- Hugely busy South East location
- Excellent reversionary potential
- Planning permission to extend the building
- Attractive 7.84% net initial yield
- Guide Price £3,500,000.00
Chessington is located in Kingston, South West London, 6 miles inside J9 of the M25.
– Central London – 15 miles
– Putney Bridge – 15 mins away by car.
– Chessington to Waterloo – 36 mins
– Tolworth to Waterloo – 34 mins
– Heathrow – 15 miles
– Gatwick – 22 miles
Kingston is one of the famous and affluent borough of London, it is known as one of the top retail destinations in the south east, outside of central London, and its proximity to beautiful stretches of the river Thames.
The property is situated in Chessington, a densely populated area of Greater London, with a local population of near 20,000.
Chessington provides a strong commercial location within easy commute from central London and the Surrey, Kent & Berkshire counties. The immediate location is a mixture of industrial and office uses, with minimal local vacancy and a huge premium for car parking. The area hosts a number of established occupiers including Prochem, Screwfix & Alliance Healthcare.
The property comprises a mixed use building, with predominantly good quality office accommodation with one warehouse. The offices have been well refurbished offering open plan, light and spacious accommodation over a range of sizes. The office specification includes a suspended ceiling, new LED lights, comfort cooling cassettes and dedicated on-site parking which is at a premium in Chessington.
The warehouse is accessed from the rear with a full height roller shutter door, solid concrete floors and 6m eves. The roof contains translucent light panels.
There are currently no voids in either the office accommodation, or the warehouse element. There has been a long history of no voids and is currently a waiting list for interested occupiers, with no arrears on the any of the rent payments.
The total floor area for the building is 2,209 sq m (23,783 sq ft) with the breakdown as follows –
- Office space – 1,666 sq m (17,943 sq ft)
- Warehouse – 542 sq m (5,840 sq ft)
Offices range from 780 sq ft up to 2,719 sq ft. a breakdown of the offices sizes is available on the tenancy schedule below.
There is allocated off street parking to the front of the building, as well as a well sized car park to the rear, with a total of 46 spaces for the building. There is also additional income from four freight containers stored in the corner of the car park. The income is set out in the tenancy schedule attached.
Space for parking is at a massive premium in Chessington and there is scope to charge for parking to further increase the rent roll.
The tenants have the following covenants
Warehouse – IMX Ltd
IMX have abbreviated accounts but have been trading since 1989 and specialise in freight transport by road. Their current Net asset value is £121,015, down from £128,215 in 2013. Further information can be found at http://www.imx.co.uk
Unit 1 – Your-Move.co.uk Ltd
Your-move.co.uk is the most visited estate agency website in the UK, and operates from over 280 branches nationwide. Further information can be found at www.your-move.co.uk
They have produced the following figures –
Unit 2, 3 & 4.1 -Tiffany Rose Ltd
Tiffany Rose provide retail clothing for specialist stores, bespoke maternity bridal wear being one example. Again, they only publish abbreviated accounts, but have been established since 2009 and show current net assets of £823,938. Further information can be found at http://www.tiffanyrose.com/
Unit 4.2 – Culross Aerospace Ltd
Culross is a service company for the directors. They are associated with Avionic Services International Ltd who have a turnover of £813,000 and net assets of £514,000. Further information can be found at http://www.avionicservices.co.uk/
Unit 5 – Briggs Amasco Ltd
Briggs Amasco specialise in roof and wall cladding and have been trading snce 1865. They are the UK’s leading industrial and commercial roofng company. Further information can be found at http://www.briggsamasco.co.uk/
They have produced the following figures –
Unit 6 & 7 – Human Race Ltd
Human Race specialise in events and events management. Having been established in 1999, they now run some of the most infamous cycling, running and triathlon evnts across the UK. Human Race only publish abbreviated accounts, but currently show net assets of £2,455,535 for the year end 31/12/14. Further information can be found here – http://humanrace.co.uk/
Unit 8 – Holden Group Holdings Ltd
A business support and administration company established in 2002. The Holden Group operate in a number of business sectors and currently have net assets of £90,533.
Unit 9.1 – Big Thoughs in Food and Drink Ltd
Unit 9.2 – Entheous Global Ltd are a newco and are yet to publish their first set of trading figures.
Unit 9.3 – Aaron Anderson & McKinsey Ltd
AA&M run a small bookkeeping company and have been trading since 1994. They specialise in accounting, auditing and tax consulting. The company currently has net assets of £11,384.
Unit 10 – Tokenhelp (UK) Ltd
Tokenhelp (UK) handles charity and commercial campaigns providing donation processing, order processing and fulfilment services. They were incorporated in 2007 and have current net assets of £1,344. Further information can be found at – http://www.tokenhelp.com/
The property has been elected for VAT. Therefore, it is envisaged that the transaction will be treated as a Transfer of a Going Concern (TOGC).
Our client is seeking offers of £3,500,000 (Three Million, five Hundred Thousand Pounds), subject to contract, reflecting an attractive net initial yield of 7.84% with purchases costs at 6.5%.
The trading businesses in The Typhoon centre are not affected by the sale. The vendors (who currently occupy part of the building) have already agreed a new 5 year lease on 1,444 sq ft, showing their commitment to the location
The property is let to 12 different tenants, on varying lease lengths. The tenants pay an ‘all in price’ for accommodation, rates and services. Total income comes to £442,752.04 per annum, with total costs (service charge) coming in at £166,367. A breakdown of the service charge costs can be provided on request.
Net income is therefore £292,225.24 per annum.
The building offers a number of ways to increase rent roll and add value
- The rents are currently well below market level, which has been established by the latest review to Briggs at £22.77 psf gross. The majority of the tenants are on rents set in the recession, and they currently average below £18 psf across the centre. The ERV is clearly set above £20 psf and therefore the rental level is more like £500,000 gross (up from the current £420,000).
- Rent reviews have been done in house, these could be set up in a traditional manner on an open market or RPI basis to bring the rents into line.
- The warehouse (5,840 sq ft) could be converted into office accommodation, bringing the rent up from £12.84 psf to the office levels of £22.77 psf adding another £58,000 pa gross.
- A mezzanine level could be put in the warehouse (as has been done in the rest of the building), to double the floor area and increase income by another c.£133,000pa gross.
- There is a newly received planning consent for another story to the front elevation of the building The consent would provide another 150 sq m (1,600 sq ft) on its own private level. Rents are expected to be in the region of £25 psf or above, therefore offering another £40,000 pa gross. The sale of the asset will prevent the vendor from implementing the consent, but development can be commenced at any point after purchase.
- Parking is a massive premium in the area, and people are even resorting to building underground parking lots as the rents back up the cost of doing so. This site does not currently charge for parking, so further income could be derived from that with ERV at £2,500 per space per annum.
All in all, the income potential from the site is significant. The initiatives mentioned about add c.£270k pa gross not including the car parking or adding another story to the front elevation.
|Initiative||Rental Increase per annum|
|Rent reviews to ERV||£80,000|
|Converting warehouse GF||£58,000|
|Adding warehouse FF||£133,000|
|New third story on front elevation||£40,000|
As you can see, there is scope to almost double the gross rental income. The service charge currently equates to c.35% of the gross income. With car parking removed (as it doesn’t add any cost to service charge), the increase in NET INCOME would be in the region of £300,000 per annum
- Huge reversionary rental uplifts
- Great asset management potential
- Planning permission to add third floor
- Thriving SE commercial location
- Great access to Central London and the major motorway network