bond street, bristol bs2 9ag highly reversionary freehold ... · 1,434 133.2 04/01/2020 31/03/2022...

Highly Reversionary Freehold Office Investment

New Bond House Bond Street, Bristol BS2 9AG

HIGHLY REVERSIONARY FREEHOLD OFFICE INVESTMENT 02


Proposal We are instructed to seek offers in excess of £4,800,000 for the freehold interest reflecting a net initial yield of 5.53% assuming purchasers costs of 6.58% and a capital value of £218 per sq ft.

• Prominent city centre building located opposite Cabot Circus

• Freehold

• Comprises a four storey office building totalling 21,955 sq ft NIA

• Multi let to 6 tenants with an AWULT to expiry of 0.95 year and 0.76 year to break options

• 23 car parking spaces, providing an excellent car parking ratio of 1:954 spaces per sq ft

• Currently producing £282,813 per annum which equates to a low overall average rent of £12.88 per sq ft

• The property is let at a significant discount to prime Bristol rents which now stand at £37.50 per sq ft and therefore considered to be highly reversionary

• The property provides an excellent refurbishment opportunity to capture higher rents and is also suited to alternative uses such as residential or student accommodation subject to obtaining the necessary consents.

Investment Summary



briefcase

Bristol’s total population increased by 9.7% between the 2001 and 2011 census, the 3rd largest growth rate of all core cities in the UK. Bristol's employment rate is 70.6%, and it has a combined student population of 52,000 from both Bristol University and University of the West of England, contributing to Bristol’s skilled labour pool which has one of the highest retention rates in the UK. Bristol University’s proposed £350m Temple Quarter Enterprise Campus will further improve Bristol’s standing as the second most targeted university by employers in the UK, and is due to open in 2022.

Bristol has a flourishing TMT, professional and financial service sector, with a world class knowledge economy based in aerospace, defence, engineering, ICT and electronics, media and creative and environmental industries.

Bristol has been identified by NESTA as among the UK’s ‘creative hotspots’, promoting innovation and economic growth.

Further information is available at www.bristolandbath.co.uk

9.7%Increase in population (in 10 years)

Bristol Demographics

USER-FRIENDS

£350mProposed Temple Quarter Enterprise Campus

52,000Student PopulationUSER-GRADUATE

70.6%Employment Rate

2nd mostTargeted university by employers

2022Temple Quarter Enterprise Campus due to open



Road Strategically located

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WINE STREET

BROAD WEIR

OLD MARKET STREET

A420

A4

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4

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MP

LE W

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BO

ND

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EET

NEWFOUNDLAND ST

COUNTERSLIP

VICTORIA STR

EET

UN

ION

ST

THE HORSEFAIR LO

WE

R C

ASTLE

STRE

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BOND STREET

LEWINS MEAD

RUPERT ST

BALDWIN ST

THE GROVE

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EL

SH

BA

CK

CUMBERLAND ROAD

P

RIN

CE

ST

COMMERCIAL ROAD

CLARENCE ROAD

YORK ROAD

A370

CORONATION ROAD

REDCLIFFE WAY

PORTWALL LN

ST THO

MA

S STRE

ET

RE

DC

LIFF

STR

EE

T

BATH RO

AD

ANCHOR ROAD

PARK STREET

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OLS

TON

AV

MARLBOROUGH STR

EETB

RO

AD

QU

AY

AVON ST

AL

BE

RT

RD

FEEDER RD

MID

LA

ND RD

TEMPLEGATE

ST PAU

LS ST

PR

ITCH

AR

D ST

PEMBROKE ST

P

P

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PPPP

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P

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TO M4JUNCTION 19

TO BATH

TO BRISTOL AIRPORT

M32

A4

TO A370 & M5

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TEMPLE QUAY

NEWUNIVERSITY OF BRISTOL

CAMPUS

TEMPLE MEADS STATION

A38TO M4/M5

INTERCHANGE

CASTLE PARK

MARRIOTT

BROADMEAD

THE GALLERIES

QUEEN SQUARE

COLLEGE GREEN

HOLIDAYINN

BUS STATION

PREMIER INN

CABOTCIRCUS

MILLENIUMSQUARE

WE THE CURIOUS

FINZELS REACH

RE

DC

LIFF

SQU

AR

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WAPPING WHARF

HOLIDAY INN EXPRESS

MEADSREACHBRIDGE

ASSEMBLY BRISTOL

CASTLEBRIDGE

TEMPLEISLAND

ST PAUL’S PARK

Bristol’s road connectivity is excellent with the city benefiting from direct access to both the M4 and M5 motorways. The city is located 120 miles west of London, 80 miles south of Birmingham and 40 miles east of Cardiff.

Bristol Temple Meads Station is within a 15 minute walk and provides direct services to many of the UK’s major cities. The mainline to London Paddington has recently been electrified reducing the fastest journey time to 82 minutes. Frequency has also increased with up to four trains per hour to the capital.

Bristol International Airport lies eight miles to the south of the city centre and is one of the UK’s fastest growing airports serving over 9.0 million passengers a year.

plane-departure

New Bond House Bond Street

Rail Bristol Temple Meads Station

Air Bristol International Airport

Connectivity



Castle Park Cabot Circus

BroadmeadBAGS-SHOPPING

BAGS-SHOPPINGTree-alt

Bus StationBUS-ALT

Temple Quay

Harboursidewater

Cabot Circus Car Park Car

Future InnsBED

Holiday InnBED

HippodromeTheater-masks

To M32 Arrow-Alt-Square-Right

Bristol MarriottBED

Finzles Reach

Assembly Bristol

St Nicholas MarketBAGS-SHOPPING

Glassboat UTENSILSBristol Old VicTheater-masks

College GreenTree-alt

We The Curioushead-side-brain

NEWFOUNDLAND ST A4032

BOND ST A4044


1BSQ

SpectrumCastlemead

New 214 bed Moxy HotelFormer Fire Station / Halo

BED

South Plaza



The property occupies a prominent site at the foot of the M32 motorway forming part of the gateway to the City

Cabot Circus offers visitors around 1 million sq ft of retail, hospitality and leisure space, including a four-storey House of Fraser department store, 15 major flagship stores, 120+ additional shops, 13 screen cinema with 3,000 seats, more than 25 restaurants and cafés.

The property provides excellent accessibility to the M32 motorway and both Bristol Bus Station and Bristol Temple Meads Railway Station, are within walking distance.

The property sits in a mixed use location, surrounded predominantly by offices, with a number of hotels in Bond Street, and residential buildings in nearby Brunswick and Portland Square.

A new 214 room Moxy hotel (Marriott) is planned to open in 2021, a short distance from the property.

1. Opposite Future Inns Hotel

2. Directly opposite Cabot Circus

3. Direct access onto M32

4. Approx 5 minute walk Bristol bus station

5. Approx 15 minute walk Temple Meads Station

Situation

1

2 3

4 5



The property comprises an office building constructed in the mid 1990’s behind a retained façade, arranged under a pitched tile clad roof on lower ground, ground and three upper floors. The property benefits from a reception at the junction of Bond Street with St Pauls Street.

The property provides open plan, regular shaped floor plates benefitting from the following specification:

• Suspended ceilings

• Air conditioning

• Secure bike storage

• Raised floors

• 23 car spaces

TenureFreehold.

Second Floor

Typical Floor

Accommodation



The property is multi let to 6 tenants in accordance with the tenancy schedule below and has an AWULT to expiry of 0.95 years and 0.76 years to break.

All leases are outside the security provisions of the 1954 Landlord and Tenant Act.

Floor Tenant Area Sq Ft

Area Sq M

Lease Start Lease End T Break Date

L Break Date

Rent Current

Rate Per Sq Ft

Notes

Lower Ground

First Sight Studios Ltd

1,434 133.2 04/01/2020 31/03/2022 01/12/2020 £20,076 £14.00 Rent from 4th Jan 2020 to 3rd Jan 2021: £17,208 pa / £12psf. Rent from 4th Jan 2021 to 31st March 2022: £20,076 pa / £14 psf. LL rolling break from 1st Dec 20 on 3 months notice. Rent deposit of £7,308.

Ground (Suite A)

Sitecore UK Ltd 3,031 281.6 16/01/2018 15/01/2021 07/07/2019 07/07/2019 £60,000 £19.80 Tenant served notice to break terminating lease 15/08/2020.

Ground (Suite B)

PVG 2007 Ltd 1,606 149.2 22/04/2019 21/04/2022 22/10/2019 22/10/2019 £33,000 £20.55 Rolling mutual break option from 22/10/10 2019 subject to 6 months notice.Rent deposit of £10,000.

1st Floor Brightpearl Ltd 5,468 508.0 08/03/2016 07/03/2021 £65,616 £12.00

2nd Floor Together for Short Lives

5,453 506.6 09/10/2015 08/10/2020 - £60,621 £11.12 The tenant are seeking to renew. Sublet part to Watts Group Ltd.

3rd Floor Shelter, The National Campaign for Homeless People Ltd

4,963 461.1 02/12/2010 01/12/2020 - £43,500 £8.76 Tenant seeking to renew.

21,955 2,039.7 £282,813 £12.88

Tenancies

New Bond House, Bond Street, Bristol, BS2 9AG

created on Plotted Scale - 1:1,250

Newfoundland Street



Tenant Year to Date Turnover Pre-Tax Profit Shareholders’ Funds Creditsafe Rating

First Sight Studios Ltd 31/10/2018 - - £32,694 79 A

Sitecore UK Ltd 30/06/2018 £16,593,000 £653,000 £5,144,000 60 B

PVG 2007 Ltd 30/09/2018 - £3,911 £2,554,849 66 B

Bright Pearl Ltd 31/12/2018 £7,416,308 (£6,157,418) £991,260 52 B

Together For Short Lives 31/03/2019 £4,082,205 £1,326,255 £2,804,564 76 A

Shelter, The National Campaign For Homeless People 31/03/2019 £71,661,000 £3,305,000 £30,135,000 95 A

Watts Group Ltd * 31/10/2018 £9,715,774 £422,608 £1,022,012 60 B

*Sub-tenant of Together for Short Lives.

Tenant Covenants



Date Address Net Internal Area (sq ft) Occupier Rent (£/psf) Lease Terms

Q3 2019

One Redcliffe Street 6th floor 10,392 Aon £30.55

headline 10 year lease with break in year 5, 12 months free.

Q4 2018

Spectrum Ground floor 14,000 MM

Teleperformance£20.00 headline

Re-gear for additional 10 years with a break in year 5. 12 months’ rent free.

Q2 2018

Quorum 3rd floor south 2,934 Echo Managed

Services£22.50 headline 5 year lease with a break in year 3.

Q2 2018

Crescent Centre Ground floor south 5,052 Learn Direct £26.52 2 year lease with a 6 month break.

Q2 2018

Prudential Buildings 4th floor 8.883 Graphcore £25.00

headline 9 year lease with a break in year 5. 8 months' rent free.

Q1 2018

Tower Wharf 4th floor 10,719 Integreon £28.50

headline10 year lease with a break in year 5. 8 months' rent free.

Q2 2017

Spectrum Suite D & E 8,806

NHS Shared Business Services Ltd

£24.00 headline 10 year lease.

Q2 2017

One Brunswick Sq 1st floor 14,147 Standard Life £21.82 10 year lease. Break in years 2 and 5. Rent free spread

over term.

Bristol city centre office stock totals circa 13.5m sq ft, with prime rents now standing at £37.50 per sq ft and vacancy rates at a historic low of 3.5%

BRISTOL OFFICE MARKET COMMENTARY Bristol has witnessed the highest rate of rental growth of all the major cities during the past 18 months at 23% for Grade A rents. With a lack of available quality accommodation we expect further compression between Grade A and Grade B rents, with Grade A rents driving above £37.50 per sq ft and Grade B above £30 per sq ft during 2020.

Take up levels in 2019 totalled 693,908 in the city centre, a 30% increase on the previous year, aided by the pre-letting to BT Plc of The Assembly.

The levels of take up could be higher with demand levels outpacing the level of supply in the market, especially for Grade A stock, illustrated by the lowest vacancy level across the UK’s Big 6 cities. Headline Grade A rents at £37.50 per sq ft is an increase of 8.57% on the previous year.

Grade A supply remains restricted. With The Assembly at Temple Quay now pre let to BT there remains only 93,000 sq ft available at Glassfields, which is under construction and due for completion in 2020.

Recent Leasing Transactions



Date Address Price Area (sq ft) Price (sq ft) Comment

Feb 2020

Wyndham Court 12-20 Pritchard Street

Under offer Quoting £6.286 m

29,242 Quoting £215

94 year leasehold interest at a peppercorn. Single let off £12.33 psf with imminent rent review.

Dec 2019 33 Colston Avenue £9.8 m 46,156 £212 Predominantly vacant; only one floor let and income

producing.

July 2019

Canningford House 38 Victoria Street £4.62 m 20,536 £225 86 year geared leasehold interest. Average rent £12.64 psf.

May 2019

Bridge House 48-52 Baldwin Street £8.2 m 43,167 £190 Geared long leasehold. 50% vacant, offices above retail.

May 2019

37-41 Corn Street £10.27 m 50,000 £205 100% vacant offices above retail.

RECENT SALES TRANSACTIONSThere have been a number of added value city centre Bristol office sales within the last 12 months, a number of which are highlighted here.

In addition, in February 2020 the adjacent building Berkeley House, a 43 bed converted student accommodation block, was sold. The price achieved reflects £450 psf, GIA.

SERVICE CHARGEThe service charge budget for the year end 31st December 2020 totals £192,545.24; Including contributions from the owners of the two adjacent buildings and taking into account service charge caps, annual shortfall for the year is estimated to be £10,894.58. The vendor will top this up to the end of the service charge year from completion.

Recent Sales Transactions



EPCE – 106

VATThe property is registered for VAT and we anticipate the transaction will be treated as a TOGC.

Conditions under which these particulars are issued: All details in these particulars are given in good faith, but Hartnell Taylor Cook LLP, nor Knight Frank for themselves and the Vendors/Lessors of this property for whom they act give notice that:- 1. These particulars do not and shall not constitute, in whole or in part, an offer or a contract or part thereof, and Hartnell Taylor Cook LLP, nor Knight Frank have no authority to make or enter into any such offer or contract. 2. All statements contained in these particulars are made without acceptance of any liability in negligence or otherwise by Hartnell Taylor Cook LLP, nor Knight Frank for themselves or for the Vendors/Lessors. 3. None of the statements contained in these particulars is to be relied on as a statement or representation of fact or warranty on any matter whatsoever, and intending purchasers must satisfy themselves by whatever means as to the correctness of any statements made within these particulars. 4. The Vendors/Lessors do not make, give or imply, nor do Hartnell Taylor Cook LLP, nor Knight Frank or any person in their employment have any authority to make, give or imply, whether in these particulars or otherwise, any representation or warranty whatsoever in relation to the property. The statement does not affect any potential liability under the Property Misdescriptions Act 1991. 5. The successful purchaser will be required to provide the usual information to satisfy the ANTI MONEY LAUNDERING requirements when Heads of Terms are agreed. MARCH 2020

K Designed and Produced by www.kubiakcreative.com 204057 03-20

IAN LAMBERT DD: 0117 946 4525 E: [email protected]

GEMMA-JANE OGDENDD: 0117 946 4529 E: [email protected]

FOR FURTHER INFORMATION, PLEASE CONTACT:

STEVE OADESDD: 0117 917 4548 E: [email protected]

NICK THURSTONDD: 0117 917 4536 E: [email protected]

We are instructed to seek offers in excess of £4,800,000 for the freehold interest reflecting a net initial yield of 5.53% assuming purchasers costs of 6.58% and a capital value of £218 per sq ft.

Proposal

bond street, bristol bs2 9ag highly reversionary freehold ... · 1,434 133.2 04/01/2020 31/03/2022...

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