Cranfield Tech Park - investment brochure

South East Investment Opportunity University Way Cranfield MK43 0BT

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A unique investment opportunity to acquire a technology-based business park, located within a world-renowned innovation habitat centred around Cranfield University

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A thriving, high quality business and technology park

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INVESTMENT SUMMARY • Cranfield University Technology Park presents a unique opportunity to acquire a high quality, thriving and successful business park with continued levels of high demand from businesses.

• Cranfield benefits from a strategic location adjacent to the M1 at the centre point between London, Birmingham, Oxford and Cambridge.

• Cranfield University Technology Park is a vibrant ‘innovation habitat’ where like-minded, knowledge-based businesses enjoy the relaxed, traffic free environment and links with

• 573 car parking spaces providing an excellent overall ratio of 1:194 sq ft.

• Multi-let to 55 tenants which presents a diverse spread of risk.

• Total net income of £1,672,242 per annum equating to a competitive average rent of £15.29 per sq ft overall.

• Asset management opportunities to improve the income profile and increase the WAULT. • Potential to sell-off individual buildings to owner occupiers at a premium to market value.

Cranfield University.

• Offers are sought in excess of £16,640,000 (Sixteen Million, • A large site extending to 8.58 acres providing a low site cover of only 30%.

• Eight high quality office buildings constructed in phases

Six Hundred and Forty Thousand Pounds), subject to contract and exclusive of VAT. • A purchase at this level reflects an attractive net initial yield

between 1999 and 2007 providing a total of 111,124 sq ft

of 9.5% and a low capital value of £150 per sq ft, exclusive of

of modern accommodation.

purchaser’s costs at 5.8%.

• Cranfield University Technology Park provides ultimate letting flexibility with each building differing in size such that it can serve a wide range of occupier requirements.

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A dynamic and successful environment

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CRANFIELD UNIVERSITY TECHNOLOGY PARK Cranfield University Technology Park, home to 55

the crossroads between Oxford to Cambridge and

Cranfield University Technology Park is a member

businesses, is adjacent to Cranfield University and

London to Birmingham. It boasts great rail and road

of UKSPA (UK Science Park Association) and as

provides 111,124 sq ft of office accommodation

transport links and is uniquely complemented by its

such is focussed on creating the right environment

across eight buildings. The total site area is

own executive airport.

to attract and support occupier businesses. This

approximately 8.58 acres meaning a low site cover of only 30%. There are approximately 573 car parking spaces providing a generous ratio of 1 space per 194 sq ft.

Cranfield University’s original vision in establishing the Tech Park, in partnership with development partner St. Modwen, was the creation of a dynamic cluster of science, technology and knowledgebased businesses, all of which would benefit from the proximity of the University’s distinctive expertise and skills base.

Construction commenced in 1999 and it has been built in two phases. The resulting high quality office buildings provide a range of accommodation from 270 sq ft to 6,312 sq ft. This has created a relaxed, traffic free environment.

The benefits of the Tech Park in terms of its environment, location, accommodation and proximity to Cranfield University, has led to continued levels of high demand from businesses.

Occupiers are diverse, with demand from the local office market, regional office market, plus specific

Since its launch, Cranfield University Technology

commercial sectors such as the automotive industry

Park has become a ‘world-renowned’ innovation

and those with direct connections to Cranfield

‘hot spot’ with its central and well-connected

University. This has created a resilient range of

location between Milton Keynes and Bedford, at

tenants.

includes pro-active management and positively engaging with tenants, to encourage growth and expansion to larger units across time. This has proved very successful and UKSPA research has shown that Science and Technology Park tenants outperform compared to similar firms located elsewhere.

Other occupiers at Cranfield include Nissan European Technical Centre on a 20 acre facility, the Cranfield University owned Martell House provides 50,000 sq ft and Invar Systems Ltd occupies a further 10,000 sq ft. cranfieldtechnologypark.co.uk

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A strategic business location

LOCATION Cranfield University Technology Park benefits from

The Tech Park is well-positioned between Milton

Rail connections are provided by Milton Keynes,

a strategic location with easy road, rail and airport

Keynes and Bedford for London, Birmingham,

Bedford and Flitwick stations whilst

connections. It is immediately adjacent to Cranfield

Cambridge and Oxford. By road it is approximately

London Luton and London Heathrow Airports

University and close to Cranfield village, which is

four miles from J13 and J14 of the M1 motorway.

are also easily accessible from the Tech Park.

accessed by road or a new footpath/cycleway.

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M69 M1

BIRMINGHAM

BIRMINGHAM AIRPORT

M5

M42

A14

M40

A45 M1

Newport Road

NORTHAMPTON

CAMBRIDGE

MOULSOE

BEDFORD

A421

A1

A421

CRANFIELD

M11

Cranfield Road

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CRANFIELD AIRPORT

A43

A10 M1 A421

MILTON KEYNES

M1 A1(M)

M40

SALFORD A41

A418

LUTON AIRPORT

STANSTED AIRPORT A1(M)

MILTON KEYNES

M11

lf Sa

OXFORD

A40

or dR oa

AYLESBURY A41 A10

d

M1 M25 M25

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LONDON

M4 M4

HEATHROW AIRPORT

Road

Rail

Air

Destination

Distance

Departing Milton Keynes

Journey Time

M1 Junction 13/14

4 miles

London Euston

30 mins

Central Milton Keynes

7 miles

Birmingham

55 mins

M25

30 miles

Departing Flitwick

Central London

50 miles

London St Pancras International

Cambridge

42 miles

Departing Bedford

45 miles

London St Pancras International

Oxford

39 mins

37 mins

Destination

Distance

London Luton

21 miles

London Heathrow

51 miles

London Stansted

50 miles

Birmingham International

58 miles

Bus A regular bus service runs between Bedford, Milton Keynes and Cranfield University Technology Park.

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Linked to an internationally renowned University

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CRANFIELD UNIVERSITY Cranfield University is a wholly post-graduate

The Cranfield University campus hosts a full

for commercial partnerships and hence demand

and research-intensive institution, specialising

programme of seminars and events ranging from

from occupiers.

in aerospace, agrifood, energy, environment,

national debates through to lunchtime seminars.

management & leadership, manufacturing, security

These encourage many tenants to work with the

& defence and transport. Many occupiers have

University to mutual benefit.

links with Cranfield University and benefit from its facilities, which include a 186 bed hotel with meeting and conference facilities. Further, there are shops, extensive sporting facilities and many places to eat and drink.

Cranfield University is preparing a masterplan to expand the campus over time, across the remaining land around the Tech Park. This will create a wider

Also, there is Cranfield Airport which offers a full range of business support and executive jet services. This includes a private lounge, secure parking and discreet personal service to customers. cranfield.ac.uk

and more vibrant campus with greater opportunities

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Invar Systems

Derwent House

Cranfi Cra Unive nfield iversit eld Un rsityy

ACCOMMODATION way 1 Med Court way 2 Med Court

Conway House

Phase 2

way 5 Med Court

way 3 Med Court way 4 Med Court

Cranfield University Technology Park has been measured by ARK Architecture in accordance with Code of Measuring Practice (6th edition). The measured survey, which can be assigned to the purchaser, provides the following net internal areas:

Phase 1 – 5.61 acres Cranfield Innovation Centre

Trent House

37,613 sq ft

Trent House 19,738 sq ft

Phase 1

Derwent House 20,012 sq ft

Cranfield Innovation Centre

Phase 2 – 2.97 acres Conway House 15,816 sq ft Martell House and M1 Motorway

Medway Court 17,945 sq ft

Total 111,124 sq ft

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Cranfield Innovation Centre

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The Cranfield Innovation Centre (CIC) was originally developed

Cranfield Innovation Centre

in 1999 by Mid Beds District Council (now Central Bedfordshire Council). After St. Modwen acquired the CIC an extension was added, including an impressive central reception area, to provide

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a total of 37,613 sq ft. The building has 46 units ranging from 270

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sq ft to 1,779 sq ft plus meeting rooms. Features include: •

Impressive manned reception and common areas

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Business support services

•

On-site café

•

Comfort cooling and IT services to all units

•

Fast broadband service to all units

•

Share of 410 car spaces

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37,613 sq ft let to 38 tenants

Rent

£526,667 per annum

Figures correct as of 5 September 2014

7 8 17

9

18 19 20 21 15

10

16

32

30A 30B

34 26A 34 33 26B 32

Ground Floor

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“The CIC’s excellent facilities and its location make it a perfect base for us and for our clients from overseas and closer to home.”

ITAS

29 10 1

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Tenancies

8

2

Overview: Net internal area

6

3

31 28

14

26A

13

26B

12

27

42

27

A B

22 23 24 25

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First Floor

40

41

39

38

44

35

43

36

37

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Trent House

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Trent House is a detached two storey office building providing

Trent House

19,738 sq ft. It was built by St. Modwen in 2000 and provides a range of offices from 1,952 sq ft to 5,956 sq ft across six units.

Its versatile design has proved popular, with floor plates being capable of sub-division and changing over time if required. The building benefits from a generous open core and plentiful car parking. Features include: •

Flexible floor plate design

•

Raised access floors

•

Comfort cooling and heating system

•

Can be occupied as a whole or in suites

•

Share of 410 car spaces

Overview: Net internal area

19,738 sq ft

Tenancies

let to 6 tenants

Rent

£284,505 per annum

Figures correct as of 5 September 2014

“Cranfield’s facilities and knowledge have helped us with our own research and development. Having their facilities on our doorstep has proved valuable.”

Caltec

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Derwent House

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Derwent House is a detached two storey office building providing

Derwent House

20,012 sq ft. It was built by St. Modwen in 2003 and provides a range of offices from 4,026 sq ft to 5,982 sq ft across four units.

Its versatile design has proved popular, with floor plates being capable of sub-division and changing over time if required. The building benefits from a generous open core and plentiful car parking. Features include: •

Flexible floor plate design

•

Raised access floors

•

Air conditioning

•

Can be occupied as a whole or in suites

•

Share of 410 car spaces

Overview: Net internal area

20,012 sq ft

Tenancies

let to 4 tenants

Rent

£276,000 per annum

Figures correct as of 5 September 2014

“The Tech Park provides our rapidly growing team with a superb working environment and access to the excellent facilities onsite at Cranfield.”

Mavedu

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Conway House

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Conway House is a detached two storey office building providing

Conway House

15,816 sq ft. It was built by St. Modwen in 2007 and provides a range of offices from 2,855 sq ft to 4,915 sq ft across four units.

Its versatile design has proved popular with floor plates being capable of sub-division to accommodate occupiers’ changing needs over time. The building benefits from a generous open core and plentiful car parking. Features include: •

Flexible floor plate design

•

Raised access floors

•

Air conditioning

•

Can be occupied as a whole or in suites

•

Generous one per 211 sq ft car parking ratio

Overview: Net internal area

15,816 sq ft

Tenancies

let to 3 tenants

Rent

£257,811 per annum

Figures correct as of 5 September 2014

“With the ultra-high technology companies and candidates that we work with, the Tech Park’s location and its links to the world class Cranfield University are an important part of our own brand.”

Vector Recruitment

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Medway Court

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Medway Court provides five self-contained detached two

Medway House

storey office buildings from 3,213 sq ft to 6,312 sq ft. Unit 5 has been sold to an occupier but the remaining four units are leased to a range of high technology occupiers, which appreciate the buildings’ flexible design. Features include: •

Self-contained two storey buildings

•

Raised access floors

•

Air conditioning

•

Can be adapted for a range of uses

•

Generous one per 204 sq ft car parking ratio

Overview: Net internal area

17,945 sq ft

Tenancies

let to 4 tenants

Rent

£292,052 per annum

Figures correct as of 5 September 2014

“We’ve been working with Cranfield University for many years and by sharing campus space with them we are ideally placed to extend our partnership as business grows.”

Food Freshness Technology Ltd

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OCCUPATIONAL MARKET Being immediately adjacent to Cranfield

Cranfield Innovation Centre (CIC) achieves

Strong demand has continued with

Against this picture of healthy demand,

University and also enjoying a strategic

rents in the region of £16 to £18 per sq ft,

transactions under offer as follows:

the regional office market continues

location on the M1, Cranfield University

whilst rents on the remainder of the Tech

Technology Park has continued to see

Park tend to be in the region of £15 to

strong demand from new tenants, whilst

£16.50 psf. Recent examples include:

also retaining its existing occupier base.

The range of unit sizes and flexible leasing approach has attracted new tenants and enabled expansion. Through proactive management and regular dialogue with tenants, this has led to a successful and

• July 2013 - new lease to Springboard Research of 1,511 sq ft at £16.61 psf • September 2013 - new lease to Impetus Automotive of 1,686 sq ft at £16.53 psf • February 2014 – new lease to Food

robust tenant base, low voids and good

Freshness Technology of 6,329 sq ft

levels of rent.

at £16.54 psf • March 2014 – lease renewal to QMatic of 5,978 sq ft at £15.06 psf

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• Derwent House – new 10 year lease of 5,982 sq ft at £15.05 psf • Conway House – new 3 year lease of 2,872 sq ft at £16.63 psf • Conway House – lease renewal of 2,855 sq ft at £16.77 psf • 1 Medway Court – lease renewal of 5,205 sq ft at £16.50 psf

to have very low levels of Grade A or good Grade B space and an over supply of poor secondary accommodation, much of which is going to residential.

This restricted supply position puts Cranfield University Technology Park in an advantageous position.

INVESTMENT MARKET The South East office investment market

Business Park assets have attracted

has remained extremely buoyant during

strong demand from investors leading

2014. This trend looks set to continue

to significant inward yield movement,

with strong inflows of capital, a severe

illustrated by the following transactions,

shortage of quality stock, positive signs

all of which make the Tech Park appear

in the occupier markets and an improving

attractively priced.

Date

Address

Size (sq ft)

Tenant

WAULT (years)

Price

Yield

CV psf

U/O

Phase 1000, Cambourne Business Park, Cambourne

105,130

Multi-let

4.25

£26.57m

7.00%

£253

U/O

Mill Court, Great Shelford, Cambridge

37,697

Multi-let

2.12

£6.35m

8.29%

£168

Aug-14

Unit 310, Cambridge Science Park

58,639

AstraZeneca

4.50

£18.83m

6.30%

£321

below 5.5%.

Aug-14

7 Roundwood Avenue, Stockley Park

38,840

Fiserv (Europe) Ltd

3.75

£15.75m

7.73%

£406

Demand is particularly strong for income

Jun-14

Quantun 1&2, Maidenhead

123,217

Multi-let

3.60

£46.70m

6.70%

£379

Apr-14

Phase 2000 Cambourne Business Park, Cambourne

135,143

Multi-let

5.50

£36.00m

6.74%

£266

Mar-14

Breakspear Park, Hemel Hempstead

321,877

Multi-let

5.00

£60.60m

7.77%

£188

Jan-14

Vision Park, Cambridge

90,000

Multi-let

7.45

£28.50m

6.05%

£317

Dec-13

Caldecotte Lakes Business Park, Milton Keynes

171,349

Multi-let

4.04

£25.67m

9.00%

£150

economic outlook taking prime yields

opportunities together with strategically located, high quality assets with shorter unexpired lease terms offering asset management opportunities such as Cranfield University Technology Park.

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TENURE

TENANCY & INCOME PROFILE*

The Property is held on two 150 year leases from

The total net income for the Property is £1,672,242 per annum equating to a competitive average rent

Cranfield University as detailed below. A breakdown of

of £15.29 per sq ft overall. The vendor will provide a 12 month rent, rates and service charge guarantee

ground rents is available on request.

from completion on any vacant units apart from those in Cranfield Innovation Centre. On the date of completion, the vendor will top up any current rent free periods/rent concessions across the Property.

A detailed tenancy schedule is available on request.

Phase 1 A long leasehold for 150 years from 23 September 2002

Building

No. of Buildings

NIA (sq ft)

Parking (spaces)

Parking (psf)

with a ground rent as a percentage of net contracted rent:

Cranfield Innovation Centre (CIC)

1

37,613

410

189 189

Trent House

1

19,738

Share above

CIC

14.0%

Derwent House

1

20,012

Share above

189

Trent House

15.1%

Conway House

1

15,816

75

211

Derwent House

15.1%

Medway Court

4

17,945

88

204

Total

8

111,124

573

194

Phase 2

Building

No. of Tenants

Rent (£ pa)

Rent (£ psf)

A long leasehold for 150 years from 9 October 2007

CIC

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£526,667

£16.39

with a ground rent as a percentage of net contracted rent:

Trent House

6

£284,505

£14.41

Derwent House

4

£276,000

£13.79

Conway House

3

£257,811

£16.30

Medway Court

4

£292,052

£16.27

Other Income**

N/A

£156,481

N/A

Ground Rent***

N/A

- £121,274

N/A

Total

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£1,672,242

£15.29

Conway House

12.5%

Medway Court

12.5%

* All figures are quoted as at 5 September 2014 ** Projected figure for year ending 2014 *** As at 24 March 2014

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PROPOSAL Capital Allowances

VAT

Data Room

The benefit of any unclaimed

The property is elected for

Access to the data room is

capital allowances could

VAT. However, it is anticipated

available on request.

be made available to the

that sale of the property will be

A purchase at this level reflects an attractive net

purchaser. Further information

treated as a Transfer of a Going

initial yield of 9.5% and a low capital value of £150

is available on request.

Concern (TOGC).

We are instructed to seek offers in excess of £16,640,000 (Sixteen Million, Six Hundred and Forty Thousand Pounds), subject to contract and exclusive of VAT, for our client’s long leasehold interests.

per sq ft, exclusive of purchaser’s costs at 5.8%.

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Noel Lander

Ali Penford

Richard Last

020 7087 5336 07931 371 825 noel.lander@eu.jll.com

020 7852 4936 07808 102 339 ali.penford@eu.jll.com

01908 340 933 07921 166 595 richard.last@brownandlee.com

A development by

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This plan is published for the convenience of identification only and although believed to be correct is not guaranteed and it does not form any part of any contract.

MISREPRESENTATION ACT 1967 | DISCLAIMER COPYRIGHT © JONES LANG LASALLE IP, INC. 2013.

All rights reserved. Jones Lang LaSalle Limited and Brown & Lee for themselves and for the vendor of this property whose agents they are given notice that: a) The particulars are set out as general outline only for the guidance of intending purchasers and do not constitute, nor constitute part of, an offer or contract. b) All descriptions, dimensions, references to condition and necessary permissions for use and occupation, and other details are given in good faith and are believed to be correct, but any intending purchasers should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them. c) No person in the employment of Jones Lang LaSalle Limited nor Brown & Lee has any authority to make or give any representation or warranty whatever in relation to these properties. Subject to Contract – Exclusive of VAT – September 2014