The Lime Street Estate

London EC3M 7AN

Overview

  • Situated in a prime City of London location, within the eastern Tower Cluster
  • Located directly opposite Lloyds of London, the world's leading specialist insurance market
  • 121,255 sq ft (11,265 sq m) of office and ancillary accommodation arranged in two adjoining buildings, across basement, ground and nine upper floors
  • Highly divisible floorplates ranging from individual suites of 500 sq ft up to 10,000 sq ft
  • Multi-let to 34 tenants with staggered lease events
  • All leases are drawn on effective FRI terms
  • Occupiers include: Everest Advisors, Tokio Marine HCC, Skuld Services and White Oak Underwriting Agency
  • WAULT of 3.9 years to lease expiry and 2.8 years to determination, as at March 2018
  • Total gross contracted rent of £6,921,416 per annum reflecting £64.24 per sq ft overall
  • Long leasehold for a further 138 years at a gearing of 15.00% of rents receivable
  • Net rental income of £5,883,204 per annum exclusive
  • Approximately 32,986 sq ft (3,064 sq m) of office accommodation is due to be vacated within twelve months, affording the opportunity to upgrade the space and re-position the asset
  • A further 5,004 sq ft (464 sq m) of office accommodation is leased on reversionary terms to tenants who are not in occupation
  • Numerous opportunities exist to manage lease events/re-gear leases
  • The public realm will continue to improve as a result of neighbouring development activity
  • Significant long term development potential. The Estate is situated in an area designated suitable for high rise buildings

Offers in excess of £78,000,000 (Seventy-Eight Million Pounds) are invited, subject to contract, for the long leasehold interest.

This reflects a net initial yield of 7.0% allowing for purchasers costs of 6.8% and a capital value of £643 per sq ft.

Location

The Eastern Tower Cluster

The Estate is located in the eastern Tower Cluster area of the City of London where high density commercial development is encouraged. The properties are equidistant between two internationally recognised buildings, 20 Fenchurch Street (the Walkie-Talkie) and The Leadenhall Building (the Cheesegrater).

Later this year a further 800,000 sq ft of Grade A offices will be delivered in two new buildings which neighbour the Estate, 10 Fenchurch Avenue and 52 Lime Street. Approximately 70% of this new floorspace has already pre-leased to M&G Investments, WR Berkley, Decus and AXIS.

Lloyds of London
The main entrance into Lloyds of London is situated directly opposite the Estate.

Lloyds is the world's oldest and leading specialist insurance market operating across 200 territories. It offers an unrivalled concentration of specialist underwriting expertise. In its 300 year plus history, Lloyds has diversified such that it now insures the world's largest and most unusual risks.

Lime Street is synonymous with global insurance and has a rich heritage. Brokers and underwriters requiring swift access into Lloyds will pay a premium to be located on Lime Street given the direct access into Lloyds.

Leadenhall Market
Leadenhall Market, one of the City's most vibrant spots, is situated directly adjacent to the Estate. This Victorian Grade II* listed building of grand proportions is crammed full of restaurants, bars, coffee houses, market stalls and artisan boutiques. Alfresco dining and live entertainment provide exceptional amenity, day and night.

Leadenhall Market is integral to the insurance community and the way in which it functions. The specialist nature of the policies written dictate that a high degree of interface still takes place between the brokers and underwriters. The coffee houses and restaurants in and around the market provide a convivial environment in which to cement relationships and conduct business, much of which still takes place based on a handshake.

A wide collection of retailers are situated along Lime Street. Concessions include Charles Tyrwhitt, Cheaney Shoes, Roderick Charles, M&S, Vodafone, Boots, Links London, Oliver Bonas and Cycle Republic.

Local Development Initiatives

The neighbouring area is one of the most transformed areas in central London.

The vicinity is home to some of London's highest profile towers including The Leadenhall Building and 20 Fenchurch Street.

These landmarks, coupled with forthcoming initiatives, are delivering exceptional improvements to the amenity of EC3 and to the public realm. Moreover, these developments are providing a world class business environment which attracts global businesses at market leading rents.

Please see the brochure for further information.

Situation

The Estate is situated in heart of the City of London, directly opposite Lloyds of London, the world's leading specialist insurance market. The buildings occupy a highly prominent position with substantial frontages onto Lime Street and Fenchurch Avenue.

Many of the world's most pre-eminent insurance businesses have entered into long term lease commitments and freehold acquisitions within the immediate vicinity. Notable examples include Willis, AON Benfield, RSA, Amlin, SCOR and WR Berkley. The critical mass of insurance industry expertise within the vicinity of Lloyds will undoubtedly ensure the success of this district for many decades to come.

In recent years a number of internationally acclaimed developments, including The Leadenhall Building, 20 Fenchurch Street and Plantation Place, have attracted corporates, financial services providers, law firms, accountancy businesses and tech firms into the area. This thriving commercial district, once the preserve of insurance and shipping industries, is now more diversified than at any point in its history.

Connectivity

The Estate is situated in the core of the City of London and benefits from excellent transport communications.

The whole of central London is accessible via the underground and rail network. Liverpool Street, Bank, Fenchurch Street, Monument and Cannon Street stations are all within a 500m radius of the Estate.

All of London's international airports are within an hour of the property and train services to Europe operate via Eurostar from St Pancras International station, which is about 8 minutes by tube.

The Elizabeth Line (Crossrail)
The Elizabeth Line is scheduled to become operational in December this year, the nearest station being Liverpool Street which is within an 5 minute walk.

The circa £15 billion initiative is Europe's largest infrastructure project. Services will be fully integrated with London's existing transport network. State-of-the-art trains capable of accommodating 1,500 passengers, will bring an extra 1.5 million people to within 45 minutes of central London.

From Liverpool Street station it will take just 7 minutes to reach Bond Street, 6 minutes to reach Canary Wharf and 35 minutes to arrive at Heathrow Airport.

Description

40 Lime Street

40 Lime Street/4 Fenchurch Avenue is strategically positioned directly opposite Lloyds of London and has substantial frontages onto Lime Street, Fenchurch Avenue and Fen Court. The building has entrances onto each of the aforementioned thoroughfares which converge into a large centralised reception. From here the concierge also oversees operations at 37-39 Lime Street.

The property provides 83,824 sq ft (7,787.43 sq m) of lettable office and ancillary accommodation arranged over two basements, ground and nine upper floors. The floorplates are divided into North and South suites, comprising circa. 7,000 sq ft and 2,500-3,000 sq ft respectively.

The property has been modernised on a rolling basis since 2008. Large roof terraces have been created on the 5th, 6th, 7th and 8th floor north facing units. Other initiatives include:-
  • Refurbishment of office areas
  • New roof coverings in part
  • Refurbishment of common areas including main reception, WCs, lifts and stairwells
  • Installation of fan coil ceiling mounted air conditioning units
  • New fire alarm
  • New heating pumps, valves and water heaters to shared plant room
The specification includes:-
  • Four eight-person passenger lifts
  • Ceiling mounted fan coil air conditioning
  • Metal/mineral fibre tiled suspended ceilings with LG compliant recessed light fittings
  • Raised access floors
  • Male, female and disabled WCs
  • Shower and bike storage facilities at basement level

37-39 Lime Street

37-39 Lime Street dates from the 1930s and is Grade II listed. The property has an attractive Portland stone façade fronting onto Lime Street and provides 37,431 sq ft (3,477 sq m) of lettable office and ancillary accommodation arranged over two basements, ground and seven upper floors.

The floorplates are typically circa 3,800 sq ft (353.02 sq m) and are capable of being leased as whole, or sub-divided into three units of occupation per floor. The ceiling heights are generous throughout and there are good levels of natural daylight from three elevations.

The reception and common areas have been refurbished in the last six months. All of the office accommodation (save the seventh floor west and fifth floor east) has been refurbished since 2008. Initiatives have included:-
  • New roof coverings in part
  • Office accommodation upgraded as and when suites have reverted
  • Reception and common areas refurbished including lifts
  • Installation of ceiling mounted fan coil air conditioning units
  • Replacement fire alarm
  • New heating pumps, valves and water heaters to shared plant room
The specification includes:-
  • Two nine-person passenger lifts
  • Ceiling mounted fan coil air conditioning
  • Metal tiled suspended ceilings (1) with LG compliant recessed light fittings
  • Raised access floors
  • Male and female WCs alternate between floors
  • Shower, bike and disabled WCs at basement level

Note (1) The ground floor and seventh floor (west) have mineral fibre ceiling tiles.


Tenure

The properties are held by way of a single headlease from the Carpenters Company which expires on 29/09/2156 i.e. circa 138 years unexpired.

The Freeholder is entitled to 15.00% of rents receivable from underletting(s), subject to a minimum rent of £355,000 per annum. The minimum rent increases by £25,000 per annum on 29/09/2031 and twenty-five yearly thereafter.

Please see the brochure for further information.

Tenancy

The Estate is let in accordance with the tenancy schedules set out in the brochure.

The gross rent is £6,921,416 per annum exclusive equating to £64.24 per sq ft overall in respect of the tenanted accommodation. Following deduction of the headrent, the net rental income is £5,883,204 per annum exclusive.

We would draw your attention to the following:-

  • All leases are drawn on effective full repairing and insuring terms
  • The ten largest occupiers by reference to their rental obligations generate 77% of the Estate's income
  • The Weighted Average Unexpired Lease Term is 3.9 years to lease expiries and 2.8 years to tenant breaks as at March 2018
  • Virtually all leases are excluded from the Landlord and Tenant Act 1954
  • 32,986 sq ft (3,064 sq m) of office accommodation is due to be vacated within the next twelve months. This provides an exciting opportunity to upgrade floorspace and re-position the asset
  • A further 5,004 sq ft (464 sq m) of office accommodation is leased on reversionary terms to tenants who are not in occupation.

Covenant Information

Occupiers include: Everest Advisors, Tokio Marine HCC, Skuld Services and White Oak Underwriting Agency.

Please see the brochure for further information and a full schedule of tenants.

VAT

The Estate is not elected for VAT.

Planning

37-39 Lime Street is Grade II listed and located within the Leadenhall Market Conservation Area.

40 Lime Street is not listed, nor is it situated within a designated Conservation Area.

Development Potential

The Estate is believed to have significant long term development potential and is situated within the eastern Tower Cluster, where the City of London Corporation has encouraged high rise development. 40 Lime Street is arranged over ground and nine upper floors. 37-39 Lime Street is arranged over ground and seven upper floors. Further information on neighbouring schemes within the immediate vicinity can be found in the brochure.

EPC

37-39 Lime Street (D85).
40 Lime Street (D82).
Further information is available upon request

Service Charge

There are no service charge shortfalls in respect of the tenanted accommodation.

Proposal

Offers in excess of £78,000,000 (Seventy-Eight Million Pounds) are invited, subject to contract, for the long leasehold interest.

This reflects a net initial yield of 7.0% allowing for purchaser's costs of 6.8% and a capital value of £643 per sq ft.

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NET INITIAL YIELD:
7%
PRICE:
£78,000,000
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