ST LUKE S TERRACE INVESTMENT. 19 St Luke s Place, Glasgow, G5 0TR STUDENT HOUSING OPPORTUNITY LET TO

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1 ST LUKE S TERRACE 19 St Luke s Place, Glasgow, G5 0TR STUDENT HOUSING INVESTMENT OPPORTUNITY LET TO

2 City of Glasgow College s Riverside Campus City Collage of Glasgow Riverside Campus

3 EXECUTIVE SUMMARY Well-let student housing investment opportunity. Located in Glasgow the largest city in Scotland and third largest in the UK with five Higher Education Institutions and almost 55,000 full time students. Situated at The City of Glasgow College s Riverside Campus, recently redeveloped as part of a 228m investment. Heritable interest. 204 en-suite student rooms arranged in clusters of between two and six units. Lease to The Board of Management of Glasgow College of Nautical Studies with five years term certain. Projected gross income for 2016/17 of 865,033 and net income of 510,073. Institutionally acceptable covenant backed the Scottish Funding Council (SFC). The City of Glasgow College is one of Scot land s largest colleges, with around 32,500 students from over 130 different countries. Predominantly occupied by stu dents from the Nautical Studies faculty the largest of 11 curriculum areas accounting for 12.6% of the College s enrolment (2013/14). Offers in the region of 6,200,000 reflecting an attractive net initial yield of 7.75%, subject to contract and purchaser s costs of 6.14%. A purchase at this level reflects a low capital value of 30,392 per bed space.

4 City of Glasgow College s Riverside Campus

5 LOCATION ABERDEEN Glasgow is the largest city in Scotland, and the third largest in the United Kingdom. It is located approximately 73 kilometres west of Edinburgh, approximately 300 kilometres North West of Manchester and approximately 500 kilometres North West of London. Glasgow City has a population of 593,245 (2011 Census). GLASGOW EDINBURGH NEWCASTLE HULL MANCHESTER Glasgow is home to five Higher Education Institutions (HEI s) with almost 55,000 full time students in 2014/15 (HESA). LIVERPOOL BIRMINGHAM SHEFFIELD MAJOR UK ROAD LINKS MAJOR UK RAIL LINKS BRISTOL LONDON PENZANCE

6 SITUATION St Luke s Terrace is situated close to the junction of Ballater Street (A74) and Laurieston Road (A728), to the south of the River Clyde. It effectively forms part of The City of Glasgow College s Riverside Campus, a 66m state of the art world class campus opened in October The Riverside campus is the first phase of a new 228m twin-site super campus. The City Campus site at Cathedral Street in Glasgow s city centre is currently under construction and is due to open in August The super campus is expected to serve up to 40,000 students and 1200 staff a year the equivalent of six million users in its lifetime.

7 CITY OF GLASGOW COLLEGE The City of Glasgow College, was formed in 2012 through the merger of Glasgow s three main further education colleges; Central College Glasgow, Glasgow Metropolitan College and Glasgow College of Nautical Studies. The City of Glasgow College is one of Scotland s largest colleges, with around 32,500 students from over 130 different countries.

8 For 2013/14, The City of Glasgow College had 22,359 applications for 5,816 places. 6,160 offers were made and 5,916 were accepted. This compares relatively favourably against other UK colleges and would put them in the top quartile according to our research. In April 2014 the college recorded a 3% increase in 1st choice applications (applicant headcount) compared with the same period in Based on 2013/14 data, we estimate that approximately 21.8% of students enrolled on courses at The City of Glasgow College are likely to require accommodation. These students are domiciled from overseas, UK outside Scotland or from outside what we consider to be a commutable distance from Glasgow. This is up on 2012/13 data which had a like for like comparison of 17.3%. The City of Glasgow College has recently invested 228m in consolidating and redeveloping their estate into two new campuses, the City Centre Campus and the Riverside Campus, which St Luke s Terrace serves. The Riverside Campus comprises circa14,500m2, 7 storey, BREEAM excellent teaching facility and engineering block catering for the curriculum areas of Engineering, Energy & Science, and Nautical Studies. The campus will be integrated with and complement the existing marine skills centre facility. The property is occupied predominantly by students from the Faculty of Nautical Studies. This is one of 11 curriculum areas offered by the college. In 2013/14, the faculty accounted for 12.6% of The City of Glasgow College s enrolment, up 9.0% on 2012/13. The Faculty of Nautical Studies is the only maritime training college in Scotland and one of the only four in the UK. The faculty works closely with, and provides training for, a number of organisations including Clyde Marine Training which recruits approximately 50% of the annual Trainee Officer intake for the British Merchant Navy. Other companies include; Northern Marine Ship Management, Sonangol USA, Bibby Ship Management Ltd, Maersk Crewing and Carnival Cruises. A large percentage of the faculty s intake are international students.

9 The Riverside Campus enjoys a stunning waterfront location and features a ten-storey student accommodation block, a landscaped recreation area alongside workshops and classrooms that comprise state-of-the-art technology. The new marine engineering workshop features Scotland s first shipping simulation suite allowing students to experience the bridge of a super tanker, as well as nautical chart rooms and a ferry-sized ship s engine. The Marine Skills Centre also has its own jetty and free-fall lifeboats. St Luke s Terrace is also within easy walking distance of the main business, shopping and leisure areas of the city centre. Whilst the property is currently occupied solely by students attending The City of Glasgow College, the city centre campuses of University of Strathclyde and Glasgow Caledonian University and City of Glasgow College are a short walk to the north. Glasgow Central Railway Station, Glasgow Queen Street Railway Station and Buchanan Bus Station, are all within a short walk from the property as is the low level train station at Argyle Street. Bridge Street Subway Station is situated a 15 minute walk to the west. River Clyde Clyde St Saltmarket Glasgow Sheriff Justice of Peace Gorbals St Norfolk St River Clyde Ballater St Crown St Citizens Rose Garden A730 A730 Citizens Theatre Cleland St Cleland Ln A728 St Luke s Pl St Luke s Laurieston Rd A728 Terrace A728 A74 St Ninian Terrace Old Rutherglen Rd Florence St Ballater St Benny Lynch Cl A74

10 City of Glasgow College s Riverside Campus City Collage of Glasgow Riverside Campus

11 DESCRIPTION The property comprises a purpose built student accommodation scheme arranged in five closes. There are 39 cluster flats providing a total of 204 bed spaces. In addition there is a small wardens flat and office comprising lounge/kitchen, 2 bedrooms and a bathroom. Externally there are 44 car parking spaces, bicycle sheds, bin stores, laundry room and landscaped areas to the rear.

12 ACCOMMODATION The accommodation is provided in clusters, each of which has between 2 and 6 en-suite bedrooms with shared kitchen and dining facilities. Kitchens are fully fitted with hob, oven, microwave and fridge freezers. Each bedroom has an en-suite bathroom comprising shower, WC and hand basin. The bedrooms themselves comprise of a single or double bed with a single wardrobe, plus wall mounted desk/work area, with telephone and TV/internet cabling provision. Each flat has a door entry phone along with individually controlled gas central heating systems. FLAT TYPE STANDARD EN-SUITE DOUBLE EN-SUITE TWIN EN-SUITE DISABLED EN-SUITE TOTAL NO. OF BEDS Typical Floor Scale 1:50

13 TENANCY INFORMATION The property is let to The Board of Management of Glasgow College of Nautical Studies for 35 years with effect from 3 September 2000 expiring 2 September For the 2016/17 academic year, projected gross income is 865,033 comprising a guaranteed primary rent of 666,161 and a secondary rent of 198,872. The primary rent is reviewed annually in-line with RPI subject to a minimum uplift of 2%. Either party can determine the lease on 60 months written notice after the fifth anniversary of the term. The landlord has a full repairing and insuring obligation plus must keep the Equipment (defined as furnishings, plenishings and equipment) in serviceable condition and where appropriate in good working order. RENT MECHANISM Under the lease, the primary rent covers 6,740 room weeks (170 bed spaces for 38 term weeks and 20 bed spaces for 14 non-term weeks). The tenant also pays a secondary rent covering 3,868 room weeks (34 bed spaces for 38 term weeks and 184 bed spaces for 14 non-term weeks). The secondary rent payable by the tenant is equal to 86.25% of the received rents in respect of direct lettings during these additional rent room weeks. 170 Beds 20 Beds 14 Beds 38 Week Primary (6,460 room weeks) Secondary (760 room weeks) Secondary (532 room weeks) 14 Weeks Secondary (2,380 Room weeks) Primary (280 room weeks) Secondary (196 room weeks) 6,740 room weeks Primary rent 3,868 room weeks Secondary rent HISTORIC AND PROJECTED INCOME 2012/ / / / /17 Primary Rent 605, , , , ,161 Secondary Rent 179, , , , ,872 Gross Rent Total 784, , , , ,033 The tenant currently undertakes a management, letting and operational role. Projected operating costs for the 2016/17 academic year are 354,960, reflecting 1,740 per bed space including VAT. Projected net income for 2016/17 is 508,448. COVENANT We understand that for the year ending 31 March 2014, The City of Glasgow College reported total income of 37.6m and a tangible net worth of 16.3m. 6.1% of total income came from the Scottish Funding Council (SFC).

14 GLASGOW STUDENT ACCOMMODATION MARKET Glasgow is one of the largest student accommodation markets in the UK with five Higher Education Institutions in addition to The City of Glasgow College. The property is strategically located for and intrinsically linked to The Glasgow City College. However, should there be any departure from the current lease arrangements, the asset also has the fundamentals to perform well in direct let scenario, being well located for a number of other institutions in the city which are summarised below: THE UNIVERSITY OF GLASGOW GLASGOW CALEDONIAN UNIVERSITY GLASGOW SCHOOL OF ART THE UNIVERSITY OF STRATHCLYDE ROYAL CONSERV. OF SCOTLAND FULL TIME STUDENT POPULATION 22,705 13,555 1,715 16,170 1,245 NUMBER OF INTERNATIONAL STUDENTS 4,025 1, , % OF INTERNATIONAL STUDENTS 18% 10% 15% 11% 15% CHANGE IN UCAS APPLICATIONS % 14% 6% 47% N/A UCAS APP:ACCEPTS RATIO N/A TIMES RANK N/A 46 N/A

15 TENURE TAX Heritable interest PLANNING We understand that the properties have consent for their existing use but purchasers will need to satisfy themselves on the current position. We understand the property is not elected for VAT and therefore VAT will not be payable on the purchase price. ENERGY PERFORMANCE The property has an Energy Performance Certificate (EPC) rating of D (53) ASSET MANAGEMENT The property is of strategic importance to The City of Glasgow College and effectively forms part of its newly redeveloped the Riverside Campus. There are significant value add opportunities through lease re-gear scenarios in addition to the possible introduction of a third party operating partner.

16 CONTACT For further information or to arrange a viewing please contact: Simon Lowe Cushman & Wakefield 1 Marsden Street Manchester, M2 1HW Mike Mitchell Cushman & Wakefield 1 Marsden Street Manchester, M2 1HW Olan Coyle Cushman & Wakefield 1 Marsden Street Manchester, M2 1HW simon.lowe@cushwake.com mike.mitchell@cushwake.com olan.coyle@cushwake.com SEPTEMBER 2016 MISREPRESENTATION ACT: Cushman & Wakefield Copyright Cushman & Wakefield gives notice that: These particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute any part of an offer or contract. Details are given without any responsibility, and any intending purchasers, lessees or third parties 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. No person in the employment of Cushman & Wakefield as any authority to make any representation or warranty whatever in relation to this property. Purchase prices, rents or other prices quoted are correct at the date of publication and, unless otherwise stated, exclusive of VAT. Intending purchasers and lessees must satisfy themselves independently as to the incidence of VAT in respect of any transaction relating to this property.