Project Tiger Summary Brochure V1.1

P R O J E C T

T I G E R

shopping centre investment portfolio

PROJECT TIGER

THE OPPORTUNITY Project Tiger offers an investor a unique opportunity to acquire seven established shopping centres (the “Portfolio”).

The Portfolio is a dynamic platform, with the opportunity to enhance performance and add value through both the continued improvement of the UK economy and implementation of key asset management initiatives.

ABERDEEN - TRINITY CENTRE Heritable (Scottish Equivalent of Freehold) with a small element being Long Leasehold

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BLAYDON - BLAYDON SHOPPING CENTRE Long Leasehold and Part Freehold

FALKIRK - HOWGATE CENTRE Heritable (Scottish Equivalent of Freehold)

GLOUCESTER - EASTGATE CENTRE Freehold and Long Leasehold

GRAYS - GRAYS CENTRE Freehold

ROMFORD - MERCURY CENTRE Freehold and Long Leasehold

SOUTHAMPTON - MARLANDS SHOPPING CENTRE Freehold with a separate Long Leasehold (999 year leasehold)

t h e opport u n it y

ABERDEEN TRINITY CENTRE

BLAYDON BLAYDON SHOPPING CENTRE

FALKIRK HOWGATE CENTRE

GLOUCESTER EASTGATE CENTRE Dundee

Glasgow

Edinburgh

Newcastle

GRAYS GRAYS CENTRE

Leeds Manchester Liverpool

ROMFORD MERCURY CENTRE

Birmingham

Cardiff Bristol

London

Exeter

SOUTHAMPTON MARLANDS SHOPPING CENTRE

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PROJECT TIGER

Critical Mass

Strong National Retailers

Significant opportunity to acquire a portfolio of seven shopping centres with a broad footprint across the UK providing an investor with scale, quality and security of income.

The tenant mix consists of some of the best known national retailers and supermarket operators including Debenhams, Marks & Spencer, Morrisons, ASDA, Argos, Wilkinson, Peacocks, H&M, Boots, and Superdrug.

Strong Economic Growth In July 2014 the UK economy surpassed GDP levels previously recorded in Q1 2008, providing strong confirmation of the UK’s robust recovery.

The IMF predict that the UK will maintain its status as one of the world’s fastest growing economies with 3.2% per annum GDP growth forecast by the end of 2014. Evidence of real wage inflation coupled with falling unemployment (now at its lowest level since 2008) is likely to lead to improved UK consumer spending, greater tenant demand, and a stronger portfolio cashflow.

Long Term Secure Cashflow The portfolio is 95% leased, generates £22,650,000 per annum of gross annual income and features an average unexpired term of 9.6 years to break (10.6 years including the Aberdeen Debenhams lease extension).

Approximately 79% of gross income is derived from national multiple or regional retailers.

Strong Historical Occupancy Dominant Locations The properties are principally located in key regional markets including Aberdeen, Gloucester, Romford and Southampton. These markets continue to demonstrate improving demographic trends and have seen their retail market fundamentals significantly improve since the downturn. The seven shopping centres are all centrally located, within their respective towns or cities, on principal retail thoroughfares.

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The Portfolio has benefitted from strong historical occupancy levels through a challenging occupational period. Average occupancy of 93.8% between Q1 2010 – Q2 2014 is in-line with the Portfolio’s current occupancy. The current owners have invested significant capital during their hold period, re-branding, re-positioning and reconfiguring the centres.

t h e opport u n it y

Significant Discount to Replacement Cost The guide pricing of £200 per square foot compares favourably with a replacement cost for the portfolio in excess of £250 per square foot. This gives an investor the ability to acquire the Portfolio at an attractive discount to replacement cost.

Superior Geographic and Tenant Diversity

Free & Clear of Existing Debt The Portfolio is being offered free and clear of existing debt. This enables an investor to take full advantage of today’s low interest rate environment. Given the Portfolio’s strong performance, long unexpired average lease length, diverse tenant mix and broad geographical footprint, a variety of lenders will be attracted to the financing opportunity.

Please contact Eastdil Secured for further details .

The Portfolio offers an investor an extremely diversified investment spread across 7 properties and 485 tenants. The average tenant size is a manageable 2,689 square feet with no tenant comprising more than 7% of rental income and 9% of total square footage. Virtually 80% of the Portfolio’s rental income consists of national or regional multiple tenants with no single property comprising more than 19% of the Portfolio’s total square footage. The cashflow is well balanced across geographies and tenants.

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PROJECT TIGER

Diversity The portfolio has a diverse geographical spread covering both England and Scotland.

Key features include: n

Over 485 tenancies.

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Seven geographically diverse locations.

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Total retail sales area of 1,350,000 sq ft (125,000 sq m).

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A combined annual footfall of c. 47 million people.

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79% of gross income from national/regional covenants.

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Weighted average unexpired term of 9.6 years to lease break (10.6 years with Aberdeen’s Debenhams lease extension).

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Total service charge of over £7.4 million per annum.

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3,305 car parking spaces.

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Significant potential to add value and engage in active asset management.

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Combined total gross income of £22,650,000 per annum.

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Combined total net income of £18,728,000 per annum.

Let and Vacant Space 95% of the accommodation is let.

Major Tenants by Income Over 28% of the income is generated from the top 8 tenants.

National / Local Income 79% of the income is generated by national/regional retailers.

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t h e opport u n it y

Lease Expiry Profile (to Break) The weighted average unexpired lease term to break is over 9.6 years (10.6 years including Aberdeen’s Debenhams lease extension).

Corporate Sale - The sale of the Jersey Holding Companies The Properties are to be sold by Rockspring UK Value Holdings (Jersey) Limited by way of a sale of the Jersey Limited Companies which hold the assets.

It is anticipated that, on the basis of a sale of the holding companies, there should be no SDLT or Stamp Duty/Stamp Duty Reserve Tax (SDRT) payable by the buyer.

An overview of the corporate structure in which the assets are held is available on the marketing website, together with the relevant tax details.

Property Asset Sales A sale of a portfolio of assets or individual asset sales will also be considered.

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ABERDEEN T R I N I T Y C e n tre

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PROJECT TIGER

INVESTMENT CONSIDERATIONS

INCOME

n

Aberdeen represents one of the UK’s strongest economies.

Gross Income

£4,286,000 p.a.

n

Recognised as a leading global centre for the energy industry.

Net Operating Income

£3,852,000 p.a.

n

Significant anticipated population and employment growth.

n

Representation from strong national multiple retailers including Debenhams.

Fully Let Net ERV (net of head rent)

£4,560,000 p.a.

n

Exceptional weighted average unexpired term of over 19 years, and almost 25 years if Debenhams lease extension actioned.

n

Debenhams have 69 years unexpired (95 years if lease extended).

n

Q-Park expiry 2045 with RPIX indexation plus 0.5%.

n

Debenhams, Argos, HMV, Waterstones, Superdrug and Q-Park account for 64% of total income.

n

410 space car park.

n

Majority Heritable Title.

Aberdeen represents one of the UK’s strongest economies.

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PROJECT TIGER

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ABERDEEN T R I N I T Y C e n tre

TENURE

TENANCIES & INCOME

Heritable, (Scottish equivalent of freehold) with two smaller long leasehold elements.

Major Tenants

The majority of Trinity Centre is held by way of Heritable title together with two smaller long leasehold interests over two areas required for access to the centre. These interests are known as Rennie’s Wynd Access and Union Street Access. They are currently owned by Primark and the long lease rent is payable by the owner of the Trinity Centre.

Long Leasehold Rennie’s Wynd Access Long leasehold for a term from 27 March 1982 to 26 March 2110 (forming part of the building situated on the site of the former Cordiner’s Garage). The current rent is £22,000 p.a. reviewed 5 yearly with the next review being on 15 May 2015. At review it is to be assumed that the property is capable of being used as warehousing totalling 3,477 sq ft (323 sq m) with an assumption that the lease term is for the unexpired duration of the lease.

Union Street Access Long leasehold of a ‘notional unit’ which forms access into the Centre from Union Street. The lease is from 27 March 1982 until 26 March 2110 with a current rent of £111,400 p.a. The notional unit is described in the lease as “247.4 sq m on the same floor level as the pavement level at 151 to 155 Union Street”. The rent reviews are 5 yearly. The review as at 31 July 2014 has been agreed at nil increase.

The assumed term is the unexpired duration of the lease and is to be reviewed to 90% of the market rent.

Tenant

Rent

%

Debenhams

£820,000

19.1%

Q-Park Limited

£604,000

14.1%

Waterstones

£502,475

11.7%

HMV

£325,000

7.6%

Argos

£310,000

7.2%

Others

£1,724,525

40.2%

Total

£4,286,000

100.0%

The majority of the leases are held on effectively full repairing and insuring leases with the provision for the full recovery of outgoings by way of a service charge.

The current contracted gross income is £4,286,000 p.a. The current net income, allowing deduction of head rents and allowing for any non-recoverable costs including landlord’s contribution to marketing, is £3,852,000 p.a.

Our estimate of the total rental value (net of head rents) is £4,560,000 p.a. when fully let. This is based on a Zone A range of between £70.00 psf and £110.00 psf.

ASSET MANAGEMENT OPPORTUNITIES n

Acquire the Union Street long leasehold from Primark and create new units in this area.

n Close one of the Union Street entrances to create two new

units, one fronting Union Street, with another to the mall. n Extend Debenhams above their existing demise. n Create an additional unit between Clinton Cards and Greggs

in the Bridge Street mall entrance. n Improve the pedestrian links from the train station, Guild

Street and Union Square Shopping Centre by installing additional escalators to further increase footfall. This could also create further income opportunities such as Remote Mall Units, ATM’s, advertising space and vending machines. n Reconfigure units 28 and 29 to create three smaller units. n

Benefit from the significant recent reduction (25%) in service charge, following recent capital expenditure. These lower occupational costs will provide an opportunity to increase rents.

An exceptional weighted average unexpired term of over 19 years.

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B L AY D O N S H O P P I N G C e n tre

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PROJECT TIGER

INVESTMENT CONSIDERATIONS n

Strong and vibrant convenience shopping centre serving the local catchment, 5 miles west of Newcastle.

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Anchored by a new 70,000 sq ft Morrisons supermarket (opened August 2014).

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Morrisons rent of £1,542,000 p.a. is 57% of the income.

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197,000 sq ft of retail accommodation.

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New 624 space car park.

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Drive thru McDonalds with dedicated parking.

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New Day Centre and Medical Centre providing additional ‘town centre’ facilities.

n

Attractive weighted average unexpired lease term of over 13 years.

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Current affordable rents provide an opportunity for growth following Morrisons opening.

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New stores for Home Bargains and Poundworld. Other tenants include B&M, Iceland and Superdrug.

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Long Leasehold at a peppercorn plus two freehold interests.

INCOME Gross Income

£2,705,000 p.a.

Net Operating Income

£2,674,000 p.a.

Fully Let ERV

£2,897,000 p.a.

An average unexpired lease term of over 13 years.

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PROJECT TIGER

FIRST FLOOR

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B L AY D O N S H O P P I N G C e n tre

TENURE

TENANCIES & INCOME

Long Leasehold at a peppercorn.

Major Tenants

Blaydon Shopping Centre is held by way of a long leasehold interest for a term of 250 years from 11th December 2012, expiring on 10th December 2262 from the freeholder the Borough Council of Gateshead at a peppercorn. The Long Leasehold title excludes Blaydon Library.

Tenant

Rent

%

Morrisons

£1,542,000

57.0%

Home Bargains

£120,000

4.4%

B&M

£85,000

3.1%

Poundworld

£80,000

3.0%

In addition there are two separate freehold interests fronting Chainbridge Road occupied by the Morrisons Petrol Filling Station and the land adjacent to this occupied by Bewick Mobility.

Iceland Food

£75,000

2.8%

Others

£803,000

29.7%

Total

£2,705,000

100.0%

The majority of the leases are held on effectively full repairing and insuring leases with the provision for the full recovery of outgoings by way of a service charge.

The current contracted gross income is £2,705,000 p.a. The current net income is £2,674,000 p.a.

Our estimate of the total rental value is £2,897,000 p.a. when fully let. This is based on a Zone A range of between £22.00 psf and £38.50 psf.

ASSET MANAGEMENT OPPORTUNITIES n Grow rents from the currently affordable levels following the

opening of Morrisons, Home Bargains, Poundworld, the new car park and the new Day and Medical Centres. n Sell the valuable Morrisons income from the supermarket and

Petrol Filling Station. n Split unit 36. Terms are agreed with Subway and Domino’s

Pizza. n Extend units to the rear of 5 – 11. These extensions to the rear

of the units have full planning consent, as does the potential extension to the rear of unit 36. n Sell off the freehold of unit 1 Chainbridge Road, occupied by

Bewick Mobility. n Split the existing Co-op store at lease expiry. Detailed drawings

In August 2014, a new Morrisons superstore plus Home Bargains and Poundworld substantially expanded the centre, accounting for 64% of the income.

have been produced with serious interest from Peacocks for 4,500 sq ft.

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FA L K I R K H O W G AT E C e n tre

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PROJECT TIGER

INVESTMENT CONSIDERATIONS Falkirk is the largest town in Central Scotland, situated between Glasgow and Edinburgh. n The population of 157,000 (census 2011) is forecast to grow by 5.7% by 2018. n Fast growing tourist destination with the Helix, Kelpies (the world’s largest equine sculpture) and The Falkirk Wheel being some of Scotland’s top tourist destinations. n Dominant scheme in the town centre. n 180,000 sq ft covered shopping centre. n Major tenants include Debenhams, New Look, Marks & Spencer, Argos, River Island and JD Sports. n Weighted average unexpired term of approximately 3.4 years. n Increase net income through new lettings and conversion of temporary inclusive deals to longer leases. n Grow rents from rebased ERV’s. n 74% of the income from national / regional multiple retailers. n Multi-storey car park with 524 spaces and ‘Park Mark’ accreditation. n Rating revaluation in 2017 will provide a platform to significantly reduce retailers’ overall occupational costs, allowing for an improvement in the rental tone. n Heritable Title. n

INCOME Gross Income

£3,482,000 p.a.

Net Operating Income

£2,780,000 p.a.

Fully Let ERV

£3,792,000 p.a.

Falkirk is the largest town in Central Scotland situated between Glasgow and Edinburgh.

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PROJECT TIGER

LOWER GROUND FLOOR

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FA L K I R K H O W gate C e n tre

TENURE

TENANCIES & INCOME

The Howgate Centre is held by way of Heritable Title (Scottish Equivalent of Freehold).

Major Tenants Tenant

Rent

%

Car Park Income

£368,000

10.6%

Argos

£240,000

6.9%

River Island

£225,000

6.5%

Poundland

£178,000

5.1%

Debenhams

£169,000

4.9%

Superdrug

£162,000

4.6%

Others

£2,140,000

61.4%

Total

£3,482,000

100.0%

The majority of the leases are held on effectively full repairing and insuring leases with the provision for the full recovery of outgoings by way of a service charge.

The current contracted gross income is £3,482,000 p.a.

The current net income, allowing for any non-recoverable costs including landlord’s contribution to marketing, is £2,780,000 p.a.

Our estimate of the total rental value is £3,792,000 p.a. when fully let. This is based on a Zone A range of between £35.00 psf and £50.00 psf. This rebased rental tone provides the platform for further letting activity and rental growth, particularly following the 2017 rating revaluation which will materially reduce tenant’s occupational costs.

ASSET MANAGEMENT OPPORTUNITIES n Continue to improve net income following the rebasing of

the scheme through a combination of new lettings and a reduction of landlord shortfalls. n

Benefit from a significant business rate reduction following revaluation in 2017. Early estimates of the quantum reduction are c. 30%-40%.

n

Amalgamate units 1, 2, and 3 to create a larger unit.

n

Amalgamate 22A to 25 to create a larger unit with added potential to link with units in the lower mall area.

n

Amalgamate units 17 to 18.

n Create a space for market operator on the lower mall. n Create large A3 units or cinema to rear of Argos. Detailed

drawings of this scheme are provided in the data room.

The centre benefits from an integral 3 storey car park totalling 524 spaces with ‘Park Mark’ accreditation..

n Lease parking spaces for longer term contract parking.

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gloucester e A S tgate C e n tre

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PROJECT TIGER

INVESTMENT CONSIDERATIONS

INCOME

n

Strong strategic location in an historic Cathedral City.

Gross Income

£3,019,000 p.a.

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170,000 sq ft covered shopping centre, with frontage to Eastgate Street, Gloucester’s prime shopping street.

Net Operating Income

£2,128,000 p.a.

Fully Let ERV (net of head rent)

£3,342,000 p.a.

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Well let scheme, with annual footfall approaching 8 million, which provides the prime fashion offer in the town, including Marks & Spencer, H&M, Select and J D Sports.

n

The Centre has a 378 space car park let to Gloucester Council until 2092, subject to index linked reviews with minimum annual uplifts of 2.5% compounded over the review period.

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Conclude plans to open a new market hall on the first floor, let to Gloucester Council on a 35 year lease at an initial rent of £150,000 per annum (incorporating 5 yearly RPI reviews).

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Reconfigure the current market space to attract a new anchor tenant, such as TK Maxx.

n

Extremely attractive current weighted average unexpired term of 13 years.

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Freehold and leasehold.

Eastgate provides the prime fashion offer with tenants including Marks & Spencer, H&M, Select and JD Sports.

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PROJECT TIGER

FIRST FLOOR

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gloucester e A S tgate C e n tre

TENURE

TENANCIES & INCOME

The main Eastgate Centre and adjoining land is held both freehold and long leasehold.

Major Tenants

The Eastgate Centre and 22 Southgate Street are held by way of a long lease from Gloucester City Council for a term expiring 1 April 2191 based on a minimum rent of £515,000, or 15% of the net rent received.

12/18 Eastgate and 13/15 Southgate Street and 25–29 and part of 31 Bell Walk (occupied by Marks & Spencer and B&M) are sublet to BNP Paribas, a nominee company for Blackrock Investments, on a lease which expires on 11 May 2136.

There is a reversionary freehold interest held for 21–25 Southgate Street which is subject to an intermediate long lease to the Council.

20 Southgate Street is let to Gloucestershire Primary Care Trust, and held freehold.

22 Eastgate Street is held leasehold for a term expiring 24 March 2072.

Tenant

Rent

%

H&M

£354,200

11.7%

Car Park (Council)

£254,000

8.4%

New Look (sublet to Select)

£155,000

5.1%

Co-Op Travel

£143,000

4.7%

Poundland

£110,000

3.6%

Burger King

£105,000

3.5%

Others

£1,897,800

62.9%

Total

£3,019,000

100.0%

The majority of the leases are held on effectively full repairing and insuring leases with the provision for the full recovery of outgoings by way of a service charge.

The current contracted gross income is £3,019,000 p.a.

The current net income, allowing for any non-recoverable costs, including landlord’s contribution to marketing, is £2,128,000 p.a.

Our estimate of the total net rental value is £3,342,000 p.a. when fully let. This is based on a Zone A range between £50.00 psf and £115.00 psf.

ASSET MANAGEMENT OPPORTUNITIES n Gloucester City Council wishes to relocate the market,

currently at ground floor, to the entire first floor to create a new market hall. The Council will enter into a new 35 year lease at £150,000 p.a. subject to 5 yearly RPI linked increases. The Council will contribute £850,000 towards the total cost of the project estimated to be circa £2.5m. n The relocation of the market will enable the redevelopment /

refurbishment of the existing Market Hall. This would enable the creation of a retail unit of 19,000 sq ft at ground floor with 3,000 sq ft at first floor to let to TK Maxx or similar. n There is potential, on redevelopment, to link the basement of

the existing Market Hall with the basement of 8-10 The Forum to create an additional 8,000 sq ft. n

Acquire the adjacent land, formerly the site of the town’s bowling green, for redevelopment.

n Convert Addison House, to the rear of the centre, into two

residential flats.

An average unexpired lease term of 13 years.

n Re-gear the headlease with the Council.

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g R AY S S H O P P I N G C e n tre

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PROJECT TIGER

INVESTMENT CONSIDERATIONS n

The dominant retail offer of the town providing 214,000 sq ft of covered retail accommodation.

n

Expanding town with rising residential values. Significant population growth is forecast by 2030.

n

99% occupancy with the opportunity to improve the income stream by converting temporary lettings to longer leases and increase car park income.

n

Anchor tenants include, Wilkinson, 99p Stores, Peacocks, Iceland, Poundworld and QD Stores.

n

Multi-storey car park with 700 spaces.

INCOME Gross Income

£2,513,000 p.a.

Net Operating Income

£2,059,000 p.a.

Fully Let ERV

£2,219,000 p.a.

n New £45m College opened in the town centre in September 2014. n

London Gateway, a £3.2bn deep water port 8.9 miles away is forecast to create 36,000 new jobs.

n

Potential sale of Crown House for residential conversion.

n

Freehold.

Significant population growth is forecast for Grays by 2030.

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PROJECT TIGER

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grays s h oppi n g C e n tre

TENURE

TENANCIES & INCOME

Grays Shopping Centre is held freehold.

Major Retail Tenants Tenant

Rent

%

Wilkinson

£221,000

10.2%

QD Stores

£145,000

6.7%

99p Stores

£110,000

5.1%

Others

£1,689,000

78.0%

Total Retail

£2,165,000

100.0%

The majority of the leases are held on effectively full repairing and insuring leases with the provision for the full recovery of outgoings by way of a service charge.

The current contracted gross income is £2,513,000 p.a.

The current net income, allowing for any non-recoverable costs, including landlord’s contribution to marketing, is £2,059,000 p.a.

Our estimate of the total net rental value is £2,219,000 p.a. when fully let. This is based on a Zone A range between £25.00 psf and £50.00 psf.

ASSET MANAGEMENT OPPORTUNITIES n Continue to enhance and improve the quality and longevity

of the income stream. The scheme has historically traded at virtually full occupancy levels providing a strong cash flow. This can be improved by converting temporary lettings to longer leases, progressing lease renewals and increasing car park revenue from additional season ticket sales. This opportunity is underpinned by the recent opening of the South Essex College, which has initially taken 50 car parking spaces. n Sell off Crown House for privately rented residential

accommodation. A feasibility study with potential residential options is available in the data room. n Split QD Stores to create two large units at ground floor with

first floor accommodation for a gym or an alternative use.

The centre benefits from a 700 space landlord operated car park.

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ROMFORD M E R C U R Y C e n tre

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PROJECT TIGER

INVESTMENT CONSIDERATIONS n

Romford is the fourth largest retail centre in London and one of the top 15 retail centres in the south-east of England.

n

188,000 sq ft shopping centre with over 174,000 shoppers per week.

n

Anchored by 100,000 sq ft ASDA, Wilkinson, McDonald’s, Peacocks, Poundland and Superdrug.

n

Weighted average unexpired term of over 6.8 years.

n

78% of the income is secured against national / regional multiple retailers.

n

26% of the income secured against ASDA for a further 17 years (excluding 20 year option to renew to 2051).

n

600 space multi-storey car park.

n

Freehold and long leasehold.

INCOME Gross Income

£4,156,000 p.a.

Net Operating Income

£3,677,000 p.a.

Fully Let ERV (net of head rent)

£3,929,000 p.a.

26% of the income is secured against ASDA for a further 17 years.

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PROJECT TIGER

LOWER GROUND FLOOR

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FIRST FLOOR

romford merc u r y C e n tre

TENURE

TENANCIES & INCOME

The Mercury Centre is held both freehold and long leasehold.

Major Tenants

The ASDA supermarket, (Dolphin Site) is owned freehold with the residential upper parts sold off on a 125 year lease, expiring 2130.

The main shopping centre and unit shops are held under a headlease for a term of 125 years, expiring 24th December 2115 at a fixed rent of £25,000 p.a.

There are 2 additional long leasehold interests relating to the lower level car park and upper level car park together with a separate lease held directly from the freeholder, Grainhome Limited. of the former Sainsbury’s Supermarket (Wilkinson).

Tenant

Rent

%

Asda

£1,076,000

25.9%

APCOA

£339,000

8.1%

Superdrug

£240,000

5.8%

Poundland

£150,000

3.6%

Choice

£136,000

3.3%

McDonalds

£130,000

3.1%

Others

£2,085,000

50.2%

Total

£4,156,000

100.0%

There are two headleases which relate to the car park: The majority of the leases are held on effectively full repairing and insuring leases with the provision for the full recovery of outgoings by way of a service charge.

The lower level car park is held by Sainsbury’s on a lease expiring September 2114 and reviewed upward only and geared to the Council tariffs at a current rent which Sainsbury’s pay to the freeholder of £500,099 p.a. Sainsbury’s, in turn, underlet to the vendor for a term of 25 years expiring December 2026, geared to 67.5% of the superior lease and therefore the rent payable by the vendor is £337,501 per annum. There is an option to extend this lease by 25 years.

The current contracted gross income is £4,156,000 p.a.

The current net income, allowing for any non-recoverable costs including landlord’s contribution to marketing, is £3,677,000 p.a.

Our estimate of the total net rental value is £3,929,000 p.a. when fully let. This is based on a Zone A rents ranging from £40.00 psf and £90.00 psf.

The upper level car park headlease is held by the vendor for a term of 125 years, expiring February 2127 at a peppercorn and then, in turn, underlet to APCOA Parking (UK) Limited for a 15 year term expiring December 2016, at a current rent of £300,000 p.a.

APCOA Parking (UK) Limited also has a management agreement for the lower level car park and pays £38,500 p.a. until December 2016.

ASSET MANAGEMENT OPPORTUNITIES n Potential re-gear of car park leases to simplify ownership

structure and generate additional income on expiry of lease to APCOA (December 2016). n Explore the opportunity of extending the first floor units into

Sainsbury’s also hold a headlease from the freeholder for 125 years expiring in September 2114 at a peppercorn which in turn is underlet to Wilkinson.

the car park with a view to bringing further anchors into the scheme. Tenants such as New Look or TK Maxx would be appropriate for such space. n Purchase the freehold.

A structure chart is shown below.

n Consider a disposal of the valuable ASDA interest. n Create additional A3 accommodation at upper ground floor

level with the re-letting of unit 36/37.

Freehold Interest “Dolphin Site”

Freehold Interest

FREEHOLDER ROCKSPRING’S UK VALUE FUND LIMITED PARTNERSHIP

FREEHOLDER Grainhome Ltd HEADLEASE

HEADLEASE

HEADLEASE

HEADLEASE

UNDERLEASE

MAIN CENTRE HEADLEASE ROCKSPRING’S UK VALUE FUND LIMITED PARTNERSHIP

SUPERMARKET LEASE SAINSBURY’S SUPERMARKET

CAR PARK LOWER LEVEL SAINSBURY’S SUPERMARKET

CAR PARK UPPER LEVEL ROCKSPRING’S UK VALUE FUND LIMITED PARTNERSHIP

SUPERMARKET LEASE ASDA

125 YEAR LEASE TO 24/12/2115 FIXED RENT AT £25,000pa

125 YEAR LEASE TO 28/09/2114

125 YEAR LEASE TO 28/09/2114 RENT GEARED TO COUNCIL TARIFFS ANNUAL UPWARD ONLY REVIEWS (£500,099pa)

125 YEAR LEASE TO 03/02/2127 RENT OF 1 PEPPERCORN

UNDERLEASES UNIT SHOPS

UNDERLEASE WILKINSONS

UNDERLEASE ROCKSPRING’S UK VALUE FUND LIMITED PARTNERSHIP

UNDERLEASE APCOA PARKING (UK) LTD

25 YEAR LEASE TO 11/12/2026 RENT GEARED TO 67.5% OF SUPERIOR LEASE ANNUAL UPWARD ONLY REVIEWS (£337,501 pa) OPTION TO EXTEND LEASE BY 25 YEARS

15 YEAR LEASE TO 24/12/2016 RENT AT £300,000 pa

25 YEAR LEASE TO 01/04/2031 RENT REVIEW TO 53% OF OMRV OPTION TO RENEW FOR FURTHER 20 YEARS

CAR PARK MANAGEMENT AGREEMENT APCOA PARKING (UK) LTD

Interests for Sale

LEASE CO-TERMINOUS WITH UPPER LEVEL LEASE RENT AT £38,500 pa

31

SOUTHAMPTON M A R L A N D S S H O P P I N G C e n tre

32

PROJECT TIGER

INVESTMENT CONSIDERATIONS

INCOME

n

A thriving major UK port city.

Gross Income

n

Extensive and affluent primary catchment population of 613,000.

Net Operating Income

£1,559,000 p.a.

n

In the top 15 PROMIS centres by shopping population.

Fully Let Net ERV

£3,192,000 p.a.

n

Transformational asset management strategy re-anchoring centre following major new lettings to Peacocks, Poundworld and JRC Global Buffet. A springboard for further new lettings, increased footfall, additional income and rental growth.

£2,490,000 p.a.

n New Cultural Quarter to be located 300 metres from Marlands

and forecast to generate £175m of investment into the area. n

180,000 sq ft of modern, well–configured, retail space.

n

Strategically situated between the popular 810 space Marlands car park and WestQuay.

n

Large ASDA supermarket neighbours the property.

n

Over 75% of the current income is derived from national / regional multiple retailers.

n

Freehold.

A significant & transformational asset management strategy has been instigated at the Marlands.

33

PROJECT TIGER

FIRST FLOOR

34

SOUTHAMPTON M A R L A N D S S H O P P I N G C e n tre

TENURE

TENANCIES & INCOME

The title to the Marlands shopping centre is held freehold.

Major Tenants

The six kiosks within ASDA are held on a 999 year lease from 25th March 1987 at a peppercorn rent. The lease does not include the walkway.

Tenant

The Marlands also benefits from a deed relating to the Marlands multi-storey car park located to the western side of the Western Esplanade and which is connected via a bridge to the walkway adjacent to the Kiosks within the ASDA store. This deed dated 8 January 1990 is made between Southampton City Council and Heron Southampton Properties Limited (Heron) to include their successors in title. The deed ensures that the Marlands Car Park is available for use as a short term public car park primarily for the benefit of shoppers and other users of and visitors to Marlands and the Supermarket, at all times when Marlands or a substantial part of it or ASDA are open and trading.

Peacocks

Rent

%

Poundworld

£200,000

8.0%

Global Buffet

£180,000

7.2%

Poundland

£165,000

6.6%

£164,500

6.6%

CEX

£110,000

4.4%

Others

£1,670,500

67.2%

Total

£2,490,000

100.0%

The majority of the leases are held on effectively full repairing and insuring leases with the provision for the full recovery of outgoings by way of a service charge.

The current contracted gross income is £2,490,000 p.a.

The current net income, allowing for any non-recoverable costs including landlord’s contribution to marketing, is £1,559,000 p.a.

Our estimate of the total net rental value is £3,192,000 p.a. when fully let. This is based on a range of Zone A rents from between £70.00 psf to £80.00 psf on the ground floor and £10.00 psf to £15.00 psf on the first floor.

ASSET MANAGEMENT OPPORTUNITIES n Capitalise on the increase in footfall and trade generated by

the opening of Peacocks and Poundworld on the ground floor and JRC Global Buffet on the first floor. These new anchors will drive rents up, raise tenant demand and act as a catalyst for the revitalisation of the centre. n Lease further upper level units. There is interest from Sega and

WOK n Go as well as a market operator for space. n Convert the 13,150 sq ft second floor space above JRC Global

Buffet for use as a gym or residential/student accommodation. n Sell the kiosk units located within the ASDA supermarket.

Peacocks, Poundworld and JRC Global Buffet offer a springboard for future growth.

35

PROJECT TIGER

Surveys

CAPITAL ALLOWANCES

The following surveys are available for the benefit of the purchaser:

As at the end of June 2014 the combined capital allowance tax written down values (TWDV) of the assets stands at c.£13 million.

This figure is likely to rise to c.£17 million following the completion of the Blaydon Morrisons extension and other minor works.

n

Building, M&E and Phase I Environmental Survey

by Paragon Building Project Consultants

n Energy Performance Certificates (EPC’s) –

provided by EPC UK Ltd

VAT The assets have all been elected for VAT. In the event of an asset sale(s), VAT will either be payable on the purchase price or, as is expected to be the case, the asset sale(s) would qualify as a Transfer of Going Concern with no VAT payable.

36

The vendor will provide full details of the original capital allowance claims, additional sums claimed (through build projects in their hold period) and projects which are currently on site, or where recently completed and where additional allowances are expected in due course.

t h e opport u n it y

Pricing The portfolio is being offered in its entirety as a corporate sale, although consideration will be given to a sale as a portfolio of assets or as a combination of individual assets.

Asset

Corporate

5.80%

1.80%

Net Price

£250,500,000

£260,343,000

Purchaser’s Costs

£14,529,000

£4,686,000

Gross Price

£265,029,000

£265,029,000

Initial %

7.07%

Reversionary %

9.03%

Equivalent %

8.88%

Projected Yield Profile 9.00%

8.50%

8.00%

7.50%

7.00%

18

01 8 c2 De

18

20 Se p

18

20 Ju n

20

01

17

7

M ar

c2 De

17

20 Se p

17

20 Ju n

6 01

16

20 M ar

c2 De

16

20 Se p

16

20 Ju n

20

15

01 5

M ar

c2 De

15

20 p Se

15

20 Ju n

20 M ar

01 4 c2 De

In i

tia

l

6.50%

37

PROJECT TIGER

Portfolio Summary TOWN

PROPERTY TENURE

AREA

NET INITIAL YIELD

EQUIVALENT YIELDS

REVERSIONARY YIELD

ASSET PRICE

CORPORATE PRICE

5.80%

1.80%

SQ FT

%

%

%

£

£

Trinity

PREDOMINANTLY HERITABLE TITLE (Scottish equivalent of Freehold) with two long leasehold elements at head rents of £22,000 per annum & £111,400 per annum both expiring 2110

188,120

6.44%

7.96%

7.63%

56,500,000

58,720,000

Blaydon

Blaydon

PREDOMINANTLY LEASEHOLD (on a peppercorn 250 years to 2262) - two additional freehold properties

196,848

6.61%

7.10%

7.16%

38,250,000

39,753,000

Falkirk

Howgate

HERITABLE TITLE (Scottish Equivalent of Freehold)

178,317

9.22%

12.00%

12.58%

28,500,000

29,620,000

Gloucester

Eastgate

PREDOMINANTLY LEASEHOLD 200 years expiring 2191 - ground rent the higher of £515,000 per annum or 15% - various smaller leasehold & freehold interests

170,642

6.49%

8.96%

10.19%

31,000,000

32,219,000

Grays

Grays

FREEHOLD

248,147

8.28%

9.68%

8.93%

23,500,000

24,423,000

Mercury

FREEHOLD & LONG LEASEHOLD (Centre expires 2115 at £25,000 per annum - lower deck car park expires 2026, but with a 25 year option to extend, £337,501 per annum)

187,522

6.75%

7.25%

7.21%

51,500,000

53,524,000

FREEHOLD with a small leasehold element (999 years) on a peppercorn

179,749

6.93%

12.76%

14.20%

21,250,000

22,085,000

1,349,344

7.07%

8.88%

9.03%

250,500,000

260,344,000

Aberdeen

Romford

Southampton Marlands

PORTFOLIO TOTAL

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t h e opport u n it y

NET OPERATING INCOME

GROSS RENT SHORTFALLS

WAULT

LANDLORD MARKETING

HEAD RENT

NET RENT

ERV

GROSS RENT

LANDLORD MARKETING

HEAD RENT

NET ERV

£

£

£

£

£

YEARS

£

£

£

£

4,285,553

(273,190)

(27,500)

(133,400)

3,851,463

19.6

4,720,927

(27,500)

(133,400)

4,560,027

2,704,730

(30,709)

2,674,021

13.5

2,896,930

3,481,833

(652,514)

(49,425)

2,779,894

3.4

3,841,688

(49,425)

3,019,191

(323,025)

(53,550)

2,127,616

12.8

3,988,794

(53,550)

2,513,051

(426,237)

(27,500)

2,059,314

3.8

2,246,534

(27,500)

4,156,005

(55,530)

(61,000)

3,676,974

6.8

4,352,301

(61,000)

2,489,878

(871,503)

(59,250)

1,559,125

3.7

3,251,108

(59,250)

22,650,241

(2,632,709)

(278,225)

18,728,406

9.6

25,298,282

(278,225)

(515,000)

(362,501)

(1,010,901)

2,896,930

3,792,263

(593,819)

3,341,425

2,219,034

(362,501)

3,928,800

3,191,858

(1,089,720)

23,930,337

39

PROJECT TIGER

Further Information For further information please contact: Eastdil Secured Berkeley Square House 4-16 Berkeley Square, 3rd Floor, Suite 5 London W1J 6BR +44 (0) 20 7074 4972

Coady Supple 12 St George Street London W1S 2FB

www.eastdilsecured.com

www.coadysupple.com

James McCaffrey Senior Managing Director Phone: +44 20 7074 4978 E-Mail: jmccaffrey@eastdilsecured.com Mobile: +1 617 968 2892

Dermot Supple +44 (0) 20 7629 5276 dermot@coadysupple.com

Michael Cochran Senior Managing Director Phone: +44 20 7074 4968 E-Mail: mcochran@eastdilsecured.com Mobile: +44 7912 181 167 Andrea Goss Senior Vice President Phone: +44 20 7074 4976 E-Mail: agoss@eastdilsecured.com Mobile: +44 7943 812 849 Ritchie Gardiner Associate Phone: +44 20 7074 4973 E-Mail: rgardiner@eastdilsecured.com Mobile: +44 77 1811 5621 Iris Behler Analyst Phone: +44 20 7074 4972 E-Mail: ibehler@eastdilsecured.com Mobile: +44 7525 582387 Financing Contact Riaz Azadi Managing Director Phone: +44 20 7074 4977 E-Mail: razadi@eastdilsecured.com Mobile: +44 7920 147 477

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+44 (0) 20 7629 5251

Robin Coady +44 (0) 20 7629 5272 robin@coadysupple.com David Sadler +44 (0) 20 7629 5259 david@coadysupple.com

t h e opport u n it y

Website All supplementary information is provided in the online dataroom: www.projectTiger-invest.com

MISREPRESENTATION ACT AND DISCLAIMER Messrs Coady Supple, for themselves and the vendors of this property whose agents they are give notice that: 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: All description dimensions, references, references to condition and necessary permission for use and occupation and other details are given in good faith and are believed to be correct but intending purchasers should not rely on them as statements of representations of fact and must satisfy themselves by inspection or otherwise as to the correctness of each of them: No person in the employment of Coady Supple has any authority to make or give any representation of warranty in relation to this property. Coady Supple are acting solely as property advisors.

All negotiations are subject to contract. October 2014.

This presentation has been prepared by Eastdil Secured, L.L.C. (“ES”) on the basis of information obtained from the Vendor and other public sources, as of the specified date. ES and the Vendor do not undertake any duty or obligation to update the information. Neither ES nor the Vendor makes or gives any representation, warranty or guarantee, whether express or implied, that the information contained in this presentation or otherwise supplied to the recipient, at any time by or on behalf of ES or the Vendor whether in writing or not, relating to the offering discussed herein is complete or accurate or that it has been or will be audited or independently verified, or that reasonable care has been taken in compiling, preparing or furnishing the information. This presentation provides a guide only and it is not intended to be exhaustive and, in particular, does not contain disclosure of any of the risks associated with the opportunity. This presentation is not to be construed as investment, tax or legal advice in relation to the relevant subject matter. You must seek your own legal or other professional advice.

This presentation contains statements that are forward-looking statements. These forward-looking statements, which are subject to numerous risks, uncertainties and assumptions, include projections of future financial performance, anticipated growth strategies and anticipated trends in the business. These statements are only predictions based on current expectations and projections about future events, subject to change due to actual results, level of activity, performance or achievements.

Any estimate or forecast contained in this presentation is not a promise or representation by ES or the Vendor as to future matters and nothing contained in the information should be relied upon as a representation as to future matters.

The projections based on financial and other pro forma data set forth in this presentation were not prepared with a view toward compliance with U.S. Generally Accepted Accounting Principles or any other published standards. Projections and other pro forma data are derived from estimates, as of the date of this presentation, based on certain hypothetical assumptions, which are inherently subject to significant business, economic and competitive uncertainties and contingencies.

Independent estimates about the future benefits of the opportunity and pro forma data should be developed by investors before any decision is made on whether or not to invest in the opportunity and investors should not rely on the projections and pro forma data contained herein. Summaries of any documents about the opportunity discussed herein are not intended to be comprehensive or all inclusive, but rather only outline some of the provisions contained therein and are qualified in their entirety by the actual document to which they relate.

This presentation does not constitute an offer or invitation to make an investment, in any form, in the opportunity discussed herein. It has been prepared to obtain indications of interest about an investment to be made which will only be made upon the basis of the negotiations and executions of full investment documentation.

This is not an offer of an investment opportunity in any jurisdiction where it is prohibited or where a pre-filing or other action is required.

You understand that the information is confidential and is furnished solely for the purpose of your review in connection with the opportunity discussed herein. You further understand that the information is not to be used for any other purpose or made available to any other person without the express written consent of ES. This offering is subject to prior placement and withdrawal, cancellation or modification without notice.

Designed and produced by Creativeworld. Tel: 01282 858200.

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