AJAX WORKS HERTFORD ROAD, BARKING, IG11 8DY - GREATER LONDON MULTI LET INDUSTRIAL INVESTMENT - Tydus Real Estate

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AJAX WORKS HERTFORD ROAD, BARKING, IG11 8DY - GREATER LONDON MULTI LET INDUSTRIAL INVESTMENT - Tydus Real Estate
AJAX WORKS
     HERTFORD ROAD, BARKING, IG11 8DY

GREATER LONDON MULTI LET INDUSTRIAL INVESTMENT
AJAX WORKS HERTFORD ROAD, BARKING, IG11 8DY - GREATER LONDON MULTI LET INDUSTRIAL INVESTMENT - Tydus Real Estate
INVESTMENT SUMMARY
 	Unbroken   industrial investment
    in the heart of East London.

 	Locatedin Barking, an extensively regenerated
    commercial and industrial centre.

 	Located  in a highly prominent location
    immediately adjacent to the North Circular Road
    (A406).

 	Existing   accommodation totals 16,921 sq ft GIA.

 	Multi  let estate comprising 5 self-contained units
    with a WAULT to break of 2.6 years and to expiry
    of 3.7 years.

 	Low  passing rent of £219,081 pa (£12.95 psf
    overall) inclusive of rental top ups.                TO CENTRAL LONDON

 	Freehold.

                                                         REGUS
 	Future  development potential, subject to                                              A406
                                                                                                 NORT
    obtaining the necessary planning consent.                                                        H CIR
                                                                                                          CULA
                                                                                                              R RD
                                                                                                                   .
                                                                     WICKES/TOOLSTATION

                                                                                                                 BIG YELLOW
	Seeking offers in excess of £4 million, subject
  to contract, reflecting a NIY of 5.14% and a low
                                                                                                                       SELCO BUILDERS WAREHOUSE
  capital value of £236 per sq ft after allowing for
  purchasers costs of 6.54%.
AJAX WORKS HERTFORD ROAD, BARKING, IG11 8DY - GREATER LONDON MULTI LET INDUSTRIAL INVESTMENT - Tydus Real Estate
BARKING REGENERATION
Planning Policy
Barking is recognised as a significant area for growth and regeneration in London.

The London Borough of Barking and Dagenham adopted an ambitious strategy in 2013 to deliver
50,000 new homes and 10,000 new jobs within 20 years. The borough has the highest expected
population growth of 15% over the next decade in London.

There is a number of key completed developments in Barking with a strong pipeline under
construction and seeking planning permission.

Selection of Key Developments

 Address                        Description          Developer                 Status

 Creative Industrial Quarters   272 apartments       Linkcity                  Completed

 Discover Apartments            254 apartments       County & Metropolitan     Completed

 Abbieville Apartments          100 Apartments       LinkCity                  Completed

 Weavers Quarter                1,575 apartments     L&Q                       Under Construction

 Barking Riverside              10,800 apartments    L&Q                       Under Construction

 Fresh Wharf                    911 apartments       Countryside               Under Construction

 Barking Wharf                  1,000 + apartments   Weston Homes              Planning Submitted
AJAX WORKS HERTFORD ROAD, BARKING, IG11 8DY - GREATER LONDON MULTI LET INDUSTRIAL INVESTMENT - Tydus Real Estate
LOCATION                                                                                                                                                                                     FA
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The property is located on the northern side of the North Circular Road (A406) at                                                                                                                      AW
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its junction with Barking Road (A124) approximately 0.5 miles west of Barking town                                                                                                                                 E
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centre. Barking is a highly popular industrial location that benefits from fantastic road                                                                                                                                              ID

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connections, the M25 is located 8 miles to the east whilst the A13 provides fast access

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to Central London.                                                                                                                                                                                       Barking
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Barking mainline railway station (C2C) provides fast and direct links to Liverpool Street,

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Fenchurch Street and Barking Underground Stations (District and Hammersmith & City

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Lines).

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The subject property is adjacent to a large Big Yellow self-storage centre. Other notable                                                        D.

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local occupiers include Local occupiers include Wickes, Tesco and Selco.

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DESCRIPTION

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The property is arranged over 5 warehouse type buildings with associated yard area.            24                                                                                                                                           PLE
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The site area totals 0.89 acres. The total accommodation comprises 16,921 sq ft GIA.                                                                                                                                                                              ER
                                                                                             TO LONDON AND A13                                                                                                                                                         S
The property provides both vehicle and pedestrian access from Hertford Road.                                                                                                                                                                                               LN
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TENURE
Freehold.

EPC
To be provided upon request.
AJAX WORKS HERTFORD ROAD, BARKING, IG11 8DY - GREATER LONDON MULTI LET INDUSTRIAL INVESTMENT - Tydus Real Estate
TENANCY & INCOME
The property is let in accordance with the tenancy schedule below.
                                                                                                                                                Rent pa
 Property        Tenant                        Size Sq ft   Size Sq m    Lease Start     Lease End          Break          Rent Review         (£ p/sq ft)   Comments
                                                                                                                                                             Stepped rental increases
                                                                                                                                                             Feb 2020 - £50,208
                                                                                                                           Rental Uplifts
                                                                                                                                                             Aug 2020 - £52,091
                                                                                                                         Feb 2020 - £50,208     £52,091
 Unit 1          Aldersbrook Engineering Ltd     4,177        388       20th May 2019   19th May 2022                                                        Feb 2021 - £53,764
                                                                                                                         Aug 2020 - £52,091     (£12.44)
                                                                                                                                                             The Vendor will top up to stepped rent at
                                                                                                                         Feb 2021 - £53,764
                                                                                                                                                             Aug 2020 from completion.
                                                                                                                                                             Outside the Landlord & Tenant Act.

                                                                                                                                                £25,440      Mutual break option subject to 6 months’
 Unit 2          Nicholas Richard L’anson        2,140        199       24th May 2019   23rd May 2025    23th May 2022          n/a
                                                                                                                                                (£11.89)     notice. Outside the Landlord & Tenant Act.

                                                                                                                                                £46,150
 Unit 3          Vacant                          3,692        343                                                                                            Vendor 12 month rental guarantee
                                                                                                                                                (£12.50)

                                                                                                                                                £60,300
 Unit 4          Bonlea Engineering Ltd          4,832        449       30th May 2019   29th May 2022                           n/a                          Outside the Landlord & Tenant Act.
                                                                                                                                                (£12.48)

                                                                                                                                                £35,000
 Unit 5          Transflow International Ltd     2,080        193       18th May 2018   17th Oct 2028    17th Oct 2023     18th Oct 2023                     Outside the Landlord & Tenant Act.
                                                                                                                                                (£16.83)

 Strip of Land   Milap Padda                      n/a          n/a      14th Sep 1979   13th Sept 2078                          n/a              £100

 Total                                          16,921       1,572                                                                            £219,081 pa
AJAX WORKS HERTFORD ROAD, BARKING, IG11 8DY - GREATER LONDON MULTI LET INDUSTRIAL INVESTMENT - Tydus Real Estate
ASSET MANAGEMENT                                                          INDUSTRIAL LEASING MARKET
& DEVELOPMENT POTENTIAL                                                   Over the past few years London Industrial rents have risen due increased occupational
                                                                          demand and through a significant proportion of the city’s industrial supply having disappeared
The property offers a number of asset management initiatives:
                                                                          through development. We anticipate this trend to continue as tenants are forced to compete
                                                                          for limited stock.
1. Increase passing rent
The most recent lettings at units 1, 2 and 4 are renewals and in our      Recent comparable lettings include:
opinion higher rents could be achieved in the open market. Units at
Abbeygrange works adjacent to this property have recently achieved         Address                                             Size (Sq ft)      Rent (psf)      Date of Letting
rents of £15.65 psf for similar quality units.                             Abbeygrange works,
                                                                                                                                     2,073      £15.65 psf           June 2018
                                                                           Hertford Road, Barking, IG11
The vendor is currently proposing to top up the rent on the vacant unit
3 at £12.50 psf. As discussed above, we believe a higher rent could be     19-21 Alpine Way, E6                                    35,463       £15.50 psf           April 2019
achievable in the market.

2. Refurbish or redevelop the existing units                               22-28 Bradfield Road, E16                                   808      £14.23 psf           Jan 2019
We believe the properties could attract a significant rental premium if
they were to be repositioned as grade A space. Prime, newly developed
stock in the area is now achieving £25 psf.                               INVESTMENT MARKET
                                                                          The London industrial market continues to outperform and remains one of the most attractive
                                                                          investment markets in the entire property sector for the following key reasons:

                                                                              Severely restricted supply of existing / pipeline stock and available land;
                                                                              Extremely robust occupier demand;
                                                                              Strong rental growth forecasts;
                                                                              Excellent retention rates;

                                                                          The table below highlights a schedule of recent comparable investment transactions:
                                                                                                                                                        Cap Val
                                                                           Property                                                     Price     NIY     £psf        Tenant       Date

                                                                           Units A-D Forest Trading Estate, Walthamstow, E17      £11,000,000   3.45%         £404   Multi Let    Q4 2018

                                                                           St Margarets Business Centre, TW1                       £7,900,000   2.62%         £257   Multi Let    Q4 2018

                                                                                                                                                                     Single let
                                                                           Abbeygrange works, Hertford Road, Barking, IG11         £1,700,000   4.82%         £300                Q3 2018
                                                                                                                                                                     (4 units)

                                                                           Alfred's Way Industrial Estate, Barking, IG11          £13,900,000   3.67%         £247   Multi Let    Q2 2017

                                                                           Units, 15-30, Leyton Business Centre, E10               £7,300,000   4.39%         £293   Multi Let    Q2 2017
AJAX WORKS HERTFORD ROAD, BARKING, IG11 8DY - GREATER LONDON MULTI LET INDUSTRIAL INVESTMENT - Tydus Real Estate
INVESTMENT CONSIDERATIONS
       	Rare multi let London industrial investment.

       	Barking is currently undergoing major regeneration.

       	Fantastic industrial location moments from the
         North Circular Road (A406).

          Future development potential.

    VAT
    The property is elected for VAT. It is envisaged that the sale
    will be treated as a Transfer of a Going Concern (TOGC).

    The Vendor is seeking offers in excess of
    £4 million, subject to contract. A purchase
    at this level would reflect a NIY of 5.14% and
    a low capital value of £236 per sq ft after
    allowing for purchasers costs of 6.54%.

    FURTHER INFORMATION
    Tydus Real Estate                                                                                                             GC Real Estate
    Jamie Baruch                                                                                                                  George Collins
    T: +44 (0) 20 3903 7310                                                                                                       T: +44 (0) 7872 605 362                          2 Riding House Street
    jamiebaruch@tydusre.com                              Tydus Real Estate                                                        george@gcrealestate.co.uk                        London W1W 7FA
                                                         50 Weymouth Mews, London W1G 7EH
    Will Elphinstone                                     www.tydusre.com
    T: +44 (0) 20 3904 3573
    willelphinstone@tydusre.com

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September 2019                                                                                                                                                 Designed & Produced: Barbican Studio I 0207 634 9573 I www.barbicanstudio.com
AJAX WORKS HERTFORD ROAD, BARKING, IG11 8DY - GREATER LONDON MULTI LET INDUSTRIAL INVESTMENT - Tydus Real Estate AJAX WORKS HERTFORD ROAD, BARKING, IG11 8DY - GREATER LONDON MULTI LET INDUSTRIAL INVESTMENT - Tydus Real Estate AJAX WORKS HERTFORD ROAD, BARKING, IG11 8DY - GREATER LONDON MULTI LET INDUSTRIAL INVESTMENT - Tydus Real Estate
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