Project Charlotte

PROJECT CHARLOTTE

PROJECT CHARLOTTE

SHOPPING CENTRE INVESTMENT PORTFOLIO

PROJECT

CHARLOTTE

project charlotte

opportunity

PROJECT CHARLOTTE

The OPPORTUNITY Project Charlotte offers an investor the opportunity to acquire a strategically assembled portfolio from an institutional UK investor, combining both a secure and diversified income stream with significant ongoing asset management opportunities to enhance and drive value.

n 7 town centre dominant shopping centres n Ongoing active asset management opportunities n Re-based rents – average £44 Zone A n Rental growth potential and improving occupational market n 2.4m sq ft of retail floorspace n 93% let and occupied space n 86% let to national covenants (excluding car park) n 48% of the income is secured for greater than 5 years (excluding car parks and commercialisation) n 570+ tenancies n Wault to expiry of 7.33 years and 6.14 years to breaks n 59.5m total footfall n 6,221 car parking spaces n £4.36 psf average service charge n Capital value £103 psf

To access a full suite of back up information please visit the data site: www.project–charlotte.com

PROJECT CHARLOTTE

KINGDOM SHOPPING CENTRE

WEST PLAZA SHOPPING CENTRE

CAPTAIN COOK SQUARE SHOPPING CENTRE

GLENROTHES

WESTER HAILES

MIDDLESBROUGH

AIREDALE SHOPPING CENTRE

KEIGHLEY Dundee

M8

Glasgow

Edinburgh

Newcastle

THE EXCHANGE SHOPPING CENTRE

ROCHDALE A1(M) M6

Leeds Manchester Liverpool M6 M54

M1

M42

PYRAMIDS & GRANGE SHOPPING CENTRE

Birmingham M5

Cardiff

Bristol

BIRKENHEAD M40

M1

London

M4 M3

M25

Exeter ANKERSIDE SHOPPING CENTRE

TAMWORTH

PROJECT CHARLOTTE

STRONG AND SECURE CASHFLOW The portfolio has an occupancy rate of 93% by floor area generating a total gross rent of £25,790,626 per annum. The average unexpired lease term is 7.33 years to expiry and 6.14 years to breaks and 81% of the income is secured to national multiple covenants (excluding car parks). The portfolio’s strong fundamentals and secure cashflow are anticipated to be attractive to a wide number of lenders.

DOMINANCE The portfolio comprises assets that all benefit from strong dominant fundamentals. The majority are either the only scheme in the town or provide the landlord control of an entire town centre. The assets are all strategically located, integrated into transport infrastructure networks and offer the opportunity to work progressively with local authorities. This provides an investor with a platform of assets offering a sustainable and secure cash flow over a long term hold period.

RE-BASED RENTS The portfolio comprises assets let off low rental levels with average rents across the portfolio standing at £44 per sq ft Zone A. In addition, manageable occupational unit costs for units with an average service charge of £4.36 per sq ft, provide affordable retail and leisure accommodation. The assets have been re-positioned and rents actively rebased. In parallel with the asset’s dominant characteristics and improving occupational markets, this provides positive and realistic rental growth prospects in the short to medium term.

PROJECT CHARLOTTE

ongoing ASSET MANAGEMENT In addition to providing an investor with a well secured cash flow, each of the properties offer a wide range of deliverable asset management initiatives. The opportunities vary from flexible tenant engineering and leasing through to larger scale development and redevelopment angles, enabling an investor to enhance value and drive strong returns early in a hold period.

RESILIENCE The portfolio comprises shopping centres that are future proofed against the changing retail landscape and the threats posed by online retailing. The retailing is predominantly mass market, convenience and value led, catering to everyday shopping necessities. These fundamentals ensure that the assets are resilient, demonstrated through high occupancy rates and positive occupational activity and offer an investor a solid platform to drive and enhance future value.

covenant strength The portfolio has a strong representation of national multiple retailers accounting for 86% of the total gross income (excluding car park and commercialisation) with representation from Boots, TK Maxx, Wilko, M&S, Next, H&M, Peacocks, Superdrug, Poundland, Argos, Co-Op, Home Bargains, and Iceland.

PROJECT CHARLOTTE

PORTFOLIO INCOME ANALYSIS n The portfolio offers excellent security of income with 81.2% of the income secured against national multiple retailers. n The portfolio provides a good average weighted unexpired lease term of 7.33 years to expiry and 6.14 years to breaks. n 48% of the income is secured for greater than 5 years (excluding commercialisation and car parks). n The portfolio has the following income breakdown: • The total gross rent is £24,702,403 • The total net rent is £18,744,652 • The total estimated rental value is £28,471,368

Vacancy by Floor Area

Rent by Covenant Type 2.6% Mall Income

7% Vacant

1.0% Other

2.8% Car Park 12.5% Local Trader

81.2% National Multiple

93% Occupied

Top 10 Tenants by Income (excluding car park and commercialisation) Tenant

Total Income

% of Total Gross Rent

Poundland

£966,100

4.33%

Boots

£912,500

4.09%

Argos

£584,500

2.62%

TJ Hughes

£575,000

2.57%

Iceland

£452,950

2.03%

Co-Op

£436,000

1.95%

Next

£391,300

1.75%

Wilko

£382,500

1.71%

TJ Morris

£375,571

1.68%

ABC Cinema

£360,000

1.61%

PROJECT CHARLOTTE

Income Lease Expiry Profile (10 Year Hold) £6,000,000

£5,000,000

£4,000,000

£3,000,000

£2,000,000

£1,000,000

£0

Yr 1

Yr 2

Yr 3

Yr 4

Yr 5

Yr 6

Yr 7

Yr 8

Yr 9

Over 10 Yrs

5 Year Running Yield (excluding rental growth) 10.00% 9.50% 9.00% 8.50% 8.00% 7.50% 7.00%

01/09/2024

01/03/2024

01/09/2023

01/03/2023

01/09/2022

01/03/2022

01/09/2021

01/03/2021

01/09/2020

01/03/2020

01/09/2019

01/03/2019

01/09/2018

01/03/2018

01/09/2017

01/03/2017

01/09/2016

01/03/2016

01/09/2015

01/03/2015

6.50%

PROJECT CHARLOTTE

PROPERTY SALE STRUCTURE The sale of the freehold and leasehold interests in the assets held within the portfolio by Mars Pension Trustees Limited and Mars Real Estate BV will be structured by way of a property asset sale with full SDLT payable by the purchaser.

VAT The properties have been elected for VAT. It is intended that the sale will be treated as a transfer of a going concern and therefore VAT should not be payable on the purchase price.

CAPITAL ALLOWANCES All unclaimed capital allowances will be available to the purchaser. Further details are available on the data room.

PROJECT CHARLOTTE

ENERGY PERFORMANCE CERTIFICATES The EPC’s covering all the assets in the portfolio can be found on the data room.

SURVEYS The following surveys will be available for assignment for the purchaser: • Building Survey Report with specialist M&E and Lift Engineers Reports • Phase 1 Environmental Audit

Proposal We are instructed to seek offers in excess of £245,000,000 (Two Hundred and Forty Five Million Pounds), subject to contract.

This reflects the following yield profile assuming purchasers costs of 5.80%: Net Initial Yield: 7.23% Net Equivalent Yield: 9.24% Net Reversionary Yield: 10.02%

Website To access a full suite of back up information please visit the data site: www.project–charlotte.com

FURTHER INFORMATION Giles Roberts Tel: 0203 1471584 Email: giles.roberts@eu.jll.com Josh Vernon Tel: 0207 0875346 Email: joshua.vernon@eu.jll.com Jennifer Milne Tel: 0207 0875397 Email: jennifer.milne@eu.jll.com

MISREPRESENTATION ACT 1967 | DISCLAIMER COPYRIGHT © JONES LANG LASALLE IP, INC. 2015. All rights reserved.

Jones Lang LaSalle Limited and Lisney for themselves and for the vendor of this property whose agents they are give notice that: a) The particulars are set out as general outline only for the guidance of intending purchasers and do not constitute, nor constitute part of, an offer or contract. b) All descriptions, dimensions, references to condition and necessary permissions for use and occupation, and other details are given in good faith and are believed to be correct, but any intending purchasers should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them. c) No person in the employment of Jones Lang LaSalle Limited or Lisney has any authority to make or give any representation or warranty whatever in relation to these properties. d) All plans, maps and photographs provided are for indicative purposes only. March 2015.

Designed and produced by Creativeworld Tel: 01282 858200

PYRAMIDS & GRANGE SHOPPING CENTRE

BIRKENHEAD

PROJECT CHARLOTTE

BIRKENHEAD PYRAMIDS & GRANGE SHOPPING CENTRE

Investment Summary • The Pyramids and The Grange dominate the retail offer in Birkenhead providing complete control of the town centre retail.

• Strong retailer demand with a significant number of live requirements and well progressed discussions on current lettings and lease renewals.

• Birkenhead is the focus of major investment having secured a £4.5 billion planning consent for wide scale regeneration.

• Average weighted average unexpired lease term of 5.6 years to expiry and 4.7 years to break.

• Extensive primary catchment population of 331,000 and an estimated population of 112,000 ranks the town well above the UK average.

• 45.6% of the current income is secured for greater than 5 years (excluding breaks).

• A total of 640,000 sq ft of retail accommodation across both shopping centres.

• Freehold.

• 75% of the current income is secured to national multiple retailers.

• Significant asset management and development opportunities to add value and enhance the retailing environment.

• Well anchored by TJ Hughes, M&S, and Next.

• Key retailer tenants include H&M, River Island, Sportsdirect, Argos, WH Smith, Deichmann, JD Sports and Home Bargains.

Income

• Two car parks providing 1,180 shopper spaces within the ownership.

Gross Income

£6,974,102

Net Operating Income

£5,976,921

• Strong combined annual footfall of 18.5 million visitors in 2014.

Fully Let ERV

£9,365,448

• Re-based rents range between £30 - £75 Zone A. • Over £2 million of investment and expenditure in the last 2 years.

PROJECT CHARLOTTE

Location

Situation

Birkenhead is located in the North West of England on the Wirral Peninsula. The town sits along the west bank of the river Mersey, opposite Liverpool, one of the UK’s fastest growing economies.

The adjoining Pyramids and Grange Shopping Centres are situated in the heart of Birkenhead town centre. The shopping centres comprise the entire retail core for Birkenhead.

Birkenhead is the dominant retail town on the Wirral Peninsula.

The town is approximately 1.5 miles (2.4km), via the Mersey Tunnel, from Liverpool City Centre, 32 miles (51km) north west of Chester and 32 miles (51km) west of Manchester. The town can be accessed from junctions 1 and 3 of the M53 motorway and two road tunnels that run underneath the river Mersey connecting Birkenhead to Liverpool.

The Pyramids is bound by Grange Road on the northern side and Borough Road to the south. The Pyramids links directly into the Grange shopping centre via St Johns Pavement at the eastern end. The principal access points are from the scheme’s multistorey car park via a covered bridge link from Grange Road and from St Johns Square via an escalator.

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Catchment and Demographics Birkenhead’s primary catchment population is 331,000, which ranks the town significantly above the UK PMA average. The estimated shopping population is 112,000, above the UK average.

The towns catchment population extends to over 1.2 million within a 30 minute drive time.

Birkenhead has an annual retail comparison goods spend of £728 million with 88% of the expenditure generated by residents.

The town’s benefits from having a retail offer that suits the local Rhyl and loyal shopping catchment, with theLlandudno town retaining a strong Colwyn Bay Conwy market share of trade within the primary catchment of 19%.

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Historically, Birkenhead has benefitted from a strong manufacturing and shipping industry, which combined with Liverpool, was the largest port in the world. Since 2001 there has been over £100 million of investment by the Mersey Docks and Harbour company. Further large employers on the Wirral include Vauxhall’s car manufacturing plant at Ellesmere Port and Shell’s large oil refinery at Stanlow.

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Retailing Stafford

The retail focus for Birkenhead is theNewport Pyramids and Grange shopping centre comprising 640,000 sq ft of managed shopping floor space in the town. The adjoining schemes are the only shopping centres in Birkenhead accounting for over 60% of the total retailing provision. The prime pitch is focussed upon the St Johns Pavement and St Johns Square in The Grange shopping centre.

Town centre floor space in Birkenhead is estimated at 1.06m sq ft and provides a wide range of mid and mass market shopping which serves the towns shopping catchment.

Birkenhead’s famous market is situated within the centre of The Grange shopping centre and provides over 300 stalls in a mix of outdoor and indoor environments and is a major attraction and footfall driver for the town.

Prime rents peaked at £120 Zone A and rents have been substantially re-based to levels ranging between £30 - £75 Zone A. Rents within the Pyramids range between £45 - £50 Zone A.

PROJECT CHARLOTTE

Description Pyramid Shopping Centre The Pyramids first opened in 1989 and was refurbished in 2006.

The shopping centre is covered and arranged over two levels, benefitting from a direct link into The Grange shopping centre.

The scheme provides 152,091 sq ft of retail accommodation across 35 retail units, 4 MSU’s, and 8 kiosks. The scheme is anchored by a 25,577 sq ft Next store. The Pyramids provides a vibrant food court, comprising 6 units and is anchored by Burger King and Subway. There is also a strong representation of national multiple retailers including River Island, Select, Beaverbrooks, Scotts, Poundland, That’s Entertainment, Ryman, Body Shop, Trespass and Claires.

Footfall The Pyramids and Grange shopping centres dominate retailing within Birkenhead resulting in strong footfall.

In 2014 footfall for both schemes combined totalled 18 million visitors, with The Grange recording 13.1 million visitors and The Pyramids 5 million visitors.

The Grange Shopping Centre The Grange opened in 1975 and was refurbished and extended in 1990. The ‘U’ shaped scheme is arranged around Birkenhead’s busy and famous market. The centre provides 484,884 sq ft of retail accommodation across 122 retail units and is anchored by a 38,000 sq ft M&S and a 59,316 sq ft TJ Hughes.

The scheme’s prime retail pitch is St Johns Pavement and St Johns Square. H&M have recently opened a store on St Johns Pavement establishing the mall as the main fashion focus for the town. Further fashion retailers include Miss Selfridge, Burton, and JD Sports. Costa Coffee anchor the eastern end of St Johns Pavement fronting St Johns Square.

The Grange’s main mall is focussed on Borough Pavement, anchored by M&S and TJ Hughes. National multiple retailers include Home Bargains, WH Smith, Sportsdirect, Poundland, Caffè Nero, Warren James and Deichmann. St Johns Pavement provides the principal access to St Johns Square and onto Borough Pavement and Milton Pavement.

Milton Pavement and Princes Pavement provide busy secondary malls adjacent to the market. Princes Pavement is anchored by Argos and accommodates national multiple retailers including Savers, Pound Bakery and Heron Foods. St Werburgh’s Square at the southern end of Princes Pavement is anchored by Home Bargains and Perfect Home. In addition these malls provide accommodation to a wide range of successful regional and independent retailers.

Car Park Both shopping centres are linked directly to multi-storey car parks providing a total of 1,180 shopper spaces and is the principal parking for Birkenhead. The ring road provides access into the two car parks located at opposite ends of both shopping centres.

The Pyramids car park is linked to the internal shopping mall via a link bridge and provides 685 spaces. The Grange car park has 495 spaces and is accessed from Conway Street. Both car parks have been awarded the Park Mark Safe Parking Certificate and are operated on pay on foot basis.

For the year ending 31st March 2014, both car parks generated a total gross income of £695,728. The breakdown is as follows: Gross Income

Operating Costs

Net Income

The Pyramids

£471,387

£244,469

£226,918

The Grange

£219,584

£187,456

£32,128

Total

£695,728

£259,046

Both car parks have benefited from expenditure and investment over the last 2 years including the installation of pay on foot systems.

The Pyramids had 2 new lifts installed in 2013.

BIRKENHEAD PYRAMIDS & GRANGE SHOPPING CENTRE

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ALBEMARLE & BOND PAWNBROKER

N VACA D DLAN E POUN STOR OUNT DISC

OPTICIAN

AR S WE

27

25

18 - 20

DEICHMANN

LADIE

SHOES

LOOK VACA

SPECSAVERS

OODS TS G SPOR

LINEN WAREHOUS E

JD

HPJ JEWELLER

21

12

14 23

16

1

FLYOVER FROM QUE

CARD FACTORY

N EW AXX TKM ENT TO OVER CLO S PORT JJB S SPTS TO ENT UNDER GDS

GRAINGER GAMES

7 SANT

SHOE ZONE

9 - 11

T TREE HN S ST JO

LONGTON HALL FARM SHOP GROCER

TY

VACANT

CEN

VACA

TEXTILES DIRECT HOUSEHOLD TEXTILES

015

BIRKENHEAD PYRAMIDS & GRANGE SHOPPING CENTRE

NT

E STOR

ENT

A VAC

NT

UG RDR

Y EAUT H&B

MIST CHE

TS

&

H&M

G K SNU ARRIC USE IC HO PUBL

32

E STOR

11

7-9

5

8

4-6

YARD

1

3

T

2a

VACANT

ESCALATOR

STAIRS

MAX SPIELMANN FILM DEV

JEWELLERY

BY DESIGN

THE CARPHONE WAREHOUSE TELEPHONES

MUMS & MIDWIVES

VACANT

VACANT

VACANT

VACANT

VACANT

VACANT

VACANT

CHARITY SHOP

BRITISH HEART FOUNDATION FURNITURE & ELECTRICAL

SVP

VACANT

HEALTH CENTRE

2

COSTA COFFEE

H SAMUEL JEWELLER

ST JOHNS PAVEMEN

10 - 12

DS GOO

EN T

H&M

LD SEHO HOU

INS

VA C

A BARG

MISS SELFRIDGE

VACANT

H&M

O2 TELEPHONES

LADIES WEAR

VACANT

B&M

THOMSON TRAVEL AGENT

EN T

39

VACANT

VACANT

AQS NEWS & SWEETS

(2 RETAIL FLOORS)

YMCA

CHEQUE CENTRE FIN SERV

BETFRED BETTING OFFICE

KINGS GAMING

VACANT

FROZEN FOOD

FARMFOODS

FORSTER DEAN SOLICITOR

ANDREW COLLINGE GRADUATES HAIRDRESSING

FIRST CHOICE TRAVEL AGENT

44 37

TELEPHONES

GAME

SHOES

CLARKS

VODAFONE TELEPHONES

NATIONWIDE

AMPLIFON DISAB GDS&EQUIP

3 STORE

5

ENT

41

14

16 - 18

1-3

7

BURTON MENS WEAR

WIRRAL METROPOLITAN COLLE GE INFORMATION CENTRE

2

4

6

8

10

MARKS & SPENCER

ST JOHNS SQUARE

2

4-6

12

10

8

29

31

33

39

35 - 37

CAFFE NERO COFFEE SHOP

20 - 26

11 - 13

15

37

40 - 42

BLUE INC

28

1-5

7-9

MILTON PAVEMENT

25

23

19 - 21

17

38

36

32 - 34

33 - 35

28

37

THE GRANGE

MARKET

26

31

24 29

22 27

25

18 - 20

23

16

14

MARKET SQUARE

SHOPPING CENTRE

BOROUGH PAVEMENT

37

THORNTONS CONF & BIS

POUNDLAND

30

VARIETY STORE

ENT TO BE MILTON JEWELLERS

SPORTS DIRECT.COM SPORTS GOODS

32 - 36

(2 RETAIL FLOORS)

MILLETS OUTDOOR WEAR & CAMPING GOODS (2 RETAIL FLOORS)

T J HUGHES

MENS WEAR FRAGRANCE SHOP HEALTH & BEAUTY

ENT

DEPARTMENT STORE

27 PO

WHSMITH NEWSAGENT & BOOK S & POST OFFICE

H&T PAWNBROKER CEX COMPUTER GAMES

DEICHMANN

21

VACANT

12 19

WEST COAST

8 - 10

(B

6 13 - 17

4

JANE McNALLY

2

VACANT

RAMP

BEYOND GIFTS

COFFEE MILL CAFE

HAIR TRENDZ L ACCESS

VACANT

FANTASTIC NAILS

BURRELL NEWS

GREER FISHMONGERS

PRETTY INKED

MAPLES CAFE

HANNON

BAKER

SAYERS

VACANT

HERON FOODS

PJ MAGIC

VACANT

BHF CHARITY SHOP

VACANT

BETFRED BETTING OFFICE

CASH GENERATOR FINANCIAL SERVICES

WILLIAM HILL BETTING OFFICE

APOLLO MUSIC

WORK WEAR

WIRRAL UNIFORM S

CLYDESDALE BANK

2A

4

6

8

10

12

14

16

VACANT

OPTICIAN

WARREN JAMES JEWELLER

(4 RETAIL FLOORS)

SAYERS BAKER SPECSAVERS

VACANT

LINEN WAREHOUSE

SHOES

CARD FACTORY

GRAINGER GAMES

SHOE ZONE

LONGTON HALL FARM SHOP GROCER

VACANT

SAVERS

SQUARE

LLOYDS TSB BANK

HOUSEHOLD GOODS

HOME BARGAINS

HOUSEHOLD GOODS

PERFECTHOME

ST WERBURGHS

14

CAPPUCCINOS ON THE SQUARE CAFE

WIMPY F/FD REST

WIRRAL WORK WEAR CLOTHING

CASH CONVERTERS FINANCIAL SERVICES

HAIR

HAIRLINES

VACANT

VACANT

VACANT

LIFTS

POWERPLAY GAMES

ROWLANDS PHARMACY

PLATTERS CAFE

STS

HEALTH & BEAUTY

COVERED

PLACE OF WORSHIP

P

OLIVER LANE

ON IFT L C

10

8

NT CE S E CR

12

53 STORE

86

NT CA VA 6

GRANGE ROAD

EL OT LH S RA R & AN NT VE AGH E O C N O M R K BA IC TR PA

(2 RETAIL FLOORS)

VACANT SITE

OLIVER STREET EAST

DEPARTMENT STORE

92

CLOSED

(35) (ACTUAL)

RAMP

HOUSE OF FRASER

SERVICE AREA

GRANGE PAVEMENT

12

OVER

(490) (ACTUAL)

MULTI-STOREY

P

ARGOS EXTRA CATALOGUE SHO WROOM

BD & KAY

CLAUGHTON ROAD

ETHEL AUSTIN

HOLLAND & BARR ETT HEALTH FOOD

POUNDWORLD

SCOPE CHARITY SHOP

DISCOUNT STORE

13 - 15 11

9 7 5 LETS LUNCH CAFE

T NEX TO ENT &M/WR L/WR

3

R

1A

BANK

1

ANDE SANT

2A

VACA

FT LI

11

DW

9

AXX TKM TO ENT OVER CLO PORTS JJB S SPTS O T T

G DW

7

T TREE HN S ST JO

JUST GENTSS ER BARB

3-5 1

2 - 2A 17 - 19

23

25

27

18

20 - 24

1

3-5

7

9 11

15

PRINCES PAVEMENT

26 - 30

32

RAMP

CLOSED

29 31

KENDAL STREET

JLL 10/2/2015

OASIS PORTHOLE &

ET S TR E

7

OASIS

9 - 11

VAC

AMUSEMENTS

Y BILIT PMO SHO CEN INFO

VACANT

G

HALL

NT

BIRKENHEAD PYRAMIDS & GRANGE SHOPPING CENTRE

Tenure The Pyramids and Grange Shopping Centres are both held freehold. The small element hatched red only relates to the bridge over the road accessing the car park and is included in the title.

PROJECT CHARLOTTE

Tenancies & Income Analysis The total contracted gross income, including vendor guarantees and top ups is £6,974,102 per annum. After deduction of landlord liabilities and void costs relating to vacant units which amount to £997,181 per annum and landlords contribution to marketing costs of £85,375 per annum, the current net operating income is £5,976,921 per annum.

The properties produce a current estimated rental value of £9,365,448 per annum.

The Pyramids Rental values within the Pyramids have been re-based since the market peak of £90 Zone A. West Mall has a rental tone of £45 Zone A and East Mall has a rental tone of between £45 to £60 Zone A. West Mall is now fully let and it is anticipated that this provides the landlord the opportunity to drive rental growth and let the remaining space.

The Grange Rental values range between £30 to £75 Zone A within the Grange. The prime pitch of St Johns Pavement and St Johns Square has a rental tone of between £70 to £75 Zone A. Borough Pavement has rental values between £55 to £65 Zone A and secondary malls such as Princes Pavement and Milton Pavement have rental tones of between £30 - £35 Zone A. These rental values represent a significant discount to peak rents of £120 Zone A. Top 5 Tenants by Income Tenant

Current Gross Rent (£ per annum)

% of Total Gross Rent

Argos

£257,500

3.69%

Next

£250,000

3.58%

M&S

£235,000

3.37%

HSBC

£170,000

2.44%

Poundworld

£145,000

2.08%

BIRKENHEAD PYRAMIDS & GRANGE SHOPPING CENTRE

Lease Contracted Income Scenario (excluding car park & commercialisation income)

Vacancy by Floor Area

£7,000,000

8.9%

£6,000,000

National Multiple Local Trader

£5,000,000

Mall Income

£4,000,000

91.1%

£3,000,000 £2,000,000 £1,000,000

Vacant

£0 0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

Occupied

25

YEARS

Unexpired Term & Covenant (excluding car park & commercialisation income)

Rent by Covenant Type

60.00%

2%

3.9% 1.1%

9.8%

50.00%

83.1%

40.00%

30.00%

National Multiple Local Trader Offices Mall Income Car Park

20.00%

10.00%

0.00%

Under 5 yrs

5-10 yrs

10-15 yrs

15-20 yrs

National Multiple

44.20%

30.22%

6.37%

0.00%

Over 20 yrs 4.68%

Local Trader

8.21%

2.00%

1.20%

0.46%

0.00%

PROJECT CHARLOTTE

Service Charge The Pyramids annual service charge budget is apportioned on a gross internal area as per the occupational leases. The service charge budget for 2015 is £1,111,003 equating to £7.53 per sq ft.

The marketing budget is £92,200 and the landlord makes a 50% contribution.

Service charge expenditure for the last 3 years and the current annual service charge budget for the year to 30th June 2015 is as follows: Service Charge Year ending 30th June

Total

The Grange annual service charge budget is apportioned on a gross internal areas as per the occupational leases.The annual service charge budget for 2015 is £1,054,530 equating to £2.10 per sq ft. Service charge expenditure for the year ending 30th June 2014 was £1,008,575. The marketing budget is £78,550 and the landlord makes a 50% contribution.

Service Charge Year ending 30th June

Total

2012 (expenditure)

£891,086

2013 (expenditure)

£1,020,306 £990,976

2012 (expenditure)

£1,155,738

2014 (expenditure)

2013 (expenditure)

£1,147,754

2015 (budget)

2014 (expenditure)

£1,089,344

2015 (budget)

£1,111,003

£1,054,530

BIRKENHEAD PYRAMIDS & GRANGE SHOPPING CENTRE

Commercialisation The Pyramids and Grange shopping centres both have contracts with Space & People. In 2014 the total income generated was £144,313 (Pyramids £110,442, Grange £33,871) and the forecast for 2015 is £151,530.

PROJECT CHARLOTTE

Asset Management Opportunities • Create 2 MSU’s on Grange Road replacing MSU 4 and Unit 30/33. This would create two 11,000 sq ft and 11,700 sq ft units and suit a number of current requirements.

• Explore the potential to redevelop the northern element of Milton Pavement to create a large surface car park and 3 new retail or leisure units. This would mitigate landlord rates liabilities, reduce the over supply of small retail units and drive footfall via the car park.

• Amalgamate or extend 1/3 St Johns Pavement to create a larger and better configured store. Interest has been expressed on both units, including Ed’s Diner subject to re-configuration. The landlord has the benefit from Santander of a potential reverse premium on Unit 3.

• Explore the option to amalgamate 15-23 Princes Pavement to capitalise on recent interest from a national multiple food and beverage operator.

• Progress ongoing leasing discussions including; Brand Port under offer on MSU 2, F Hinds offer on 32-34 Borough Pavement, Cancer Research UK offer on 21 Borough Pavement, The Entertainer on SU9/10 or SU17 and 19/21 Borough Pavement, Reubens Coffee on 2 Borough Pavement, Equivalenza on 2A St Johns Pavement, Milton Jewellers on 36 Borough Parade and Pepkor UK on 32-36 Milton Pavement.

• The 28 vacant units providing 69,500 sq ft of floor space enables a flexible approach to tenant re-engineering and unit amalgamations offering the potential to drive income.

• Explore the potential to acquire Unit 37 Borough Pavement which is held on a long leasehold interest in order to mitigate the landlord shortfall from the service charge restriction to drive income.

• Seek to acquire and integrate Birkenhead Market into the scheme providing redevelopment opportunities and additional control of the town centre.

KINGDOM SHOPPING CENTRE

glenrothes

PROJECT CHARLOTTE

glenrothes kingdom SHOPPING CENTRE

INVESTMENT SUMMARY • Kingdom Shopping Centre forms the entire retail provision for Glenrothes and is the largest indoor shopping centre in Fife.

• Average weighted unexpired lease term of 5.6 years to expiry and 4.7 years (including breaks).

• Glenrothes is the administrative capital and 3rd largest town in Fife.

• 45% of the current income is secured for greater than 5 years.

• The Fife District is the third largest local authority in Scotland.

• Retail catchment population extending to 241,000.

• Glenrothes retains 40% of its primary catchment comparison good spend.

• Heritable Title (Scottish equivalent to freehold).

• 83% of the current income is secured to national multiple retailers.

• Offers numerous asset management and development opportunities to enhance the retailing environment and drive income.

Income

• 430,800 sq ft of retail floor space across four quarters.

• 1,462 car parking spaces offering free parking for up to 3 hours.

• Annual footfall of 6.7 million per annum in 2014.

• Anchored by a 42,300 sq ft Dunnes Department Store.

• Key anchor tenants include an 10,850 sq ft TJ Morris, 15,050 sq ft New Look, JD Sports, Sportsdirect, Store 21, Home Bargains, Iceland, Boots, Superdrug and Poundland.

Gross Income

£4,666,868

Net Operating Income

£3,740,759

Fully Let ERV

£4,947,311

PROJECT CHARLOTTE

Location Glenrothes is located in Fife, 24 miles south west of Dundee and 32 miles to the north east of Edinburgh. The town is well located on the A92 dual carriageway which links Dunfermline with Dundee. There are good road links from the town to the M90 motorway which connects to Edinburgh, Perth, Dundee, and Aberdeen.

Glenrothes benefits from well-connected public transport infrastructure with the main bus station located immediately adjacent to the Postgate entrance to the Kingdom Shopping Arbroath Centre. The bus station received over ÂŁ250,000 of investment for improvements in 2010.

Dundee DUNDEE

Perth 10

Situation

11

9

St Andrews

Kingdom Shopping Centre forms the town centre for Glenrothes and is the dominant shopping centre in Fife.

M90

Glenrothes

8

The site is bound by North Street and Falkland Place to the north, Church Street to the south, Central Avenue to the east and Church Street and Rothes Road to the west.

7 6

Buckhaven

11

Stirling

10

5 4

Alloa

M9

Dunfermline

8

M80 5 4

2

8

3

7

1

6

Falkirk

5

4

M9

3

Airdrie

M8

5

The shopping centre has 14 car parks bounding it on all sides and linking directly into the scheme, with the main access points for the car parks from Church Street and North Street. The bus station is situated on the southern side off the shopping centre by the Postgate entrance accessed from Church Street.

M90

2

EDINBURGH 1

EDINBURGH Musselburgh Dalkeith Bonnyrigg

Livingston

4

6

LASGOW

Motherwell

5 6

st Kilbride

7

Carluke

Riverside Park

A9

A Z E L H I LL

2

NS

LESLIE

FLEMI

RD

QUEENS

NORTH RD

O

AUCHM U

ROTHES RD

D PL

RD

W AY

ALB

UTY DR

A 9

LL DR

DOVE

EE R

B

RD

RD

CA

PE

N

SKI

A TL

EBERRAN

ND

PA R

K

DR

BALBI

AVE

RN

ON

WAROUT

RD

H

IE

EX A N DER

D

RD

AL

TR

RD

The Lomond Centre

S

RU

CE

R T RD

D

R

ES

A

OO

E

TH

U

CD U F

COT R D

ID

RO

ST

MA

W

LY

RD

OL

IDE

F R D

AN

GARET DR MAR

A92

DS

E

RD

O

SSE

O

RU

T CH S

TH

QUEEN

ADRIAN RD

R I M B L E TO N AV E

RIMBLET

U

11

R

R

D

AUCHM

E

UR

W

CH

S PA R K S R D

R I M B L E TON A E V

N G TO N

T Y DR

LY L E A V

TE

RD

FA L K L A N

BAX

S TE S COT T

THE PROPERTY

RD

E PK

LIE

Q U E E N S G AT E

RN

LES

H

CRES

F ULLERTO N RD

NAPIER RD

VE N S

Q UEE

W I LL O W

GAT E

N AV E

11 1

Kirkcaldy

D

15

1 3

M73

2

Cowdenbeath

2

3 3

3

Grangemouth Bo'ness

Cumbernauld

debank M80

24 20

The town benefits from two rail stations at Glenrothes and Markinch which are linked to the Fife circular route providing access to Edinburgh via Kirkcaldy in 50 minutes and Dundee in 40 minutes.

TH

BIRCHT

Warout Stadium Social Club Warout Wood

E BE CHES E

REE RD

glenrothes kingdom SHOPPING CENTRE

Catchment and Demographics

Perth

Glenrothes is the third largest town in Fife, and originally planned as a post war new town it is now the region’s administrative capital.

St Andrews Cupar

The town has a primary retail catchment population of 35,110, a secondary catchment population of 32,591 and a total catchment population extending to 241,113.

Kennoway

Kinross

Glenrothes Ballingry

The town has an estimated shopper population of 27,000 and an annual comparison goods spend of £61.3 million with 87% of the expenditure generated by residents. Glenrothes benefits from being relatively isolated limiting competition and leakage to nearby centres, illustrated by it retaining a 40% share of the primary catchment. Nearby, Kirkcaldy is principally an Edinburgh commuter town while Glenrothes benefits from having a very localised population.

Anstruther

Leven Methil

Kelty Lochgelly Cowdenbeath

Kirkcaldy

Oakley Dunfermline Burntisland Inverkeithing

n Primary n Secondary n Tertiary n Quarternary

Local Economy

Retailing

Glenrothes has a robust local economy with recent expansion to accommodate an influx of service sector and manufacturing jobs. The service sector accounts for 70% of the total employment in Glenrothes, with finance accounting for 16% and manufacturing 11%. The town was originally an important mining town but is now a major economy for Fife with high tech electronics, manufacturing, public sector agencies, accommodation and food services, and a strong retail base.

Retail provision within Glenrothes is dominated by the Kingdom Shopping Centre which forms the core retailing for the town.

The scheme is the only shopping centre in the town and provides a mixture of retail and service uses.

The largest occupiers in the town are manufacturing based and over 50% of Fife’s electronics sector is based in the town. Global manufacturing and engineering firms in occupation include Bosch, Rexroth, Flexell and Plastech. Other major occupiers include Tullis Russell, Raytheon Systems, Smith Anderson Packaging, and Velux. Recent investment and expansion in the town includes Kyndal Group and John Fergus Co’s joint venture for a newly built £6.7 million Scotch Whisky distillery and RWE npower completing a £200 million biomass CHP plant.

Saltire Retail Park is located to the north west of the town centre. It provides 145,000 sq ft of retail accommodation across 8 units. The retail park is anchored by Homebase with key tenants including Matalan, Brantano and Carpetright. The retail provision within Saltire Retail Park is predominantly bulky goods and does not compete with the Kingdom Shopping Centre.

Prime retail rents are within the Kingdom Shopping Centre.

Rents peaked at £57.50 Zone A on Unicorn Way but have been re-based to levels of £30-40 Zone A.

Education contributes an important role to the local economy with Glenrothes having 12 primary schools, 3 secondary schools and Fife College accommodating 25,000 students.

‘Kingdom Shopping Centre forms the town centre for Glenrothes….’

PROJECT CHARLOTTE

Description

Footfall

The Kingdom Shopping Centre is the primary shopping destination in Glenrothes, providing the only shopping centre and forming the entire retail provision for the town. The scheme is Fife’s largest indoor shopping centre.

Kingdom Shopping Centre has strong footfall with 6.9 visitors in 2013 and 6.7 million visitors in 2014.

The centre was built in 4 phases between 1963 to 1994 and extends to 430,800 sq ft of retail floor space. The centre trades over ground floor only and comprises 139 retail units, Rothes Hall library and theatre, and Unicorn House.

The four retail cores include Unicorn Way, Albany Gate, Falkland Square and Lyon Square. It is an enclosed scheme, arranged in a broadly linear layout with the main mall running west to east with Unicorn Way bounding the western end, and Albany Gate the eastern end. Falkland Gate forms a junction at the centre of the mall dissecting Unicorn Way and Lyon Square. There is also a secondary mall branching off on Postgate linking south to the bus station terminal.

Unicorn Way is the prime retail pitch with national multiple retailers including Sportsdirect, New Look, Store 21, WHSmith, Savers, Poundland, JD Sports and Argos. Unicorn Way is anchored by Rothes Halls Theatre at the western boundary providing an entertainment venue holding a wide range of events. A 42,300 sq ft Dunnes department store anchors the junction between Unicorn Way and Falkland Gate. Principal access points are from Marchmont Gate to the west and by Bute Gate to the north.

Falkland Square accommodates national multiple retailers including Iceland, Home Bargains, Superdrug, Shoe Zone and Game. The main access points are from Falkland Gate to the north and Carrick Gate to the south.

Lyon Way is anchored by Boots with other national multiples including M&Co, Holland & Barrett, Brighthouse, Poundland, H Samuel, and Farmfoods. Principal access points are from Albany Gate to the east, Kintyre Gate to the north and the Postgate entrance, an external precinct leading south to the bus station.

Albany Gate provides a vibrant mix of independent and regional operators.

Car Park Kingdom Shopping Centre benefits from having a total of 1,462 car park spaces, with 1 multi storey car park providing 405 shopper spaces and 13 surface car parks providing 1057 spaces.

The main car parks serving the scheme are the 3 level multi storey car park connecting to Rothes Hall via a glazed link at the western end of the scheme and two large surface car parks on the northern side of the shopping centre accessed from North Street.

The car park is operated and managed by Smart Parking.

The tariffs are as follows: Car Parking

Tariff (£)

1,093 spaces

Free for 3 hours

369 spaces

£1 per day

glenrothes kingdom SHOPPING CENTRE

PROJECT CHARLOTTE

open for goad plan >

glenrothes kingdom SHOPPING CENTRE

Tenure The Kingdom Shopping Centre is held Heritable Title (Scottish equivalent of Freehold). The car park is held on long leasehold at a peppercorn rent. The landlord has the ability to purchase the freehold for ÂŁ1 at expiry in 2094.

S

M O .C CT RE DI DS O GO

NT CA VA (60) (ESTIMATED)

P

1

SERVICE YARD 1 YARD 2

VACANT

BINGO

&

SERVICE

CLUB 3000 THE PHOENIX PUBLIC HOUSE

LADBROKES LADBRO KES

8

1

6 2-4

(90) (ESTIMATED)

P 10

DUN DUNN NES ES STORES

VARIETY STORE

ENT

BUS STATION

LLOYDS TSB

BANK

ENT

LADBROKES BETTING OFFICE

THE SALV S ATION ARMY CHAR CH ITY SHOP

CAFE

ABRAXAS HAIR

WAITING ROOM

CTN

R S MCCOLL

3

BAYNES BAKER

WAITING ROOM

1

BLAIRS GROCER

5

TRIMMERS BARBER SH & RARE HAIR OVER

19

17

STORE

15

SERVICE AREA

13

1

VACANT

BUS STATION

ED)

ET CHURCH STRE

7 5

VACANT

9

STORE

ACORN COURT

3 KNIT KNAX HO TEXT

CLOTHING

ALBANY GATE 11 CALEDONIAN KILTS

1

OXFAM CHARITY SHOP

STAIRS

KINGDOM CREDIT UNIONS BUS SERV

5 VACANT

4

2 STS

SERVICE

VACANT AREA

GARAGES

WEE DINER

OFFICE

(60) (ESTIMATED)

P

VACANT

26

CAFE LYON

1 CTN

24

ENT

22 18 - 20 16

(25) (ACTUAL)

P

OFFICE

TO LETTING ESTATE AGENT

34

2 3

NORTH HOUSE

JLL 16/2/2015

FIDE PROPERTIE S ESTATE AGENT

(20) (ACTUAL)

32

SLATER HOGG & HOWISON ESTATE AGENT

28 - 30

DUNFERMLINE BUILDING SOCIETY

HERITAGE HOUS E

ENT

DENT SURGY

R S MCCOLL

YOUR MOVE ESTATE AGENT

P

VACANT

VACANT

VACANT

WC

ABETATAN SOLARIUM

AREA

HOME DIY HOUSEHOLD GOOD S

7

KINTYRE GATE

SERVICE

BAKER

9 4-6

QUICKSILVER AMUSEMENTS

SERVICE SERVIC E

STUARTS OF BUCKHAVEN

NATIONWIDE BUILDING SOCIETY

CHEMIST

5

PING CENTRE

BRITISH RED CROSS CHARITY SHOP

LYON SQUARE

FARMFOODS FROZEN FOOD

8

BRITISH HEART FOUNDATION CHARITY SHOP

11 - 13

RACH OPTICIAN

10

PDSA CHARITY SHOP

3

12 - 14

GREGGS BAKER

2

BOOTS

DEBRA

4

VACANT

5-7

FIFE BUTCHERS OF GLENROTHES

BOOTS OPTICIAN

SALLY SALON SERVIC ES HEALTH & BEAUT Y

ENT

GAHC

CLOTHING

M & CO

HOLLAND & BARR ETT HEALTH FOOD

BRIGHTHOUSE HOME ENTERTAIN MENT

JESSOP JEWELLER

CLARKS SHOES

SPECSAVERS OPTICIAN

TRESPASS

VACANT

SHOE ZONE ZONE

4-6

OFFICE

GUEST HOUSE

PUBLIC HOUSE J D WETHERSPO ON & GOLDEN ACO RN HOTEL

BANK OF SCOT SCOTL LAND AND

6

PADDY POWER

9 JEWELLER

BOOKS

LYO ON WAY

8

H SAMUEL

13

1 18

THE WORKS

14 EXIT

15

20

VACANT

22

RAM SDEN RAMS S DENS JEWE LLER JEWE S LLER

17 - 21 VACANT

24 - 26

VACANT

23 POUNDLAND DISCOUNT STOR E

THE CARPHONE WAREHOUSE TELEPHONES

25

28

VACANT

27 30

CASH GENERATOR FINANCIAL SERVICES

29 CARD LAND

31

32

POSTGATE

8

32

7-9

VAC VACA ANT NT

VODAFONE TELEPHONES

HOME BARGAINS

34

5

10

FALKLAND GA TE FALKLAND SQUARE SQUA RE GAME COMPUTER GAM ES

12

HOUSEHOLD GOOD S

9

SUPERDRUG

11

THE MONEY SHOP

HEALTH HEALT H & BEAUTY

36

6-8

10 MAX SPIELMANN FILM DEVELOPING

1 ENTRANCE

YMCA & YWCA

GOLDEN ACORN

3 FIFE COUNCIL

FALKLAND PLAC E

PIZZA HUT DELIVE RY TAKE AWAY

3

5

14 VACANT

EE EE

THE KINGDOM SH OP

CHEQUE CENTRE FIN SERV

7 SOCIALITES

STORE

2-4

9 BAYNES BAKER

SERVICE AREA

AREA

TOUR OP

11 THOMAS COOK TRAVEL AGENT

UNICO COR RN N HOUSE

ICELAND

CLYDESDA CLYDE SDAL LE E BANK

THE AUD STITCH CLO ALT RING-AROSES FLOR

13

18 16

NATURAL DOC

EL

FROZEN FOOD

BANK

1-3

15

20 - 22

SUBWAY SANDWICH BAR

17 7

24

VACANT MOBILE TECH

19

26

RETA CLOTHING

28

SPHERE & TURRET CLOTHING

UNICORN SQUARE

VACANT

30 BB`S COFFEE & MUFFINS COFFEE SHOP

VACANT

32 CLAIR CLAIRE E`S `S L ACCESS

ii MUSIC

BARRHEAD TRAV

ENTRAN NCE CE

VACANT

21

THOMSON TRAVEL AGENT

23A

TIMPSON SHOE REPAIRS

OFFICERS CLUB MENS WEAR

RYMAN STATIONER

HARVEY WILLIS GIFTS

36

JD SPORTS SPOR PORT TS S GOODS

23B 38

ARGOS CATALOGUE SHOW ROOM

UNICORN WAY34 40

WHSMITH NEWSAGEN T & BOOKS (2 RETAIL FLOORS) PO & POST OFFICE

23C 42

STORE 21 CLOTHING (2 RETAIL FLOO RS)

44

POUNDWORLD DISCOUNT STO RE

46 3 STORE TELEPHONES AMERKANDY

PRESENTE GIFTS

STORE ENTRANCE

STAGECOACH

NEW LOOK

25

LADIES WEAR

OPTICIAN

EXIT

STORE

FAL FALK KLAN LAND COURT

BANK

VAC

37 48

EXIT

27 VALUE SPECS

50

HEALTH & BEAU TY

29 VACANT

52

SAVERS

2 1

WATCH REPAIR CENTRE

VACANT

CLYDESDALE BANK

RBS

STO

2

39

X FI Y E UT YL RE EA ST B CA & DY TH AL HE NT CA VA

35

BUTE GATE

UNIT 2

JLL 16/2/2015

JOBCENTRE PLUS

31 THOMAS COOK TRAVEL AGENT

VACANT

3

O

RT O SP

S RT O SP

T

8 5 -4

AY W

BO

43 NT CA VA

N CA VA

4

RN CO 41 I UN 33 DANJO HAIR

P

(240) (ESTIMATED)

1

FE CA

54

CARD FACTORY CARDS & GIFTS

58 CARD CHOICE

UNIT 3

NORTH STREET (RETAIL PARK) VIDEO RENTAL

BLOCKBUSTER

CARRICK GATE

THEATRE G IN AT SE

STO

ROTHES HALLS 56

NT CA VA

NT CA VA

EE S NE O PH LE TE

IT EX

ARY

BAKER

& EXIT STORE

GREGGS

ROTHES HALLS LIBR

VACANT

CHARITY SHOP

CAFE ALFRESCO

BARNARDO`S

2

INDIGO SUN SOLARIUM VACANT

P (60) (ESTIMATED)

PROJECT CHARLOTTE glenrothes kingdom SHOPPING CENTRE

ARY SURGERY

(30) (ESTIMATED)

P

NORTH STREET BRITISH TELECOM TELEPHONE EXCH ANGE

P

(200) (ESTIMATED)

SOLICITOR

BAIRD & CO

OFFICE

INNES JOHNSTON & CO SOLICITOR

KINGDOM KILTS MENS WEAR

ENT

14

2

ALBANY HOUSE

NORTH STREET

GOVERNMENT BUILDI NG

PROJECT CHARLOTTE

Tenancies & Income Analysis The total contracted gross income, including vendor guarantees and top ups is £4,666,868 per annum. After deduction of void costs relating to vacant units which amount to £816,109 per annum and landlords contribution to marketing costs of £110,000 per annum, the current net operating income is £3,740,759 per annum.

The properties produce an estimated rental value of £4,947,311 per annum. The centre has a broad rental tone ranging between £30 - 40 Zone A. The estimated rental values that we have adopted illustrate the following tones: Unicorn Way

£30 - £40 Zone A

Falkland Square

£27.50 Zone A

Lyon Way

£30 Zone A

Albany Gate / Postgate

Global on a unit by unit basis

The rents represent a discount to the peak market rents of £57.50 Zone A in 2007 having been re-based to affordable and sustainable levels providing a strong platform for rental growth.

In comparison to competing schemes, the Kingdom Centre represents a discount, with rents in East Kilbride at £70 Zone A, Kirkcaldy £60 Zone A, Dunfermline £50-55 Zone A, and Irvine £45 Zone A. The shopping centre absorbs all the retail demand and requirements for Glenrothes resulting in active lease renewal and letting activity. New lettings that have been secured in the last 3 months include Greggs, Paddy Power and Trespass, and Sportsdirect have recently renewed their lease on Unicorn Way. There are also number of live retailer requirements for the town.

Top 5 Tenants by Income Tenant

Current Gross Rent (£ per annum)

% of Total Gross Rent

Co-Op

£256,000

5.49%

Poundland

£166,500

3.57%

New Look

£166,000

3.56%

Home Bargains

£154,571

3.31%

Mackays

£116,700

2.50%

glenrothes kingdom SHOPPING CENTRE

Lease Contracted Income Scenario

Vacancy by Floor Area

£5,000,000 £4,500,000

11.7%

National Multiple

£4,000,000

Local Trader

£3,500,000 £3,000,000 £2,500,000

88.3%

£2,000,000 £1,500,000 £1,000,000 £500,000 £0 0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

Vacant

25

YEARS

Unexpired Term & Covenant (excluding car park & commercialisation income)

Occupied

Rent by Covenant Type 2.1%

60.00%

14.9%

50.00%

83.0% 40.00%

30.00%

National Multiple Local Trader Mall Income

20.00%

10.00%

0.00%

Under 5 yrs

5-10 yrs

10-15 yrs

15-20 yrs

National Multiple

43.38%

28.85%

9.53%

0.00%

Over 20 yrs 2.99%

Local Trader

11.00%

4.04%

0.22%

0.00%

0.00%

PROJECT CHARLOTTE

Service Charge The operating costs of the shopping centre are covered by a comprehensive service charge which is apportioned on a gross internal area basis.

The service charge year runs to 26th May and the audited service charge expenditure over the past three years has been as follows:

Service Charge Year to May 26th

Total

2012 (expenditure)

£1,585,697

2013 (expenditure)

£1,805,699

2014 (budget)

£1,769,703

2015 (budget)

£1,781,768

The current annual service charge budget of the year to 26th May 2015 is £1,781,768 equating to £4.14 per sq. ft. The total marketing budget is £120,048. The landlord contributes £110,000 towards the marketing budget, well in excess of 50% standard practice level. The current landlord has been investing heavily in the shopping centre but there is potential for a future landlord to reduce this contribution significantly.

glenrothes kingdom SHOPPING CENTRE

Commercialisation The landlord controls and operates mall and commercialisation income within the shopping centre. The total income generated through commercialisation for the service charge ending 26th May 2014 was £84,850. The forecast mall income for the service charge year ending 2015 is £84,700 (including the optional landlord’s contribution of £15,300 to the service charge).

PROJECT CHARLOTTE

Asset Management Opportunities • Progress ongoing discussions with the Co-Op to surrender their lease expiring in 2018 on their unoccupied 24,000 sq ft unit on 2 Marchmont Gate. Explore the option to split into two units providing 16,000 sq ft of leisure space and an 8,000 sq ft retail unit, and let to a gym operator and national multiple.

• Explore options to mitigate the £85,796 landlord rates liability on the vacant Unicorn House by stripping the unit to shell or reinstating the services and letting to a charity.

• Investigate plans to redevelop the eastern quarter of the shopping centre incorporating Lyon Square and Albany Gate to create a retail park serviced by the surface car park. Demand for retail parks is strong due to limited competition and undertaking this development would reduce the over supply of units within the shopping centre.

• Re-investigate plans to secure a supermarket development on the car parking site on the northern boundary of the scheme.

The plans previously had a planning consent for a 80,000 sq ft supermarket development. There is limited supermarket competition within the town with Asda and Morrisons both on the outskirts of the town.

• Amalgamate 13 and 15 Lyon Way to create a larger, better configured unit.

• Upsize Thomson Travel incorporating 11 Unicorn Square.

• Complete ongoing lettings to Pepkor on 41 Unicorn Way and NHS Dentist on 15 Lyon Way.

AIREDALE SHOPPING CENTRE

KEIGHLEY

PROJECT CHARLOTTE

KEIGHLEY AIREDALE SHOPPING CENTRE

INVESTMENT SUMMARY • The Airedale Centre is a town centre dominant shopping centre forming the prime retailing offer for Keighley.

• 57% of the current income is secured for greater than 5 years (excluding breaks).

• Keighley is the 3rd largest civil parish in England and benefits from being home to Leeds City College, the UK’s 3rd largest education provider.

• Re-based and sustainable rents of £40-50 ZA provide rental growth opportunities.

• Strategically located adjoining the Metro Bus Station and Keighley Market.

• Anchored by a Beales Department Store.

• 192,508 sq ft covered shopping centre with key tenants including M&S, Boots, Peacocks, New Look, Next, JD Sports, Poundland, WH Smith and Argos.

• Food and beverage operators include Burger King, Costa Coffee, and Greggs.

• 460 space multi-storey car park links directly into the scheme and is the main car park for Keighley.

• High occupancy levels with 95.4% of the total floor area occupied and let.

• Positive tenant trading with 16 lease renewals in the last 24 months and new lettings to Burger King and Peacocks in the last 12 months.

• Asset management opportunities to increase the income stream and enhance the retailing environment.

Income Gross Income

£3,326,218

• Strong footfall of 8.4 million visitors per annum for the last 2 years.

Net Operating Income (inc head rent pay away)

£2,360,482

• Average weighted unexpired term of 6.85 years to expiry and 5.38 years (assuming tenant breaks are exercised).

Fully Let ERV

£3,486,334

Fully Let ERV (Net of Head Rent)

£2,920,851

• 94% of the current income is secured to national multiple retailers.

NEWCASTLE UPON TYNE Jarrow

Gateshead

CARLISLE

44

SUNDERLAND

43

Carlisle

PROJECT CHARLOTTE

Consett

42

Washington

65 64 63

Stanley

Houghton le Spring 62

Durham Brandon

M6

Peterlee 61

41

Hartlepool

Spennymoor A1(M) Bishop Auckland 60

Penrith

40

Redcar

Appleby-inWestmorland

Middlesbrough

59

Location

Darlington TEESSIDE

57

Whitby

56 The West Yorkshire town of Keighley is located within the 38 Metropolitan District of Bradford and is situated approximately 10 miles (16 km) north west of Bradford, 19 miles (30 km) north west of Leeds and 12 miles south (19 km) of the Yorkshire Dales Kendal 37 National Park.

Road communications are good, with the A6068 to the north of the town providing access to the M65 linking to Bradford and Preston. The A629 to the south of the town accesses Halifax.

Northallerton

Keighley railway station, situated in the town centre, provides Scarborough access to Skipton (19 min), Bradford (30 min) and Leeds (28 min).

Keighley has well connected public transport with a 17 stand bus station managed by the Metro. The station is situated directly adjacent to the entrance of the Airedale Centre.

M6 36

Ulverston Ripon

35

Bridlington

Situation

34

Lancaster Knaresborough

M6 33

Keighley Clitheroe Padiham 12

Blackburn

Leyland

28

30 29 9

6

Accrington

M65

Darwen

M6

Chorley

Ormskirk 4

M583

5

Wigan

3

5

Kirkby 4 3

22 2

4 5

M62

7

11

9

M62

33

14

Buxton

Chesterfield

ROYD

Halfords STOKE-ON-TRENT

S RO A

D

26

S

AD

EN

RO

RD

Grantham

25

LA NE

M1 Cannock

2

KH

OL

M

8

1

7

5

W

ISH

2

M42

5

STR

3

4

M1

3

6

M42

2

M6

DA

LT O

A N L

COVENTRY

Market Harborough Corby

20

Ely

Kettering

A

35 M40 0

6

Leamington Spa

Warwick 15 14

Droitwich

M5

M45

St Ives

17

Wellingborough Daventry

13

Northampton

KW PA R

OO

Rushden ET RE

T D S

13

B

1 2

M50 4

3

Stratford upon Avon Evesham

6

1

Great Malvern

Hereford

15

12

Banbury

11

Milton Keynes

M5

M11 10

Biggleswade

Newport Pagnell

Royston

14

13

10

Haverhill 9

Saffron Walden

Letchworth

9

10

11

Bedford

M1

8

Tewkesbury

GLOUCESTERSHIRE

Cambridge

12

7

THE PROPERTY

3

N

14

St Neots

16

6

4

Mildenh

Huntingdon

18

16

March

VA L L E Y RO A D

NE

Leeds City College (Keighley Campus) 1 19 KEIGHLEY

EET

Redditch

Peterborough

M69

1

8

BIRMINGHAM

4 1

5

Wisbech Downham Market

AIREDALE ROAD

21

03 6

3

Worcester

King's Lynn

Stamford

2

BIRMINGHAM

C AV M5 EN D

5

Spalding

50

LEICESTER

9

M6

2

Bromsgrove

M42

M6(T)

A6

10

REE T

22

11

11

RUSSELL STREET

A6

23

12

SPENCER ST

Travelodge Hotel Keighley

24

EAST MIDLANDS

Stafford 13

Stourporton-Severn

TH

GA

DERBY

Boston

OR

G

14

5

DEVONSHIRE STREET

Newark- 6 5 2 on-Trent B6

27

NOTTINGHAM Uttoxeter

WOLVERHAMPTON

ST

B&Q

28

DING

Ashbourne

NewcastleUnder-Lyme

MORNINGTON STREET

RT

5 HA R

EW

N

A629 SKIPTON LANE

RI

15

M54

BE

Mansfield

AIR

SP 6

Lincoln

INGS A VENUE

M6 7

AL

A63

McDonalds

16

Newport

Devonshire Park

Retford

Matlock Leek

Crewe

try

Louth

29 17

Nantwich

Cleethorpes

30

18

Chester

5

34

M1

Macclesfield

M6

12

Scunthorpe M180

3

Gainsborough

32

19

16

2

31 MANCHESTER

12 9 10

34 34

SHEFFIELD

E

8

7

10 M56

11 5

35

5

M180

4 4 Keighley Bus Station is situated at the entrance to Airedale 37 Shopping Centre, accessed from Bow Street and acts as a strong 36 3 footfall driver for the scheme. Keighley railway station is situated A1(M) Rotherham less 1than 500 metres to the east of the shopping centre.

36

LA

M53

M60

6

5 1

38

MANCHESTER 1 3

6

20 4

M1

9

3

38

37

14

24 23

39

Huddersfield

20

19

17

15

40

21

NE

1

4

25 6

ERPOOL

3 5

1

7

2

6

43

30 M62 Batley 41 Dewsbury 25

24

23

M62

22

47

FO

mby

1

Bury M66 Bolton 2

M61

27

Rochdale

1

27

26

Brighouse

Rawtenstall

8

uthport

Halifax

Todmorden

LEEDS

AD

St Anne's

7

M621

BRADFORD

Burnley

10

8

31

AD

Preston

Tadcaster The scheme is bound by Cavendish Street to the north, North Beverley Street to the west, Hanover Street to the east and Low Street to the south.

The centre has an additional external retail parade Garforth Selby HULL 38 on Towngate running adjacent to the multi-storey car park. The M62 37 Castleford centre has two principal entrances at the northern end from the 32 36 31 Goole 33 34 bus station and at the southern end from Low Street. Hanover Pontefract M18 Street provides additional access points on the eastern boundary Immingham ofHemsworth the scheme. 6 Thorne M181 Grimsby

LEEDS & BRADFORD

RO

1 32

Bingley Shipley

Colne Nelson

14

RD

M55

Otley

BR

3

4

Ilkley

LA

pool

13

The Airedale Centre forms the prime retail pitch within Keighley York and is situated in the heart of the town centre.

Harrogate

Skipton

etwood

10

M40

Leighton Buzzard

Hitchin

12

M1

9 8

A1(M)

STANSTED

KEIGHLEY AIREDALE SHOPPING CENTRE

Catchment and Demographics Milnthorpe

Keighley is the third largest civil parish in England and has a primary retail catchment population of 56,263, a secondary catchment population of 40,112 and total catchment population of 770,488.

Ripon

Lancaster Knaresborough

The town has an estimated shopper population of 52,884 and an annual spend of £108.3 million with 95% of this expenditure generated by residents.

Harrogate Skipton Ilkley

Keighley benefits from having very limited leakage to competing centres, retaining a 52% market share of trade in its primary catchment.

Preston

Local Economy

Keighley is witnessing significant inward investment with a number of major initiatives currently underway to drive the economy. A £120 million clean energy complex has been granted approval and will be constructed on the derelict former gasworks site at Marley. In addition a data centre and offices will be built on the land, generating 500 new jobs. Furthermore, the creation of an Industrial Centre of Excellence on the Leeds City College Keighley campus aims to develop a strong skilled workforce for the rapidly expanding engineering and manufacturing base.

The area benefited hugely from the success of the Tour de France in 2014 which was anticipated to have boosted the Yorkshire economy by £102 million and the area is expected to witness a further £24 million boost from visitors returning to the region over the next 2 years.

‘Keighley is dominated by the Airedale Shopping Centre...’

Clitheroe

Colne Brierfield Burnley

Blackburn

Leyland

Keighley’s economy was historically built around the textile and engineering industries. The service sector is now the dominant employment sector within Keighley accounting for 74% of the total employment, and within this financial and business services account for 21%. Manufacturing still plays an important role in the economy accounting for 11% of total employment.

Keighley

Haslingden Chorley

Ramsbottom

Todmorden

Wetherby

Otley LEEDS & BRADFORD

Bingley

Leeds

Bradford Halifax

Garforth

Dewsbury Brighouse

Wakefield

Huddersfield

n Primary n Secondary n Tertiary n Quarternary

Retailing Retail provision within Keighley is dominated by the Airedale Shopping Centre which forms the core retailing for the town, focussing on the axes of Queensway, Cooke Lane, College Walk and Brunswick Arcade. External frontages are provided along Bow Street and Towngate parade. The Airedale Centre is the only shopping centre in the town.

Secondary retailing in the town is provided on Cavendish Street, North Street and Low Street, which are situated around the boundary of the Airedale Centre and Cavendish Retail Park to the east of the town centre.

Prime retail rents are within the Airedale Centre. Rents peaked at £95 Zone A on College Walk but have been re-based to levels of £55 Zone A. Keighley market is situated opposite the Cooke Lane entrance to the Airedale Centre, on the south side of Low Street. The enclosed market is open Monday to Saturday, and provides a busy and vibrant retailing environment and is a major footfall driver for the town centre.

PROJECT CHARLOTTE

Description Airedale Shopping Centre opened in 1968, and was extensively refurbished and extended in 1987.

The core shopping for Keighley is focussed upon the Airedale Shopping Centre which dominates the retail provision. The centre provides 192,508 sq ft of retail floor space and trades over ground floor only. The mall is arranged in an ‘H’ shaped configuration with three principal shopping malls. Cooke Lane and Queensway running north to south in parallel alignment form the main retailing pitch for the shopping centre.

The shopping centre has 79 retail units, 6 kiosks and a 460 space multi-storey car park. The shopping centre is anchored by a Beales Department store, which is excluded from the ownership but links directly into the shopping centre.

Key national multiple retailers include a 15,000 sq ft Boots, 12,800 sq ft New Look, M&S, Peacocks, Next, Poundland, Argos, WH Smith, Bodycare and Clarks. Food and beverage operators represented include Burger King, Greggs, and Costa Coffee.

Footfall Airedale Centre benefits from having strong and consistent footfall with 8.4 million visitors in both 2013 and 2014.

Car Park The Airedale Centre benefits from having a multi-storey car park providing 460 shopper spaces across three levels within the ownership. The car park is accessed from Hanover Street and is operated on a pay on foot basis.

The car park financial year runs in parallel with the service charge from April 1st to March 31st.

Year (April 1st – March 31st)

Gross Income (net of VAT)

Expenditure (£)

Net Income (£)

2012 - 2013 (Jan 1st – Dec 31st)

£151,800

£80,996

£70,804

2013 – 2014

£130,489

£48,497

£81,992

2014 – 2015 (Forecast to March 2015)

£108,169

£71,310

£36,859

For the current car parking year ending March 31st 2015 the total income to date is £84,086.

‘8.4 million visitors in both 2013 and 2014’

KEIGHLEY AIREDALE SHOPPING CENTRE

PROJECT CHARLOTTE

JACK FULTON

N

S BU

TIO STA

VACANT

VACANT

VACANT

ROMAN ORIGINALS

VACANT VACANT

VISION EXPRESS

11b

18

GOING PLACES

VACANT

14-16

KEIGHLEY AIREDALE SHOPPING CENTRE

Tenure Airedale Shopping Centre is held long leasehold from the City of Bradford Metropolitan Council for a term of 150 years from 1 April 1986 to 31 March 2136.

The ground rent is calculated as 21% of net rents received, being the gross rent less the permitted deductions. The ground rent is payable in advance on 1 April each year.

In addition, the car park is held within the head lease at a peppercorn. The former Laycocks building is held freehold under a separate title.

Year to 31st March

Head Rent (£)

% of gross rent

2014

£458,306

13.64%

2013

£599,804

16.67%

2012

£655,067

18.37%

An average of the last 3 years head rents has been adopted to estimate the head rent payable for 2015/16, which will be 16.22% of the gross rent (excluding car parking income) equating to £518,936. The head rent for 2015 is anticipated to be lower because of a number of capital inducements that the landlord has committed for new lettings that will classify as permitted deductions.

PROJECT CHARLOTTE

Tenancies & Income Analysis The total contracted gross income, including vendor guarantees and top ups is £3,236,218 per annum. After deduction of void costs relating to vacant units which amount to £296,800 per annum and landlords contribution to marketing costs of £60,00 per annum, and the head rent pay away of £518,936, the current net operating income is £2,360,482 per annum.

The properties produce a current estimated rental value of £3,486,334 per annum. The centre has a broad rental tone of £50 - £55 Zone A within the main malls of Cooke Lane, College Walk and Queensway. Secondary malls such as Brunswick Arcade have a rental tone of £30 - £32.50 Zone A. The rents have been re-based to affordable and sustainble levels providing a strong platform for rental growth. Leasing activity has been robust with 16 lease renewals in the last 24 months including Savers, Dorothy Perkins, Bon Marche, Boots Opticians, William Hill, Boots, Carphone Warehouse and WH Smith. In addition, new lettings have been secured to Peacocks, Burger King, Pink v Blue, and Fultons have recently upsized on Towngate.

Top 5 Tenants by Income Tenant

Current Gross Rent (£ per annum)

% of Total Gross Rent

Poundland

£225,000

9.67%

Next

£140,000

6.02%

Boots

£114,000

4.90%

Peacocks

£100,000

4.30%

Argos

£96,000

4.13%

KEIGHLEY AIREDALE SHOPPING CENTRE

Lease Contracted Income Scenario (excluding car park & commercialisation income)

Vacancy by Floor Area

£3,500,000

5.6%

£3,000,000

National Multiple Local Trader

£2,500,000 £2,000,000

94.4%

£1,500,000 £1,000,000 £500,000

Vacant

£0 0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

Occupied

25

YEARS

Unexpired Term & Covenant (excluding car park & commercialisation income)

Rent by Covenant Type

50.00%

1.2% 5.9%

4.0% 0.2%

45.00% 40.00%

88.7%

35.00% 30.00% 25.00% 20.00%

National Multiple Local Trader Car Park Mall Income Miscellaneous

15.00% 10.00% 5.00% 0.00%

Under 5 yrs

5-10 yrs

10-15 yrs

15-20 yrs

Over 20 yrs

National Multiple

39.01%

43.92%

3.04%

5.55%

2.03%

Local Trader

3.99%

2.27%

0.00%

0.00%

0.00%

Miscellaneous

0.19%

0.00%

0.00%

0.00%

0.00%

PROJECT CHARLOTTE

Service Charge The operating costs of the shopping centre are covered by a comprehensive service charge which is apportioned on a gross internal area basis.

The service charge year runs from 1st April to 31st March and the audited service charge expenditure over the past three years has been as follows:

Service Charge Year to 31st March 2012 (expenditure)

Total £878,255

2013 (expenditure)

£994,502

2014 (expenditure)

£1,044,642

2015 (budget)

£1,026,750

The service charge budget for 2015 equates to £6.13psf. The total marketing budget is £130,000. The landlord contributes £60,000 (46%) towards the marketing budget.

KEIGHLEY AIREDALE SHOPPING CENTRE

Commercialisation Space and People have a commercialisation contract across the shopping centre. In 2014 the total income was £104,622 with a forecast income for 2015 of £109,890. To date in 2015 commercialisation income is estimated at £54,000.

PROJECT CHARLOTTE

Asset Management Opportunities • Explore the opportunity to create a vibrant food hub on the junction of Queensway and College Walk opposite Burger King. Unit 20 has external seating and could be integrated and it is anticipated that the initiative would increase dwell time and provide mall income opportunities.

• Capitalise on strong retailer demand to let the 5 vacant units. Current requirements and interest includes; Coral, Betfred, Warren James, FX, One World Travel, Pepkor, Store 21 and Trade Nation.

• Investigate the potential option to create a 10,000 sq ft MSU on 20-42 Brunswick Arcade. The landlord has flexibility on the leases enabling a redevelopment.

• Utilise the £44,000 of dilapidations from the re-location of the Post Office to Cooke Lane in order to facilitate discussions with Trade Nation on 44 Towngate.

• The Laycocks Building sits within the ownership and has been identified as a redevelopment opportunity. There are plans to incorporate this building into the units on 1-15 Cooke Lane to create an MSU. • Explore a potential re-gear of the headlease.

CAPTAIN COOK square SHOPPING CENTRE

MIDDLESBROUGH

PROJECT CHARLOTTE

MIDDLESBROUGH CAPTAIN COOK square SHOPPING CENTRE

Investment Summary • Captain Cook Square is situated in a prominent position in the heart of Middlesbrough.

• Middlesbrough is the largest and most dominant retail location within Teesside.

• Total shopper catchment comparison goods expenditure of £296 million ranking the town above other major UK centres including Blackpool, Carlisle, Northampton and Dundee.

• Captain Cook Square provides the dominant value offer for the town.

• Strategically located adjacent to the town’s main bus station and one of the most popular car parks in the town.

• A total of 222,000 sq ft of modern well configured retail accommodation.

• Footfall of 11.35 million in 2014.

• 74% of the current income is secured to national multiple retailers.

• 50% of the current income is secured for greater than 5 years (excluding breaks).

• Average weighted unexpired lease term of 5.97 years to expiry and 5.14 years to breaks.

• Opportunity to drive rental growth, with the scheme offering the most modern and well configured space in the town and rents that have been substantially re-based.

Income

• Freehold.

Gross Income

£1,930,946

• Low re-based rents of £50-£60 Zone A.

Net Operating Income

£1,562,610

• Well anchored by a TK Maxx, TJ Hughes and Wilko.

Fully Let ERV

£2,120,696

• 773 space car park offering free parking for 2 hours.

• Low service charge budget of £2.99 per sq ft.

• Strong occupational activity with 13 tenants renewing or completing new leases since 2012.

PROJECT CHARLOTTE

Location Middlesbrough is the dominant town in Teeside, which is a densely populated area located to the north of the North Yorkshire Moors. Other towns located in Teeside include Darlington, Stockton-on-Tees, Billingham, Redcar, and Hartlepool.

Rail services to London Kings Cross are available with a fastest journey time of 3 hours 4 minutes. Middlesbrough’s Teesside Airport is located 12 miles (19 km) to the south west, with Newcastle Airport 39 miles (62 km) to the north. Both provide regular flights to domestic and European destinations.

Middlesbrough is located 39 miles (62 km) south of Newcastle-upon-Tyne and 50 miles (80 km) north of York.

Morpeth The town is linked to the A1(M) 19 miles (30 km) to the west via the A66 dual carriageway.

Situation Captain Cook Square is located in the heart of Middlesbrough, in a prominent town centre site.

Blyth

Ponteland

NEWCASTLE

The centre is bound by Newport Road and Hill Street Centre to the north, Linthorpe Road to the east, Grange Road to the south and the town’s principal bus station to the west. Captain Cook Square is anchored by one of the town’s most popular multistorey car parks providing 773 spaces situated to the rear of the centre.

Whitley Bay Tynemouth

Gosforth

NEWCASTLE UPON TYNE Jarrow

Gateshead

SUNDERLAND

Stanley

Consett

Washington

65 64 63

Middlebrough’s main bus station is located directly to the north west of the shopping centre integrating into the scheme and providing easy access for shoppers. The schemes principal access point is via Gilkes Street, accessible from Linthorpe Road or the bus station. There is an additional entrance via Taylor Street and the car park at the rear of the centre.

Houghton le Spring 62

Durham Brandon

Peterlee 61

Spennymoor

Hartlepool

A1(M)

Bishop Auckland

‘Integrated into Middlesbrough’s main bus station and anchored by the towns principal car park…’

60

Redcar

Middlesbrough 59 Darlington TEESSIDE

57 56

Northallerton

S TAT I O N R D

MIDDLESBROUGH ZETLA

A66

ND RD

WILSON ST

R AT I O

A

Cinema

N RD

T MEW S

GURNE

ALBER

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6

6

ST

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UL

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MELRO

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Teesside University

BOROU

GRANG

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Museum of Modern Art

BRIGH

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Town Hall

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Bus Station

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W NE

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B1 W NE

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ALBER

Sainsbury’s

DUNDA

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Hill Street Shopping Centre

Dundas Arcade

W

IN

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WILSON ST

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W

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MARS

Middlesbrough College

BRIDGE ST EAST

BRIDGE ST WEST

N

NORTH RD

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78

HARR

A1

D

MIDDLESBROUGH CAPTAIN COOK square SHOPPING CENTRE

LOCAL ECONOMY Middlesbrough is the main service centre in the Tees Valley, the sub-regional centre for shopping and education and a major hub for cultural, social, business, and community life. Historically employment within the town has been reliant on the steel and chemical industries, however the economy has shifted and is now focussed around the service sector reflecting the towns role as a major administrative centre for Teeside.

Sunderland

Birtley

Houghton le Spring

Annfield Plain

Hetton

Durham Brandon

Peterlee

Hartlepool

Spennymoor Bishop Auckland

Billingham

Newton Aycliffe

Redcar

Middlesbrough Darlington Ingleby Barwick

The service sector accounts for 80% of total employment within the town, of which ‘financial and business services’ accounts for 18% of the total employment. Major employers in the town include University of Teesside, South Tees NHS Foundation Trust, Middlesbrough Council, Vantis Accountants, PD Ports, Cleveland Cable Co, Containerships (UK) Limited, and AV Dawson. A number of businesses have expanded within the town including The Cordell Group and PD Ports who completed a major upgrade to their container terminal facilities. Middlesbrough also benefits from having two sites designated within the Tees Valley Enterprise Zone at South West Ironmasters and St Hildas.

Whitby

Northallerton

Scarboroug Pickering

Ripon

Malton

n Primary n Secondary n Tertiary n Quarternary

Catchment and Demographics

RETAILING

Middlesbrough serves a large primary catchment area that includes the neighbouring town of Stockton-on-Tees and borders the catchments of Hartlepool to the north and Darlington to the west. Middlesbrough’s primary catchment also extends to smaller towns such as Redcar, Northallerton, Guisborough and Sedgefield.

Middlebrough’s town centre is the main centre for shopping within the Tees Valley providing 1.36 million sq ft of retail floor space, ranking the town 48 of the PROMIS centres and above the sub regional average.

The total population within the Middlesbrough primary catchment area is 550,000 ranking the town 30th out of the PROMIS Centres. The estimated shopping population of Middlesbrough is 253,000, ranking the town 42 of the PROMIS centres. Middlesbrough ranks 35 in terms of volume comparison retail spend available within the catchment area and has a total comparison spend of £296 million (CACI) ranking it above major UK retail centres including Blackpool, Carlisle, Crawley, Dundee, and Northampton.

Middlesbrough retains a healthy share of its comparison catchment spend, with a total market share of 12% and a primary catchment market share of 34%.

The retail offer within Middlesbrough is focussed upon the town centre, centrered upon retail either side of the pedestrianised Linthorpe Road which runs north to south dissecting the town centre.

Middlesbrough’s retail provision is dominated by the three managed shopping centres, Captain Cook Square, Cleveland Centre and Hill Street Shopping Centre. Cleveland Centre and Hill Street provide mass market and fashion retail provision, with Captain Cook Square providing the town’s main value and convenience retail offer.

Captain Cook Square is an open air shopping centre, providing a number of large well configured stores with national multiple retailers including Wilko, Peacocks and TK Maxx.

Linthorpe Road traditionally formed the prime retail pitch for the town, however this has shifted to the shopping centres which now dominate retail provision within Middlesbrough.

PROJECT CHARLOTTE

Description

Car Park

Captain Cook Square was built in 1999 and provides 222,000 sq ft of retail accommodation across 23 well configured modern retail units trading over ground floor only. The scheme provides an attractive open shopping environment in the heart of Middlesbrough town centre and is integrated into the main bus station for the town.

The 773 multi-storey car park is operated by Middlesbrough Council. The main multi-storey car park has 613 spaces, with an additional 160 spaces situated above Unit 5, LSU 2 and LSU 4/5 accessible via a link bridge.

The scheme provides 23 retail units including 7 large stores of over 9,500 sq ft. The centre is well anchored by a 21,900 sq ft TK Maxx, 54,500 sq ft TJ Hughes and 44,800 sq ft Wilko. Further national multiple retailers include Peacocks, The Entertainer, Waterstones, Poundland, Greggs, and Shoe Zone. The shopping centre holds a well-defined position within the retail hierarchy, providing larger, more modern retail space compared to the competition and providing the dominant value and convenience retail offer for Middlesbrough.

The centre benefits from having one of the towns principal car parks providing a 773 space multi-storey car park within the scheme. The car park is owned and operated by Middlesbrough Council and provides free parking for up to two hours making it one of the most popular car parks in the town and driving footfall into the scheme.

The car park is let on a long lease to the council at a peppercorn rent. The landlord is responsible for the fabric and structure of the car park and in 2013 they completed £360,000 of building works to the car park deck above TJ Hughes and Wilko which is covered by a 10 year warranty.

Car parking tariff is as follows: Short Stay (Levels 0,1,2 & 3) Up to 2 hours

Free

Over 2 hours

£1 per hour up to a maximum of £6

Long Stay (Levels 4, 4a & 5) Up to 2 hours

Free

Up to 4 hours

£2

All day

£3

Footfall Captain Cook Square benefits from strong footfall with 11.35 million visitors in 2014. There has been a steady rise in footfall over the last 2 years with footfall up 5% over the period.

‘Captain Cook Square provides the dominant value and convenience retail offer for Middlesbrough…’

MIDDLESBROUGH CAPTAIN COOK square SHOPPING CENTRE

C&S TYRES & EXHAUS TS

S STREE T

OFFICE

OFFICE

BRENTH ALL STR EET

GAR

2

1

T EN

(BUSES & COACHES ONLY)

P

CE FI OF

57

55

WILKINS ON

LSU2

LOADING BAY

( 2 RETA IL FLOORS )

FASHION

PEACOC KS

WALKWA Y

FLOORS)

HOUSEH OLD GOOD S

COVERE D

(2 RETAIL

DEPARTM ENT STOR E

T J HUGH ES

PLATFO RM

BUS STATION

P

-O

CO

ART 4 AL L POSTER S PICTURE & FRAMING

INTOWN PET SHOP

H G U O E R TR SB EN P E C E L D E R I D CL C M CY CY

OFFICE

4

7

KARISMA L/WR & M/WR

STEPHEN APPLEYARD LOCSMTH

BELLS BUTCHER

8

4

5

POUNDL AND

9 - 10

2

SQUARE 3

26

3

2

LSU1

B 10

55

1A

A 10

C VA

1

57

18

15 13 11 9 5

59 - 61

SERVICE AREA

63

65

13

HOUSE OF FRASER

DU

JEWELLER

BEAVERBR OOKS

PHONES 4U TELEPHON ES

GIFTS

WICKED WAX

LADIES &

GAME GAMES

MCDONA LD`S RESTAURA NT (2 RETAIL FLOORS)

VACANT

MAPLIN ELECTR ONICS

LLOYDS BANK

3 STOR E TELEPH ONES

EE TELEPH ONES

NOBLES AMUSEM ENTS

PARISIA LADIES WEAR

COMPUT ER

SANTAN DER BANK

SELECT EMPLOYME NT AGEN CY

USC MENS WE AR

RIVER ISL AND LADIES & MENS WE AR (2 RETAIL FLOORS)

OUTLET ST ORE LADIES & MENS WE AR

FAST FOOD

CLOTHIN G

SO CHICH I

MCMAHONS GGRO

VIRGIN MO NEY BANK

(7 RETAIL FLOORS)

DEPARTMENT STORE

GILKES S TREET 7

BODY EXT REME HEALTH FD

UNIT B

13

DAVISON STREET

CLOTHING

T K MAXX

SHOE ZO NE

BOOKS

WATERS TONES

LADBRO KES BETTING OFFICE

LLOYDS NO 1

PUBLIC HOUSE

THE RESOLUTION

ENTRANCE

ND MO VEN S DIA EA ES H C C LA

SERVICE AREA

1

20 - 22

PARK STREET

GRANGE ROAD

47

24

(BUSES & CYCLES ONLY EXCEPT LOADING 8.00AM - 6.00PM)

DISCOUN T STORE

PRIORY PLACE

VACANT

3A

CAPTAIN COOK

FACTORY SHOP CLOTHIN G

4a

ELEGANCE FLORIST

OFFICE

BAKER

MILLIGANS

11

3

2

SUPASTITCH CLO ALT

TALK TIME TELEPHONES REGAL

NEWPORT ROAD

NORTH PLATFORM

SOUTH

GILKES S TREET

GILKES ST REET ARTIS TS ART GALLE RY (RETA IL)

ENTRAN CE

1

STREET

BAXTER

E US HO 2 NG I T AS

THE GREEN TR EE PUBLIC HO USE

VACANT

(CYCLES BUSES LOADING & TAXIS ONLY)

39

NOBLES

JLL 10/2/2015

LSU3 - LS U4

TAYLOR STREET 37

37 39

GOODS

ARRIVA

THOMAS THE BA KER

STO

5 (PEDESTRIA NS ONLY)

OCCASIONS PARTY

6

9 10

10A

TOUR OPERAT OR

GREENW OO MENS WE DS AR

VACANT RESTAURA NT

AMUSEMENTS

CELEBRAT ION CAKES CAKE MA KIN SUPPLIE G S EXOTIC BEAU SA L

37A

VACANT

BRITISH HEART FOUNDATION FURNITURE & ELECTRICAL CHARITY SHOP

THAT`S ENTERTAI NMENT RECORD INGS THE JOHN PAUL CENTRE CAFE

LSU6

YATES`S

12A

A UN IT CASH CO NVERTE RS FINANCI AL SERV ICES

LSU5

SMITH ST REET

11

PUBLIC HOUSE

12

2 CHEQUE CENTRE FIN SERV

VACANT BANK/ FINANCI AL

AMUSEMENTS

GRANGE RS COFFEE SHOP

3 VACANT COOPLA NDS BAKER

WHIN ST REET

GRAINGE R GAME COMP GA S ME

NEWPORT CRESCENT CH MEN ANGES SW EAR S

GRE GGS BAK ER LADB R BET O OKES FF

RAMSDE NS PAWNBR OKER

CLOSED

BAR ALVINS BER S TAT ANGEL TOO IST

PEEL EN GRAVER S TROPH& ENGRAV

VACANT BA FINANCIA NK/ L

BETFRE D BETTING OFFIC

E

TELEPHON ES

10

7

WESLEY

I-VAPO TOB

TICIANS

15

STAIRS

10

VIP BUS SER V

12

5 - 13

8

NEW LO OK LADIES W

TOPSHO P LADIES WE AR & TOPMAN MENS W EAR

& BOOTS OP

6-8

BHS

13

14

1-3

GLAMOUR BEAUTY SALON

83

GRANG E

81

LOTTO

4-6

VACANT

4

VACANT

THE FLOS SY SHOP SHOES

FIRE EXIT THE LIFE STORE HEALTH FOOD

FLOORS )

COSTA COFFEE SHOP

E

MALL 5

(2 RETAIL

CLEVELA EAR ND CENT R

NEWTO N MALL

CALEND AR CLUB GIFTS

12

VARIETY STORE

BOOTS CHEMIST (2 RETAIL FLOORS )

STORMF RONT COMPUT ER EQUIP MENT STARBUCK S COFFEE SH OP

VODAFO NE TELEPHON ES

3 - 11

CORPOR ATION RO AD

GREGGS BAKER CHILLI LADIES & MENS WE AR HOLLAN D & BARR ETT HEALTH FOOD

VACANT

VIRGIN ME TELEPHONDIA ES CLAIRE`S L ACCESS

O2

DEICHMAN N

SHOES

THE CARP WAREHO HONE US TELEPHON E ES

NATWES T BANK

71

75

77 83 87 - 89

55 57

102 100

79

81

104 106 108

91 - 93 95 95

51 53

74

76

41 - 43

45

47

49

86

70 - 72 80

82 88 - 90

- 73 69 LINTHOR 98 PE ROAD

EE TELEPHON ES

78

TES CON

LIFT TIMPSO SHOE RE N P

2

10 - 16

17 - 19

68 CASH SO LUTIONS PAWNBRO KER

(PEDEST RIANS ON LY)

92 - 94

THE PER FUME SHOP HLTH&BEA

99P STOR ES

CEX EN TE RT AIN MENT EXCHANGE COMPUT ER GAME S THE ENTE RTAINER TOYS & GA MES (2 RETAIL FLOORS ) JEFFS BERS SHO P

OFFICE

EUROCH ANGE BUR DE CHGE BUBBLE S JUICE BA R

DISCOUN T STORE

VACANT CO-OP PHARMA CY

EXIT & LIFT

ENT

84

LUSH HLTH&B EA VACANT

FOOT LO CKER SPORTS GOODS

V G BA

ICELAND FROZEN F

BANK LADIES &

VISION E OPTICIAN

ENTRA

ZUMO JUICE BAR

HEALTH RACK HEALTH FO

WA CE

ENT

HMV RECORD ING

31

33

35

CENTRE MALL MARKET

NT CA VA

VACANT

FA TAK HAY TRA

H SAMU EL JEWELL ER

STAIRS

18A 21 23 25 27

RS BE AM CH R I HA

6

VACANT

PROJECT CHARLOTTE

S B` Y N NE RE HO ILD R CH EA W

MULTI-S TOREY (800) (ES TIMATED )

BRENTNALL STREET

MIDDLESBROUGH CAPTAIN COOK square SHOPPING CENTRE

Tenure Captain Cook Square is held Freehold.

PROJECT CHARLOTTE

Tenancies & Income Analysis The total contracted gross income, including vendor guarantees and top ups is £1,930,946 per annum. After deduction of void costs relating to vacant units which amount to £312,336 per annum and landlords contribution to marketing costs of £56,000 per annum, the current net operating income is £1,562,610 per annum.

The properties produce a current estimated rental value of £2,120,696 per annum. The rental values have generally been applied on a unit by unit global basis based on demand, recent rental evidence and affordability. However, there is a broad rental tone of £50 - £60 Zone A across the scheme. These rents have been re-based from peak market rents of £80 Zone A representing a healthy discount from peak. The affordable levels provide a landlord a strong platform for rental growth over a short to medium term hold.

There has been positive occupational activity within Captain Cook Square with recent lease renewals to Waterstones, Co-Operative Travel, TK Maxx and Peacocks. In addition there are a number of live retailer requirements and ongoing discussions for new retailers and operators to the scheme.

Top 5 Tenants by Income Tenant

Current Gross Rent (£ per annum)

% of Total Gross Rent

Wilko Retail

£382,500

19.81%

TJ Hughes

£350,000

18.13%

Poundland

£210,000

10.88%

Peacocks

£125,000

6.47%

JD Wetherspoon

£120,000

6.21%

Captain Cook Square’s average weighted unexpired lease term is 5.97 years to expiry and 5.14 years to break.

MIDDLESBROUGH CAPTAIN COOK square SHOPPING CENTRE

Lease Contracted Income Scenario (excluding car park & commercialisation income)

Vacancy by Floor Area

£2,000,000

9.7%

£1,800,000 National Multiple

£1,600,000

Local Trader

£1,400,000 £1,200,000

90.3%

£1,000,000 £800,000 £600,000 £400,000 £200,000 £0

Vacant 0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

Occupied

15

YEARS

Unexpired Term & Covenant (excluding car park & commercialisation income)

Rent by Covenant Type

60.00%

1.4% 3.4% 21.4%

50.00%

73.9%

40.00%

30.00%

National Multiple Local Trader Mall Income Vacant

20.00%

10.00%

0.00% National Multiple Local Trader

Under 5 yrs

5-10 yrs

10-15 yrs

15-20 yrs

48.51%

24.41%

4.59%

0.00%

Over 20 yrs 0.00%

1.10%

21.38%

0.00%

0.00%

0.00%

PROJECT CHARLOTTE

Service Charge The operating costs of the shopping centre are covered by a comprehensive service charge and apportioned on a gross internal floor area basis.

The service charge year runs from 1st January to 31st December and the service charge expenditure for the last three years has been as follows:

Service Charge Year

Total

2012 (expenditure)

£470,122

2013 (expenditure)

£504,927

2014 (expenditure)

£579,054

2015 (budget)

£562,615

The service charge budget for 2015 equates to £2.99 per sq ft, representing low and affordable costs for retailers. The total marketing budget is £112,000. The landlord contributes 50% towards the marketing budget.

MIDDLESBROUGH CAPTAIN COOK square SHOPPING CENTRE

Commercialisation Space and People have a commercialisation contract within the shopping centre. In 2014 the total income was ÂŁ26,196.

PROJECT CHARLOTTE

Asset Management Opportunities • Works are to be undertaken on Unit 4. Unit 4a is let to TCCT retail and Morrisons has expressed interest in taking the remainder of Unit 4.

• Opportunity to let LSU 6. The unit, let to U-think People, offers landlord flexibility, with rolling landlord breaks. NRG Gym are currently in negotiations to take LSU 6.

• Target re-location tenants from elsewhere in the town with requirements that would suit the large and well configured space that Captain Cook Square offers, including Sportsdirect, Home Bargains, HMV, Ann Summers, and Argos.

• Increase the leisure offering within the centre specifically Unit 3A for coffee operators.

• Advance re-gear and renewal discussions with key tenants including Wilko and TK Maxx.

THE EXCHANGE SHOPPING CENTRE

ROCHDALE

PROJECT CHARLOTTE

ROCHDALE THE EXCHANGE SHOPPING CENTRE

Investment Summary • The Exchange Shopping Centre is in the heart of Rochdale and forms the prime and dominant retail pitch for the town.

• 75% of the current income is secured against national multiple covenants.

• Rochdale is a large and busy market town with excellent communication links to Manchester and Leeds.

• Strong average weighted unexpired lease term of 10.9 years to expiry and 10.2 years to break (excluding the car park).

• A total retail footprint extending to 820,000, and retains 49% of spend within the primary catchment.

• 42% of the current income is secured for greater than 5 years (excluding breaks).

• The Exchange provides 265,000 sq ft of covered retail accommodation.

• A number of significant asset management and development opportunities including the potential to redevelop the 80,000 sq ft covered market.

• Well anchored by 52,318 sq ft Beales, Boots and B&M Bargains.

• National Multiple retailers include WH Smith, River Island, Superdrug, Poundland, Iceland and Clarks.

• Robust occupational demand has been demonstrated by the successful upsize of Poundland and lease renewals to WH Smith, Game and Holland & Barratt.

• Re-based rental tone of £50-£75 Zone A, compared to a market peak of £100 ZA. • Multi-storey car park with 779 spaces within the ownership.

• Strong footfall of 6.3 million in 2014.

• 8 new lettings and lease renewals concluded in the last 12 months.

Income Gross Income

£2,963,465

Net Operating Income

£2,532,120

Fully Let ERV

£3,157,912

PROJECT CHARLOTTE

Location Rochdale is a large and busy market town in Greater Manchester. The town lies at the foothills of the South Pennines on the River Roch, and is located 11 miles (17 km) north east of Manchester and 30 miles (48 km) south west of Leeds. Rochdale is surrounded by a number of smaller towns that form the Metropolitan Borough of Rochdale.

Rochdale railway station provides regular rail services to Manchester Victoria (21 min), Bradford (45 min) and Leeds (69 min).

Manchester International Airport and Liverpool John Lennon Airport are within close proximity, with drive times of 35 minutes and 1 hour respectively. Both airports provide significant international and European connections and coverage.

The town is well connected with excellent road communications.

Junction 20 of the M62 motorway lies 1.5 miles (2.4 km) to the south and links Rochdale to Manchester and Liverpool in the west, and Leeds and Hull in the east.

Situation The Exchange Shopping Centre is situated in the heart of Rochdale town centre. The scheme is bound by Newgate to the south, St Marys Gate to the west and north and Yorkshire Street to the east.

34

M6 33

Skipton

York

Ilkley

Fleetwood Clitheroe 3

4

M55

Padiham

1 32

Preston

Lytham St Anne's

Leyland

31

Blackburn

28

30 29 9

M65

M6 Ormskirk

Formby

M58

1

3

Kirkby

5

4 3

24 23

2 7

M62

9

M53

5

8

32

31

Huddersfield

38

Rochdale

M1

38

37

37 36

36 35

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MANCHESTER

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Pontefract The shopping centre can also be accessed via the schemes multi-storey car park, Newgate Street and Hunter’s Lane.

Hemsworth

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27

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Burnley Todmorden

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Southport

13

Accrington

7

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LEEDS & BRADFORD

ICK

Blackpool

The principal entrance to the scheme is accessed via Yorkshire Tadcaster Street, the town’s main thoroughfare running south west to north east dissecting the town. The scheme benefits from good LEEDS M621 Garforth Selby frontage and visibility onto the A58 which flanks the centre to the north and west.

Castleford

Otley

Bingley Colne Keighley Nelson Shipley

14

FIS

Lancaster

ROCHDALE THE EXCHANGE SHOPPING CENTRE Lancaster Knaresborough

Harrogate Skipton Ilkley

Catchment and Demographics Rochdale has a total resident population of 820,000 within a 30 minute drive time. The core retail catchment population is 132,176.

The town has an estimated shopper population of 76,000 and an annual spend of £149 million, with 92% of the comparison spend generated by residents. Rochdale benefits from having a local and loyal catchment shopper population. The town retains a strong 49.5% share of spend in the primary catchment, with Crosbyand limited leakage to competing centres such as Bury, Oldham Bootle Manchester.

Wallasey Birkenhead

Rochdale is forecast to witness increasing growth in professional services, logistics, and communications and is not as reliant on public sector employment as a number of other Greater Manchester districts. Rochdale’s strategic location, makes the town a major commuter hub for Manchester, Salford, Lancaster, and Wigan.

The town has benefited from a £1 billion physical generation programme which has delivered significant improvement in the borough’s education infrastructure.

‘Rochdale retains 49.5% share of spend in the primary catchment…’

Bingley

Leyland

Haslingden

Todmorden

Halifax

Dewsbury Brighouse

Ramsbottom Witworth

Chorley

Leeds

Bradford

Burnley

Blackburn

Huddersfield

Rochdale Bolton

Mossley

Leigh

Salford

Manchester Glossop Cheadle

Widnes

LOCAL ECONOMY Rochdale benefits from being part of the Greater Manchester economy. The town was historically built around the textile industry, with commerce focussed around the Rochdale Canal.

Rochdale has transformed into a thriving business location, and is home to a number of major blue chip companies, including: ASDA, JD, Camfil Farr and Yodel. The service sector now accounts for 69% of total employment within the town, of which ‘financial and business services’ accounts for 17% of total employment. Manufacturing still plays an important role in the town accounting for 15% of total employment.

Colne Brierfield

Preston

Wetherby

Otley LEEDS & BRADFORD

Clitheroe

Knutsford

Wilmslow

Northwich

n Primary n Secondary n Tertiary n Quarternary Sandbach

Crewe Nantwich

RETAILING

Congleton

Matlock Kidsgrove

Leek

Stoke-on-Trent Ashbourne

Retail provision within Rochdale is dominated by The Exchange Shopping Centre, situated in the heart of the town centre. The Exchange forms the prime retail for the town, focussed along the internal mall of Market Way which provides well configured modern units.

Secondary retailing in the town is focussed towards the eastern end of Yorkshire Street and the second scheme in the town, The Wheatsheaf Shopping Centre.

Rochdale has a total retail floor space of 930,000 sq ft, with the Exchange Shopping Centre accounting for the majority of the well configured modern provision. The Wheatsheaf Shopping Centre opened in 1990 and provides 106,000 sq ft of retail space.

The scheme is anchored by Wilko, New Look and Peacocks but suffers from a high number of vacant units.

The historic prime retail pitch of Yorkshire Street provides a vibrant mix of national multiples and local traders with representation including M&S and JD Sports. The M&S store is situated opposite the entrance to the Exchange Shopping Centre.

PROJECT CHARLOTTE

Description The Exchange Shopping Centre opened in 1976 and was subsequently refurbished in 1997. The scheme provides 266,017 sq ft of retail accommodation in an enclosed mall and trades over ground floor only. The retail units have ancillary storage at basement and first floors.

The Exchange is comprised of 44 modern retail units including a 52,318 sq ft Beales Department Store, 4 kiosks and a mall café.

The centre is anchored by a Beales Department Store, with additional large stores let to Iceland, B&M Bargains, and Boots. Further national multiple retailers include River Island, WH Smith, Superdrug, Home Bargains and Poundland. There is an 80,000 sq ft covered market, which is no longer in use at the rear of the scheme and provides a number of deliverable asset management opportunities for a landlord.

The shopping centre’s mass market and value led shopping offer suits the local and loyal catchment base and remains the main destination for retailers looking for modern well configured units, demonstrated by the high occupancy rate and only one vacant unit.

The scheme also has a 779 multi-storey car park within the ownership, which provides the towns principle parking and is easily accessible from the A58. There is a three storey office building situated directly above the car park.

Footfall The Exchange had a footfall of 6.3 million visitors in 2014.

Car Park The Exchange benefits from having the towns principal car park within the ownership, providing a 779 space multi-storey car park.

The car park is comprised of 10 levels. The car park has witnessed strong increase in revenue over the last two years with income in 2014 up 16% on the previous year.

Year (Jan – Dec)

Gross Income (Net of VAT)

Expenditure (£)

Net Income (£)

2012 - 2013

£294,827

£396,093

£-101,266

2013 – 2014

£303,389

£385,500

£-82,111

2014 – 2015

£352,990

£385,306

£-32,316

The landlord has made some significant cost savings in car park operation and expenditure through a successful rates revaluation initiative which has reduced the 2015 budget to £329,150. Based on the improving revenues and reduced expenditure costs, it is anticipated that car parking income can be driven considerably in the short to medium term.

ROCHDALE THE EXCHANGE SHOPPING CENTRE

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28

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CARDS & GIFTS THE CASH STORE FIN SERV

VACANT

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H SAMUEL JEWELLER

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WARREN JAMES JEWELLER & HAIR R OU COL DIO STU

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PROJECT CHARLOTTE

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ROCHDALE THE EXCHANGE SHOPPING CENTRE

Tenure The Exchange Shopping Centre is held freehold.

PROJECT CHARLOTTE

Tenancies & Income Analysis The total contracted gross income, including vendor guarantees and top ups is £2,963,465 per annum. After deduction of void costs relating to vacant units which amount to £431,345 per annum, the current net operating income is £2,532,120 per annum.

The properties produce a current estimated rental value of £3,157,912 per annum. The scheme has a broad rental tone of £50 -75 Zone A. The prime retail pitch of Market Way has a rental tone of £75 Zone A, which falls to £50 Zone A towards the rear of the scheme and Market Place. Recent occupational evidence has been positive with lease renewals to WH Smith, Holland & Barrett, Everything Everywhere, Claires, and Game. New lettings have been secured to Costa Coffee and Poundland.

Top 5 Tenants by Income Tenant

Current Gross Rent (£ per annum)

% of Total Gross Rent

Boots

£400,000

13.50%

Beales

£258,480

8.72%

Bodycare

£130,750

4.41%

Iceland

£130,000

4.39%

Home Bargains

£120,000

4.05%

ROCHDALE THE EXCHANGE SHOPPING CENTRE

Lease Contracted Income Scenario (excluding car park & commercialisation income)

Vacancy by Floor Area

£3,000,000

2.26%

National Multiple

£2,500,000

Local Trader Offices

£2,000,000

Miscellaneous

£1,500,000

97.74%

£1,000,000 £500,000 £0 0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

Vacant

25

Occupied

YEARS

Unexpired Term & Covenant (excluding car park & commercialisation income)

Rent by Covenant Type

70.00%

9.8%

60.00%

2%

3.9% 1.1%

50.00%

83.1%

40.00%

30.00%

National Multiple Local Trader Offices Mall Income Car Park

20.00%

10.00%

0.00%

Under 5 yrs

5-10 yrs

10-15 yrs

15-20 yrs

Over 20 yrs

National Multiple

58.10%

6.48%

6.56%

6.76%

9.31%

Local Trader

4.40%

1.58%

0.00%

0.00%

4.32%

Offices

2.15%

0.00%

0.00%

0.00%

0.00%

Miscellaneous

0.00%

0.34%

0.00%

0.00%

0.00%

PROJECT CHARLOTTE

Service Charge The operating costs of the shopping centre are covered by a comprehensive service charge which is calculated on a gross internal area basis.

The Exchange has two service charge budgets in operation covering the shopping centre and the car park. Historically a third service charge budget was in place to cover the market, however this is no longer effective since its closure by the landlord.

The service charge year runs from 1st January to 31st December and the service charge expenditure for the last 2 years has been as follows:

Service Charge Year

Total

2013 (expenditure)

£1,321,769

2014 (expenditure)

£1,367,468

2015 (budget)

£1,400,792

The Rochdale Exchange benefits from a very low service charge, equating to £4.50 per sq ft for 2015.

ROCHDALE THE EXCHANGE SHOPPING CENTRE

Commercialisation Space and People have a commercialisation contract within the shopping centre. In 2014 the total income was ÂŁ104,428.

PROJECT CHARLOTTE

Asset Management Opportunities • Explore the opportunity to create additional LSU’s on the current market site. Potential to create additional anchor units or an out of town retail park format taking advantage of the prominence and frontage onto the A58.

• Investigate the opportunity to secure additional leisure operators within a new development or existing scheme incorporating the 80,000 sq ft covered market in order to drive footfall and increase dwell time.

• Target re-location tenants from within the town centre and the Wheatsheaf Shopping Centre.

• Acquire the remainder of the B&M Bargains store to bring under one ownership.

• Let unit 6-7 Market Way. The unit is in a prominent position and re-letting will enhance the shopping centre and tenant mix.

• Complete a letting to Competition Line Gym operators on first and second floor of Market Place.

• Low vacancy, affordable rents and all in costs for units provides a landlord with an opportunity to improve the rental tone and drive rental growth over the short to medium term.

‘Create additional LSU’s on the 80,000 sq ft market site…’

ANKERSIDE SHOPPING CENTRE

TAMWORTH

PROJECT CHARLOTTE

TAMWORTH ANKERSIDE SHOPPING CENTRE

Investment Summary • Ankerside Centre is the only shopping centre in Tamworth and dominates retail provision.

• Tamworth is located only 14 miles from Birmingham, the UK’s 2nd largest economy.

• Average wages grew by 16% in 2014 in Tamworth and unemployment in the town has fallen faster than the UK average.

• Ankerside Shopping Centre benefits from being located on the town’s main high street.

• Key anchor tenants include Dunnes Department Store, Iceland and Boots.

• 170,700 sq ft covered shopping centre with national multiple retailers including Peacocks, Poundland, Argos, Specsavers, Holland & Barrett, Blue Inc, Costa and Greggs.

• Positive occupational feedback with strong lease renewal and leasing activity including renewals to Boots, Clintons, Specsavers and The Fragrance Shop and new lettings to Warren James, Blue Inc and The Works in the last 12 months.

• 72.9% of the current income secured against national multiple retailers.

• 47% of the current income is secured for greater than 5 years (excluding breaks).

• Numerous asset management opportunities to increase the income stream and enhance the retail environment.

Income Gross Income

£2,289,645

• Leasehold from Tamworth Borough Council.

Net Operating Income

£1,116,351

• 675 space multi-storey car park links directly into the shopping centre and is the main town centre car park.

Fully Let ERV

£3,220,393

Fully Let ERV (Net of Head Rent)

£2,067,393

• Strong annual footfall of 5.6 million visitors in 2014.

• Average weighted unexpired term of 4.9 years (excluding breaks) and 3.8 years (assuming breaks are exercised).

• Opportunity to grow rents from re-based level of £47.50-£55 ZA.

PROJECT CHARLOTTE

Location

Situation

Tamworth is a large market town located in the North West of England in the county of Staffordshire. The town is located 14 miles (23 km) to the north east of Birmingham city centre, the UK’s second largest economy, and 103 miles (166 km) to the north west of London. It is the second largest town in Staffordshire.

Ankerside shopping centre is situated in the heart of Tamworth town centre and is the only shopping centre in the town. The scheme is located on the southern side of George Street, the town’s most prominent retail pitch, and can be accessed via two entrances along this street. The centre is bounded by the grounds of the historic Tamworth Castle to the west, the River Anker to the south and Bolebridge Street to the east.

Tamworth benefits from excellent road communications. The A5 runs through the town linking it to the M6 motorway to the west and the M42 motorway to the east.

Ankerside shopping centre is situated a short walk away from a number of town centre bus stops and within 10 minutes walking distance from Tamworth railway station, which is located 800 metres to the north east of the shopping centre.

Tamworth railway station is located on Victoria Street, and serves as an interchange between the West Coast Mainline and the Cross Country Route connecting Tamworth to London (92min), Liverpool (97min), Manchester (104min), Preston (74min), Stafford (24min), Crewe (68min) and Stoke-on-Trent (47min).

13

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M6 Cannock

12

M54

22

11

11 2

M42

M6(T)

LEICESTER 21

10 9

6

5

BIRMINGHAM

3

M5

5

4 2

1

M42

4

COVENTRY

20

M6

1

19 18

16

M40

M45

Leamington Spa

Warwick

Redditch

5

2

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Bromsgrove Droitwich

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3

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TAMWORTH ANKERSIDE SHOPPING CENTRE Matlock Leek

Crewe Nantwich

Stoke-on-Trent

Catchment and Demographics

Nottingham Uttoxeter

Tamworth has a primary catchment population of 76,020 and a total catchment population of 842,823. This extends to over 1.2 million within a 30 minute drive time.

The town has an estimated shopper population of 26,413 and an annual comparison goods spend of £65 million. Of this comparison spend 76% of the expenditure is generated by residents, 17% by tourists and 7% by workers.

Tamworth’s retail offer is well suited to the local catchment and demographic and retains a loyal shopper base. The town benefits from a relatively affluent catchment, with a good representation of ABC1 demographics. The area has an above average representation of Steady Neighbourhoods, Striving Families and Executive Wealth ACORN groups. It is anticipated that with increasing manufacturing demand in Staffordshire this will serve to drive affluence within Tamworth over the medium term.

Burton upon EAST Trent MIDLANDS Loughborough Swadlincote Ashby-de-la-Zouch

Stafford Newport

Penkridge

Derby

Rugeley

Coalville Cannock

Birstall

Tamworth

Walsall

Codsall

Aldridge

Atherstone Sutton Coldfield Hinckley Nuneaton West Bromwich

Wolverhampton Wombourne

Historically, Tamworth has benefitted from strong logistics, manufacturing and mining industries. Until 2001 it was home to the Reliant car company, which produced the Robin model and the Scimitar sports car for several decades. Today the town is part of the wider West Midlands economy and is a major commuting hub for Birmingham.

Tamworth’s local economy boasts significant employment and wage growth over recent years. The town’s unemployment rate has fallen faster than anywhere in the UK, more than halving from 9.9% to 4.7% since 2012. This has had a dramatic effect on local wages, which, on average rose by an impressive 16% last year (source: ONS, ASHE). This improvement in the local economy is set to continue, with increasing employment demand in the Staffordshire area from manufacturing businesses.

M Harbo

Birmingham

Halesowen

BIRMINGHAM

Coventry Stourporton-Severn

Bromsgrove

Redditch

Wellingb

Warwick

Droitwich

LOCAL ECONOMY

Leicester

Daventry

Northampton

n Primary n Secondary n Tertiary n Quarternary

Worcester

RETAILING

Stratford upon Avon

Ankerside Shopping Centre is located on Tamworth’s main high street, George Street. The centre is the primary shopping destination in the town, providing 210,000 sq ft of value and convenience retail provision for the catchment. Ankerside Shopping Centre provides the town’s principal car park.

Further town centre retail provision is well defined and focussed along the remainder of George Street and, to a lesser degree, Church Street. Tamworth also benefits from a popular market which is held on George Street, opposite the entrances to Ankerside Shopping Centre, on Tuesday and Saturday each week. The market is a major attraction within the town and acts as a strong footfall driver for the shopping centre.

Town centre floor space in Tamworth is estimated at 48,000 sq ft, ranking the town 193 on the PMA retail ranking. Retailing in the town is value and convenience focussed and is suited to the local resident population.

In contrast to Tamworth’s in town retailing offer, out-of-town retail provision is fashion and food-orientated. Ventura Retail Park, totalling 338,000 sq ft is anchored by John Lewis with key retailers including Next, ASDA, Currys and Halfords. Jolly Sailor and Cardinal Point Retail Parks provide predominantly fashion and bulky goods retail with tenants including Argos Extra, Brantano, TK Maxx and Dreams.

PROJECT CHARLOTTE

Description

Footfall

Ankerside Shopping Centre is the prime retail destination in Tamworth town centre. Built in 1979 and refurbished in 1989, the covered scheme provides approximately 170,700 sq ft of retail accommodation over ground floor, with storage at ground and basement level. The ownership includes two units on George Street, the town’s main retailing parade and high street.

Ankerside Shopping Centre benefits from strong footfall with 5.6 million visitors in 2014. It is anticipated that the level of footfall will remain stable throughout 2015.

The shopping centre comprises a total of 58 retail units and 4 kiosks. The centre is anchored by a 15,000 sq ft Dunnes, 9,712 sq ft Boots and a 4,375 sq ft Iceland supermarket.

The centre benefits from good representation of national multiple retailers including Iceland, Argos, Claire’s Accessories, Boots, Vodafone, Specsavers Opticians, The Body Shop, The Fragrance Store and Ryman. The retailers trade positively and are well suited to the local catchment, as evidenced by the strong lease renewal activity over the past 24 months including; Boots, Clintons, The Fragrance Shop, Specsavers, Goldsmiths, Savers and Specsavers. Additionally Iceland and Argos have potential upsize requirements for their existing stores.

‘Ankerside Shopping Centre is the prime retail destination in Tamworth town centre…’

Car Park Ankerside Shopping Centre provides the town’s principal car park. The large multi-storey car park comprises 675 car parking spaces.

The car park is run and managed by APCOA for a fixed management fee of £9,999 per annum plus additional expenses, such as electricity and staff costs.

The car park financial year runs in parallel with the service charge from April 1st to March 31st.

Year (April 1st – March 31st)

Gross Income (net of VAT)

Expenditure

Net Income

2013-2014

£631,331

£191,018

£440,312

2014-2015 (Forecast)

£631,322

£205,740

£425,582

For the year to January 2015 the car park has collected a gross income of £527,824 (net of VAT) which is ahead of the same period for 2014.

The net operating income for the year to January 2015 is £361,791.

TAMWORTH ANKERSIDE SHOPPING CENTRE

VACANT PUBLIC HOUSE

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TAMWORTH TOOLBOX DIY

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PROJECT CHARLOTTE

& IRS STA S LIFT

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TAMWORTH ANKERSIDE SHOPPING CENTRE

Tenure The property is held leasehold from Tamworth Borough Council for a period of 99 years from December 1989, expiring 24 December 2088. There is a right to renew the lease for a further 51 years, effectively giving an unexpired term of 126 years.

A Deed of Variation was agreed in 2012 which altered the head rent payable to the higher of ÂŁ1,153,000 or 21.41% of Net Rents received after deduction of defined permissible expenses.

PROJECT CHARLOTTE

Tenancies & Income Analysis The total contracted gross income, including vendor guarantees and top ups is £2,829,645 per annum. After deduction of void costs relating to vacant units which amount to £512,044 per annum and landlords contribution to marketing costs of £48,250 per annum, and the head rent pay away of £1,153,000, the current net operating income is £1,116,351 per annum.

The property produces a current estimated rental value of £3,220,393 per annum. Based on demand, recent rental evidence and affordability, there is a broad ERV tone of £47.50 - £55 Zone A throughout the scheme.

The current owners have actively re-based rents to affordable levels providing a strong platform for rental growth in the future.

Leasing activity has been robust with strong renewal activity and the following retailers renewing their leases in the last 24 months; Boots, Clintons, The Fragrance Shop, Specsavers, Goldsmiths, Savers and Specsavers. In addition, new lettings have been secured to Poundland, Costa, Co-op Travel, Warren James, Blue Inc, The Works and Cargo.

Top 5 Tenants by Income Tenant

Current Gross Rent (£ per annum)

% of Total Gross Rent

Boots

£200,000

6.53%

Poundland

£165,000

5.36%

Argos

£137,000

4.45%

Iceland

£125,000

4.06%

Peacocks

£100,000

3.25%

APCOA Parking Services (UK) Ltd

£365,814

12.93%

TAMWORTH ANKERSIDE SHOPPING CENTRE

Lease Contracted Income Scenario (excluding car park & commercialisation income)

Vacancy by Floor Area

£2,500,000

2.1% National Multiple

£2,000,000

Local Trader Mall Income

£1,500,000

97.9% £1,000,000

£500,000

£0 0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

Vacant

25

Occupied

YEARS

Unexpired Term & Covenant (excluding car park & commercialisation income)

Rent by Covenant Type

60.00%

13.5% 50.00%

1.1%

40.00%

72.9%

12.4% 30.00%

20.00%

National Multiple Local Trader Mall Income Car Park

10.00%

0.00%

Under 5 yrs

5-10 yrs

10-15 yrs

15-20 yrs

National Multiple

47.41%

37.27%

2.41%

0.00%

Over 20 yrs 0.00%

Local Trader

3.86%

7.67%

0.00%

0.00%

0.00%

Mall Income

1.34%

0.00%

0.00%

0.00%

0.00%

Miscellaneous

0.04%

0.01%

0.00%

0.00%

0.00%

PROJECT CHARLOTTE

Service Charge The operating costs of the shopping centre are covered by a comprehensive service charge.

The service charge year runs from 1st April to 31st March and the audited service charge expenditure over the past two years has been as follows:

Service Charge Year (Apr-Mar)

Total

2012 (expenditure)

£1,189,376

2013 (expenditure)

£1,215,599

2014 (expenditure)

£1,273,948

2015 (budget)

£1,169,597

2016 (draft budget)

£1,137,086

The service charge budget for 2015 equates to £5.85 per sq ft, representing low and affordable costs for retailers. The total marketing budget is £48,250. The landlord contributes 50% towards the marketing budget.

TAMWORTH ANKERSIDE SHOPPING CENTRE

Commercialisation Space and People have a commercialisation contract across the shopping centre. There are 4 additional items licenced separately, which contribute an additional £31,140 of income per annum.

Prior to Space and People’s contract from July 2014, commercialisation was run by centre management.

The total income receipts for the past 4 years are outlined below and the total net income for 2014 includes receipts collected by both Space and People and centre management.

Year (Jan – Dec)

Net Income Collected

2011

£71,500

2012

£73,041

2013

£58,671

2014

£76,310

2015 (forecast)

£75,950

Commercialisation income forecast for 2015 is £75,950.

To date in 2015, Space and People have generated £42,263 of income.

PROJECT CHARLOTTE

Asset Management Opportunities • Explore the potential to acquire the Dunnes department store lease which is let on a peppercorn rent. The Landlord has a pre-emption right over the unit.

• Iceland and Argos over trade from their units. Explore potential to upsize their units and relocate Claire’s Accessories within the centre.

• Complete new letting of Unit 15A to Warren James.

• Complete lease renewals to Vodafone (Unit 32) and Claire’s Accessories (Unit 48). Terms agreed.

• Advance lease renewal discussions with H Samuel, Greggs and Boots Opticians.

• Explore potential to upsize Card Party (Unit 24).

• Blue Inc trade well and occupy Unit 53/54 on a short-term basis. Investigate the opportunity to convert this into a permanent lease at ERV level.

• Explore option to re-gear the head lease with Tamworth Borough Council.

Westside plaza, wester hailes

edinburgh

PROJECT CHARLOTTE

EDINBURGH WEST PLAZA, WESTER HAILES

INVESTMENT SUMMARY • Westside Plaza is the only shopping centre in Wester Hailes.

• Wester Hailes is located 3 miles from Edinburgh City Centre, the powerhouse of the Scottish economy.

• Anchored by Odeon Cinema, Gala Bingo, Iceland and Lidl.

• Provides the only cinema in West Edinburgh.

• 190,000 sq ft of retail and leisure accommodation; national multiple retailers including Home Bargains, Store 21, Peacocks, Farmfoods, Poundstretcher, Card Factory, Brighthouse, Ladbrokes, William Hill, and Barnardos.

• Westside Plaza is situated in the heart of the local community, providing everyday facilities such as the job centre, health centre and Government housing offices.

• Long leasehold from the City of Edinburgh Council expiring 5 October 2146.

• Positive occupational feedback with strong lease renewal and letting activity including deals to Xercise 4 Less, Iceland, Lidl, Semi Chem and AMC Lighting Direct in the last 12 months.

• Numerous asset management opportunities to increase the income stream and enhance the retail environment.

• 60.2% of the current income secured for greater than 5 years (excluding breaks).

• Average weighted unexpired term of 11.58 years (excluding breaks) and 6.23 years (assuming breaks are exercised).

• 76.4% of the income secured against national multiple retailers.

Income

• 720 free car parking spaces.

Gross Income

£2,101,159

• Annual footfall of 2.5 million visitors in 2014.

Net Operating Income

£1,455,408

Estimated Rental Value

£2,173,274

Fully Let ERV (Net Head of Rent)

£1,771,218

• High occupancy levels with 99.4% of the space let.

• Re-based levels of between £22.50-25 Zone A provide rental growth opportunities.

PROJECT CHARLOTTE

Location Wester Hailes is situated 2.5 miles (4 km) north of the A720 Edinburgh City Bypass, which circles the south of Edinburgh and links together the A1 towards north east England, the A702 towards north west England, the M8 towards Glasgow, the A7 through south east Scotland as well as the A8 leading to the M9 for Stirling.

Wester Hailes is a suburb of Edinburgh, one of the UK’s largest cities and the powerhouse of the Scottish economy. The town is situated just 3 miles (4.8 km) south west of Edinburgh city centre and benefits from excellent communications to and from the city as well as the surrounding areas.

By rail, Wester Hailes benefits from direct services to and from Arbroath Edinburgh Waverley (17 min), Edinburgh Haymarket (12 min) and Glasgow Central (75 min).

Dundee

Situation

DUNDEE

Perth 9

Westside Plaza is situated at the heart of Wester Hailes and forms the entire retail provision for the town.

St Andrews

M90

Wester Hailes railway station is located on the southern boundary of the shopping centre, and the town’s main bus terminal is located on the northern boundary, providing shoppers with easy access to Westside Plaza.

8 7 6

Glenrothes

Buckhaven

11 5 4

Alloa

M9

Dunfermline

8

M80 5 4

2

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7

1

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Falkirk

5

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M9

3

11

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1

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The shopping centre is bound by Murrayburn Road to the north, Murrayburn Gate to the east and south, and Wester Hailes road to the west. Westside Plaza’s main entrance is accessed from Murrayburn Road or Murrayburn Gate via an external town square. There is an additional entrance to the mall via the surface car park located to the south west of the scheme.

M90

Wester Hailes

2

EDINBURGH 1

EDINBURGH Musselburgh Dalkeith Bonnyrigg

Livingston

6

ASGOW

‘A suburb of Edinburgh, one of the UK’s largest cities….’

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THE PROPERTY

WESTER HAILES

E

EDINBURGH WEST PLAZA, WESTER HAILES

Catchment and Demographics

Queensferry

Linlithgow

Wester Hailes is classified as a ‘Small Urban Centre’ based on its retail offer, geography and demographic profile. The town has a primary catchment population of 12,473, a secondary catchment population of 37,251 and a total catchment population of 182,646. The 15 minute drive time population extends to 245,887 and encompasses Edinburgh City Centre.

Leith Docks Davidsons Mains Kirkliston

Abbeyhill

EDINBURGH

West End

Portobello

Corstorphine Merchiston

Dechmont

Wester Hailes is a strong local convenience centre with 94% of expenditure generated by residents. Although Edinburgh is within close proximity it attracts shoppers looking for a retail Livingston destination and experience, while Wester Hailes benefits from having a retail offer that serves the local and loyal shopping catchment well.

Dedridge

Edinburgh

Wester Hailes

Woolm

Bonnington Juniper Green Currie

Wilkieston Kirknewton

Fairmilehead

Balerno

Bonnyrigg and Westwood

Local Economy

Murieston

Wester Hailes benefits from being located 3 miles from Edinburgh City Centre. Edinburgh is the historic, administrative and financial capital of Scotland. It is the UK’s second largest financial centre after London and Europe’s fourth by equity assets. The economy of Edinburgh is strongly focused on the service sector. The financial and business service sector employs around 35% of residents, significantly above the UK average.

Edinburgh is home to Scotland’s two largest banks, the Royal Bank of Scotland and Bank of Scotland, as well as some its largest financial institutions, Standard Life, Scottish Widows and AEGON. Edinburgh’s labour market is buoyant relative to Scotland as a whole. The city has an unemployment rate of 1.8% as at February 2015, significantly below the UK average unemployment rate of 5.7%.

Penicuik

Rosslynlee

n Primary n Secondary n Tertiary n Quarternary

Retailing Westside Plaza forms the main retail focus in Wester Hailes. The centre is heavily embedded within the local community, providing key community services including a health centre, and forms the main social and shopping hub of the area. The focus of the scheme is on convenience and mass market retailing, which suits the local catchment population. The centre also benefits from strong leisure anchors, Odeon Cinema and Gala Bingo.

Westside Plaza is the only shopping centre and forms the entire retail provision for Wester Hailes. Edinburgh town centre (3 miles north east) and the Gyle Shopping Centre (2 miles north) offer higher-spend comparison and fashion retailing destinations, that do not compete with Westside Plaza which offers a strong local convenience retail offer for the loyal catchment population.

Hermiston Gate Retail Park is located 2 miles north west of Westside Plaza and forms the main out-of-town retail provision for Wester Hailes. The scheme provides 300,000 sq ft of open A1 non-food retail space over 10 units and is anchored by Tesco and B&Q. Further national multiples include Halfords, Staples, Carpetright and Decathlon. The retailing offer is predominantly bulky goods use and does not compete with Westside Plaza’s convenience offer.

‘Edinburgh is the UK’s 2nd largest financial centre after London…’

PROJECT CHARLOTTE

Description

Footfall

Westside Plaza is West Edinburgh’s only integrated shopping and leisure shopping centre. The scheme is a well-established local retail and leisure destination.

The centre benefits from strong footfall of 2.5 million visitors in 2014. This reflects an increase on 2013 where footfall reached 2.3 million visitors.

Westside Plaza was extensively refurbished in 1997 and provides approximately 190,000 sq ft of retail and leisure floorspace over ground and first floor. The centre comprises 35 retail units, cinema, bingo hall, petrol station and a 3-storey office block.

Car Park

The scheme has a strong leisure element and is anchored by a 36,000 sq ft 4 screen Odeon Cinema and 28,000 sq ft Gala Bingo hall. In addition, the centre has strong anchor tenants including a 10,600 sq ft Home Bargains, 14,000 sq ft Lidl and a 7,800 sq ft Iceland. Further national multiple retailers include Brighthouse, Peacocks, Store 21, Farmfoods, Card Factory, Poundstretcher and Greggs.

Westside Plaza provides a number of key services including a health centre and post office making the centre an integral part of the local community and driving footfall into the scheme.

There are 720 free shopper car spaces at Westside Plaza provided on a surface car park on the southern boundary of the shopping centre directly adjacent to the Odeon Cinema. This is the principal car park for the town and provides direct access to Wester Hailes railway station.

The maintenance costs for the car park are funded through the service charge.

EDINBURGH WEST PLAZA, WESTER HAILES

PROJECT CHARLOTTE

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Ground Floor

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UNIT 39 HOME BARGAINS HOUSEHOLD GOODS

UNIT 20 FARMFOODS FROZEN FOOD

UNIT 22 UNIT 21

GREGGS BAKER

UNIT 23 - 26

UNIT 27 - 29

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LIDL SUPERMARKET

UNIT 31 UNIT 30

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First Floor

EDINBURGH WEST PLAZA, WESTER HAILES

Tenure The property is held long leasehold from the City of Edinburgh Council for a term expiring 5 October 2146. The current rent is ÂŁ310,800 pa which is subject to rent review on 24 June 2016 and 10 yearly thereafter. The revised rent will be the higher of the Base Rent of ÂŁ310,800 pa or 18.5% of all Rental Income receivable for the previous year. From 24 June 2016 there is potential for an annual Turnover top up of the Base Rent if 18.5% of all Rental Income receivable produces a number greater than the Base Rent.

PROJECT CHARLOTTE

Tenancies & Income Analysis The total contracted gross income, including vendor guarantees and top ups is £2,101,159 per annum. After deduction of void costs relating to vacant units which amount to £312,451 per annum and landlords contribution to marketing costs of £22,500 per annum, and the head rent pay away of £310,800, the current net operating income is £1,455,408 per annum.

The property produces a current estimated rental value of £2,173,274 per annum. Based on demand, recent rental evidence and affordability, rental values within the scheme range between £22.50 - £25 Zone A. The current owners have actively re-based rents to affordable levels providing a strong platform for rental growth in the future.

Leasing activity has been robust and over the last 12 months there have been new lettings which include Peacocks, Xercise 4 Less, Retail Convenience Stores, AMC Lighting, and Semi Chem. There are a number of live requirements for the town including Wetherspoons and a car showroom operator for the petrol station.

Top 5 Tenants by Income Tenant

Current Gross Rent (£ per annum)

% of Total Gross Rent

ABC Cinemas

£360,000

17.09%

Gala Bingo

£285,000

13.50%

Lidl

£167,500

7.96%

Xercise 4 Less

£150,000

7.12%

Secretary for State for Communities

£112,584

5.35%

EDINBURGH WEST PLAZA, WESTER HAILES

Lease Contracted Income Scenario (excluding car park & commercialisation income)

Vacancy by Floor Area

£2,500,000

0.6% National Multiple

£2,000,000

Local Trader Offices

£1,500,000

Miscellaneous

99.4%

£1,000,000

£500,000

Vacant

£0 0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

Occupied

25

YEARS

Unexpired Term & Covenant (excluding car park & commercialisation income)

Rent by Covenant Type

45.00%

3.2%

40.00%

6.1% 1.4%

12.9%

35.00%

76.4%

30.00% 25.00% 20.00%

National Multiple Local Trader Mall Income Offices Miscellaneous

15.00% 10.00% 5.00% 0.00%

Under 5 yrs

5-10 yrs

10-15 yrs

15-20 yrs

National Multiple

29.66%

11.40%

15.58%

22.24%

Over 20 yrs 0.00%

Local Trader

2.58%

8.02%

1.38%

1.38%

0.00%

Offices

6.12%

0.00%

0.00%

0.00%

0.21%

Miscellaneous

1.43%

0.00%

0.00%

0.00%

0.00%

PROJECT CHARLOTTE

Service Charge The operating costs of the shopping centre are covered by a comprehensive service charge which is calculated on a gross internal area basis.

The service charge year runs from December 25th to 24th December and the audited service charge expenditure over the past two years has been as follows: Service Charge Year ending 24th December 2015

Total

2012 (expenditure)

£854,903

2013 (expenditure)

£733,215

2014 (budget)

£825,543

2015 (budget)

£865,599

The service charge budget for 2015 equates to £5.09 per sq ft.

The total marketing budget is £45,000 per annum. The landlord contributes £22,500 (50%) towards the marketing budget.

EDINBURGH WEST PLAZA, WESTER HAILES

Commercialisation Space and People have a commercialisation contract across the shopping centre. There is one additional item licenced separately, which contributes an additional £8,000 of income per annum.

In 2014 the total net income receipts from Space and People were £56,088, with a forecast projection of £58,892 for 2015. To date in 2015 they are estimated to have generated £18,105.

PROJECT CHARLOTTE

Asset Management Opportunities • Complete new letting of Unit 41 and the Market Hall to Xercise 4 Less. Landlord enabling works currently being completed.

• Complete new lettings to Peacocks (Unit 36b), Retail Convenience Stores Ltd (Unit 19) and Tahar Javad (Car Showroom).

• Complete assignment of Unit 31 to Speedloan Finance Ltd currently in solicitors’ hands.

• Progress lease renewal negotiations with British Heart Foundation (Unit 34).

• Advance regear discussions with Brighthouse (Unit 9-11).

• Progress discussions with Wetherspoons who have indicated an interest in the Public House / Hotel.

• Progress negotiations with Gala Bingo who have indicated that they would be willing to move their break out by 5 years.

• Secure Lidl’s contractual obligation to complete £1.5m refurbishment works on their unit which were negotiated as part of their recent 10 year lease regear.

• Advance ongoing discussions to let part of the car parking site to Lidl.

• Explore the potential to accommodate a drive-thru operator.

• Explore potential to reconfigure Cinema to accommodate A3 restaurant operators at ground floor.

PROJECT CHARLOTTE

PROJECT CHARLOTTE

SHOPPING CENTRE INVESTMENT PORTFOLIO

PROJECT

CHARLOTTE