8 Fenchurch Place

London EC3M 4PB

Overview

  • 8 Fenchurch Place is located in a prime EC3 City of London location, in the heart of the world's largest insurance district.
  • Comprehensively refurbished in 2012.
  • 98,647 sq ft of highly specified office and ancillary accommodation arranged over lower ground, ground, mezzanines and five upper floors.
  • Fully let on effective full repairing and insuring terms to a diverse mix of five tenants from the insurance, professional services and charitable sectors.
  • Secure income with a WAULT of just under 9 years to lease expiries and 7 years to tenant break options.
  • Current passing rent of £4,399,900 per annum, equating to an attractive low rent of only £44.60 per sq ft overall, compared to prime City rents which are currently in excess of £65.00 per sq ft.
  • Reversionary income profile with five upcoming rent reviews occurring in 2019 and 2020.
  • Held on a long leasehold interest from Network Rail Infrastructure Limited (originally British Railways Board) for a remaining term of circa 169 years at a peppercorn rent. Potential asset management opportunities in the short to medium term to add value and enhance the running yield.
  • Offers are invited in excess of £78,600,000 (Seventy-Eight Million, Six Hundred Thousand Pounds), subject to contract and exclusive of VAT, for our client's Long Leasehold interest in 8 Fenchurch Place. This represents an attractive net initial yield of 5.50% and a capital value of £797 per sq ft, assuming acquisition costs of 1.80% through the purchase of the Luxembourg SARL.

Location

8 Fenchurch Place is situated in London's premier business district in the heart of the City of London and in a core EC3 location being only a 3 minute walk from Lloyds, the world's leading insurance market.

Although in the heart of the insurance district, 8 Fenchurch Place is also in a prominent location for occupiers from a variety of sectors, with several major transport hubs being situated in the vicinity.

The immediate location has also been enhanced through the provision of a growing and diverse range of retail, leisure and hotel amenities. This includes the historic Leadenhall Market with a unique boutique retail offering, iconic London landmarks such as the Tower of London and Tower Bridge and a range of high end hotels such as the Four Seasons Hotel, Grange City Hotel and the Hilton Hotel Tower of London.

The building itself is located directly above Fenchurch Street Station and fronts a landscaped square which hosts a bustling street food market. 70 Mark Lane, occupied by Zurich Insurance and Miller Insurance, and AIG's owner occupied headquarters at 58 Fenchurch Street, also border the square.

Situation

8 Fenchurch Place has unrivalled connectivity being situated above Fenchurch Street Station and within a short walk of multiple underground and national rail stations.

The connectivity of 8 Fenchurch Place will be further enhanced when Crossrail (The Elizabeth Line) becomes operational in late 2018. This east-west rail link will span across Central London, significantly reducing journey times from Reading and Heathrow in the west to Abbey Wood and Shenfield in the east. The Crossrail station at Liverpool Street will provide the City with direct access to Heathrow within 35 minutes, the West End within seven minutes and Canary Wharf within six minutes.

Description

8 Fenchurch Place was comprehensively refurbished in 2012 providing a high quality office building in the heart of the City of London. The building provides 98,647 sq ft of Grade A office and ancillary accommodation arranged over lower ground, ground, three floors of mezzanine and five upper floors, with flexible floorplates ranging between 11,556 sq ft and 23,707 sq ft and excellent levels of natural light.

The principal office entrance is from Fenchurch Place, which leads into an impressive triple height reception and the main core of the building with three passenger lifts serving all floors. A second reception is accessible from Crutched Friars on the southern elevation, which provides access to a further two passenger lifts which also serve all floors. The ground floor reception areas comprise 1,866 sq ft in total.

The building was originally constructed in 1986 and is of steel frame construction on an acoustic raft. The refurbishment works in 2012 were undertaken by PMB Holdings and Ares Management and designed by ORMS Designers & Architects. The 2012 refurbishment included extensive works to the air conditioning system, a comprehensively remodelled reception area including a prominent white limestone facade around the Fenchurch Place entrance, and the renewal of all internal office finishes including new metal tile suspended ceilings, fully accessible raised floors and new lighting fittings throughout.

Specification

8 Fenchurch Place benefits from a Grade A specification which includes the following:
  • Two impressive ground floor office reception areas, comprising 1,866 sq ft in total
  • Ceiling mounted 4 pipe fan coil air conditioning system
  • Ceilings are finished with white accessible perforated ceiling tiles comprising 1,200mm x 300mm planks with fully integrated lighting and an exposed grid system
  • Fully accessible medium duty 600m x 600m tile raised floor system
  • 3 x 13-person passenger lifts which serve the Fenchurch Place reception
  • 2 x 13-person passenger lifts which serve the Crutched Friars reception
  • Typical slab to slab ceiling heights of 3.70 metres with 3.85 metres on the first floor
  • Typical floor to ceiling height of 2.70 metres
  • 13 showers, of which 7 have recently been completed and include integrated changing cubicles
  • 42 bicycle spaces
  • 8 car parking spaces


Tenure

8 Fenchurch Place is held on a long leasehold interest from Network Rail Infrastructure Limited (originally British Railways Board) for a term of 200 years from 24 June 1987 expiring on 23 June 2187, providing an unexpired term of approximately 169 years. The headlease is subject to an annual rent of a peppercorn.
A summary of the headlease can be found in this brochure and in the data room.

Tenancy

8 Fenchurch Place is multi-let on effective full repairing and insuring leases to five tenants from the insurance, professional and charitable sectors.

The total passing rent is £4,399,900 per annum, which equates to an overall rent of £44.60 per sq ft, an attractive level compared to prime City headline rents which are currently in excess of £65.00 per sq ft.

The property provides secure income secured against a diverse tenant mix with a weighted average unexpired lease term (WAULT) of approximately 8.7 years to expiries and 7 years to tenant breaks.

A small storage unit at lower ground level and 6 car parking spaces are currently vacant. The vendor will provide a rental guarantee in respect of these elements.



PLANNING

8 Fenchurch Place is within the jurisdiction of the City of London. The property is located within the Fenchurch Street station Conservation Area and the period frontage to Crutched Friars is Grade II listed.

VAT

The property is elected for VAT.

SUSTAINABILITY

8 Fenchurch Place has an Energy Performance Certificate of C (63) and has been certified as BREEAM Very Good.

CAPITAL ALLOWANCES

It is anticipated that capital allowances may be available to qualifying parties. Further details of these, if applicable, are available in the online data room.

DATA ROOM

Access to an online data room containing further information is available on request.

ASSET MANAGEMENT OPPORTUNITIES

8 Fenchurch Place provides secure income with a number of potential asset management initiatives including the following:
  • Improving rental levels through the five upcoming rent reviews in 2019 and 2020.
  • There are rent reviews for every tenant between May 2019 and December 2020, therefore providing an opportunity to seek to increase the rents within the building. The passing rental levels range from £42.50 per sq ft to £51.00 per sq ft, compared to prime City headline rental levels which are currently in excess of £65.00 per sq ft.
  • Opportunity to re-gear and extend the leases and remove break options to improve the income duration
  • Subject to negotiation in due course, there may be the potential to remove the break options within the leases to Resolute Management Ltd (break 1 December 2022) and etc.venues Ltd (break 11 August 2025) and regear other leases in the building, increasing the duration of the income.

HEADLEASE SUMMARY

For further information please see marketing particulars.

Proposal

  • Offers are invited in excess of £78,600,000 (Seventy-Eight Million, Six Hundred Thousand Pounds), subject to contract and exclusive of VAT, for our client's long leasehold interest in 8 Fenchurch Place.
  • This represents an attractive net initial yield of 5.50% and a capital value of £797 per sq ft, assuming acquisition costs of 1.80% through the purchase of the Luxembourg SARL.
  • 8 Fenchurch Place is part of the Amundi Collection of eight UK properties located in London, Glasgow and Cardiff. These assets are available individually or as a portfolio.
  • Full details can be found at www.amundicollection.com

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NET INITIAL YIELD:
5.5%
PRICE:
£78,600,000
REGISTER INTEREST
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