DARLEY BANK 7-11 Brook Street Derby DE1 3PF - FOR SALE
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FOR SALE
DA R L E Y B A N K
7-11 Brook Street
Derby DE1 3PF
RARE STUDENT ACCOMMODATION
LONG INCOME INVESTMENT OPPORTUNITY
• Rare opportunity to acquire a freehold, high-quality • Underpinned by a strong vacant possession, direct let
DARLEY BANK, 7-11 BROOK STREET, DERBY, DE1 3PF
student accommodation asset situated in Derby value reflecting c.95% of the property’s market value
• Darley Bank comprises a modern, cluster-led purpose- • University of Derby is rated Gold in the Teaching
Investment
built student accommodation scheme with 14 studios Excellence Framework
and 391 cluster bedrooms • The University of Derby has seen student population
• Located on Brook Street, its prime situation offers easy growth of 25% over the five years to 2018/19
Summary
access to the University of Derby and Derby City Centre
• The property is let for a term certain of 28 years and 6
months, offering secure, index-linked income
• Rent is reviewed annually in line with RPI, with a collar of
Montagu Evans are instructed to seek offers in excess of £27,500,000
2% and a cap of 4% respectively (Twenty-Seven Million Five Hundred Thousand Pounds) subject to
• Let to Derbyshire Student Residences Limited with the contract and exclusive of VAT. This reflects a low capital value of £67,901
University of Derby acting as guarantor, both benefiting per bed space and an attractive Net Initial Yield of 4% at the current
from a Dun & Bradstreet Ratings of 5A1 passing rent (assuming purchaser’s costs of 6.76%)
• Current passing rent of £1,177,335 (effective 1st
September 2020) reflecting a rent cover ratio (on the basis
of Direct Let) of approximately 1.5 times
PAGE 2
Derby
DARLEY BANK, 7-11 BROOK STREET, DERBY, DE1 3PF
Derby is a major regional centre in the East Midlands, situated
approximately 15 miles west of Nottingham and 26 miles north-
west of Leicester. The city benefits from strong road connectivity
with its situation on the A52 providing access to the M1 motorway
at junction 25 (Sandiacre Interchange).
• Derby Railway Station offers direct services to Nottingham • Derby’s profile as a city of sport has increased in recent
in 23 minutes, Birmingham New Street in 33 minutes years, with a number of local professional sports teams
and London St Pancras in 1 hour and 35 minutes. East including Championship side Derby County Football
Midlands Airport is situated 13 miles south-east of Derby and Club and Derbyshire County Cricket Club
offers flights to over 70 international destinations
• Derby has a highly skilled workforce and is well
• Under the Derby City Centre Masterplan 2030, the Council established in the advanced transport manufacturing sector,
are aiming to leverage £3.5 billion in investment, create with 11.8% in hi-tech functions, four times the national
4,000 new jobs and deliver 1,900 new homes by 2030 average. A number of internationally renowned businesses,
including Rolls-Royce, Toyota and Bombardier, have
• Each year the City hosts various cultural events, including the substantial operations in the City
Derby Book Festival and the Derby Festé. Derby Arena
at Pride Park opened in 2015 as a multi-use indoor arena • The £200m development of Infinity Park Derby is
and has since hosted a range of cycling, badminton and currently in progress and aims to attract new high-tech
entertainment events businesses to the city. Extending to 100 acres and set to offer
1.5 million sq ft of commercial space, it aims to create
• Derby benefits from three main retail areas - Cathedral 8,000 new jobs
Quarter, St Peters Quarter and the Derbion
PAGE 3
(formally Intu Derby) offering a variety of shops, cafés
and restaurants
DARLEY BANK, 7-11 BROOK STREET, DERBY, DE1 3PF
Brookside
Derwent Students Jurys Inn
DUFFIELD ROAD
Rail Research and Innovation Centre A601
University of Derby
Kedleston Road
Campus
Peak Court Chapel Street Multistorey Car Park
University of Derby
Queen’s Leisure Centre Derby Cathedral
Derby College
Cathedral Court
University of Derby
Princess Alice Court
University of Derby
The Croft
Homes for Students
Derby Railway Station
FORD STREET A601
Sir Peter Hilton Court
University of Derby
Parksafe Multistorey Car Park
Markeaton Street Campus Law School
Britannia Mill Campus Agard Court University of Derby
University of Derby
BOLD LANE
FRIAR GATE
FRIAR GATE
Roman House
Collegiate
PAGE 4
Situation
DARLEY BANK, 7-11 BROOK STREET, DERBY, DE1 3PF
Brook Street occupies a prime position on the edge of Derby City The Property is well situated for the University • 5 minute walk to One Friar Gate Square
Centre in a mixed-use area which includes further University of • 10 minute walk to Derby city centre
of Derby, being within walking distance of the
Derby accommodation and academic buildings. The surrounds • 10 minute walk to Britannia Mill
also include a variety of high-quality residential developments
campuses. Furthermore, the University bus also runs • 14 minute walk to Markeaton Street
such as Brookbridge Court, comprising converted old mill along Bridge Street to the Kedleston Road campus • 23 minute walk to Kedleston Road
buildings, and Westpoint. A short distance to the south sits the with a stop in close proximity.
attractive Friar Gate, one of the key retail and restaurant pitches
leading to the City Centre.
Darley Bank is located amongst a number of PBSA schemes, with
Peak Court to the north, Sir Peter Hilton Court and Agard Court
to the south. To the west is Princess Alice Court and Nunnery
Court along with the University of Derby’s Enterprise Centre.
Kedleston Road
The accommodation buildings are all managed by the University University of Derby
of Derby. Further privately operated PBSA accommodation in
the vicinity includes Brookside (Derwent Students), The Croft
(Homes for Students) and Roman House (Collegiate).
Ked
lest
on R
oad
Markeaton Street Britannia Mill
University of Derby University of Derby
A6
ET
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RE A38 Ash A61
GE bou
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BR
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R oad o P
ST kS Jurys Inn A601
RE
ET t P
Willows
Sports Centre
WI
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OW
treet
A52
RO
10 mins walk P
Derby
W
P
ord S
CAR PARK City Centre
Staff
Derby
Museum
Cathedral Quarter
Shopping Centre A6
w Road
r Ne
xete Derbion
Utto Shopping Centre
A601
CAR PARK Derby
Train Station
Lo
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REE
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STR
PAGE 5
L ST
Rd
FORD
R
SEA
STAF
AGA
RDS
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Derby
• The University of Derby is arranged across three main sites in its
DARLEY BANK, 7-11 BROOK STREET, DERBY, DE1 3PF
namesake city, with campuses at Kedlestone Road, Markeaton
Street and Britannia Mill along with the self-contained One Friar
Student
Gate Square. Aiming to be ‘an applied university of today and for
tomorrow’, facilities include a Forensic Training Facility, STEM
Centre, NHS-standard Mock Hospital Wards and a Bloomberg
Financial Markets Lab. On site campus amenities include a fully
equipped sports centre, library and Students Union
Market
• The University of Derby has seen average annual full-time
student population growth of 5.8% pa, increasing from
10,760 in 2014/15 to 13,500 in 2018/19
• The Derby PBSA market totals 3,663 beds, 2,725 of which are
managed by the University of Derby and 938 of which are managed
privately. This reflects a full-time student to bed ratio of 3.7
(above the UK average of 2.1) and that only 27% of full-time
students can access PBSA
Status Full-time Student Population Growth PBSA Market
• Rated Gold in Teaching Excellence Framework 16,000
• 1st – University of the Year (UK Social Mobility Awards 2020)
• 1st – Higher Education Institution of the Year (National Education 14,000
Opportunities Network Awards 2020) 12,000
20%
Student Population
• 1st – Social and Community Impact (Guardian University Awards 2020)
• Top 10 – Postgraduate Student Experience (Postgraduate Taught 10,000
Experience Survey 2020) 7%
8,000
• Top 10 – in the world for international student learning experience
(Global ISB Benchmark Group 2018) 6,000 73%
4,000
2,000
0
2014/15 2015/16 2016/17 2017/18 2018/19
University PBSA Private PBSA Not accommodated in PBSA
University of Derby Academic Year
Total HE Students 19,145
Full-time Students 13,500
Undergraduates (FT) 11,895
Postgraduates (FT) 1,605
Internationals 1,555 (12% of full-time students)
Applications 4.9 per place
Ranking 91st
PAGE 6
HESA 2018/19 & The Times Good University Guide 2021.
Accommodation
DARLEY BANK, 7-11 BROOK STREET, DERBY, DE1 3PF
Darley Bank opened in September 2013 and comprises modern purpose-built
student accommodation totalling 405 beds. The Property offers an attractive
accommodation mix, with 391 premium en-suite cluster rooms and 14 self-
contained studios. The cluster rooms are arranged in flats of three to seven
people, each with shared kitchen and social space.
Both the cluster and studio rooms offer small double beds with storage,
en-suite bathrooms, workspace, wardrobes, full length mirrors and
modern décor. The Property also benefits from a common room, reception,
management office, cycle storage and external amenity space.
Typical Floor Plan
Not to scale. For illustrative purposes only.
Summary Accommodation Schedule
Room Type Number of Rooms Area (Sq M)
Economy Bronze En-suite 7 12.5
Bronze En-suite 246 13
Silver En-suite 104 13 - 13.5
Gold En-suite 34 15 - 16 Cluster room
Studio
Bronze Studio 4 19 - 20
Kitchen /
social space
Silver Studio 6 20 - 22
Gold Studio 4 23 - 24
Total 405
PAGE 7
Tenancy &
DARLEY BANK, 7-11 BROOK STREET, DERBY, DE1 3PF
Covenant
Darley Bank is let under a reversionary FRI lease for a term
certain of 28 years and 6 months, commencing on 1st
September 2019 and expiring on 31st August 2049.
The current passing rent is £1,177,335 per annum, following
a 2% increase from the initial rent of £1,154,250 per annum on 1st
The subject Property is let to Derbyshire Student Residences
September 2020. The rent is reviewed annually in line with RPI
(Company Registration No. 03087455) with the University of Derby
on the 1st September and is subject to a collar of 2% and cap
(Company Registration No. 03079282) acting as guarantor. The
of 4% and therefore will increase to a minimum of £1,200,882 per
accommodation is operated by the University of Derby who won
annum from 1st September 2021.
three awards in the 2019 National Student Housing Survey Awards
including Best Customer Service, Best Student Wellbeing and Best
Environmental Management.
Derbyshire Student Residences Limited has a Dun & Bradstreet
rating of 5A1, reflecting a tangible net worth in excess of £35,000,000
and minimum risk. Their current tangible net worth is reported by Dun
& Bradstreet to be £73,471,000.
The University of Derby also has a Dun & Bradstreet rating of 5A1,
and its tangible net worth is significantly higher at £400,482,000.
PAGE 8
Estimated
DARLEY BANK, 7-11 BROOK STREET, DERBY, DE1 3PF
Rental Value
The University has provided the following rental values
at Darley Bank for the 2021/22 academic year. En-suite
cluster beds have been priced at between £138.88 to
£152.53 per week on the basis of 42 week contracts
whilst studio beds have been priced at between £159.74
to £172.48 per week, on the basis of 51 week contacts.
From our research, we believe the below schemes to
be the most comparable. They include both private and
University accommodation in order to provide a holistic
take on the student market in Derby. The following
rental analysis reflects marketing rents for available
accommodation at the time of publication for the
2021/22 academic year:
Scheme Operator Room Type Weeks Rents 2021/22 (per week)
Agard Court University of Derby En-suite Cluster 42 £152.53
Cathedral Court University of Derby En-suite Cluster 42 £152.53
43 £145 - £147
En-suite Cluster
51 £128 - £130
The Croft Homes for Students 43 £148 - £150
En-suite Cluster (Large)
51 £132 - £134
En-suite Cluster (XL) 51 £150 - £152
Twodio 51 £145
Studio (Compact) 51 £160
Roman House Collegiate Studio 51 £168 - £172
Studio (Premier) 51 £175 - £180
Studio (Ultra) 51 £185
PAGE 9
Abbey Lodge Fresh Student Living En-suite Cluster 42/48/51 £140/£130/£126
DARLEY BANK, 7-11 BROOK STREET, DERBY, DE1 3PF
Based on our analysis of the comparable evidence, we anticipate that Darley Bank (if let on a Direct Let basis) could generate a gross rent of circa
£2.57 million. Furthermore, due to the quantum of beds we would expect it to be operated at an efficient management cost per bed space.
A breakdown of our income / cost assumptions are set out in the table below.
Room Type No. Weeks Occupancy Rent (per week) Total Rent
Economy Bronze
7 44 97% £135 £40,333
En-suite
37 51 £135 £247,103
Bronze En-suite 97%
209 44 £140 £1,248,817
16 51 £140 £110,813
Silver En-suite 97%
88 44 £145 £544,597
5 51 £145 £35,866
Gold En-suite 97%
29 44 £150 £185,658
Bronze Studio 4 51 97% £160 £31,661
Silver Studio 6 51 97% £165 £48,975
Gold Studio 4 51 97% £170 £33,640
Rent Sub-total £2,527,461
Summer Income 333 7 10% £142 (Ave.) £33,121
Sundry Income 405 45 100% £0.75 £13,743
Ancillary Income
£46,864
Sub-total
Gross Income £2,574,325
Management Costs 405 £1,850 £749,250
Net Operating Income £1,825,075
On the aforementioned assumptions, we would anticipate that the Net Operating Income would be in excess of the current passing rent. Based on the
PAGE 10
projected NOI of £1.825 million and lease passing rent of £1.177 million, we estimate the rent cover ratio to be c.1.5 times, reflecting a highly
reversionary asset.Darley Bank
7-11 Brook Street
Derby DE1 3PF
Further
Tenure Contact Information
Freehold held under DY143792.
Information
EPC Rating
The Property has an EPC rating of B (45). A copy of the
certificate is available in the data room.
VAT
We understand that the Property is not elected for VAT.
Arthur Coxon
Viewings 07387 237 995
arthur.coxon@montagu-evans.co.uk
Montagu Evans are instructed to seek offers in excess
Viewings are strictly by appointment only. Please contact
of £27,500,000 (Twenty-Seven Million Five Hundred Montagu Evans to arrange an inspection.
Thousand Pounds) subject to contract and exclusive of VAT. Craig McPhail
This reflects an attractive Net Initial Yield of 4% at the current Data Room 07818 012 459
passing rent and assuming purchaser’s costs of 6.76%. craig.mcphail@montagu-evans.co.uk
A full suite of information is available in the data room. Please
contact Montagu Evans to request access.
Offers are invited on an unconditional basis, by way of an Will Hyslop
informal tender. Our client reserves the right to not accept 07342 050 230
the highest, or indeed any offer received. will.hyslop@montagu-evans.co.uk
Montagu Evans LLP for themselves and for the vendors or lessors of this property whose agents they are give notice that: (i) the particulars are set as a general outline only for the guidance of intending purchasers or lessees and do not constitute the whole or any part of an offer or
contract: (ii) all descriptions, dimensions, references to condition and necessary permissions for use and occupation, and other details are given in good faith but without any responsibility whatsoever and any intending purchasers or tenants should not rely on them as statements or
representations of fact, but must satisfy themselves by inspection or otherwise as to the correctness of each of them; (iii) neither Montagu Evans LLP nor its employers has any authority to make or give any representation or warranties whatsoever in relation to this property; (iv) unless
otherwise stated all prices and rents are quoted exclusive of VAT, and intending purchasers or lessees must satisfy themselves independently as to the applicable VAT position. (v) All the plans and maps provided within the particulars are for identification purposes only. January 2021You can also read
