The Tramshed

The Tramshed comprises a mixed retail and office development extending to 23,443 sq ft. White Pennant Ltd acquired the long leasehold interest from clients of DTZ Investors as an investment for the asking price of £5.25m. Pricing at this level reflects £200 per sq ft for the office accommodation assuming a capitalisation rate of 6.50% on the A3 income and purchaser’s costs of 6.60%. The bar / restaurant is let to Ha Ha Bar & Grill Limited from 5th September 2002 for 25 years expiring 4th September 2027 with five yearly open market rent reviews. The lease is internal repairing with the tenant contributing to external repairs via a service charge. The passing rent is £130,000 per annum reflecting £27.14 per sq ft and the next rent review is 5th September 2017. The office element was previously ran as a serviced office scheme directly by the vendor and therefore no overriding lease or operator was in place. The seller was responsible for all costs associated with operating the serviced offices and in turn received an inclusive rent from the various tenants. The operation proved successful with high occupancy levels over recent years. The individual serviced office agreements are terminable upon 3 months’ notice and as such vacant possession could be achieved relatively quickly. On 27th May 2015 an application was made for prior approval to the change of use from offices to residential to create 16 dwellings. The application was successful and prior approval given on 17th July 2015. It is understood that the new owner intend to pursue this strategy with the regards to the future of the property. The property is held long leasehold at a peppercorn rent for a term of 145 years from 1st March 2001 expiring 28th February 2146. The lease contains no restriction on use and landlord’s consent is not required for the conversion of the property to residential. Joint agents Cortex Partners and Knight Frank acted on behalf of the vendor.