• Industrial & Office Opportunity

• Strategic location in an established employment area

• 40% of income secured to MyOptique Group t/a Glasses Direct

• Acquired by Essilor International in August 2016

• Essilor International is the world leader in opthalmic lenses

• Highly successful property with excellent letting history

• Building recently refurbished

• £1,250,000, subject to contract

• 12.7% Net Initial Yield

• £35 per sq ft Capital Value

The subject property, Gemini House, forms part of Groundwell Industrial Estate which is a long established employment area and is strategically located immediately adjacent to the A419 dual carriageway and A4311 Blunsdon Junction to the north east of Swindon town centre. The A419 provides direct access to Junction 15 of the M4 Motorway approximately 9.5 km (6 miles) to the south east.

The property which was constructed in the early 1980’s and systematically refurbished over the past two years comprises a detached self-contained building around a central landscaped courtyard providing a communal reception area together with office accommodation on ground and first floor. In addition, there is a warehouse attached to the side of the property.

The office accommodation is built of concrete frame construction with part brick part steel elevations and provides office suites around a central landscaped courtyard. The office accommodation and common parts have been refurbished to provide 30 individual self-contained suites which have proved extremely popular with local SME’s; so much so that there has been a waiting list of occupiers for the property.

The offices have been let in two ways. On an inclusive licence agreement including heating, lighting, WIFI, access control, buildings insurance and use of communal kitchen and WC amenities. Costs are paid monthly in advance plus 3 months’ deposit subject to a minimum 6 month term. Alternatively, conventional leases have been offered where in addition to the rent the occupiers are responsible for a building service charge with includes heating, access control and use of communal kitchen and WC facilities. The individual suites are responsible for their own business rates. Buildings insurance and electricity is apportioned on a pro-rata basis.

The warehouse accommodation is of steel portal frame construction accessed via two vehicle loading doors and benefitting from a minimum eaves height of 23 ft. The tenant has installed a mezzanine floor within the warehouse to provide additional accommodation for themselves. Part of the ground floor which is attached to the warehouse comprises a bespoke production facility for the tenant.

According to the Valuation Office website the various suites are individually assessed for their own rateable value which is set out under the Accommodation and Tenancy Schedule.

The Uniform Business Rate is 48 pence per pound for 2015/2016.

We estimate the site area to be approximately 1.005 hectares (2.5 acres) providing a site coverage in the order of 31.5%.

A Phase 1 Environmental Survey has been carried out by WSP UK Limited. The report concluded that the site presents a low/medium environmental risk. A copy of the report is available in the data room and it is also available for assignment to a purchaser.

The property is held long leasehold for a term of 125 years from 21st March 1983 expiring 20th March 2108 (approximately 92 years unexpired).  The ground rent payable is currently £41,000 per annum. The lease is reviewed on a 5 yearly upward only basis to 15% of open market rental value. The next review is in March 2018. 

Gemini House is multi-let to twenty eight tenants in accordance with the attached tenancy schedule.

The property provides a diverse spread of income with 40% secured against one occupier – MyOptique Group Limited. Their October 2016 rent review has been agreed at £102,000 per annum from a previous rent of £96,000 per annum. The tenant also had an option to break in October 2016 which has not been exercised.

The total passing rent is £248,975 per annum.

Therefore, the total current net income receivable after deducting the head rent and non-recoverable service charges is £168,169.65 per annum.

A copy of the Service Charge Budget is available to download.

The Service Charge for the year 1st January 2016 to 31st December 2016 is £159,141.91 (£48.09 per sq m / £4.47 per sq ft) overall.

£120,786.29 is payable by the tenants and therefore the landlord is responsible for £38,355.62.

The property is let to twenty eight tenants and their accounts, where published, are available to download.

40% of the current income is from MyOptique Group Limited (Co. No. 5139004) who are in occupation of 44% of the building. The company has reported the following figures; 

MyOptique Group Limited is a market leading company in the European optical industry providing its customers with a direct-to-home online service for prescription glasses, contact lenses and sunglasses. Established in 2004 the company has served some 3 million customers and experienced double digit growth in each of the last eight years. In 2015 one of MyOptique’s brands, Glasses Direct which occupies the subject property, was recognised as delivering the best e-commerce experience in the Retail Week Customer Experience Awards.

In August 2016 it was announced the company entered into an exclusive agreement to be acquired by Essilor International, the world leader in ophthalmic lenses. The deal is reportedly worth in the region of £120m. With MyOptique Groups key management personnel to remain in place the acquisition enables Essilor to expand its presence in Central Europe. According to its website The Essilor Group has 55,000 employees in 62 countries.

For further information visit www.myoptiquegroup.com and www.essilor.com.

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

Our client is seeking offers in the region of £1,250,000 (One million, two hundred and fifty thousand pounds), subject to contract, reflecting a net initial yield of 12.7% and a capital value of £35 per sq ft, assuming purchasers’ costs of 5.96%.

Investment Considerations

1. An opportunity to acquire a highly popular, fully let and income producing mixed-use investment in an established employment area;

2. 40% of the income secured to the covenant of MyOptique Group Limited, a leading European online prescription glasses, contact lenses and sunglasses business;

3. Announced in August 2016 that MyOptique Group Limited has been acquired by Essilor International, the world leader for corrective lenses;

4. The property is let to twenty eight tenants in total providing an investor with an attractive spread of income;

5. The property has been refurbished by the vendor over the past two years and is maintained to a high standard;

6. The property has an enviable letting history and is extremely well run by the full time building manageress;

7. Potential to enhance value and income through asset management strategies;

8. A purchase at the asking price reflects a highly attractive double-digit net initial yield and capital value of under £35 per sq ft for an investor;