mortec office park, york road, leeds multi

MORTEC OFFICE PARK, YORK ROAD, LEEDS
MULTI-LET OFFICE INVESTMENT
INVESTMENT SUMMARY
LOCATION
• High quality, well-specified Business Park investment.
Leeds is the principal financial and business service centre in the North East of England.
The City has a district population of over 727,000 persons (making it the second largest
metropolitan district in England) and an estimated 2.2 million persons living within a 30
minute drive time of the City Centre.
• Built/comprehensively refurbished in 1999/2000.
• Six modern purpose-built, self-contained office units and one refurbished Grade II Listed
building standing in 1.98 hectares (4.89 acres) of mature landscaped grounds.
• The investment offers good income diversity and security with tenants including Crosby
Homes (Yorkshire) Limited, Technology In Motion, Emcor Group Limited, Specialist
Liability Services Limited and Trett Contract Services Limited.
• Excellent overall car parking ratio of 1:17.32 m² (1:187 ft²).
• Long leasehold – 999 years at a peppercorn rent.
• Offers in the region of £4,500,000 (Four Million Five Hundred Thousand Pounds),
subject to contract and exclusive of VAT. This reflects an attractive net initial yield of
8% after allowing for purchase costs of 5.75%.
Leeds is strategically located at the northern end of the M1 motorway, only 10 miles from
the M62 transpennine motorway, providing direct links to London and Manchester/Hull
respectively. The completion of the M1/A1 link to the south of the City, which provides a
direct link between the M1/M621 and the A1(M) motorways, has further enhanced the
City’s road communications.
The City benefits from an excellent rail infrastructure, providing a regular intercity service
with a fastest journey time to London (Kings Cross) of 1 hour 56 minutes. Leeds also enjoys
a regular service to Manchester, Liverpool, York and Newcastle. Leeds City Station is the
busiest rail station in the UK outside Central London, with an estimated 50,000 passengers
using it each day.
Leeds Bradford International Airport is located approximately 7 miles to the north west of
the City Centre and offers daily flights to both domestic and European destinations. The
airport handles over 2.8 million passengers per year.
LEEDS BRADFORD
AIRPORT
YEADON
A58
A61
WHINMOOR
A6120
HORSFORTH
A658
A64
A6120
Roundhay
LEEDS
A6120
A65
HEADINGLEY
A660
A658
A61
MORTEC OFFICE PARK
0
12
CHAPEL
ALLERTON
A6
A657
A58
YO
A647
CITY CENTRE
RO
RK
AD
4
A6
MORTEC OFFICE
PARK
A6120
A64
SCHOLES
A647
PUDSEY
46
A6110
A6177
GARFORTH
HUNSLET
BRADFORD
3
A63
2
1
A58
BEESTON
4
A642
7
A650
SEACROFT
M621
44
A62
27
A653
MIDDLETON
43
ROTHWELL
SWARCLIFFE
MORLEY
26
SITUATION
EXTERNAL SPECIFICATION
Mortec Office Park is prominently situated to the north east of Leeds City Centre on the A64
York Road, one of the City’s main arterial routes. The development is 1 mile from Leeds
Outer Ring Road, 4 miles from the M1/A1 link and only 5 miles from Leeds City Centre.
Mortec Office Park therefore benefits not only from excellent road communications to the
local and national motorway network but is also less than a 10 minute drive from Leeds City
Centre. Mortec Office Park benefits from a perpetual right of access over the road hatched
orange on the Ordnance Survey Extract.
Superb landscaped setting forming part of a controlled business environment.
DESCRIPTION
Mortec Office Park comprises a development of eight individual B1 office units developed
between 1999 and 2000 and set within 1.98 hectares (4.89 acres) of mature and
landscaped grounds providing a total of 2,252 m² (24,245 ft²) of accommodation.
• High quality finishes.
• Impressive combination of new and Listed buildings.
• Self-contained campus style office park with strong identity.
• Attractive courtyard area and landscaping with pond and quest recreation areas.
INTERNAL SPECIFICATION
Each of the buildings on the Park has the following specification:• Spacious contemporary offices with excellent natural lighting and ventilation.
• Full raised access floors.
Units 1 & 2 are occupied by Crosby Homes (Yorkshire) Limited and is a Grade II Listed
property that forms part of a property previously known as Morwick Hall. The property was
substantially refurbished in 1999/2000 to a high standard of office accommodation.
The remainder of the Park consists of five modern single/two-storey office buildings that
were constructed in 2000 within the extensive grounds of the original building, Morwick Hall.
The property benefits from 130 car parking spaces on site, representing an excellent car
parking ratio of 1:17.32 m² (1:187 ft²).
• Category 2 lighting.
• Impressive high quality entrance areas.
• Aluminium framed double-glazed windows.
• Gas fired central heating.
• Male, Female and Disabled WC facilities.
TENURE
The property is held long leasehold by way of a 999 year lease with effect from 1 March 2000, expiring on 1 March 2999, at a peppercorn rent.
TENANCY SCHEDULE
The property is let in accordance with the Schedule of Accommodation & Tenancies below and produces a total current income of £381,628 per annum.
Area ft2
NIA
Lease Start
Rent
Review
Lease Expiry
(Break)
Passing Rent
PA (£/ft2)
ERV
(£/ft2)
Crosby Homes
(Yorkshire) Ltd
6,844
29/09/05
28/09/10
28/09/15
(29/09/10)
£104,312
(£15.25)
£104,312
(£15.25)
3
Technology In
Motion Limited
2,188
23/02/07
-
22/02/12
(23/02/10)
£32,600
(£14.89)
£35,000
(£16.00)
4
Educational Ideas Ltd
861
01/11/07
-
31/10/12
(01/11/10)
£14,000
(£16.25)
£14,000
(£16.25)
5A
Emcor Group (UK) Plc
1,220
05/07/06
-
04/07/11
(05/07/09)
£18,755
(£15.37)
£19,500
(£16.00)
5B
Trett Contract Services
Limited
2,161
01/01/03
01/01/08
31/12/12
(31/12/09)
£38,900
(£18.00)
£34,600
(£16.00)
6A
1st Floor
Shopcreator Limited*
2,945
01/04/07
01/04/12
31/03/17
(01/04/10)
£47,120
(£16.00)
£47,120
(£16.00)
6B
Gnd Floor
Vacant - 2 year Rent, Rates
and Service Charge Guarantee
1,071
2 year Rent, Rates and
Service Charge Guarantee
-
-
£17,404
(£16.25)
£17,404
(£16.25)
2 year Rent, Rates and Service Charge
Guarantee.
6C
Gnd Floor
Vacant - 2 year Rent, Rates
and Service Charge Guarantee
1,622
2 year Rent, Rates and
Service Charge Guarantee
-
-
£25,952
(£16.00)
£25,952
(£16.00)
2 year Rent, Rates and Service Charge
Guarantee.
7
Vacant - 2 year Rent, Rates
and Service Charge Guarantee
3,349
2 year Rent, Rates and
Service Charge Guarantee
-
-
£53,585
(£16.00)
£53,585
(£16.00)
2 year Rent, Rates and Service Charge
Guarantee. Unit has potential to be sub
divided and let on a floor by floor basis.
8
Specialist Liability
Services Limited
1,984
25/11/05
-
07/12/10
£29,000
(£14.61)
£31,700
(£16.00)
£381,628
£383,173
Unit
Tenant
1&2
Total
24,245
Comments
* Shopcreator Limited entered administration and have been purchased by Selserve (UK) Limited. A Tenancy at Will is in place, whilst and assignment of the original lease liability is documented.
OUT-OF-TOWN OFFICE MARKET
Historically, Leeds has not had a strong out-of-town office market as the firms that have
traditionally dominated demand have been from the professional services, who prefer to
locate in the town/city centre. However, over the last 10 – 15 years Leeds has seen the
development of out-of-town office parks as issues associated with land costs, availability
and parking ratios have come to the fore.
Purpose built out-of-town office developments have included White Rose Office Park
(Arlington Office Park) to the south of the City Centre, Thorpe Park to the east, Leeds Valley
Park to the south and Capitol Park and Airport West to the north of Leeds. These purpose
built developments have attracted national covenants and commanded rents of £20.00 £21.00 ft². This is in contrast to the subject property, which has a low average passing rent
of £15.75 ft² and provides a platform from which to drive rents forward.
ASSET MANAGEMENT OPPORTUNITIES
• Potential to increase the rental profile of the asset by developing a serviced office business.
• Underlying potential to develop the site to a higher density subject to the relevant consents.
• Flexible accommodation offer that is capable of sub division to provide higher value small
floor plate office suites. Unit 7 capable of being sub divided and let on a floor by floor basis
VAT
The property is registered for VAT purposes and VAT will be payable on the purchase price.
PRICE
We are instructed to seek offers in excess of £4,500,000 (Four Million Five Hundred Thousand Pounds), subject to contract and exclusive of VAT, for our client’s long
leasehold interest. A purchase at this level reflects a net initial yield of 8%, after deduction of usual purchaser’s costs of 5.75%.
The pricing explicitly makes an allowance for potential re letting voids that may be incurred in the period up to 2011. The vendor is prepared to put in a 2 year rent, rates and
service charge guarantee on the vacant accommodation.
FURTHER INFORMATION
Should you require any further information, or wish to arrange an inspection, please contact:
David Scott
Tel: 0113 235 5244
Email: david.scott@kingsturge.com
Phil Martin
Tel: 0113 235 5226
Email: phil.martin@kingsturge.com
© Crown Copyright 2008. All rights reserved. Promap licence number 100020449. King Sturge licence number 100017659.
This plan is published for the convenience of identification only and although believed to be correct is not guaranteed and it does not form any part of any contract.
Misrepresentation Clause: The accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and other details contained herein is not guaranteed and is for general guidance only and prospective purchasers or tenants must not rely on them as statements
of fact or representations and must satisfy themselves as to their accuracy. Neither King Sturge LLP nor any of their employees or representatives has any authority to make or give any representation or warranty or enter into any contract whatever in relation to the property. Rents quoted in these particulars
may be subject to VAT in addition.
The reference to any mechanical or electrical equipment or other facilities at the property shall not constitute a representation (unless otherwise stated) as to its state or condition or that it is capable or fulfilling its intended function. Prospective tenants/purchasers should satisfy themselves as to the fitness of
such equipment for their requirements.
Subject to Contract • Exclusive of VAT • March 2008