SECURE 15 YR INCOMEPARK ROYALUNIT 1, SOVEREIGN PARKESTATE, CORONATION ROAD,LONDON NW10 7QPPRIME INVESTMENT OPPORTUNITY

REVERSIONARY FREEHOLDINDUSTRIAL WAREHOUSE

INVESTMENT

InvestmentSummary• Prime warehouse unit in Park Royal, the most significant industrial area in Inner London.• Self-contained unit measuring approximately 38,698 sq ft (3,595.2 sq m) GIA.• Site area of approximately 1.23 acres.• Occupied by international auctioneering firm Bonhams.• Entirely let to Bonhams 1793 Ltd on a 15 year lease from 23 December 2013 (14.5 years unexpired).• Low passing rent of £300,000 per annum reflecting £7.60 psf, with 5 yearly open market rent reviews.• Estimated Rental Value of approximately £387,000 per annum (£10 psf).• Lease contracted outside of the protection of the L&T 1954 Act.• Freehold.• Offers in excess of £6,400,000 (Six Million, Four Hundred Thousand Pounds).• This reflects a net initial yield of 4.43% and a reversionary yield in 2018 of 5.72% based on the Cushman & Wakefield ERV.• A low capital value of £165 psf.

LOCATIONLocated in Park Royal, approximately 6 miles west of Central London and nearthe junction of the A40 and A406 (North Circular), the area has excellenttransport links. The A406 provides direct access to the M4 (Junction 1)approximately 3.5 miles to the south and the M1 (Junction 1) 4 miles to thenorth. The A40 provides links directly with the M40 (Junction 1)approximately 12 miles to the west.

Park Royal has excellent public transport links with a number of LondonUnderground stations within walking distance including Alperton (PiccadillyLine), Hanger Lane (Central Line) and Stonebridge Park (Bakerloo Line).

The proposed HS2 and Crossrail schemes will greatly benefit the area in termsof its national connectivity. Old Oak Common, which is to lie on the easternedge of Park Royal, will act as the only open line station between Euston andBirmingham via HS2. Access to London will be improved through the CrossrailActon Main Line Station on the south edge of Park Royal, which will place thearea within one stop of London Paddington.

Heathrow Airport is approximately 11 miles to the south-west.

SITUATIONThe property is situated on the corner of Sovereign Park and CoronationRoad, with excellent road frontage to Britannia Way. The unit occupies aprominent position on the south side of the road, sitting directly oppositeMatrix Park.

Park Royal is the largest and most significant industrial and business park inLondon covering approximately 1,200 acres, with over 1,900 businessesemploying approximately 40,000 people. Sovereign Park is on the west side ofPark Royal with Western Avenue (A40) to the south. Nearby occupiersinclude Bakkavor Foods, Asda, DHL, CEVA, McVitie’s and Renault Trucks.

SITEThe unit’s demise extends to approximately 1.23 acres.

These plans are published for convenience of identification. Any boundaries shown are indicative only and should be checked against the Title Deeds. The plans are based upon Ordnance Survey Map with the permission of the Controller of H M Stationery © Crown Copyright.

Unit 1SovereignPark Estate

Unit 1SovereignPark Estate

A40 (WESTERN AVE

NUE)

SubjectProperty

Thunder &Lightning

Origin

Aura 40

Royal Leisure Park

Matrix Park

Premier Park

Western AvenueBusiness Centre

Vue Cinemas

15

16

17

18

19

20

21

22

Buildings/Sites

McVitie’s

LH2 Studios

Red Box

Wasabi

Panalux

Bakkavor

FedEx

1

2

3

4

5

6

7

IndustrialOccupiers

Royal Mail

Fulton

DHL

Kuehne + Nagel

Brakes

D-Link

John Lewis

8

9

10

11

12

13

14

1822

16 13 9-1215 20 6 17 19 1 7

8 3 2 4 5 1421

PARK ROYAL

DESCRIPTIONThe property is a modern, detached warehouse unit of steel frameconstruction with brick elevations and a part glazed frontage. The unitcomprises approximately 38,698 sq ft GIA of warehouse and ancillary officeaccommodation, with the office component accounting for approximately11.9%. The offices are located at ground and first floor levels. There is apermanent mezzanine within the warehouse and two temporary mezzanines.To the front of the property is a brick-paved parking area with space for 25cars and there is a yard area to the rear for deliveries. The main warehousearea comprises a large single-apex frame with an eaves height of approximately

6.1m, with concrete floors,corrugated roofing panels androof lights. There are two rollershutter doors to the rear andone to the front providingaccess for deliveries.

Bonhams use the premises astheir main storage facility for auction lots both prior and post auction in theirKnightsbridge and New Bond Street auction houses. The tenant also uses theunit for the purposes of catalogue photography prior to lots being auctioned.

ACCOMMODATIONThe property has been measured on a Gross Internal Area basis in accordancewith the RICS Code of Measuring Practice (6th Edition). From this we calculatethe approximate gross internal areas as follows:

The above areas include the permanent mezzanine level, which has been statedseparately from the main ground and first floor office space levels as the area itprovides has a reduced eaves height. The areas do not include the twotemporary mezzanines which are also in place.

FLOOR DESCRIPTION SIZE(SQ M)

SIZE(SQ FT)

Ground Floor Warehouse 2,154.60 23,192

Ground Floor Offices 418.50 4,505

First Floor Office 424.60 4,570

First Floor Warehouse (Permanent Mezzanine) 597.50 6,431

Total 3,595.20 38,698The unit comprises approximately38,698 sq ft GIA of warehouse andancillary office accommodation, withthe office component accounting forapproximately 11.9%

OCCUPATIONAL MARKET The Park Royal area has seen sustained tenant demand and low vacancy ratesover the past five years, defying the economic uncertainties of other industrialmarkets. The largest share of a growing occupational take-up level over thisperiod has been in the 25,000 – 50,000 sq ftbracket, accounting for almost a quarter of allspace. Headline rents in Park Royal have recentlybeen set at £13.75 per sq ft by the letting ofSegro’s 11,111 sq ft unit on Central Park toKinetic Enterprises. There has also been a reduction in the level of incentivesbeing offered to tenants for the more prime stock, which is indicative of thetight market supply.

The lack of supply and strong tenant demand has resulted in a number ofspeculative developments being undertaken, including Segro’s Premier Parkand Canmoor’s Vision Park.

Summary of recent lettings:

Land Values in Park Royal:

Land values in Park Royal have also held up well over the past few years. An example of this is the acquisition of the Former Carey Site by GoyaDevelopments for a price of £1.75m per acre. The 6.5 acre site has sincewitnessed development into Central Park. This transaction was in 2011 and assuch values will most certainly have risen since, given the growing occupierand tenant demand.

ESTIMATED RENTAL VALUEWe are of the opinion that the Estimated Rental Value of the unit is in theregion of £10.75 psf. In arriving at our ERV of £387,000 per annum, we haveapplied £10.75 psf to the warehouse and office spaces, £6.25 psf to thepermanent mezzanine on the first floor and we have not rentalised thetemporary mezzanine floor.

BONHAMS –PARK ROYAL

DATE ADDRESS TENANT SIZE(SQ FT)

RENT(PSF) LEASE

Mar2014

Unit 1, CentralPark – Acton Lane

KineticEnterprises 11,111 £13.75 10 years

Dec2013

Unit 7, CentralPark – Acton Lane Christies 32,968 £13.50 10 years

Break at Year 6

Oct2013

Unit A – PremierPark Road

Ward ThomasLtd 41,463 £11.75

(asking) 10 years

May2013

Unit C – PremierPark Road DHL Ltd 61,031 £11.75 10 years

Break at Year 5

Headline rents arenow at £13.75 persq ft

InvestmentMarketInvestor demand has focused on particular areas ofGreater London such as Park Royal, due to the pressureon land supply and the loss of employment land toalternative uses. Park Royal has consistently attractedstrong investor interest with premium yield levels beingachieved. The industrial investment market haswitnessed a significant market improvement over thepast 18 months.Recent transactional evidence includes the following:

DATE ADDRESS TENANT PRICE NIYCAPVAL(PSF)

RENT(PSF)

UNEXPIREDTERM(YEARS)

UnderOffer

Units 1-6, Stour Road, Bow E3 2NT

6 Units, 4 LocalTenants £1.825m 4.94% £174 £9.11 3.9

Mar2014

Jewsons, 33 Manor Farm Way,Alperton, Wembley HA0 1AB Jewsons £4.114m 4.25% £178 £8.00 17.5

Dec2013

The Royals, 55 Victoria Road,Park Royal NW10 6ND EE Ltd £4.359m 6% £193 £12.00 15

Dec2012

40 Cumberland Avenue, ParkRoyal, London NW10 7RQ

Bakkavor FoodsLtd £10.95m 5.9% £187 £11.70 14

Jul2012

Units 1-4, Minerva RoadNW10 6HJ Speedy Hire £5.69m 6.3% £146 £9.74 8.4

Oct2011

Central Way, Park RoyalNW10 7XN

Matthew ClarkeWholesale Ltd £13.85m 5.65% £176 £10.50 11.5

TENUREThe property is held freehold.

TENANCYThe property is let to Bonhams 1793 Ltd (Co No: 04326560) on a 15 yearlease from 23 December 2013. The passing rent is £300,000 per annum reflecting

a low rate of £7.60 psf (excluding the temporarymezzanine which has not been rentalised). The leaseincorporates 5-yearly upwards only, open market rent

reviews. The lease has been contracted outside of the protection of the L&T1954 Act.

TENANT COVENANTBonhams is a privately owned British auction house and one of the world’s oldestand largest auctioneers of fine art and antiques. It was formed by the merger inNovember 2001 of Bonhams & Brooks and Phillips Son & Neale. The Bonhamsname is recognised worldwide throughout all sectors of the fine art, antiques andcollectors’ market, with several of its departments establishedas world leaders within their specialist category.

Today Bonhams offers more sales than any of its rivals. Thereare two large salerooms in London: the recently developedsale rooms at 101 New Bond Street and the long established Bonhams sale roomsat the Montpelier Galleries in Montpelier Street, Knightsbridge. There are alsotwo regional sale rooms in Britain: Edinburgh and Oxford. Sales are also held inSan Francisco, Los Angeles, New York and Boston in the USA; in France,Germany, Monaco, Hong Kong and Australia. The property is leased directly to Bonhams 1793 Ltd (Co No: 04326560) who have published the following financial accounts:

31ST DEC 2013(£)

31ST DEC 2012(£)

31ST DEC 2011(£)

Revenue 79,102,000 67,281,281 73,679,007

Pre-Tax Profit 19,366,000 12,341,324 16,015,595

Bonhamsfounded in 1793

Low passing rentof £7.60 psf

INVESTMENT RATIONALE• Highly reversionary lease with excellent growth potential.

• Prime industrial location of Park Royal.

• High profile tenant.

• Low capital value per sq ft of £165.

• 14.5 years unexpired to Bonhams.

EPC RATINGThe EPC rating for the property is C.

PLANT & MACHINERYNone of the systems or equipment in the property have been tested by Cushman& Wakefield LLP and a prospective purchaser may wish to make their owninvestigations to check that they are in working order.

CAPITAL ALLOWANCESThere are no transferable plant and machinery capital allowances available to thepurchaser as these are to be retained by the vendor.

VATWe understand this property has been elected for VAT which will therefore bechargeable on the sale price unless the transaction can be treated as a Transfer ofa Going Concern (TOGC).

PROPOSALWe are instructed to seek offers in excess of £6,400,000 (Six Million, FourHundred Thousand Pounds). This reflects a net initial yield of 4.43% and areversionary yield of 5.72% after allowing for purchaser’s costs. A purchase atthis price also reflects a low capital value of £165 psf.

WEB ACCESSwww.cushmanwakefieldinvestmentsales.co.uk/cw/bonhams

BONHAMS –PARK ROYAL

www.cushmanwakefield.com

FURTHER INFORMATION:

MIKE BURDENTel: 020 7152 5086Email: mike.burden@eur.cushwake.com

CUSHMAN & WAKEFIELD LLP43/45 Portman SquareLondon W1A 3BG

KYLE JOSSTel: 020 7152 5561Email: kyle.joss@eur.cushwake.com

SAM HARPERTel: 020 7152 5293Email: sam.harper@eur.cushwake.com

CUSHMAN & WAKEFIELD LLP

MISREPRESENTATION ACT 1967 Cushman & Wakefield LLP (and their joint agents if appointed) for themselves and for vendors or lessors of this property whose agents they are, give notice that: (1) The particulars are produced in good faith, are set out as a general guide only and do not constitute any partof a contract. (2) No person in the employment of the agent(s) has any authority to make or give any representation or warranty whatever in relation to this property. (3) This property is offered subject to contract and, unless otherwise stated, all rents are quoted exclusiveof VAT. (4) Nothing in these particulars should be deemed to be a statement that the property is in good condition or that any services or facilities are in working order. (5) Unless otherwise stated, no investigations have been made regarding pollution or potential land, air or water contamination. Interested parties are advised to carry out their own investigations if required.

Photography, Print & Production by Plus Art Ltd 0115 972 4000

March 2014