Enterprise House Enterprise House - 32-34 Earl Grey Street Edinburgh EH3 9BN - Savills
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Enterprise House 32-34 Earl Grey Street Edinburgh EH3 9BN Enterprise House Investment Sale Opportunity to purchase a high quality well let modern office and convenience retail investment in Edinburgh City Centre
Investment Summary
Opportunity to acquire a high quality
modern office and convenience retail
investment in Edinburgh’s City Centre
• Edinburgh, is a vibrant capital city and is a major financial,
administrative, legal and commercial centre
• Strong economic and property fundamentals ensure that
the city remains a key destination for UK and international
investment
• The property is located in a prominent position on Earl
Grey Street in Edinburgh’s Exchange District
• Enterprise House is positioned on the west side of Earl
Grey Street, one of the principal arterial routes to the south
of city leading to the Edinburgh’s City-Bypass
• Enterprise House provides good quality open plan office
accommodation with retail use on the ground floor
• Extending to 17,259 sq ft and arranged over basement,
ground and four upper floors
• 6 car parking spaces providing an excellent city centre
ratio of 1: 2,877 sq ft
• Fully let to Lyons Davidson Ltd and Tesco Stores Ltd
• Total passing rent of £287,030 per annum
• Rent reflects a low office rental of £18 psf compared with
Prime Headline rents of £36 psf in Edinburgh, offering
genuine rental growth
• Outstanding rent review on the offices offers the prospect of
instant growth and performance
• WAULT of 8.98 years to expiry (7.85 years to break)
• Heritable Interest (Scottish equivalent of English freehold)
• Exceptionally strong occupier market. Critical shortage of
Grade A supply and very limited development pipeline.
Seeking offers in excess of £4,000,000 (Four Million Pounds
Sterling), subject to contract and exclusive of VAT reflecting an
attractive net initial yield of 6.74%, assuming purchaser’s costs
of 6.51%, and an overall capital value of £232 psf.
Edinburgh Overview Connectivity
• Edinburgh is Scotland’s Capital City, located approximately 400 miles Edinburgh benefits from excellent connectivity locally, nationally and
(640 km) north of London and 45 miles (72 km) east of Glasgow. internationally due to continued investment in its transport infrastructure. In
addition to the below, Edinburgh has an excellent local bus service.
• It is the UK’s second financial centre and Europe’s fourth by equity assets.
• Edinburgh has a population in excess of 500,000 increasing to 1.6m within the
Lothian catchment area, and is the most prosperous regional city in the UK. Air Tram
• It is the home of the Scottish Parliament, which was established in 1998 and Edinburgh airport, located 8 miles west The city’s tram system, which commenced
is also the UK’s second most visited tourist destination after London, attracting of the city centre, is Scotland’s busiest operations in May 2014, connects
roughly 13 million visitors every year. and the UK’s 6th busiest airport. It has Edinburgh Airport with Edinburgh
• The city has an exceptional transport and communications network that includes 37 airlines flying 227 routes to 157 Gateway, Edinburgh Park, Haymarket
direct flights from Edinburgh Airport to over 150 destinations. destinations across Europe, North America Station, Princes Street and St Andrew
and the Middle East. Square. Phase 1A, extending the tram to
• The average Gross Value Added (GVA) per resident in Edinburgh is £39,300 Leith and Newhaven has begun.
the second highest of all major UK cities.
• The city boasts a highly qualified workforce with over 54% holding a degree or Train
has degree equivalent level qualification. Road
Waverley and Haymarket, Edinburgh’s
• One of the fastest growing and most productive cities in the UK, Edinburgh’s two main city centre rail stations, provide Edinburgh benefits from excellent road
highly skilled workforce, competitive costs and unrivalled quality of life make services to all major Scottish centres. With communications with direct access into
the city popular with international investors. direct train services to and from London on the national motorway network. The city
• Major occupiers within Edinburgh include Blackrock, Standard Life Aberdeen, the east coast rail network, they are also is served by the M8 & M9 from the west
Brewin Dolphin, Skyscanner, Nat West Group, Lloyds Banking Group, Aegon, easily reached from other main English (Glasgow, Livingston and Stirling), the
Rockstar North, State Street, Virgin Money and Baillie Gifford. towns and cities. Both rail stations have M90/A9 from the north (Aberdeen and
seen multimillion pound refurbishments and Inverness) and the A1 trunk road and A7
upgrading programmes to cope with the from the south/south east (East Lothian,
increased demand in passenger numbers. Newcastle and the Scottish Borders).
Population expected to grow by 20% by 2039
Capital City and
Situation International
Business Centre
Enterprise House is situated on Earl Grey Street, one of the
principal arterial routes to the south of the city, leading to
the city-bypass linking the country’s motorway network. The
property is located within Edinburgh’s Exchange District,
Edinburgh’s main financial and commercial hub, developed
as an extension to Edinburgh’s traditional office locations in
the West End, Charlotte Square and George Street.
Major occupiers within the Exchange District include
Standard Life Aberdeen, Lloyds Banking Group, Blackrock,
Brewin Dolphin, Bank of Scotland, Pinsent Masons, Wood
MacKenzie, Brodies, Franklin Templeton, Aon, PWC, EY,
DWF, KPMG, Deloitte and CMS Cameron McKenna LLP.
In the immediate vicinity there is excellent amenity with a
wide variety of coffee shops, restaurants, national retailers Enterprise
and other leisure facilities. Cafés and bistros line the
waterside at the nearby Edinburgh Quay. The Traverse
House
DUN
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Theatre, the Royal Lyceum, the Usher Hall, Odeon Cinema,
ST R
the Filmhouse and the Cameo Picturehouse are all within 5
EET
minutes’ walk. Edinburgh International Conference Centre
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is also located approximately 5 minutes’ walk away.
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Haymarket and Waverley train stations are both within 1
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mile of the property, offering connectivity into the local and
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national rail network. The property is also located close to
A90 TR
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the tram stations on Princes Street (0.7 miles), Shandwick EET
HAN
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Place (0.5 miles) and Haymarket (0.7 miles) providing a
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rapid transit to Edinburgh airport. There are also numerous
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bus routes serving Edinburgh and the wider surrounds.
A9
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Princes Street and George Street, Edinburgh’s main
Enterprise
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shopping streets lie 0.4 miles and 0.6 miles to the north of E MARKET ST
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Description & Specification Accommodation Floor Plans
Fourth Floor
The property comprises a modern high quality, The property has been measured in accordance with
mid terrace open plan office building arranged the RICS Code of Measuring Practice (Sixth Edition)
over four upper floors and occupied in its entirety and provides the following approximate areas:
by Lyons Davidson Ltd, with a ground floor retail
unit occupied by Tesco Stores Ltd. The office levels Floor SQFT SQM
are accessed from a ground floor entrance which
opens onto a lift lobby and stairwell to the upper Fourth 2,840 263.8 Third Floor
floors.
Third 3,141 291.8
• Raised access floors Second 3,033 281.8
• Suspended ceiling First 3,321 308.5
• Gas fired central heating
Ground 3,176 295.1
• 8 person passenger lift Second Floor
Basement 1,748 162.4
• Accessible Male and Female toilets
Total 17,259 1,603.4
on each floor
• Fully fitted kitchen on each floor
• LG7 Lighting
• Good natural daylight First Floor
Parking is provided for six cars to the rear
of the building accessed from Dunbar Street.
Basement &
Ground Floor
We have measured the site using Promap
and estimate the total site area to extend to
0.125 acres.
Low office rent of WAULT of 8.98
Tenancy Schedule £18.00 psf allowing for years to expiry &
future rental growth. 7.85 years to break.
The property provides a total net income of £287,030 per annum.
All leases are drawn up on Full Repairing & Insuring terms.
Car Rent Rent Lease WAULT WAULT
Tenant Floor sq ft Lease Start Break Option Next Review Comments
Spaces (pa) (psf) Expiry (Earliest) (Expiry)
09-Dec-24 Tesco regeared for a further
Tesco Stores Limited Ground 3,176 £65,000 £20.46 09-Dec-04 09-Dec-24 08-Dec-29 3.60 8.60
(OMR) 10 years from Dec 2019
*Basement rent agreed at
nil at all times. Schedule of
09-Jun-20** condition
Lyons Davidson Limited B, 1st – 4th 14,083 6 £222,030 £18.00* 09-Jun-15 - 08-Jun-30 9.10 9.10
(OMR)
**Outstanding review,
upwards only to OMRV
Total 17,259 6 £287,030 7.85 8.98
*Rent Payable quarterly in advance
Tenant Covenants
Tesco Stores Limited Lyons Davidson Limited
(Company No : 00519500) (Company No : 07592441)
Tesco is a British multinational groceries and general Lyons Davidson is a British law firm providing
merchandise retailer with headquarters in Welwyn legal services to businesses and individuals with
Garden City, Hertfordshire, England. The company headquarters in Bristol, England. The firm have
was founded in 1919, now employing 400,000 staff, been providing services to businesses, individuals
and has in excess of 6,800 stores worldwide. It is the and the insurance industry for over
third largest retailer in the world measured by gross 40 years.
revenues. Tesco has the largest market share of all
grocery stores in the UK standing in excess of 28% of
the whole market.
www.tescoplc.com www.lyonsdavidson.co.uk
A Capital City with
Exceptional Property
and Economic
Fundamentals
Edinburgh Office Market Recent Edinburgh Office Investment Transactions
CAP VAL
Date Address WAULT Price Yield
Occupational Market (PSF)
Edinburgh has a total office stock of 18 million sq ft with approximately 60% of this in OTM Holyrood Park House, Holyrood, Edinburgh 7.50 years £17.50m 5.75% £376
the city centre. Historically the office market was driven by a number of key players
Princes Exchange & New Uberior House,
in the Financial, Business Services and Public sectors; however, the last decade has U/O
Exchange District, Edinburgh
10.50 years £70.00m 5.50% £452
seen the emergence of a far more diverse city economy and occupier base within
the context of both existing and emerging sectors. Supply within the city centre has Mar-21 The Stamp Office, City Centre, Edinburgh 4.00 years £16.60m 5.25% £298
continued to remain constrained during this period, primarily as a consequence of the
Dec-20 6 Lochside Avenue, Edinburgh Park, Edinburgh 5.03 years £11.10m 6.51% £277
lack of suitable sites and height restrictions on new development.
Sep-20 Quartermile 3, Quartermile, Edinburgh 7.4 years £45.00m 4.61% £613
Investment Market Jul-20 1-3 Lochside Crescent, Edinburgh Park, Edinburgh 17 years £133.25m 5.41% £538
As a major UK regional office centre, Edinburgh consistently experiences demand
Apr-20 4 North, St Andrew Square, Edinburgh 9.00 years £30.75m 4.36% £743
for well-let office investments, due to its excellent market fundamentals and status as
a capital city. Edinburgh’s prime yields remained at 4.75% throughout 2020 amid
Mar-20 6-8 Wemyss Place, City Centre, Edinburgh 8.97 years £5.30m 5.08% £429
continuing strong investor demand for the capital.
118 Lothian Road & 3-5 Morrison Street
Edinburgh office investment volumes reached £266m in 2020. Key buyers were principally Mar-20 3.24 years £31.00m 6.00% £544
Exchange District, Edinburgh
Overseas investors, who are attracted to the capital, transparency and low interest rate
Nov-19 Elgin House, Haymarket, Edinburgh 4.08 years £18.00m 6.15% £360
environment, accounting for over 95% of Edinburgh’s office investment in 2020.
Edinburgh is one of the most liquid and attractive regional markets in the UK. Oct-19 Causewayside House, Edinburgh 5.50 years £9.10m 6.97% £232
Office vacancy 2.8% lowest on record
EPC Indicative Debt Terms
32 Earl Grey Street (Retail) - G (102) Assuming full acquisition costs and arrangement fee of 1.00%.
34 Earl Grey Street (Office) - C (37)
Indicative Cash on Cash Returns
Copies of the EPC can be made available on request.
Leverage 60% 55%
Quantum £2,400,000 £2,200,000
Tenure
Term 5 years 5 years
Heritable interest (Scottish equivalent of English freehold). Gross cost of funds 3.20% (Based on 3.05% (Based on
3 month Libor rate) 3 month Libor rate)
VAT Repayment Interest Only Interest Only
The property has been elected for VAT and therefore VAT will be payable on Average Cash-on-Cash returns 11.06% 10.47%
the purchase price. However it is anticipated that the sale will be treated as a
Transfer Of a Going Concern (TOGC).
Dataroom Contact
Access to the data room can be provided on request. Rod Leslie Jeremy Tolley
+44 (0) 131 247 3812 +44 (0) 131 247 3745
Investment Proposal +44 (0) 7870 555 883 +44 (0) 7811 698 369
Seeking offers in excess of £4,000,000 (Four Million Pounds Sterling),
RLeslie@savills.com JTolley@savills.com
subject to contract and exclusive of VAT reflecting an attractive net initial
yield of 6.74%, assuming purchaser’s costs of 6.51%, and an overall capital
value of £232 psf. 8 Wemyss Place, Edinburgh, EH3 6DH
Savills, their clients and any joint agents give notice that: 1. They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement
that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact. 2. Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not
necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Savills have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise. May 2021.
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