Dean Clarke House
Southernhay East, Exeter
We are instructed to seek offers with a guide of £985,000 + VAT which reflects an initial yield of 7.16% after allowance for purchaser’s costs of 6.69%. This equates to a capital value of £232 psf.
The rental income potential will increase depending upon the letting strategy adopted, either for traditional leases or flex space. Assuming the vacant suites are let on a serviced basis the net rents will be circa £104,320 per annum. This reflects a reversionary yield of 10.02%. There is potential to increase the serviced office rents based upon £275 per desk pcm to £128,440 per annum net of running costs.
Features
- Attractive investment opportunity in the prime Southernhay office quarter
- Part of a historic Grade II* listed, mixed use development
- Anchored by a new lease to Handelsbanken
- Potential for increasing rental income
- Co-working, serviced or flex space
- Four car parking spaces
Details
Situation
Dean Clarke House is situated in an exclusive position in Southernhay, Exeter’s prominent office district. The property offers the best of both worlds, sat within walking distance of both the bustling city centre and the busy and popular Exeter quay. A number of car parks and hotels nearby offer optimum convenience for those travelling from outside the city. The property is just a 5 minute walk from eateries, shopping, and leisure amenities.
St Sidwell’s Point is just 10 minutes walk, offering high quality gym and swimming pool facilities. Southernhay is a legal centre of excellence and office occupiers include Stephens Scown Solicitors, Family Law, The Courts Service, Foot Anstey, The Insolvency Service, Browne Jacobson, Trowers & Hamlins and many other professional practices
Description
Designed and built by North Devon born architect John Richards in the 18th Century, Dean Clarke House began life as a city hospital. The building was both the brain child and namesake of Dr A Clark, Dean of Exeter in 1874, who sadly did not live to see the building completed. Constructed in two stages, the central and southern wings were built first, with the Northern wing adding balance to the building nearly six years later. It acquired ‘Royal status’ in 1899, following a visit from the Duke and Duchess of York, and was newly
named the Royal Devon and Exeter Hospital.
Sadly the building was eventually abandoned and had become dilapidated - until Burrington Estates purchased it in December 2012. They began extensive renovations that took over 3 years to complete and restored the building to its former glory. Today, this prominent Grade II* Georgian property has been transformed into luxurious residential and business accommodation, the latter of which has now come to market, offering a prime investment opportunity in a historic property within this prominent location.
Tenancies
Offices 1-6 and the Club Room are let to Handlesbanken on a new 10 year internal repairing and insuring lease by way of service charge with a tenant only break option at the 5th anniversary of the term. Offices 8 & 9 are let on serviced agreements. The Cresswell Room is let out on an ad hoc basis to existing tenants at an hourly rate of £25 per hour but could be let on a serviced basis.
Amenities
Manned reception lobby with concierge services.
Connection to a network of members and users.
Shared shower facility.
24/7 access available via electronic door fob system.
Meeting / boardroom facility.
Communal courtyard garden and secure terrace.
Bike storage provision.
Secure car parking.
Exeter Office Market
Dean Clarke House is in the prime central business district of Southernhay, close to Southernhay Gardens where rents are in excess of £20 psf, plus parking. A new letting in Broadwalk House recently achieved a headline of £23 psf, with £25 psf being quoted for Grade A refurbishments in Manor Court Terrace and Longbrook House. The headline rent agreed on the ground floor letting is at £20 psf plus parking, and the serviced office rates reflect an all in price at a rate of £275 per desk per month.
Covenant Information
The investment is anchored by the letting to Handlesbanken Plc. They are an undoubted covenant and have a Fitch rating of AA and a Standard & Poor`s of AA - representing minimal risk. They have been rated as Europe’s safest commercial bank in Global Finance Magazine`s ranking of the World`s Safest Banks 2022 and 2023.
A service charge is levied to cover the cost of providing the heating, lighting, maintenance and cleaning of the common areas of Dean Clarke House, and the maintenance of the landscaping and parking in the courtyard. The managing agents are Whitton and Laing. For further information on the service charge contact the agents.
Capital Allowances
All capital allowances will be retained by the Vendor.
Tenure
The property is offered on a 199 year Full Repairing and Insuring Lease at a peppercorn. A copy of the lease is
available from the Agents.
The current EPC is a D.
VAT
The property is elected for VAT and it envisaged that the sale will be treated as a Transfer of a Going Concern (TOGC).
Investment Proposal
Offers in the region of £985,000 are invited for the long leasehold interest. The freehold may also be available which includes a number of ground rents. For further details contact the agents.
