Rotterdam House - Prime Multi-Let Grade A Quayside Office Investment - 116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY - Cushman & Wakefield
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Prime Multi-Let Grade A Quayside Office Investment Rotterdam House 116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY
Investment Summary
• Prime Grade A city centre office investment
occupying a prominent waterfront position on
Newcastle’s Quayside, one of the city’s core
office locations.
• Purpose built modern office accommodation
extending to 3,315.37 sq m (35,686 sq ft) over
ground and four upper floors.
• Fully let to three tenants including Ramboll,
116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY
Stantec and Regus at an annual rent of
£696,550 reflecting a low average rent of
£17.81 psf (excluding parking), which is strongly
reversionary.
• All three tenants heavily embedded in the
building, with both Stantec and Ramboll not
exercising recent break clauses and Regus
having been in occupation since 2000.
• Good rental growth in the market with £21.50
plus parking, achieved in Quayside House and
£23.50 at Central Square South
• WAULT of 5.92 years to expiry
Rotterdam House
• Excellent parking provision with 122 spaces,
a ratio of 1:293 sq ft.
• We have been instructed to seek offers in excess
of £9,500,000 reflecting a NIY of 6.87% after
purchasers costs of 6.69%. A purchase at this
price reflects a capital value of only £266
per sq ft.
Newcastle upon Tyne
Newcastle upon Tyne is the commercial and
administrative capital of the North East with a
population of approximately 280,000 people
[census 2011]. The city forms part of the wider
Tyneside conurbation with a total population in
the region of 1.1 million people, making it the
7th largest in the UK.
Newcastle is the largest retailing, leisure and office centre in the
North East and has an international draw as a business, education
116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY
and tourism centre. Major occupiers in the city include Sage Group,
NPower, Barclays Bank, BSkyB and Proctor & Gamble. The city is also
a major public sector hub, not just for local and regional government,
but also for national operations, most notably the Department for
Work and Pensions and HM Revenue & Customs.
The city is home to two leading Universities, Newcastle and
Northumbria, which attract in excess of 55,000 students, from
both the UK and 136 countries abroad. Newcastle University is a
member of the prestigious Russell Group, comprising the leading 24
Universities in the country.
Rotterdam House
TO NEWCASTLE AIRPORT
Communications and Transport
& NORTH
Rotterdam House is well positioned within
the city centre and has excellent access To the
A1 North
& Newcastle
to both the regional road network and public
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International
HAYMARKET
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Airport
transport links.
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Located approximately 286 miles north of London and 105 miles
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116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY
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transport links to the A1(M) and the rest of the North East region. LEY IDE
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Newcastle Central Station is a major transport hub and key stop on
QUAYS
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the East Coast railway line. The city has direct services to London
THE SAGE
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Kings Cross and Edinburgh, with journey times of less than 2 hours Birmingham
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Cardiff
Newcastle Central is also the main interchange with the Tyne & Bristol
M4
London
Wear Metro, the rail network which runs throughout Tyneside.
A1
METRO
The network supports 60 stations throughout Tyne and Wear
89
RADIO
RED
ARENA To A1
extending as far as Newcastle Airport, 6 miles to the North West
HE
Western Bypass To the South
UG
and Sunderland to the south east and is the second largest
HB
RID
system in the UK behind the London Underground.
GE
Air
Newcastle International Airport is situated 7 miles to the north
west of the city centre and serves in excess of 4.46m passengers
Rotterdam House
annually, to 74 direct destinations globally. Flights are provided via
13 scheduled airlines, including Air France, British Airways, Flybe,
Easyjet and Emirates. Newcastle International Airport is one of
the leading regional airports and benefits from regular flights to
London with a flight time of less than one hour.
Situation
Rotterdam House occupies a prominent waterfront location on Newcastle’s Quayside. The area The property occupies a very prominent position with broad views of Newcastle’s iconic
was developed from the 1990's as office occupiers sought larger, more modern floor plates bridgescape and the Baltic Centre for Contemporary Art and the Sage Music Venue. Surrounding
outside the traditional office core of Grey Street and Pilgrim Street. The Quayside now offers an leisure occupiers include The Malmaison Hotel, Pitcher & Piano, Gusto, Starbucks and Las Iguanas.
attractive, landscaped working environment, better car parking provision than the traditional CBD Office occupiers located on the Quayside include Knight Frank LLP, Womble Bond Dickinson LLP,
and a good range of leisure facilities including hotels, restaurants and bars. KPMG LLP, Regus, The Northumberland Estates and NEP&I.
29 28
26 M
27
18
M
19
16
116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY
17
M
25 M 15
24 22 14
23
21 12 M
11
13
9
20 Rotterdam
House
5 3
10
2
4
6
7 1
Rotterdam House
8
1 Quayside 7 Baltic Centre for Contemporary Art 13 Tyne Bridge 19 Eldon Square 25 Central Station
2 Barclays 8 Baltic Place 14 Grey Street 20 Hilton Hotel 26 Citygate
3 Mal Maison 9 Law Courts 15 Northumbria University 21 Copthorne Hotel 27 Wellbar Central
4 Pitcher & Piano 10 The Sage Music Centre 16 Newcastle Civic Centre 22 Central Square 28 St James' Park
5 NEP&I 11 Trinity Gardens 17 Northumberland Street 23 Central Square South 29 Newcastle Science
6 Millennium Bridge 12 Central Motorway 18 Newcastle University 24 Stephenson Quarter Central Development
- The Rocket/Crowne Plaza
Investment and Development
Newcastle has seen extensive regional and inward
investment in recent years, delivering a number
of significant schemes throughout the city and the
surrounding Quayside.
Science Central
A 24 acre landmark development for science and business. Legal and
General Capital have been brought on as an investment partner with an
initial investment of £65 million into the site creating 2,000 jobs. Planning has
already been sought and approved for two Grade A office buildings, the first of
which will start construction in Q4 2018 and will provide 120,000 sq ft of office
accommodation, with building B delivering 100,000 sq ft.
116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY
Stephenson Quarter
An extensive 11 acre site in the heart of Newcastle City Centre, phase one
completed in Q1 2016 comprising the Crowne Plaza Hotel, The Rocket, a
35,000 sq ft grade A office building and a 24 hour 360 space multi storey
car park. Phase 2 is currently under construction and includes the UTC (the
North East Futures University Technical College) with plans to deliver a second
50,000 sq ft Grade A office building. Overall the regeneration scheme is valued
at £200m.
Gateshead Quays
A 9.49 acre site on the southern bank of the River Tyne, in between the iconic
Sage Gateshead and the Baltic Centre for Contemporary Art and fronting onto
the Millennium Bridge. The site is earmarked for mixed-use development
with conferencing, exhibition and leisure uses being prioritised amongst
office, residential and ancillary retail use and is being brought forward by Ask
Developments and Gateshead Council.
Rotterdam House
East Pilgrim Street
The East Pilgrim Street development site is mostly owned by the Reuben
brothers, who have been working closely with Newcastle City Council in
creating a development framework for the prime site. The site is split into two
blocks, with demolition already underway on the northern block, which has
been earmarked for retail-led development. The southern block has been
earmarked for residential, leisure and office uses.
Description
Rotterdam House comprises a five storey Grade A office
building constructed in 2000 to the following high
specification;
• Open regular floorplates with extensive floor to ceiling
glazing, giving excellent natural light and fantastic views
of Newcastle’s iconic bridgescape
• Raised access floors (150 mm void)
• Air conditioning units throughout
• Suspended ceilings incorporating fluorescent or LED
116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY
lighting
• Male and female w/c facilities on each floor.
• Shower facilities on each floor
• 2 X 10 person passenger lifts
Stantec replaced all lights throughout their
accommodation with LED fittings as part of their fit out
in 2015 and Regus are undertaking a rolling replacement
of lighting to LEDs.
Ground Floor Plan Upper Floor Plan
Rotterdam House
Rotterdam House 116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY
Description
Tenancy
The property is fully let to three tenants in accordance with the following tenancy schedule.
Area Parking Rent per Sq Ft Lease
Accommodation Tenant Rent Rent Review Comments
Sq M Sq Ft Spaces (Excl. parking) Start Expiry
Excluded from L&T 1954 act. May 2018 break
Ground Floor Ramboll UK Limited 526.0 5662 - £102,095 £18.03 29/05/2015 28/05/2020 - notice elapsed. Service charge cap of £35,004
per annum. Cap excludes utilities.
Option to determine not exercised therefore
principal rent reduces to £63,227.50 from
20/06/2018 to 29/06/2019 (inclusive) plus the
25 parking spaces demised in the lease at a rent
of £500 per space, which is payable in addition
116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY
First Floor Stantec UK Limited 671.0 7223 25 £138,955 £17.50 01/07/2015 30/06/2020 - to the principal rent. This is to be topped up by
the landlord to the full rent of £138,995. June
2018 break right lapsed. Service Charge cap
of £46,824.48 reviewed annually in line with
RPI subject to a cap of 3%. Service charge cap
excludes utilities.
Lease includes 77 parking spaces at St Ann’s
2nd, 3rd Newcastle Quayside
2118.3 22801 77 £445,500 £17.85 27/10/2000 26/10/2025 28/10/2020 car park. Tenant in occupation since 2000.
& 4th Floor Centre Limited
Regus PLC guarantee of six months rent.
Car Parking Stantec UK Limited - 5 £2,500 - 01/07/2015 30/06/2020 - Excluded from L&T 1954 Act
Car Parking Stantec UK Limited - 5 £2,500 - 27/07/2015 30/06/2020 - Excluded from L&T 1954 Act
The North of England
Excluded from L&T 1954 Act. 6 month rolling
Car Parking Protecting and Indemnity - 10 £5,000 - 27/05/2016 26/02/2021 -
mutual break. Significant neighbouring occupier
Association Limited
Total 3,315.3 35,686 122 £696,550
Rotterdam House
Tenure Service Charge
The property is held freehold. An estate charge is payable for the upkeep, maintenance and security of the
wider Quayside estate which is fully recoverable from the tenants. Full building
122 spaces are held in the adjacent St Ann’s Car Park on a and estate service charge information is available upon request.
999 year lease commencing 26th October 1999 from East
Quayside Management Limited at a peppercorn rent.
Tenants’ Covenant Strength
Stantec UK Limited Newcastle Quayside Centre Limited
(Formerly MWH UK Ltd) Company Number 6996211
Company Number 1188070
Regus is the world’s largest provider of flexible workspace solutions and provides office space,
Stantec UK Limited is a global company and world class market leader specialising in solving meeting rooms and virtual offices in over 3,000 locations in 900 cities across 120 countries.
complex infrastructure and environmental challenges for water and natural resources. In 2016, Regus was founded in Brussels, Belgium in 1989 and is now headquartered in Luxembourg.
the company was bought by global engineering company Stantec Inc and today the company The company provides a range of office formats allowing flexibility for all users, at different
operates in 35 countries employing over 22,000 people. In the UK, Stantec UK Limited employ price points.
900 people from 7 UK offices.
31/12/2016 (000’s) 01/01/2016 (000’s) 02/01/2015 (000’s) 31/12/2016 (000’s) 31/12/2015 (000’s) 02/01/2015 (000’s)
116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY
Turnover £110,671 £103,963 £92,920 Turnover £1,079 £1,194 £1,443
Pre tax Profit £7,941 £13,041 £6,720 Pre tax Profit (£352k) (£163k) (£43k)
Net Assets £32,181 £39,878 £29,246 Net Assets (£1,154) (£802k) (£639k)
Further information is available at: https://www.stantec.com/en Further information is available at: https://www.regus.co.uk
Ramboll UK Limited
Company Number 3659970
Ramboll is a leading engineering, design and consultancy company providing multidisciplinary
solutions from engineering design of buildings and infrastructure to the management of
precious resources. Ramboll was founded in 1945 as Ramboll & Hannemann in Denmark. The
company has now expanded to become an international corporation employing 13,000 people
worldwide in 35 countries from 300 offices.
Rotterdam House
31/12/2016 (000’s) 31/12/2015 (000’s) 31/12/2014 (000’s)
Turnover £75,362 £75,642 £75,080
Pre tax Profit (£1,507) (£8,321) (£6,401)
Net Assets £22,054 £23,211 £15,362
Further information is available at: http://www.ramboll.co.uk/Newcastle Office Market
Supply
The supply of new office space has been highly restricted and Newcastle city centre now has in
the region of 161,795 sq ft of Grade A stock remaining, which reflects just 1.46 years supply, based
on the last 3 year average take-up levels. Despite no new buildings coming to the market, 2017
saw two refurbished Grade A buildings return at Central Square South and Earl Grey House. Central
Square South is quoting £25 per sq ft, the highest quoting rent in the City Centre.
Building Locality Availability (sq. ft.) Quoting Rent (psf)
Wellbar Central Gallowgate 5,853 £24.00
Central Square Stephenson Quarter 7,400 £18.00 (Assignment)
13,039
Time Central Gallowgate £20.00 - £21.00
(4,851 U/O)
116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY
Trinity Gardens Quayside 37,109 £22.00
Central Square South Stephenson Quarter 38,424 £25.00
No 1 St James’ Gate St James’ Boulevard 5,500 £18.00 - £20.00
Stockbridge House Quayside 28,698 £20.00
Lloyds Court Grey Street 7,410 £19.00
St Nicholas Building Grainger Town 6,017 £19.50
Earl Grey House Grey Street 12,345 £21.50
Total 161,795
Supply Pipeline
The market has seen no new stock delivered since The Rocket and the Live Works in 2016, both
of which let within three and six months of completion respectively. The next new development
in what is a highly restricted pipeline is L&G’s Science Central development, with phase 1 due
to complete in 2019 delivering 120,000 sq ft to the market. Two further buildings have been
granted planning permission, Phase 2 at Science Central will be delivered by L&G extending to
Rotterdam House
100,000 sq ft, the second is the Phoenix Building at the Stephenson Quarter, which will deliver
50,000 sq ft. Both buildings are not expected to be completed until late 2021 at the earliest.
Rental Tone
Take up Prime headline rents in Newcastle are £23 per sq ft for quality core stock and are well
Take up has been supressed by the lack of stock in the market. The last new space delivered established, with the market ready to take the next step. On the Quayside, a devaluation
was in 2016, when The Rocket and Live Works both let in their entirety within 3 and 6 months of the 2015 lease renewal to Ward Hadaway gives £19.34 psf for Keel Row House which does
of completion respectively. not have river frontage and £21.18 psf for Sandgate House, which does, excluding car parking
at £500 per space. More recently, Quayside House has seen two lettings at £21.50, including
88% of 2016’s transactions and 84% of transactions in 2017 were at or below 8,000 sq ft, 6,950 sq ft to Norton Rose Fulbright.
fitting well with the offering of floorplates at Rotterdam House.Newcastle Investment Market
We set out a schedule of recent comparable office investment transaction for Newcastle and competing regional cities.
Property Date Price NIY Comments
Keel Row House, Landmark Quayside building let to Ward Hadaway with 13.5 years
Sept 17 £8.855m 5.57%
Quayside remaining with RPI linked reviews.
Fringe Grade A building let to 5 tenants including UBS, Serco,
National Lottery and Charities Board. WAULT of 5.8 years to expiry
No 2. St James’ Gate July 17 £20m 7.92%
and 4 years to break. Total passing rent of £1,690,694 per annum.
Sale included 3 additional retail units.
Sandgate House, New 15 year lease to Ward Hadaway Solicitors off a passing rent
Dec 16 £10.75m 5.88%
Quayside, Newcastle of £675,000 per annum.
116 QUAYSIDE, NEWCASTLE UPON TYNE NE1 3DY
Purchased off market. Let to KPMG, Pantheon Macroeconomics,
Quayside House,
July 16 £11.25m 6.90% Arthur J Gallagher & Clydesdale Bank with a passing rent of
Quayside, Newcastle
£535,087 per annum.
Citygate 2, Gallowgate, Purchased off market. Tenants included Ernst & Young & Grainger
Jan 16 £19.25m 6.47%
Newcastle PLC. Total rental income of £1,345,884 per annum.
The property is let to 10 tenants including established names such
as Svenska Handlesbanken, Costa Coffee, Rathbone Brothers Plc
Earl Grey House,
Jan 16 £11.9m 7.60% and Grant Thornton UK LLP. The total passing rent is £956,639 per
Grey Street, Newcastle
annum with a WAULT of 13.86 years to break and 15.73 years to
expiry. 30% vacant.
Multi-let with total passing rent of £2,561,242 and a WAULT of 7
Wellbar Central,
Dec 15 £40.075m 6.04% years to expiry, Two retail units on ground floor, one let to Greggs,
Gallowgate, Newcastle
one vacant. Fixed rental uplift on Sky income in July 2016.
Fully let to 9 tenants with WAULT to lease expiry 8.8 years and
Central Square,
Dec 15 £21.580m 6.42% to break 8.2 years. Total passing rent is £1,446,126, transacted
Forth Street, Newcastle
above asking.
Rotterdam House
EPC VAT
Both the EPC and recommendation report are available The property has been elected for VAT and it therefore
upon request. VAT will be payable on the purchase price. It is
envisaged the sale will be treated as a Transfer of a
going concern (TOGC).Proposal
Keel Row House
We have been instructed to seek offers in excess of £9,500,000 for our clients freehold
intertest reflecting
EAST QUAYSIDE, an attractive
NEWCASTLE UPON TYNE of 6.87%
NIYNE1 XXX after deducting purchaser’s costs of 6.69%.
A purchase at this level reflects a capital value of £266 per sq ft.
Rotterdam
House
For further information
Richard Turner Katy Paxton
+44(0)191 223 5720 +44(0)191 223 5752
Cushman & Wakefield Debenham Tie Leung Limited ("C&W") gives notice to anyone who may read these particulars as follows: 1. These particulars are prepared for the guidance only of
richard.turner@cushwake.com katy.paxton@cushwake.com prospective purchasers. They are intended to give a fair overall description of the property only and do not constitute any part of an offer or contract. 2. Any information contained in these
particulars (whether in the text, plans or photographs) is given in good faith but should not be relied upon as being a statement or representation of fact or that the property is in good
condition or otherwise nor that any services or facilities are in good working order. 3. The photographs appearing in these particulars show only certain parts and aspects of the property
Peter Atkinson Gagan Jagpal at the time when the photographs were taken. Certain aspects may have changed since the photographs were taken and it should not be assumed that the property remains precisely
as displayed in the photographs. Furthermore no assumptions should be made in respect of parts of the property which are not shown in the photographs. Any areas, measurements or
+44(0)191 223 5715 +44(0)191 223 5709 distances referred to herein are approximate only. 4. Where there is reference in these particulars to the fact that alterations have been carried out or that a particular use is made of any
peter.atkinson@cushwake.com gagan.jagpal@cushwake.com part of the property this is not intended to be a statement that any necessary planning, building regulations or other consents have been obtained and these matters must be verified by
any intending purchaser. 5. No person in the employment of C&W has any authority to make or give any representation or warranty whatsoever in relation to this property. 6. This property is
offered subject to contract and unless otherwise stated all rents are quoted exclusive of VAT. 7. Unless otherwise stated, no investigations have been made by or on behalf of C&W regarding
pollution, or potential land, air or water contamination. Interested parties are advised to carry out their own investigations as required. Particulars prepared January 2018.
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