500 Capability Green · AB InBev UK Limited (company number 03982132) D&B Rating: 5A 1 In October...

500 Capability GreenL U T O N

Multi Let Value Add Opportunity

brayfoxsmith.com

brayfoxsmith.com

AIRPORT W

AYLUTON PARKWAY STATION0.75 MILE

ASTRA ZENECA

IMPELLAM GROUP

DAVID LLOYD LEISURE

REGUS

SELEX GALILEO

HANDELSBANKEN,CAFE SATIS

ERNST & YOUNGORACLE

REXAM

J10

AB INBEV, WILLIAMS LEA STONEGATE PUB COMPANY

500 Capability Green

M25,CENTRALLONDON

MILTON KEYNES,

NORTHAMPTON,THE NORTH

OAG AVIATION

RANDSTAD

LUMESSE

M1

LUTON AIRPORT

LUTON AIRPORT PARKWAY

500 Capability GreenM1


INVESTMENT CONSIDERATIONS

- Landmark office building situated at the entrance to one of the M25s premier business parks

- Excellent access to Junction 10 of the M1 motorway, Luton Parkway station and Luton Airport

- Capability Green is home to many international companies including Astra Zeneca, Impellam Group, Selex Galileo, Oracle, Ernst & Young and Regus

- Headquarters style office building extending to 79,977 sq ft

- Multi-let to internationally recognised tenants Anheuser Busch, Williams Lea and Stonegate Pub Company

- AWULT of 6.98 years to expiry and 3.23 years to break on the let element of the property

- 2 floors totalling 25,717 sq ft are currently vacant and will not be subject to a rental guarantee

- 378 car parking spaces which equates to a ratio of 1:212 sq ft

- Freehold site extending to 5.1 acres

- The current passing rent is £909,712.50 per annum reflecting a low average rent of £17.52 per sq ft on the let space

- The current estimated rental value of the property is £22.00 per sq ft

- There is currently no competing landlord space available on Capability Green

- Numerous asset management opportunities to include the letting up of the vacant accommodation and the regearing of existing leases to significantly increase value and capture future rental growth

- Offers are invited in excess of £14,500,000 (Fourteen Million, Five Hundred Thousand Pounds) for the freehold interest, subject to contract and exclusive of VAT Based on purchaser’s costs of 6.73% a purchase price at this level reflects the following yield profile:

Gross yield - 5.88%

Potential reversionary yield - 9.53% (assuming an ERV of £22.00 per sq ft on the vacant accommodation) Capital value - £181 per sq ft

1

25,717 SQ FT CURRENTLY VACANT AND WILL BE SOLD WITHOUT A RENTAL GUARANTEE

LOCATION

500 Capability Green2

Luton is a long established commercial location approximately 30 miles north of London and 10 miles north of the M25 Motorway. The town is located 2 miles (3.2km) east of Junction 10 of the M1 Motorway.

RoadLuton benefits from excellent road links with the A505 providing access to the M1 and A1(M). Junctions 10 and 11 of the M1 are located circa 10 miles to the north of the M25 London orbital, linking Luton to the regional and national motorway network.

RailLuton Parkway Station is located less than a mile from Capability Green, providing direct services to Central London with a fastest journey time of approximately 20 minutes. There are regular Thameslink services to London St Pancras, Farringdon and Gatwick Airport as well as services to the Midlands and the North.

AirLondon Luton Airport is located approximately 1 mile north east of Capability Green and is one of the UK’s fastest growing airports, alongside the country’s biggest base for private jet travel. The airport services over 80 national and international destinations including all major UK and European cities together with some intercontinental flights and carried 10.5 million passengers in 2014.

Luton Airport is investing £110 million to transform the airport by 2020. As well as delivering major improvements for passengers, the proposed redevelopment will increase capacity from 12 million to 18 million passengers per year.

Plusbus

Thameslink Route Services

Mainline Rail StationsLondon UndergroundTramlinkAirportCrossrail

ELSTREE &BOREHAMWOOD

16

121

5

3

15 4568

23

2019

18

25

27

10

9

32

1

10

14

4

7

9

10

8

A10

M40

M4

M25

M25

M1

M11

M25

A1(M)

A1

A6

A5

A41

A502A418

A40

A406

A421

A5

UXBRIDGE

BARNET

WEST END CITY

ENFIELD

ROMFORD

MILTONKEYNES

HARLOW

STEVENAGE

LUTON BISHOP’SSTORTFORD

HIGHWYCOMBE

HEMELHEMPSTEAD

AMERSHAM

AYLESBURY

LEIGHTONBUZZARD

WELWYNGARDEN CITY

BLETCHLEY

BEDFORD

DUNSTABLE

STOKENCHURCH

MAIDENHEADSLOUGH

HEATHROW

HITCHIN

WATFORD

Gatwick Airport

Birmingham Peterborough Cambridge

Bristol

Oxford

STANSTEDAIRPORT

9

A10

A505

Metropolitan Line

London Overground

London Midland

Metropolitan Line (Croxley Extension Opens 2018)

Southern Railways

Chiltern Railways

Virgin Trains

11

1

A406

LUTON


SITUATION

3

Capability Green is situated on the A1081 with dual carriageway access to Junction 10a of the M1 one mile to the south and is within 0.75 miles of Luton Parkway Station.

On 20 July 2015 a £30 million improvement scheme at junction 10a was opened significantly improving access to Luton Airport and Capability Green.

500 Capability Green occupies a prominent location at the entrance to the park fronting one of the main boulevards in the park and the A1081.

NEWLA

ND

S RO

AD

FARLEY HILL

KIMPTON R OAD

LOW

ER HARPENDEN ROAD

AIRPORT WAY

LON

DO

N R

OA

D

CUTENHOE R

OAD

PARK ST

CRAWLEY G

REEN

RD

AIR

PORT

WAY

WINDMILL ROAD

L U T O NA I R P O R T

LON

DO

N R

OA

D

A505

A6

A505

THE MALLSHOPPING CENTRE

LUTON

LUTONAIRPORTPARKWAY

T O W N C E N T R E

M1

10M2510 MILES

0.5 MILE

1 MILE

1.5 MILES

2 MILES

Capability Green

POSTCODE: LU1 3LS


CAPABILITY GREEN

Capability Green is one of the premier business parks within the northern M25, accommodating businesses such as Astra Zeneca, Impellam Group, Selex Galileo, Oracle, Ernst & Young and Regus.

The park is now fully developed and totals approximately 1,000,000 sq ft of accommodation set in 85 acres. It was originally developed by Pillar Property and Haslemere Estates and has been designed and planned to provide a low density development, complemented by high quality landscaping.

The park also benefits from a David Lloyd leisure club, a Jigsaw day nursery, an information centre, 24-hour security patrols and is monitored by a CCTV system. The provision of these facilities represent an important stage in the park’s development, meeting the demands of occupiers and enable’s the park to compete with major business parks in the western corridor.

Salex Galileo& TelespazioSalex

Galileo & Telespazio

Ernst & Young /Oracle

Lumesse

OAG Aviation

Randstad

RexamAstra

Zeneca

RegusDavidLloyd

Marriott Hotels/Wates/Accord

Holdings

ImpellamGroup

Handelsbanken,Cafe Satis

SITE PLAN

500

500 Capability Green 5

DESCRIPTION


500 Capability Green was constructed in 1989 and provides 79,977 sq ft of Grade A office accommodation arranged on ground and two upper floors. The building is of steel frame construction with brick and stone clad elevations and sits on a site of approximately 2.06 ha (5.1 acres).

Internally the building is designed as two ‘L’ shaped blocks around a central full height atrium with the upper floors served by two x 10 person passenger lifts.

The specification includes:

- VAV air conditioning

- Fully accessible raised floors

- Suspended ceilings with recessed lighting

- 2 x 10-person passenger lifts

- WC and shower facilities on each floor

- Full height central atrium

The second floor south wing has been fully refurbished by the Vendor at a cost of £456,000. The fit out includes new metal suspended ceiling tiles, new LED lighting and new toilet facilities.

The building affords excellent on site car parking with a total of 378 spaces which equates to a ratio of 1:212 sq ft.


ACCOMMODATION

A measured survey has been undertaken by Plowman Craven, which is provided within the data room and is capable of being assigned and relied upon by the purchaser.

Floor Use NIA (sq ft) NIA (sq m)

Second North Offices 12,515 1,162.7

Second South Offices 12,638 1,174.1

First North Offices 13,149 1,221.6

First South Offices 13,202 1,226.5

Ground North Offices 13,109 1,217.9

Ground South Offices 13,110 1,218.0

Ground Reception 2,254 209.4

TOTAL 79,977 7,430.2

The property has been measured in accordance with the RICS Code of Measuring Practice (6th Edition) and provides the following net internal floor areas:

STONEGATE PUB COVACANT

SOUTH WING NORTH WING

DHL WILLIAMS LEA VACANT

AB INBEV AB INBEV



2

1

GTENURE Freehold

(IPMS areas are available on request)


TENANCY

The property is multi-let in accordance with the following tenancy schedule, providing a WAULT of 6.98 years to lease expiries and 3.23 years to break on the let element of the property. The passing rent of £909,712.50 per annum equates to a low average rent of £17.52 per sq ft.

Demise Area (sq ft)

Tenant Lease start Lease expiry

Break option

Months of notice

Rent review

Current rent PA

Current Rent PSF

Comments

Ground 2,254 Reception

Ground 26,219 AB InBev UK Ltd 17/06/2014 24/03/2025 25/03/2020 9 25/03/2020 £449,837.50 £17.16

First floor North Wing

13,149 Williams Lea Limited

14/02/2014 13/05/2024 13/03/2019 9 14/02/2019 £225,000 £17.14 Floor area as stated in the lease 13,127 sq ft. Tenant break penalty of £112,500. Service charge cap of £7.50 psf subject to annual RPI increases.

First Floor South Wing

13,202 VACANT £0.00 £0.00 Unrefurbished accommodation.

Second Floor North Wing

12,515 VACANT £0.00 £0.00 Fully refurbished accommodation.

Second Floor South Wing

12,638 Stonegate Pub Company Limited

25/03/2015 24/03/2020 None N/A None £234,875 £18.58

TOTAL 79,977 £909,712.50


COVENANT

Williams Lea Limited (company number 02119266)D&B Rating of 5A 1

Williams Lea Group is the leader in business and marketing services, helping organisations transform business processes and realise brand potential. Williams Lea is part of Deutsche Post DHL, the world’s most powerful distribution and logistics company.

The company has a global workforce of 8,000 employees in more than 650 locations in 195 cities around the world.

Further information can be found at www.williamslea.com

AB InBev UK Limited (company number 03982132)D&B Rating: 5A 1

In October 2016 Anheuser-Busch InBev NV closed the biggest corporate takeover in UK history by paying $106 billion for SABMiller Plc to establish its position as the world’s biggest brewer. AB InBev UK Limited is the UK arm of Anheuser-Busch, producing some of the world’s best known brands, including Budweiser, Stella Artois, Corona, Bass and Boddingtons.

The company employs around 1,000 people at UK breweries in Magor, Samlesbury and Mortlake. The company headquarters are in the subject property.

Further information is available at www.ab-inbev.co.uk

Stonegate Pub Co Ltd (company number 029833)D&B Rating of O

Stonegate Pub Co operate over 660 pubs and bars across the UK. The company operates the Slug and Lettuce, Classic Inns, Yates’s and Proper Pubs brands as well as numerous unbranded pubs, bars and restaurants.

Further information can be found at www.stonegatepubs.com

AB InBev UK Limited Fiscal Non consolidated

GBP 31 Dec 2014 (000’s)

Fiscal Non consolidated

GBP 31 Dec 2013 (000’s)


GBP 31 Dec 2012 (000’s)

Sales Turnover £1,159,433 £1,112,229 £1,133,380

Profit / (Loss) Before Taxes £33,838 £12,599 £13,383

Tangible Net Worth £103,839 £111,864 £150,535

Net Current Assets (Liabilities) £118,843 £104,747 £97,480

Williams Lea Limited Fiscal Non consolidated

GBP 31 Dec 2014 (000’s)


GBP 31 Dec 2013 (000’s)


GBP 31 Dec 2012 (000’s)

Sales Turnover £361,325 £344,885 £310,862

Profit / (Loss) Before Taxes £17,569 £9,485 £8,592

Tangible Net Worth £58,739 £55,748 £48,685

Net Current Assets (Liabilities) £45,905 £33,317 £24,408

Stonegate Pub Co Ltd Fiscal Non consolidated

GBP 31 Dec 2012 (000’s)


GBP 31 Dec 2011 (000’s)

Sales Turnover £484,263 £262,671

Profit / (Loss) Before Taxes £14,573 (£24,447)

Tangible Net Worth £81,549 £65,863

Net Current Assets (Liabilities) (£14,004) (£16,962)


LUTON OCCUPATIONAL MARKET

Capability Green is a high quality business environment which is widely recognised as the leading business park in London’s M1 corridor. The park extends to 85 acres and provides approximately 1 million sq ft of offices with additional health club and amenity offerings.

The Northern M25 markets combined with London’s M1 corridor have seen increased occupier demand in recent years with relocations out of London and expansions viewing the sub-market as a cost effective location with excellent connectivity to London, London Luton Airport, Stansted Airport and the North. This combined with the amount of office space that has been lost to residential conversions has seen constrained supply for quality office space increasing rents in Luton and the Wider markets.

16

121

5

3

15 4568

23

2019

18

25

27

10

9

32

1

10

14

4

7

9

10

8

A10

M40

M4

M25

M1

M11

M25

A1(M)

A1

A6

A41

A502A418

A40

A406

A421

A5

UXBRIDGE

WEST END CITY

ROMFORD

MILTONKEYNES

BISHOP’SSTORTFORD

HIGHWYCOMBE

AYLESBURY

BEDFORD

STOKENCHURCH

MAIDENHEADSLOUGH

HEATHROWGatwick Airport

Birmingham Peterborough Cambridge

Bristol

Oxford

STANSTEDAIRPORT

9

A10

A505

Metropolitan Line

London Overground

London Midland

Metropolitan Line (Croxley Extension Opens 2018)

Southern Railways

Chiltern Railways

Virgin Trains

11

1

A406

£23.50BOREHAMWOOD

£18.5027.02%

£30.00WATFORD

£22.5033.00%

£23.50HEMEL HEMPSTEAD

£19.0023.68%

£22.00LUTON

£18.5018.91%

£34.50ST ALBANS

£24.0043.75%

£19.50

WELWYN GARDEN CITY

£15.5026.00%

Headline Rent 2016 (£psf)Headline Rent 2014 (£psf)Growth (%)

KEY

Luton has a total office stock of 3.3 million sq ft. Occupier take up for the year to date currently stands at 131,444 sq ft, which is 55% higher than the 5 year average and 18% higher than the 10 year average.

Capability Green has dominated take up in Luton; over the past 5 years averaging approximately 64% of all transactions in the market over 5,000 sq ft.

Total availability in Luton currently stands at 162,963 sq ft, of which, just 45,033 sq ft is regarded refurbished or Grade A space.

The 3 most significant recent deals in Luton have all been on Capability Green and all taken refurbished

or Grade A space. These deals have seen rents increase to £22.25 psf and incentives come in to as little as 9 months for a 5 year terms certain.

The vacancy rate currently stands at 4.9%, which is below the M25 average of 5.5%.

There is currently a good level of enquiries in the market that have included Luton within their search area, with approximately 107,500 sq ft of demand in the market. Of these, 5 requirements require over 10,000 sq ft.

500 Capability Green is currently the only landlord available space on Capability Green.

500 Capability Green has traditionally always achieved rents in line with prime rents on Capability Green representing strong rental growth prospects.

Date Property Tenant Size (sq ft) Terms

Sep 16 1 Capability Green Axis Communication

9,091 10 year lease with a break at year 5. £22.25 per sq ft with 9 months rent free.

May 16 450 Capability Green Randstad 28,000 7 year lease at £19.25 per sq ft.

Nov 15 1 Capability Green OAG Aviation Worldwide

8,577 10 year lease with a break at year 5. £22 per sq ft with 9 months rent free.

Feb 15 400 Capability Green Micros (Oracle)

11,104 10 year lease with a break at year 5. £19 per sq ft with 12 months rent free.

Aug 14 Randstad CourtLaporte Way

Civica UK Ltd 4,401 10 year lease with a break at year 5. Incentive unknown..

Feb 14 500 Capability Green DHL (Williams Lea)

13,230 10 year lease with a break option at the end of year 5. £17.15 psf. 21 months rent free.

Deals

• The 3 most significant recent deals in Luton have all been on Capability Green and all taken refurbished or Grade A space. These deals have seen rents increase to £22 psf and incentives come in to as little as 9 months for a 5 year terms certain.

• 500 Capability Green has traditionally always achieved rents in line with prime rents on Capability Green representing strong rental growth prospects.

Headline Rents

Market Commentary•

•

•

•

•

•

•

•


INVESTMENT MARKET

Date Address Town Sale Price Yield (NIY)

Term Certain Capital Value (per sq ft)

Tenant Purchaser

Sep 16 The Heights Harrow £8.53m 6.84% 3.02 £218 Multi-Let Private Investor

Sep 16 45 Clarendon Road Watford £8.00m 6.80% 3.48 £336 Multi-Let First Property Group

Aug 16 4 Victoria Square St albans £16.30m 6.53% 3.8 £316 Multi-Let Knight Frank IM

Feb 2016 Kings Court Brentwood £7.7m 7.43% 1.4 £231 Multi-Let Private Investor

Feb 2016 420 Thames Valley Park Reading £25.86m 6.45% 5.0 £359 Mulit-Let Palm Capital

Jan 2016 Walton Court Walton-On-Thames

£20m VP VP £195 Vacant Private Purchaser

Dec 2015 54 Clarendon Road Watford £8.85m 6.06% 4.7 £297 Regus Canada Life

Dec 2015 1000 & 2000 Cathedral Hill

Guildford £38.97m 8.05% 1.2 £323 Alcatel Networks

Europa Capital

Oct 2015 Voyager Place Maidenhead £14.55m 10.20% 2.0 £201 Alcatel Networks

Clearbell

Oct 2015 Landmark Place Slough £19.05m 5.19% 3.8 £257 Multi-Let Hermes

The South East office investment market continues to be the focus of significant investment. Investor demand remains strong for good quality, multi-let assets in core South East office locations offering asset management opportunities.

As a result of strong take up levels, limited development and the removal of stock for conversion to residential use the occupational markets remain undersupplied resulting in positive rental growth forecasts in the short to medium term. The table below highlights the most recent office transactions in South East locations:

500 Capability GreenL U T O N , B E D F O R D S H I R E L U 1 3 L S

Misrepresentation Act. These brief particulars have been prepared as agent for our client and are intended as a convenient guide to supplement an inspection or survey. Their accuracy is not guaranteed. They contain statements of opinion and in some instances we have relied on information provided by others, you should verify the particulars on your visit to the property and the particulars do not obviate the need for a full survey and all the appropriate enquiries. Accordingly, there shall be no liability as a result of any error or omission in the particulars or any other information given. Complied October 2016.

For further information please contact:

James Archibald 020 3362 4357

[email protected]

Sim Khatkar 020 3362 4351

[email protected]

Tom Jansons 020 3362 4358

[email protected]

brayfoxsmith.com

brayfoxsmith.com

Corporate Stationary

Letting Board

Agent Logo

Alternative colour clash Corporate Stationary

Alternative colour clashLetting Board

Alternative colour clashAgent Logo

brayfoxsmith.com

SERVICE CHARGEThe current service charge equates to £6.95 per sq ft. Further information available on request.

VATThe property has been elected for VAT purposes. It is anticipated that this will be a TOGC (Transfer of Going Concern).

EPCThe property has an EPC rating of D. A copy of the EPC rating is available on request.

PROPOSALOffers are invited in excess of £14,500,000 (Fourteen Million, Five Hundred Thousand Pounds) for the freehold interest, subject to contract and exclusive of VAT. Based on purchaser’s costs of 6.73% a purchase price at this level reflects the following yield profile:

Gross yield - 5.88%Potential reversionary yield - 9.53%(assuming an ERV of £22.00 per sq ft on the vacant accommodation)

Capital value - £181 per sq ft

FURTHER INFORMATION

500 Capability Green · AB InBev UK Limited (company number 03982132) D&B Rating: 5A 1 In October...

Documents

Transcript of 500 Capability Green · AB InBev UK Limited (company number 03982132) D&B Rating: 5A 1 In October...