2 Spencer Yard, Leamington Spa, Warwickshire, CV31

INVESTMENT SUMMARY

* Redeveloped, securely let, higher education establishment.
* Located in Royal Leamington Spa and situated in the heart of Leamington's Creative Quarter, a new digital creative business hub, located between Leamington's train station and the prime retail pitch.
* The property comprises a repurposed, extended and fully refurbished former nursery which has been reconfigured to provide a high specification educational establishment specialising in creative media honours degrees in the areas of animation, audio content, content creation, film, games, music business and web development.
* Total area 294.75 sq.m (3,173 sq.ft).
* The property was subject to a comprehensive redevelopment in 2022/2023, at a cost of over £700,000. Redesigned to the highest environmental standards achieving an EPC A rating.
* Securely let to Cogent Elliot Ltd for a term of 10 years (without break) expiring on 11 November 2033.
* Cogent Elliot is an integrated creative marketing agency whose headquarters are situated adjacent to the subject property.
* The property is sublet in its entirety to SAE Education Ltd, guaranteed by ADE Holdings SAS, who operate the facility as a higher education establishment in collaboration with Cogent Elliot and the University of Hertfordshire.
* Below market passing rent of £61,500 per annum (£19.39 per sq.ft).
* The lease is subject to an upward only review to open market value on 12 November 2028.
* Headline rents in the immediate vicinity are now in excess of £23.00 per sq.ft. offering potential for significant uplift at review.

LOCATION
Royal Leamington Spa is an attractive and affluent Regency town located in the county of Warwickshire approximately 2 miles east of Warwick, 8 miles south of Coventry and 18 miles south east of Birmingham. It is the largest town and principal employment centre in the district of
Warwick.
Due to its strategic location, Leamington Spa benefits from excellent road links with direct access to the M40. Junction 13 is situated within 5 miles providing routes to London and the south and Junction 14 is 4 miles west, providing access to the M42 and the north. The A46 is 4 miles to the
North and the M45 11 miles to the northeast, providing links to major towns across the Midlands, and the M1 motorway.
Royal Leamington Spa railway station is also very well connected, with a regular direct service to London Marylebone in 71 minutes and Birmingham Moor Street and Snow Hill in 29 minutes. Birmingham International Airport lies 19 miles north west of the town centre and provides national and international flights to over 150 destinations. The airport is accessible via the A452/A45 with a journey time of approximately 45 minutes or via a direct train service in 23 minutes.
Royal Leamington Spa is benefiting from significant investment in new homes, schools and sports facilities with the population expected to rise from circa 50,000 to 60,000 people by 2030.

SITUATION
The property is situated in Spencer Yard in Leamington's Creative Quarter, a new regeneration zone being developed by Complex Development Projects in collaboration with Warwick District Council. Spencer Yard is accessed off Spencer Street close to the junction with Bath Street in the heart of Leamington's town centre, a short walk from the prime retail pitch and the train station.
The Spencer Yard development includes the subject property a 10,800 sq.ft creative hub (known as The Fold and also occupied by Cogent Elliot) and 1 Spencer Yard, (a 4,360 sq.ft modern multi-tenanted office building). The buildings are centred around a shared courtyard which also links into additional creative premises occupied by Motionhouse, Heartbreak Productions and The
Loft Theatre.
The development has been designed to deliver excellent sustainability credentials with all buildings repurposed to benefit from air source heat pumps, photovoltaic roof systems, low energy lighting systems, improved insulation and glazing.

DESCRIPTION
The property comprises a repurposed, extended and fully refurbished high specification higher education establishment. Set out over ground and part first floor the property is of brick construction with a part flat and part pitched slate roof.
Internally the property has been divided into teaching rooms, offices, break out areas and toilets on ground and first floor. There is a roof terrace at first floor level with outside seating. The building benefits from air source heat pumps in conjunction with a mechanical ventilation heat recovery, photovoltaic panels on the flat roof, wall mounted air conditioning units and LED motion censored lighting throughout. Externally the property has a right to park in two car parking spaces demised to the front of the entrance.
The property has an EPC rating of A18.

ACCOMMODATION
The buildings have been measured in accordance with the RICS Code of Measuring Practice (6th Edition) and provide the following Net Internal Areas:

Description Sq.Ft. Sq.M

Ground Floor 237.83 2,560
First Floor 56.92 613
Total 294.75 3,173

TENURE
The property is held long leasehold for a term of 250 years from 19 September 2023 at a peppercorn rent. The freeholder is Warwick District Council.

Tenancy

Tenant Cogent Elliot Ltd
Term 10 years from 13 November 2023
Lease Expiry 12 November 2033
Passing Rent P.A. £61,500 (£19.39 per sq. ft.)
Rent Free The tenant has a rent free period which expires on 17 September 2024.
The Vendor will top-up the rent free period from completion of the sale.
Rent Review 13 November 2028
Review Mechanism Upward only to the higher of passing rent or OMV.

Sub Tenancy

Sub-Tenant SAE Education Ltd
Guarantor ADE Holdings SAS
Term 6 years from 13 November 2023
Lease Expiry 12 November 2029
Passing Rent P.A. £61,500 (£19.39 per sq. ft.)
Security of Tenure The lease is excluded from Sections 24-28 of the Landlord & Tenant Act
1954.

OCCUPATIONAL MARKET
The in-town office market in Leamington is suffering from a chronic shortage of quality and well located stock. This is evidenced by the recent lettings achieved on the adjacent Crown Building, 1 Spencer Yard. This property reached practical completion in January 2024 and comprises 4,360 sq.ft of high specification creative business space in six suites over three storeys. The property has been refurbished to the highest eco standards including air source heat pumps, a photovoltaic system, LED lighting throughout and thermally efficient glazing. The EPC rating throughout the building is A21. The suites are already all let or under offer, with very strong interest received, at headline rents of over £23.00 per sq.ft.

ADDITIONAL INFORMATION

VAT The property is elected for VAT but will be sold by way of a TOGC.
EPC The property has an EPC rating of A18. The report is available on
request.
Anti money laundering In accordance with Anti Money Laundering Regulations, two forms of
identification and confirmation of the source of funding will be required
from the successful purchaser.

PROPOSAL
We are instructed to seek offers in excess of £730,000 subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 8.00%, subject to purchaser's costs of 5.36%.