alexander house, reading original brochure
DESCRIPTION
TRANSCRIPT
High Yielding Secure South East Office Investment
ALEXANDER HOUSE205/207 KINGS ROAD, READING RG1 4LW
LOCATION
Reading is the major commercial and administrative centre in the Thames Valley, located approximately 40 miles west of London and 26 miles south east of Oxford, with a population of over 230,000 (2001 Resident Urban Population).
Reading is the UK’s most populous town without city status.
RoadThe town has excellent road communications with junctions 10,11 and 12 of the M4 motorway immediately south of the town centre, affording rapid access to the national motorway network and the following destinations:
Maidenhead 16 milesWindsor 20 milesHeathrow Airport 30 milesOxford 41 milesCentral London 42 miles
INVESTMENT SUMMARY
• Reading is the largest commercial centre in the South East outside of London
• Reading boasts excellent road, rail and air connectivity that has contributed in attracting major
multi-national organisations such as Oracle, Microsoft and Cisco
• Alexander House occupies a prominent position on Kings Road, a main arterial route linking the
town centre and the A3290/A329M
• The property is situated less than 3/4 of a mile from Reading Station and the Oracle Shopping
Centre and less than 2/3 of a mile from the dual carriageway A3290
• The building extends to 12,899 sq ft (1,198.3 sq m) with excellent parking for 47 cars (1:269 sq ft)
• The entire property is let to Aon Ltd until 28/9/2017 (5.5 years) at a current rent of £305,000
(£24.21 psf)
• Aon Limited has net current assets of £364M and a Dun & Bradstreet rating of 5A1
• Offers in excess of £2,650,000
• Initial yield of 10.9% (net of purchaser’s costs of 5.8%)
10
11
4 9
7
12
13
14
15
16
8 9/
11
M40
M23
M4
M25
4
A329 (M)
A4
A34A339
A34
A4A4
A24
A24
A23
A329
A316
A33
A40
A405
A205
A40
A30
A30
A30
A33
A3
A3
M1
MAIDENHEAD
WINDSOR
STAINES
SUTTON
LONDON
4a
FARNHAM
NEWBURY
5
M3
A329
KINGSTON
PADDINGTON
WATERLOO
UXBRIDGE
BRACKNELL
REDHILL
WOKING
8
4
M25
A31
A32010
HIGH WYCOMBE
12
GUILDFORD
A217
GATWICK
HEATHROW
SLOUGH
CHERTSEY
FARNBOROUGH
BASINGSTOKE
SOUTHAMPTON
CAMBERLEY
76
A4074
A4155
A327
13 READING
6
1
1
1
1
BRISTOL &SOUTH WALES
OXFORD
BRIGHTON
RailThe town centre mainline railway station is the second busiest outside of London and acts as major southern hub. The station is currently undergoing a substantial upgrade which will increase its passenger capacity to 35m passengers per year by 2016.
There is stong speculation that Network Rail will extend Crossrail to Reading by 2018.
Central London 25 minutesOxford 23 minutesBristol 53 minutes
AirHeathrow Airport is 28 miles to the East and is easily accessible via the nearby M4 motorway, with an approximate journey time of 30 minutes. Gatwick Airport is located approximately 60 miles to the east with a journey time of 60 minutes.
READING
The Thames Valley has a strong telecoms, computing and research presence derived from both the public and private sectors. A large number of the world’s largest companies are present in the area. As an IT cluster it is second only to California’s Silicon Valley and therefore the most high-tech location in the UK.
In employment terms Reading boasts a higher than average representation in computing, R&D and telecoms. The town’s highly educated and skilled employment pool largely originate from the university, encouraging organisations not to relocate away from the town.
Large numbers of major multi-national organisations have been attracted to Reading and companies such as Oracle, Microsoft and Verizon have established their European HQs in the town. Other substantial occupiers include Foster Wheeler, Thames Water, British Gas, Prudential, BMW, Cisco and Siemens.
Reading has benefited from considerable infrastructure investment over the past decade. This investment continues with a £850M project to improve the town’s station.
SITUATION
The property is prominently situated fronting the Kings Road at the junction of Rupert Street and approximately 3/4 of a mile east of Reading town centre and its comprehensive retail facilities.
Junction 10 of the M4 is easily accessed via the A329M, which lies 2/3 of a mile to the east of the property.
The surrounding area provides a mix of offices, residential and educational uses.
ALEXANDER HOUSE
ALEXANDER HOUSE205/207 KINGS ROAD, READING RG1 4LW
DESCRIPTION
The property was completed in 1992 and comprises a modern self-contained, air-conditioned office arranged over ground and first floors. Car parking is provided in secure surface and basement car parks.
The building has regular L-shaped floor plates with a central core. Each floor benefits from male and female toilets with the ground level having an additional disabled toilet.
The base specification includes:
• Air-conditioning
• Raised floors
• 12 person passenger lift
• Suspended ceilings
ACCOMMODATION
The property has been inspected and measured in accordance with the 6th edition of the Royal Institution of Chartered Surveyors Code of Measuring Practice.
The net internal floor areas can be summarised as follows:
Ground Floor Reception 606 sq ft 56.3 sq m
Ground Floor Offices 5,808 sq ft 539.6 sq m
First Floor Offices 6,485 sq ft 602.4 sq m
TOTAL 12,899 sq ft 1198.3 sq m
The site area is approximately 0.4 acres.
A total of 47 car spaces are provided giving an excellent town centre ratio of 1:269 sq ft (1:25 sq m).
LB
LONDON ROAD
SKI
NGSG
ATE
RUPE
RTST
REET
El Sub Sta
Saxon
Alexander House
ClubPrincipal Court
Haven Court
House
318
Haven
320
Court
78
308to314
2
139
910
129
Avon
3
147
4
1 to 7
King
dom
Hall
Court
1
Club
25to45
1 to 53
The Pinnacle
318a
1 to 99
Crossway Point
El Sub Sta
43.6
43.8m
KING'S ROAD
NORWOOD ROAD
(PH)
6
Hal
231
Bapt
ist
5
9
30
Wyc
liffe
108to112
C
Upin ArmsPCs
16
Baths
0m 10m 20m 30m
Ordnance Survey © Crown Copyright 2012. All rights reserved. Licence number 100020449. Plotted Scale - 1:1124
READING OFFICE OFFICE MARKET
During the downturn Reading has emerged as one of the most resilient south-east office centres, accounting for 42% of the south east take up in 2010.
Reading is the largest office market in the south east with a total stock of 12.1m sq ft representing 20% of the M4/Thames Valley market and 7% of the entire south east market.
According to Experian, the Reading area will benefit from above average economic growth up to 2026. This will cement Reading’s status as the economic capital of the Thames Valley.
There are currently no speculative developments underway which has resulted in Reading being one of the few office locations nationally to see rental growth in the last 12 months. Prime rents in town are currently £30.00 sq ft and out of town £27.50 sq ft.
TENUREThe property is Freehold.
TENANT FINANCIAL INFORMATION
D&B Risk Assessment – 5A1 – Minimum risk of business failure.
AON LTD 31 Dec 2010 (000’s) 31 Dec 2009 (000’s) 31 Dec 2008 (000’s)
Sales Turnover 640,490 645,989 530,633
Profit Before Taxes 100,032 27,740 126,656
Net Worth 364,175 175,742 170,864
TENANCY
Tenant Area sq ft Lease Start Lease Expiry Rent Review Current Rent per annum Rent psf
Aon Ltd 12,899 11.11.1992 28.09.2017 29.09.2012 £305,000 £24.21 per sq ft
For idicative purposes only.
AON Corporation, AON Ltd’s ultimate parent, employs 50,000 employees globally with 2010 total annual revenue exceeding $8.5bn.
Misrepresentation Act 1967:BNP Paribas Real Estate Limited for themselves and for the vendor(s) of this property whose agents they are, give notice that:i) These particulars do not constitute, nor constitute any part of, an offer or contract.ii) None of the statements contained in these particulars as to the properties are to be relied on as statements or representations of fact.iii) Any intending purchaser must satisfy himself by inspection or otherwise as to the correctness of each of the statements contained in these particulars.iv) The vendor(s) or lessor(s) do not make or give and neither BNP Paribas Real Estate Limited nor any person in their employment has any authority to make or give, any representation or warranty whatever in relation to this property.
Finance Act 1989:Unless otherwise stated all prices and rents are quoted exclusive of VAT.
Property Misdescriptions Act 1991:These details are believed to be correct at the time of compilation, March 2012, but may be subject to subsequent amendment.
CONTACTS
Richard Talbot-WilliamsTel: 020 7338 4244
Charles InghamTel: 020 7338 4336
Edward CornwellTel: 020 7484 8126
VAT
The property is elected for VAT purposes and it is anticipated that the transaction will be treated as a TOGC.
PROPOSAL
Offers in excess of £2,650,000 for the freehold interest reflecting a net initial yield of 10.9% net of usual purchaser’s costs of 5.8%.
INVESTMENT CONSIDERATIONS• Excellent transport links• Core Thames Valley location• Freehold• Excellent car parking ratio - 1:269 sq ft• Blue chip tenant/income
• Potential future alternative uses
Date Town Property Price Yield Capital Value psf Size sq ft Term Certain Purchaser
Jan 2012 Guildford 65 Woodbridge Road £11.6m 6.52% £380.00 30,505 6.5 years Mayfair Capital
Jan 2012 Uxbridge Anixter House £5.3m 10.5% £221.00 24,000 1 year Aviva
Dec 2011 Reading 3 Manor Park £8.0m 7.35% £222.00 36,050 10.8 years Private Investors
Aug 2011 Redhill 25 Clarendon Road £3.45 10.4% £230.00 15,000 4.0 years Boultbee
Aug 2011 Watford 40 Clarendon Road £9.95 9.5% £201.00 49,393 2.5 years Threadneedle
Dec 2010 Reading Adelphi Building £7.34m 7.6% £253.10 29,000 7.5 years F&C
July 2011 Cambridge 140 Cambridge Science Park £6.32m 7.85% £263.33 24,000 3.5 years Mayfair Capital
Jul 2010 Theale 1600 Arlington Business Park £13.25 10.4% £230.00 57,100 5.2 years Praxis
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