20 COLLINGWOOD STREET NEWCASTLE UPON TYNE NE1 1JFbulkloader.prd.pl.artirix.com.s3.amazonaws.com/1f... · A purchase at this level reflects a net initial yield of 7.10% after purchasers’

Prime Multi-let City Centre Leisure / Office Investment

20 COLLINGWOOD STREET NEWCASTLE UPON TYNE NE1 1JF

FOR SALE

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Investment Summary• A prime leisure / office investment in the heart of Newcastle City Centre.

• Substantial mid-terraced building with attractive stone façade providing accommodation at basement to fourth floor totalling 1,584.00 m2 (17,050 ft2).

• Popular ground floor and basement bar/nightclub in Newcastle’s premier leisure location.

• Upper floor office accommodation with the potential for reversion or future residential development.

• Freehold.

• Let to four tenants including Vaulkhard Leisure Limited t/a Perdu and ESG (Skills) Limited t/a Interserve at a passing rent of £196,435 per annum.

• Weighted Average Unexpired Lease Term (WAULT) of 17.52 years to expiry and 17.21 years to the break options.

We are instructed to seek offers in excess of £2,600,000 (Two Million Six Hundred Thousand Pounds) subject to contract and exclusive of VAT.

A purchase at this level reflects a net initial yield of 7.10% after purchasers’ costs of 6.40%, and a low capital value of £152.49/ft2 and a reversionary yield of 9.29%.



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LocationThe City of Newcastle upon Tyne is located in the North East Region of England, approximately 275 miles north of London, 100 miles north of Leeds and 120 miles south of Edinburgh.

Newcastle International Airport is situated approximately 7 miles to the north west of the City Centre and is accessed via the A167(M) and the A696. Newcastle is a major regional airport handling over 5 million passengers a year serving 80 national and international destinations.

The City is located on the East Coast Mainline that connects London to Edinburgh and as a result benefits from excellent rail connections to the major centres of the UK. There are currently 32 direct train services every weekday to London Kings Cross from Newcastle with a fastest journey time of 2 hours 37 minutes and 1 hour 30 minutes to Edinburgh.

The A1(M) which bypasses the City to the south and west is the principal arterial road to the East Coast of the UK, linking London to Edinburgh. The A19, which runs north – south through the eastern suburbs of the City connects Newcastle to the other main centres within the Region.

Newcastle Central Station is also the main interchange for the Tyne and Wear Metro; the underground rail network which runs throughout Tyneside. The network supports 60 stations throughout Tyne and Wear extending as far as Newcastle Airport to the north west and Sunderland to the south east. The Tyne & Wear Metro is regarded as one of the UK’s most efficient urban transport systems.

London

Perth

NEWCASTLE

Norwich

Southampton

Penzance

Carlisle

Glasgow

Aberdeen

Dundee

Inverness

Manchester

Liverpool

BirminghamShrewsbury

Cardi�Swansea

Plymouth

York

Edinburgh

Belfast

Dublin

M74

M25M3

M4

M5

M40

A1(M)

M11

M20

M6

M1

M62

M1

M90

M8

M23

A PRIME LEISURE / OFFICE INVESTMENT IN THE HEART OF NEWCASTLE CITY CENTRE

SituationThe property is situated on Collingwood Street at the heart of Newcastle City Centre. As well as being at the heart of Newcastle’s traditional office core, Collingwood Street is also now highly regarded as being the prime leisure pitch within Newcastle City Centre forming part of a wider circuit of premium bars and restaurants.

Nearby leisure occupiers include Floritas, Revolution, Tup Tup Palace, Madame Koos and House of Smith as well as being within a short distance from Grey Street which is home to Miller & Carter, Las Igunas, Carluccios, Browns, Harrys Bar and BarLuga.

Collingwood Street is a well regarded office location and has a critical mass of office buildings nearby including Cathedral Square, St Nicholas Building, Merchant House and Collingwood House. This location offers occupiers good amenities and accessibility to Central Station and provide floorplates which are appropriate to the large majority of Newcastle City Centre office requirements. 4

River Tyne

Leazes Park

Exhibi�on Park

NewcastleUniversity

NewcastleBusiness

School

CentreFor Life

BALTIC CentreContemporary Art

Westgate Road

Jesmond Road

Scotswood Road

New Bridge StMarket St

Ponteland St

St JamesParkBarrack Road

St J

ames

Blv

d

EldonSquare

shoppingCentre

Central

Sta�on

Mosely St

COLLINGWOOD STREET IS THE PRIME LEISURE PITCH IN THE CITY CENTRE

20 COLLINGWOOD STREET


5

CENTRAL STATION

TYNE BRIDGE

GREY STREET

NORTHUMBERLAND STREET

20 COLLINGWOOD STREET

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COLLINGWOOD STREET


Newcastle upon Tyne (voted “The Best city in the UK 2014” by readers of the Guardian and Observer) is home to one of the UK’s most buoyant and vibrant nightlife. Over the past 24 months the city centre licenced & leisure industry has experienced substantial investment from a combination of high end national and local operators. Notable occupiers and venues which have recently opened include Miller & Carter, Avieka, The Botanist, Bon Bar, Sky Lounge, Filthy McNastys and Harry’s Bar.

There is continuous investment into Newcastle’s leisure industry supported by a £25 million redevelopment of Eldon Square (Greys Quarter). This flagship redevelopment will provide the city centre with 21 new leisure operators including the likes of TGI Fridays, Giraffe and Bella Italia and anchor luxury operators such as The Alchemist and Chaophraya.

The expansion of national brands has enhanced the cities leisure offering complimented by the ever evolving regional operators. Recent refurbishment initiatives include Pleased to Meet You, Lady Grey’s, Hop and Cleaver, The Redhouse to name but a few. The regional operators continue to meet the demands of their customer requirements with speciality restaurants, Gin bars and those offering craft beers and in-house micro-breweries.

The operator of the subject property (Vaulkhard Group) is amongst the highest regarded leisure operators in the North East with establishments including BarLuga, Bealim House, Pacific House, All Seeing Eye amongst others. High-end refurbishments have recently been completed on Bealim House and Pacific House with the subject property being next on the list to benefit from an additional upgrade. More information can be seen at www.vaulkhardgroup.co.uk.

The property resides in the heart of what has become commonly known as the ‘Diamond Strip’. The Diamond Strip is the most popular city centre location for revellers and offers premium venues such as Revolution, Perdu, House of Smith, Floritas and Tup Tup Palace. The strength of the location is further emphasised with Wetherspoons acquiring the freehold of their property (The Union Rooms) situated within close proximity.

The location also benefits from being within the immediate vicinity of Central Station and a highly densely populated hotel / student area. The Bigg Market (comprising 31 listed buildings and ancient market area) is set for a major redevelopment after NE1 Ltd outlined aspirations to invest £3m into improving the area / public space.

Overall Newcastle’s leisure scene continues to be a UK leader supported by an ever expanding tourist base with the subject property benefitting by sitting at its core.

Licenced & Leisure Market

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AccommodationWe have measured the property in accordance with the RICS Code of Measuring Practice, Sixth Edition, and we confirm the following Gross and Net Internal Areas:

Floor Use M2 Ft2

Basement Leisure 324.42 3,492

Ground Leisure 276.29 2,974

First Offices 247.03 2,659

Second Offices 244.99 2,637

Third Offices 243.50 2,621

Fourth Offices 247.77 2,667

Total 1,584.00 17,050

POPULAR GROUND FLOOR AND BASEMENT BAR/NIGHTCLUB AND UPPER FLOOR OFFICE ACCOMMODATION


TenureFreehold.

TenanciesThe building is let in accordance with the tenancy schedule below:

Tenant Demise Ft2 Passing Rent £/ft2 Lease Expiry

(Break) ERV Comments

Vaulkhard Leisure Limited t/a Perdu

Basement and Ground Floor

6,271 £110,000 23.30 15.05.2041 £130,000

5 yearly rent reviewed upwards only to OMV. Basement rentalised at half of ground floor.

Enhanced Care Group 1st Floor 2,659 £31,908 12.00 - £31,908Under offer based on a new 3 year lease with annual tenant only break options.

Capital 4 Services Limited

2nd Floor 2,637 £22,850 8.67 24.04.2017 £31,644

J & B INS Limited 3rd Floor 2,621 £18,477 7.0502.07.2020 (02.07.2018)

£31,452Capped service charge of £4,648 per annum.

ESG (Skills) Limited t/a Interserve

Part 4th Floor (rear)

1,126 £13,200 11.7201.03.2018

(01.03.2017)£13,512

Gross rent of £21,600 per annum, inclusive of rates and service charge.

VacantPart 4th Floor (front)

1,541 - - - £18,492 ERV - £12.00/ft2

Total 16,855 £196,435 £257,0088

WAULT OF 17.52 YEARS TO EXPIRY



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Covenant StatusVaulkhard Leisure Limited (previously Fluid Design Solutions Limited) t/a Perdu

Vaulkhard Leisure Limited (Company number 05298491) is part of the Vaulkhard Group which is involved in the leisure sector operating several highly regarded leisure operations within the Newcastle area and providing interior design solutions across the leisure sector throughout the UK and Europe. The Vaulkhard Group are known as the most established and successful leisure operator in Newcastle city centre. Venues operated by the Vaulkhard Group include:

All of the above venues are well established in the Newcastle leisure scene.

Further information can be found at www.vaulkhardgroup.co.uk.

Vaulkhard Leisure Limited report the following financial figures:

31 March 2015 £

30 April 2014 £

30 April 2013 £

Turnover 6,294,118 7,149,408 6,964,000

Profit (loss) before taxation 377,260 (£12,850) 612,000

Tangible Net Worth 8,482,484 1,787,586 9,349,000

Enhanced Care Group

Enhanced Care Group offer award winning and affordable Residential, Nursing and Dementia Care Homes.

Further information can be found at www.enhancedcare.co.uk.

Capital 4 Services Limited

Capital 4 Services Limited (Company number 08224095) is a private training provider offering Apprenticeships, Short Courses, Commercial Training and CPC (Certificate of Professional Competence) Training throughout the North East.

Further information can be found at www.capital4training.org.uk.

J & B INS Limited

J & B INS Limited (Company number 05242514) is a local firm of insurance brokers.

ESG (Skills) Limited t/a Interserve

ESG (Skills) Limited (Company number 07703720), is part of ESG Holdings Limited and a subsidiary of Interserve Plc, a multinational support service and construction company based in the UK.

ESG Holdings Limited employs over 800 staff and is a leading supplier of vocational skills and welfare to work services within the UK working closely with Skills Fund Agency (SFA), Department for Work & Pensions (DWP), National Apprenticeship Service (NAS) and European Social Fund (ESF).

Further information can be found at www.learning-employment.com.

ESG (Skills) Limited report the following financial figures:

31 July 2014 £

31 July 2013 £

31 July 2012 £

Turnover 20,713,000 19,589,000 15,743,000

Profit (loss) before taxation 971,000 3,243,000 (1,316,000)

Tangible Net Worth 3,111,000 1,867,000 (1,376,000)

VAULKARD LEISURE - NEWCASTLE’S PREMIER LEISURE OPERATOR

• Perdu• Barluga • Bealim House• Blackie Boy

• Pacific House• Quilted Camel• The Mushroom• All Seeing Eye

ContactFor further information or to arrange an inspection, please contact either of the following:

Douglas Cranston MSc MRICS 0191 594 5023 07867 001 380 [email protected]

Adam Greenwood MRICS 0191 594 5000 07776 858 536 [email protected]

Dickon Wood MRICS 0191 594 5036 07966 023 924 [email protected]

MISREPRESENTATION ACT: Knight Frank LLP give notice to anyone who may read these particulars as follows:-

1. Particulars: These particulars are not an offer or contract, nor part of one. You should not rely on statements by Knight Frank LLP in the particulars or by word of mouth or in writing (“information”) as being factually accurate about the property, its condition or its value. Neither Knight Frank LLP nor any joint agent has any authority to make any representations about the property, and accordingly any information given is entirely without responsibility on the part of the agents, seller(s) or lessor(s). 2. Photos etc: The photographs show only certain parts of the property as they appeared at the time they were taken. Areas, measurements and distances given are approximate only. 3. Regulations etc: Any reference to alterations to, or use of, any part of the property does not mean that any necessary planning, building regulations or other consent has been obtained. A buyer or lessee must find out by inspection or in other ways that these matters have been properly dealt with and that all information is correct. 4. VAT: The VAT position relating to the property may change without notice. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London W1U 8AN, where you may look at a list of members’ names. April 2016.

Knight Frank LLP St Ann’s Quay 124 Quayside Newcastle upon Tyne NE1 3BD


FOR SALEVATThe property has been elected for VAT and therefore VAT will be payable on the purchase price. It is envisaged that the sale will be dealt with by way of a TOGC.

EPCThe property has an EPC rating of D (94).

SPV DisclaimerKnight Frank LLP is not authorised and cannot advise in relation to any sale of shares or units and will act as agents in respect of a sale of the property interest only. We would recommend that you seek your own independent advice in relation to any sales of shares or units in other corporate structures and we are not responsible for any information or opinions provided in respect of any such sale.

ProposalWe are instructed to seek offers in excess of £2,600,000 (Two Million Six Hundred Thousand Pounds) for our clients freehold interest, subject to contract and exclusive of VAT.

A purchase at this level will reflect a net initial yield of 7.10% net of purchasers’ costs of 6.40%. The asking price reflects a low capital value of £152.49/ft2 and a reversionary yield of 9.29%.

We understand the property is held in a Special Purpose Vehicle. There may be tax advantages when purchasing the Special Purpose Vehicle. A purchase at this level of the SPV reflects a net initial yield of 7.42% net of purchasers’ costs of 1.80%.

Documents

20 COLLINGWOOD STREET NEWCASTLE UPON TYNE NE1 1JFbulkloader.prd.pl.artirix.com.s3.amazonaws.com/1f... · A purchase at this level reflects a net initial yield of 7.10% after purchasers’