The Energy Centre, Le Bouet

St Peter Port, Guernsey GY1 2BB

Overview

  • High quality Guernsey headquarters office investment totalling 23,640 sq ft
  • Excellent location in the capital of St Peter Port
  • Guernsey is one of the world's leading offshore banking and financial centres, home to occupiers including: Credit Suisse; PwC; Schroders; KPMG; Royal Bank of Canada; Deutsche Bank; BNP Paribas and many more
  • Situated adjacent to the major development of Admiral Park, an established mixed use business park location, approximately 0.5 miles from St Peter Port's prime office pitch, Glategny Esplanade
  • Let in its entirety to Guernsey Gas Limited, Guernsey's only gas provider, with 14.6 years unexpired term certain
  • Rent passing at £355,000 per annum, which equates to £15.02 per sq ft overall and only £20.00 per sq ft on the offices
  • Benefit of upward only annual Guernsey Retail Price Index increases (capped at 2.5% per annum) and coinciding three yearly upward only open market rent reviews
  • Excellent car parking ratio of 1:234 sq ft
  • Freehold
  • Offers are invited in excess of £5,430,000 (Five Million, Four Hundred and Thirty Thousand Pounds) for the freehold interest, subject to contract. A purchase at this level reflects a net initial yield of 6.44% after allowing for purchaser's costs of 1.50%, assuming an acquisition of the SPV

Location

Guernsey

Guernsey forms part of the Channel Islands and covers approximately 78 sq kilometres (30 sq miles). Guernsey is situated 50 km (31 miles) west of France's Normandy coast, and 120 km (75 miles) south of Weymouth. St Peter Port, located on the eastern coast, is the island's capital and commercial centre.

Guernsey is a British Crown Dependency rather than part of the United Kingdom. The island therefore benefits from its own legislative assembly and is self-governing in all areas excluding foreign affairs and defence. An independent fiscal and legal status has established Guernsey as a leading global offshore financial centre, with a large number of banking and finance sector occupiers. Guernsey has a gross domestic product of £2.355 billion (2015 estimate) and a population of 63,001 (2015 estimate).

The island is very well linked to the UK by sea and air with daily flights operating to destinations including: London Gatwick; London City; London Stansted; Manchester; East Midlands; Birmingham; Exeter and Southampton. Mainland Europe is also served with flights operational to Dinard, Düsseldorf and Stuttgart.

Situation

The Energy Centre is prominently positioned on the east coast of Guernsey, adjacent to Admiral Park, a major mixed use business park situated approximately 0.8 km (0.5 miles) north of St Peter Port, Guernsey's capital and main port. Admiral Park has a number of established office buildings situated to the east and north-eastern areas of The Energy Centre. Approximately 230,000 sq ft of office space is provided, with occupiers including: Northern Trust; State Street Bank; Canaccord Genuity; ABN AMRO; Kleinwort Benson and Intertrust.

A large utility plant, owned by the occupier, is strategically situated adjacent to the north of the site, illustrating the importance of the location to the occupier. The site neighbours further commercial uses to the north and north west, including a Waitrose superstore and B&Q warehouse, whilst eastern, southern and south-eastern boundaries are adjoined by residential premises.

The Energy Centre is in close proximity to the prime office pitch, Glategny Esplanade, which is located only 750m (0.46 miles) away.

Further information can be found in the marketing brochure.

Description

The Energy Centre

The Energy Centre was purpose built for Guernsey Gas in 2006 and comprises modern office, showroom and workshop accommodation totalling 23,640 sq ft, arranged over ground and first floors. The property is of a steel framed construction with profile cladding and PVC windows to its elevations, joint with a glazed frontage to the showroom customer entrance.

The ground floor of the premises comprises a modern expansive showroom, workshop and distribution store, whilst the first floor provides fully fitted office and ancillary space, operational as Guernsey Gas' administrative headquarters. The office accommodation is predominantly open plan with some partitioned offices.

The internal specification includes the following features:
  • Quality sales showroom
  • Raised access floors
  • Passenger lift
  • Suspended ceilings
  • Air conditioning
The property benefits from 101 car parking spaces providing an excellent ratio of 1:234 sq ft

Site

We understand the site has an estimated area of approximately 1.24 acres (0.50 ha), providing a low site coverage of 31.7%.

Accommodation

We have been provided with floor areas and understand that the property provides the following areas as shown in the link below, in accordance with the RICS Code of Measuring Practice (6th Edition).


Tenure

The property is held freehold.

Tenancy

The property is let in its entirety to Guernsey Gas Limited for a term of 15 years from 28th April 2016 on a Full Repairing and Insuring Lease, expiring on 27th April 2031, providing a term certain of 14.6 years unexpired. The current passing rent is £355,000 per annum (£15.02 per sq ft overall) and is subject to upward only Guernsey Retail Price Index (GRPI) increases, compounded annually and capped at 2.5% per annum. There is also a coinciding three yearly upwards only open market rent review mechanism, reviewed to the higher of the preceding rent or market rent.

Guernsey Retail Price Index
The Guernsey Retail Price Index has averaged an annual change of 2.3% between June 2011 and June 2016 (Guernsey Quarterly Inflation Bulletin).

The Guernsey Policy & Resources Committee have a GRPI target rate of 3%, which they hope to attain by mid-2017. A target of 3% illustrates excellent potential for maximising annual rental uplifts through achieving increases at the cap level of 2.5%.

Covenant Information

Guernsey Gas Limited (Guernsey Reg Number: 19923)
Guernsey Gas Limited was incorporated in January 1911 and supplies and distributes gas on the island. They are Guernsey's only gas provider and have remained privatised as compared to Guernsey's electrical and water suppliers, who are ultimately controlled by the States of Guernsey. The company also provides gas maintenance and installation services, as well as retailing a variety of appliances and electrical equipment at the subject property's on-site showroom.

Guernsey Gas is one of five operating companies under ownership of the International Energy Group (IEG), who also own gas providers in the offshore centres of Jersey (Jersey Gas Company Limited) and The Isle of Man (Manx Gas Limited). IEG has more than 40,000 customers connected to its networks and has been supplying gas in the Channel Islands and the Isle of Man since the 1830s.

The International Energy Group was acquired by Ancala Partners LLP in May 2016 for its UK Infrastructure Platform. Ancala is a long-term infrastructure investor, investing on behalf of pension plans. The company do not disclose their financial records and are registered in Guernsey.

VAT

Currently neither VAT nor GST (Goods and Services Tax) are applicable in Guernsey.

Office Market Overview

Guernsey Market
Guernsey's office market is concentrated around St Peter Port at the mixed use development areas of Admiral Park and Glategny Esplanade. There is very limited office provision outside of these core areas and supply has not changed considerably over recent years due to tight planning controls limiting new build supply.

Rents in Guernsey are higher than in Jersey and provincial UK, with the office market underpinned by the strength of the international offshore financial services industry and the local business community. Prime rents in Guernsey currently stand at c£40-43 per sq ft, as evidenced by rents achieved at Admiral Park and Royal Chambers.

Channel Islands Investment Market
Further information can be found in the marketing brochure.

Proposal

Offers are invited in excess of £5,430,000 (Five Million, Four Hundred and Thirty Thousand Pounds) for the freehold interest, subject to contract. A purchase at this level reflects a net initial yield of 6.44%, after allowing for purchaser's costs of 1.50%, assuming an acquisition of the SPV.

Investment Rationale

  • Long income opportunity offering an attractive Net Initial Yield
  • Fully income producing and let to Guernsey Gas Ltd, Guernsey's only gas provider, who occupy the premises as their headquarters
  • Low base rent of £15.02 per sq ft overall and only £20.00 per sq ft on the offices
  • Benefit of upward only annual Guernsey Retail Price Index increases (capped at 2.5% per annum) and coinciding three yearly upward only open market rent reviews
  • Strategically located for the tenant who owns the adjoining utility site to the north of The Energy Centre
  • Prominently situated adjacent to Admiral Park and within only 750m walking distance of the prime office pitch in Guernsey
Further information can be found in the marketing brochure.

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NET INITIAL YIELD:
6.44%
PRICE:
£5,430,000
REGISTER INTEREST
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