CASE STUDY
Hemel One
Our experience in Hemel covers a ten year journey of property management and development, through some extraordinary and entirely unpredictable events, all of which help to demonstrate the RO’s approach to property in terms of its resilience in times of challenge, its adaptability to change, its flexibility to meet the needs of occupiers and ultimately its entrepreneurial philosophy.
The original purchase from 3 Com Europe Ltd took place in February 2005 for £7.05m. The 7.5 acre site included an 86,000 sq ft office building and a 2.2 acre development site with planning consent for an additional 105,537 sq ft.
Initially the vacant floors were refurbished and an atrium infilled to increase the lettable floor space. A pre-let was secured on 23,782 sq ft with Kodak and a letting of 8,100 sq ft to Asus. A restaurant operator was also secured to run an on-site restaurant facility, and restaurant licences were secured from the tenants to cover the agreed subsidy.
In November 2005 terms were agreed to sell the building to a pension fund at a significant premium. The sale was just days from exchange when the Buncefield oil depot exploded on 10 December 2005 leaving extensive damage to the building.
The fact that it took more than four years before the insurance claim was finally settled bears ample testament to the resilience, and indeed patience, of the RO and its team.
In reinstating Hemel One we took the opportunity to enhance the quality of the building, infilling additional redundant areas and making large rectangular floorplates that could easily be split into smaller suites, thus providing greater leasing flexibility, and modernising the common parts and reception area.
We successfully managed to retain all of our existing tenants and subsequently managed to lease the remainder of the now Grade-A space on both traditional and innovative, semi-serviced office agreements to tenants including the likes of Ericsson and BP. The various asset management and development initiatives led to an increase in the headline rent of the building from £12.25 to £17.00 psf.
In May 2008 we also purchased an adjoining 1.5 acres of land from 3 Com in order to improve Hemel One’s frontage, release additional land for development and rationalise parking. The reconfigured estate provided parking for 465 cars as well as three self-contained plots that were ultimately sold for £3.45m to owner occupiers.
The decade long journey finally came to end when we sold the office building to Threadneedle Investments in October 2014 for £17.75m.