G4S, 12 HERON VIEW, AIRPORT ROAD WEST, SYDENHAM BUSINESS PARK, BELFAST, BT3 9LN WELL SECURED INVESTMENT

Transcription

1 Investment G4S, 12 HERON VIEW, AIRPORT ROAD WEST, SYDENHAM BUSINESS PARK, BELFAST, BT3 9LN WELL SECURED INVESTMENT

2 Investment Summary GROUND FLOOR - INTERIOR Well located office building situated on Heron View within Sydenham Business Park. The office accommodation is set over two floors and extends to 11,995 Sq Ft (net internal area) and benefits from 47 surface car parking spaces. The building has been fitted to a high grade A office specification and was constructed in Let in its entirety to G4S Secure Solutions (UK) Limited (company registration number: ) on Full Repairing & Insuring terms. Unexpired Lease Term of 9 years. Let at a gross rent of 164,425 per annum excluding VAT and a net rent of 116, per annum after ground rent. The investment is held long leasehold for 125 years commencing the 1st May 2008 from Belfast Harbour Commissioners at a rent of 47, excluding VAT. Set on a rectangular site measuring approximately 1.20 acres (0.49 hectares). FIRST FLOOR - INTERIOR The property is elected for VAT and it is envisaged the transaction will be treated as a TOGC. An excellent EPC Rating of C52. Offers in the region of 1,200,000 reflecting an attractive NIY of 9.20% after purchaser s costs of 5.80%. Producing an attractive capital value of 100 per Sq Ft on the net internal area.

3 Location Belfast is the capital of Northern Ireland and is ranked the 14th largest city in the United Kingdom and the 10th largest conurbation. The city is located approximately 103 miles north of Dublin and 70 miles south east of Londonderry. Belfast has an excellent communications network. The M2 motorway provides access to the north towards Antrim and Londonderry and the M1 motorway provides access to the south and west of the province towards Lisburn and Dublin. The city benefits from four railway stations and the Belfast to Dublin train route has a journey time of approximately 1 hour 50 minutes. The two airports, George Best Belfast City and Belfast International, provide access to all major UK and international locations including America and mainland Europe. Sydenham Business Park is located 3 miles east of Belfast city centre and is within close proximity to George Best Belfast City Airport, Port of Belfast and Holywood Exchange.

4 Local Economy Belfast has a resident population of c. 281,000 which represents 15.5% of Northern Ireland s total population of 1.81 million. The wider Belfast metropolitan area has a population extending to c. 650,000. Over 60% of Belfast s total population is of working age. Belfast is a young city, with 18.6% of the population under 16 years old (2011 census). As of January 2014 the unemployment rate stands at 7.4%. As the largest commercial centre in Northern Ireland, Belfast has developed into one of Ireland s premier business cities and has the largest employed population in the region. In the last few years Belfast has been extremely successful in attracting Foreign Direct Investment driven primarily by a highly skilled and educated employment base, competitive operating costs and advanced telecoms infrastructure. Businesses that have chosen to locate in Northern Ireland include Microsoft, HCL Technologies, Seagate Technology, DuPont, Bombardier Aerospace, Caterpillar, Allstate Northern Ireland, Liberty IT, Abbey, Citi, Chicago Mercantile Exchange, Herbert Smith and Allen & Overy to name but a few. For further information on the local economy please visit Situation The subject property is situated within Sydenham Business Park and is accessed via Airport Road West and Heron View. The property is easily accessible to the A2 Holywood/ Sydenham Bypass giving excellent access to the regional motorway network. Nearby occupiers include Fannin, Tyco, CEM Systems, American Dynamics, Phoenix, Emo Oil and SHS Group to name but a few. For indicative purposes only. This plan is published for convenience of identification only and although believed to be correct, its accuracy is not guaranteed and does not form any part of a contract. Not to scale. Site The property sits on a flat rectangular site measuring approximately 1.20 acres (0.49 hectares).

5 Description RECEPTION The property was constructed in 2008 and comprises a substantial two storey building arranged to provide offi ce accommodation at ground and fi rst fl oor levels. The building has been constructed using modern construction techniques incorporating a solid ground fl oor slab with piled foundations, a steel superstructure frame and pre-cast concrete fi rst fl oors with cavity masonry enclosing walls with a self-rendered fi nish. There are powder coated aluminum windows below a fl at inverted roof and separate roof top plant area. Internally the unit has been fi tted out to a high corporate specifi cation with high quality internal fi nishes. There is a comprehensive air conditioning and ventilation system which has been bespokely constructed to the tenant s confi guration. The internal specifi cation includes: Raised access computer fl ooring. Suspended ceilings incorporating indirect recessed lighting. A full heating and cooling air conditioning and ventilation system. Acommodation 8 person passenger lift. Disabled ladies and gents toilets and welfare areas. The lease states that the property provides 11,955 sq ft net internal area as defi ned in the RICS Code of Measuring Practice (5th Edition) and we believe the area is split as follows: Very high security CCTV and control system. Surface car parking for 47 is provided on site and is entered via a security traffi c light system with automatic rising bollards and intercom link to the main building. Floor NIA (Sq Ft) NIA (Sq M) Ground 6, First 5, Total 11,955 1,110.5 The property benefi ts from 47 surface car parking spaces.

6 Tenancy Covenant Information The property is let in its entirety to G4S Secure Solutions (UK) Limited (company registration number: ) on a full repairing and insuring lease for a term of 15 years from the 9th May 2008 expiring on the 8th May The investment therefore provides an unexpired lease term of 9 years. The lease provides a gross rent of 164,425 per annum and is reviewed on an upward only basis every 5 years, the next rent review is due on the 8th May A ground rent of 47, per annum is paid to the Harbour Commission; therefore the investment provides a net rent of 116, per annum. FIRST FLOOR INTERIOR G4S Group It is the world s largest security company measured by revenues and has operations in around 125 countries. With over 620,000 employees, it is the world s third-largest private sector employer. G4S was founded in 2004 by the merger of the UK-based Securicor plc with the Denmark-based Group 4 Falck. G4S has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It has a secondary listing on the Copenhagen Stock Exchange. G4S Secure Solutions G4S Secure Solutions business provides a broad range of solutions to both commercial and government customers. They use their risk management, security and sector expertise to encourage greater outsourcing of the security needs of commercial and government facilities in markets such as ports, airports, retail, fi nancial institutions and the oil and gas sector, and for government departments such as justice, police, health, foreign affairs and border control. G4S Secure Solutions (UK) Limited (company registration number: ) has an Experian Credit rating of 15/100. Full Experian Credit Report is available on request. The last three years of reported accounts may be summarised as follows: G4S Secure Solutions 31 Dec Dec Dec 2012 (UK) Ltd (No ) Total Turnover 193,630, ,476, ,078,000 Net Worth 7,881,000 ( 19,231,000) ( 84,197,000) Pre-tax Profi ts 7,271,000 1,875,000 ( 85,549,000) For further information on G4S visit:

7 Title EPC The property is held on a 125 year ground lease commencing the 1st May 2008 from The Belfast Harbour Commissioners at a rent of 47, excluding VAT. The ground lease is reviewed every fi ve years in line with the Retail Price Index (RPI) with the next review due on the 4th July The property has been given an Energy Performance Certifi cate Rating of C52. Full EPC Report is available on request. An estate service charge of per annum excluding VAT is paid to The Belfast Harbour Commissioners. The estate service charge is recovered from the tenant. CAR PARK

8 Belfast Occupational Market Investment Market Office take-up of 401,484 sq ft was achieved in the Belfast market in 2013, which was up 46% compared to the previous year. We expect improving economic conditions to bolster demand for new office accommodation in the Northern Ireland market in 2014 with demand expected to emanate from the expansion of existing occupiers as well as from new entrants. Although there are a number of new office developments planned, which will ultimately ease the shortage of Grade A office accommodation in the city, it will be some time before these schemes come on stream. We therefore expect to see rental growth emerging in the office sector in Northern Ireland over the course of the next 12 months. There was a notable improvement in transactional activity in the investment sector in Northern Ireland in the second half of 2013 in particular, with several high-profile retail properties changing hands and a discernible improvement in investor sentiment. In total, approximately 160 million was invested in income-producing investments in the Northern Ireland market during 2013 in 17 individual transactions compared to more than 92 million invested in 8 individual transactions in the previous year. We are aware of the following office investment transactions: We expect prime office rents in Belfast to increase by 20% to reach per sq ft by year-end. This anticipated rental growth will in turn boost demand for office investment properties in core locations. (Source: CBRE Research) Address Tenants Sq Ft Date Sold Purchaser Capital Value NIY AWULT James House, Gasworks, Belfast Government 111,488 Dec 2013 Threadneedle 10,050, % To expiry: 5.9 yrs To break: N/A Dublin Road, Belfast EU Commission 13,590 Dec 2013 Private Local Investor 1,300, % To expiry: yrs To break: N/A Law Society, 100 Victoria Street, Belfast Various 46,913 Dec 2013 Private Local Investor 4,250, % To expiry: 8.32 yrs To break: 4.67 yrs Killeaton House, 41 Mosside Road, Dunmurry Danske Bank 23,500 Aug 2013 Private Local Investor 2,330, % To expiry: yrs To break: 6.67 yrs The Warehouse, 7 James Street Belfast Various 12,450 Jan 2013 Private Local Investor 815, % To expiry: 1.72 yrs To break: 1.64 yrs (Source: CBRE Research)

9 VAT We understand the property has been elected for VAT and it is anticipated that the sale will be structured as a Transfer of a Going Concern (TOGC). Proposal We are instructed to seek offers in the region of 1,200,000 (exclusive of VAT) for our client s interest. A purchase at this level would reflect an attractive net initial yield of 9.20%, after allowing for normal purchaser s costs at 5.8% and a low capital value of 100 per Sq Ft based on the net internal area. Contacts Tim Reid E: tim.reid@cbre.com T: M: Gavin Elliott E: gavin.elliott@cbre.com T: M: CBRE Imperial House Donegall Square East Belfast BT1 5HD T: F: DISCLAIMER: CBRE These particulars are issued by CBRE on the understanding that any negotiations relating to the property are conducted through them. Whilst every care is taken in preparing them, CBRE for themselves and for the vendor/lessor whose agents they are, give notice that:- (i) the particulars are set out as a general outline for guiding potential purchasers/tenants and do not constitute any part of an offer or contract, (ii) any representation including descriptions, dimensions, references to condition, permissions or licenses for uses or occupation, access or any other details are given in good faith and are believed to be correct, but any intending purchaser or tenant should not rely on them as statements or representations of fact but must satisfy themselves (at their own expense) as to their correctness, (iii) neither CBRE, nor any of their employees have any authority to make any or give any representation or warranty in relation to the property. Note: All plans and photographs are for identification purposes only. Subject to contract. MAY 2014.