About this property
The city of Wolverhampton lies in the north west of the West Midlands and is a major commercial centre. Birmingham is located 15 miles to the south east while Walsall is 5 miles to the east and Telford 18 miles to the west. The city has good road communication with Junction 10 of the M6 4 miles to the east and Junctions 1&2 of the M54 4 miles to the north. The A41 provides access south east into the Black Country along the Black Country Route and the A449 Stafford Road leads north to Junction 2 of the M54.
The city’s main railway station has direct access to London, via Birmingham New Street with a journey time of 1 hour 40 minutes.
Wolverhampton has a diverse economy with a skilled workforce of 145,000 supporting over 8,500 companies. Wolverhampton is home to a number of major UK firms including Marstons, Jaguar LandRover, Lloyds Bank (formerly Birmingham Midshires), Carillion, Goodrich and Moog.
UNIVERSITY OF WOLVERHAMPTON
Wolverhampton University is a city based campus university located in the heart of Wolverhampton. With over 15,000 full time undergraduates enrolled and over 26,000 students in total studying, it is one of the fastest growing universities in the UK. The university is placed across two central campus’s either side of the city’s ring road. Both are within a 5 minute walk of the subject property as is much of the university’s residential accommodation.
The university has over £250m of investment committed for the campus by 2020. This includes a new £18m Business School, £21m Science Centre and a new £65m Construction and Built Environment campus at the former Springfield Brewery site.
The property lies at the junction of Waterloo Road and St Andrews/St Peters on the city’s ring road. It is an extremely prominent position in one of the city centre’s main office locations. There are professional firms located all along Waterloo Street including accountants, solicitors and recruitment agencies.
Waterloo Court is only 250m from the city centre and the main retail pitch. Wolverhampton Council offices and the Civic Hall are directly east of Waterloo Road while Marstons Brewery HQ is west across Chapel Ash Island.
Like many cities Wolverhampton is seeing many old offices being converted to residential, decreasing the amount of available office stock. Construction House is a 61,500 sqft office adjoining the subject site which is in the process of being converted to provide 233 studio rooms. There are also plans to convert Telecom House (85,000 sqft) into 100 apartments.
Waterloo Court is a multi let office building arranged over ground and five upper floors of offices and a further vacant caretaker’s flat on the sixth floor. The building also has 77 car spaces on site, part in an undercroft. The car park is accessed from a security controlled entrance off Clarence Road at the rear of the property.
The offices have a ground floor reception and two 8 person passenger lifts serving all upper floor offices. The office suites on each floor are arranged in three wings. Part of the ground floor is divided into smaller individual suites off a central corridor.
There is gas central heating throughout with a number of suites also having ceiling mounted air conditioning cassettes. There are wcs on each floor with male and female wcs on alternate floors.
ACCOMMODATION AND TENANCIES
The property is currently 95% let to 14 tenants. The AWULT to expiries is 2.93 years and to breaks, 2.37 years. The current total rent passing is £359,169 per annum. There are currently three vacant suites in the building totalling 1,918 sqft. The average rent is only £8.92 per sqft.
60% of the current tenants have been at Waterloo Court for over 10 years, with several renewing or regearing in the past two years. There are further discussions ongoing with two prospective tenants and other existing tenants with leases close to expiry.
The service charge is currently budgeted for the 2017/18 year at £4.00 per sqft. There are only two leases with caps of which only one produces a shortfall, currently standing at £916 per annum. Full service charge information is available on request.
ASSET MANAGEMENT OPPORTUNITIES
• Refurbish and upgrade vacant suites and further suites on any expiries
• Drive general rental tone upwards, especially on the small ground floor suites
• Manage car park and generate more income from spaces
• Regear/renew further leases due for expiry in next twelve months
• Upgrade 6th floor, former caretaker’s flat to provide additional lettable space
• Potential future conversion to alternative uses (residential, student), subject to planning.
The property has an EPC rating of D-92. A copy of the report is available on request.
The property is elected for VAT and VAT will be payable on the purchase. The intention will be to sell as a TOGC.
We are seeking offers in excess of £3,200,000, a purchase at this level will show an initial yield of 10.54%, based on purchase’s costs of 6.47%. The reversionary yield is 11.07%. A purchase at this level gives an underlying capital value of under £77.95 per sqft.
In accordance with Anti-Money Laundering Regulations, two forms of identity and confirmation of the source of funding will be required from the successful Purchaser.
- Prominent city centre multi let office building
- 41,053 sqft of accommodation over seven floors
- 77 secure car spaces on site (1:522 sqft)
- 95% let, currently with 14 tenants
- WAULT of 2.93 years to expiries & 2.37 years to breaks
- Current rent of £359,169 per annum (low average of only £8.92 per sqft)
- Asset management opportunities
- Initial yield - 10.54%, reversionary yield of 11.07%
- Underlying capital value of under £77.95 per sqft