36 40 langham street, london w1 - hanovergreen.co.uk · langham street is in the heart of...

36 – 40 Langham Street,

London W1

Prime Mixed Use Central London Freehold

Investment / Refurbishment / Development

Opportunity

Investment Summary

Prominent and unbroken attractive parade of three mixed use properties

on the south side of Langham Street in the heart of London’s fashionable

district of Fitzrovia.

All the properties comprise of office suites of various sizes with two

residential apartments within 38 Langham Street and one within 40

Langham Street.

The properties have been measured by Murphy Asset Services in

accordance with the RICS Code of Measuring Practice (6th Edition) and a

summary of these are provided below:

* Measured on a gross internal basis

The properties are located within the boundaries of Westminster City

Council and the East Marylebone Conservation Area. 38 and 40 Langham

Street are Grade II listed.

Freehold interest.

The properties are multi let on 24 commercial leases and 3 Assured

Shorthold tenancies, producing a total rental income of £298,731.96 per

annum.

Offers in excess of £5,895,000, subject to contract, are sought which

would reflect a net initial yield of 4.79% after deducting the usual

acquisition costs of 5.8%, and a capital value of £550 per sq ft.

Investment Rationale

Freehold.

Mixed use unbroken West End parade.

Attractive and prominent period buildings with good levels of natural

light.

Passing rents reflect an average rental of only £26.77 per sq ft on the

office floors.

Reversionary.

Numerous asset management opportunities including substantial

refurbishment or potential residential conversion of the upper floors,

subject to obtaining the necessary planning consents.

Multi let with opportunities to extend and enhance the income profile.

Suitable for owner occupiers and investors.

Low capital value per sq ft.

Attractive lot size.

Potential to purchase adjoining building at 94 Great Portland Street

under separate negotiation with Hanover Green.

Page 1

USE SQ M SQ FT %

Offices 806.8 8,684 81%

Residential * 188.6 2,030 19%

TOTAL 995.4 10,714 100%

36 – 40 Langham Street, Fitzrovia, London W1

Location and Communications Location

Langham Street is in the heart of London’s West End and forms part of Fitzrovia, one of London’s most vibrant and fashionable districts. The

surrounding area comprises a mix of offices, residential and diverse shopping, restaurant and bar facilities including Market Place just to the

south.

Over recent years Fitzrovia has attracted substantial office occupiers, drawn to the area by improvements in the office stock including 180 Great

Portland Street, 60 Great Portland Street and Wells & More (Mortimer Street). Just to the west is the BBC’s newly constructed Broadcasting

House which has created a new focal point in the area. Other major occupiers include The Engine Group, University of Westminster, Gleeds,

EMAP and Computer Future Solutions.

Fitzrovia also offers a rich and diverse social scene and is renowned for its fusion of modern bars and restaurants with the Mediterranean style

pavement cafes/bistros, Greek tavernas and Asian restaurants. The immediate area benefits from Market Place which has become a centre for

a mixture of independent and chain bars and restaurants. Other bars and restaurants include Villandry on Great Portland Street and Vanilla on

Great Titchfield Street. There are also a number of internationally renowned hotels, such as The Langham Hotel, the Grange Langham Court

Hotel, The Sanderson and The Charlotte Street Hotel, which also offer their own trendsetting bars and restaurants.

Although the area has become a well known office location it also benefits from a colourful residential community which will be further enhanced

with the proposed redevelopment of the Middlesex Hospital site on Mortimer Street.

Communications

Communications are excellent with Oxford Circus (Central, Bakerloo and Victoria lines), Great Portland Street (Circle, Metropolitan and

Hammersmith & City lines) and Goodge Street (Northern line) underground stations within close proximity. The proposed Crossrail station at

Tottenham Court Road station will further enhance the area’s appeal. There are numerous bus routes running along Oxford Street and Portland

Place providing additional access to Euston and Kings Cross mainline railway stations and the national and international rail networks.

Page 2


Location Plans

Page 3

The above plans are for indicative purposes only and are not to scale.


Description

The property is split into three separately accessed buildings

within the same development on Langham Street.

The buildings were originally constructed as terrace houses, in

the latter part of the 18th Century, out of traditional red brick

beneath a slate roof. We understand that the facades were

replaced in the early 1900’s but the original interior features were

retained.

They now provide office accommodation over basement, ground

and four upper floors with differing sizes of suites due to the

period nature of the property together with three 2 bedroom

apartments. The 4th floor flats in 38 and 40 Langham Street have

the benefit of roof terraces with views across the local skyline.

As the main features have been retained, the office space

provides attractive, spacious electrically heated accommodation

with good natural light. Access is via entrances from Langham

Street at ground floor level.

Page 4


Accommodation

The properties have been measured by Murphy Asset Services in accordance with the RICS Code of Measuring Practice (6th Edition) and both

the net internal and gross internal floor areas are provided below.

Page 5

40 Langham Street 36 Langham Street

38 Langham Street

FLOOR USE NET INTERNAL AREA GROSS INTERNAL AREA

SQ M SQ FT SQ M SQ FT

Basement B1 41.4 446 50.6 545

Ground B1 45.8 493 48.4 521

1st B1 38.1 410 40.3 434

2nd B1 37.8 407 39.8 429

3rd B1 36.6 394 39.5 425

4th B1 36.0 388 47.8 515

TOTAL 235.7 2,538 266.4 2,869



Basement B1 90.5 974 111.1 1,196

Ground B1 89.6 964 97.1 1,045

1st B1 56.0 603 59.0 635

2nd B1 41.4 446 58.9 634

3rd * C3 65.4 704 65.4 704

4th * C3 70.5 759 70.5 759

TOTAL 413.4 4,450 462.0 4,973



Basement B1 68.6 738 98.6 1,061

Ground B1 77.0 829 78.6 846

1st B1 49.2 530 50.9 548

2nd B1 46.0 495 47.4 510

3rd B1 52.6 567 53.7 578

4th * C3 52.7 567 61.8 567

TOTAL 346.3 3,726 391.0 4,110

* Residential use (C3) - Gross Internal Areas

The Measured Report by Murphy Asset Services is fully

assignable to the purchaser.


Tenure

Freehold. The property is edged in red on the OS extract below (for the purposes of identification only).

Page 6


Tenancies

The properties are currently multi let on 24 commercial leases and 3 Assured Shorthold Tenancies, producing a total rental income of

£298,731.96 per annum, and are let in accordance with the following tenancy schedules:

40 Langham Street

Page 7

Floor Use Tenant NIA sq m NIA sq ft Lease Details Lease Expiry

(Tenant’s Break)

Rent £pa

(Rent psf) Comments

Lower

Ground Offices

International

Publishing Group 68.6 738

4 year lease from

6th Aug 2010 5th Aug 2014

£12,500

(£16.94)

Inside the L&T Act 1954. Rent deposit of

£3,672.

Ground

Front Offices

Amber Clothing

Company Ltd 42.4 454

1 year lease from

25th March 2008 24th March 2009

£15,500

(£34.14)


£3,750. Tenant holding over. Service charge

cap of £1,600 pax linked to RPI

Ground

Rear Offices

Aquatic Design

Centre Ltd 34.8 375

5 year lease from

20th Aug 2002 19th Aug 2007

£10,950

(£29.20)


£2,737.50 Tenant holding over. Service

charge cap of £2,190 pax linked to RPI.

1st Offices 3D Eyes Corporation

Limited 49.2 530

2 year lease from

25th Feb 2011 24th Feb 2013

£15,000

(£28.30)

Outside the L&T Act 1954. Rent deposit of

£4,500.

2nd Offices Pearlshine Ltd 46.0 495 3 year lease from


£14,500

(£29.29) Inside the L&T Act 1954. Tenant holding over.

3rd A Offices Cowboy Films Ltd 26.9 290 3 year lease from

1st Nov 2009 31st Oct 2012

£7,500

(£25.86)


£1,875.

3rd B Offices Cowboy Films Ltd 18.0 194 11 month lease

from 9th Nov 2011 31st Oct 2012

£5,250

(£27.06)


£1,575.

3rd C Offices Cowboy Films Ltd 7.7 83 1 year lease from

14th Sept 2011 31st Oct 2012

£3,250

(£39.16)


£975.

4th Residential AST 52.7 * 567 * AST – 1 year from

11th Sept 2012 10th Sept 2013 £24,699.96

Assured Shorthold Tenancy. Rent deposit of

£2,850. Mutual rolling break option after 6

months (11th March 2013).

TOTAL 346.3 ** 3,726 ** £109,149.96

Notes

* Gross Internal Areas on the 4th floor

** Total floor area includes Gross Internal Areas on the 4th floor


38 Langham Street

Page 8


(Tenant’s Break)

Rent £pa

(Rent psf) Comments

Lower

Ground Offices

G Martin

Construction Ltd 90.5 974

5 years lease from

11th April 2012

10th April 2017

(10th April 2014)

£14,000

(£14.37)

Outside the L&T Act 1954. Mutual break

option. Rent deposit of £4,200.

Ground

Right Offices Gallery Vela Ltd 68.7 739

5 year lease from

8th March 2010

7th March 2015

(20th October 2012)

£20,000

(£27.06)

Inside the L&T Act 1954. Rent deposit

of £5,875. Break exercised by the

tenant.

Ground Left Offices Mr A Atiqullah 20.9 225 3 year lease from

21st Oct 2009 20th Oct 2012

£7,000

(£31.11)

Inside the L&T Act 1954. Service

charge cap of £6 per sq ft until 15th

October 2012

1st Offices Psychotherapy UK

Training Ltd 56.0 603

3 year lease from

27th May 2011 26th May 2014

£17,000

(£28.19) Outside the L&T Act 1954. Rent deposit

of £5,100.

2nd Offices Charanjiv Dhawan 41.4 446 3 years from

13th July 2004 12th July 2007

£15,000

(£33.63)


of £3,750. Tenant holding over.

3rd Residential AST 65.4 * 704 * AST – 1 year from

11th Aug 2012 16th Aug 2013 £19,500

Assured Shorthold Tenancy. Rent

deposit of £2,010. Mutual rolling break

option after 6 months (11th Feb 2013).

4th Residential AST 70.5 * 759 * AST – 1 year from

11th Aug 2012 10th Aug 2013 £21,840

New Assured Shorthold Tenancy agreed

but not yet completed. Rent deposit of

£2,400. Mutual rolling break option after

6 months (11th Feb 2013).

TOTAL 413.4 ** 4,450 ** £114,340

Notes

* Gross Internal Areas on the 3rd and 4th floors

** Total floor area includes Gross Internal Areas on the 3rd and 4th floors


36 Langham Street

Page 9


(Tenant’s Break)

Rent £pa

(Rent psf) Comments

Lower

Ground Offices Feda Mohebbi 41.4 446

3 year lease from

20th Oct 2004 19th Oct 2007

£9,000

(£20.18)

Inside the L&T Act 1954. Tenant is

holding over. Rent deposit of £2,250.

Ground

Front Offices

Zafar Rushdie (t/a

Rushdie Media) 23.1 249

2 years from

6th Oct 2009 5th Oct 2011

£9,000

(£36.14)


£2,250. Service charge cap of £1,495

pax linked to RPI

Ground

Rear Offices

Jan Hendrik

Verstraten 22.7 244

1 year lease from

13th Jan 2004 12th Jan 2005

£6,000

(£24.59)

Inside the L&T Act 1954. Tenant is

holding over. Rent deposit of £1,500.

Service charge cap of £550 pax.

Repairing obligations are subject to a

written Schedule of Condition.

1st Front Offices Artemis Recruitment

Ltd 31.0 334

2 year lease from


£9,492

(£28.42)


of £2,125. Tenant is holding over.

1st Rear Offices Ciao London Limited 7.1 76 2 year lease from

1st June 2011 31st May 2013

£3,750

(£49.34)


of £1,200.

2nd Front

East Offices Mr Robin M Lee-Smith 11.6 125

5 year lease

27th July 2009

26th July 2014

(27th July 2012)

£5,000

(£40.00)


of £1,250. Tenant’s only break option.

2nd Front

West Offices If Music Ltd 19.5 210

2 years from

22nd July 2010 21st July 2012

£6,500

(£30.95)


of £1,910. Service charge of £2,160 pax

linked to RPI. Tenant holding over.

2nd Rear Offices Summit Trust

Company Ltd 6.7 72

1 year from

17th January 2012 16th January 2013

£3,500

(£48.61)


of £900.

3rd Front Offices Kitch and Honey Ltd 30.1 324 3 years from

5th Oct 2010

4th Oct 2013

(4th Oct 2012)

£8,500

(£26.23)


£1,665. Break option exercised by

tenant.

3rd Rear Offices 1st Secretarial Ltd 6.5 70 5 years from

1st Dec 2011

30th Nov 2016

(30th Nov 2014)

£2,500

(£35.71)

Outside the L&T Act 1954. Rent deposit

of £750.

4th Offices Music Management t/a

Finger 36.0 388

3 year lease from

12th March 2012

11th March 2015

(11th March 2014)

£12,000

(£30.93)

Outside the L&T Act 1954. Rent deposit

of £3,600.

TOTAL 235.7 2,538 £75,242


Planning, Residential Opportunity & VAT

Planning

The properties are located within the boundaries of Westminster City Council and are split between the Harley Street and East Marylebone

Conservation Areas. 38 and 40 Langham Street are Grade II listed.

Residential Opportunity

The properties are well suited to a residential conversion subject to obtaining the necessary consents. The Westminster City Council Unitary

Development Plan states that “The City Council will seek to maximise the amount of land or buildings in housing use outside the CAZ and, where

appropriate, within the CAZ” (Policy H3). The Council generally welcomes proposals to convert buildings from office use to housing, subject to

appropriate design.

Brimelow McSweeney Architects have prepared a Feasibility Study for a potential residential conversion, a copy of which can be made available

on request.

VAT

The property has been elected for VAT which will therefore be payable on the purchase price.

Page 10


Capital Allowances, EPC & Proposal

Capital Allowances

For the avoidance of doubt, the benefit of any outstanding capital

allowances shall remain with the vendor.

Energy Performance Certificate (EPC)

Please note that we are currently waiting for the completion of the EPC

and this will be included in the final details.

94 Great Portland Street

The above property is also owned by the Vendor and can be bought by

way of separate negotiation through Hanover Green.

Page 11

Simon Hall

T: 020 3130 6403

M: 07715 323553

E: [email protected]

Peter Trinder

T: 020 3130 6408

M: 07831 396542


Neil Proctor

T: 020 3130 6406

M: 07711 468893



Proposal

We are instructed to seek offers in excess of £5,895,000 (Five Million, Eight Hundred and Ninety Five Thousand Pounds), subject to

contract and exclusive of VAT, for our client’s freehold interest. A purchase at this level would reflect a net initial yield of 4.79%, after the usual

acquisition costs of 5.8%, and a capital value of £550 per sq ft.

Further Information

For further information or to arrange an inspection of the property, please contact:

Hanover Green LLP for themselves and for the vendors or lessor of this property for whom they act, give notice that: i) these particulars are a

general outline only, for the guidance of prospective purchasers or tenants, and do not constitute the whole or any part of an offer or contract; ii)

Hanover Green LLP cannot guarantee the accuracy of any description, dimensions, references to condition, necessary permissions for use and

occupation and other details contained herein and prospective purchasers or tenants must not rely on them as statements of fact or

representations and must satisfy themselves as to their accuracy; iii) rents quoted in these particulars maybe subject to VAT in addition; iv)

Hanover Green LLP will not be liable, in negligence or otherwise, for any loss arising from the use of these particulars; and v) the reference to

any plant, machinery, equipment, services, fixtures or fittings at the property shall not constitute a representation (unless otherwise state) as to its

state or condition or that it is capable of fulfilling its intended function. Prospective purchasers/tenants should satisfy themselves as to the fitness

of such items for their requirements. vi) no employee of Hanover Green LLP (and its subsidiaries) has any authority to make or give any

representation or warranty or enter into any contracts whatever in relation to the property.

September 2012


FLOOR PLANS (Not to Scale)


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