space is presented in the best possible light. In general, a combination of open plan areas together with meeting rooms, reception area and kitchen/dining facilities have been created benefitting from the following specification:
Remodelled reception and common areas
Four-pipe fan coil air conditioning
2.6m clear floor to ceiling heights
Full access raised floor
New shower facilities in the basement
Bike racks and lockers
3 x 16 person passenger lifts
1 x 8 person goods lift
1 x car lift
24-hour security
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The property has been measured by Hollis, in accordance with the RICS Code of Measuring Practice (6th Edition).
A reliance letter is available in the data room.
Floor Use NIA Sq Ft NIA Sq M
Sixth Office 6,067 563.6
Fifth Office 6,757 627.7
Fourth Office 6,896 640.7
Third Office 7,121 661.6
Second Office 7,233 672.0
First Office 7,067 656.5
Ground Office 5,673 527.0
Ground Reception 1,448 134.5
Lower Ground Office 3,086 286.7
Total 51,348 4,770.3
ACCOMMODATION SCHEDULE
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G 7,121 sq ft 661.5 sq m
4thTypical Upper
6,896 sq ft 640.7 sq m
LG 3,086 sq ft 286.7 sq m
6th 6,067 sq ft 563.6 sq m
FLOOR PLANS
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ST
J
AM
ES
’S
S
TR
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Key
Office Reception Parking / Ancillary Lift Core
2 92 8 Not to scale. Indicative only.
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P AR
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TENURE
The property is held freehold.
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Not to scale. Indicative only. This plan is based upon the Ordnance Survey Map with the sanction of the controller of H.M. Stationary Office. Crown Copyright reserved.
TENANCY SCHEDULE
THE PROPERTY IS LET TO THREE HIGH-QUALITY OCCUPIERS WITH A WEIGHTED AVERAGE UNEXPIRED LEASE TERM OF 10.33 YEARS TO LEASE EXPIRIES AND 8.25 YEARS TO THE TENANT BREAK OPTIONS.
LET AT A REVERSIONARY RENT OF £100 PER SQ FT OVERALL, ARTEMIS INVESTMENT MANAGEMENT LLP ACCOUNT FOR 58% OF THE OVERALL INCOME.
Floor Use Tenant NetInternalArea(sqft) Lease Start Lease Expiry Rent Review Break Option Rent(£pa) Rent(£psf) Comments
6th Office Mitsui Fudosan (UK) Limited 6,067 11-Feb-20 10-Feb-30 11-Feb-25 11-Feb-25 £643,102 £106.00 Tenant break option subject to 6 months notice and 12 months rent free if not exercised.
5th Office Shore Capital Stockbrokers Limited 6,757 12-Mar-19 11-Mar-29 12-Mar-24 11-Mar-24 £714,485 £105.74Tenant break option subject to 9 months notice and 12 months rent free if not exercised. Includes 1 car parking space.
4th Office Shore Capital Stockbrokers Limited 6,896 12-Mar-19 11-Mar-29 12-Mar-24 11-Mar-24 £729,080 £105.73Tenant break option subject to 9 months notice and 12 months rent free if not exercised. Includes 1 car parking space.
3rd Office Artemis Investment Management LLP 7,121 22-Dec-17 24-Mar-33 25-Mar-23 £763,250 £107.18
2nd Office Artemis Investment Management LLP 7,233 22-Dec-17 24-Mar-33 25-Mar-23 £782,118 £108.13 Includes 1 car parking space
1st Office Artemis Investment Management LLP 7,067 01-Sep-17 24-Mar-33 25-Mar-23 £709,000 £100.33 Includes 1 car parking space
Ground Office Artemis Investment Management LLP 5,673 22-Dec-17 24-Mar-33 25-Mar-23 £523,400 £92.26 Includes 1 car parking space
Ground Reception 1,448
Lower Ground Ancillary Artemis Investment Management LLP 3,086 22-Dec-17 24-Mar-33 25-Mar-23 £154,650 £50.11 Includes 1 car parking space
Lower Ground Car Park 7 Car Spaces
Total 51,348 £5,019,085 £100.58
MitsuiFudosan(UK)Limited 13%
29%
58%
ShoreCapitalStockbrokersLtd
Artemis Investment Management LLP
RENT BY TENANT
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Mitsui Fudosan (UK) Limited
Mitsui Fudosan is one of Japan’s largest listed property companies with global operations spanning three continents and total assets worth around £38 billion. Mitsui Fudosan has been operating in the UK since 1990 and has developed over 3.6 million sq ft with notable recent projects including The Television Centre W12, One Angel Court EC2, 6 Hanover Square W1 and 8-10 Moorgate EC2. Mitsui Fudosan have a credit safe rating of 93 and a Dun & Bradstreet rating of 5A 1.
Shore Capital Stockbrokers Ltd
Shore Capital is a financial services group which specialises in equity capital market activities, alternative asset management and principal finance. It has offices in Guernsey, London, Liverpool, Edinburgh and Berlin. In 2020 the company turned over £36.6 million in terms of revenue, an increase of 67% on the previous financial year, which reflected a net profit of £7.2 million before tax. Shore Capital have a credit safe rating of 93 and a Dun & Bradstreet rating of 4A 2.
Artemis Investment Management LLP
Artemis Investment Management LLP is a UK–based fund management business, offering a range of funds, which invest in the UK, Europe, the US and around the world. Artemis is owned by its UK-based management team and Affiliated Managers Group (AMG), an American international investment management company headquartered in Massachusetts, with $37.9 billion under management. In 2019 Artemis employed 168 employees, turned over £179.4 million in revenues, which reflected a net profit of £22.3 million. Artemis have a credit safe rating of 92 and a Dun & Bradstreet rating of 5A 1.
TENANTCOVENANTS
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OCCUPATIONAL MARKET
Recent Leasing Transactions
Address Date Floor Tenant NIA(SqFt) Rent(Psf)
20 St James’s Street, SW1 Q2 2021 8th Veriton 4,222 £120.00
Medici Courtyard, W1 Q1 2021 3rd Lexington Partners 9,023 £115.00
6 Duke Street, SW1 Q1 2021 6th QuadReal 2,821 £117.50
18 Hanover Square, W1 Q1 2021 1st Confidential 16,500 £121.00
1 Berkeley Street, W1 Q1 2021 4th – 6th Waypoint Capital 34,534 £122.00
33 Davies Street, W1 Q4 2020 5th Troy AM 5,045 £115.00
Devonshire House, W1 Q4 2020 5th - 7th Bain Capital 48,582 £117.00
20 St James's Street, SW1 Q3 2020 3rd Harrison Street 6,540 £112.50
Smithson Plaza, 25 St James’s Street, SW1 Q1 2020 5th Cranemere International Limited 3,609 £125.00
Smithson Plaza, 25 St James's Street, SW1 Q4 2019 11th Greyhound Capital Europe LLP 3,595 £160.00
The Marq, 32 Duke Street, SW1 Q4 2019 2nd – 3rd Millennium Capital Management 6,575 £112.50
21 St James's Square, SW1 Q3 2019 1st – 6th Cinven Partners LLP 51,278 £120.00
18 Hanover Square, W1 Q1 2019 2nd – 4th Glencore PLC 53,916 £116.00
18 Hanover Square, W1 Q2 2018 5th – 8th KKR LLP 57,198 £115.00
St James’s is renowned as London’s most prestigious corporate address attracting a wealth of global corporations. The success of the sub-market is testament to the continued investment by the Crown Estate, and their long-term vision to improve the quality of the offices and the public realm on their Estate.
Occupiers are focused on quality Grade A accommodation that offers additional wellbeing benefits for employees and St James’s has seen a number of recent transactions from occupiers attracted by the abundance of Royal Parks that sit alongside best in class new developments. New occupiers include the private equity firm Cinven and investment management firm, Harrison Street Partners, who join more established tenants including Rolex, BAE Systems and Rio Tinto.
With a significant number of listed buildings, the supply of new developments remains restricted in St James’s and with strong demand, the return of rental growth in the sub-market is widely forecast from 2022 onwards.
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Recent Freehold Investment Transactions
Address Date Price Net Initial Yield Capital Value Psf IncomeDuration
Cassini House, SW1 Available £135.0m 3.48% £2,629 10 years
8 St James’s Square, SW1 Under Offer £230.0m 3.30% £3,700 3 years
21 St James’s Square, SW1 Q4 2020 £187.5m 3.65% £3,055 11 years
1 St James’s Square, SW1 Q4 2020 £250.1m 4.20% £2,413 2 years
The Clarges Estate, W1 Q4 2020 £177.0m 3.52% £2,720 7 years
64 St James’s Street, SW1 Q4 2020 £36.0m - £2,645 Vacant Possession
23 Savile Row, W1 Q3 2019 £277.0m 4.14% £2,798 6 years
Despite considerable ongoing uncertainty in the wake of the Covid-19 pandemic, acutely constrained availability for high-quality investment opportunities and a relative discount when compared against other core European markets has ensured that Central London has once again demonstrated its resilience with a near record quarterly turnover of £5.1 billion recorded in the final quarter of 2020.
In the midst of a widening pricing gap between prime and secondary real estate and increased scrutiny of covenant security, trophy freehold assets, such as Cassini House, offering investors secure income in a low interest and uncertain economic environment have remained particularly attractive and sought after.
Set against recent transactions, Cassini House is a compelling proposition, let off a reversionary rental base, attractive initial yield and comparably low capital value per sq ft.
INVESTMENT MARKET
8 St James’s Square, SW1
Cassini House, SW1
1 St James’s Square, SW1
The Clarges Estate, W1
23 Savile Row, W121 St James’s Square, SW1
64 St James’s Street, SW1
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Low overall passing rent of £100.58 per sq ft with recent local market evidence over £120 per sq ft.
£140per sq ft
10.33years
2023-2025
£2,629per sq ft 4.50%New York
3.50%London’s
West-End
2.80%Hong Kong
2.75%Berlin
3.40%Tokyo
2.75%Paris
ASSET LEVEL CONSIDERATIONS MARKET LEVEL CONSIDERATIONS
FreeholdLondon Yield Arbitrage
51,348 sq ft 75BPS+
Rare, freehold trophy asset located in an area dominated by estate freeholders.
Prime yields in London are some of the highest available in any gateway city around the world and provides in excess of 75 bps arbitrage over gateway European cities.
The prime West End yield provides a substantial premium over 10 year Government Gilts at 0.84% (June 2021).
Accretive Debt
Premium Over Risk Free Assets
>200BPS
>250BPS
Anticipated margin below 2.0% is highly accretive to a leveraged buyer and translates to very attractive cash-on-cash returns.
Brexit Risk
Covid Vaccination
Refurbished
Core Income
Rent Performance Review
Low Capital Value Per Sq Ft
Forecast GDP Growth
Deal Signed
66million+ Mid-2022
With the trade agreement signed by the UK and EU on 24th December 2020, it is expected that UK yields will become more aligned with Europe.
The UK has led the vaccine rollout with over 66 million vaccinations now administered.
Recently undergone a comprehensive refurbishment, at a cost of £140 per sq ft, delivering the asset to an excellent Grade A specification and removing the need for further capital expenditure.
Let to three established occupiers, Artemis Investment Management, Mitsui Fudosan and Shore Capital, with a WAULT to lease expiries of 10.33 years and 8.25 years to tenant break options.
Well-timed rent reviews between 2023 and 2025 offering an excellent opportunity to capture the reversionary rent in a rising leasing market.
Cassini House’s low passing rent offers an attractive discount to other recent, rack-rented investment transactions in Mayfair and St James’s, which have transacted at over £3,000 per sq ft.
Given the success of the vaccine rollout and the removed threat of a no-deal Brexit, the UK economy is expected to return to pre-Covid-19 levels by mid-2022.
£100per sq ft
Reversionary
4 34 2
FURTHERINFORMATION
DEBT TERMS
With the tenants’ outstanding covenant strength and secure income stream, the investment is highly suitable for debt.
Further details of debt terms are available in the data room.
CAPITAL ALLOWANCES
Further information available upon request.
PLANNING
The property is not listed and lies within the St James’s Conservation Area.
EPC
The property has an EPC rating of C. Full EPCs are available in the data room.
VAT
The property is elected for VAT. It is anticipated that the sale will be treated as a TOGC.
DATA ROOM
Available upon request.
AML REGULATIONS
In order to discharge our legal obligations, including under applicable anti-money laundering regulations, we will require certain information of the successful bidder. In
submitting an offer you agree to provide such information when Heads of Terms are agreed.
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For further information, or to arrange an inspection, please contact:
Anthony Barnard+44 7979 260 [email protected]
James McCluskey+44 7951 766 [email protected]
Tim Pierce+44 7773 258 [email protected]
CHINA DESKAustin Xu+44 7773 613 [email protected]
Rob Hayes+44 7768 051 [email protected]
Simon Ewart Perks+44 7921 750 [email protected]
Charlie van der Gucht+44 7967 007 [email protected]
Important Notice: Knight Frank, RX London, their clients and any joint agents give notice that:
1. They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact.
2. Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Knight Frank nor RX London have tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise. June 2021.
Designed by Studio 185. studio185.london | 299
OFFERS ARE INVITED IN EXCESS OF £135,000,000, FOR THE FREEHOLD INTEREST, SUBJECT TO CONTRACT AND EXCLUSIVE OF VAT.
A PURCHASE AT THIS LEVEL REFLECTS A NET INITIAL YIELD OF 3.48% (AFTER THE DEDUCTION OF PURCHASER’S COSTS AT 6.80%) AND A LOW CAPITAL VALUE OF £2,629 PER SQ FT.
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