PRIME WEST LONDON MIXED USE RETAIL AND OFFICE/D1 OPPORTUNITY - 179-183 Fulham Palace Road, Hammersmith London W6 8QZ
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PRIME WEST LONDON MIXED USE RETAIL AND
OFFICE/D1 OPPORTUNITY
LET TO AND
179-183 Fulham Palace Road, Hammersmith London W6 8QZ
L
Investment
Considerations
Highly prominent mixed use freehold investment in Fulham;
one of London’s most affluent and densely populated
boroughs
Mixed use secure income of £320,000 pa let to Sainsbury’s
Supermarkets Ltd and West London National Health Service
Trust a subsidiary of Charing Cross Hospital
Ground floor and basement let to Sainsbury’s Supermarkets
Ltd for a term of 15 years at £120,000 pa expiring December
2032, subject to upwards only rent reviews in December
2022 and 2027. Tenant break option 2027.
First and second floors let to West London National Health
Service Trust (B1a and D1 use) at £200,000 pa until October
2026 subject to an upwards only rent review in October 2021 Offers sought in excess of
£6,250,000
*Assumes Review of Sainsbury’s settled at
Opportunity to increase rental performance on October 2021 ERV with effect from 12/12/2022.
%
and December 2022 reviews
(subject to contract and exclusive of VAT) reflecting a net Net Initial Yield 4.80%
The first and second floors have excellent potential for future initial yield of 4.80%. Estimated Reversionary Yield* 5.34%
residential redevelopment subject to the relevant permissions Equivalent Yield 5.44%
Yields are net of purchaser’s costs
Freehold subject to existing tenancies
179/181 Fulham Palace Road, Hammersmith London W6 8QZ
LOCATION Hammersmith
Fulham is one of the most affluent suburbs of London, situated
within the London Borough of Hammersmith & Fulham, SUBJECT PROPERTY
approximately 4 miles (6.4 km) to the south west of Central
London. The area is well known for its attractive residential
streets, high end retail offerings and various sports grounds. Stamford
Bridge
The property is located approximately 0.5 miles south of Craven
Cottage
Hammersmith Underground station within the Broadway Shopping
Centre. Hammersmith is a significant interchange on the London
Underground network, offering multi-line provision, with
Hammersmith being one of only eight underground stations
served by four or more underground lines (District Line, Piccadilly
Line, Hammersmith & City Line and Circle Line)
Bishop’s
Park
Kensington Olympia national rail station is located close by linked
to the London Overground network providing connections to
Clapham Junction, London Euston, Richmond, Stratford
International and Watford Junction. National and international rail
services are available from Paddington and Victoria via the
Hammersmith & City and Circle Lines
The Hammersmith Broadway bus station (situated adjacent to the
underground station) is one of the largest interchanges in London
with seventeen bus routes passing through the main interchange
providing access to both Central London and the London suburbs. FULHAM
Seven of the bus routes run 24-hours a day.
Hammersmith benefits from excellent links to Heathrow
International Airport, located 10 miles to the west and can be
easily accessed either by road (M4 motorway) or via London
underground (Piccadilly Line) in approximately 30 minutes
.
179/181 Fulham Palace Road, Hammersmith London W6 8QZ
Description
The property comprises a highly prominent, redeveloped mixed use building
arranged over basement, ground and two upper floors with extensive frontage onto
Fulham Palace Road.
The property comprises retail and storage space at ground floor and basement levels
occupied by Sainsbury’s and offices at first and second floor levels occupied by West
London National Health Service Trust.
Sainsbury’s occupy a well-configured unit which has been fitted out in Sainsbury’s usual
corporate style.
The upper parts are self-contained. Each floor is currently arranged in a mixture of open
plan and partitioned cellular offices and consulting rooms. The upper parts are serviced by
a 1 x 8 (630 kg) person passenger lift. Each floor has demised male, female and disabled
WC facilities.
Situation
The property is located in a highly prominent position fronting Fulham Palace Road at
its junction with Greyhound Road.
The surrounding commercial properties on Fulham Palace Road are a mixture of
national occupiers and good quality independent retail and restaurant occupiers.
The Broadway Shopping Centre is a significant retail destination comprising
approximately 430,000 sq. ft. forming part of Hammersmith Broadway located a short
distance to the north of the property.
Notable occupiers in close vicinity to the property include Boots, Pret A Manger,
Caffe Nero, Tesco Express and Waitrose.
179/181 Fulham Palace Road, Hammersmith London W6 8QZ
EPC
Energy Perform ance Ratings as follows:
Sainsbury's – B47
NHS– B46
ACCOMMODATION A copy of each EPC is available
upon request.
UNIT PERMITTED USE GROSS INTERNAL AREA
SQ. M SQ. FT
NET INTERNAL AREA
SQ. M SQ. FT VAT
The property has been elected for VAT and
is assumed the sale will be conducted via
Basement Ancillary to retail 350.90 3,777 217.10 2,337
a Transfer of a Going Concern (TOGC).
Ground Retail (A1) 332.30 3,577 258.30 2,780
First Office (B1a)/Medical Use(D1) 338.70 3,646 287.50 3,095
Tenure AML
In accordance with Anti-Money
Second Office (B1a)/Medical use (D1) 319.30 3,437 259.50 2,793
Freehold Laundering Regulations, two form s of
Total 1,341.20 14,437 1,022.40 11,005 identification and confirm ation of the
source of funding will be required from
the successful purchaser.
TENANCY SCHEDULE
DESCRIPTION TENANT CLASS TYPE LEASE LEASE UNEXPIRED TENANT RENT RENT COMMENTS
USE START EXPIRY TERM BREAK REVIEW PASSING
Ground Floor & Sainsbury’s A1 Lease 09/12/2017 08/12/2032 13.00 09/12/2027 09/12/2022 £120,000 Rent reviewed 5-yearly to Open Market Rent. Tenant’s
Basement Supermarkets Ltd Renewal improvements undertaken in the previous Lease may
specifically now be taken account in the assessment of
Open Market Rent in connection with December 2022
and 2027 rent reviews.
First & Second West London Mental B1(a) & Letting 05/10/2006 04/10/2026 6.83 n/a 05/10/2021 £200,000 Rent reviewed 5-yearly to Open Market Rent.
Floors Health National Health D1
Service Trust
179/181 Fulham Palace Road, Hammersmith London W6 8QZ
Comparable Leasing Activity – Retail Comparable Leasing Activity – Office/Medical
Sainsbury’s Supermarkets Ltd undertook alteration works prior to their initial occupation detailed in a The permitted use of upper parts of the property is that of an office under Class B1 (a) or Class D1 use (medical &
Supplemental Agreement for Alterations dated 5th March 1998. The passing rent of £120,000 pa incorporates an health) presently being used as a medical centre under Class D1. Refurbished office stock in Hammersmith has
amortised cost to reflect said alteration works. As part of the lease renewal agreement in December 2017, the seen headline rental levels of £50 per sq. ft. Medical rents in the London Boroughs are similarly high on a per sq.
alteration works undertaken by Sainsbury’s shall be regarded at the next and following rent reviews to Open ft. basis. We anticipate a minimum rent of £206,000 pa may be achievable at the October 2021 review reflecting
Market Rent with effect from December 2022 and 2027. approximately £35 per sq. ft. Relevant rental evidence:-
We anticipate a minimum rent of £150,000 pa to be achievable at the December 2022 reflecting approximately
£27.50 per sq. ft. and £13.75 per sq. ft. on ground floor and basement respectively
Address Use Type Date Headline Rent
Relevant rental evidence:- (£/sq. ft.)
103-115 Hammersmith Road, W14 B1 Letting Nov-19 £46.00
202 Shepherds Building, Rockley Road, W14 D1 Letting Oct-19 £55.00
317-321 Fulham Road, SW0 B1 Letting Oct-19 £42.50
Address Type Date Tenant Headline Rent 4 Lyric Square, W6 B1 Letting May-19 £47.50
Rent (pa) (£/sq. ft.) Alexander House - 14-16 Peterborough Road B1 Letting Oct-18 £42.50
Balham Hill Road, SW12 Renewal Jul-19 M&S £195,000 £31.35 20 Hammersmith Broadway, W6 B1 Letting Jun-18 £39.50
Battersea Exchange, SW8 Letting April-19 Sainsbury’s £125,000 £37.00 Battersea Studios, SW8 D1 Letting Sept-17 £47.50
Villiers Ave, Surbiton KT5 Letting Sept-18 Co-op £140,000 £31.44 33-35 Praed Street, W2 D1 Letting Mar-17 £45.00
Hampton Road, Twickenham Letting Sept-18 Co-op £115,000 £33.10
Herne Hill, London SE24 Review Jan-18 Sainsbury’s £150,000 £31.80
FulhamAddress
Palace Road, W6 Review May-17 (O/S) Little Waitrose £130,000 £28.86
Fulham Palace Road, W6 Review Sept-16 Tesco Express £157,120 £28.07
Comparable Investment Activity – Retail Comparable Investment Activity – Office/Medical
Location Tenant Date Price Yield Term Certain Address Date Use Price Yield Term Certain
Unexpired Unexpired
Lordship Lane, N17 Sainsbury’s Jan-20 £1.285m 5.05% 7.8 years 1B Hollywood Road, SW10 Jul-18 A1/B1 £14m 4.5% 6.5 years
Fulham Road, SW6 Sainsbury’s Dec-19 £2.1m 4.75% 5 years 7-9 Bath Street, EC1V 9LF Jun-18 B1/D1 £17.32m 4.12% 7.6 years
Martin Way, Morden SM4 Sainsbury’s Jan-20 £1.375m 5.41% 10.5 years 5 Trinity Street, SE1 Apr-18 B1 £4.3m 4.00% 1 year
Brixton Hill, SW2 Sainsbury’s Jun-19 £2.75m 4.25% 11 years 227 Shepherds Bush Road, W6 Dec-17 B1 £9.75m 5.50% 6.62 years
Hampton Road, Twickenham Co-op Feb-19 £2.275 4.79% 15 years 510 Fulham Palace Road, SW6 Sep-17 D1 £2.475m 3.84% 14.8 years
Clapham Road, SW9 Sainsbury’s Dec-18 £2.6m 3.99% 11 years
Wandsworth Bridge Road, SW6 Sainsbury’s Nov-18 £4.25m 4.69% 11 years
Adenmore Road, Lewisham SE6 Sainsbury’s Sept-18 £2.102m 4.25% 15 years
179/181 Fulham Palace Road, Hammersmith London W6 8QZ
132 Wandsworth Bridge Road, London, SW6 2UL
Covenant information
Sainsbury’s Supermarkets Limited (company number
03261722) is one of the leading food store operators
within the UK and is one of the ‘Big Four’ supermarket West London NHS Trust is a leading provider of health
chains dominating the UK grocery market. services mental and physical health services to the
London Boroughs of Ealing, Hammersmith and Fulham
Sainsbury’s is the third largest chain of supermarkets in the UK, and Hounslow serving approximately 800,000 people. The
with a 15.3% market share of the supermarket sector. The NHS trust employs over 3,892 people.
company occupies c. 23.2 million sq. ft. of retail space in the UK
across 1,374 stores (560 supermarkets and 814 convenience
stores) and employs over 161,100 employees.
The covenant is one of the strongest in the supermarket sector
with a Dun & Bradstreet rating of 5A1 representing a ‘minimum
risk of business failure’.
ASSET
A summary of the last three years’ accounts is set
out below:
MANAGEMENT
OPPORTUNITIES
Y/E Y/E Y/E Y/E • There may be the opportunity in the future to develop (and
11/03/2019 10/03/2018 14/03/2017 possibly extend) the first and second floors for
£’000 £’000 £’000 residential use subject to planning – plenty of windows
on all elevations with great natural light.
Sales
24,040,000 23,606,000 23,234,000
Turnover
• Possibility to add an additional storey as achieved on
Pre-Tax Profit 174,000 187,000 342,000 adjacent property.
Net Worth 5,838,000 4,562,000 4,353,000
179/181 Fulham Palace Road, Hammersmith London W6 8QZ
TENURE
The property is held freehold
PROPOSAL
VAT
The property is elected for VAT and we would expect the transaction to We are instructed to seek offers in excess of £6,250,000 (Six Million Two Hundred
be treated as a Transfer of a Going Concern (TOGC).
and Fifty Thousand Pounds) reflecting a net initial yield of 4.8% assuming usual
EPC purchaser’s costs and a potential estimated reversionary yield of 5.34% upon
The Energy performance ratings for the property are highlighted below:
Ground & Basement
Sainsbury’s rent review in December 2022.
Rating D (85)
First & Second Floors Ra tin g E (111)
AML
A successful bidder will be required to provide the usual information For further information or to make arrangements for viewing please contact:
to satisfy the AML requirements when Head of Terms are agreed.
Mark Tindale 0207 7462 5763 David More 020 7462 5762
Sale Documentation mark.tindale@johnsonfellows.co.uk david.more@johnsonfellows.co.uk
A sales pack providing all relevant documentation is available on
request.
Misrepresentation Act: 1. Johnson Fellows LLP on its own behalf and on behalf of the vendor/lessor of this property whose agent Johnson Fellows LLP is, gives notice that: (a) these particulars do not constitute in whole or in part an offer or contract for sale or lease; (b) none of the statements contained in these
particulars as to the property are to be relied on as statements or representations of fact; and (c) the vendor/lessor does not make or give, and neither Johnson Fellows LLP nor any of its members or any person in its employment has any authority to make or give, any representation or warranty whatsoever in relation
to the property. The only representations, warranties, undertakings and contractual obligations to be given or undertaken by the vendor/lessor are those contained and expressly referred to in the written contract for sale or agreement for lease between the vendor/lessor and a purchaser or tenant. 2. Prospective
purchasers or tenants are strongly advised to: (a) satisfy themselves as to the correctness of each statement contained in these particulars; (b) inspect the property and the neighbouring area; (c) ensure that any items expressed to be included are available and in working order; (d) arrange a full structural (and where
appropriate environmental) survey of the property; and (e) carry out all necessary searches and enquiries. Allsop is the trading name of Johnson Fellows LLP
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