South East Investment Opportunity University Way Cranfield MK43 0BT
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A unique investment opportunity to acquire a technology-based business park, located within a world-renowned innovation habitat centred around Cranfield University
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A thriving, high quality business and technology park
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INVESTMENT SUMMARY • Cranfield University Technology Park presents a unique opportunity to acquire a high quality, thriving and successful business park with continued levels of high demand from businesses. • Cranfield benefits from a strategic location adjacent to the M1 at the centre point between London, Birmingham, Oxford and Cambridge. • Cranfield University Technology Park is a vibrant ‘innovation habitat’ where like-minded, knowledge-based businesses enjoy the relaxed, traffic free environment and links with
• 573 car parking spaces providing an excellent overall ratio of 1:194 sq ft. • Multi-let to 55 tenants which presents a diverse spread of risk. • Total net income of £1,672,242 per annum equating to a competitive average rent of £15.29 per sq ft overall. • Asset management opportunities to improve the income profile and increase the WAULT. • Potential to sell-off individual buildings to owner occupiers at a premium to market value.
Cranfield University. • Offers are sought in excess of £16,640,000 (Sixteen Million, • A large site extending to 8.58 acres providing a low site cover of only 30%. • Eight high quality office buildings constructed in phases
Six Hundred and Forty Thousand Pounds), subject to contract and exclusive of VAT. • A purchase at this level reflects an attractive net initial yield
between 1999 and 2007 providing a total of 111,124 sq ft
of 9.5% and a low capital value of £150 per sq ft, exclusive of
of modern accommodation.
purchaser’s costs at 5.8%.
• Cranfield University Technology Park provides ultimate letting flexibility with each building differing in size such that it can serve a wide range of occupier requirements.
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A dynamic and successful environment
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CRANFIELD UNIVERSITY TECHNOLOGY PARK Cranfield University Technology Park, home to 55
the crossroads between Oxford to Cambridge and
Cranfield University Technology Park is a member
businesses, is adjacent to Cranfield University and
London to Birmingham. It boasts great rail and road
of UKSPA (UK Science Park Association) and as
provides 111,124 sq ft of office accommodation
transport links and is uniquely complemented by its
such is focussed on creating the right environment
across eight buildings. The total site area is
own executive airport.
to attract and support occupier businesses. This
approximately 8.58 acres meaning a low site cover of only 30%. There are approximately 573 car parking spaces providing a generous ratio of 1 space per 194 sq ft. Cranfield University’s original vision in establishing the Tech Park, in partnership with development partner St. Modwen, was the creation of a dynamic cluster of science, technology and knowledgebased businesses, all of which would benefit from the proximity of the University’s distinctive expertise and skills base.
Construction commenced in 1999 and it has been built in two phases. The resulting high quality office buildings provide a range of accommodation from 270 sq ft to 6,312 sq ft. This has created a relaxed, traffic free environment. The benefits of the Tech Park in terms of its environment, location, accommodation and proximity to Cranfield University, has led to continued levels of high demand from businesses. Occupiers are diverse, with demand from the local office market, regional office market, plus specific
Since its launch, Cranfield University Technology
commercial sectors such as the automotive industry
Park has become a ‘world-renowned’ innovation
and those with direct connections to Cranfield
‘hot spot’ with its central and well-connected
University. This has created a resilient range of
location between Milton Keynes and Bedford, at
tenants.
includes pro-active management and positively engaging with tenants, to encourage growth and expansion to larger units across time. This has proved very successful and UKSPA research has shown that Science and Technology Park tenants outperform compared to similar firms located elsewhere. Other occupiers at Cranfield include Nissan European Technical Centre on a 20 acre facility, the Cranfield University owned Martell House provides 50,000 sq ft and Invar Systems Ltd occupies a further 10,000 sq ft. cranfieldtechnologypark.co.uk
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A strategic business location
LOCATION Cranfield University Technology Park benefits from
The Tech Park is well-positioned between Milton
Rail connections are provided by Milton Keynes,
a strategic location with easy road, rail and airport
Keynes and Bedford for London, Birmingham,
Bedford and Flitwick stations whilst
connections. It is immediately adjacent to Cranfield
Cambridge and Oxford. By road it is approximately
London Luton and London Heathrow Airports
University and close to Cranfield village, which is
four miles from J13 and J14 of the M1 motorway.
are also easily accessible from the Tech Park.
accessed by road or a new footpath/cycleway.
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M69 M1
BIRMINGHAM
BIRMINGHAM AIRPORT
M5
M42
A14
M40
A45 M1
Newport Road
NORTHAMPTON
CAMBRIDGE
MOULSOE
BEDFORD
A421
A1
A421
CRANFIELD
M11
Cranfield Road
14
CRANFIELD AIRPORT
A43
A10 M1 A421
MILTON KEYNES
M1 A1(M)
M40
SALFORD A41
A418
LUTON AIRPORT
STANSTED AIRPORT A1(M)
MILTON KEYNES
M11
lf Sa
OXFORD
A40
or dR oa
AYLESBURY A41 A10
d
M1 M25 M25
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LONDON
M4 M4
HEATHROW AIRPORT
Road
Rail
Air
Destination
Distance
Departing Milton Keynes
Journey Time
M1 Junction 13/14
4 miles
London Euston
30 mins
Central Milton Keynes
7 miles
Birmingham
55 mins
M25
30 miles
Departing Flitwick
Central London
50 miles
London St Pancras International
Cambridge
42 miles
Departing Bedford
45 miles
London St Pancras International
Oxford
39 mins
37 mins
Destination
Distance
London Luton
21 miles
London Heathrow
51 miles
London Stansted
50 miles
Birmingham International
58 miles
Bus A regular bus service runs between Bedford, Milton Keynes and Cranfield University Technology Park.
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Linked to an internationally renowned University
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CRANFIELD UNIVERSITY Cranfield University is a wholly post-graduate
The Cranfield University campus hosts a full
for commercial partnerships and hence demand
and research-intensive institution, specialising
programme of seminars and events ranging from
from occupiers.
in aerospace, agrifood, energy, environment,
national debates through to lunchtime seminars.
management & leadership, manufacturing, security
These encourage many tenants to work with the
& defence and transport. Many occupiers have
University to mutual benefit.
links with Cranfield University and benefit from its facilities, which include a 186 bed hotel with meeting and conference facilities. Further, there are shops, extensive sporting facilities and many places to eat and drink.
Cranfield University is preparing a masterplan to expand the campus over time, across the remaining land around the Tech Park. This will create a wider
Also, there is Cranfield Airport which offers a full range of business support and executive jet services. This includes a private lounge, secure parking and discreet personal service to customers. cranfield.ac.uk
and more vibrant campus with greater opportunities
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Invar Systems
Derwent House
Cranfi Cra Unive nfield iversit eld Un rsityy
ACCOMMODATION way 1 Med Court way 2 Med Court
Conway House
Phase 2
way 5 Med Court
way 3 Med Court way 4 Med Court
Cranfield University Technology Park has been measured by ARK Architecture in accordance with Code of Measuring Practice (6th edition). The measured survey, which can be assigned to the purchaser, provides the following net internal areas:
Phase 1 – 5.61 acres Cranfield Innovation Centre
Trent House
37,613 sq ft
Trent House 19,738 sq ft
Phase 1
Derwent House 20,012 sq ft
Cranfield Innovation Centre
Phase 2 – 2.97 acres Conway House 15,816 sq ft Martell House and M1 Motorway
Medway Court 17,945 sq ft
Total 111,124 sq ft
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Cranfield Innovation Centre
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The Cranfield Innovation Centre (CIC) was originally developed
Cranfield Innovation Centre
in 1999 by Mid Beds District Council (now Central Bedfordshire Council). After St. Modwen acquired the CIC an extension was added, including an impressive central reception area, to provide
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a total of 37,613 sq ft. The building has 46 units ranging from 270
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sq ft to 1,779 sq ft plus meeting rooms. Features include: •
Impressive manned reception and common areas
•
Business support services
•
On-site café
•
Comfort cooling and IT services to all units
•
Fast broadband service to all units
•
Share of 410 car spaces
1
37,613 sq ft let to 38 tenants
Rent
£526,667 per annum
Figures correct as of 5 September 2014
7 8 17
9
18 19 20 21 15
10
16
32
30A 30B
34 26A 34 33 26B 32
Ground Floor
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“The CIC’s excellent facilities and its location make it a perfect base for us and for our clients from overseas and closer to home.” ITAS
29 10 1
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Tenancies
8
2
Overview: Net internal area
6
3
31 28
14
26A
13
26B
12
27
42
27
A B
22 23 24 25
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First Floor
40
41
39
38
44
35
43
36
37
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Trent House
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Trent House is a detached two storey office building providing
Trent House
19,738 sq ft. It was built by St. Modwen in 2000 and provides a range of offices from 1,952 sq ft to 5,956 sq ft across six units. Its versatile design has proved popular, with floor plates being capable of sub-division and changing over time if required. The building benefits from a generous open core and plentiful car parking. Features include: •
Flexible floor plate design
•
Raised access floors
•
Comfort cooling and heating system
•
Can be occupied as a whole or in suites
•
Share of 410 car spaces
Overview: Net internal area
19,738 sq ft
Tenancies
let to 6 tenants
Rent
£284,505 per annum
Figures correct as of 5 September 2014
“Cranfield’s facilities and knowledge have helped us with our own research and development. Having their facilities on our doorstep has proved valuable.” Caltec
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Derwent House
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Derwent House is a detached two storey office building providing
Derwent House
20,012 sq ft. It was built by St. Modwen in 2003 and provides a range of offices from 4,026 sq ft to 5,982 sq ft across four units. Its versatile design has proved popular, with floor plates being capable of sub-division and changing over time if required. The building benefits from a generous open core and plentiful car parking. Features include: •
Flexible floor plate design
•
Raised access floors
•
Air conditioning
•
Can be occupied as a whole or in suites
•
Share of 410 car spaces
Overview: Net internal area
20,012 sq ft
Tenancies
let to 4 tenants
Rent
£276,000 per annum
Figures correct as of 5 September 2014
“The Tech Park provides our rapidly growing team with a superb working environment and access to the excellent facilities onsite at Cranfield.” Mavedu
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Conway House
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Conway House is a detached two storey office building providing
Conway House
15,816 sq ft. It was built by St. Modwen in 2007 and provides a range of offices from 2,855 sq ft to 4,915 sq ft across four units. Its versatile design has proved popular with floor plates being capable of sub-division to accommodate occupiers’ changing needs over time. The building benefits from a generous open core and plentiful car parking. Features include: •
Flexible floor plate design
•
Raised access floors
•
Air conditioning
•
Can be occupied as a whole or in suites
•
Generous one per 211 sq ft car parking ratio
Overview: Net internal area
15,816 sq ft
Tenancies
let to 3 tenants
Rent
£257,811 per annum
Figures correct as of 5 September 2014
“With the ultra-high technology companies and candidates that we work with, the Tech Park’s location and its links to the world class Cranfield University are an important part of our own brand.” Vector Recruitment
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Medway Court
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Medway Court provides five self-contained detached two
Medway House
storey office buildings from 3,213 sq ft to 6,312 sq ft. Unit 5 has been sold to an occupier but the remaining four units are leased to a range of high technology occupiers, which appreciate the buildings’ flexible design. Features include: •
Self-contained two storey buildings
•
Raised access floors
•
Air conditioning
•
Can be adapted for a range of uses
•
Generous one per 204 sq ft car parking ratio
Overview: Net internal area
17,945 sq ft
Tenancies
let to 4 tenants
Rent
£292,052 per annum
Figures correct as of 5 September 2014
“We’ve been working with Cranfield University for many years and by sharing campus space with them we are ideally placed to extend our partnership as business grows.” Food Freshness Technology Ltd
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OCCUPATIONAL MARKET Being immediately adjacent to Cranfield
Cranfield Innovation Centre (CIC) achieves
Strong demand has continued with
Against this picture of healthy demand,
University and also enjoying a strategic
rents in the region of £16 to £18 per sq ft,
transactions under offer as follows:
the regional office market continues
location on the M1, Cranfield University
whilst rents on the remainder of the Tech
Technology Park has continued to see
Park tend to be in the region of £15 to
strong demand from new tenants, whilst
£16.50 psf. Recent examples include:
also retaining its existing occupier base. The range of unit sizes and flexible leasing approach has attracted new tenants and enabled expansion. Through proactive management and regular dialogue with tenants, this has led to a successful and
• July 2013 - new lease to Springboard Research of 1,511 sq ft at £16.61 psf • September 2013 - new lease to Impetus Automotive of 1,686 sq ft at £16.53 psf • February 2014 – new lease to Food
robust tenant base, low voids and good
Freshness Technology of 6,329 sq ft
levels of rent.
at £16.54 psf • March 2014 – lease renewal to QMatic of 5,978 sq ft at £15.06 psf
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• Derwent House – new 10 year lease of 5,982 sq ft at £15.05 psf • Conway House – new 3 year lease of 2,872 sq ft at £16.63 psf • Conway House – lease renewal of 2,855 sq ft at £16.77 psf • 1 Medway Court – lease renewal of 5,205 sq ft at £16.50 psf
to have very low levels of Grade A or good Grade B space and an over supply of poor secondary accommodation, much of which is going to residential. This restricted supply position puts Cranfield University Technology Park in an advantageous position.
INVESTMENT MARKET The South East office investment market
Business Park assets have attracted
has remained extremely buoyant during
strong demand from investors leading
2014. This trend looks set to continue
to significant inward yield movement,
with strong inflows of capital, a severe
illustrated by the following transactions,
shortage of quality stock, positive signs
all of which make the Tech Park appear
in the occupier markets and an improving
attractively priced.
Date
Address
Size (sq ft)
Tenant
WAULT (years)
Price
Yield
CV psf
U/O
Phase 1000, Cambourne Business Park, Cambourne
105,130
Multi-let
4.25
£26.57m
7.00%
£253
U/O
Mill Court, Great Shelford, Cambridge
37,697
Multi-let
2.12
£6.35m
8.29%
£168
Aug-14
Unit 310, Cambridge Science Park
58,639
AstraZeneca
4.50
£18.83m
6.30%
£321
below 5.5%.
Aug-14
7 Roundwood Avenue, Stockley Park
38,840
Fiserv (Europe) Ltd
3.75
£15.75m
7.73%
£406
Demand is particularly strong for income
Jun-14
Quantun 1&2, Maidenhead
123,217
Multi-let
3.60
£46.70m
6.70%
£379
Apr-14
Phase 2000 Cambourne Business Park, Cambourne
135,143
Multi-let
5.50
£36.00m
6.74%
£266
Mar-14
Breakspear Park, Hemel Hempstead
321,877
Multi-let
5.00
£60.60m
7.77%
£188
Jan-14
Vision Park, Cambridge
90,000
Multi-let
7.45
£28.50m
6.05%
£317
Dec-13
Caldecotte Lakes Business Park, Milton Keynes
171,349
Multi-let
4.04
£25.67m
9.00%
£150
economic outlook taking prime yields
opportunities together with strategically located, high quality assets with shorter unexpired lease terms offering asset management opportunities such as Cranfield University Technology Park.
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TENURE
TENANCY & INCOME PROFILE*
The Property is held on two 150 year leases from
The total net income for the Property is £1,672,242 per annum equating to a competitive average rent
Cranfield University as detailed below. A breakdown of
of £15.29 per sq ft overall. The vendor will provide a 12 month rent, rates and service charge guarantee
ground rents is available on request.
from completion on any vacant units apart from those in Cranfield Innovation Centre. On the date of completion, the vendor will top up any current rent free periods/rent concessions across the Property. A detailed tenancy schedule is available on request.
Phase 1 A long leasehold for 150 years from 23 September 2002
Building
No. of Buildings
NIA (sq ft)
Parking (spaces)
Parking (psf)
with a ground rent as a percentage of net contracted rent:
Cranfield Innovation Centre (CIC)
1
37,613
410
189 189
Trent House
1
19,738
Share above
CIC
14.0%
Derwent House
1
20,012
Share above
189
Trent House
15.1%
Conway House
1
15,816
75
211
Derwent House
15.1%
Medway Court
4
17,945
88
204
Total
8
111,124
573
194
Phase 2
Building
No. of Tenants
Rent (£ pa)
Rent (£ psf)
A long leasehold for 150 years from 9 October 2007
CIC
38
£526,667
£16.39
with a ground rent as a percentage of net contracted rent:
Trent House
6
£284,505
£14.41
Derwent House
4
£276,000
£13.79
Conway House
3
£257,811
£16.30
Medway Court
4
£292,052
£16.27
Other Income**
N/A
£156,481
N/A
Ground Rent***
N/A
- £121,274
N/A
Total
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£1,672,242
£15.29
Conway House
12.5%
Medway Court
12.5%
* All figures are quoted as at 5 September 2014 ** Projected figure for year ending 2014 *** As at 24 March 2014
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PROPOSAL Capital Allowances
VAT
Data Room
The benefit of any unclaimed
The property is elected for
Access to the data room is
capital allowances could
VAT. However, it is anticipated
available on request.
be made available to the
that sale of the property will be
A purchase at this level reflects an attractive net
purchaser. Further information
treated as a Transfer of a Going
initial yield of 9.5% and a low capital value of £150
is available on request.
Concern (TOGC).
We are instructed to seek offers in excess of £16,640,000 (Sixteen Million, Six Hundred and Forty Thousand Pounds), subject to contract and exclusive of VAT, for our client’s long leasehold interests.
per sq ft, exclusive of purchaser’s costs at 5.8%.
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Noel Lander
Ali Penford
Richard Last
020 7087 5336 07931 371 825 noel.lander@eu.jll.com
020 7852 4936 07808 102 339 ali.penford@eu.jll.com
01908 340 933 07921 166 595 richard.last@brownandlee.com
A development by
MISREPRESENTATION CLAUSE Crown Copyright 2014. All rights reserved. Promap licence number 100020449. Jones Lang LaSalle licence number 100017659. This plan is published for the convenience of identification only and although believed to be correct is not guaranteed and it does not form any part of any contract. MISREPRESENTATION ACT 1967 | DISCLAIMER COPYRIGHT © JONES LANG LASALLE IP, INC. 2013. All rights reserved. Jones Lang LaSalle Limited and Brown & Lee for themselves and for the vendor of this property whose agents they are given notice that: a) The particulars are set out as general outline only for the guidance of intending purchasers and do not constitute, nor constitute part of, an offer or contract. b) All descriptions, dimensions, 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 any intending purchasers should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them. c) No person in the employment of Jones Lang LaSalle Limited nor Brown & Lee has any authority to make or give any representation or warranty whatever in relation to these properties. Subject to Contract – Exclusive of VAT – September 2014