loNdoN Ec3 - Hall Kemp - Home Royal Exchange...loNdoN Ec3 RARE PRESTIGIOUS FREEHOLD INVESTMENT WITHIN 100 METRES OF THE BANK OF ENGLAND. N o.1 Ro ... BRiTish sTEEl …

N o 1 R o ya l E x c h a N g E av E N u Elo N d o N E c 3

RARE PRESTIGIOUS FREEHOLD INVESTMENT WITHIN 100 METRES OF THE BANK OF ENGLAND

NO.1 ROyAL ExcHANGE AVENUE

N o 1 R o ya l E x c h a N g E av E N u E

ovERviEw

Rare prestigious freehold investment within 100 metres of the Bank of England

Prime city of London location

Attractive refurbished period building providing 13,077 sq.ft. of office and ancillary

accommodation

New 15 year lease subject to a tenant’s option to determine at the 10th anniversary

Five yearly upward only reviews

Securely let with a parent company guarantee from the ultimate holding company,

Business Environment Holding Ltd

Business Environment (BE) has traded for in excess of 20 years providing serviced offices

Proposed rent of £751,928 per annum exclusive (£57.50 per sq.ft. overall)

Excellent opportunity for rental growth and capital appreciation

BE has successfully operated a business centre from the property for 10 years

Highly liquid asset let to an occupier who is heavily incentivised to maintain the premises and

extend the lease upon expiry

2

PRoPosal

Offers are invited, subject to contract, for the

freehold interest.




__________________________ $2.7 TRillioN oF

FoREigN ExchaNgE TuRNEd ovER Each day -

41% oF gloBal FoREigN ExchaNgE__________________________

MONUMENT

BANKDLR

n

NM ROTHScHILD & SONS

ARTHUR J GALLAGHER

NATIONWIDE

VTB BANK

FIDESSA

DAVIS POLK & WARDWELL

PUNJAB NATIONAL BANK

BANK OF cHINA

ING

BLAcKROcK

DEUTScHE BANK

HBOS

GATEHOUSE BANK BRITISH STEEL PENSION FUND

KING & SPALDING INTERNATIONAL

AGRIcULTURAL BANK OF cHINA RK cAPITAL MANAGEMENT

BAKER BOTTSBINGHAM MccUTcHEN

ROyAL ExcHANGE

TOWER 42 122 LEADENHALL STREET

30 ST MARy AxE

20 FENcHURcH STREETTHE LLOyD’S BUILDING

WILLIS

BANK OF ENGLAND

BLOOMBERG PLAcE

MANSION HOUSE

LEADENHALL MARKET

BROADGATE

cANNON STREET

LIVERPOOL STREET

M&GDAIWA cAPITAL MARKETS

cANADA LIFE

ROyAL LONDON GROUP

SOHO HOUSE GROUP

SALES FORcE TOWER

LATHAM & WATKINS LLP

AIG ZURIcH

UBS

cATLIN

MMc

cOLUMBIA THREADNEEDLE cBI

cMS cAMERON McKENNA

WELLS FARGO



__________________________ $2.7 TRillioN oF

FoREigN ExchaNgE TuRNEd ovER Each day -

41% oF gloBal FoREigN ExchaNgE__________________________

__________________________400,000 PEoPlE

aRE EMPloyEd iN ThE

ciTy oF loNdoN __________________________

__________________________loNdoN METal ExchaNgE:

75% oF all NoN-FERRous METal FuTuRE BusiNEss. iN 2015 This EQuaTEd To

$12 TRillioN NaTioNal •

4 BillioN ToNNEs •

170 MillioN loTs__________________________

__________________________ lloyd’s oF loNdoN:

ThE woRlds sPEcialisT iNsuRaNcE aNd

RE-iNsuRaNcE MaRKET oPERaTiNg acRoss 200 TERRiToRiEs ________________________

__________________________

ThE ciTy oF loNdoNEsTaBlishEd ad50 __________________________

__________________________loNdoN sTocK ExchaNgE:

300 yEaRs old aNd RaNKEd FiRsT gloBally iN TERMs oF iNTERNaTioNaliTy wiTh 300 coMPaNiEs FRoM

70 NaTioNs lisTEd __________________________

__________________________ gRoss wRiTTEN

iNsuRaNcE PREMiuMs iNcREasEd 6%

iN 2015 To £26.7 BillioN_________________________

__________________________ 251 FoREigN BaNKs

iN loNdoN _________________________

__________________________530 FoREigN coMPaNiEs

lisTEd iN loNdoN__________________________

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ROyAL ExcHANGE

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THE LLOyD’S BUILDING

BANK OF ENGLAND

MANSION HOUSE

N o 1 R o ya l E x c h a N g E a v E N u E

20 FENcHURcH STREET



SEMAHT REVIR

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locaTioN

1 Royal Exchange Avenue lies at the heart of the financial

centre of the city of London, within 100 metres of the Bank

of England and within a five minute walk of Lloyd’s of London

and the city’s thriving insurance district.

This highly energised commercial environment is steeped in

history and is home to numerous occupiers of international

repute. The Lord Mayors’ Mansion House and Guildhall are

both nearby.

The property is situated in a hidden enclave bordered by

two of the city’s most famous thoroughfares, Threadneedle

Street and cornhill. Access is via an attractive landscaped

piazza which sits adjacent to eastern entrance of The Royal

Exchange.

Royal Exchange is the city’s premier luxury retail

destination. Boutiques include; Hermes, Bulgari,

Tiffany & co, Penhaligon’s, Lulu Guinness and Jo Malone.

The central atrium houses a range of premier restaurants

and bars. These are soon to be complemented by a much

awaited development of 27 Poultry where Soho House and

Sydell Group have teamed up to deliver a flagship 5 star

hotel, restaurants, rooftop bar, health spa and gym.

8

No.1 royal exchaNge aveNue

N o 1 R o ya l E x c h a N g E av E N u E N o 1 R o ya l E x c h a N g E av E N u E

coNNEctivity

The property is within 200 metres of Bank underground station. This interchange provides access to the central and Northern lines, District and

circle and Waterloo and city lines and Docklands light railway (connections to canary Wharf).

Mainline rail and underground services are provided at cannon Street (Mainline, circle and District lines), Moorgate (Mainline, circle, Northern,

Metropolitan and hammersmith & city lines), Fenchurch Street (Mainline) and liverpool Street (Mainline, circle, central, Metropolitan and

hammersmith & city lines) stations, all of which are within a short walk.

communications will be further enhanced in 2018 when crossrail (The elizabeth line) is scheduled to become operational. approximate journey

times and key stations are shown in the diagram below.

Travel Times From Bank (minutes)

* airports not on the crossrail route - to travel to these airports passengers will need to travel on other connecting rail servicesSource:tfl.gov.uk and rac.co.uk

ToTTeNhaM courT roaD

PaDDiNgToN

heaThroW a

irPorT

BoND STreeT

FarriNgDoN

STraTForD

caNary WharF

liverPool STreeT

Circle

Hammersmith & City

Bakerloo

District

Northern

Central

Piccadilly

Heathrow Metropolitan

Hammersmith & City

Stansted

Northern

Central

Central

Jubilee

DLR

Overground

Jubilee

DLR

Metropolitan

Circle

Hammersmith & City

Luton

Gatwick

Central

Jubilee

**

*

Circle

crossrail connections

liverPool STreeT

WaTerloo

KiNgS croSS/ST PaNcraS

BoND STreeT

caNary WharF

vicToria

loNDoN ciTy airPorT

PaDDiNgToN

27

63

1112

14

17

22

N

MONUMENT

STATION

BA

NK STATION

CANNON

STREET

STATION

FENCHURCH

STREET

STATIO

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MOORGATE

STATION

LIVERPOOL

STREET

STATION

1 MiN4 MiNS

5 MiNS

DLR

DLR

N o 1 R o ya l E x c h a N g E a v E N u E

9



dEscRiPTioN

1 Royal Exchange Avenue is an attractive period building benefitting from a return

frontage onto Finch Lane.

BE acquired the property in 2006 at which time a comprehensive refurbishment

was undertaken to provide 13,077 sq.ft. (1,215 sq.m.) of office and ancillary

accommodation.

continual improvement work has maintained the property to a very high standard

and additional refurbishment works were undertaken recently in 2015.

Arranged over lower ground, ground and four upper floors. The floorplates

have excellent levels of natural daylight from two elevations and from a shared

courtyard. They are typically circa 2,300 sq.ft.

BE has successfully operated a high quality business centre from the building for

the last decade. A desire to provide clients with a premium service is such that the

building is continually upgraded and refreshed.

Amenities include:-

A large reception.

Passenger lift serving all floors.

VRV air conditioning / comfort cooling throughout.

Perimeter trunking.

Wc facilities on all floors.

LG compliant light fittings (these are being upgraded to LED as and

when suites revert).

Large decked roof terrace.

Gym, shower and changing facilities.

Fourth Offices 1,535 142.60

Third Offices 2,372 220.36

Second Offices 2,323 215.81

First Offices 2,308 214.41

Ground Offices & Reception 2,470 229.46

Lower Ground Meeting Room & Ancillary 2,069 192.21

FLOOR USE AREA (SQ.FT.) AREA (SQ.M.)

TOTAL 13,077 1,215

accoMModaTioN

The property has been independently referenced in accordance with the latest RIcS code of

Measuring Practice and provides the following net internal floor areas:-

1 0







Bank of England

For indicative purposes only. This plan is based upon the Ordnance Survey map with the sanction of the controller of H.M. Stationary Office. crown copyright reserved.

TENuRE

Freehold.

The area shaded blue denotes basement vaults.

Finch Lane



TENANT FLOOR USE AREA AREA TERM NEXT RENT RENT (£PA) RENT COMMENTS (SQ.FT.) (SQ.M.) REVIEW DATE (£ P.S.F)

Fourth Offices 1,535 142.60 5 yearly £751,928 £57.50

Third Offices 2,372 220.36

Second Offices 2,323 215.81

First Offices 2,308 214.41

Ground Offices & Reception 2,470 229.46

Lower Ground Meeting Room 2,069 192.21

& Ancillary

TOTAL 13,077 1,215 £751,928

Inside 1954 Act.

Business Environment Holding

Ltd will act as surety for the first

five years of the term.

15 years from

completion, subject

to a tenant’s option

to determine at the

10th anniversary

Business Environment REx Ltd

TENaNcy

A leaseback on effective full repairing and insuring terms in accordance with the tenancy schedule set out below.

The lease will be subject to five yearly upwards only rent reviews.

1 5



ThE TENaNT

Be is a private group of companies providing serviced offices throughout the uK with a focus

on central london. The group has successfully traded for 21 years making it one of the most

established in the sector, achieving an operating profit every year.

Be is the second largest independent provider of serviced offices in london with a portfolio of

circa 857,000 sq.ft.. There are seventeen centres, operating 14,000 workstations.

approximately 73.50% of Be’s revenue is generated from london and the South east.

This will rise significantly to in excess of 86% when four new centres are fully integrated.

Further acquisitions are anticipated.

Be places great emphasis on client and employee satisfaction and has won numerous awards

including (on multiple occasions), ‘Business centre of the year’. The group has won this award more

than any other operator. The group has appeared in the ‘Sunday Times Best Small companies To

Work For top 100’ for 7 years. The group has also achieved ‘Investors In People’ status.

The future prospects for Be are well placed in the serviced office sector with rising revenues being

recorded across all of the group’s centres with record turnover and profitability. Moreover, there

is a growing trend towards occupational flexibility and service delivery across virtually all business

sectors.

The following summary has been set out below:-

Further information is available online at www.beoffices.com

Turnover £24,318,779 £9,995,804 £32,385,513 £45,148,493

Operating Profit £10,984,307 £4,053,649 £8,158,765 £12,476,586

Total Assets less Liabilities £89,317,982 £89,649,353 n/a n/a

Business Environment Holding Ltd 31/12/2015 Five months to 2016 Forecast 2017 Forecast Audit 31/05/2016 (With New Centres) (With New Centres) Management

1 6



Investment

london remains the world’s number one destination for real estate investment and is perceived to be

a safe haven for overseas investors given its transparent and competitive market and established legal

system. commercial real estate continues to offer strong returns relative to other asset classes.

capital transactions reached £18 billion in 2015 making it one of the most active years on record

and significantly higher than the 10 year annual average. volumes were lower in the run up to the

european referendum as investors sought clarity. Sentiment has improved during august and

September and a number of transactions have taken place during this period.

Wells Fargo, the world’s biggest bank by capitalisation, has undertaken a circa £300m deal to buy a

new european headquarters in the heart of london’s financial district. The majority of acquisitions

have been undertaken by overseas groups taking advantage of favourable exchange rates. estimates

indicate that the weight of global capital seeking deployment in central london exceeds £40bn.

Leasing

The city of london has a highly diversified occupational market. It is home to numerous global

organisations from the Finance, Insurance, TMT, legal, Professional, accounting, Mining,

commodities and Shipping sectors.

Prime grade a rents during Q2 remained unchanged at £70.00 per sq.ft. The largest share of market

activity (circa 41%) in Q2 was located in the city core. lettings of < 5,000 sq.ft. are currently the most

active sub-sector, representing 20% of take up during Q2 2016 (63% of the number of transactions

recorded).

47% of floor space currently under construction in the city of london is already pre-let, moreover,

supply is 22% below the long term-average of 9.4 million sq.ft..

a number of speculative developments have been put on hold following the Brexit result.

The development pipeline is unlikely to keep pace with tenant demand. as and when full confidence

returns to the market, a supply squeeze is likely to give rise to strong rental performance.

Businesses typically seek greater occupational flexibility during periods of market turbulence.

The serviced office sector is very well placed to take advantage of this.

recent leasing transactions:

17 Moorgate, ec2 Q2 2016 Fh 15,977 £16.90m 3.50% £1,057

50 cannon Street, ec4 Q2 2016 Fh 26,115 £29.60m 4.50% £1,149

32 cornhill, ec3 Q2 2016 Fh 14,792 £21.00m 4.25% £1,420

Watergate house, Wc2 Q2 2016 Fh 11,187 £19.90m 3.77% £1,779

1 Bishopsgate, ec2 Q1 2016 Fh 26,406 £32.75m 3.33% £1,240

39 cornhill, ec3 Q1 2016 Fh 20,295 £24.00m 2.90% £1,183

33/35 cornhill, ec3 Q4 2015 Fh 14,087 £14.80m 2.96% £1,050

Address Date Tenure Area (Sq. Ft.) Price NIY Capital Value

1 carey lane, ec2 Q3 2016 opus ltd 2,283 £79.50

32 cornhill, ec3 Q3 2016 Mattos Filho 1,562 £75.00

augustine house, ec2 Q3 2016 MrI Software 3,463 £67.50

6 Dowgate hill, ec4 Q2 2016 Minter ellison 2,404 £70.00

3 copthall avenue, ec2 Q2 2016 Mulvaney capital 3,334 £67.50

26 Throgmorton St, ec2 Q2 2016 Monex europe ltd 3,132 £65.00

37/39 lime Street, ec3 Q2 2016 Norwegian hull club 1,418 £65.00

32 cornhill, ec3 Q1 2016 eQS 600 £80.00

21 great Winchester St, ec2 Q1 2016 The PFa charity 3,721 £70.00

6 Dowgate hill, ec4 Q1 2016 arrow ecS 6,318 £70.00

Address Date Tenant Area (Sq.Ft.) Reported Headline Rent (£ PSF)

MaRkEt coMMENtaRy

Britain’s economy is the 5th largest globally and the 2nd largest in europe. unemployment is at its

lowest level for a decade. consumer sentiment and retail sales appear strong and inflation is low.

The governor of the Bank of england has observed that the uK’s financial system has consistently

strengthened over the last 8 years and that the capital allocations of our largest banks is 10 times

higher than pre the collapse of lehman Brothers in 2008.

1 7

recent capital transactions:



CORNHILL

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ROYAL EXCHANGE AVENUE

OFFICE

OFFICE

RECEPTION

OFFICE

OFFICEOFFICE

OFFICEOFFICE

LIFTWC

ENTRANCE

GROUND FLOOR

For indicative purposes only. Not to scale.

TyPIcAL UPPER FLOOR (SEcOND)

CORNHILL

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1 8





PlaNNiNg

grade II listed and situated within the Bank conservation area.

caPital allowaNcEs

No capital allowances are available.

EPc

The property has an energy

Performance certificate (ePc)

rating of D.

vat

The property is elected for vaT.

hall KeMP

37-39 lime Street

london ec3M 7ay

Tel: 020 7100 5555

Douglas hall

Tel: 020 7100 5555

[email protected]

MIchael ellIoTT

3 hanover Square

london W1S 1hD

Tel: 020 7493 8184

Mark Shipman

Tel: 020 7529 5708

[email protected]

Nathan Sugar

Tel: 020 7529 5716

[email protected]

PRoPosal

offers are invited, subject to contract, for the freehold interest.

FuRthER iNFoRmatioN

For further information please contact the vendor’s joint sole agents:-

2 0



MISREPRESENTATION ACT 1967 AND DECLARATION

Hall Kemp (trading name of HK Property Services Ltd) and Michael Elliott LLP for themselves and for the vendors of this property who agents they are give notice that:

a) the particulars are set out as general outline only for the guidance of intending purchaser’s and do not constitute, not constitute part of, or an offer or contract b) all descriptions, dimensions, references or condition and necessary permissions for use and occupation, and other details are given in good faith and are believed to be correct, but any intending purchaser’s should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of them c) no person in employment of Hall Kemp (trading name of HK Property Services Ltd) or Michael Elliott LLP has any authority to make or give any representation or warranty whatever in relation to this property.

PROPERTY MISDESCRIPTION ACT 1991

These details are believed to be correct at the time of compilation but may be subject to subsequent amendment.

September 2016.

PRoPosal

Offers are invited, subject to contract, for the freehold interest.

FuRThER iNFoRMaTioN

For further information please contact the Vendor’s joint sole agents:-

Documents

loNdoN Ec3 - Hall Kemp - Home Royal Exchange...loNdoN Ec3 RARE PRESTIGIOUS FREEHOLD INVESTMENT WITHIN 100 METRES OF THE BANK OF ENGLAND. N o.1 Ro ... BRiTish sTEEl …