sovereign house office/leisure … house 1-2 south parade leeds ls1 5ql prime leeds city centre...

PRIME LEEDS CITY CENTRE OFFICE/LEISURE INVESTMENTSOVEREIGN HOUSE 1-2 SOUTH PARADE LEEDS LS1 5QL

PRIME LEEDS CITY CENTRE OFFICE/LEISURE INVESTMENT

SOVEREIGN HOUSE

1-2 SOUTH PARADE LEEDS LS1 5QL


PARK ROW

HEADROW BRIGGATE

LEEDS STATION

01 Law Courts

02 Park Square

03 Town Hall

04 Bank of England

05 Zurich

06 Walker Morris

07 DLA

08 The Light

09 FD Arena

10 Deloitte UBS

11 Pinsent Masons Barclays

12 Trinity Shopping Centre

13 Wellington Place

14 Victoria Gate

01

02

03

04

05

06

07

14

08

1011 12

13

09


INVESTMENT SUMMARY• Multi-let prime office and leisure investment in the heart

of Leeds office and leisure cores.

• Highly prominent corner building with three frontages onto South Parade, Park Row and The Headrow.

• Attractive Grade II listed building extending to 36,291 sq ft (3,371.52 sq m) over basement, ground and five upper floors.

• Let to four tenants with an attractive AWULT of 6.7 years to expiry and 6.5 years to lease breaks.

• Strong tenant occupier profile including Hays, the renowned Bierkeller and Shooters Bar.

• Currently producing £518,646 pa, reflecting a low average rent of £14.15 psf (including guarantee) and £14.48 psf on the office and leisure accommodation respectively.

• Excellent asset management potential to enhance the income and unexpired term.

• Freehold.

• Offers are sought in excess of £6,650,000 (Six Million, Six Hundred and Fifty Thousand Pounds) subject to contract and exclusive of VAT, reflecting a net initial yield of 7.31%, assuming purchaser’s costs of 6.64%, with strong reversionary potential in December 2017 and a low capital value of £183 psf.


LOCATION Leeds is the principal commercial and financial centre of Yorkshire. It forms one of the UK’s largest conurbations and is the 3rd largest city in the UK with a population of 751,500 (Census 2011) and an estimated catchment of 2.2 million within a 30 minute drive.

Leeds is one of the country’s top retail and leisure destinations ranking 4th of the PMA centres and is one of the ‘Big 6’ UK regional offices centres ranking 3rd behind Manchester and Birmingham (PMA). The opening of Leeds Trinity and Leeds Arena in 2013 and Victoria Gate last year has reinforced the city’s reputation as the dominant retail/leisure destination within its extensive catchment.

The city is the 2nd largest financial and legal services centre and is home to 30 national and international banks, 150 legal firms including Addleshaw Goddard, Eversheds and DLA Piper and 200 accountancy firms including Deliotte, KPMG and PWC.

The city is located in the heart of the UK and highly accessible being approximately 35 miles (56 km) north of Sheffield, 44 miles (71 km) north east of Manchester and 194 miles (312 km) north of London and benefits from excellent transport links as follows:

CONNECTIVITY

SHEFFIELD

HULL

YORK

MANCHESTER

MACCLESFIELD

STOCKPORT

HUDDERSFIELD

OLDHAM

BURY

ROCHDALE

CHESTERFIELD

WORKSOP

BRADFORD

CASTLEFORD

SELBY

HALIFAX

HARROGATE

BURNLEY

BARNSLEY

PONTEFRACTWAKEFIELDDEWSBURY

DONCASTER

SCUNTHORPE

PEAK DISTRICT NATIONAL PARK

LEEDSM65 M1

M1

M1

M1

M1

M1

A1(M)

A1(M)M621

M621

M606

A1(M)

M180

M180

M181

M66

M62

M62

M62

M62

M18

M18

M62

M62

M67

M60

M56

A627A665

A646

A1041A19

A63A63

A682 A629

A629

A658

A658

A650

A650

A628

A628

A638A642

A629

A616

A623

A623

A619

A638

A638A159

A159

A631 A631 A631

A158

A159

A159

A630A635A628

A628A628

A567

A660

A166

A165

A614

A614

A164

A671

A646

A646

A6068

A6033

A6036

A6195

A6102

A6182

A1103

A619

A619

A5103

A537

A34

A537

A523

B5359

A6120

A1079

A1079

A1033

A1165

A1035

A682

A59A59

A65

A65

A65

A59

A56

A56

A56

A56

A57

A57

A57

A15

A15

A15

A57 A57 A57

A15A46

A46

A46

A60

A60

A54

A34

A59

A58

A62

A58

A58

A59

A58

A59A64

A64

A19

A19

A19

A61

A64

A63

A63

A64

A61

A6

A6

A1

A1A1

A6

A6

A6

LEEDS BRADFORDAIRPORT

DONCASTER SHEFFIELDAIRPORT

MANCHESTERAIRPORT

ROADThe M621 motorway links the city to the M1 and M62 motorways, 7 miles (12 km) to the south and A1 (M) 10 miles (16 km) to the east, which link the city to London, the Midlands, Manchester, Liverpool and Hull.

RAIL Leeds train station is the busiest in the country by passenger numbers (38 million a year) outside of London and serves as Yorkshire’s hub to the rest of the UK. The fastest train time to London Kings Cross is 2 hours 15 minutes. The new HS2, High Speed Rail link, will reduce travel times to London to 1 hour 28 minutes.

AIRLeeds Bradford Airport lies 7 miles (11 km) to the north west of Leeds city centre. The airport serves over 75 destinations.


SITUATION Sovereign House is exceptionally located in a highly prominent corner position in the centre of Leeds within the traditional office and prime retail/leisure core. Trinity Leeds, The Light leisure scheme, the main retail areas and the train/bus stations are within a few minutes’ walk.

There are a number of restaurant and bar operators nearby on South Parade, Greek Street and Park Row, including San Carlos, Gaucho, Sukhothai and Stockdales of Yorkshire. In addition, Leeds’ newest luxury boutique hotel, Dakota Deluxe, opened in May 2017 on Greek Street which further strengthens the area.

E

PARA

DE

KI

NG ST

BEDFORD ST

THE HEADROW

THE HEADROW

RUSSELL ST

GREEK ST

CALL LN

THE CALLS

KIRKGATE

BOAR LN

VI

CAR

LN

B ISHO

PGATE ST

PRI NCESS SQUARE

ALBI

ON

ST

GEORGE ST

A64 (M)

GREAT GEORGE ST

ALBI

ON

ST

PARK

RO

W

BUTT

S CT

BRIG

GATECOMMERCIAL ST

ALBION PLACE

WELLINGTON ST

QUEBEC ST

UPR

BASI

NGH

ALL

ST

LAN

DS L

ANE

S PARADE

MERRION ST

ST PAUL’S ST

PARK PL

YORK PL

PARK

SQ

E

PARK

CRO

SS S

T

LEEDS ARTGALLERY

LEEDS ARTCATHERDRAL

THE LIGHT

ST JOHN’S CENTRE

MERRIONCENTRE

VICTORIAQUARTER

LEEDS KIRKDALEMARKET

LEEDS STATION

CITYSQUARE

PARKSQUARE

THE CORE

GRAND THEATRE & OPERA HOUSE

50 metres

For more information on our products and services:www.experian.co.uk/goad | [email protected] | 0845 601 6011

Leeds - Central

Experian Goad Plan Created: 16/10/2017Created By: Joiner Cummings

Copyright and confidentiality Experian, 2017. © Crown copyright anddatabase rights 2017. OS 100019885

RBS

GAUCHO

BROWNS

SAN CARLO

CARLUCCIOS

GUSTO

WAGAMAMA

SANTANDER

J D WETHERSPOONTHE ALCHEMIST

GALLERYHOUSE

FOUNTAINHOUSE

PHEONIXHOUSE

SOVEREIGN HOUSE 1-2 SOUTH PARADE LEEDS LS1 5QL

ACCOMMODATION The property has been measured in accordance with the RICS Code of Measuring Practice 6th Edition. The office and leisure areas have been measured on a NIA and GIA basis respectively.

Floor Use Sq Ft Sq M

Basement Leisure 4,331 402.36Ground Floor Leisure 5,348 496.84First Floor Leisure 6,208 576.74Second Floor Office 6,072 564.10Third Floor Office 6,298 585.10Fourth Floor Office – Suite A 2,639 245.17Fourth Floor Office – Suite B 2,442 226.87Fifth Floor Office 2,953 274.34TOTAL 36,291 3,371.52

PLANNING

FIFTH FLOOR

FIFTH FLOOR

FOURTH FLOOR

SECOND FLOOR

DESCRIPTIONSovereign House is an attractive Grade II listed former banking hall originally built in 1864 for The Bank of England. The property extends to 36,291 sq ft over basement, ground and five upper floors. It provides a bar over the basement, ground and first floor and offices over second to fifth floors.

The bar is very well established and configured to provide three different brands: Bierkeller (a German beer hall) in the basement, Around the World Bar on the ground floor and Shooters Sports Bar on the first floor. The tenant has recently taken additional ground floor accommodation and gained listed building consent to extend and reconfigure.

The offices have their own dedicated entrance off South Parade with a communal lobby area providing access to two passenger (eight person) lifts which were new in 2012. The offices are well configured and provide regular modern floor plates which offer excellent flexibility with potential to let on a floor by floor basis or through subdivision. WCs are provided on each floor.

The vacant fifth floor offices have recently benefited from refurbishment including:

• New air conditioning

• Suspended ceiling

• Lighting

• Carpet and decoration throughout


PLANNING Sovereign House is Grade II listed and lies within the Leeds City Centre Conservation Area.

Sports Cafe 2008 (Leeds) Limited were granted planning permission (Ref: 16/00155/FU) in February 2016 to reconfigure the ground and first floor and to expand their ground floor bar area. Plans can be provided upon request.

TENURESovereign House is held Freehold. A copy of the registered title is available on request.

SERVICE CHARGEA service charge is administered by our client. The service charge budget for the current financial year ending 31 December 2017 is £242,563. Further details are available on request.

EPCSovereign House has an EPC rating of D(76). A copy can be provided on request.


TENANCYSovereign House is let to four tenants with an attractive weighted unexpired lease term of 6.7 years (6.5 years to breaks).

UNIT TENANT AREA (SQ FT)

LEASE START

LEASE BREAK

LEASE EXPIRY

RENT REVIEW

RENT (£ PA)

RENT (£ PSF)

COMMENTS

Basement, ground and first floor

Sports Café 2008 (Leeds) Limited

BST: 4,331GF: 5,3481F: 6,208Total: 15,887

26/4/2004 25/4/2029 26/4/2019 £230,000 £14.48 Two co-terimnus leases. The tenant has recently taken a supplemental lease for 1,050 sq ft of ground floor space at £28.57 psf. Schedule of condition relating to the basement vaults.

Second & third floor Hays Specialist Recruitment (Holdings) LimitedGuarantor: Hays Specialist Recruitment Limited

2F: 6,0723F: 6,298Total: 12,370

28/11/2003 27/5/2019 £178,128 £14.40

Part fourth floor (Suite A)

Tube Approach Limited 2,639 18/12/2012 17/12/2022 18/12/2017 £26,260 £9.95 Service charge cap of £17,032.65 pa + RPI. The lease is contracted outside S24-28 of the 1954 L&T Act. December 2017 break notice passed.

Part fourth floor (Suite B)

MacIntosh James & Partners Limited

2,442 27/9/2015 27/9/2018 26/9/2020 £39,963 £16.36 Service charge cap of £17,760.69 pa + RPI. The lease is contracted outside S24-28 of the 1954 L&T Act.

Fifth floor Vacant 2,953 £44,295 £15.00 Vendor to provide an 18 month rent and service charge guarantee.

TOTAL 36,291 £518,646


TENANT INFORMATION

Sports Cafe 2008 (Leeds) Limited

Sports Cafe 2008 (Leeds) Limited is a wholly owned subsidiary of The Burning Night Group. They are a successful and growing bar group which focuses on large premises located in major city centres such as Leeds, Liverpool, Manchester and Cardiff that house multiple concept bars in one site. These brands include Bierkeller, Shooters Bar, and Around The World Bar.

Sports Cafe 2008 (Leeds) Limited report abbreviated accounts only which can be provided upon request. Their ultimate parent company, Burningnight Limited, reported a turnover of £17.38m, operating profits of £493k and a net worth of £3.16m for the year ended 31st July 2016.

Hays Specialist Recruitment (Holdings) Limited

Hays Specialist Recruitment (Holdings) Limited and, their guarantor, Hays Specialist Recruitment Limited are a wholly owned subsidiary of Hays Plc. Hays Plc is a substantial FTSE 250 listed global specialist recruitment and human resources group. The group employs 9,214 people in 33 countries globally.

Hays Specialist Recruitment (Holdings) Limited report abbreviated accounts only which for the year ended 24th June 2016 showed sharedholders’ funds of £8.49m. Their ultimate parent company, Hays Plc, report a turnover of £4.23bn, pre-tax profits of £173.00m and shareholders’ funds of £457.80m for the year ended 30th June 2016.

MacIntosh James & Partners Limited

MacIntosh James & Partners Limited are independent wealth managers providing services to private clients. They provide overall financial planning advice including asset management, retirement planning, tax planning and protection advice. For the year ended 31st December 2015 MacIntosh James & Partners Limited, reported abbreviated accounts showing a net worth of £557k.

Tube Approach Limited

Tube Approach Limited is also a wholly owned subsidiary of The Burning Night Group. Their demise on the fourth floor is the head office for The Burning Night Group and all their bars they own and manage.

Tube Approach Limited report abbreviated accounts only which can be provided upon request.


OCCUPATIONAL MARKET OVERVIEW LEISUREThe opening of Trinity Shopping Centre and Leeds Arena in 2013 and Victoria Gate in 2016 has cemented Leeds as one of the country’s top leisure and retail destinations.

Sovereign House occupies a highly prominent position in the area known for many of Leeds’s best restaurants and bars. Greek Street and the surrounding streets including Park Row and South Parade are home to some of the City’s most popular bars/restaurants including Stockdales of Yorkshire, San Carlos, Gusto, The Alchemist and Gaucho. The Light, the main leisure based scheme within Leeds, sits in close proximity to Sovereign House on the north side of The Headrow.

Demand from restaurant and bar operators has been very strong in recent years in Leeds with new concepts opening including Gaucho on Park Row and Gusto on Greek Street. The 2016 letting to Bills restaurant on the corner of Albion Street and Albion Place reflected a rent of £50 psf. Within The Light on The Headrow rents of £35 per sq ft have been achieved.

OFFICELeeds is one of the ‘Big 6’ UK regional office centres and has proved particularly popular with financial services and legal firms. It is regarded as one of the most important UK legal centres outside of London. Sovereign House sits in the heart of the traditional office core.

2017 is expected to be a record year for Leeds offices. In the first half of the year, take up was 239,732 sq ft and there are a further 500,000 sq ft of active lease requirements including from HMRC and the Government’s Property Unit, which are expected to boost take up in 2017 towards 800,000 sq ft. Furthermore, a new benchmark prime office rent of £30.00 psf was set in May 2017 at 6 Queen Street with a 46,000 sq ft letting to Burberry.

Demand for alternative uses, including residential and student accommodation, has continued to remove secondary office stock from the market and resulted in driving rents forward on refurbished space.


ASSET MANAGEMENT Sovereign House offers a purchaser numerous asset management opportunities including:

• Letting the vacant fifth floor offices.

• Seek lease re-gear with the existing office tenants who have shown interest.

• Low rents offer the opportunity to enhance the income, including:

- The upcoming Tube Approach rent review in December 2017.

- Rent review in 2019 of leisure parts.

• Longer term the building may afford the potential for alternative uses subject to the necessary consents.

VATWe understand the property is elected for VAT purposes. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).

INVESTMENT RATIONALE • Exceptional location within Leeds city centre.

• Highly prominent position on the corner of The Headrow, Park Row and South Parade.

• Prime leisure pitch offering strong trading prospects as evidenced by the existing ground floor tenant taking additional space at £28.57 psf.

• Attractive Grade II listed building providing flexible and well configured modern floor plates.

• Excellent potential for rental growth with the average office rental reflecting only £14.15 psf (including guarantee) and £14.48 psf for the leisure space.

• Strong tenant occupier profile.

• Attractive yield profile and low capital value.

PROPOSALOur client is seeking offers in excess of £6,650,000 (Six Million, Six Hundred and Fifty Thousand Pounds), subject to contract and exclusive of VAT.

A purchase at this level would reflect an attractive net initial yield of 7.31%, after allowing for purchaser’s costs of 6.64%, and a low capital value of £183 psf.


FURTHER INFORMATION

SIMON [email protected]

JOHN BLACKWELL [email protected]

Tel: 020 7409 7828

Disclaimer Notice Messrs Joiner Cummings for themselves and (and their joint agents where applicable) for the vendors or lessors of this property whose agents they are give notice that; (i) the particulars are set out as a general outline for the guidance of the intending purchasers and do not constitute part of an offer or contract; (ii) all descriptions, dimension references to condition and necessary permissions for use and occupation and other details are given in good faith and are believed to be correct, but are given without responsibility and any intending purchasers or tenant should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of them; (iii) all plant, machinery, equipment, services and fixtures and fittings referred to in these particulars were present at the date of preparing these particulars, they have not however been tested and therefore we give absolutely no warranty as to their condition, operation or fitness for the purpose of an intending occupier or purchaser; (iv) no investigations have been undertaken by Joiner Cummings in respect of asbestos, issues concerning pollution and potential land, building, air or water contamination and any intending purchasers or tenant must satisfy themselves by inspection; (v) unless otherwise stated, all prices rents and other charges are quoted exclusive of Value Added Tax (VAT) and any intending purchaser or tenant must satisfy themselves as to the incidence of VAT in respect of any transaction; (vi) no person in the employment of Joiner Cummings has any authority to make or give any representations or warranty whatever in relation to this property; (vii) no responsibility can be accepted for any expenses incurred by intending purchasers in inspecting properties which have been sold, let or withdrawn. The date of this publication is October 2017.

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sovereign house office/leisure … house 1-2 south parade leeds ls1 5ql prime leeds city centre...

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