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ONE PENRHYN ROADKingston-upon-Thames | KT1 2BT

Freehold, super-prime, purpose built student accommodation investment

02 | ONE PENRHYN ROAD Kingston-upon-Thames

ONE PENRHYN ROAD Kingston-upon-Thames | 03

� Freehold, super-prime, purpose built student accommodation investment

� 115 studio bedrooms offering 121 beds, each complete with en-suite bathroom facilities and kitchen

� Fully occupied for 2014-15 on a direct let basis

� High quality build and specification with substantial and stylish communal areas

� Hugely sought after market town to invest in (across all real estate sectors), located on the south-west fringes of London, with a renowned retail centre

� Excellently situated at edge of Kingston University’s Penrhyn Road and Knights Park campuses and a short distance to the town centre

� Extremely challenging planning environment in Kingston-upon-Thames, restricting delivery pipeline and insulating values

� Supply and demand imbalance with only 15% of full-time students able to access purpose built student accommodation

� The property is underpinned by residential use. Sales of studio units, whilst larger than most student bedrooms, have averaged £261,000 in Kingston-upon-Thames over the last 12-months, which is above One Penrhyn Road capital values

� Savills are instructed to seek offers in excess of £25,000,000 (Twenty Five Million Pounds) for the freehold title in the property, which reflects a blended net initial yield of 5.30% increasing to 5.54% for the 2015-16 academic year, based on usual purchaser’s costs

INVESTMENT CONSIDERATIONS


HYDEPARKKENSINGTON

CHELSEA

FULHAM

WIMBLEDON

RICHMOND

TWICKENHAM

KINGSTON-UPON-THAMES

HAMPTON

CLAPHAM

WANDSWORTH

CANARYWHARF

CITY OFLONDON

WEST ENDGREENPARK

WIMBLEDONCOMMON

WIMBLEDONPARK

CLAPHAMCOMMON

RICHMONDPARK

BUSHYPARK

HAMPTONCOURT PARK

BATTERSEA

BUCKINGHAMPALACEROYAL

ALBERTHALL

HAMPTONCOURTPALACE

HOUSES OFPARLIAMENT

THESHARD

THEO2

ST PAUL’SCATHEDRAL

BATTERSEAPOWER

STATION

LONDONEYE

OXFORDCIRCUS

CHELSEAHARBOUR

TWICKENHAMRUGBY

STADIUM

KEWGARDENS

WIMBLEDONTENNISCLUB

HAMPTON

TWICKENHAM

KINGSTON

RICHMOND

WIMBLEDON

CLAPHAMJUNCTION

LONDONWATERLOO

LOCATION

The town is located four miles south-west of Richmond and 10 miles south-west of London and is easily accessible via the A3 dual carriageway and M25 motorway.

Kingston-upon-Thames train station provides services to locations including Wimbledon, Clapham Junction and London (Waterloo). Kingston is served by 6 trains per hour from London Waterloo, with the fastest journey time of 25 minutes. Kingston town centre is served by 40 bus routes, providing a frequent service to all parts of the Borough and other parts of Greater London. Heathrow is located 10 miles away and can be directly accessed by a bus service in 40 minutes.

Kingston-upon-Thames is one of the UK’s most affluent conurbations and a major commercial and retailing centre. It is the premier retail destination of South West London providing a diverse retail offer from high street multiples to boutiques to international stores.


The property is located prominently, fronting Penrhyn Road, the location of the University’s main campus and 3 minutes walk from the Knights Park campus. The property’s central position means that it benefits from high footfall and significant ‘walk-in’ student trade, reducing marketing costs.

Penrhyn Road is the prime location within the town centre from a student accommodation perspective and is close to retail and leisure facilities (located 0.2 miles north) as well as being easily accessible to the mainline railway station (located 0.5 miles north).

There is significant local amenity including supermarkets, department stores, bars and restaurants. The Rotunda Leisure Complex is located five minutes’ walk from the property with a 14-screen Odeon cinema (the largest in the UK), Tenpin Bowling, and restaurants.

SITUATION

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BERRYLANDS

NEW MALDEN

KINGSTON

NORBITON

HAMPTONWICK

TEDDINGTON

RICHMONDPARK

HAMPTONCOURT PARK

PEN

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A24

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MALDEN RD

FAIRFIELD ST

H

AWKS RD

CAMBRIDGE RD

KINGSTON RD

BURLINGTON RD

A306

KINGST

ON HILL

BRIGHTON RD

B3370

VILL

IERS

AVE

V

ILLI

ERS

RD

C

OU

RT W

AY

HA

MPT

ON

CO

URT

WA

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HAMPTON COURT RD

HORSE FAIR

WOOD STREET

PORTSM

OUTH

RD

A307

PORTSMOUTH RD

A30

7

HIG

H S

T

KINGSTON

KING

STON

RD

A238

COOMBE LN

W

A238

BUSHYPARK

TOLWORTH

SURBITON

THAMESDITTON

CLARENCE ST

UN

ION

STREET

EDEN

ST

CANBURY PARK ROAD

ACRE RO

AD

HALL RD

HIG

H ST

H

Weir

FB

Path

PP

Cycle

Cyc

le P

ath

ROUNDABOUT

Hogsm

ill Walk

PALMER

WATERSPLASH

CLOSE

CRESCENTCOLLEGE

GRANGE ROAD

4

Edinburgh

2

3

7

1

1113

1

1

Grebe Terrace

1a

2a

8

2

1 to 7

23a

14

1

1414

a

8

11a

21a21

12

6b

3

7

12

2

Prior

y

23

Court

2

Sta

6a

Court

6

1 to 32

9

3

20

ElSub 16 18

0m 10m 20m 30m

PE

NR

HY

N R

OA

D

NOTE:- Reproduced from the Ordnance Survey Map with the permission of the Controller of H.M. Stationery Office. © Crown copyright licence number 100024244 Savills (UK) Ltd. NOTE:- Published for the purposes of identification only and although believed to be correct accuracy is not guaranteed.

KEY

1. Kingston Town Centre

2. The Bentall Shopping Centre

3. The Rotunda Leisure Centre Odean IMAX

4. Kingston College

5. Kingston University - Knights Park Campus

6. Kingston University - Penrhyn Road Campus

1

6

5

4

2 3

ONE PENRHYN ROAD

TRAINS TO CENTRAL LONDON

WATERLOO 28 MINUTES

HAMPTONCOURT PALACE

Not to scale - for identification purposes only


KINGSTON UNIVERSITY

Kingston University was founded as Kingston Technical Institute in 1899 and was granted university status under the Further and Higher Education Act 1992. The University is a thriving seat of higher education and has 6.4 applicants per available place, demonstrating student demand.

The University has four campuses: The Penrhyn Road and Knights Park campuses are located around 0.2 miles south and south-east of the town centre; whilst Kingston Hill and Roehampton Vale campuses are located between two – three miles north-east of the town centre. Some 9,212 students (48% of total students as per 1 December 2014 Student Census Summary) study at Penrhyn Road, which is the University’s main campus.

As part of a £123 million redevelopment programme to revitalise its estate, Kingston University has added three new buildings to its campuses to enhance its academic facilities including the £20 million John Galsworthy Building, which incorporates lecture theatres, flexible teaching space, IT suites and a ‘Knowledge Centre’ for students doing coursework, and the £26 million Business School opened in 2012. Nearly £80 million remains to be spent in the next three years including the addition of a £55 million landmark tower on Penrhyn Road, which will serve as the main reception point for all of the University’s campuses.

Kingston recently won two major contracts with NHS London which has given the University a key role in training nurses and physiotherapists in London, and is estimated to increase student numbers by 6%.

The University was also awarded £1.85 million of Government-funding for a project aimed at encouraging students to remain in higher education and undertake postgraduate studies in science, technology, engineering and mathematics.

The latest University prospectus reports that 21,614 students were enrolled at the University in December 2013 with a non-UK student population of 3,891 made up of 154 nationalities. This reflects an international student body of some 18%, which is above the UK average.

The University of Kingston has reported the following consolidated financial performance:

£’000s 31 July 2014 31 July 2013 31 July 2012

Income 205,463 202,686 203,330

Expenditure (193,975) (192,145) (192,476)

Surplus 11,488 10,541 10,854

Net Assets 158,347 155,849 131,347

Purpose Built Student Housing in Kingston-upon-ThamesThere are 2,999 purpose built student accommodation bedrooms in Kingston-upon-Thames, a figure which includes 2,349-beds of University accommodation and 650-beds of privately built stock.

Based on the HESA 2012-13 data of a full time population of 19,545, this equates to only c.15% of full-time students being able to access such accommodation, which is significantly lower than the UK average and illustrates a severe supply and demand imbalance within the city.

There are only 942 beds with planning permission in the town and it is uncertain whether all of these bedrooms are capable of being delivered. Currently 130 are under construction. Should all of these bedrooms be delivered, the supply ratio would move to 20%.

Kingston University has previously communicated a requirement for an additional 2,500 bedrooms for their students, which at present have not been built.

Knights Park Campus


One Penrhyn Road practically completed in September 2014 and is arranged over ground and up to four upper floors. The property is of concrete frame construction with double glazed windows, predominantly brick elevations and a flat roof.

There is vehicular access from Penrhyn Road leading to a small car park for two cars, refuse store and emergency exit access and egress.

Entrance is via the building reception located at the front of the property, allowing on site staff to monitor access. The building reception leads to a stylish common room area which includes televisions, seating, study areas and pool table.

There are 121 beds within the property, arranged as 109 single studios and 6 twin studios. Average room sizes for single studios range between 18.3 sq m and 23.9 sq m for different categories of rooms and for twin studios the average room size is 21.9 sq m. All bedrooms benefit from a high specification including 3/4 sized beds, en-suite bathrooms and a large desk. Kitchen facilities include a fitted fridge, freezer and microwave with premium studios also containing a fitted oven.

The bedrooms are rented on an all-inclusive basis, encompassing all utility bills and 30MB broadband and WiFi in all rooms and communal areas.

There is also an on-site laundry room and secure internal bicycle storage area.

DESCRIPTION


An accommodation schedule is set out below:

Room Type Average Area (sqm) Number of Beds

Twin 21.9 12

Classic 18.4 3

Premium 1 18.3 25

Premium 2 18.8 69

Premium 3 21.7 6

Premium 4 23.9 6

Total 121

ACCOMMODATION

Not to scale - for identification purposes only

Sample Floor Plan - Third Floor


INCOMEStudent AccommodationThe property is fully let for the 2014-15 academic year with an average contract length of 46.6 weeks. The gross student income for the current academic year is £1,518,182, with summer income forecast to be £49,504. Including £7,500 ancillary income, the total 2014-15 gross income is therefore £1,575,186.

CRM, the largest third party manager of student accommodation, has provided a budget of £1,768 per bed per annum, equating to £213,961 for 2015-16 academic year. A summary of the 2015-16 forecast income is shown in the table below:

Bedroom TypeTotal Number

of BedsContract

Length (weeks)2015-16 Rent

Per WeekTotal Gross

Rent*

Twin 12 51 £175 £106,029

Classic Type 1 3 51 £249 £37,716

Premium 1 25 51 £259 £326,923

Premium 2 69 51 £279 £971,983

Premium 3 6 51 £299 £90,579

Premium 4 6 51 £329 £99,667

Total Gross Income £1,632,897

Sundry Income at £1.25 per bed per annum £7,714

Operating and Management Costs at £1,768 per bed per annum -£213,961

Total Net Income 2015-16 £1,426,650

Note: *The above gross rent figures assume a 1% occupancy void.

Commercial Within the demise of the property, there is also a vacant ground floor suite with permission for D1 use. There are agreed terms to let this space to a dentist for a term of 15 years, with no breaks. The rent is agreed at £40,000 per annum with open market upward only rent reviews every 5 years. A rent-free period of 6 months and a rent deposit of £16,000 have been agreed with the tenant.

Total IncomeTherefore, the total net income for 2014-15 is £1,401,225 with the forecast for the 2015-16 academic year £1,466,650.


ProposalSavills are instructed to seek offers in excess of £25,000,000 (Twenty Five Million Pounds) for the freehold title in the property. The yield profile at this level is shown below:

Purchasing

CostsValue

Net Initial Yield 2014-15

Reversionary Yield 2015-16

Student Accommodation 5.80% £24,370,000 5.28% 5.53%

Dentist Surgery 5.80% £630,000 6.00% 6.00%

Total / Blended Yield £25,000,000 5.30% 5.54%

Contacts:Marcus Roberts Head of Student Investment +44 (0) 20 7016 3799 +44 (0) 7807 999 187 [email protected]

James Hanmer Director +44 (0) 207 016 3711 +44 (0) 796 755 5897 [email protected]

Lizzie Whetman Associate +44 (0) 20 7016 3863 +44 (0) 7807 999174 [email protected]

TenureFreehold interest.

PlanningUnder planning decision notice 13/12022/FUL full planning consent was granted. Minor material amendments to the planning consent were approved under decision notice 14/12389/FUL. Further information can be provided on request.

The planning regime in Kingston-upon-Thames is exceptionally restrictive against new student accommodation permissions, and currently, there is only permission for 942 new student bedrooms. In addition, an introduction of the Community Infrastructure Levy, which is stated at £220 per sqm for student accommodation in the January 2014 draft charging schedule, would make development even more challenging.

Savills believe that the restriction on new student development will enhance rental growth and insulate values of existing schemes in the town.

EPCThe EPC rating for property is A. The EPC certificate is available upon request.

VATVAT will apply. However, provided the buyer complies with the relevant conditions, the sale of the property should qualify as a transfer of a going concern (TOGC).

Capital AllowancesThere is an unclaimed pool of capital allowances for the property and these can be acquired subject to negotiation. Further details available on request.

SDLTPayable at 4%. Multiple Dwellings Relief on the student element of the property will not be available. However, the Jersey domiciled company is also available to purchase, subject to negotiation, and details of this can be provided on request.

DataroomPlease register at www.savills.com/onepenrhynroad for further information.

Important Notice

Savills, their clients and any joint agents give notice that:

1.They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact.

2. Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Savills have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise.

Designed and produced by Savills Marketing: 020 7499 8644 | February 2015

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