BLOCK | INVESTOR_2025

Disclaimer ↓

This communication is exempt from the General Restriction contained in section 21 of The Financial Services and Markets Act 2000 as an invitation or inducement to engage in investment activity on the grounds that it is made to you as either a certified high net worth individual or as a self-certified sophisticated Investor by reason of the exclusion contained in The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (S.I.2005/1529).

PRESS PLAY →

Our workspaces are underpinned by 3 main factors:

01.

02.

03.

Premium Proposition

Unrivalled Service

Established Brand

BLOCK offers workspaces for the new era of work; versatile, inspiring spaces with style and edge. Spacious coworking zones, cellular private offices, meeting rooms and relaxed lounges provide opportunities to collaborate, innovate and socialise.

The right answer at the right time—taking advantage of a gap in the market and the demand for flexible working solutions (accelerated and amplified by the Covid-19 pandemic), BLOCK offers hybrid environments that perfectly complement working from home.

Re­—working how people work.

ACHIEVEMENTS TO DATE

Equity raise for sites 1, 2 & 3 totalling £1.6M 90% occupancy achieved in just 6 months on sites 1 and 2, and in just 3 months for site 3 100% occupancy sustained at all established sites Clients including KPMG, Babcock, NHS, Universities, Local Government, Francis Clarke, Princess Yachts 1000 gym members and successful coffee shop

TIME

IP established and protected.

First two sites contracts signed.

Fundraiser executed.

Fit out commenced, Funding complete.

Taunton site opens.

Plymouth site opens. 90% occupancy achieved in just 3 months at both sites .

LINE

100% occupancy achieved in both sites. Bristol site negotiated and delivered. £1m annual EBITDA run rate.

Bristol site 90% in just 3 months. £1.5m EBITDA run rate.

Launch two new sites.

Launch three new sites.

Launch three new sites.

Launch four new sites.

Launch four new sites.

30 0 2 9 2 20 8 2 0 2 27 0 2 6 2 20 5 2 0 2 24 0 2 3 2 20 2 2 0 2021 2

LOCATIONS BLOCK will aim to explore opportunities with 50+ potential properties/developers with a view to eventually shortlisting 5—10, ensuring the final locations fulfil the following criteria:

Best in class product – region specific Difficult to replicate Sought after location with evidence of demand Capex contribution from landlord towards fit out

PROSPECTIVE LOCATIONS Manchester Liverpool Birmingham Worcester Cardiff Swansea Bath Bristol Southampton London

EXISTING Plymouth Exeter Taunton

PROSPECTIVE LOCATIONS Manchester Liverpool Birmingham Worcester Cardiff Swansea Bath

TAUNTON

Bristol

250k

Southampton

Target EBITDA

London

EXETER

150k

Target EBITDA

BRISTOL

800k

Target EBITDA

PLYMOUTH

800k

EXISTING Plymouth Exeter Taunton

Target EBITDA

Company Structure

BLOCK Plymouth

BLOCK Taunton

BLOCK Exeter

BLOCK Bristol

£800k

£250k

£150k

£800k

BLOCK can demonstrate an EBITDA run rate of circa £2m per annum during 2025.

At this stage a demonstrable EBITDA position in the region of £2.3M with a gross rental income in the region of £6M could result in a wider group valuation of between £15M and £20M, as demonstrated by the following precedent transactions —

Flexible workspace operator acquired for £245m

Buyout fund Blackstone buys The Office Group valuing it at $640m.

LONDON (Reuters)

UK flexible workspace operator BizSpace has been acquired by Sirius Real Estate for £245 million. The deal is based on an enterprise value of £380 million and reflects around a 5.4x multiple of BizSpace’s gross rental income of £45.5 million for the year ending December 31 2019.

Sirius Real Estate is a German-focused firm which owns and operates branded business and industrial sites offering both flexible workspaces and conventional work space across Germany. The company views the acquisition of BizSpace as a strategically valuable opportunity to replicate its German business model in a different marketplace.

The company believes that the takeover provides it with a high- quality portfolio in an attractive market that offers organic growth potential for rental income. The firm says that the acquisition offers its shareholders an “opportunity for significant value creation and further long-term growth potential”.

Buyout fund Blackstone BX.N agreed to acquire a majority interest in The Office Group (TOG), valuing the flexible workspace provider at about 500 million pounds ($640 million). Launched in 2003, TOG provides workspace in 36 buildings, mainly across central London, and has a growing client base of more than 15,000 members. Its clients include AOL, Dropbox, Pinterest, British Gas and Santander. “The traditional workspace is being redefined in gateway cities across the globe, as evolving business practices increase demand for flexible office space,” said Anthony Myers, Blackstone’s head of European real estate.

GROWTH VALUE

NO OF SITES

12,000,000

20 18

10,000,000

16 14

8,000,000

12 6,000,000

10 8

4,000,000

6 4

2,000,000

2 0 TIMELINE

0 B/FORWARD

2025

Number of Sites (Cumulative)

2026 EBITDA Run Rate

2027

2028

2029

PROFITABLITY TARGETS

B/FORWARD

2025

2026

2027

2028

2029

3

5

7

10

14

18

INVESTMENT PER YEAR

£1,465,000

£1,500,000

£1,500,000

£2,250,000

£3,000,000

£3,000,000

EBITDA RUN RATE

£1,500,000

£2,700,000

£3,900,000

£5,700,000

£8,100,000

£10,500,000

MULTIPLIER (10x)

£15,000,000

£27,000,000

£39,000,000

£57,000,000

£81,000,000

£105,000,000

NO. OF SITES (CUMULATIVE)

MARKET FACTORS

40%

80%

UK OFFICE space

Global FLEX space market 2020

2030

MARKET COMMENT

of office space to be flexible in some form by 2030.

of companies surveyed identified flexible office space as the most in demand amenity of the future.

ESSENTIAL LINKS Forbes Business Matters Magazine Yahoo Finance Harvard Business Review The Guardian Fastcompany.com The Times

Hybrid work is now the norm for the year ahead — and beyond. ↗ Flexible workplaces to contribute £12BN to local UK economies in the next decade. ↗ Coworking model thrives post-pandemic. ↗ How Coworking spaces impact employee well-being. ↗ How Coworking spaces help creatives cut costs and stay motivated. ↗ Coworking is making a comeback as companies downsize offices. ↗ Hybrid working to stay with us forever. ↗

Yourstory.com

Coworking bookings surge 300% in 2023: gofloaters report on hybrid work trends. ↗

The Guardian

IWG reports rise in UK workspace visits as hybrid working takes hold. ↗

AV Magazine

Hybrid work could boost Europe’s economy by €113bn. ↗

The Times

Hybrid working to become the norm in public sector. ↗

The New York Times BBC News The Financial Times The Guardian

Why are remote corporate workers having more fun? Coworking spaces. ↗ Flexible office space demand to soar over five years. ↗ Hybrid working changes the role of cities forever. ↗ Coworking puts the spark back into office life. ↗

OUR FIRST AWARD —PROJECT OF THE YEAR

The 2023 Michelmores Property Awards celebrates outstanding property and construction projects throughout Somerset, Devon and Cornwall.

OUR SPACES —PLYMOUTH

OUR SPACES —TAUNTON

OUR SPACES —BRISTOL

SITE EXAMPLE — KEY ASSUMPTIONS Building

Fairfax

↓ PROPERTY COSTS

Location

Bristol

Market Rent / Base Return (sq ft pa)

Number of Desks

343

↓ KEY MODEL INPUTS Total Net Internal Area (Sq ft)

21,325

£33.90

Lease rent Incentive (Months)

10.5

Business Rates (sq ft pa)

£9.73

Service Charge (sq ft pa)

£8.60

Utilities (sq ft pa)

£3.00

Space Efficiency

80%

Repairs & Maintenance (sq ft pa)

£1.00

Sq ft / Desk

47.25

Insurances (sq ft pa)

£1.00

Coworking Desks

4%

Coworking Income Multiple

1.50

↓ OPERATIONAL COSTS

Av. Office Desk Price P/M

£420

Services Revenue Costs (% of Services Revenue)

2%

Av. Coworking Desk Price P/M

£250

Commissions (% of Desk Revenue)

1%

Meeting Room Revenue (% of Desk Revenue)

10%

Cleaning (sq ft pa)

£1.50

Services Revenue (% of Services Revenue)

7%

Telephone & Internet (sq ft pa)

£1.00

Opening Occupancy

30%

Other Costs (sq ft pa)

£0.30

Mature Occupancy

90%

Furniture & Equipment (pa)

£5,000

Mature After (Months)

19

Staff (pa)

£75,000

Sales & Marketing (pa)

£90,000

Accounting (pa)

£5,000

↓ OTHER Assumed Inflation Rate P/M

4%

PROJECT FUNDING 22% ↓ FIT OUT COST & FUNDING APPORTIONMENT Cat B

£1,279,500

FF&E

£533,125

Acquisition Costs

£163,767

Total Costs

£1,976,392

Landlord Contribution

£1,200,000

Equity

£500,000

Debt/Asset Finance

£500,000

Total Funding

£2,000,000

22%

Landlord Contribution

56%

Equity

Asset Finance

PROFITABILITY 100%

58.75%

£2,108,632

£1,238,821

Direct Expense

£125,453

£125,453

Overheads

£1,112,807

£1,112,807

PROFIT

£870,372

£562

Breakeven Stress Analysis

Revenue

Annual EBITDA

Year 1

Year 2

Year 3

Year 4

Year 5

Revenue

£1,109,023

£1,803,087

£1,973,680

£ 2,052,627

£ 2,134.732

Direct Expense

£120.330

£126.795

£132.783

£138.095

£143.619

Overheads

£1,104,720

£1,118,464

£1,130,933

£1,149,784

£1,169,389

£116.027

£557.828

£709.963

£764.748

£821.725

EBITDA

KEEP MOVING FORWARD.

Important Information

Summary of Risks

↓

↓

The content of this promotion has not been approved by an authorised person within the meaning of The Financial Services and Mar-

This is a summary of risks relating to investment into a Seed Enterprise Investment Scheme (SEIS) or Enterprise Investment Scheme

kets Act 2000 (the “Act”). Reliance on this promotion for the purpose of engaging in any investment activity may expose an individual

(EIS) in Cheriton Group Melville Limited. Other risks may exist, and you are urged to make your own assessment. This list is not

to a significant risk of losing all of the property or other assets invested. This communication is exempt from the General Restriction

comprehensive, and the risks are not presented in any order of importance.

contained in section 21 of The Financial Services and Markets Act 2000 as an invitation or inducement to engage in investment activity on the grounds that it is made to you as either a certified high net worth individual or as a self-certified sophisticated Investor by rea-

The investor documents have been produced by the Directors of Cheriton Group Melville Limited. We have to make you aware that

son of the exclusion contained in The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (S.I.2005/1529).

the Investment Summary has not been approved by a suitably authorised person and is only to be communicated to certified High Net Worth or Sophisticated investors who have agreed to receive such communications. You should satisfy yourself as to the accuracy of the information and financial projections before investing. The investment described in this document will not be suitable for all

01.

02.

In order to qualify as a certified high net worth individual,

sale of securities in any company.

investors. You have to make your own decision whether to proceed with the investment, and we will not advise you on the suitability to

you must have signed a Statement for a Certified High Net

The Offer Shares will be unlisted securities. No

your needs and circumstances.

Worth Individual within twelve months ending with the day

application will be made for admission of the Offer

on which this communication is made.

Shares to the Official List of the UKLA or to the AIM

If you are in doubt about the contents of this offer, or the action you should take, you are strongly recommended to consult a financial

Market of the London Stock Exchange. Further,

adviser authorised under the Financial Services and Markets Act 2000 who specialises in advising on investments in unlisted debt,

In order to qualify as a self-certified sophisticated investor

neither the UKLA nor the London Stock Exchange

shares or other securities.

you must have signed a Statement for a Self-Certified

has examined or approved the contents of this

Sophisticated Investor within twelve months ending with

document. The Offer Shares will not be dealt on

The information provided is based upon current taxation and other legislation, and HMRC practice, and any changes in the legislation

the day on which this communication is made.

any other investment exchange and no application

or HMRC practice may affect the shares. In particular, if Capital Gains Tax (CGT) rates increase then those Investors who choose to

has been or is being made for the Offer Shares to

defer a gain may face a higher CGT liability when the deferred gain comes back to charge following the sale of the shares. The value of

be admitted to trading on any such exchange or

the tax reliefs will depend on the individual circumstances of Investors.

market.

You should seek professional advice tailored to your particular situation.

This offer will not be suitable or appropriate for all recipients of this document. If you are in any doubt about the

The Offer Shares have not been and will not be

contents or the action you should take, you should seek

registered under the United States Securities

the advice of a suitably qualified independent financial

Act 1933 or under the securities legislation of any

adviser who is used to dealing in investments of this kind.

state of the United States and may not be offered

You are responsible for making your own decision as to

or sold in the United States or to any US persons.

whether or not to invest and its suitability to your personal

The Offer Shares have not been and will not be

needs and circumstances.

registered under the applicable securities laws of Australia, Canada, the Republic of Ireland, South

This communication must not be acted on or relied on

Africa, Japan or any other jurisdiction. The distribu-

by persons who are not high net worth individuals or

tion of this document in other jurisdictions may be

self-certified Sophisticated Investors. Any investment or

restricted by law and therefore persons into whose

investment activity to which this communication relates is

possession this Share Offer Document comes

available only to relevant persons and will be engaged in

should inform themselves about and observe

only with relevant persons. If you do not qualify as either

any such restrictions. Any failure to comply with

a high net worth individual, or a self-certified sophisticat-

these restrictions may constitute a violation of the

ed investor, you should not take any further action and

securities law of such jurisdictions. If you are in any

instead return the document to the person who sent it to

doubt as to the action you should take, you are rec-

you.

ommended to seek your own professional advice immediately from your stockbroker, bank manager,

This document does not constitute a formal offer, being

solicitor, accountant or other independent financial

capable of acceptance, or an invitation to purchase or

adviser authorised under FSMA.

acquire any securities in any company or any interest therein, nor shall it form the basis of any contract for the

Risks relating to Cheriton Group Melville Limited ↓ 01.

The SEIS or EIS shares will be subject to the trading

05.

The company may not achieve the forward statements

risks associated with the operation of Cheriton

and forecasts made. The forward statements and

Group Melville Limited and the performance may

forecasts are not a warranty or representation that they

be affected by factors outside the control of the

will be achieved. Circumstances may determine that

management team.

they are not achieved. Examples would include lack of customers, the general public demand, the availability of

02.

Investors should not consider investing if they

distribution channels, the general economic climate.

could require access to their funds. Cheriton Group Melville Limited is an unquoted company that is

06.

considered to be higher risk than securities listed on

Technical and/or supply issues may affect the ability of the company to deliver its products and services.

the London Stock Exchange.

07.

03.

Trading risks exist as for any business of this type.

Past performance and experience of the Directors is not a guide to future performance and may not be repeated.

Performance may be affected by factors outside the control of the Directors. There is competition in

08.

Investors will hold a minority interest in Cheriton Group

this market and trends may change quickly, or other

Melville Limited and accordingly may have little influence

innovations may surface. The general state of the

on how the business is conducted, unless they act

economy and government legislation may also have

collectively.

a significant impact on performance.

09.

04.

The level of any debt (or any other prior ranking

At the time of writing, the long term effects of the

securities) used by Cheriton Group Melville Limited will

Coronavirus pandemic are unknown. Persistence

significantly increase risk.

of strains of coronavirus that are immune to current or future vaccines may affect demand for some of the products or services offered by Cheriton Group Melville Limited.