Keel Row House, 1 Sandgate, East Quayside

Newcastle upon Tyne NE1 2NG

Overview

  • Prime Grade A city centre office investment occupying a key position on the Quayside, one of Newcastle's core office locations
  • Purpose built modern office accommodation extending to approximately 2,210.48 sq m (23,794 sq ft) over four floors
  • Fully let to Ward Hadaway Solicitors (WH 2013 LLP) on an FRI lease expiring 21st December 2030, providing an unexpired lease term in excess of 13.5 years
  • RPI linked 5 yearly rent reviews subject to a collar and cap of 1%-4% per annum compounded, therefore providing guaranteed rental growth
  • Excellent parking provision with 81 spaces at the adjacent Sandgate car park, equating to a ratio of 1:293 sq ft
  • Passing rent topped up to the minimum uplift on the 2020 review at £526,293 per annum reflecting a modest rate of £18.71 per sq ft (accounting for car parking at £1,000 per space)
  • Freehold
  • We have been instructed to seek offers in excess of £7,950,000 (Seven Million, Nine Hundred and Fifty Thousand Pounds) reflecting an attractive 6.21% NIY based on the topped up rent and assuming standard purchaser's costs of 6.67%
Further information can be found in the marketing brochure.

Location

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 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.

Transport connections

Road
Located approximately 286 miles north of London and 105 miles south of Edinburgh, the city is well connected to the wider road network with the A1(M) approximately 2 miles to the west and the A19 7 miles to the east.

Rail
Newcastle Central Station is a major transport hub and key stop on the East Coast railway line. The city has direct services to London King's Cross and Edinburgh with journey times of less than 2 hours 40 minutes and 1 hour 30 minutes respectively. Newcastle Central is also the main interchange for the Tyne & Wear Metro, the rail network which runs throughout Tyneside. The network supports 60 stations throughout Tyne and Wear extending as far as Newcastle Airport 6 miles to the north west and Sunderland to the south east.

Air
Newcastle International Airport is situated 7 miles to the north west of the city centre and serves in excess of 4.46m passengers 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.

Further information can be found in the marketing brochure.

Situation

Keel Row House is situated on the Quayside, one of Newcastle upon Tyne's leading city centre business quarters. The locality boasts a host of leisure and retail amenities in an attractive waterside setting, a 5-10 minute walk from Grey Street, the main retailing quarter of Northumberland Street and the Eldon Square Shopping Centre.

Development of Newcastle's East Quayside began in the 1990s, and was delivered over the following decade through three phases, with Keel Row House being one of the most modern constructed during phase 2A in 2001. The development introduced a new style of office accommodation to the Newcastle market, offering more flexible and modern floor plates than was available within the traditional office core. In addition to the extensive development of the office quarter, the Quayside saw an influx of new leisure amenities, art galleries and conferencing venues, a theatre and further development of the bridge scape, making it an internationally renowned business, leisure and tourist destination.

Keel Row House occupies a prominent corner position fronting Sandgate at its junction with Quayside (B1600), the main access road for Newcastle's Quayside, linking the city centre and the A167(M) central motorway to the north. Notable office occupiers in the immediate surrounds include Newcastle Crown Court, Barclays Bank, Bond Dickinson LLP and KPMG LLP. Surrounding leisure occupiers and landmarks include The Malmaison Hotel, Pitcher & Piano, Gusto, Baltic Centre for Contemporary Art and the Sage Gateshead Music Venue.

Description

Keel Row House comprises a four storey Grade A office building constructed in 2001. The building is of steel frame construction with part brick, part curtain wall elevations under a part curved part flat roof.

Access is provided via a glazed reception lobby fronting onto Sandgate. Internally, each floor provides modern open plan office accommodation and benefits from the following specification:

  • Four pipe fan coil air conditioning
  • 2 x 10 person passenger lifts
  • Suspended ceilings with Category II lighting
  • Fully accessible raised floors with a loading capacity of 4.0 kN. sq m
  • Male and female WCs on each floor and disabled WCs on ground floor level
  • 81 parking spaces at the adjacent Sandgate car park providing an excellent ratio of 1:296 sq ft
We understand the tenant is due to undertake a full overhaul of the internal lighting, installing LEDs throughout, in addition to a full replacement of all window blinds.

Accommodation

Net internal areas are available in the link below.

A fully assignable measured survey has been instructed to be undertaken by Lane & Frankham, reliance upon which will be made available to the purchaser.


Tenure

The property is held freehold.

Tenancy

The property is let to WH2013 LLP (trading as Ward Hadaway Solicitors) on a 15 year lease expiring 21st December 2030 at a passing rent of £500,750 per annum. The lease provides for five yearly RPI linked rent reviews compounded annually, subject to a collar and cap equivalent to 1%-4% per annum. The vendor will top up the rent to £526,293 per annum, the minimum uplift due at the 22nd December 2020 review. At this level the rent reflects a modest rental tone of £18.71 per sq ft (accounting for car parking at £1,000 per space).

The lease is personally guaranteed by not less than 15 partners of Ward Hadaway Solicitors, a list of which is set out in schedule 3 of the lease.

Covenant Information

Founded in 1988 Ward Hadaway are one of the UK's Top 100 law firms and operate out of three offices - Newcastle, Leeds and Manchester. The firm employs over 450 staff with 80 partners across the business. Operating in both the public and private sectors, the firm also gives tailored advice to individual clients and are acknowledged as national experts across a wide range of specialist areas. They are rated as one of the leading law firms in the country by the independent Chambers & Partners legal guide The Legal 500.

Further information can be found in the marketing brochure.

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 by way of a transfer of a going concern (TOGC).

Car Parking

81 parking spaces are held on a 999 year lease commencing 8th May 2000 from Quayside Management Company. This is at a peppercorn rent, to be transferred to the purchaser upon sale.

The tenant has exclusive use of the car parking spaces under the occupational lease, and maintenance costs are fully recoverable by way of the service charge. More information is available upon request.

Service Charge

An estate charge is payable for the maintenance and security provided on the wider Quayside estate. This is fully recoverable from the tenant. The 2016/2017 budget attributed to Keel Row House is currently £14,146.88 per annum (£0.59 per sq ft). Further information is available upon request.

EPC

The property has an energy performance rating of D (97). Both the EPC and Recommendation report are available upon request.

Proposal

We have been instructed to seek offers in excess of £7,950,000 (Seven Million, Nine Hundred and Fifty Thousand Pounds) reflecting a capital value of £334 sq ft and an attractive NIY of 6.21%, based on the topped up rent and assuming standard purchaser's costs of 6.67%.

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NET INITIAL YIELD:
6.21%
PRICE:
£7,950,000
REGISTER INTEREST
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