Summary
On behalf of Administrators, acting as agent without personal liability
Undoubted Government income – let to Secretary of State for Defence until
March 2028
Failure by tenant to exercise a break option correctly
Add - value opportunity given negotiation potential with the tenant
Located within the heart of the town centre
Offers in excess of £307, 500
20% Net Initial Yield
Location
Wrexham is the largest town in North Wales, situated between the Welsh
mountains and the lower Dee Valley alongside the border with England. It is
the administrative, commercial and retail centre for the region. Wrexham is
located approximately 86 km (53 miles) south - west of Manchester, 50 km (31
miles) north of Shrewsbury and 21 km (13 miles) south of Chester.
The town benefits from good road communications with the A55 being 14 km (9
miles) to the north, which in turn links with the M53 and M56 Motorways. The
A483 also serves the town and provides access to Shrewsbury and the M54
Motorway to the south. The M6 Motorway is approximately 48 km (30 miles) to
the east, accessed via the A534.
The town is connected to the national railway network with a fastest journey
time to London Euston of 2 hours 24 minutes. There are also regular services
to Chester with a 15 minute journey time. Liverpool John Lennon Airport is
approximately 61 km (38 miles) to the north and Manchester International
Airport is some 72 km (45 miles) to the north - east.
Situation
Wrexham is the largest town in North Wales, situated between the Welsh
mountains and the lower Dee Valley alongside the border with England. It is
the administrative, commercial and retail centre for the region. Wrexham is
located approximately 86 km (53 miles) south - west of Manchester, 50 km (31
miles) north of Shrewsbury and 21 km (13 miles) south of Chester.
The town benefits from good road communications with the A55 being 14 km (9
miles) to the north, which in turn links with the M53 and M56 Motorways. The
A483 also serves the town and provides access to Shrewsbury and the M54
Motorway to the south. The M6 Motorway is approximately 48 km (30 miles) to
the east, accessed via the A534.
The town is connected to the national railway network with a fastest journey
time to London Euston of 2 hours 24 minutes. There are also regular services
to Chester with a 15 minute journey time. Liverpool John Lennon Airport is
approximately 61 km (38 miles) to the north and Manchester International
Airport is some 72 km (45 miles) to the north - east.
Description
Halkyn House is arranged over ground and three upper floors and is currently
occupied by the Secretary of State for Defence who use the building as an
Armed Forces careers information / assessment centre.
The primary access to the property is via Rhosddu Road. We understand that the
unit was fully refurbished externally in 2012 and re - roofed in 2014.
Internally the accommodation comprises an open - plan ground floor area with
offices and ancillary staff facilities on the upper floors.
Externally there is a car park to the rear of the property providing 9 car
parking spaces, accessed from Egerton Street.
The ground floor of 19 Rhosddu Road comprises a retail unit which is currently
vacant.
Accommodation
The property has been measured by bkr Floor Plans and provides the following
Net Internal floor areas:
Zone A 102. 28 sq m 1, 101 sq ft
Zone B 38. 09 sq m 410 sq ft
Ground Floor Total 140. 37 sq m 1, 511 sq ft
First Floor 195. 18 sq m 2, 101 sq ft
Second Floor 198. 25 sq m 2, 134 sq ft
Third Floor 180. 60 sq m 1, 944 sq ft
Total 714. 40 sq m 7, 690 sq ft
A set of floor plans is available to download and the measured survey report
will be re - addressed to a purchaser at a cost of £450. 00 + VAT.
Tenure
Freehold.
Tenancy
Overview, the property is let as follows:
• Part Ground, First, Second & Third Floors – let to Secretary of State for
Defence until 24th March 2028 at £63, 477 per annum.
• Ground Floor, 19 Rhosddu Road – retail unit, currently vacant.
• Electricity substation – let to sp Manweb until June 2111 at £1. 00.
Halkyn House is let to Secretary of State for Defence on a full repairing and
insuring lease for a term of 10 years from 25th March 2018, expiring on 24th
March 2028 at a passing rent of £63, 477 per annum. The lease benefits from 5
yearly rent reviews [25th March 2023 rent review is outstanding]. We
understand the tenant has been in occupation since at least 2008 and entered
into a lease renewal in 2018.
The tenant had a break option on 25th March 2023 which it attempted to
exercise but failed to comply with the preconditions in accordance with the
lease provisions. The lease states that the tenant may determine the lease
subject to them giving up occupation on or before the break date and there
being no arrears of the annual rent. However, the tenant has continued to
occupy the property and rental sums remain outstanding. The vendor’s solicitor
has notified the tenant that they have invalidated the break option and, as
such, the lease has not been determined. Please refer to the data room for
further information and correspondence between the parties. The vendor is
leaving the purchaser to pursue the matter with the tenant or enter into
discussions regarding a new lease; it should be noted that Heads of Terms were
provisionally agreed early in 2023, prior to the tenant failing to exercise
the break clause correctly, with a new lease rent of £30, 300 per annum for the
part ground and first floor, and a licence of £6, 800 per annum in respect of
the second floor. Since these terms were prior to the failed break by the
tenant, a purchaser may chose to reject as now a landlord is in a more
favourable position.
The tenant has a right to use eight car parking spaces in the car park at the
rear.
The ground floor of 19 Rhosddu Road is currently vacant. There is an
electricity substation let to sp Manweb Plc for a term of 99 years from 7th
June 2012 at £1. 00.
It should be noted that the current arrears position is as follows:
Halkyn House (Secretary of State for Defence) £106, 436
19 Rhosddu Road (Vacant) £3, 568. 88
(As at 27th October 2023)
It should be noted that the purchaser is not required to pay for the arrears
at completion in respect of the main tenancy. The purchaser will use
reasonable endeavours to collect the arrears on behalf of the seller, failing
which the right to collect will pass back to the seller.
Service Charge
For the period 1st October 2022 to 30th September 2023 the service charge
budget is £71, 814. 25. A copy of the current service charge is available to
download via the data room. Note that the current service charge covers three
adjoining properties and the purchaser will need to implement a new service
charge for the subject property.
**VAT**
It is anticipated that the sale will be treated as a Transfer of a Going
Concern (togc) and the purchaser will be required to submit the appropriate
election to hmrc. It should be noted that the administrators may not hold
documentation to prove VAT election at the point of completion.
Proposal
We are instructed to seek offers in excess of £307, 500 (Three Hundred and
Seven Thousand Pounds), subject to contract, reflecting a net initial yield of
20. 0% allowing for purchaser’s costs at 2. 82%
Please note that a purchaser will be re - charged the costs of the measured
survey (£450 + VAT) and searches (£515. 46 + VAT) which are provided in the
data room.
Please note that a purchaser will be charged a Transaction Fee of 1. 0% of the
Purchase Price plus VAT.
Investment Considerations
A high yielding office investment;
The property provides an investor with undoubted income, being let to the
Government (Secretary of State for Defence) until March 2028;
The opportunity to negotiate with the tenant given the error in serving a
valid break notice;
The property occupies a prominent position in the heart of the town centre;
A purchase at the asking price reflects an attractive yield;
Attractive lot size for an investor.
Disclaimer
The affairs, business and property of the Company is being managed by the
Joint Administrators Andrew Knowles and Steven Muncaster, who act as agents
for the Company and without personal liability. Both are licensed by the
Insolvency Practitioners Association and are bound by the Insolvency Code of
Ethics.
For full details please visit our website or view PDF brochure below
* Sizes listed are approximations. Please contact the agent to verify actual sizes.

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