THE ROYAL EXCHANGE LONDON

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1 1 THE ROYAL EXCHANGE LONDON

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3 4 5 INVESTMENT SUMMARY A UNIQUE OPPORTUNITY TO ACQUIRE ONE OF THE MOST PRESTIGIOUS AND RECOGNISABLE BUILDINGS IN THE CITY OF LONDON Iconic trophy office investment opportunity located in the heart of the City of London. City core location opposite the Bank of England and Bank Underground Station. Prestigious Grade I Listed building comprising 68,023 sq ft of office and ancillary accommodation arranged over mezzanine and four upper floors. Multi-let at a low average rent of only per sq ft overall. Recent lettings in the building in excess of per sq ft highlighting the undoubted reversionary income profile. WAULT of 7.0 years to expiries and 4.7 years to tenant break options. Long leasehold. Offers in excess of 47,500,000 subject to contract, and exclusive of VAT, reflecting an attractive net initial yield of 5.63% and a low capital value of only 698 per sq ft, assuming purchaser s costs of 6.78%.

4 6 T H E R O YA L E X C H A N G E SALESFORCE TOWER 100 BISHOPSGATE 22 BISHOPSGATE THE LEADENHALL BUILDING THE SCALPEL 52 LIME STREET 10 FENCHURCH AVENUE 20 FENCHURCH STREET THE WILLIS BUILDING TOWER 42 LLOYD S OF LONDON LIVERPOOL STREET THE ROYAL EXCHANGE AN IMPERIOUS AND COMMANDING POSITION A DJ AC E N T TO T H E BANK OF ENGLAND THE BANK OF ENGLAND BANK MANSION HOUSE THE WALBROOK BUILDING 7

5 8 THE ROYAL EXCHANGE 9 THE WORLD S LEADING FINANCIAL CENTRE A WORLD CLASS RETAIL AND LEISURE OFFERING The City of London is the world s leading financial and international business centre synonymous with the global leaders in the legal, banking and insurance sectors and home to the headquarters of the world s most influential corporations. Combined with a number of nationally significant cultural landmarks, the City is one of the most visually distinctive and enriched environments anywhere in the capital. With a first-class retail and leisure offering the City of London is now a key Central London retailing destination. The luxury retail provision at The Royal Exchange is further complemented by the contemporary retailers at One New Change, the boutiques of Leadenhall Market and the completion of Mitsui Fudosan and Stanhope s Angel Court. Opened in 2017, the 320,000 sq ft mixed-use scheme has further enhanced the area s credentials offering a number of high profile restaurants including Peruvian taste sensation Coya and Neil Rankin s unique BBQ and fire pit restaurant, Temper, within 300 metres of The Royal Exchange. The recent opening of The Ned, the latest offering from the Soho House Group, has proved a huge success. Boasting a hotel, a collection of restaurants and bars and a social and fitness club, The Ned has now established itself as one of London s premier social destinations.

6 10 THE ROYAL EXCHANGE 11 THE CITY S BEST- CONNECTED ADDRESS ELIZABETH LINE (FROM LIVERPOOL STREET) (FROM KING S CROSS ST PANCRAS) BANK / 20 METRES CANNON STREET / 480 METRES FARRINGDON / 2 MINUTES BRUSSELS / 1 HOUR 50 MINS CITY / 22 MINUTES MONUMENT / 320 METRES MOORGATE / 640 METRES TOTTENHAM COURT ROAD / 4 MINUTES PARIS / 2 HOURS 15 MINS HEATHROW / 48 MINUTES CANNON STREET / 480 METRES LIVERPOOL STREET / 640 METRES CANARY WHARF / 6 MINUTES LYON / 5 HOURS 30 MINS GATWICK / 56 MINUTES MANSION HOUSE / 480 METRES FENCHURCH STREET / 700 METRES BOND STREET / 7 MINUTES BOURG ST MAURICE / 8 HOURS STANSTED / 60 MINUTES MOORGATE / 640 METRES LONDON BRIDGE / 1100 METRES STRATFORD / 8 MINUTES LUTON / 76 MINUTES LIVERPOOL STREET / 640 METRES PADDINGTON / 10 MINUTES HEATHROW / 33 MINUTES (FROM 2018)

7 12 13 BANK STATION IMPROVEMENTS CROSSRAIL ( ELIZABETH LINE) ELIZABETH LINE BANK STATION IS CURRENTLY UNDERGOING AN IMPROVEMENT PROGRAMME DUE TO COMPLETE IN 2021 WHICH INCLUDES: A new railway tunnel and platform for the Northern line that will reduce interchange times and create more space for passengers Step-free access to the Northern line and DLR platforms More direct routes within the station, with two new moving walkways Three new lifts and 12 new escalators A new station entrance on Cannon Street Liverpool Street Station - one of the five key Central London Crossrail stations - is located within a short walk of the building Over 24 trains will flow through Liverpool Street Station every hour London journey times reduced by up to 70% One quarter of the population of England will be able to reach Liverpool Street Station within 45 minutes Trains to Stansted 61 Reading Hayes & Harlington Paddington 10 7 Tottenham Court Road 4 2 LIVERPOOL STREET Stratford 2 8 Shenfield Terminals 2 & 3 Heathrow Airport Ealing Broadway Bond Street Farringdon Trains to Gatwick Trains to Luton Whitechapel Canary Wharf 6 41 Terminal 4 Custom House 10 X Typical journey times from Liverpool Street (minutes) Woolwich 14 NEW BANK STATION ENTRANCE ON CANNON STREET REVOLUTIONARY TRANSPORT FOR LONDON Abbey Wood 18

8 14 THE ROYAL EXCHANGE 15 ONE OF THE MOST ARCHITECTURALLY SIGNIFICANT BUILDINGS IN LONDON

9 16 17 T H E R O YA L E X C H A N G E STEEPED IN HISTOR Y T H E R O YA L E X C H A N G E H A S B E E N AT T H E C E N T R E O F LO N D O N S C O M M E R C I A L T R A D I N G S I N C E T H E 1 6 T H C E N T U R Y. R I C H I N A R C H I T E C T U R E W I T H A P R E S T I G I O U S A N D R O YA L P A S T, I T I S A F O U N D AT I O N P I E C E O F L O N D O N S H I S T O R Y A N D T O D AY A N I M P O R TA N T P A R T O F I T S F U T U R E Wealthy merchant Sir Thomas Gresham establishes The Royal Exchange (modelled on the Bourse in Antwerp) as London s first purpose-built centre for trading stocks Officially opened by Queen Elizabeth I, who awards it a royal title and a license to sell alcohol. Sir Thomas Gresham adds two additional floors, effectively creating Britain s first shopping mall In a dramatic twist, Jerman s Royal Exchange is also destroyed by fire, most likely caused by an overheated stove in Lloyd s Coffee House on nearby Lombard Street. Architectural competition to design the third (and current) Royal Exchange is won by Sir William Tite who s design reverts to the original layout of the building including an imposing, eight-column entrance inspired by the Pantheon in Rome. The building is officially opened by Queen Victoria. Returning to its trading origins, The Royal Exchange becomes the home of the London International Financial Futures Exchange. The Victorian roof is replaced, and two floors of new offices are added. The Grade I-listed building is extensively remodelled by architects Aukett Fitzroy Robinson and transformed into a luxury shopping and dining destination with unique office accommodation over the upper floors The Great Fire of London destroys the original Royal Exchange. A second site opens in 1669, designed in a Baroque style by City surveyor Edward Jerman. Trading is suspended following the outbreak of World War II. The Royal Exchange survives the Blitz but is left in a state of disuse for several decades SIR THOMAS GRESHAM The proclamation of King Edward VII takes place on 23 January 1901 at The Royal Exchange, days after the death of Queen Victoria Today, The Royal Exchange remains one of London s finest landmarks offering prestigious offices on the upper floors with luxury retail at ground floor level.

10 18 19 THE BUILDING FOLLOWING A COMPREHENSIVE RESTORATION AND RECONSTRUCTION IN THE 1990 S ( INCLUDING THE CREATION OF TWO ADDITIONAL FLOORS) TODAY S ROYAL EXCHANGE COMPRISES 68,023 SQ FT OF OFFICES ARRANGED OVER MEZZANINE AND FOUR UPPER FLOORS. Luxury retail accommodation complete with a courtyard café, restaurant and bar is provided at basement and ground floor levels. This element is held separately on a long lease and does not form part of the sale. Office accommodation is accessed courtesy of two main entrances at either side of the West Portico between Cornhill and Threadneedle Street. A separate third entrance is located at the eastern end of the building on Royal Exchange Buildings. Set around a large internal courtyard, the offices provide excellent levels of natural light throughout with a high degree of flexibility and capability to sub-divide floors.

11 20 21 At first floor level several period rooms have been retained providing some of the most unique executive suites and boardrooms in the City of London. The fourth floor has recently undergone a substantial CAT A refurbishment to a high specification. Paying homage to the building s prestigious history many of the suites are adorned with ornate detailing and original features, offering exceptional floor to ceiling heights of 3.80m. The second, third and fourth floors provide flexible modern office accommodation with suspended ceilings, fully accessible raised floors and recessed lighting with finished floor to ceiling heights of 2.55m.

12 22 23 SPECIFICATION 2.55 to 3.80m finished floor-to-ceiling heights Fully accessible raised floors on 2nd to 4th floors and part 1st floor Suspended ceilings throughout (except part 1st floor) Four pipe fan coil air conditioning LG7 compliant lighting Perimeter trunking (parts 1st floor) Excellent levels of natural light Dedicated male and female, DDA compliant WCs 3 manned receptions 6 x 10-person passenger lifts 1 x goods lift

13 24 25 OFFICE ACCOMMODATION MEZZANINE 2,580 SQ FT THREADNEEDLE STREET THE ROYAL EXCHANGE PROVIDES THE FOLLOWING APPROXIMATE NET INTERNAL FLOOR AREAS: FLOOR USE SQ FT SQ M Fourth Office 15,270 1,418.6 Third Office 15,390 1,429.8 The Royal Exchange Investment ASO Fal UK Harrington Cooper Second Office 14,782 1,373.3 Storage CORNHILL First Office 18,986 1,764.0 Mezzanine Office 2, Basement Storage TOTAL 68,023 6,319.8 FIRST FLOOR 18,986 SQ FT Sheraton Systems Landmark Space Logicalis UK Diamond House Banca d Italia Camberford Law Avert IT Building Manager Vacant Under offer Ancillary Not to scale. Indicative only. THREADNEEDLE STREET CORNHILL

14 26 27 FLOOR PLANS SECOND FLOOR 15,552 SQ FT THREADNEEDLE STREET FOURTH FLOOR 15,270 SQ FT THREADNEEDLE STREET Landmark Space Under offer NTT Data Allegis Group Plant CORNHILL Not to scale. Indicative only. CORNHILL THIRD FLOOR 15,390 SQ FT SECOND FLOOR THREADNEEDLE STREET NTT Data Not to scale. Indicative only. CORNHILL

15 28 29 TENURE OWNERSHIP STRUCTURE Held long leasehold from the Mercers Company and the Mayor and Commonalty and Citizens of the City of London (The Joint Gresham Commitee) from 17 September 2002 expiring 28 December 2115 (c years unexpired). The head rent payable is geared to 10% of rents received in respect of the office accommodation, subject to a current minimum head rent of 200,000 per annum. The minimum head rent is subject to upward only review on 24 June 2017 and five yearly thereafter to 7.5% of the rental value. The approximate extent of the site is shown outlined in gold on the plan below. THE JOINT GRESHAM COMMITTEE* FREEHOLDERS HEAD RENT PAYABLE GEARED TO 10% OF RENTS RECEIVED CGIS ROYAL EXCHANGE HEAD LEASEHOLD INTEREST - EXPIRING 28 DECEMBER 2115 RETAIL ELEMENT OFFICE ELEMENT PEPPERCORN RENT PAYABLE THE JOINT GRESHAM COMMITTEE* OFFICE TENANTS HEAD RENT PAYABLE LEASEHOLD INTEREST EXPIRING 24 DECEMBER 2115 OXFORD PROPERTIES GROUP RETAIL TENANTS The total site area extends to approximately 1.14 acres (0.46 hectares) Not to scale. For identification purposes only. This plan is based upon the Ordnance Survey Map with the sanction of the controller of H.M. Stationery Office. Crown Copyright reserved. * THE MERCERS COMPANY & THE CITY OF LONDON CORPORATION

16 30 31 TENANCY SCHEDULE MULTI- LET PRODUCING A TOTAL GROSS PASSING RENT OF 3,172,468 PA LOW OVERALL RENT OF PER SQ FT WAULT OF 7.0 YEARS TO EXPIRIES AND 4.7 YEARS TO TENANT BREAK OPTIONS ALL LEASES HELD OUTSIDE THE LANDLORD & TENANT ACT 1954, SAVE FOR NTT DATA UK LIMITED FLOOR DEMISE TENANT USE NET AREA (SQ FT) 4th Floor 3rd Floor 2nd Floor 1st Floor Mezzanine START DATE EXPIRY DATE NEXT REVIEW BREAK OPTION RENT ( PER ANNUM) RENT ( PER SQ FT) Part 4th Under offer Office 11, , Part 4th 3rd Floor and 2nd Floor Storage Part 2nd (North & West) Major, Lindsey & Africa-UK Limited (t/a Allegis Group) NTT Data UK Limited Landmark Space Limited Office 4, , Office 15,390 Storage 329 Office 7,909 Storage /12/ /12/ /12/ /12/ , /12/ /07/ /12/ , COMMENTS Under offer for a term expiring 30/10/2024. Rolling tenant break option between 31/03/2020 and 30/10/2020. Rent commencement 6 months from lease completion date. Vendor to top-up outstanding rent free. 10 months rent free if break is not exercised. 12 month rent & service charge guarantee if lease does not complete. Service charge cap at psf. Lease exchanged on a new 5 year term. The lease dates to be confirmed on completion of the lease. Rent commencement 19/08/2018. Vendor to top-up outstanding rent free. Tenant break option on 3rd anniversary of lease completion. Service charge cap at psf. 6 months rent free if tenant break is not exercised. Inside the L&T Act Service charge cap at psf. Part 2nd (East) Landmark Space Limited Office 6,873 22/08/ /07/ /08/ , Reversionary lease from 22/08/2018. Service charge cap at psf. Units 1, 2 & 3 Avert IT Limited Office /08/ /08/ , Unit 1A Vacant Office , month rent and service charge guarantee. Units 4 & 5 Banca d'italia Office /05/ /05/ /05/ , Service charge cap at psf. Unit 10 Camberford Law Plc Office /07/ /07/ , Unit 11 Diamond House Jewellery Limited Office /12/ /12/ /12/ , Rent is subject to annual RPI uplifts. Unit 12 Under offer Office 438 Storage 12 28, Unit 13 Banca d'italia Office /05/ /05/ /05/ , Service charge cap at psf. Under offer on a 5 year term. Break option on 3rd anniversary of the term. Rent commencement 5 months from lease start date. Vendor to top-up outstanding rent free. 12 month rent & service charge guarantee if lease does not complete. Unit 15 Building Manager: CGIS Royal Exchange Office , Rent reclaimed through the Service Charge. Units 17, 20 & 27 Landmark Space Limited Office 6,086 17/07/ /07/ /07/ , Units 18 Vacant Office , month rent and service charge guarantee. Units 19 Vacant Office , month rent and service charge guarantee. Units Sheraton Systems Limited Office 2,319 19/11/ /11/ , Part 1st Floor Logicalis UK Limited Office 6,360 25/07/ /07/ , North ASO Fal UK Limited Office /11/ /11/ , Service charge cap at psf. South Harrington Cooper LLP Office /02/ /02/ , Royal Court The Royal Exchange Investment Limited Office /11/ /11/ /11/ /11/ , Basement Storage Coq D'Argent Limited Storage /04/ /03/2018 5, Total 68,023 3,172, Ground Rent - 317,247* Net Rent 2,855,221 *Ground rent assumes that the building is fully let and income producing at the rents above. Rent commencement 14/02/2019. Vendor to top-up outstanding rent free. Service charge cap at psf. Tenant break with nine months written notice. Tenant option to renew for a further 10 years upon lease expiry. Service charge cap at psf. Terms being discussed for a new 6 month lease at psf. Heads of Terms out for a further 6 month term at 6,300 pa from 01/04/2018.

17 32 33 TENANT COVENANTS NTT DATA UK LIMITED (23% OF INCOME) LOGICALIS (10% OF INCOME) SHERATON SYSTEMS LIMITED (4% OF INCOME) ASO FAL UK LIMITED (2% OF INCOME) DIAMOND HOUSE JEWELLERY (1% OF INCOME) COQ D ARGENT LIMITED (0.2% OF INCOME) NTT Data UK Limited is a leading IT services provider and global innovation partner headquartered in Tokyo, with business operations in over 40 countries. The company has a D&B Rating of N1. Logicalis is an international IT solutions and managed services provider with a breadth of knowledge and expertise in communications and collaboration, data centre and cloud services and managed services. The company employs over 4,000 people worldwide with over 6,500 global customers. The company has a D&B Rating of N1. Sheraton Systems (re-branded to Websure) provide software solutions focusing specifically on businesses within the insurance industry. The company has a D&B Rating of 1A2. Aso Fal UK Limited is a subsidiary of ASO Corporation. Founded in Japan over 100 years ago, the company focusses on infrastructure, environmental solutions, medical and healthcare, education and lifestyle services. The company has a D&B Rating of 5A1. Diamond House Jewellery is a diamond buying service with offices in Antwerp, London and Washington DC. The company has a D&B Rating of E2. Coq d Argent is a D&D London restaurant. The company has been backed by leading UK equity house LDC since April 2013 and owns and operates over 30 leading restaurants in London, Leeds, Paris, New York and Tokyo. The company has a D&B Rating of 1A LANDMARK SPACE LIMITED (21% OF INCOME) Landmark Space operate 29 business centres across the UK. Founded in 2009, the company operates over 10,000 workstations and is one of the largest providers of best in class flexible office space. The company has a D&B Rating of 2A1. MAJOR, LINDSEY & AFRICA-UK LIMITED (T/A ALLEGIS GROUP) (8% OF INCOME) The Allegis Group is one of the largest recruitment specialists in the world, with over 11,000 employees and operates in 500 locations across the globe. The company has a D&B Rating of 5A1. BANCA D ITALIA (2% OF INCOME) Banca d Italia is the central bank of the Republic of Italy and is part of the European System of Central Banks, employing over 6,000 people. The bank owns 2,452 tonnes of gold, making it the third largest gold reserve in the world. HARRINGTON COOPER LLP (2% OF INCOME) Harrington Cooper is a cross-border asset-raising business, facilitating global expansion for asset managers. Since founding in 2006, the firm have raised over $3.5bn of assets across over 20 differentiated investment strategies. The company has a D&B Rating of C4. CAMBERFORD LAW PLC (0.3% OF INCOME) Camberford Law was founded in 1958 and is one of the largest independently owned insurance brokers and underwriting agents in the UK. The company has a D&B Rating of 3A1.

18 34 35 INVESTMENT RATIONALE An historic London landmark. City core location opposite the Bank of England at the epicentre of London s thriving legal, banking and insurance markets. One of the most prestigious, recognisable and architecturally important buildings in the City of London. Retaining many of its ornate original features reflecting the building s prestigious history. Very low passing rent of only per sq ft with recent transactional evidence in the building exceeding per sq ft. Lease events provide excellent short term opportunities to take advantage of the building s undoubted reversionary nature. All leases, except NTT Data, are held outside the 1954 Landlord & Tenant Act. Grade I Listed with no empty rates charges payable. Net initial yield: 5.63% Low capital value: 698 per sq ft

19 36 THE ROYAL EXCHANGE 37 FURTHER INFORMATION PLANNING The Royal Exchange is Grade I Listed and is situated within the Bank Conservation Area. DATA ROOM Access is available on request. BUILDING SURVEY A fully assignable Watts Building Survey will be made available to the purchaser. MEASURED SURVEY A fully assignable Plowman Craven Measured Survey will be made available to the purchaser. VAT The property is elected for VAT and it is proposed the transaction will be treated as a Transfer of a Going Concern (TOGC). EPC Certificate available on request. PROPOSAL Offers in excess of 47,500,000 subject to contract, and exclusive of VAT, reflecting an attractive net initial yield of 5.63% and a low capital value of 698 per sq ft, assuming purchaser s costs of 6.78%.

20 38 39 CONTACT For further information or to arrange an inspection of the property, please contact: Dominic Rowe +44 (0) Martin Lay +44 (0) Nick Steele +44 (0) Sean Howes +44 (0) Richard Carter +44 (0) James Willson +44 (0) Argie Taylor +44 (0) Peter Ng Misrepresentations Act 1967 & Declaration: Michael Elliott and Cushman & Wakefield for themselves and for the vendors of this property whose agents they are given 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 purchaser should not rely on them as statements or representations of fact but should satisfy themselves by inspection or otherwise as to the correctness of each of them; c) no person in the employment of Michael Elliott nor Cushman & Wakefield has any authority to make or give any representations or warranty whatever in relation to this property. March (Q3920)

21 40 THE ROYAL EXCHANGE