1 23 & SHANDWICK PLACE EDINBURGH EH2 4RG

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1 1 23 & SHANDWICK PLACE

2 INVESTMENT SUMMARY - Rare opportunity to acquire prime mixed use investment in the heart of Edinburgh city centre - One of the city s most prominent corner blocks - Income spread between several tenants, offering a diversification of risk - Complementary mix of leisure and retail income - Total passing rent of 416,251 per annum (1-23 Shandwick ) and 175,000 per annum (35-47 Shandwick ) - WAULT of years on 1-23 Shandwick and 9.36 years on Shandwick - Perfect opportunity to re-base rent with rates ranging from only 36.11/sq ft Zone A on the retail and /sq ft on the nightclub leisure - Cityroomz rent per room equates to only 2,380/room per annum - Redevelopment opportunity of Shandwick to create a mixed use building - Superb opportunity to secure substantial rental growth from extremely modest rebased rentals set following the conclusion of tramworks 1-23 SHANDWICK PLACE Offers in excess of 6.3 Million (SIX MILLION THREE HUNDRED THOUSAND POUNDS STERLING) exclusive of VAT SHANDWICK PLACE Offers in excess of 2.2 Million (TWO MILLION TWO HUNDRED THOUSAND POUNDS STERLING) exclusive of VAT. A purchase at this level would reflect an attractive Net Initial Yield of 6.25% assuming purchaser s costs of 6.15%. A purchase at this level would reflect an attractive Net Initial Yield of 7.5% assuming purchaser s costs of 5.86%.

3 LOCATION 1 23 & Edinburgh is the capital city of Scotland, located approximately 400 miles north of London and 45 miles east of Glasgow. It is one of the six cities categorised by PMA as a major city and, consequently, benefits from a significant catchment population. The city has a population of 486,000 people and a regional population of over 1.6 million. It attracts a significant number of tourists from the UK, with an average 2.28 million trips to the City, in addition to the 1.24 million trips from overseas visitors. This added influx provides a boost to the local economy of approximately 1 billion (Source: Scottish Tourist Board). Road communications are excellent with the M90 located to the north, the M8 and M9 to the west and the A1 trunk road to the south which provide links to all major cities in the UK. The city is well served by the rail network, with direct and frequent services to London (Euston and Kings Cross) and Glasgow with fastest journey times of approximately 4 hour 50 minutes and 51 minutes respectively. Edinburgh also benefits from one of Britain s fastest growing airports, providing both domestic and international flights. Edinburgh has a strong educational heritage, boasting four universities providing an education hub for over 100,000 students. This in part accounts for Edinburgh s workforce being one of the most highly educated in the UK with 44% holding a degree or professional level qualification. George Street SHANDWICK PLACE EDINBURGH EH2 4RG Queen Street Frederick Street Hanover Street St Andrew Square Bus Station Charlotte Square Princes Street The Mound Waverley Station Princes Street Gardens Shandwick Lothian Rd Edinburgh Castle Royal Mile Cowgate Torphichen St Atholl Cres West Approach Rd King s Stables Road Castle Terrace Spittal St West Port Grassmarket Chambers Street

4 SITUATION Shandwick forms a continuation of Princes Street, at Edinburgh s west end and is one of the main thoroughfares to and from the city centre. The street is a popular retail and leisure pitch and benefits from its close proximity to the Exchange Office District and the more traditional West End district with excellent transport links. In addition, the primary shopping destinations of Princes Street and George Street are within a short walking distance. The surrounding area has seen significant improvement since the opening of the tram line in recent years. Since the opening of the street and the installation of tram stop/ line the street has flourished with a number of new lettings of various uses and a number of tenants signing lease extensions. Shandwick has more recently adjusted itself to reflect the location, i.e. convenience, take away, casual dining and general retail. It is now a vibrant pitch benefitting from a variety of different uses, with a number of new leases and lease extensions including Starbucks, ASK Restaurants, Sainsbury s, Pret a Manger, Superdrug, Ryman, Specsavers, Holland & Barrett and Optical Express. DESCRIPTION The subjects comprise two prime blocks of Edinburgh city centre retail and leisure units multi let to a variety of tenants. The block at number 1-23 forms an entire corner block fronting the central Edinburgh crossroads joining Shandwick with Princes Street and the thoroughfares of Queensferry Street, Hope Street and Lothian Road. This block is a mixture of ground and basement, retail and leisure use with a new hotel to be created in the three upper floors. The block at Shandwick comprise a terrace of three retail units, number and are ground and basement floors, while number is an entire 3 storey building arranged over ground, first and second floors.

5 Hanover Street 1 23 SHANDWICK PLACE St James Centre SHANDWICK PLACE George Street Castle Street Waverley Station Princes Street Shandwick

6 EDINBURGH RETAIL MARKET SHANDWICK PLACE Edinburgh is the dominant retail centre for the east of central Scotland with 2,500 retail outlets and consumer expenditure of 970 million. The city centre has a compact prime retail centre with an estimated floor space 2.09 million sq ft. The traditional prime retailing streets within Edinburgh are Princes Street and George Street, with Frederick Street, Castle Street and Hanover Street lying perpendicular linking the two. Princes Street is the traditional prime retailing street and benefits from the highest footfall, estimated to be in excess of 12 million annually. Princes Street is unique in that it only has an active frontage on a single (north) side of the street, with spectacular views over Edinburgh Castle, Princes Street Gardens and the Old Town. Since the tram became operational in 2014 general trading conditions and retailer certainty on the street has improved considerably. As a consequence, retailer demand has increased and there are now very few available units on the street. Prime rents are currently 210/sq ft Zone A. George Street to the north of Princes Street, has continued to improve as a retailing location and is now considered to be the prime destination for upmarket boutique style retailers, high end fashion retailers, licensed leisure operators and jewellers. Prime rents are now 200/sq ft Zone A. At the east end of Princes Street, Standard Life Investments are developing a 165,000 sq ft mixed use scheme which is due to complete by the end of Furthermore, the redevelopment of St James Shopping Centre is due to commence in 2016 and complete in Shandwick is an extension of Princes Street to the west, beyond the junction with Lothian Road. Shandwick previously suffered at the hands of Edinburgh s delayed tram infrastructure project with four years of roadworks and traffic diversions preventing any meaningful pedestrian flow. This led to a drop in the previous Zone A rates of over 70/sq ft to the current levels as outlined within this brochure. Now that Shandwick is once again a vibrant, busy thoroughfare with superb bus and tram access, we believe that significant rental growth will be forthcoming. EDINBURGH HOTEL MARKET Hotel demand in Edinburgh is supported by the exceptionally strong leisure market marked the second highest year on record for global hotel transactions topping 85 billion, posting a confounding growth rate of 50% on the prior year. This is a figure which far exceeds that seen in other real estate sectors. The EMEA hotel market will continue in its stride, with a projected 25 billion in hotel trades in 2016, driven by single asset transactions, with an increasing share in secondary markets. The Edinburgh luxury segment has witnessed strong growth to RevPAR over the last three years with many hotels experiencing improved trading fundamentals as a result of a number of strategic investments and rebranding projects. Hotel companies made headlines in 2015 announcing purchases of other parent companies such as Marriott International s merger with Starwood Hotels & Resorts, and more consolidation is ongoing. Even with mergers and acquisitions announced in 2015, the lodging industry remains considerably more fragmented than other large consumer industries in terms of the market share controlled by the top brands. We expect to see more consolidation among operators and real estate owners alike, whether portfolio transactions or public to private trades.

7 COVENANT INFORMATION 1-23 Shandwick, Edinburgh SS North Ltd (ex Subway Scotland Ltd) Cairnsouth Azzurri Restaurants Shuropody Polmex Edinburgh Optical Express Cityroomz Edinburgh D&B Rating Accounts Filed Sales Turnover Profit/Loss Before Taxes Tangible Net Worth Net Current Assets 1A , ,035 B , ,460 5A ,670,000 17,357,000 45,592,000-73,992,000 N ,529,855-1,669,138-1,279,537-1,026,845 H N ,223,000-16,582,000-18,200,000-30,276,000 1A ,542, ,718 1,172, , Shandwick, Edinburgh M Yeaqub & D Hossain (t/a Kasturi Indian Restaurant) Music in Print (t/a Rae MacIntosh ) Amplifon D&B Rating N/A Accounts Filed Sales Turnover Profit/Loss Before Taxes Tangible Net Worth Net Current Assets N ,613, ,669-3,475,954-4,133,515 N ,601,000-7,684,000-36,626,000-42,700,000

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9 ACCOMMODATION & TENANCY 1 23 & SHANDWICK PLACE 1-23 Shandwick Address NIA (sq ft) GIA (sq ft) 3 Shandwick Basement 9 Shandwick 7/9/13 Shandwick 17 Shandwick Basement 23 Shandwick Ground floor 23 Shandwick Part ground, all first, second and third floors 5 Shandwick SS North Ltd (ex Subway Scotland Ltd) Cairnsouth Azzurri Restaurants (Ask Italian) Shuropody Polmex Edinburgh Optical Express Cityroomz Edinburgh (Guarantee from Sleeperz Hotels ) ITZA (sq ft) Annual Rent Rent (sq ft) Zone A Future Rent Lease Start Lease End , /11/03 27/11/18 Ground floor 1,275 Basement 509 Lower ground/ basement 2,003 Ground 2,627 Basement 1,353 Total GIA 3,980 Next Review Date 30, /10/03 30/05/35 31/05/20 150, /03/15 15/03/40 16/03/ , /2/17 40,000 08/02/13 07/02/23 08/02/18 Break Date 28/11/03 Not Exercised 31/5/25 Mutual 31/5/30 16/3/35 08/02/18 Comments From 31 May 2020 the rent will be the greater of or open market rental value as at 31 May 2020 subject to a maximum of 45,000 At review the rent will be the greater of 45,000 or open market rental value Basement 2,037 35, /01/15 29/01/30 30/01/25 Schedule of Condition in place 1, , /05/14 15/05/24 16/05/19 42 rooms 100,000 Roof Space TCS Freehold Investments 1 TOTAL RENT 416,401 2,380 per room 01/01/17 31/12/46 01/01/27 By date of completion 20 years 15/05/19 At review the rent will be the greater of 50,000 or open market rental value Stepped rent 90k years 1&2; 95k years 3&4; 100k year 5-30 year term with tenant only option to extend for further 10 years; RR upwards only and based on CPI indexation using 94k as base and collar & cap 1%/3% per annum. Vendor will top up rent to 100k/per annum Shandwick Address NIA (sq ft) GIA (sq ft) 35/37 Shandwick 41/43 Shandwick 45/47 Shandwick M Yeaqub & D Hossain (Kasturi Indian Restaurant) Music in Print (t/a Rae MacIntosh ) Guarantee by Music Sales Group Ltd (Co No ) Amplifon Ground floor 1,926 Basement 1,907 Total NIA 3,833 Ground floor 1,358 First floor 617 Second floor 452 Ground floor 1,942 Basement 1,765 Total GIA 3,707 ITZA (sq ft) Annual Rent TOTAL RENT 175,000 Rent (sq ft) Zone A Lease Start Lease End Next Review Date 70, /11/13 12/11/33 12/11/18 1, , /07/13 30/06/23 01/07/18 Break Date 01/07/18 Comments , /09/10 23/09/20 24/09/15 There is a Schedule of Condition in place

10 OPPORTUNITY This is a rare opportunity to acquire two prime mixed use city centre blocks which have genuine growth prospects. Although the location suffered from four years of tramworks it is now witnessing a transformation in tenant demand as illustrated by recent deals agreed with ASK and Cityroomz Shandwick Offers in excess of 6.3 Million (SIX MILLION THREE HUNDRED THOUSAND POUNDS STERLING) exclusive of VAT. A purchase at this level would reflect an attractive Net Initial Yield of 6.22% assuming purchaser s costs of 6.15%. TENURE We believe that investors have a wonderful opportunity to acquire a prime central block at a fraction of its true rental value, which will undoubtedly benefit from the huge growth Edinburgh in general and Shandwick in particular is about to enjoy Shandwick Offers in excess of 2.2 Million (TWO MILLION TWO HUNDRED THOUSAND POUNDS STERLING) exclusive of VAT. A purchase at this level would reflect an attractive Net Initial Yield of 7.5% assuming purchaser s costs of 5.86%. The properties are held on heritable title (Scottish equivalent to English freehold). VAT EPC We are advised that the Energy Performance Ratings of the units are as follows: Our clients have elected to waive exemption for VAT and accordingly VAT will be payable on the purchase price, although we anticipate the sale will be dealt with by way of a Transfer of Going Concern (TOGC). 3 Shandwick - Subway G 9 Shandwick Cairnsouth E 7-13 Shandwick ASK G 17 Shandwick Shuropody E 23 Shandwick Polmex G 23 Shandwick Optical Express G Shandwick Kasturi Restaurant F Shandwick Rae MacIntosh C Shandwick Amplifon G LEGAL COSTS Each party will be responsible for their own legal costs incurred in connection with the transaction.

11 VIEWING & FURTHER INFORMATION Please contact the joint selling agents: Sheridan Property Consultants 37 ONE 37 George Street Edinburgh EH2 2HN Tel Stewart Sheridan Cathal Keane Allan King Harmer Ray Hoffbrand 3rd floor, Portland House 4 Great Portland Street London W1W 8QJ Tel Andrew Hoffbrand andrew@hrh.uk.com Jeremy Lovell jeremy@hrh.uk.com Richard Ward richard@hrh.uk.com & SHANDWICK PLACE EDINBURGH EH2 4RG Sheridan Property Consultants/Harmer Ray Hoffbrand for themselves and for the vendors or lessors of this property whose agents they are, give notice that: (i) the particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract; (ii) all descriptions, reference to condition and necessary permission for use and occupation, and other details are given without responsibility and any intending purchasers or tenants should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them and are advised to do so; (iii) no person in the employment of Sheridan Property Consultants/Harmer Ray Hoffbrand have any authority to give representation or warranty whatever in relation to this property; (iv) all prices, rents and premiums quoted are exclusive of VAT at current rate; November 2016.