mutual house - savillspdf.savills.com/documents/mutual_house_london_w1... · · 2014-10-07......
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MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W11
MUTUAL HOUSE193 - 201 | REGENT STREET | LONDON W1
2MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W13
MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 4 1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1
3MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W12 3 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1
INvESTMENT SUMMARy• AtrophyassetsituatedonLondon’sRegentStreet.
• Attractiveflagshipretailunitswithselfcontainedofficestotheupperfloors,accessedfromConduitStreet.
• SituatedintheheartofRegentStreet,directlyoppositethefamousHamleystoystoreandsurroundedbymanyoftheworld’shighendretailbrands.
• TheRetailelementislettorenownedBritishluxuryretailersHackett,Church’sShoesandThePenShop.
• Lowretailrentsofferingexcellentrentalgrowthprospects;retailrentsonRegentStreetcurrentlyofferac.50%discounttoprimerentsonNewBondStreetandac.20%discounttoprimerentsonOxfordStreet.
• Opportunitytoimprovetheretailofferingthroughtheimplementationofaplanneddevelopmentschemetocreatealargerflagshipunitandestablishoptimumrents.
• Theofficeaccommodationismulti-lettofivetenantswithanaveragerentofonly£45.49persqft.
• LongleaseholdinterestfromTheCrownEstatewithapproximately103yearsunexpiredandnolandlord’sredevelopmentbreakoptionorpre-emptionrighttopurchase.
• Offersinexcessof£85,000,000,subjecttocontract,areinvitedfortheLongLeaseholdinterest.Thisreflectsaninitialyieldof2.95%andareversionaryyieldof3.83%,basedonouropinionofERV.
A Unique Opportunity to acquire a landmark property on London’s Regent Street”
5MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W14 5
BuckinghamPalace
GreenPark
HydePark
StJames’sPark
BerkeleySquare
HanoverSquare
NewBondStreet
MAYFAIR
SOHO RegentStreet
6MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W17
REGENT STREET
Extendingtojustunderonemileandboastingtwomillionsquarefeetofcommercialspace,RegentStreetisoneofthemostprestigiousshoppingdistrictsintheWestEnd.ItformsanimportantlinkbetweenupmarketMayfairtotheWest,thecreativequarterofSohototheEastandconnectingthemajortransporthubsofOxfordCircusandPiccadillyCircus.
Crown Estate
RegentStreethassubstantiallybenefitedfromanongoing£1billioninvestmentprogrammeinitiatedoverthepastdecadebytheCrownEstate,whichownsthemajorityofRegentStreet.ThisongoingprogrammehashelpeddefineRegentStreetasamajorshoppingdestination,characterisedbyrenownedglobalretailers.TheCrownEstatehascompletedtenmajorschemestodatewithanumberofupcomingcompletions,includingBlockW5(adjacenttoMutualHouse)inQ42015.
ThisinvestmenthasresultedinRegentStreetbecomingLondon’smostimpressiveandarchitecturallygrandretaillocations.
Regent Street has substantially benefited from a £1 billion investment programme initiated by the Crown Estate. This ongoing programme has helped define Regent Street as a major shopping destination.”
H Y D E P A R K
S T J A M E S ’ SP A R K
G R E E N P A R K
B U C K I N G H A MP A L A C EG A R D E N S
G R O S V E N O R
S Q U A R E
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P I C C A D I L L Y
M AY FA I R
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8-9 Stratton Street
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O X F O R D S T R E E T
H A N O V E R
C A V E N D I S H
S Q U A R E
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BOND STREET
PICCADILLY CIRCUS
OXFORD CIRCUS
GREENPARK
HYDE PARK CORNER
MARBLE ARCH
TOTTENHAM COURT ROAD
7
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1
International Retailer Presence
Londonistheworld’smostpopulardestinationforforeigntouristswithover18millionvisitorsannuallyspending£11.44billion,whichisforecasttoincreaseto£18.82billionby2020.
RegentStreethasseenthegreatestexpansionininternationalretailerpresenceintheWestEnd,proportionallyupby33percentagepoints.IncomparisontootherkeypitchesinCentralLondon,RegentStreetisthefirstchoiceforinternationalretailersalongsideCoventGarden.TheinternationalappealofRegentStreethashelpedtodrivefootfallandsignificantlyincreasetotalsales.
London is the most visited city by international tourists in the World Total visitor spend in London
16
18
12
14
16
10
12
6
8
2
4
0
Source: Mastercard Global Destination Cities Index Q2 2013*London data is based on year end 2013 data
Ove
rnig
ht in
inte
rnat
iona
l vis
itor
s (m
illio
ns)
London Bangkok Paris Singapore SeoulIstanbul HongKong
Dubai KualaLumpur
New York
20,000Rest of the World Europe North America
15,000
10,000
Tota
l spe
nd (£
m)
5,000
02007 2008 2009 201
Source: Savills; ONS; Deloitte
BRIC (Brazil, Russia, India, China)
10 2011 2012 2013 2020
Source:Savills;ONS;Deloitte
Flagship Stores1.Hamleys
2.Liberty
3.Burberry
4.Abercrombie&Fitch
5.LouisVuitton
6.Apple
7.Selfridges
8.JohnLewis
9.Topshop20,000Rest of the World Europe North America
15,000
10,000
Tota
l spe
nd (£
m)
5,000
02007 2008 2009 201
Source: Savills; ONS; Deloitte
BRIC (Brazil, Russia, India, China)
10 2011 2012 2013 2020
Averageweeklyfootfallhasincreasedby15%overthelastyearwhereasOxfordStreetandBondStreetlevelshaveremainedflat.TheworldfamousHamleystoystore,amajortouristattraction,islocateddirectlyoppositethesubjectpropertyandattractsfivemilliontouristsperyear.
InadditiontoincreasedtouristsflowstoLondon,TheUKGovernmentisactivelyimprovingtheChineseVisasystem.Thisincludes:anew24hourvisaservice;exploringthedevelopmentofasinglevisaapplicationcentreforbothUKandSchengenvisas;andanewjointBritish/Irishvisascheme.ForsomeGulfStatescitizenscannowobtainafreeelectronicvisawaivertotraveltotheUKinsteadofneedingtoapplyforavisitvisa.Thesechangesarelikelytoresultinincreasedvisitornumbers.
Source:Savills
8MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W19
11MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W110 11
HISTORy
OriginallydesignedbyJohnNash,RegentStreetwastheworld’sfirstmodernpurposebuiltshoppingstreet,pre-datingtheChampsElyseeandFifthAvenue.Intheearly20thCentury,thestreetwasredevelopedbyleadingBritisharchitectsinordertoreconfiguretheshopstomakethemsuitableformodernretailtrading.
TodayeachbuildingisprotectedwithlistedbuildingstatusconservingthefamousgrandPortlandstonefaçades.RegentStreet’suniqueandhistoricenvironmentattractsanincreasingamountofshopperswhilstlargestoresmeettherequirementsoftoday’soccupiers.
Regent Street was the world’s first modern purpose built shopping street, pre-dating the Champs Elysee and Fifth Avenue”
12MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W113
UNITED COLOURS
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MutualHouseissituatedintheheartofRegentStreetatitsjunctionwithConduitStreet.
ThepropertyissituateddirectlyoppositetheworldfamousHamleystoystorewhichattractsover5millionvisitorsonanannualbasis.OthernotablelocaloccupiersincludeBurberry,MichaelKors,JCrew,Longchamp,Jaegar,Apple,HugoBossLacosteandWatchesofSwitzerland.
ConduitStreetisoneofMayfair’smostdesirablestreetsandlinksRegentStreetdirectlywithBondStreetandtherestofMayfair.
SITUATION
The property is anchored by many local occupiers including the world famous Hamleys Toy Store, Burberry, Michael Kors, Jaegar, Apple, Hugo Boss, Lacoste and Longchamp.”
14MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W115
DESCRIPTION
Originallydatingbacktotheearly20thCentury,MutualHousewasredevelopedin1992behinditsoriginalGradeIIlistedfaçadecreatingaprimetrophyMayfairassetcomprisingthreeretailunitsfrontingRegentStreetandfiveupperfloorsofofficeaccommodation.ThepropertywasconstructedaroundareinforcedconcreteandsteelframewithstrikingPortlandstonefaçades.
TheretailaccommodationcomprisesthreefullyglazedunitswithprominentfrontagestoRegentStreetandConduitStreet.Hackett’sLondonflagshipstoreisarrangedoverground,lowergroundandtheproperty’sentirefirstfloorwithreturnfrontagetoConduitStreet.Atalmost9,000sqft,itrepresentsHackett’sglobalflagshipstorebenefittingfromopentradingspace,abespoketailoringservice,arefinedBeefeaterBarandfeaturinganimposingwroughtironstaircase.
Theofficeaccommodationhasself-containedaccessfromConduitStreetandisarrangedover2ndto6thfloorsprovidinghighspecificationL-shapedfloorplatesaroundacentralcore.
Officespecificationincludes:
- Acombinationoffourpipefan-coilandperimeterVRVairconditioning;
- Fullyaccessibleraisedfloorswithperimetertrunkingtosomeareas;
- Male,femaleanddisabledWCsdemisedtoeachfloor;
- Twox8-personpassengerliftsservingallfloors;
- Contemporaryrecentlyrefurbisheddoubleheightreceptionarea;
- Excellentnaturallightfromitstwoelevationscomprisingamixtureoffullheightandsashdoubleglazedwindows.
Mutual House is rare in that it offers a prime retail Regent Street address together with a prime Mayfair office address on Conduit Street.”
16MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W117
ACCOMMODATION
Address Use Description Net Internal Area
Sq m Sq ft
201RegentStreet(Church’s)
Retail
GroundFloorSales
96.06 1,034
BasementAncillary
128.39 1,382
(ITZA) (1,003)
199RegentStreet(ThePenShop)
Retail
GroundFloorSales
32.05 345
BasementAncillary
15.98 172
(ITZA) (352)
193-197RegentStreet(Hackett)
Retail
GroundFloorSales
227.33 2,447
BasementSales 132.39 1,425
BasementAncillary
116.04 1,249
Store 45.06 485
1stFloorSales 289.85 3,120
(ITZA) (2,547)
Retail Sub-Total 1,083.15 11,659
70ConduitStreet Office
2ndFloor 313.46 3,374
3rdFloor 312.05 3,359
4thFloor 308.99 3,326
5thFloor 262.35 2,824
6thFloor 222.12 2,391
Office Sub-Total 1,418.97 15,274
TOTAL 2,502.12 26,933
1.InteriorofHackettFirstFloor
2.OfficeReception
3.InteriorofThePenShop
4.InteriorofChurch’sShoes
Attractive flagship retail units with self contained offices to the upper floors, accessed from Conduit Street.”
1
2
4
3
19MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W118 19
FLOOR PLANS
GROUND FLOOR TYPICAL UPPER FLOOR
Floorplansarenottoscaleandareforindicativepurposesonly
R E G E N T S T R E E T
CO
ND
UI
T S
TR
EE
T
OFFICE RECEPTION
R E G E N T S T R E E T
CO
ND
UI
T S
TR
EE
T
20MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W121
TENURE
ThepropertyisheldlongleaseholdfromTheCrownEstateforatermof125yearsfrom5April1992(approximately103yearsunexpired).
Theheadrentiscalculatedasthegreaterof:
(a)12.5%ofallmoniesreceivedintheprevious12monthslessdeductions;and
(b)theBaseRent
BaseRentmeans10%ofeither:
(x)theopenmarketrent–theassumptionsareflexibleenablingthelandlordtomaximisethelikelyopenmarketrent;or
(y) theaverageannualamountofNetRentsreceivedduringtheprevious5yearperiodsuchsumbeingsetevery10thanniversaryof5April1992,andisupwardsonly.
ThetotalheadrentpayableuptoyearendingApril2014was£232,154.1
NEW BURLINGTON PLACE
TREET
NEW BURLINGTON STREET
REET COND
UIT
STRE
ET
T
60
50
70
198
11
204
21
177
1
206
25
25
51
14 to
15
PH
170
172
17
181
16
2201
169
175
177
184
12
52
18
4
202
19
10
11
16
53
13
203
56 to 60
55
200
53 to
58
193
to 1
99
179
5152
186
188 to 196
2
20515
28 27
26
2
13 to 17
21
23
27
25 1 to
3
4
23
176
178 to 182
174
185
to 1
91
Heathcoat House
7 to
8
61 - 63
MAD
DOX
STRE
ET
Foubert's
PlaceLITTLE MARLBOROUGH ST
Little Marlborough St
3 to 5
28 2
7
31
30 29
47
45
208a
12a 12
1
208
6a
227
221
1
32
10
31 30
29
34
14
22
108
Clachan
Bank
(PH)
The
223
6
18
20
20
26
PH
32 to 33
8a
1a
32
210 to 222
2
21
46
9
6
13
19
33
2
4
14
209
207
211
to 213
0m 10m 20m 30m
Ordnance Survey © Crown Copyright 2014. All rights reserved. Licence number 100022432. Plotted Scale - 1:1250
REGENT STREET
NOTE:-ReproducedfromtheOrdnanceSurveyMapwiththepermissionoftheControllerofH.M.StationeryOffice.©Crowncopyrightlicencenumber100024244Savills(UK)Ltd.NOTE:-Publishedforthepurposesofidentificationonlyandalthoughbelievedtobecorrectaccuracyisnotguaranteed.1.Subjecttofinalsignofffromfreeholder.
23MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W122 23
24MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W125
TENANCy SCHEDULE
Thepropertyisletoneightcommercialleases(insidetheAct)producingacurrentgrossincomeof£2,883,715perannumwithaweightedaverageunexpiredtermof9.04years.1
Tenant Floor Lease Term Next Rent Review
Net Internal Area sq ft (ITZA)
Rent psf Annual Rent
ERV psf ZA
ERV Rent
Comments
Retail
ChurchUKRetailLtd(t/aChurch’s)
Ground&Basement
01/02/2004-31/01/2014
-2,416(1,003)
£349ZA £350,000 £750 £827,475
Tenantholdingover.Negotiationsongoingfornewleaseatmarketlevel.Additional10%premiumforreturnfrontage.
T&GAllanLimited(t/aThePenShop)
Ground&Basement
12/09/2014-11/09/20158
-517(352)
£750ZA £263,910 £750 £263,910NewleaseisoutsidetheLandlordandTenantAct1954.
HackettLimitedGround,Basement&1st
04/07/2013-03/07/2028
04/07/20188,726(2,547)
£645ZA £1,575,000 £750 £1,819,286Less5%discountonGroundFloorITZAforshape.
Retail Sub-Total 11,659 £2,188,910 £2,910,671
Office
AALTOInvestLLP 2nd09/01/2014-08/01/2019
- 3,374 £51.00 £172,074 £60.00 £202,440
PFMGroupServiceLtd 3rd29/07/2011-28/07/20212
29/07/2016 3,359 £40.00 £134,360 £60.00 £201,540
AppliedPredictiveTechnologies(UK)Ltd
4th10/07/2014-24/03/20193
- 3,326 £53.00 £176,278 £60.00 £199,560
KikoUKLtd 5th24/02/2012-23/02/20224
24/02/2017 2,824 £47.59 £134,385 £60.00 £169,440
HongKongTourismBoard
6th04/05/2010-03/05/20205
04/05/2015 2,391 £32.50 £77,708 £60.00 £143,460
Office Sub-Total 15,274 £694,805 £916,440
Total 26,933 £2,883,715 £3,827,111
Headrent -£232,154 6 -£382,7117
Net Total £2,651,561 £3,444,400
1.AsatSeptember2014.2TenantBreakOption29/07/2016.3.TenantBreakOption10/07/2017.4.TenantBreakOption24/02/2015&24/02/2017.
5.TenantBreakOption03/05/2015.6.Subjecttofinalsignofffromfreeholder.7.Assumeheadrentof10%8.Anticipateddates,subjecttocontract
26MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W127
vALUE ENHANCEMENT
MutualHouseformspartofanarchitecturallyimportantsectionofRegentStreet.ThepropertyisGradeIIlistedandsitswithintheRegentStreetConservationArea.Thevendorhasrecentlyappliedforpre-applicationplanningadvicetocombineThePenShopandChurch’sunitstoprovideasingle,largeretailunitwithsalesovergroundandbasementlevels.
Thecombinationofthetwoshopswouldnotonlysimplifytheretailfrontage,makingitanevenmoreprominentfeatureofRegentStreetwithdualfrontages,butitwillalsocapturethegreaterdemandandhigherrentsassociatedwithlargerretailunitsinthislocation.
A real opportunity to combine The Pen Shop and Church’s units to provide a single large retail unit with sales over ground and basement levels”
Intheirresponsetopre-applicationplanningadviceWestminsterCouncilwaswhollypositivetothischangeonthebasisthatthedesignwassympathetictohistoricalnatureofthebuildingandplannersguidance.
Furtherinformationavailableonthemarketingwebsite:
www.mutual-house.com
29MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W128 29
RETAIL OCCUPATIONAL MARKET COMMENTARy
London’sWestEndisoneoftheworld’spremierretaildestinations,attractingmillionsofdomesticandinternationalshoppersannually.Itistheworld’smostvisitedcitybyinternationaltouristswithover18millionforeignvisitorsperyear.Thesetouristscontributeanestimated£11.44billionofrevenue,whichisforecasttogrowtocloseto£18.82billionby2020withgrowthinretailspendoverthisperiodforecasttoaverage10%perannum.
TheWestEndischaracterisedbythreemainshoppingdestinations;BondStreetisrenownedasbeingthecapital’shighendluxuryquarter,OxfordStreetasthemid-marketfashionandaccessoriesretaillocationandRegentStreet,whichhasevolvedtobecomethehomeofflagshipstoresformanyluxuryretailers.
TheCrownEstate’shighlysuccessfultenantengineeringstrategy,coupledwithacommitmenttoprovideaccommodationofthehighestqualityandthecreationoffewerbutlargerandimposingstores,hasattractedarangeoflargeinternationalbrandstoRegentStreet.Thisinturnhascontinuedtodriverentalgrowthasoccupierscompeteforthefewunitsthatbecomeavailable.
BothestablishedUKretailersandnewmarketentrantsaspiretohaveanaddressonRegentStreetasalocationfortheirconceptandflagshipstores.Itisnowthetoprankingstreetfornewinternationalentrants.RetailerswhohaveopenedstoresinrecentyearsincludeApple,Burberry,Hollister,Superdry,BananaRepublic,MichaelKors,JCrew,Omega,Anthropologie,WatchesofSwitzerlandandHackett.
Occupier Profile
Over50%oftheoccupierprofileisdedicatedtofashionwhichhasincreaseddramaticallyoverthepastdecade.BrandpositioningonRegentStreethasalsomovedup-market.Anumberofhighprofilelettingshaveoccurredoverthepast18monthsincluding;&OtherStorieswhichisthefirststoreofH&M’sluxurybrandtoopenintheUK,KarlLagerfeldwhoopenedtheirEuropeanflagshiponRegentStreetinMarch2014,securingtheunitbypayingapremiumof£2.2millionandWatchesofSwitzerlandwhoopenedtheirthreestoreyflagshipstoreinJuly2014.Inaddition,BritishfashionbrandHunteristoopenitsfirstglobalflagshipstoreonRegentStreetinAutumn2014andMichaelKorswillopenanew15,000sqftflagshipin2015.
West End Retail Occupational Deals
Address Tenant Zone A Rent (£ per sq ft)
Premium Lease Event
Date
383OxfordStreet
Simit £872.50 NewLease Q22014
16NewBondStreet
PatekPhilippe Subjecttoreview
£10.0m Leaseassignment
Q12014
11NewBondStreet
SwatchGroup Subjecttoreview
£7.5m Leaseassignment
Q42013
163NewBondStreet
ChristianDior £1,300 Newlease Q12013
12NewBondStreet
Chopard £1,300 Newlease Q22013
361OxfordStreet
EE £872.50 Newlease Q22014
451OxfordStreet
Omega £800 Newlease Q22014
291OxfordStreet
McDonalds £775 RentReview Q42013
Source:Savills
Source: New West End Company
0 500,000 1,000,000 1,500,000 2,000,000 2,500,000
Bond Street
Regent Street
Oxford Street
3,000,000 3,500,000 4,000,000
Average weekly footfall (Jun 13-May 14)
15%
fall year-on-yearas of May 20142%
increase year-on-yearas of May 2014
fall year-on-yearas of May 20140.4%
Regent Street footfall
Source:NewWestEndCompany
SomeofRegentStreet’smoreestablishedoccupiers,suchasAustinReed,JaegerandHamleys,havebeenoccupiersforoveracenturyandhelpcreateanenvironmentandshoppingexperiencethatisuniquetoRegentStreet.
Historically,RegentStreetrentshavebeenlowerthanotherkeypitchesacrossCentralLondon.Howeveroverthelastthreeyearsrentallevelshavegrownatagreaterratethancompetingdestinationswithgrowthof10.9%perannumcomparedto7.2%perannumonOxfordStreet.RentalforecastsforPrimeWestEndindicaterentalupliftof9.7%perannumthroughto2018.
DuetothedramaticchangeinRegentStreet’slandscapeandtenantmix,thereisagrowingrequirementfrommanywellknowninternationalretailerstosecureapresenceonthestreet.TheCrownEstate’sselectivestrategytocontrolthestreet’stenantmixhasresultedinalonglistofretailerswillingtosetnewrecordrentstocompeteforthefewstoresthatbecomeavailable.
ThecurrenthighestrentsachievedonRegentStreetareapproaching£750persqftZoneA.AsaresultRegentStreetisextremelyaffordablewhencomparedtothemoremid-marketOxfordStreet(£900persqftZoneA)andthesuperprimeBondStreet(£1,300persqftZoneA).EvencomparedtootherglobalretaildestinationssuchasHongKong,NewYorkandParis,WestEndretailpropertyismoreaffordable.
WiththecompletionofRegentStreet’sremainingschemesduewithinthenextfiveyears,rentsareanticipatedtogrowsubstantially.
70%
80%
60%
40%
50%
30%
10%
20%
0%
Inte
rnat
iona
l ret
aile
rs a
s %
of
all r
etai
lers
Source: Savills
Old Bond Street Oxford Street WestNew Bond Street Regent Street Oxford Street East
33%percentage points
since 2000
17%percentage points
since 2000
12%percentage points
since 2000
13%percentage points
since 2000 14%percentage points
since 2000
Source:Savills
Covent Garden
Regent Street
South Molton Street
Bond Street
Carnaby Street
Kings Road
Bond Street Fringe
Oxford Street
Source: Savills
10 2 3 4 5 6 7 8 9 10 11 12New international retailer entrants (since 2012)
Source:Savills
Regent Street top with Covent Garden for new international entrants
Regent Street has seen the greatest expansion in international retailer presence in the West End
Prime Zone A Rents
Address Established Zone A (£ per sq ft)
% growth over last 5 years
BondStreet £1,300 80.6%
OxfordStreet £900 56.5%
RegentStreet £750 57.9%
CoventGarden £700 27.3%
BromptonRoad £700 32.1%
Source:Savills
Origin of international entrants
Europe
61%
Asia Pacific
8%
Middle East
2%
North America
27%
South America
1%
Asia
1%
Source:Savills
30MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W131
OFFICE OCCUPATIONAL MARKET COMMENTARy
Inadditiontoitspopularityasaretaildestination,RegentStreetisaleadingbusinessdistrictwithapproximatelytwomillionsquarefeetdedicatedtoofficeaccommodationservingadiversemixoftenants.
TheofficesatMutualHouseareaccessedfromaself-containedentranceonConduitStreet,oneofMayfair’smostdesirableofficeaddresses.DemandforhighqualityofficeaccommodationinMayfairhasbeenexceptionallystronginrecentyearswithhightake-upandlowvacancyratescharacterisingtheWestEndoccupationalmarket.
INvESTMENT MARKET COMMENTARy
TheCapital’sroleasanimportantretaildestinationforinternationalhighspendingshoppersandtouristshasbeenamajorfactorinunderpinningstrongretailsalesandfootfalllevels.ThesefundamentalshavereinforcedCentralLondonretailstatusasasafehavenandhaveledtoCentralLondonretailbeingthebestperformingsectorintheUKinvestmentpropertymarket.OverseasinvestorshavebeenparticularlyactivewithbuyersoverrecentyearsregardingprimeCentralLondonretailasalongtermgrowthplaywithlittledownside.
2014hasseenacontinuationoftheinvestmenttrendsevidentinprecedingyearswithafurthertighteningofprimeretailyieldsintheWestEnd.Investordemandhasremainedstrongparticularlyforsecurelyletinvestmentswithincorelocationswhichhascontinuedtoplacedownwardpressureonyields.
Themajorityofmarketactivitycomprisestransactionsofsub10,000sqftandthelowlevelofsupplyhasledtorentsinMayfairreturningtopre-downturnlevels.RentsforthebestofficefloorsinMayfairarenowconsistentlyachievingover£100persqft,forexampleGrosvenorhasrecentlypre-let20GrosvenorStreettoKPMGatarentreflecting£125persqftonthebestfloors.
TheaverageofficerentaltoneinMutualHouseis£45.49persqftrepresentingexcellentprospectsforrentalgrowth.
Wehaveadoptedaconservativerentalvaluefortheofficeaccommodationof£60.00persqft.
Thefollowingprovidesatableofrecentcomparableofficelettingsinthevicinity:
Address Tenant Size (sq ft)
Rent (£ per sq ft)
Term Date
49-51ConduitStreet DSquared 4,510 £110.00 15years Jun-2014
5HanoverSquare HeritageOil
7,983 £107.50 10years Jun-2014
33DaviesStreet CainHoyCapital
5,063 £115.00 10years May-2014
8-10HanoverStreet NOMUK 3,550 £112.50 10years Jan-2014
8-10HanoverStreet Muzinich&Co
3,857 £103.80 10years Jan-2014
31-33MaddoxStreet BrummerPartners
11,070 £65.00 10years Apr-2014
25ArgyllStreet H&M 10,761 £69.50 15years Mar-2014
RegentGate,56-58ConduitStreet
SFMUK 4,568 £82.50 10years Jul-2013
RegentGate,56-58ConduitStreet
PineRiverCapitalPartners
4,600 £85.00 10years Feb-2013
Ascarcityofinvestmentstockcontinuestofrustratethemountingdemandfromoverseasinvestors.Combinedwithastrongoccupationalmarket,historicallylowinterestratesandsomeGlobalpoliticalinstability,thishascontributedtotheallureofprimeLondoninvestmentsasabastionforwealthpreservationandcapitalgrowth.
TheCrownEstate’sdominanceofownershiponRegentStreetmeansinvestmentopportunitiesareextremelyrareandhighlysoughtafter.InvestmenttransactionsonthestreethavebeenverylimitedinrecentyearswiththebulkofprimeretailinvestmentsconcentratedonOxfordStreetandBondStreetinparticular.Furthermore,theeverpresentdemandfromretailerstoacquiretheirownbuildingsintheWestEndhasreinforcedinvestorconfidenceofthelongtermattractivenessofthelocation.
BelowweprovideexamplesofkeyWestEndinvestmentactivity:
Date Property Tenure Tenant PriceNet Initial Yield
July-1497NewBondStreet
FH RBS £18.80m 2.30%
May-1416NewBondStreet
LHPatekPhilippe&variousofficetenants
£112.00m 2.12%
Apr-14321OxfordStreet
FHSwarovski&Next
£38.00m 2.49%
Feb-14103NewBondStreet
vFH Christies £30.00m 1.87%
Jan-14141-142NewBondStreet
vFH Fendi £75.20m 2.64%
Nov-1316OldBondStreet
FH Prada £50.00m 2.45%
Sept-13126-127NewBondStreet
vFH Canali £44.00m 2.10%
Aug-13178NewBondSreet
FH Boodles £33.00m 2.14%
Jun-139OldBondStreet
FH GinaShoes £19.25m 1.41%
May-13171NewBondStreet
vFH HarryWinston £31.30m 2.26%
Feb-1317-18OldBondStreet
FH Prada £87.50m 2.75%
The office accommodation at Mutual House has an average rental tone of only £45.00 per sq ft which represents excellent value for Mayfair offices”
Prime West End retail yields continue to remain between 2% and 3%.”
32MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W133
COvENANTS
Church UK Retail Ltd (t/a Church’s)
Church’swasfoundedin1873bytheChurchfamilywhopioneeredluxuryfootweardesignthroughoutthelastcentury.Today,Church’sisoneoftheworld’sleadingluxuryshoemakerssynonymouswithawiderangeofleatherproducts.
In1999,Church’swastakenoverbyPrada,oneoftheworld’sleadersinluxurydesign.Thebrandcontinuestoexpandandnowtradesfromover40countriesworldwidewith11unitsintheUKandtheRegentStreetbranchactingasitsflagshipstore.
Fortheyearending31January2014ChurchUKRetailLimitedreportedaturnoverof£17,909,911andanetworthof£7,256,460.
Furtherinformationcanbefoundat:
www.church-footwear.com
Hackett Limited
HackettLimitedisadesignerofmen’sluxuryclothingandaccessorieswithaprestigiousBritishhistory.Foundedin1979byJeremyHackettandAshleyLloyd-JenningsfromastallonLondon’sPortobelloRoad,todayHackettisaninternationallyrecognisedluxurybrandoperatingfrom77storesin16countries.TheRegentStreetstoreisitslargestgloballyandisthecompany’sflagshipretailunit.
Fortheyearending31March2013thecompanyreportedaturnoverof£97,672,000,apre-taxprofitof£35,135,000andanetworthof£56,355,000.
Furtherinformationcanbefoundat:
www.hackett.com
T&G Allan Limited (t/a The Pen Shop)
ThePenShopwasestablishedin1858andtodayisEurope’slargestwritinginstrumentspecialistandoneofonlytwopenshopchainsintheworld.With21branchesnationwide,ThePenShopstocksawiderangeofluxurypensandleatheraccessories.
Fortheyearending28September2013thetenantcompanyreportedaturnoverof£8,327,011,apre-taxprofitof£19,560andanetworthof£1,655,717.
Furtherinformationcanbefoundat:
www.penshop.co.uk
AALTO Invest LLP
AALTOInvestLLPareaindependentassetmanagercoveringrealestate,creditandspecialsituationstrategies.FoundedbytwoformerMorgan&Stanleybankersin2011,thecompanyhasraised£700mofcapitalfromagroupofEuropeanPensionFunds.Thecompanyemploys23professionalsbasedoutoftheirLondon,Pfaffikon(Switzerland)andMadridoffices.
Furtherinformationcanbefoundat:
www.altoinvest.com
Kiko UK Limited
KikoUKLimitedispartofKikoMilanowhichwasestablishedin1997bythePercassiGroup.ThecompanyisanItalianprofessionalcosmeticsbrandthatfeaturesarangeofcutting-edgemakeup,faceandbodytreatmentsfromover500pointsofsaleinEurope.KikohasthreeLondonstoresoneofwhichisat262RegentStreet.
Furtherinformationcanbefoundat:
www.kikocosmetics.com
PFM Group Services Ltd
ThePFMGroupofcompaniesisaUSbasedleaderintheprovisionofindependentfinancialandinvestmentadviceaswellasmanagementandconsultingservicestolocal,stateandregionalgovernmentandnon-for-profitinstitutions.
PFMwasestablishedinPhiladelphiain1975.TheGrouphas47officesacrossNorthAmericaandemploysmorethan500professionalsandservesclientsineveryregionoftheUS.
Furtherinformationcanbefoundat:
www.pfm.com
Applied Predictive Technologies (UK) Limited
AppliedPredictiveTechnologies(APT)isasoftwarecompanythatprovidesnative,cloud-basedsoftwaretoolsthatenablelarge,consumer-focusedbusinessestoseizetheBigDataanalyticsopportunity.APTsclientsincludeanumberofbluechipandFortune500companies.
Thecompany,foundedin1999,employsapproximately200peopleandisheadquarteredinArlington,VirginiawithadditionalofficesinSanFrancisco,LondonandTaipei.
Furtherinformationcanbefoundat:
www.predictivetechnologies.com
Hong Kong Tourism Board
TheHongKongTourismBoard(HKTB)isaGovernment-subventedbodyfoundedin2001andreplacedtheHongKongTouristAssociation(HKTA)whichwasestablishedin1957.Thebody’sroleistomarketandpromoteHongKongasatraveldestinationworldwide.UnliketheHKTA,theHKTBisnotaffiliatedtoaspecificsectorororganisation,allowingittowhollysupporttheinterestsofHongKong’stourism.
TheHKTBhas15branchofficesand5representativeofficesworldwideandemploysapproximately325people.
Furtherinformationcanbefoundat:
www.discoverhongkong.com
34MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W135
ImportantNotice
Savills,MichaelElliott(thejointsalesagents)andtheirclientsgivenoticethat:
1. Theyarenotauthorisedtomakeorgiveanyrepresentationsorwarrantiesinrelationtothepropertyeitherhereorelsewhere,eitherontheirownbehalforonbehalfoftheirclientorotherwise.Theyassumenoresponsibilityforanystatementthatmaybemadeintheseparticulars.Theseparticularsdonotformpartofanyofferorcontractandmustnotberelieduponasstatementsorrepresentationsoffact.
2. Anyareas,measurementsordistancesareapproximate.Thetext,photographsandplansareforguidanceonlyandarenotnecessarilycomprehensive.Itshouldnotbeassumedthatthepropertyhasallnecessaryplanning,buildingregulationorotherconsentsandthejointsalesagentshavenottestedanyservices,equipmentorfacilities.Purchasersmustsatisfythemselvesbyinspectionorotherwise.
DesignedandProducedbySavillsMarketing:02074998644|September2014
WEBSITE
Furtherinformationcanbefoundonthemarketingwebsite:
www.mutual-house.com
vAT
EPC
PROPOSAL
CONTACTS
ThepropertyiselectedforVATanditisenvisagedthesalewillbetreatedasaTransferofaGoingConcern.
ThepropertyhasanEPCratingofD(98).
Offersinexcessof£85,000,000areinvitedfortheLongLeaseholdinterest.
Thisreflectsaninitialyieldof2.95%andareversionaryyieldof3.83%assumingouropinionofERV.
Forfurtherinformationpleasecontact:
Jonathan O’Regan Dominic RoweSavills MichaelElliott+44(0)2074098179 +44(0)[email protected] [email protected]
Anthony Selwyn David HarrisonSavills MichaelElliott+44(0)2077583880 +44(0)[email protected] [email protected]
George Gawthrop Savills +44(0)[email protected]
CAPITAL ALLOWANCES
Anyunclaimedcapitalallowanceswillbemadeavailable.
36MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W137
38MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1 MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W139
40MUTUAL HOUSE | 193 - 201 | REGENT STREET | LONDON W1