Bioscience Facility, Lower Parliament Street, Nottingham


Bioscience Facility, Lower Parliament Street, Nottingham

  • Prominently located at Lower Parliament Street, Nottingham adjacent to the existing Bio-City buildings within Nottingham’s creative quarter.
  • 150 years long-leasehold interest at a peppercorn rent from Nottingham City Council.
  • Construction commenced in August 2015 on the new Biocity Science building over ground and 4 upper floors providing state of the art laboratory and office accommodation and extending to 52,475 sq ft NIA. Willmott Dixon is the appointed contractor.
  • To be let to Nottingham City Council for 30 years from completion of this transaction on a full repairing and insuring lease at an initial rent of £714,000 per annum equating to £13.61 per sq ft. The rent is reviewed every 5 years in line with the CPI index compounded annually.
  • Sub-let to Biocity the UKs leading Bioscience incubator organisation.
  • Total construction costs are £26million, however, by way of a grant and other council funds, the total price sought inclusive of stamp duty is £17,760,000 (Seventeen Million Seven Hundred and Sixty Thousand Pounds) reflecting a pre-tax yield of 3.95% adopting purchasers costs of 1.8%.
  • There are estimated £9,750,000 of available capital allowances to a purchaser which at a higher tax rate of 45% are worth £4,387,500 over a 5 year period.
  • Nottingham City Council is to provide a loan to the purchaser of £11,011,200 for a 5 years period at a fixed interest rate of 4.50% which equates to £495,484 interest per annum. No amortisation required during this period.
  • Purchaser equity requirement of £6,748,800 which after interest charges provides a net annual pre tax yield of 3.18%.
  • Post tax annual yields are Year 1 - 7.54%, Year 2 - 6.86%, Year 3 - 6.27%, Year 4 - 5.76%.
  • At year 5 Nottingham City Council have an option to purchase the building for £15,300,000.  If the council exercise their option then the post tax IRR is 7.96% with an anticipated after tax profit of £2,528,419 which is a 37.5% return of equity.
  • If the option to purchase is not exercised then there will be 25 years remaining on the lease.
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