42-50 Grey Street

Newcastle upon Tyne NE1 5JE

Overview

  • A rare refurbishment/redevelopment opportunity on Newcastle's historic Grey Street
  • Situated at the heart of Newcastle's traditional office core, immediately to the south of the retail core and forming part of the city's prime leisure pitch
  • Previously redeveloped behind the imposing Georgian façade, the property offers flexible modern open plan floorplates
  • Grade II listed and therefore benefits from nil rates payable on vacant accommodation
  • Ground floor and basement let to Azzurri Restaurants Limited (t/a Zizzi) expiring on 6th June 2026 providing approximately 8.3 years remaining at an annual rent of £180,300
  • Freehold
  • Suitable for a variety of uses subject to planning
  • We have been instructed to seek offers in excess of £3,750,000 (Three Million, Seven Hundred and Fifty Thousand Pounds) for our client's freehold interest. A purchase at this level reflects a capital value per sq ft of £205

Location

Newcastle upon Tyne is the commercial and administrative capital of the North East, with a population of approximately 280,000 people (census 2011) extending to a total of 1.1 million people across the wider Tyneside Conurbation, making it the 7th largest in the UK.

The city's economy has in the region of 7,000 registered businesses across learning, digital technology, retail, tourism and cultural sectors, contributing £13 billion towards the United Kingdom's GDP.

Newcastle is the largest retailing, leisure and office centre in the North East and has an international draw as a business, education 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.

Newcastle has an extensive primary catchment shopping population of 1.5 million people, and an extensive license and leisure market, which has seen over 75 new bars and restaurants open in the last 3 years alone, attracting over 2 million leisure visitors per annum.

Further information can be found in the marketing brochure.

Situation

Grey Street

With its grand and imposing Georgian architecture, Grey Street is widely regarded as one of the finest streets in Europe.

Forming part of the wider Grainger Town conservation area, the street has long been viewed as the focal point of Newcastle's traditional office core. With a movement in demand away from cellular office accommodation many buildings, including 42-50 Grey Street, have undergone a redevelopment behind the existing façade to provide modern flexible office accommodation. Grey Street remains very popular, with occupiers attracted by the wide range of amenities on offer along with excellent transport links and connections.

Grey Street has evolved over recent years to become the prime upmarket leisure and dining scene for Newcastle upon Tyne. Home to the iconic Theatre Royal, the street links the Quayside to the south, with the 'Diamond Strip' to the west. The street is home to many popular restaurants and bars, including national multiples such as Las Iguanas, Browns, Carluccio's, Café Rouge and The Living Room, along with local and regional occupiers such as Bar Luga, Decantus and Fitzgeralds.

Description

42-50 Grey Street comprises a five-storey mixed use building set over basement, ground, mezzanine and three upper floors constructed in the late 1860s and extending to 18,312 sq ft. The property was significantly redeveloped behind the existing sandstone façade in 1969 and now benefits from Grade II listed status.

At ground and basement level, the property comprises two separate restaurant units, each with individual access off Grey Street and also rear access to the service area yard, via a separate service corridor running along the southern extent of the building.

At first, second and third floor level, 42-50 Grey Street comprises three open plan office suites accessed via Grey Street into the ground floor reception and dedicated office core with both lift and stair provision. In addition, there is a secondary stair access and fire escape at the southern extent of the building.

Further information can be found in the marketing brochure.


Tenure

The property is held Freehold.

Tenancy

The ground floor, mezzanine and basement accommodation is let to Azzurri Restaurants Limited t/a Zizzi on a 25 year lease expiring 6th June 2026 at an annual rent of £180,300 and subject to 5 yearly upward only rent reviews to Open Market Rent. The 2016 rent review has been triggered and discussions are ongoing. The tenant sublet the basement accommodation to La Tasca Restaurants Limited, who are no longer in occupation.

The 1st, 2nd and 3rd floors are vacant.

Service Charge

The property is managed and operated under a service charge which is divided into two schedules.

Schedule 1 relates to the whole building and recovers costs for building and M&E maintenance, running costs, cleaning, servicing and insurance, whereas Schedule 2 relates to the office accommodation only and covers lift maintenance and repairs and additional external building repairs. For the service charge year 2017/2018, the total budget is £36,330, of which £30,330 is apportioned to Schedule 1, and £6,000 apportioned to Schedule 2.

Full service charge information is available upon request.

Covenant Information

Azzurri Restaurants Limited
(Formerly Ask Restaurants Limited) Company Number: 02792998
The Azzurri Group is a market leader in the Italian and casual dining sector operating as ASK Italian, Zizzi and Coco di Mama. Azzurri Group employ over 6,000 people serving in excess of 15 million meals a year from their 250 shops and restaurants throughout the UK.


VAT

The property has been elected for VAT and therefore VAT will be payable on the purchase price. It is envisaged the sale will be treated as a transfer of a going concern (TOGC).

EPC

The property has the following EPC ratings;
Basement & Ground Floor Restaurants C72
First Floor Offices D83
Second Floor Offices D94
Third Floor E112


Further information is available upon request.

Proposal

We have been instructed to seek offers in excess of .£3,750,000 (Three Million, Seven Hundred and Fifty Thousand Pounds) for our client's freehold interest. A purchase at this level reflects a capital value per sq ft of £205.

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NET INITIAL YIELD:
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PRICE:
£3,750,000
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