The Waterfront, Newburn Riverside

Newcastle Upon Tyne, Tyne and Wear NE15 8NZ

Overview

  • An opportunity to acquire a prime industrial and office park, prominently situated on the banks of The River Tyne close to Newcastle City Centre.
  • Excellent communication links sitting adjacent to the A1, and providing rapid access to Newcastle International Airport, Newcastle Central Station, the ports of Tyne & Tees and The Intu Metrocentre shopping complex.
  • Total site area of approximately 19.54 acres (7.91 Ha) with a low site cover of just 23.5%.
  • Three modern office buildings and an industrial estate extending to approximately 257,587 sq ft, split 47% office accommodation and 53% industrial by floor area.
  • Very strong tenant base including NHS Property Services Ltd, Intrinsic Financial Services Ltd, MacFarlane Group UK Limited and Euro Car Parts Limited.
  • An average weighted unexpired lease term of approximately 3.43 years to expiry (2.79 years to break).
  • 19,527 sq. ft. Office void and 11,978 sq. ft. Industrial void subject to generous rent, rates, and service charge guarantee.
  • Held by way of several long leasehold interests with between 131 and 138 years unexpired at a peppercorn rent.
  • Very modest rental tones and significant value add potential.
  • The total passing rent for the property (including guarantees) is £2,241,683.34 per annum with circa 40% secured to NHS/Government organisations.
  • Offers are invited for the whole in excess of £23,294,000 reflecting an attractive 9.01% NIY, 9.78% RY and a low blended capital value of just £90 psf.
  • Offers are also invited for the constituent Office and Industrial elements in isolation, further details can be found within the marketing particulars.
Offers for the Industrial element are invited in excess of £10,862,000 reflecting 6.75% NIY, 6.98% RY and a low blended capital value of just £80 psf.

Offers for the Office element are invited in excess of £12,432,000 reflecting an attractive 11.00% NIY, 12.23% RY and a low blended capital value of just £102 psf.

Location

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

Home to 67,000 companies, 3 major ports, five world class universities and a growing skilled workforce of 1.2m, the North East offers a diverse and rapidly growing economy.

Transport links

Road

Newcastle upon Tyne is located approximately 97 miles north of Leeds and 105 miles south of Edinburgh with drive time of 1 hour 40 minutes and 2 hours 20 minutes respectively. The city is well connected to the wider region and national Motorway Network via the A1(M) and A19 linking north to south, and the A69 linking to Carlisle and the M6 to the west.

Rail

The city is a major transport hub and key stop on the East Coast mainline, with Newcastle having direct rail services to London Kings Cross in 2 hours 50 minutes and Edinburgh within 1 hour 30 minutes. Newcastle Central station is also the main interchange for the Tyne and Wear metro, the rail network which runs throughout Tyneside. The Tyne and Wear metro supports 60 stations throughout Tyne and Wear extending as far as Newcastle International Airport to the east, and Sunderland to the south east.

Air

Newcastle International Airport is situated 7 miles north west of the city centre and serves in excess of 4.8 million passengers annually to 80 destinations worldwide. The airport operates flights via 18 scheduled airlines including Emirates, British Airways, Air France, and Easyjet. Newcastle International is the leading airport in the north east benefitting from regular flights throughout the UK, European and international destinations.

Situation

Newburn Riverside is one of the regions leading business parks situated on a 227 acre (92 Ha) site strategically situated on the banks of the Tyne, just 3 miles west of Newcastle city centre and with almost immediate access onto the A1.

The Waterfront comprises a 19.54 acre (7.91 Ha) site and forms the southern portion of the Newburn Riverside. Situated off Kingfisher Boulevard, which links directly with the A69/A6085 and connects to the A1 just 0.6km to the east, the park benefits from attractive river views on 3 sides as well as excellent accessibility and amenity offered by its urban fringe location.

Immediately to the west Homes England are expected to deliver a further 1,250 homes, a new primary school, community and health facilities along with retail and leisure provision which will add further vibrancy to the area. This is currently in for outline planning permission with Newcastle City Council.

Description

The Waterfront Industrial Estate

Riverside Industrial Estate comprises four terraces of modern industrial units of varying sizes ranging from 1,700 sq ft up to 14,808 sq ft, along with two standalone solus units G (34,866 sq ft) and H (22,238 sq ft). The units are of steel portal frame construction with shallow pitch roofs and having metal clad elevations.

The industrial estate has the benefit of a generous 297 space parking provision reflecting a parking ratio of 1/457 sq ft.

Specification of the terrace units includes:
  • Approximately 10% office accommodation
  • Eaves heights ranging from 5 metres to 6 metres
  • Floor loadings to 35kN/sq m
  • Full height electric loading doors
  • Sodium lighting
  • Spacious shared yard areas
  • Dedicated car parking facilities
Unit G benefits from:
  • A two-bay warehouse
  • A minimum eaves height of 11 metres
  • Large yard area
  • 2 electric roller shutter doors
  • 3 dock levellers
  • Dedicated car parking
  • On site CCTV
Unit H benefits from:
  • A minimum eaves height of 6 metres
  • Large yard area
  • 2 electric roller shutter doors
  • Dedicated car parking
  • On site CCTV
The ownership also includes a nursery building which is let to Mid-Counties Co-operatives on a long lease. Further details included within the tenancy schedule.

The Waterfront Offices

The office element consists of three standalone office buildings constructed in phases since 2002 and are known as The Quadrant, Riverside House, and Waterfront 4. A fourth office known as Bernicia House has been sold off to the North East Ambulance Service who owner occupy the building. All three remaining buildings in the ownership have received BREEAM (Building Research Establishment Environmental Assessment Method) Excellent ratings for their environmental performance and sustainability.

All offices have glazed/brick elevations and provide three floors (ground, first and second) of quality open plan accommodation arranged in two wings around a central double height reception. The accommodation has the flexibility to be split on either a wing-by-wing or on a floor-by-floor basis.

The specification has been finished to a good standard, typically to include:
  • Impressive atrium entrance areas
  • Full raised access floors
  • Fully air conditioned with the exception of The Quadrant
  • 2.7m finished floor to ceiling height
  • Double glazing
  • Category II light fittings
  • 2 x 13 person passenger lift
  • Male and female WCs on each floor together with disabled WCs
  • Generous 536 space parking provision (Waterfront 4 1:231 sq ft, Riverside House 1:271 sq ft, Quadrant 1:167 sq ft)
A Schedule of Tenancy & Accommodation can be found within the marketing particulars.

Tenure

The Waterfront Industrial Estate

Title
The property is held via three long leasehold interests with between 132 and 135 years unexpired at a peppercorn rent. Further information available in the dataroom.

The Waterfront Offices

Title
The property is held via three 150 year long leasehold titles with between 132 and 134 years unexpired and subject to a peppercorn rent. Further information is available in the dataroom.

Tenancy

A Schedule of Tenancy & Accommodation can be found within the marketing particulars.

The Waterfront Industrial Estate

Service Charge
The property is subject to a service charge with the 2020 budget reflecting an average of £0.39 psf. This is inclusive of the estates charge which is currently budgeted at £0.20 psf. The Nursery service charge is currently budgeted at £1.59 psf including estates charge. Further information available on request.

The Waterfront Offices

Service Charge
A separate service charge regime is in place for each building. The average rate as per the 2020 budget is £7.47 psf. This is inclusive of the estates charge which is currently budgeted at £0.21 psf. Further information is available on request.

Covenant Information

Further information in relation to the tenant covenants can be found within the marketing particulars.

INVESTMENT MARKET

Further information in relation to the investment market can be found within the marketing particulars.

VAT

The property has been elected for VAT and therefore it is anticipated the sale will be treated as a TOGC.

EPC

All EPCs and recommendation reports are available in the dataroom.

Anti-money laundering

In order to discharge its legal obligations, including under applicable anti-money laundering regulations, C&W will require certain information of the successful bidder. In submitting a bid, you agree to provide such information when Heads of Terms are agreed.

Proposal

PURCHASE RATIONALE

  • A rare opportunity to acquire a leading mixed-use business park strategically located adjacent to the A1 and just 3 miles west of Newcastle City Centre.
  • Built in phases from 2001 to 2008 the park provides sought after modern high specification industrial units of varying sizes and BREEAM excellent Grade A office accommodation.
  • The ownership offers a diverse income stream underpinned by a wide range of local, regional, national and NHS covenants.
  • Low passing rents offer significant rental growth prospects against a backdrop of falling availability, limited development pipeline and a highly constrained city centre market.
  • Strong occupier demand as demonstrated by recent and on-going letting activity.
  • Attractive high yielding income profile with significant reversionary potential.
  • Low capital value psf offering significant discount to build cost.
Offers are invited for the whole in excess of £23,294,000 reflecting an attractive 9.01% NIY, 9.78% RY and a low blended capital value of just £90 psf.

Alternatively, offers are invited for the office and industrial elements as per below.

Waterfront Offices - Offers in excess of £12,432,000 reflecting an attractive 11.00% NIY, 12.23% RY and a low blended capital value of just £102 psf.

Waterfront Industrial - Offers are invited in excess of £10,862,000 reflecting an attractive 6.75% NIY, 6.98% RY and a low blended capital value of just £80 psf.

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NET INITIAL YIELD:
9.01%
PRICE:
£23,294,000
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