• A prime office investment

• Highly secure income

• Let to Irwin Mitchell LLP (Turnover £200m, Net Assets £94.2 million)

• New lease from September 2016

• Freehold

• Prime office location, adjacent to Irwin Mitchell’s UK Headquarters

• £7,080,000, subject to contract

• 7.35% net initial yield

• £174 per sq ft capital value

Riverside Exchange is situated just to the north of the traditional office core and is on the edge of the principal retail area of the city centre.

Riverside Exchange has been developed around a central spine, Millsands, which is accessed from Bridge Street, part of the city’s inner ring road (A61). The A61 and A57 link the city centre with Junctions 33 and 31 of the M1 motorway 6 miles (9 km) to the east and 10 miles (16 km) to the south east respectively. Furthermore, the A6109 and A6178 provides direct access to Junction 34 of the M1 motorway, 3.5 miles (5 km) to the north east of the scheme.

Sheffield rail station is located approximately 0.5 miles (0.8 km) to the south, accessed via the A61 ring road or is approximately 10 minutes by foot.

Riverside Exchange is within walking distance of numerous city centre amenities including the main retail offer, leisure and restaurants. It is well located for public transport including the central bus station, railway station and Castle Square tram stop.

Riverside West is located at the southern end of Millsands at its junction with Bridge St, and very close to the law courts.

Riverside Exchange

Riverside Exchange is one of Sheffield’s eleven designated city centre Quarters and is one of the city’s largest regeneration schemes. It is situated on the former Exchange Brewery site and was developed in phases by Wilson Bowden plc from 2000 to 2008.

The scheme has transformed the area into a vibrant, mixed-use location providing approximately 380,000 sq ft of office accommodation, a 500+ space multi-storey QPark car park and 370 apartments within five residential blocks. It is considered to be the city’s professional district with over 1,500 employees and local occupiers including The Home Office, Howells Solicitors, Department for Environment Food and Rural Affairs (Natural England), British Business Bank and the Health & Safety Executive.

The immediate surrounding area has a strong legal presence with the Family Court and Crown Court to the west of the property and The Magistrates Court and South Yorkshire Police station to the south.

Irwin Mitchell, tenant of Riverside West, also occupy a second office building directly opposite the subject property as their UK headquarters, confirming their strong commitment to the location.

Westbar Square

Directly adjacent and effectively an extension of Riverside Exchange this scheme is a joint venture between Bolsterstone Plc & Bowmer and Kirkland. It recently received outline planning consent for a mixed use commercial & residential scheme of circa 1.4 million sq ft with an estimated GDV of £250m. Detailed design work is underway for over 326 residential units together with spec offices. In respect of the latter, office rents of £22 per sq ft are being targeted. A previous phase of this development has already been completed linking Irwin Mitchell to the adjacent law courts and West Bar. For further information see www.westbarsquare.com.

Sheffield is a large office centre with an estimated stock of approximately 11.5m sq ft (929,000 sq m).

There is no defined central core with the main office buildings and developments dispersed around the city centre. In this regard, the latest developments of note include Riverside Exchange (35,303 sq m / 380,000 sq ft), St Pauls Place (28,335 sq m / 305,000 sq ft) and Digital Campus which will exceed 21,368 sq m (230,000 sq ft).

Prime office rents are now well established above £20 per sq ft with the latest lettings being St Pauls Place, Arup 16,000 sq ft - £23 per sq ft (excluding parking) March 2016 and St Pauls Place, Handelsbanken 3,353 sq ft - £23.50 per sq ft (excluding parking) March 2017.

With the potential for rents of £22 per sq ft being achieved on the adjacent Westbar Square development the potential for future rental growth on Riverside West is strong.

The property has been measured by Commercial Measured Surveys and provides the following accommodation:

A set of floor plans is available to download and the measured survey report can be re-addressed to a purchaser.

We estimate the site area to be approximately 0.23 hectares (0.58 acres).

A Phase I Environmental Review was carried out by Ramboll Environ in April 2017. The report concluded that the site is suitable for current use and considered to be of low to moderate risk in terms of the potential ground contamination. A copy of this report is available to download and can be made assignable to a purchaser. 

The property is entirely let to Irwin Mitchell LLP on a Full Repairing and Insuring lease for a term of 7 years from 29th September 2016, expiring on 28th September 2023 at a passing rent of £555,000 per annum (£147.17 per sq m / £13.67 per sq ft overall). The lease benefits from an upwards only rent review on 29th September 2021.

The tenant has been granted a 20 month rent free period expiring on 29th May 2018. In order that a purchaser does not suffer an income shortfall the vendor will top up the rent on completion by way of an adjustment to the purchase price.

Irwin Mitchell have occupied the property since it was first completed in 2001. The original lease was granted in 2001 for a term from 29th September 2001, expiring on 28th September 2016. The original lease was taken by Irwin Mitchell partners, but (with the landlord’s consent) was assigned to Irwin Mitchell LLP in 2009. The current lease was a reversionary lease granted to follow on from the original lease.

We understand the rateable value for the property is currently £415,000.

The Uniform Business Rate is 47.9 pence per pound for 2017/2018.

The vendor has elected the property for VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).

1. An opportunity to acquire a prime office investment in Sheffield City Centre;

2. Sheffield is England’s fourth largest city and the commercial, administrative and retail centre of South Yorkshire.

3. The subject property forms part of Riverside Exchange, one of Sheffield’s largest regeneration schemes. The immediate area is the subject of major improvement, including the adjoining Westbar Square Scheme;

4. The investment provides highly secure income being let to Irwin Mitchell LLP, the 11th largest law firm in the UK with Net Assets of £94.2 million;

5. New letting from September 2016;

6. The property is situated in a prime office location, immediately adjacent to Irwin Mitchell’s UK Headquarters;

7. A purchase at the asking price reflects an attractive net initial yield.