PRIME NEWLY REFURBISHED SHOREDITCH OFFICE INVESTMENT · status. Boxpark, the UK’s original pop up...

PRIME NEWLY REFURBISHED SHOREDITCH

OFFICE INVESTMENT

EXECUTIVE SUMMARY

Located in the heart of Shoreditch, one of London’s most dynamic and best performing submarkets.

Excellent transport connectivity with Old Street, Liverpool Street and Moorgate stations within walking distance of the property.

155 year Long Leasehold interest from 11th May 2017 (circa 153 years remaining) with head rent geared to 9% of passing rents, subject to a base rent of £17,500 per annum.

Comprising 16,753 sq ft NIA of contemporary office space which was fully refurbished in 2018, arranged over ground and 3 upper floors with an extensive roof terrace.

Multi-let to 3 tenants, providing a WAULT of 4.13 years to tenant break options and 6.79 years to lease expiries.

Circa 45% of the income is secured by CANCOM SE, an international technology business with a revenue stream of €1.4 billion.

Gross rental income of £1,032,006 per annum, reflecting £64.70 per sq ft overall. Net rent of £939,125 per annum after the deduction of the head rent.

Opportunity for asset management and massing potential to enhance value.

Capital allowances available by separate negotiation.

Offers are sought in excess of £19,500,000 for the entire share capital in the UK company which holds the long leasehold interest subject to contract and exclusive of VAT.

A purchase at this level reflects an attractive net initial yield of 4.70% allowing for purchasers costs of 2.30%.

TRINITY | 39 TABERNACLE STREET | 2TRINITY

Body copy.

White Collar Factory

Old Street Station

Liverpool Street Station

Moorgate Station

The Bower The Atlas Building

Barbican Centre

Barbican Station

SHOREDITCH FROM ABOVE

TRINITY | 39 TABERNACLE STREET | 3LOCATION

LONDON’S NEW CENTRE OF INNOVATION

Proposed redevelopment of Old Street Roundabout and station.

The Tea Building White Collar Factory

Trinity is located in the heart of Shoreditch, one of London’s most vibrant and fashionable districts and an area which is home to the third largest cluster of technology companies in the world.

The ‘Tech City cluster’ surrounding Old Street Roundabout is located just a few hundred metres to the north of Trinity and is regarded as Europe’s leading technology centre. Shoreditch and Tech City have become distinct as London’s new centre of innovation and have firmly established themselves as the primary location for tech occupiers within the London market and as one of the City’s strongest submarkets.

Shoreditch has seen significant capital invested in the last 10 years and Old Street Roundabout is currently undergoing a multi-million pound investment programme to transform the area into a thriving destination in the middle of Tech City. Old Street Roundabout, otherwise known as ‘Silicon Roundabout’, has received widespread support and funding from both local and central government to attract and stimulate businesses and employment particularly in the TMT sector. There is a strong emphasis on establishing the area as one of the world’s greatest technology centres, which will support the expanding requirements of small start-ups to global businesses.


A VIBRANT LOCATION

Shoreditch and its surrounding area has become one of London’s most vibrant and cosmopolitan retail and leisure destinations over the last ten years and has gained an international reputation.

The area is now home to some of the most exciting restaurants, bars, shops and hotels in London.

With the growth of both commercial and residential development in the area, Shoreditch has become a seven day trading destination serving an increasingly affluent population. Shoreditch attracts a range of retail and restaurant operators of both independent and global status. Boxpark, the UK’s original pop up market hosts a range of ever changing retail offerings whilst Dinerama to the east of Trinity is one of the fastest growing street food markets in London. Ultimately Shoreditch offers one of the most dynamic, vibrant and exciting amenity destinations in the capital.


LOCAL OCCUPIERS

Occupiers

Amenities

Restaurants & Bars

01. 70 Leonard Street

02. Ceviche

03. Dinerama

04. Dishoom

05. Eight Moorgate

06. Flat Iron

07. Flight Club

08. Meat Mission

09. Merchants Taverns

10. Mcqueen

11. Pizza Pilgrims

Retail

01. Anthropologie

02. Cos

03. Goodhood

04. Hackett

05. Kiehl’s

06. Nike Lab

07. Oliver Bonas

08. Reiss

09. Sneakers n Stuff

10. Urban Outfitters

11. Whistles

Hotels & Services 01. Ace Hotel

02. Courthouse Hotel

03. Andaz Hotel

04. Holiday Inn

05. The Hoxton Hotel

06. M by Montcalm

07. Nobu

08. Shoreditch House

09. Boundary

10. The Curtain

11. Z Shoreditch

Theobalds Road

C

lerkenwell Road

Old St

Old St

City Rd

Moorgate

Bunhill Row

City Rd

City Rd

Pitfield St

East Road

Vest

ry S

t

Beech St

Chiswell St

London Wall

Great Eastern St

Kingsland Rd Shoreditch H

igh St

Hoxton St

Curtain Rd

Hackney R

d

London Wall

Bishops gat e

Worship St

Bath St

Whitecross St

Rivington St

Tabe

rnac

le S

t

Paul St Wilson St

Clifton St

Luke St

Sun St

FinsburySquare

Redchurch St

Boundary St

Leonard St

N

ile St

Ebenezer St

Old Nichol St

Bonhill St

Scrutton St

ArnoldCircus

HoxtonSquare

SHOREDITCHHIGH STREET

HOXTON

LIVERPOOLSTREET

MOORGATE

OLD STREET

Box Park

Old SpitalfieldsMarket

WhitecrossMarket

Tea Building

2

3

6

9

8

4

5

1

7

10

11

12

11

3

9

8

10

6

4

5

7

1

2

3

4

5

7

6

8

9

912 13

7

11

3

6

105

4 8

10

1

2

11

The established tech quarter of Shoreditch has seen a rise in a diverse range of occupiers across the financial, professional, technology, creative and media sectors.

The area has seen a large influx of TMT firms relocating from traditional West End or City locations, including Amazon, TripAdvisor, Airbnb, Soundcloud and Groupon as well as the opening of an innovation centre by Cisco and an incubator hub by Google. Major occupiers around Silicon Roundabout include Google, MindCandy, Farfetch and Adobe.

LONDON UNION

01.

08.

05.

12.

03.

10.07.

02.

09.06.

13.

04.

11.


CONNECTIVITY

THE ELIZABETH LINE (CROSSRAIL)

Crossrail is Europe’s largest infrastructure project and is set to transform London’s transport network.

It is estimated that the new rail line will bring an extra 1.5 million people to within a 45 minute journey time of Central London. Service from the Elizabeth line is due to commence from December 2020 and Liverpool Street and Moorgate are due to become two of the key transport hubs, both of which are within 650 metres of Trinity. These stations will provide direct access to the West End, Canary Wharf and London Heathrow.

The property is located within 250 metres of Old Street Roundabout and within 650 metres of both Liverpool Street and Moorgate stations, providing easy access to the London transport network.

Old Street Roundabout is the principal northern gateway into the City of London with City Road and Old Street the primary arterial roads connecting the area with Angel, Kings Cross, Holborn and the West End. There are numerous bus routes connecting the micro location around Trinity with the rest of the City, West End and beyond.

The location is set to be further enhanced with the arrival of the Elizabeth line (Crossrail) at Liverpool Street and Moorgate stations, both of which are within short walking distance of the property.

Elizabeth Line Travel Times

LIVERPOOL STREET

Reading60 mins

Slough38 mins

Heathrow33 mins

Paddington10 mins

Tottenham Court Road4 mins

Whitechapel2 mins

Stratford8 mins

Canary Wharf6 mins

Bond Street6 mins

Farringdon2 mins

Paddington32 mins

King's Cross / St Pancras14 mins

Old Street3 mins walk

Moorgate8 mins walk

Barbican14 mins walk

Farringdon22 mins walk

Liverpool Street8 mins walk

Shoreditch High Street Station8 mins walk

Journey times from the building. Source: TfL

National Rail

Underground

Elizabeth Line

Overground

Northern Central Circle

Hammersmith & City Metropolitan Overground


Arnold 21-33 Great Eastern Street, London EC2

The Property Trust 75,000 sq ft Completed Q2 2018

1 2

Finsbury Tower 103-105 Bunhill Row, London EC1

Finsbury Tower Estates (CIT) 12 storey extension, 289,151 sq ft

offices and 25 residential units Under Construction Completion 2021

3

White Collar Factory 1 Old Street Yard, London EC1

Derwent London 237,000 sq ft Completed Q3 2017 Rents of £75.00psf have

been achieved

Spectrum 160 Old Street, London EC1

Great Portland Estates and BP Pension Fund

153,000 sq ft offices, with café and restaurants

Completed Q3 2018 Rents of £72.50psf have

been achieved

4 5

The Bower 207-211 Old Street, London EC1

Helical Plc Phase 1: 140,000 sq ft offices and retail, 100% pre-let

Phase 2: 180,000 sq ft offices, with retail, a third pre-let to WeWork

P1 completed 2016, P2 Q3 2018 Rents in excess of £80.00psf have been achieved

C Space 37-45 City Rd, London EC1

Helical Plc 62,000 sq ft 75% pre-let to Mullins Lowe Completed 2015 Rents of £70.00psf have

been achieved

6

Theobalds Road

C

lerkenwell Road

Old St

Old St

City Rd

Moorgate

Bunhill Row

City Rd

City Rd

Pitfield St

East Road

Vest

ry S

t

Beech St

Chiswell St

London Wall

Great Eastern St

Kingsland Rd Shoreditch H

igh St

Hoxton St

Curtain Rd

Hackney R

d

London Wall

Bishopsgate

Worship St

Bath St

Whitecross St

Rivington St

Tabe

rnac

le S

t

Paul St Wilson St

Clifton St

Luke St

Sun St

FinsburySquare

Redchurch St

Boundary St

Leonard St

N

ile St

Ebenezer St

Bonhill St

Scrutton St

Old StreetRoundabout

HoxtonSquare

SHOREDITCHHIGH STREET

HOXTON

LIVERPOOLSTREET

MOORGATE

OLD STREET

Box Park

Old SpitalfieldsMarket

WhitecrossMarket

Tea Building

1

3

4

910

117

2

5

68

LOCAL DEVELOPMENTS

The micro location has experienced substantial investment and development activity in recent years and will continue to do so with further high profile developments due for completion in the coming years.

A summary of key development projects, either under construction or recently completed, are illustrated below.

The Stage 73-75 Scrutton Street, London EC2

Cain Hoy Enterprises 220,000 sq ft and

412 residential units Office 100% pre-let Completion Q2 2019

20 Bonhill Street London EC2

The Estate Office 70,000 sq ft Under Construction Completion 2020 or beyond

Be Wilson 70 Wilson Street, London EC2

71,550 sq ft offices Completed Summer 2017 Rents of £72.00psf have

been achieved

Development House 56-64 Leonard Street, London EC2

AHMM Architects 76,650 sq ft offices Planning application submitted for

redevelopment of existing site

Principal Place 111-113 Worship Street, London EC2

ENPAM (Developed by Brookfield) 642,000 sq ft and

301 residential units 100% pre-let to Amazon Completed Q3 2017

7 8 10 119


v

Trinity is a new, design led scheme that has recently been fully refurbished and extended to provide 16,753 sq ft (1,556.7 sq m) of statement, high specification, office accommodation.

Accessed by a substantial reception area, the office accommodation is arranged over ground and three upper floors and benefits throughout from superb levels of natural light and panoramic views of the Grade I listed Wesley’s Chapel to the rear. The levels of natural light are guaranteed to be retained with Trinity occupying a virtual island site which is bordered by the Chapel’s memorial ground, therefore preventing development to the rear of the building.

Trinity was comprehensively refurbished in 2018 to a high specification providing accommodation that reflects the areas creative edge. The building offers a new communal sky garden, newly remodelled reception with feature Tom Dixon lighting and panoramic views from every floor. An eight person passenger lift provides access to the upper floors which have floor plates ranging from 1,867 sq ft – 5,413 sq ft.

DESCRIPTION

TRINITY | 39 TABERNACLE STREET | 9THE PROPERTY

SPECIFICATION

Newly remodelled reception with feature Tom Dixon lighting

Typical finished floor to ceiling heights of 2.9m (soffit) / 2.5m (bulkhead)

Fully air conditioned – individually controllable system

LED intelligent lighting with feature Bauhaus style to the soffit

Fully accessible raised floors – 100 mm (150mm on Ground and 85mm on 3rd)

Communal sky garden, totalling 745 sq ft

1 x 8 person passenger lift

Bike storage with 20 spaces

Shower facilities


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ACCOMMODATION

The property has been measured by PureRes Chartered Surveyors in accordance with the RICS Code of Measuring Practice (6th Edition).

Floor Use Sq Ft (NIA)

Sq M (NIA)

3rd Offices 3,330 309.4

2nd Offices 5,413 502.8

1st Offices 5,340 496.1

Ground Offices 1,867 173.4

Ground Reception 803 75

Total 16,753 1,556.7

A duty of care in respect of the measured survey can be provided to the purchaser.

GROUNDOffice 1,867 sq ft / 173.4 sq m Reception 803 sq ft / 75 sq m

2NDOffice 5,413 sq ft / 502.8 sq m

Office Core Reception Courtyard

Sky Garden Showers Cycle Storage

Tabernacle Street Tabernacle Street

Tabernacle StreetTabernacle Street

1STOffice 5,340 sq ft / 496.1 sq m

3RDOffice 3,330 sq ft / 309.4 sq m

Floor plans not to scale, for indicative purposes only.

N


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745 SQ FT COMMUNAL SKY GARDEN ON THE THIRD FLOOR


THE PROPERTY

TENURE

The property is held long leasehold under title number AGL414648 for a term of 155 years from 11th May 2017*.

The head rent terms are summarised below:

Freeholder: Trustees for Methodist Church Purposes

Lease Start Date: 11th May 2017

Lease Expiry: 10th May 2172

Term Remaining: 153 years

Head Rent Gearing: 9% of passing rents, subject to a base rent of £17,500 per annum

Base Head Rent Review Date: 24th March 2027 and every 5th subsequent year

Alterations: Superior Landlords Consent needed

Permitted Use: B1 Office Use

The total site area is 0.15 acres (0.06 hectares).

* A copy of the headlease is held within the data room.

TRINITY | 39 TABERNACLE STREET | 14

TENANCY SCHEDULE

Floor Use Area NIA (Sq Ft) Tenant Lease Start Lease Expiry Lease Break Rent (£/pa) Rent (£/psf) Comments

3rd Offices 3,330 Futerra Sustainability Communications Limited

17/10/2018 16/10/2023 17/10/2021 £224,775 £67.50 Rent deposit of £67,432.50 held. If the break is not exercised on six months written notice then a further four months’ rent free is to be given.

2nd Offices 5,413 Ocean Unified Communications Limited

04/06/2019 30/06/2029 01/07/2024 £351,845 £65.00 The parent company CANCOM SE act as guarantor for the duration of the lease. Rent commencement date of 1st July 2020.

1st Offices 5,340 Croud Inc. Limited 18/06/2018 17/06/2023 N/A £347,100 £65.00 Rent deposit of £173,550.00 held.

Ground Offices 1,867 Ocean Unified Communications Limited

04/06/2019 30/06/2029 01/07/2024 £108,286 £58.00 The parent company CANCOM SE act as guarantor for the duration of the lease. Rent commencement date of 1st July 2020.

Ground Reception 803

Total 16,753 £1,032,006 £64.70 (excluding reception)

Head-Rent 9% £92,880

Net Rent £939,126

All leases are contracted outside the protection of the Landlord and Tenant 1954 Act Part II.


Ocean Unified Communications Limited (Cancom) Circa 45% of the income

Founded in 1992, Cancom is a highly rated technology business based in Munich with over 55 offices in Germany and London, employing 3,000 staff. Cancom is a partner of Hewlett-Packard, Microsoft, Cisco, IBM and Apple and offers IT services in the field of cloud computing. The company has grown rapidly in recent years and are expanding their European operations.

The financial statements of the UK based company (Ocean Unified Communications Limited) dated 31st August 2017, disclose a turnover, for the period 31st August 2016 – 31st August 2017 of £11.71 million and a pre tax profit of £1.74 million.

Ocean Unified Communications Limited has a Creditsafe rating of 87 which represents a very low risk of business failure.

The income is also secured by the parent company CANCOM SE who will act as guarantor for the duration of the lease. CANCOM SE’s financial statements dated 31st December 2017 disclose over €360 million of equity for the period 31st December 2016 – 31st December 2017 and a pre tax profit of over €58 million. CANCOM SE have a Creditsafe rating of 100 which represents a very low risk of business failure.

More information can be found on www.cancom.co.uk

Futerra Sustainability Communications Limited Circa 22% of the income

Futerra is a fast growing sustainability consultancy and a creative agency. Founded in 2001, the company has pursued the mission of “making sustainable development so desirable it becomes normal”. Futerra has worked with clients such as Interface, Lancome, Econyl and Swire amongst others. The company also has offices in New York, Stockholm and Mexico.

The financial statements of the UK based company (Futerra Sustainability Communications Limited) dated 30th April 2018 showed the company’s total equity was £1,247,126.

Futerra Sustainability Communications Ltd has a Creditsafe rating of 41 which represents a moderate risk of business failure.

More information can be found on www.wearefuterra.com

Croud Inc Limited Circa 33% of the income

Croud is a global digital marketing agency, powered by the best talent, custom-built tech and the world’s first crowd-sourced network of digital experts. Founded in 2011, Croud is now one of the largest independent digital agencies, with four offices across the US, UK and Australia and 162 staff. Croud has provided services for brands such as Virgin Trains, AMC Networks, IWG and many more.

The financial statements of the UK based company (Croud Inc Limited) dated 31st March 2017 show the company’s net assets were £1,494,831.

Croud Inc Limited has a Creditsafe rating of 62 which represents a low risk of business failure.

More information can be found on www.croud.com

COVENANTS

All three tenants currently occupying the building were all existing Shoreditch occupiers who have expanded as their businesses have grown.

TRINITY | 39 TABERNACLE STREET | 16TENANT COVENANT

DEVELOPMENT POTENTIAL

Option 1

Erection of roof terrace to west elevation and two storey roof extension to north elevation plus alterations to ground floor façade to Tabernacle Street.

Option 2

Erection of single storey roof extension at 3rd floor level to east elevation, erection of a single storey extension at 4th floor level to north east elevation and erection of extension to 3rd floor level on north elevation with 380 sq m of additional office use (B1) plus alterations to ground floor facade to Tabernacle Street.

The property provides an opportunity to increase the massing of the existing building and deliver additional net lettable area. A historic pre-application was prepared by Waugh Thistleton Architects to explore the following development options;

TRINITY | 39 TABERNACLE STREET | 17PLANNING

MARKET COMMENTARY

Occupational Market

Occupier Take-up

Overall take up in the City totalled 6.7 million sq ft, 26.4% ahead of the 10 year average.

Take-up in the Shoreditch market reached 387,000 sq ft in 2018.

This was across 23 transactions, which is in line with 2017 where a total of 24 transactions occurred.

Occupier Demand

Overall City demand for office space totalled 9.6 million sq ft at the end of 2018, of which approximately 77% was targeted at the Shoreditch market.

This comprised 4.5 million sq ft of active demand and 3.0 million sq ft of potential demand.

Existing Supply

Strong take-up in the City led to an 11% fall in supply, ending the year at 4.5 million sq ft.

Shoreditch supply fell marginally in Q1 2019 to 357,000 sq ft, compared to 385,000 sq ft at the end of 2018.

The overall Shoreditch vacancy rate fell to 4.1% and is now in line with the wider City market vacancy rate.

Rents

Prime City rents remain stable at £70.00 per sq ft.

Further rental growth is forecast over the next 5 years.

The Bower, EC1

Epworth House, EC1

Address Rent (£/sq ft)

Tenant Date Signed

Spectrum, 160 Old Street, EC1 £72.50 Hotel Reservation Services Ltd Apr- 19

The Bower, EC1 £83.00 Travelex Dec- 18

The Bower, EC1 £72.00 Infosys Nov- 18

Broadgate Tower, EC2 £69.50 Trade Tech Alpha Oct- 18

70 Wilson Street, EC2 £72.00 The Bio Agency Jun- 18

70 Wilson Street, EC2 £70.00 WeWork Jun- 18

Epworth House, EC1 £71.00 NTT May- 18

TRINITY | 39 TABERNACLE STREET | 18MARKETS

MARKETS

Investment Market

The Central London investment market remains buoyant with total transactional volumes reaching £18.3 billion in 2018.

The inflow of overseas capital continues, with approximately 83% of all transactions in Central London undertaken by non-domestic buyers in 2018. International investors have continued to enter the market in 2019 together with an increase in UK investors, particularly for smaller lot sizes.

The opportunity to acquire prime assets with strong growth prospects is extremely limited.

Address Size (sq ft)

Completion Date

Tenancy Profile Price NIY Cap value (£/sq ft)

Purchaser

29-39 Mount Pleasant, WC1 27,480 Mar- 19 Multi-let £31,000,000 4.48% £1,109 Earl of Bute

16-18 Hatton Garden, EC1 16,679 Feb- 19 Multi-let £19,620,000 2.23% £1,176 Private German

52-54 St John Street, EC1 12,340 Dec- 18 Multi-let £14,250,000 4.65% £1,155 Perses Holdings

50-54 Clerkenwell Road, EC1 8,954 Aug- 18 Multi-let £11,350,000 4.66% £1,268 DTZIM

80 Clerkenwell Road, EC1 12,387 Jul- 18 Multi-let £18,500,000 4.62% £1,494 Orchard Street IM

50-54 Clerkenwell Road, EC180 Clerkenwell Road, EC152-54 St John Street, EC1

TRINITY | 39 TABERNACLE STREET | 19

JLL and Somerford Real Estate for themselves and for the vendors or lessors of this property whose agents they are, give notice that:- a. the particulars are set out as a general outline only for guidance and do not constitute, nor constitute part of, an offer or contract; b. all descriptions ,dimensions ,references to condition and necessary permissions for use and occupation,and other details are believed to be correct, but any intending purchasers, tenants or third parties should not rely on them as statements or representations of fact but satisfy themselves that they are correct by inspection or otherwise; c. All properties are measured in accordance with the RICS property measurement , 1st Edition May 2015 (incorporating IPMS) unless designated NIA/GIA/GEA , in which case properties are measured in accordance with the RICS Code of Measuring Practice (6th Edition); d. Any images may be computer generated. Any photographs show only certain parts of the property as they appeared at the time they were taken. June 2019.

Designed and produced by Cre8te – 020 3468 5760 – cre8te.london

WILLIAM WYNN-WILLIAMS

+44 (0)20 7317 [email protected]

CHRISTOS LEMOS


JONATHAN SHARPE


MILTON KARAMANI


GET IN TOUCHFURTHER INFORMATION

Planning

Trinity lies within the jurisdiction of the London Borough of Islington. The property is not listed but located within the Bunhill Fields and Finsbury Square conservation area.

VAT

The property has been elected for VAT. We understand that the property will be sold by way of a Transfer of a Going Concern (TOGC).

EPC

The property has an Energy Performance Rating of B.

A copy of the EPC is available in the data room.

SPV

The property is held in a UK company. Further details are available upon request.

Proposal

Offers are sought in excess of £19,500,000 for the entire share capital in the UK company which owns the long leasehold interest, subject to contract and exclusive of VAT. A purchase at this level reflects an attractive net initial yield of 4.70%, assuming SPV costs of 2.30%.

Data Room

Further information can be found on the online data room. Please contact the vendor’s agent for access.

For further information or to arrange an inspection, please contact:

FURTHER INFORMATION

PRIME NEWLY REFURBISHED SHOREDITCH OFFICE INVESTMENT · status. Boxpark, the UK’s original pop up...

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