UNION STREET ABERDEEN AB11 6BB RETAIL INVESTMENT OPPORTUNITY

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1 UNION STREET ABERDEEN AB11 6BB RETAIL INVESTMENT OPPORTUNITY

2 INVESTMENT SUMMARY ABERDEEN is Scotland s third largest city, and consistently voted one of the Best UK Cities to Live and Work In Located on Aberdeen s Prime Retailing Street With an affluent catchment population of over 290,000 and limited retailing competition, Aberdeen has low spend leakage to other towns Let to Current income 97,500PA with a fixed increase in 2017 WAULT c. 5 years to break Absolute Ownership (Scottish equivalent of English Freehold) Offers in excess of 975, % niy after allowing for purchaser s costs, with a fixed reversion to 9.75% in Cushman & Wakefield Union Street, Aberdeen

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4 ABERDEEN IS SCOTLAND S THIRD LARGEST CITY, AND THE ADMINISTRATIVE AND ECONOMIC CENTRE OF THE NORTH EAST Rated one of the Best UK Cities to Live and Work in for four consecutive years (PwC/Demos) 504 million of UK and Scottish Government funding pledged over the next 5-10 years to deliver significant infrastructure improvements 293,200 regional catchment population within a 30 minute drive time 30 minutes drive time ABERDEEN 37,460 Gross Value per head in 2014 Productivity (Gross Value Added) per head is 37,460, this is 44% above the UK average (ONS). 4 Cushman & Wakefield Union Street, Aberdeen

5 Well-known for its oil and gas industry, Aberdeen s economy has recently diversified into renewable energy, tourism and life sciences Ongoing major infrastructure investment includes the Aberdeen Western Peripheral Route, the new Aberdeen Exhibition and Conference Centre and an extension to Aberdeen Airport 1.5m TOURISTS International festivals, world-class golf facilities and a wide range of visitor attractions draw annual tourist numbers of over 1.5 million and a spend of 422 million (Visit Scotland) Highest business start-up rate of any Scottish city and 2nd highest innovation rate of any UK city (Centre for Cities) 20 million set aside to deliver free WiFi across the city, creating a digital UK capital Cushman & Wakefield Union Street, Aberdeen 5

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8 FOCUS ON ABERDEEN Aberdeen is the major retail and leisure hub for the North East of Scotland. The core retail area in Aberdeen city centre comprises the prime high street pitch of Union Street, which stretches east to west, and the city s four main shopping centres - Bon Accord Centre, St. Nicholas Centre, Trinity Centre and Union Square which are situated in a linear formation from north to south. In 2015, Aberdeen had a total in-store comparison retail expenditure of 1.46bn, which is 37% ahead of the average UK retail town (PROMIS). Key new developments in the city centre include the Silver Fin which will provide over 130,000 sq ft of Grade A office accommodation, and a new mixed-use development at Marischal Square, which is currently under construction. The development will include 26,600 sq ft of retail and restaurant space, 173,500 sq ft of Grade A offices, a high quality public realm space and a 4 star Residence Inn by Marriott. The Food & Beverage (F&B) sector is currently seeing a surge in occupier activity, with Aberdeen being one of the go to locations in Scotland. New F&B entrants to the Aberdeen market include Byron, Five Guys and All Bar One. Union Street in particular has evolved beyond a traditional retail pitch with more bars and restaurants opening at the east and west ends of the street. National occupiers on Union Street include Jamie s Italian, Jamie Oliver s restaurant chain, and Thai Leisure Group (TLG), owners of the Thaikhun and Chaophraya brands. These operators are both new to the street, which is already home to Pizza Express, La Tasca and a number of local operators. Catchment spend 37% above UK average 8 Cushman & Wakefield Union Street, Aberdeen

9 SITUATION The property is located on Aberdeen s traditional high street, Union Street, between its junctions with Bridge Street and Crown Street. The subject units are in close proximity to the Trinity Centre, anchored by Debenhams. Cushman & Wakefield Union Street, Aberdeen 9

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11 Union Street West will reaffirm itself as an elegant city quarter, home to a sizable business community, a growing residential community and a vibrant mix of retail and leisure uses. Aberdeen City Centre Masterplan Report

12 DESCRIPTION The subject property comprises two retail units within a three storey granite Grade B Listed building. The British Red Cross and Shuropody both trade from the ground floor with basement storage and staff accommodation. There may be an opportunity to release some additional value from the upper floors as these are not currently utilised, subject to agreement with the leaseholder, Shuropody, and the necessary planning consent. The units have been measured in accordance with the RICS Code of Measuring Practice (Sixth Edition) and the approximate areas are as follows: UNION STREET UNION STREET AREA SQ M SQ FT AREA SQ M SQ FT Ground floor ,691 Ground floor ,360 Basement Basement ,730 Total NIA ,189 1st floor ,055 ITZA ,133 2nd floor ,437 Total NIA ,582 ITZA , Cushman & Wakefield Union Street, Aberdeen

13 TENANCY The subject property has a WAULT of approximately 5 years to break. ADDRESS TENANT START DATE EXPIRY DATE RENT REVIEW BREAK OPTION RENT (PA) RENT (PSF ZA) 191/193 Union St The British Red Cross Society 02/09/ /09/ /09/ /09/ ,500* /197 Union St Shuropody Footcare Limited 04/06/ /06/ /06/ , Total 97,500 * The rent will increase to 50,000 pa on 02/09/2017. Note: Both leases are subject to a Schedule of Condition, which can be provided on request. Cushman & Wakefield Union Street, Aberdeen 13

14 TENANT COVENANT 100% of the income is secured against national retailers rated by Experian as Below Average Risk. British Red Cross Society is the British division of the International Red Cross movement. It is a not-for-profit humanitarian organisation established in 1870, providing assistance in conflicts, natural disasters and individual emergencies. Its charity shops raise funds for their work in the UK and abroad. British Red Cross Society has an Experian rating of 80, reflecting Below Average Risk. Shuropody is the UK s largest private provider of chiropody and podiatary services. Over 250,000 patients are treated each year across 150 clinics nationwide. Shoes and footcare products are also available for purchase at these clinics. Shuropody has an Experian rating of 72, reflecting Below Average Risk. The table below sets out Shuropody s recent account information. YEAR TO DATE TURNOVER PRE-TAX PROFIT NET WORTH 31/12/2012 7,461,132 3,238, ,833 31/12/2013 7,708,615 2,822, ,442 31/01/2015* 8,538,550 3,053,854 2,936,020 *Please note change of reporting date from December to January 14 Cushman & Wakefield Union Street, Aberdeen

15 TENURE The property is held Absolute Ownership (Scottish equivalent of English freehold). EPC Full EPC reports can be provided on request. VAT The property has been elected for VAT and therefore VAT will be payable on the purchase price. However it is anticipated that the sale will be treated as a Transfer of A Going Concern (TOGC). Cushman & Wakefield Union Street, Aberdeen 15

16 PROPOSAL We are instructed to seek offers in excess of 975,000 (Nine Hundred And Seventy Five Thousand Pounds Sterling) subject to contract and exclusive of VAT for the Absolute Ownership (Scottish Equivalent of English Freehold) interest in the subject property. A purchase at this level would reflect a Net Initial Yield of 9.50% after allowing for purchaser s costs of 5.30% based on Scotland s Land and Buildings Transaction Tax (LBTT). With a fixed reversion of 9.75% on 2nd September FOR VIEWINGS & ENQUIRIES: Sarah Stewart Tel: +44(0) sarah.stewart@cushwake.com Natasha Ross Tel: +44(0) natasha.ross@cushwake.com MISREPRESENTATION ACT Cushman and Wakefield, their clients and any joint agents give notice that: (i) These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact. (ii) No person in the employment of the agent(s) has any authority to make or give representation or warranty whatever in relation to this property. (iii) Floor areas, measurements or distances given are approximate. Unless otherwise stated, any rents, or outgoings quoted are exclusive of VAT. (iv) Any descriptions given of the property cannot be taken to imply, it is in good repair, has all necessary consents and is free of contamination, or that services and facilities are in working order. Interested parties are advised to carry out their own investigations as required. October 2016.