A major land holding on one of Europe’s most successful and best known office parks A Major Land Holding on one of Europe’s most Successful Office Parks 1
Introduction We are pleased to present the opportunity of acquiring the last undeveloped site on Stockley Park, West London, known as Phase 3. Stockley Park is the office park destination of choice for both the West London and the greater South East markets. Over 30 companies are accommodated in 26 buildings designed by some of the world’s leading architects, all of which benefit from extensive amenities, a mature landscaped environment and unrivalled national and international transport connections. Phase 3 Stockley Park provides a critical mass extending to 30 acres with planning permission secured in 2000 to accommodate up to 538,195 sq ft GEA of headquarters office space, arranged in a five building scheme.
Phase 3 is an opportunity to deliver a next-generation urban business park in a prime West London location.
3
18 14
Welcome to
5 17
19
Stockley Park
11
12
20
13
16
A 14 10
9
8
15 7 6 5
2 3 4
1
1
1
PHASE 3: THE SITE
Stockley Park Key Occupiers 1. GSK 2. Celgene 3. Suntory 4. M&S 5. BP 6. IMG 7. Fiserv
8. Webfusion 9. Activision 10. World Vision 11. Gilead 12. Sharp 13. Apple 14. Canon
15. Regus 16. IBM 17. JLL 18. Hasbro 19. Aspect 20. Coats A. The Arena
Also see map at www.stockleypark.co.uk
4
The Opportunity • Phase 3 Stockley Park secured planning permission in 2000 for a five building 538,195 sq ft GEA office development providing approximately 450,000 sq ft of net lettable space together with 1,143 car parking spaces. • Phase 3 is a unique opportunity. It is of a scale that enables place making, offers first mover timing advantage in the West London market and provides an unbroken office park holding which is a rare commodity. • Phase 3 is the only development site in West London of this scale ready to accommodate the growing corporate occupier activity and pre-let requirements.
• The Park’s connectivity will be further enhanced in 2018 with Crossrail serving West Drayton, a 10 minute walk from Phase 3 Stockley Park. • Phase 3 Stockley Park is a prime Headquarter office development site totalling approximately 12.20 Ha (30.10 acres). • Market conditions to deliver the final phase on this iconic scheme are perfect. The West London occupational market continues to be under supplied (3.3% Grade A vacancy rate) whilst current occupational demand of 3 million sq ft continues to escalate.
• Current market evidence and underwriting assumptions (rental levels and exit yields) are at a substantial discount to the West London market long term average.
• We are instructed to seek offers in excess of £35,000,000 for our client’s freehold interest in Phase 3 Stockley Park. This reflects approximately £65 per sq ft on the developable area and also provides a conservative 20% ungeared profit on cost return profile.
• Stockley Park is an exceptional office park which has gained international recognition and has attracted a strong cluster of global corporate occupiers.
• The timing of the purchase of Phase 3 Stockley Park at this point in both the economic and property market cycles is opportunistic and advantageous.
• Stockley Park is located only 2 miles from London Heathrow Airport and 15 miles west of Central London.
A major land holding on one of Europe’s most successful and best known office parks 5
The Stockley Park Brand
6
Stockley Park is the benchmark by which all other UK office parks are assessed. Its unprecedented success is proven by both the occupiers it has attracted as well as the calibre of investors who have purchased buildings on the Park.
The Park has been developed in phases since the mid 1980s and has involved some of the world’s leading architects and designers including Arup Associates, SOM and Foster & Partners.
Stockley Park offers the benefit of unrivalled communication links, excellent on-site amenities and high quality office accommodation. All of this has helped to attract an occupier mix comprising an array of the leading global organisations.
Stockley Park is held in high regard both nationally and internationally and has won over 20 awards, including the International Award for Excellence of the Urban Land Institute and the Financial Times Architecture at Work Award.
Stockley Park is held in high regard both nationally and internationally
Stockley Park Corporate Occupier Profile Total built stock at Stockley Park is approximately 1.7 million sq ft, making it one of the largest developments of its type in Europe. Combined with the highest quality of design and set in a rich vibrant setting, Stockley Park has attracted some of the world’s most prestigious global occupiers.
A major land holding on one of Europe’s most successful and best known office parks 7
Stockley Park – Timeline
1986
1991
2000
2014
Construction of the first phase of buildings commenced in the mid 80s. Speculatively funded, the development was pioneering, converting high tech land into a fully master planned, forward looking business park.
By the early 90s the final buildings on Phase 1 had been constructed and amenity hub installed. 3 Furzeground visually links the original phase of buildings to its predecessors. The arrival of GSK saw development commence to the west of Stockley Road land adjoining the Phase 3 site. The Park had gained National and European recognition as the office park of choice for the modern corporate occupier.
The turn of the millennium introduced a new phase of buildings to the Park. The Square (referred to as Phase 2) saw delivery of 5 new buildings pioneering in both design and architectural treatment. A principal feature of the Arup designed buildings is an outer glazed ‘skin’ wrapped around the building to improve performance and increase potential for energy saving. The buildings are still considered amongst the best offices in the South East.
Phase 3 provides an opportunity to build on the last 30 years of success. The brand is established and reputation amongst corporates second-to-none. The Phase 3 land has been prepared to enable delivery of real estate which can meet and exceed the requirements of the modern corporate.
Momentum continued into the late 80s as a number of high profile corporates chose Stockley Park as their headquarters.
8
The arrival of Crossrail will enable the evolution of Stockley Park into an urban office park with a mixed mode transport system.
A Managed, Master Planned Business Environment Stockley Park is one of Europe’s premier office parks having been developed over the years by the Stockley Park Consortium (Kajima, M&G Real Estate and Aldersgate). The Park benefits from world-class, multi-modal transport infrastructure which provides fast and affordable connectivity both nationally and internationally. Set within 415 acres (168 hectares) of landscaped environment, the Park offers the benefit of unrivalled communication links, excellent on-site amenities and high quality accommodation. All of this has attracted a tenant mix comprising an array of global corporate brands including GSK, Apple, Sharp, Marks & Spencer and Canon. The Park’s unprecedented success to date is proven by both the tenants it has attracted as well as the global investor base who have purchased buildings on the park. The Park now totals over 1.7 million sq ft of Grade A office accommodation in 26 office buildings. A major attraction of Stockley Park to its global occupier base is its fully-managed, master planned environment. The arrival experience embodies professionalism, promotes corporate identity and provides occupiers with unrivalled presence. The amenities complete the Stockley Park experience, offering a business community with convenient services, social meeting places and recreation all within a pleasant waterside environment. In addition to this, the Park benefits from extensive landscaping with 11 lakes across its entirety, providing attractive settings for the office properties and a tranquil working environment with numerous cycle, footpaths and running tracks meandering throughout it.
The Arena Building, located within 10 minutes’ walk from the Phase 3 site, is the amenity hub serving the existing buildings on the Park comprising: • A Virgin Active gym, pool and café
• Costa coffee shop
• Bakery
• Wine bar
• Public house
• Newsagent
• Dry cleaners
• Serviced offices
Stockley Park also has an 18 hole golf course and the Busy Bee nursery which provides childcare throughout the working day (situated adjacent to Phase 3). The Phase 3 development will benefit from Stockley Park’s existing and improving amenity offer. Furthermore, subject to planning, the development opportunity is of significant scale to justify delivery of an amenity-rich scheme to meet and exceed occupier expectations. The welfare of both staff and buildings are of paramount importance to occupiers. The Park’s security is run by the management company which mans the park 24 hours a day, 365 days a year. Utilising mobile patrols, foot patrols and extensive CCTV coverage, the security team monitors the park facilities day and night, meeting occupiers and landlords requirements for effective security with a subtle presence, which does not impact upon day to day business operations of occupiers.
A major land holding on one of Europe’s most successful and best known office parks 9
RD AM
D
EY
IVER
A20
044 A3
Stockley Park is located on the A408 dual carriageway providing direct access to Junction 4 of the M4 motorway, allowing easy access to and from Heathrow International Airport and Central London. The A408 also connects directly to the M40 motorway which links London with the UK’s second city, Birmingham. Destination Junction 4 of the M4
Distance 1 mile
Junction 15 of the M25
2 miles
Junction 1 of the M40
10 miles
Central London
15 miles
10
A23
OR D
RD
LANE
GREE NF
IN G
12
2 0 TH E BR O
RD
HAYES & HARLINGTON
J3
A4 COLNBROOK BY -PASS
BRENTFORD A4 GREAT WEST RD
A4
J14
BAT
HEATHROW AIRPORT
HEATHROW
H RD LO ND ON RO AD
M23
0 A3
Public Transport (Rail & Bus)
Air
Stockley Park can be reached from Central London via overland train or the Underground network. There is a direct train link from London Paddington to Hayes & Harlington which takes approximately 17 minutes and numerous bus routes from Hayes & Harlington to Stockley Park which takes a further 5 minutes. There are also buses from the Park to Heathrow Airport and the Heathrow Express provides a frequent service to London Paddington with a journey time of 20 minutes.
Heathrow Airport caters for approximately 70 million passengers per year and is viewed as the aviation hub of the world. With the opening of Terminal 5 at a cost of £4.2 billion, Heathrow Airport is now equipped to handle the predicted doubling of air passengers over the next 20 years. The opening of the redeveloped Terminal 2 in June 2014 at a cost of £2.56 bn will provide a home to the 22 Star Alliance airlines and accommodate 20 million passengers a year.
The 350 and U5 Stockley Park Link buses offer regular services from Hayes & Harlington and West Drayton stations with the A10 serving Heathrow Airport and Uxbridge town centre. Journey times are 10 minutes and operate from 4am to 12.30am. An express link bus additionally serves the Park by Uxbridge underground station and Heathrow.
Heathrow has 990 departures each week to key business destinations in Asia, America and Europe.
Destination
Distance
The proximity to the national motorway network also allows for easy access to London’s other major airports, Gatwick, Luton and Stansted. Destination
London 15 miles
BOSTON MANOR
M4
M25
HANWELL
ADWA Y
J4
J4b
M4
J5
ROAD OR LL M O
Road
A3
I P ROAD
NW E
This combination of the Park’s connectivity, access to a large labour force and close proximity to Heathrow Airport and Central London make this the ideal business location.
M3
S TA
Stockley Park provides occupiers with an unrivalled office park location being just 15 miles west of Central London and 2 miles from Heathrow
IS L
E
SOUTHHALL
E
A24 A309
A4 0
HYD
WEST DRAYTON
U X BR IDGE R D
TO NR
NORTH
M25 SLOUGH
RU
L AVENUE S HI L
D
A2
A30
Stockley Park Phase 3
STOCKLEY RD A 408
Central London
M4
K ING
A3
M25
N G DON HIL L
G LI N HAR 37 A4
A40
LI
AVEN U
YE AD
RD IDGE XBR
GREENFORD
N
A312
U
A12
H IL
Stockley Park Phase 3
A408 HIGH ST
SL O
WES TER
A437 LO
HILLINGDON
NORTHHOLT
A40
NG LANE
UXBRIDGE
D
R UG H
D
Stockley Park – Strategically Located
R
UXBRIDGE
A406
SOUTH RUISLIP
DR
WL CO
NH DE
A10
M40
RUISLIP GARDENS
ICKENHAM
EN
M11
WEST RUISLIP
J1
J16
GREENF ORD R D
D AKELE Y S R SW
M40
ST WE
M1
Distance
West Drayton Station
1 mile
Heathrow
2 miles
Heathrow Airport
2 miles
Gatwick
40 miles
Uxbridge Station
4 miles
Luton
40 miles
Hayes & Harlington Station
4 miles
Stansted
70 miles
Heathrow Airport
Junction 4
Central London 15 miles
M25 Motorway 2 miles
M4 Motorway 1 mile
West Drayton Station 10 minutes walk
J1 M40 Motorway 3 miles 11
West Drayton Station
Agreed Towpath Access (2009 / 10 Masterplan)
12
Stockley Park – Unrivalled Connectivity Crossrail
Key Facts
West Drayton station (which is located within a 10 minute walk of Phase 3 Stockley Park), will be served by Crossrail. The introduction of Crossrail in 2018 will further enhance Stockley Park’s connectivity with a high speed service. The estimated journey time from West Drayton to Bond Street will be only 22 minutes.
• 22 minutes to the West End • 29 minutes to the City • 10 minutes walk from the site
At a cost of approximately £14.8 bn Crossrail will arrive at nearby West Drayton station in 2018. The Crossrail route will run over 100 km from Reading and Heathrow in the west, through new tunnels under Central London to Shenfield and Abbey Wood in the east. West Drayton, the closest station to Stockley Park Phase 3 being just a 10 minute walk away will undergo significant improvement to coincide with the arrival of Crossrail. Crossrail will deliver a fast, high capacity service using new rolling stock which will link the South East’s principal employment hubs; Heathrow, the West End of London, The City and Canary Wharf.
Crossrail Map
* * District Central
Taplow
Slough
Maidenhead Burnham
Langley
Iver
Hayes & Harlington
West Drayton
Southall
Heathrow Airport Piccadilly
Hanwell
Ealing Broadway
West Ealing
Acton Main Line
Jubilee Central
Bond Street Paddington Circle Bakerloo District Hammersmith & City
Luton Gatwick Thameslink Metropolitan Hammersmith & City Circle
Hammersmith & City District Overground
Farringdon
Whitechapel
Tottenham Court Road
Eurostar DLR Jubilee Central
1 stop DLR
Stratford
Liverpool Street
Northern Central
Circle Metropolitan Northern Central Hammersmith & City
*
Canary Wharf Jubilee Canary Wharf 200m
DLR West India 100m
Stansted
The onset of Crossrail will connect Stockley Park Phase 3 to Central London in just 22 minutes
Images used with the kind permission of Crossrail Limited
A major land holding on one of Europe’s most successful and best known office parks 13
14
Phase 3 Realising the Future Vision
15
The Site – Prepared To Enable Swift and Derisked Development The Stockley Park Phase 3 site extends to approximately 12.20 Ha (30.10 acres) in size, and is located immediately west of Stockley Park Phases 1 and 2 and therefore represents a natural extension to the already established business environment. The site is bounded to the north by Horton Road, beyond which is Stockley Park Golf Club, by Ironbridge Road to the east, the Grand Union Canal to the south and Horton Road Industrial Area to the west. The site has undergone significant works to prepare for development of the scheme consented in 2000. The site was reclaimed and remediated between 1989 and 1991, including the removal of waste landfill off site and backfilling with inert graded bulk fill material, and the extensive infrastructure and mature landscaping that characterises the site today was built in accordance with the master plan in 2000-2002. Key features include an avenue of semi-mature oak trees at the north east corner of the site, facing the Horton Road roundabout, and a raised level plateau running through the centre of the site grading out the gentle level change from the north-east corner to the south-west corner and forming the central square of the master plan.
16 A major land holding on one of Europe’s most successful and best known office parks
A network of internal service roads has been laid out providing access to the plots and car parking. Additionally the site is serviced with gulleys, ducts and utility corridors running underneath or alongside these roads laid out to support the arrangement of the five office buildings as designed in the 2000 scheme. The western part of the site is within the Green Belt and the eastern part is within the Hayes / West Drayton corridor which is identified as an Industrial and Business Area within the Hillingdon UDP. The site is adjacent to Strategic Industrial land and falls within the Heathrow North Opportunity Area.
2
3
1
4
5
17
The Site Infrastructure
Civil Works
Gas Supply
Between 2000 and 2002 a substantial amount of site works were undertaken and infrastructure installed, pursuant to the outline planning permission, to service and prepare the site for the construction of the consented buildings. As a result of these works, the purchaser will benefit from a significant amount of front-end works having already been carried out, significantly shortening the time frame to scheme delivery and materially reducing the cost of preparing the land for development.
Nuttall undertook the civil works on site between March 2001 and May 2002, including:
Transco installed the gas ring main and connections to office plots 1 – 5. The site is connected to the mains gas.
• Construct and reinforce earth retaining banks
Electricity Supply
• Excavate the site and backfill to form the service road network which surrounds the central raised plateau and circles the perimeter. The service roads have been completed to base course finish, foundations for speed humps with kerbs installed
Southern Electric excavated and installed an electric ring main on the site. Plots 1 and 2 are connected to the mains supply. Electricity supply capacity to the site is 5.0MVa and Southern Electric carried out off-site network reinforcement work to support this level of supply.
• Network of footpaths laid out finished to base course with edgings
Environmental
Since 2000, in preparation for the development of the consented scheme, over £12 million has been spent on infrastructure works alone.
• Storm drain network installed with manholes and covers • Foul pumping station with pumping main
In 2005 Davis Langdon (AECOM) prepared a summary report identifying the extent of works that were carried out for the Stockley Park Consortium on the site.
• Network of IT / telecom ductwork installed across the site with access chambers and covers
Earthworks
• Excavate and lay main irrigation ring main with connections
PJ Carey were appointed to undertake the earthworks. These were executed between August 2000 and June 2001.
• Cast concrete bases installed for sub stations
• Excavate and lay cabling for street lighting • Excavate trenches for gas and water installations
• Levelling of the site
Water Supply
• Stabilisation of the sub grade
Three Valleys Water carried out works over the course of 12 months to install the water ring main, wash points and onward connections to the off-site water main. Thames Water carried out a flow rate study between December 2000 and May 2002.
• Laying of land drainage systems • Laying of piling mats to plots 1 – 5 • Importing topsoil for landscaping
18 A major land holding on one of Europe’s most successful and best known office parks
Most of Stockley Park has been developed on reclaimed land which had formerly been used for waste landfill uses. The site was comprehensively decontaminated and remediated in 1989 – 1991. The remediation works have been extensive, involving the removal of landfill and then back filling with inert material and the undertaking of measures to ensure that the park is not exposed to leachate or landfill gases. Monitoring of the site is no longer required. A detailed environmental report has been prepared by OVE Arup Associates who have been involved in the site from the outset. This is available on the data site (titled Land Quality Report).
Existing Water Bodies
Existing Infrastructure
Existing Road Layout
Existing Utilities
19
Phase 3 – The Proposed 2000 Scheme Outline planning consent granted on 25 August 2000 (reference 37977W/96/1447) permitting comprehensive redevelopment to provide up to 50,000 sq m (538,195 sq ft) of offices and / or industrial and / or research and development and / or training together with other ancillary uses, parking and open space with a maximum number of 1,143 car parking spaces. This reflects an overall car parking ratio of 1:44 sq m (1:471 sq ft) on the gross floor areas or 1:394 sq ft on the assumed net area.
1
The proposed scheme (2000 consent) is master planned to provide 5 office buildings ranging from approximately 86,110 to 150,695 sq ft GEA anticipated to offer solutions to both single-let headquarter occupier requirements and / or multi-let building scenarios.
2
3
4
5
N
The 2000 master plan was drawn by renowned architects Kohn Pedersen Fox and depicts how the buildings could be arranged in a V-shaped configuration around a notional axis between an elevated bund in the southwest corner of the site and the Horton Road / Ironbridge Road roundabout. The intention is to create a dramatic sense of arrival. The buildings are designed to sit facing the central elevated plateau which is proposed to be the focus of the office park. The 2000 scheme seeks to build upon Stockley Park’s established design ethos of high quality buildings set amongst high quality landscaping. The proposed car parking will be sensitively integrated into the wider landscape throughout the Park positioned behind the office buildings largely hidden from view. Full details and a comprehensive planning summary has been prepared by Herbert Smith Freehills and is available on the data site.
20
Proposed Accommodation The consented 2000 scheme provides a base-build specification commensurate with a headquarters office park of its era. Key design features are as follows: • Full height floor-to-ceiling glazed façade • Solar shading provided by either interstitial blinds or external louvres • Floor to ceiling height of 3.0m clear • 1.5m planning grid • 9.00m x 9.00m structural grid • Combination of undercroft and surface level car parking providing 1,143 spaces
Approximate Building Areas Max size (Sq m GEA)
Max size (Sq ft GEA)
Max height (storeys)
Plot 1
8,000
86,110
3
Plot 2
10,000
107,640
4
Plot 3
14,000
150,695
5
Plot 4
10,000
107,640
4
Plot 5
8,000
86,110
3
TOTAL
50,000
538,195
Indicative Ground Floor Plan
Phase 3 presents an opportunity to deliver next‑generation business space specified to meet the needs of the modern corporate occupier
A major land holding on one of Europe’s most successful and best known office parks 21
2009 / 2010 Master Plan PLOT 1 7,500 sq m Office (B1) 3-4 Storeys
PLOT 2 10,000 sq m Office (B1) 3-4 Storeys
PLOT 6 3,500 sq m Office/Amenity (A1/A2/A3/B1/D1/Amenity) 3-4 Storeys
PLOT 5 26,000 sq m Hotel (C1) 3-8 Storeys PLOT 3 18,135 sq m Data Centre 5-6 Storeys
The application was recommended for approval by the London Borough of Hillingdon. The scheme was submitted and considered by Central and South Planning Committee on 13 July 2010. The Committee resolved to grant consent subject to completion of a section 106 agreement and statutory referrals to the Mayor and Secretary of State (Mayoral approval received 1 September 2010). Statutory consultee approval was secured and the s106 was substantially agreed. However the application was withdrawn for broader market reasons. The 2009 / 2010 master plan depicts a movement towards a denser, mixed-use scheme, encompassing a movement towards a next-generation urban office park.
PLOT 4 7,500 sq m Office (B1) 3-4 Storeys
22
A revised outline planning application for Phase 3 was submitted in 2009. The proposals sought permission for approximately 781,843 sq ft (72,635 sq m) of floor space reflecting considerable intensification of land use in comparison to the 2000 scheme. The indicative master plan shows the plot layout, including the introduction of a new Plot 6 in the centre of the site and a new parking building between Plots 3 and 4.
A comprehensive summary of the planning opportunities has been prepared by DP9 and is available on the data room.
2009 / 2010 Master Plan Indicative images from the 2009 / 2010 Design and Access statement
A major land holding on one of Europe’s most successful and best known office parks 23
The Western Corridor office market is poised to enjoy an exceptionally active period Office Market Occupational Commentary West London / Western Corridor • Strengthening demand position – 2013 take-up reflects 50% increase on 2012 • Flight to quality – occupiers seek best quality space • Supply fast depleting – 1.25% stock replacement rate is historically low • Rents are increasing – especially inside the M25 The Western Corridor office market is poised to enjoy an exceptionally active period; take-up in 2013 rose by over 50% with total space let across the Western Corridor at 3 million sq ft – the highest level for 5 years. Structural demand from lease breaks and expiries coupled with obsolescence of stock means that the demand for Grade A space is fast outstripping current and predicted supply delivered through new development. The West London market, Hammersmith out to the M25, has been the epicentre for both takeup and rental growth. JLL expect these trends to continue into the short and medium term. We anticipate an increasing number of Central London occupiers to edge west, away from the core and relocating to recognised, lower cost areas to escape high occupational costs. 2013 take-up within the Western Corridor was spread across the size bands, however, the focus for take-up was the best quality stock. Occupiers are looking to attract the best talent to grow their businesses and drive efficiency by taking the most efficient space which can accommodate the highest occupational densities. 2013 saw the return of pre-lets in the Western Corridor markets with BP, Dunnhumby and Rackspace all taking pre-lets of over 120,000 sq ft. Of importance, BP’s acquisition at Bedfont Lakes has absorbed all remaining supply at this important Heathrow business park.
24 A major land holding on one of Europe’s most successful and best known office parks
JLL Research currently shows named active demand of just under 3 million sq ft. The requirements are being facilitated by the lease events profile with over 15 million sq ft of lease events in the Western Corridor over the next four years providing tenants the flexibility to relocate. Stock of Grade A space in the Western Corridor is fast being exhausted. The vacancy rate in West London for Grade A supply is only 3.3% compared to 7.5% in the Thames Valley. The current development pipeline is not replenishing stock which is being absorbed. With only 980,000 sq ft of new development currently on-site the replacement rate is less than 1.25%. This is historically low and will create a ‘pinch point’ in supply supporting the business case for speculative development on a major scale. The inevitable effect of lack of supply and strengthening demand has been an increase in rents both headline and net effective. Incentive periods are fast reducing and lease lengths extending. Average rents in the West London area now stand at £34.14 per sq ft, a 6.1% increase on the same period in 2012. West London continues to outperform the wider Thames Valley market which saw a 3.5% increase in annual average rents to £25.36 per sq ft. The infrastructure improvements being delivered into the Western Corridor market will continue to accelerate occupier demand and help to deliver rental growth. Crossrail is on track to be operational in 2018. This will be a true differentiator for the Western Corridor market and specifically Stockley Park Phase 3. The service will provide uninterrupted access to Central London, The City, Canary Wharf and East London.
Stockley Park • No new stock delivered on the Park since 2001 • Park vacancy rate currently sits at 10 year low • Arrival of Crossrail will be a ‘needle-moving’ infrastructure event • Only 2% of stock is fully available for immediate occupation Stockley Park is the largest office park in Greater London comprising approximately 1.7 million sq ft of built office space. Its scale, brand and market recognition as a premium scheme promotes outperformance against standalone buildings within the locality.
Stockley Park has been subject to marked rental growth during this recovery cycle. The headline rent at Stockley Park currently stands at £32.50 per sq ft, however there has been no new Grade A delivered since 2001. Whilst there has been a number of good-quality refurbishments in the intervening period, in our opinion these refurbished products do not illustrate the full commercial potential for the Park.
Stockley Park has led the renaissance of the South East market over the last few years being at the forefront of activity during the recovery cycle. Vacancy on the Park has substantially eroded since the recent recession. From total built stock of approximately 1.7 million sq ft, only 31,351 sq ft is currently fully available, readily prepared for immediate occupation. The continued popularity of the Park was most clearly marked by the high profile letting in 2012 of 5 Longwalk Road (107,500 sq ft) to IMG Worldwide, who relocated from Chiswick.
Looking forward, JLL forecast consistent rental growth in the Western Corridor market driven by the appreciation of rents in West London which includes Stockley Park. Those locations benefiting from major infrastructure improvements have the potential to deliver the highest rental growth. Stockley Park Phase 3 is within a short walk of West Drayton main line Rail Station, which in 2018 will benefit from Crossrail. This will change Stockley Park from a predominantly car borne location to an urban Business Park with the benefit of a business park floor plate and car parking ratio.
This occupier relocation signalled a positive change of direction for the Park which had been broadly characterised as a technology and IT location. The Parks’ occupier base has broadened having attracted a globally-recognised media company to complement the range of occupiers who are now based on the Park, including international pharmaceutical companies, retailers and oil and gas companies. We expect the tenant mix to wider further as an increasing number of companies seek to relocate from Central London to escape rising occupational costs.
Prime Annual Rent (£ sq ft pa) M4 Corridor Average Annual Rental Growth (%) M4 Corridor Average Heathrow Prime Forecasts Annual Rental Growth
Q4 2013
Q4 2014
Q4 2015
Q4 2016
Q1 2017
Q2 2018
£32.00
£33.33
£34.92
£36.42
£37.83
£38.92
5.5%
4.2%
4.8%
4.3%
3.9%
2.9%
£30.00
£32.50
£34.00
£35.50
£36.50
£38.00
8.3%
4.6%
4.4%
2.8%
4.1%
25
Investment Market Commentary Stockley Park Phase 3 is an exceptionally rare opportunity to acquire a major landholding at the start of a period of extended economic growth and accelerated investor and occupier demand in one of the world’s largest metropolitan economies. Stockley Park has historically offered some of the best income and capital returns in the West London and Thames Valley markets, and is expected to reach and surpass these levels over the period in which Phase 3 can be delivered. Market pricing currently represents an approximate 10% discount to the Park’s peak capital value per square foot. We detail below a selection of achievable investment values secured at Stockley Park over the last 17 years.
Stockley Park Investment Transactions 10 Year Plus Income Transactions Date
Property
Tenant
Price
NIY
Capital Value per sq ft
Feb 07
2 Furzeground Way
Apple
£25.55m
4.85%
£495
Feb 98
2 The Square
Aspect
£13.70m
6.00%
£466
Oct 99
4 The Square
Cisco
£38.10m
6.00%
£466
Apr 99
6 Roundwood Avenue
Heinz
£20.00m
6.00%
£455
Oct 00
5 The Square
Cisco
£37.36m
5.74%
£521
Jun 00
Lakeside House
Regus
£34.00m
5.75%
£472
Less than 10 Year Income Date
Property
Tenant
Price
NIY
Capital Value per sq ft
Dec 06
4 Roundwood Avenue
EDS
£58.50m
5.40%
£448
May 07
4 Furzeground Way
Motorola
£20.60m
6.52%
£525
Vacant Possession (Properties Requiring a Full Refurbishment) Date
Property
Tenant
Price
NIY
Capital Value per sq ft
Nov 97
6 Roundwood Avenue
VP
£9.00m
N/A
£205
Sep 05
5 Longwalk Road
VP
£23.10m
N/A
£198
26
Current West London and Western Corridor Investment Market Investor sentiment for this strategic South East office market has improved throughout 2013 and into 2014. Prime yields within this market place now stand at 5.50%. With the continued evidence of rental growth, growing investor demand and with investment opportunities remaining in short supply, it is likely that yields will continue to harden throughout 2014 and 2015. We detail below a selection of key market transactions: Date
Address
Area (Sq Ft)
Tenant
Term Certain (Years)
Price (£)
NIY (%)
Capital Value per sq ft
Under offer
Hollywood House, Woking
43,440
Multi-let
4.00
c. £15.0m
6.40%
£345
Jan 2014
Richmond Riverside
132,965
Multi-let
5.50
£64.50m
4.90%
£485
Jan 2014
Unilever HQ, Leatherhead
176,654
Unilever UK Ltd
10.10
£75.80m
6.18%
£429
Dec 2013
Intercontinental Hotels Group, Denham
97,223
Six Continents Ltd
9.00
£36.75m
6.16%
£378
Dec 2013
Enterprise House, Uxbridge
122,983
Coca Cola Enterprises Ltd
14.00
£52.53m
5.75%
£427
Dec 2103
Vision Park, Cambridge
89,945
Multi-let
7.45
£28.50m
6.05%
£317
Nov 2013
Braywick Gate, Maidenhead
39,609
Multi-let
1.70
£17.28m
6.25%
£436
Nov 2013
Integra House, Egham
46,017
Enterprise Rent-a-Car
15.20
£20.90m
5.29%
£454
Sept 2013 Stanza Building, Uxbridge
82,403
Nexen PLC
12.00
£43.09m
5.72%
£523
Sept 2013 QVC Building, Chiswick Park
126,222
QVC
19.70
£71.00m
4.75%
£562
Sept 2013 Capital Court Uxbridge
58,853
Multi-let
8.60
£21.20m
5.96%
£360
Investor sentiment for this strategic South East office market has improved throughout 2013 and into 2014
A major land holding on one of Europe’s most successful and best known office parks 27
28
A major land holding on one of Europe’s most successful and best known office parks 29
Dataroom
Proposal
Further detailed information can be found in the Dataroom. Please contact JLL for access.
We are instructed to seek offers in excess of £35,000,000 (Thirty Five Million Pounds) subject to contract and exclusive of VAT for our client’s freehold interest in Phase 3 Stockley Park.
Tenure
A purchase at this price reflects £65 per sq ft per developable floor area. Alternatively, the site may be available by way of a corporate transaction.
• The site is held Freehold by Stockley Park Phase 3 Limited. • A number of parcels of land required to fulfil s106 obligations will be included in the title for sale. • Part of Plot 5 has been let to GSK on a short term lease until 2016, subject to a landlord’s rolling break option, for the sum of £150,000 per annum. • A Tenancy at Will has been granted to BMW London to park cars on the site in return for a payment of £1,375 per week.
Further Information For further information regarding this opportunity, or if you would like to arrange an inspection, please contact either: Mark Wilson Tel: 020 7399 5874 Mob: 07958 427 643 mark.wilson@eu.jll.com
Stuart Austin Tel: 020 3147 1112 Mob: 07912 299 725 stuart.austin@eu.jll.com
James Finnis Tel: 020 8283 2534 Mob: 07788 188 863 james.finnis@eu.jll.com
020 7493 6040
Misrepresentations Act 1967 and Property Misdescriptions Act 1991 Jones Lang LaSalle and their clients give notice that: (i) These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact. (ii) No person in the employment of the agent has any authority to make or give representation or warranty whatever in relation to this property. (iii) Floor areas, measurements or distances given are approximate. All CGIs reflect buildings and/or the scheme as proposed in the 2000 planning application. Unless otherwise stated, any rents, or outgoings quoted are exclusive of VAT. (iv) Any descriptions given of the property cannot be taken to imply, it is in good repair, has all necessary consents, is free of contamination, or that services and facilities are in working order. Interested parties are advised to carry out their own investigations as required. April 2014. Images used with the kind permission of Crossrail Limited. Designed and produced by Creativeworld. Tel: 01282 858200
30 A major land holding on one of Europe’s most successful and best known office parks
A major land holding on one of Europe’s most successful and best known office parks
020 7493 6040