Carphone Warehouse headquarters

Carphone Warehouse Headquarters
1 Porta l Way, Lon d on W3 6RS
Pri m e w est Lon don O ffi c e I n v est m en t
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Investment Summary
- Prime headquarters office building in West London
- Very prominent location on the A40 with excellent transport links
- Four miles from London’s West End (18 minutes by London Underground)
- Area to benefit greatly from Crossrail, cutting journey time to the West End to
7.5 minutes
- 151,653 sq ft with a maximum floorplate of 79,227 sq ft
- High specification with excellent access to power and fibre network connectivity
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- Excellent underlying residual value
-Freehold
- Let to the 5A1 covenant of Carphone Warehouse Limited until
1st February 2023
- Current rental income of £3,599,000 per annum (£23.73 per sq ft)
- Fixed uplift in March 2017 to £4,172,237 (£27.51 per sq ft)
- We are seeking offers in excess of £42,500,000, subject to contract and
exclusive of VAT
- Attractive Net Initial Yield of 8.00% rising to 9.28% in March 2017, allowing for
purchaser’s costs at 5.80%
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not to scale
Location
Destination
The Carphone Warehouse Headquarters office building is located within the
London Borough of Ealing, 4 miles west of Central London and 2 miles north of
Chiswick and Hammersmith. The property’s location provides easy access to
Central London, the Thames Valley, and all the London International Airports.
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Communication
Situation
Distance
Hammersmith
Chiswick Park
Ealing Broadway
Westfield Shopping Centre
Paddington
West End
Description
Accommodation
2 miles
2 miles
2 miles
2 miles
3.5 miles
4 miles
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Destination
Distance
City
Stockley Park
Heathrow International Airport
Canary Wharf
Maidenhead
Reading
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Communications
Road
The property benefits from excellent road links. The A40 Western Avenue provides direct access east to Central London (4 miles), and west
to the A406 North Circular (1.5 miles), the M40 motorway (10 miles) and the M25 motorway (12 miles). The A406 North Circular provides
easy access to the M4/A4 (2 miles), the M1 (4 miles) and the A1(M) (11 miles). An extensive bus network also operates in the area.
Underground
North Acton underground station is located a 2-minute walk north of the property, providing Central Line services to the West End (18
minutes) and City (30 minutes). Park Royal underground station is located 1 mile to the west, providing Piccadilly Line services to Heathrow
Airport (32 minutes) and Central London (30 minutes). North Acton underground station is soon to be the subject of an extensive
refurbishment and upgrade, incorporating new amenity space.
Air
The property is well served by International Airports including Heathrow (8 miles), City (13 miles), Gatwick (25 miles), Luton (25 miles) and
Stansted (32 miles).
Crossrail and Rail Links
Acton Main Line Station is located less than a 10-minute walk to the south and will be completely rebuilt to accommodate an increase in
passenger numbers following the introduction of Crossrail in 2018/19, whilst continuing to serve the local railway network.
Crossrail will provide a high speed rail service which will link Acton with key destinations including Heathrow Airport, Bond Street, Liverpool
Street and Canary Wharf. Crossrail will bring 1.5 million more people within 60 minutes reach of London’s key business areas and will carry
more than 200 million passengers a year. For more information please visit www.crossrail.co.uk.
Crossrail Route Map & Journey Times
(Source: Crossrail)
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Situation
The property is highly prominent, being clearly visible from the A40 Western Avenue with frontages onto
and access from Portal Way and Wales Farm Road (A4000).
The A40 is a major route into Central London with over 75,000 cars passing per day attracting strong
demand for advertising hoardings. As a result one of the largest commercially available digital advertising
screens in the UK (1,130 sq ft) is situated immediately to the west of the property.
The property also benefits from excellent nearby amenities, with a Ramada Encore hotel and Virgin Active
gym to the south, a Holiday Inn Express, Tesco Express and NatWest bank to the north and an Asda
superstore to the north-west.
Office occupiers including Boden, Diageo, River Island, Lovefilm and Tetley GB Ltd have all located in
the area, drawn by its excellent communications and proximity to Central London, attractive rents, and
exclusion from the Congestion Charge Zone.
The immediate area has experienced a significant increase in residential development, including around
450 apartments and 900 student beds with further development in the pipeline. The area has been
particularly popular with students, since 11 university campuses lie within 35 minutes journey time of
the site.
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The property is highlighted within Ealing’s Unitary Development Plan as a Special Opportunity Site and, as
such, offers significant opportunities for major redevelopment. The property is identified as being suitable
for “tall buildings” and high density mixed use development, providing excellent scope to increase the
value of the property. The property may also be suitable for use as a datacentre, subject to planning.
Sat Nav: W3 6 RS
not to scale
Local Developments
1
Westgate, Victoria Road
15-storey Fairview development comprising 446
flats, Holiday Inn Express, Tesco Express and
Ladbrokes. Completed 2007.
4
North Acton Underground Station (Central Line)
Ealing Council has submitted a CPO to acquire
the Esso garage to provide a new station square
and amenity space.
7
The Perfume Factory
Multi-let business units. Pre-application
submitted in 2004 for development of three
towers to provide 234 flats, offices and retail.
10 Ramada Encore Hotel
11 Shurgard, Gypsy Corner
2
The Costume Store, Victoria Road
18-storey student housing development by
Berkeley First, on behalf of the University of
Arts, with 718 student beds and ground floor
retail. Completed September 2012.
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6
3 Portal Way
8-storey student housing development by
Goldcrest. It will comprise 184 student beds
with ground floor retail and amenity space.
Currently under construction.
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Communication
Victoria Road and Chase Road
Planning application submitted for 150 flats
over 18 storeys.
NEC House, Victoria Road
Planning application submitted by Berkeley
First, on behalf of Imperial College London,
for 657 student beds over 19 storeys.
Description
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Accommodation
Portal West Business Centre
Business units developed by Frogmore in 2005
with tenants including TSS Security, Rigby &
Peller and Lovefilm.
5 Portal Way
The freehold of this 31,605 sq ft office building
is under offer.
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150 bed hotel developed by Frogmore in 2004.
Self storage facility developed by Frogmore
in 2004.
12 Remploy Acton
Factory employing disabled people developed
by Frogmore in 2006.
13 Acton Main Line
Station to be redeveloped upon the introduction
of Crossrail in 2018/19.
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12
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Acton Main Line 200m
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Description
The property, redeveloped in 2001, is a very prominent two storey headquarters office building totalling
151,653 sq ft. The building provides unique open plan floor plates of 70,818 sq ft and 79,227 sq ft,
with surface and basement parking. Recently-refurbished facilities include a communal garden area of
12,120 sq ft, a large roof terrace of 4,300 sq ft, a restaurant/canteen, gymnasium and workplace nursery.
There are also brand new breakout areas with a Starbucks coffee shop.
The property is of steel frame construction with clad elevations including a double glazed structural window
system. The roofs are finished with insulated roof sheets. The four large lightwells and atrium, combined with
the excellent floor to ceiling heights, provide for very good natural light.
The property occupies a highly secure site of 3.5 acres (4.5 acres including Estate Road) providing 24-hour
security with perimeter palisade fencing, two gated entrances and CCTV.
The property’s high office specification includes:
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Four pipe fan coil air-conditioning
Cat 2 lighting
Suspended ceilings
Fully accessible raised floors with 150mm
clear void
- Two 10-person passenger lifts and a goods lift
- Excellent floor to ceiling height up to 3.925m
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Location
- Two 275 kVA diesel generators
- Uninterrupted power supplied from two
separate ring mains
- Excellent fibre network connectivity
- 235 car parking spaces (71 surface and 164
basement), reflecting an attractive ratio of
1:645 sq ft
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Accommodation
Floor
Use
Area (sq m)
Area (sq ft)
First
Office
6,579.2
70,818
Ground
Office
7,360.5
79,227
Ground
Reception
128.6
1,384
Ground
Storage
6.6
71
Ground
Security
14.2
153
14,089.1
151,653
Total
Floor plans
Ground floor
First floor
Victoria Road
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Ro
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Portal Way
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Tenure
Freehold.
The ownership includes Portal Way which is not adopted and therefore maintained through an
Estate Service Charge, split equally between the six adjoining ownerships. The 2013 budget
is £15,000.
Tenancy Details
The property is let to Carphone Warehouse Limited on a Full Repairing and Insuring lease from
26th March 2002 expiring on 1st February 2023, providing an unexpired term of approximately
10.5 years. The current rent passing is £3,599,000 per annum with a fixed uplift on 26th
March 2017 to £4,172,237 per annum until expiry.
The current rent reflects £23.73 per sq ft and will rise to £27.51 per sq ft.
A mobile telecoms mast agreement between Carphone Warehouse Limited and T Mobile is in
place and is currently under re-negotiation. The historic rent was £9,000 per annum, although
this is due to increase.
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Covenant Information
The Carphone Warehouse was founded by Sir Charles Dunstone in 1989 as a mobile phone retailer offering its customers simple,
impartial advice over the right combination of mobile phone handset and cellular network. Following international expansion it became
the largest independent telecommunications retailer in Europe.
The company listed on the London Stock Exchange in 2000 and in 2008 Best Buy Co., Inc., a world leading consumer electronics
retailer, acquired 50% of the Group’s retail and distribution business creating a joint venture known as Best Buy Europe which includes
Carphone Warehouse Limited.
Best Buy Co., Inc. was founded in 1966 and has operations in the US, Canada, Mexico and China as well it’s 50% share in Best Buy
Europe. It posted sales of over $50bn in the year to March 2012.
Carphone Warehouse Limited is the operating company for Best Buy Europe’s UK operations and has approximately 800 stores
throughout the UK and well developed online channels. It specialises in combining hardware, connections and services making it ideally
placed to benefit from the recent evolution of smartphones and other areas of complex technology. It is currently migrating its stores to
a new ‘Wireless World’ format which are typically larger and offer a broader product range than its traditional stores.
Carphone Warehouse Limited has been in occupation of 1 Portal Way since 1996 and the property is the company’s registered
headquarters. It has a Dun and Broadstreet (D&B) rating of 5A1 and has reported the following financial results:
Year
Sales (£000’s)
Profit/(Loss) Before Taxes (£000’s)
Net Worth (£000’s)
02 April 2011
1,623,364
188,529
884,974
03 April 2010
1,583,205
61,646
714,392
04 April 2009
1,642,914
(43,361)
353,088
Source Dun and Bradstreet
Carphone Warehouse Group plc also has a D&B rating of 5A1. A timeline of its remarkable growth is detailed below:
More information can be found at www.cpwplc.com
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Carphone Warehouse HQ has four striking characteristics for a West London office:
- A single 151,653 sq ft office building;
- Unique floorplates of 70,818 sq ft and 79,227 sq ft;
- Excellent public transport connections with good on site parking;
- Highly visible building from major London thoroughfare.
The West London office market is experiencing an upturn in activity with an estimated 2m sq ft of active requirements. This
demand has been particularly strong for large floor plates, as evidenced by over 50% of current total requirements and around
40% of take up in the first half of 2012 being for space in excess of 50,000 sq ft. The subject property represents very good
value within the West London market, as demonstrated by the key transactions and quoting rents set out in the table and plan
below respectively.
Date
Property
Tenant
Area
(sq ft)
Rent
(psf)
Aug 2012
Chiswick Green, Chiswick High Road, Chiswick
ViaSat
52,000
£39.00
Jul 2012
Grove House, Hammersmith
Winton Capital
63,000
£35 .00
Jul 2012
5 Longwalk, Stockley Park
IMG Worldwide
107,500
£26.75
Jun 2012
2 Kingdom Street, Paddington
Stat Oil
26,150
£57.50
May 2012
80 Hammersmith Road
Marsh & Parsons
10,500
£36.50
May 2012
Building 6 Chiswick Park
Aker Solutions
213,440
£46.50
Mar 2012
Ealing Cross, 79-89 Uxbridge Road, Ealing
Toluna Group Ltd
9,500
£29.00
Feb 2012
Ealing Cross, 79-89 Uxbridge Road, Ealing
Redbee Media
28,000
£27.00
Jan 2012
44 Brook Green, Hammersmith
BBC Magazines
60,000
£34.00
Dec 2011
Horizon West, Great West Road, Brentford
BSkyB
170,000
£25.00
Dec 2011
3 Olaf Street, Notting Dale
Stella McCartney
12,500
£31.80
Dec 2011
2 Kingdom Street, Paddington
Nokia
58,350
£57.50
Aug 2011
Kings House and Conquest House, Kingston
Saipem
90,100
£24.00
Mar 2011
Bakers Court, Bakers Road, Uxbridge
Coca-Cola
119,500
£27.40
Aug 2010
Building 9 Chiswick Park
Tullow Oil
130,000
£33.50
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Prime south east office yields for 10 year income have remained stable at 6.50%, due to a shortage of high quality office investment opportunities combined with strong investor demand for prime assets. The table below illustrates
comparable investment transactions providing a range of yields from 6.25% to 7.25%, clearly demonstrating the subject property’s exceptional value at 8.00%.
Date
Property
Purchaser
Tenant(s)
Term Certain
Price
Yield
Size sq ft
Aug 2012
3000 Parkway, Solent Business Park, Southampton
Claymore Group
Zurich Insurance
10
£13,500,000
7.25%
53,000
Jul 2012
Buildings 220 + 230 Cambridge Science Park, Cambridge
Legal & General
Jagex and Conexant Systems
10.7
£22,250,000
7.20%
75,267
Jun 2012
Unilever House, Leatherhead Office Park, Leatherhead
London & Stamford Property
Unilever
11.2
£61,150,000
6.85%
179,457
May 2012
Costain House, Vanwall Business Park, Maidenhead
Private Middle Eastern Investor
Costain Ltd
12.6
£14,700,000
7.00%
36,973
Feb 2012
1 Callaghan Square, Cardiff
Capital Trust
Eversheds LLP
10.3
£25,500,000
6.50%
93,668
Dec 2011
Quadrant Court, Woking
Private UK Investor
Surrey County Council
10.3
£17,500,000
7.16%
71,004
Dec 2011
Watson House, London Road, Reigate
PRUPIM
Towers Watson
9.75
£19,700,000
7.22%
74,269
May 2011
Sir William Siemens Square, Frimley
USS
Siemens Plc
11
£42,350,000
7.00%
183,868
May 2011
1 Longwalk, Stockley Park, Heathrow
RREEF
Celgene Europe
10
£26,400,000
7.11%
77,055
Nov 2010
IHG Group HQ Broadwater Park, Denham
Gatehouse Bank
IHG Group
11.5
£32,650,000
6.25%
97,463
Jul 2010
Napp Buildings, Cambridge Science Park
Legal & General
Napp Pharmaceutical
9.7
£36,000,000
6.50%
107,994
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Capital Allowances
We understand that there are no remaining capital allowances to
be claimed.
VAT
The sale can be treated as a Transfer of a Going Concern.
Proposal
Offers are invited in excess of £42,500,000 (Forty Two Million, Five
Hundred Thousand Pounds) for the freehold interest, subject to contract
and exclusive of VAT. This reflects a net initial yield of 8.00%, rising to
9.28% in March 2017, allowing for purchaser’s costs at 5.80%.
Further Information
Tom Paton-Smith
Tom Woolhouse
T: 020 7312 7440
M:07818 012 440
tom.paton-smith@montagu-evans.co.uk
T: 020 7312 7428
M:07818 012 428
tom.woolhouse@montagu-evans.co.uk
Paul Gummer
Simon Knight
T: 020 7866 8611
M:07966 784 972
paul.gummer@montagu-evans.co.uk
T: 020 7312 7419
M:07818 012 419
simon.knight@montagu-evans.co.uk
Misrepresentation Act 1967
Montagu Evans LLP for themselves and for the Vendors or Lessors of the property whose Agents they are, give notice that:- (i) The
particulars are set out as a general guideline only for the guidance of intending purchasers or lessees and do not constitute the
whole or any part of an offer or contract. (ii) All descriptions, dimensions, references to condition and necessary permissions of
the use and occupation, and other details are given in good faith without responsibility whatsoever and any intending purchasers or
tenants should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise
as to the correctness of each of them. (iii) Neither Montagu Evans LLP nor their employees has any authority to make or give any
representation or warranties whatsoever in relation to the property. (iv) Unless otherwise stated, all prices and rents are quoted
exclusive of VAT and intending purchasers or lessees must satisfy themselves independently as to the applicable VAT position.
(v) All plans and maps provided within the particulars are for identification purposes only. September 2012.
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