21 VICTORIA AVENUESOUTHEND-ON-SEA, SS99 1BD
ON THE INSTRUCTIONS OF THE JOINT FIXED CHARGE RECEIVERS
WELL LET FREEHOLD INVESTMENT OPPORTUNITY
ALEXANDER HOUSE
EXECUTIVE SUMMARY
Well let investment opportunity.
Located in the south east London commuter town of Southend-on-Sea.
Single let to the undoubted government covenant of The First Secretary of State.
Passing rent of £1,773,742 per annum.
Large site area of 2.543 acres (1.029 hectares).
Freehold.
Totalling 235,679 sq ft.
Long term potential to redevelop the site for alternative uses subject to gaining the necessary planning consents.
The Vendor is seeking offers in excess of £17,000,000 (Seventeen Million Pounds) subject to contract and exclusive of VAT, for the benefit of the freehold interest in the property. This price reflects a net initial yield of 9.86% after purchaser’s costs of 5.8% and only £72 psf capital value.
ALEXANDER HOUSESOUTHEND-ON-SEA
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St Clears
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Royston
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Felixstowe
Sudbury
Haverhill
Harwich
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Canvey Island
Canterbury
Rayleigh
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Bishop's Stortford
Sittingbourne
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Crowborough
Bexhill-on-Sea
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Newhaven
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Petersfield
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Newport
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Winchester
Romsey
Farnham
Aldershot
Leatherhead
Croydon
Andover
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Salisbury
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Weymouth
Bridport
Sidmouth
Christchurch
Chippenham
Melksham Newbury
Frome
Clevedon
Burnham-on-Sea
Taunton
Bridgwater
Warminster
Trowbridge
Devizes
Cirencester
Didcot
Dartford
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Minehead
Tiverton
Barnstaple
Ilfracombe
Bideford
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St Ives
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St Albans
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Bicester
Aylesbury
BanburyEvesham
Stratfordupon Avon
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Tewkesbury
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Chepstow
Abergavenny
MerthyrTydfil
Hereford
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Ipswich
Margate
Brentwood
Colchester
Clacton-on-Sea
Basildon
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Maidstone
Hastings
Eastbourne
RochesterGillingham
Crawley
Brighton
HoveWorthing
BognorRegis
Portsmouth
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Eastleigh
Basingstoke
Camberley
StainesReading
PooleBournemouth
BathWeston-super-Mare
Swindon
Exeter
Torquay
Cheltenham
Harlow
Watford
Newport
Luton
Bedford
HighWycombe
Oxford
Milton Keynes
Gloucester
Swansea
Fareham
Gosport
Chelmsford
SOUTHAMPTON
BRISTOL
CARDIFF
PLYMOUTH
LONDON
SOUTHEND-ON-SEA
LOCATION
Southend on Sea lies in the heart of Essex and is a well-established commercial, residential and tourist hub. The town grew rapidly in the 19th century with the arrival of the railway link to London which provided a fast connection for seaside tourists. The town now boasts two railway stations with direct links to London Liverpool Street (Southend Central 1 hour 14 minutes and Southend Victoria 1 hour 16 minutes), as well as an international airport (London Southend Airport) and its own university (The University of Essex).
The town is located 42 miles east of Central London and 20 miles south of Chelmsford. Road links are excellent with the A13 providing direct access to London within 1 hour and 30 minutes.
ALEXANDER HOUSESOUTHEND-ON-SEA
Southend Victoria Station
Sainsburys Odeon
University of Essex
High Street
Victoria Shopping Centre
The Range
ALEXANDER HOUSESOUTHEND-ON-SEA
Red keyline for indicative purposes only
SITUATION
Alexander House occupies a prominent site at the junction of Victoria Avenue, Queensway and Baxter Avenue with frontages to all 3 streets. The property is less than a 1 minute walk from Southend Victoria train station and only 7 minutes’ walk from Southend Central train station.
Alexander House is opposite both the High Street and the Victoria Shopping Centre with retailers including; Boots, Next, H Samuel, Pizza Express, Vodafone, Starbucks, New Look, Odeon and Royal Bank of Scotland.
DEMOGRAPHICS
The total population of the Southend catchment area is 336,000 and it is expected to see growth at the national average over the next 5 years (Promis July 2015).
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SOUTHENDEASTSOUTHEND
CENTRAL
WESTCLIFF
CHALKWELL
SOUTHENDVICTORIA
PRITTLEWELL
ODEONCINEMA
ADVENTUREISLAND
SOUTHEND PIER
SOUTHENDHOSPITAL
WELLESLEYHOSPITAL
TESCOEXTRA
SOUTHEND LESIURE & TENNIS CLUB
GARON PARKGOLF COMPLEX
SOUTHCHURCH
SOUTHCHURCHPARK
BOURNESGREEN PARK
PRIORYPARK
WAITROSE
B&Q
THE ROYALSSHOPPING CENTRE
VICTORIA SHOPPING
CENTRE
ALEXANDER HOUSE
DESCRIPTION
The property was constructed in 1973 and comprises a 16 storey office building, a separate single storey office building to the rear used as a data centre and an additional 3 storey car park. The office building was constructed using a concrete frame with an extensively glazed façade. The specification includes:
• 8 x 12 person passenger lifts• Male, female and disabled WC’s on each floor• Air conditioning• Suspended ceilings
The site provides for 283 cars with 196 spaces located in the 3 storey car park and 87 surface parking spaces located in front of the property.
ALEXANDER HOUSESOUTHEND-ON-SEA
ACCOMMODATION SCHEDULE
OFFICE BUILDING
Floor Use Sq M Sq Ft15th floor Offices 695.19 7,48314th floor Offices 1,370.12 14,74813th floor Offices 1,354.33 14,57812th floor Offices 1,356.65 14,60311th floor Offices 1,356.65 14,60310th floor Offices 1,356.65 14,6039th floor Offices 1,356.65 14,6038th floor Offices 1,356.65 14,6037th floor Offices 1,356.65 14,6036th floor Offices 1,356.65 14,6035th floor Offices 1,356.65 14,6034th floor Offices 1,352.01 14,5533rd floor Offices 1,356.65 14,6032nd floor Offices 1,356.65 14,6031st floor Offices 1,529.36 16,462Ground Offices 1,380.71 14,862Ground Reception 102.01 1,098TOTAL 21,350.23 229,814
DATA CENTRE
Floor Use Sq M Sq FtWhole building Data Centre 544.88 5,865TOTAL 544.88 5,865
ALEXANDER HOUSESOUTHEND-ON-SEA
TENURE
The property is held freehold.
TENANCY AND INCOME
The property is let on 2 coterminous leases as described below.
The office building and multi storey car park are single let to The First Secretary of State on a lease commencing 25th December 2013 and expiring 2nd April 2026. The annual rent is £1,758,658 per annum equating to £7.50 per sq ft having apportioned £39,200 per annum to the multi storey car park.
There is a tenant only break option on 2nd April 2021 with a nine month notice period. The rent is reviewed 5 yearly to the higher of Open Market Value or the passing rent. The next review is 25th December 2018.
The data centre is single let to The First Secretary of State on a separate lease commencing 25th December 2013 and expiring 2nd April 2026. The annual rent is £15,058 per annum equating to £2.57 per sq ft.
There is a tenant only break option on 2nd April 2021 with a nine month notice period. The rent is reviewed 5 yearly to the higher of Open Market Value or the passing rent. The next review is 25th December 2018.
The total income is therefore £1,773,742 per annum.
The entire property is occupied by HMRC which houses circa 1,600 permanent employees at the building. HMRC recently rationalised their holdings in Southend and have consolidated many of their staff and functions in Alexander House.
HMRC have occupied the building since 1973.
ALEXANDER HOUSESOUTHEND-ON-SEA
UEENSWAY
3941
27.7m
TCBs
SOUTHEND-ON-SEA
Victoria
Sub StaEl
Car Park
24to
28
Car Park
AlexandraCourt
Multi-storey
1to
11
15to
25
nment
ffices
27to
37
27
Cycle Way
VICTORIA
AVENUE
Sub StaEl
Museum
GovernmentOffices
Southen
21
0m 25m 50m 75m
Alexander House21 Victoria AvenueSouthend-on-Sea
Ordnance Survey © Crown Copyright 2015. All rights reserved. Licence number 100022432. Plotted Scale - 1:1250
DEVELOPMENT POTENTIAL
Due to the large site area and low levels of massing to the rear, the property lends itself to a large scale redevelopment at some point in the future. The property could either be developed in its existing use as offices or for alternative uses subject to the necessary consents.
The property lies within the area covered by the Southend Central Area Action Plan (SCAAP) which sets out the strategy for major change and regeneration of the town centre.
RESIDENTIAL MARKET
Levels of home ownership in Southend are above the UK national average with 74% of the residents owning their properties. Average house prices in Southend are also above the UK national average and the infrastructure links to London make the town attractive for commuters. The building could also be suitable in the future as a Private Rented Scheme (PRS).
Recent residential sales in Southend include:
Property Price Date Comments
Flat 1, The Pickfords Building, SS2 £250,000 Aug 2014 2 bed flat11 Clifftown Parade, SS1 £293,000 Sept 2013 2 bed flatFlat 5, Grange Heights, SS1 £168,000 Feb 2015 1 bed flatFlat 1, 4 Clifftown Road, SS1 £180,000 July 2014 1 bed flat
ALEXANDER HOUSESOUTHEND-ON-SEA
MARKET COMMENTARY
South East offices have performed exceptionally well in 2015 with investors attracted to both rental and capital growth. South East offices have reported a total return of 20.2% in 2015 to date and CBRE predict an annualised total return of 12.6% between 2015 and 2019.
There has also been a surge in occupier activity with rents forecast to grow by 5.8% in 2015 and by an annualised rate of 2.9% from 2015 to 2019.
Recent comparable office lettings in Southend include:
Property Rent £psf Date Comments
Finance House, 20-21 Aviation Way, Southend
£10.78 June 2015 Ground floor letting
10 Alexandra Street, Southend
£7.46 January 2015 First floor letting
Cohav House, 16-17 Aviation Way, Southend
£10.00 August 2014 First floor letting
Princess Caroline House, 1 High Street, Southend
£9.35 June 2014 Ground floor letting
Recent comparable investment sales include:
Property Price (£million)
NIY Cap Val £psf
Date Comments
Warwick House, 67 Station Road, Redhill
£5,180,000 7.90% £253 Mar 2015 Single let to the First Secretary of State for 6.6 years
Elstree Gate, Imperial Way, Borehamwood
£9,250,000 9.60% £135 Feb 2015 Let to the First Secretary of State and Cable and Wireless for 6.2 years
Jupiter and Juniper House, Warley Hill Business Park, Brentwood
£8,390,000 8.22% £221 Feb 2015 Multi let offices with a WAULT of 3.5 years
Apollo and Lunar House, Wellesley Road, Croydon
£94,900,000 5.50% £215 Available Single let to the First Secretary of State for 8 years
ALEXANDER HOUSESOUTHEND-ON-SEA
PLANNING
The property is located in the county of Essex and administered by Southend on Sea Borough Council. The property is not listed and does not sit within a conservation area.
The property lies within the area covered by the Southend Central Area Action Plan (SCAAP) which sets out the strategy for major change and regeneration of the town centre.
VAT
The property has been elected for VAT purposes and it is intended to treat the transaction as TOGC so that VAT will not be payable upon the purchase price.
EPC
The property has an EPC score of 109 giving it a rating of E.
PROPOSAL
The Vendor is seeking offers in excess of £17,000,000 (Seventeen Million Pounds) subject to contract and exclusive of VAT, for the benefit of the freehold interest in the property. This price reflects a net initial yield of 9.86% after purchaser’s costs of 5.8% and only £72 psf capital value.
FURTHER INFORMATION
For further information please contact:
Will ElphinstoneTel: +44 (0) 20 7182 2008Mob: +44 (0) 7876 [email protected]
Paul IrelandTel: +44 (0) 203 214 1907Mob: +44 (0) 7912 205 [email protected]
James BaruchTel: +44 (0) 20 7182 2011Mob: +44 (0) 7889 [email protected]
MISREPRESENTATION ACT 1967CBRE for themselves and for the vendors or lessors of the property whose agents they are give notice that:(i) these particulars are given without responsibility of CBRE or the vendors or lessors as a general outline only for the guidance of prospective purchasers or tenants, and do not constitute the whole or any part of an offer or contract; (ii) CBRE cannot guarantee the accuracy of any descriptions, dimensions, references to condition, necessary permissions for use and occupation and other details contained herein and any prospective purchaser or tenant should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the accuracy of each of them; (iii) no employee of CBRE (and their joint agents where applicable) has any authority to make or give any representation or warranty or enter into any contract whatsoever in relation to the property; (iv) VAT may be payable on purchase price and/or rent, all figures are quoted exclusive of VAT, intending purchasers or lessees must satisfy themselves as to the applicable VAT position, if necessary by taking appropriate professional advice; (v) except in respect of death or personal injury caused by the negligence of CBRE, its employees or servants, CBRE will not be liable, whether in negligence or otherwise howsoever, for any loss arising from the use of these particulars save to the extent that any statement made in these particulars has been made fraudulently. September 2015. Designed and produced by Creativeworld Tel: 01282 858200.
ALEXANDER HOUSESOUTHEND-ON-SEA