PRIME MULTI LET OFFICE INVESTMENT MILL COURT GUERNSEY MILL COURT, LA CHARROTERIE, ST PETER PORT, GUERNSEY, GY1 1EJ

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1 PRIME MULTI LET OFFICE INVESTMENT MILL COURT MILL COURT, LA CHARROTERIE, ST PETER PORT,, GY1 1EJ

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3 02/03 RARE OPPORTUNITY TO ACQUIRE A PRIME OFFICE BUILDING IN ONE OF THE WORLD S PREMIER OFFSHORE CENTRES PRIME MULTI LET OFFICE INVESTMENT

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5 MILL COURT 04/05 INVESTMENT SUMMARY Guernsey is regarded as one of the world s premier offshore centres with a Standard & Poor s credit rating of AA- and a GDP of 2.4 billion (2015). Guernsey has excellent communications with the UK mainland and Europe. St Peter Port is the island s capital and major commercial centre being home to numerous international businesses including Barclays, Deutsche Bank, Credit Suisse, BNP Paribas, Rothschild, PwC, EY, Investec, Cazenove, Deloitte and KPMG. Mill Court is a self-contained Grade A headquarters office building, providing 37,041 sq ft of modern, flexible accommodation. One of Guernsey s best car parking ratios of 1:215 sq ft on the office accommodation. Freehold. Combined total income of 1,384,471 per annum. The low average rent of per sq ft on the office accommodation reflects a 32% discount to prime rents in Guernsey which demonstrates the strong reversionary potential of the income profile. Numerous asset management opportunities to improve the WAULT and drive income returns. We are instructed to seek offers in excess of 13,130,000 (Thirteen Million, One Hundred and Thirty Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level reflects an attractive net initial yield of 10.00% exclusive of purchaser s costs of 5.44%. Multi let to nine tenants including Credit Suisse, providing a diverse and well balanced income profile. PRIME MULTI LET OFFICE INVESTMENT

6 MILL COURT COMMUNICATIONS Guernsey forms part of the Channel Islands and is strategically positioned in the English Channel, approximately 75 miles south of Weymouth, England and 30 miles west of France s Normandy Coast. Guernsey is part of the Bailiwick of Guernsey which incorporates the islands of Guernsey, Alderney, Sark and Herm. Guernsey is the second largest of the Channel Islands with an area of 24 square miles and a population of approximately 63,000 people. St Peter Port, located on the eastern coast, is the island s capital and commercial centre. Guernsey is regarded as one of the world s premier offshore centres and is politically and economically robust, with a Standard & Poor s credit rating of AA- and an estimated GDP of 2.4 billion (2015). The island is a self-governing dependent territory of the British Crown. It is not represented in the UK Parliament but has its own democratically elected parliament called the States of Deliberation. There are no political parties in Guernsey. Under Protocol 3 of the UK Treaty of Accession, Guernsey also has a special relationship with the European Union (EU) which means it is within the Common Customs Area and the Common External Tariff (i.e. it enjoys access to EEC countries of physical exports without tariff barriers). Other EU rules do not apply. Guernsey is serviced by regular air and sea links to both the UK and Europe. Daily flights operate from Guernsey to three London airports as well as principal regional destinations. Sea travel is provided by regular ferry services to the UK, France and the other Channel Islands. Destination Time (hours) London Gatwick 0:50 Birmingham 1:00 London Stansted 1:10 London City 1:25 Manchester 1:25 Destination Time (hours) Sark 0:55 Jersey 1:00 St Malo 1:50 Dielette 1:55 Poole 3:00 London Guernsey Calais Newquay ENGLISH CHANNEL Dielette Le Havre Guernsey Caen Jersey Paris St Malo Brest Saint-Brieuc

7 06/07 SITUATION Mill Court is situated on La Charroterie in the commercial area of St Peter Port. The property is immediately adjacent to Sir Charles Frossard House, the administrative headquarters of the States of Guernsey. There are a number of professional services occupiers nearby including Guernsey Finance, BDO Accountants, Skipton International, Moore Stephens Accountants, HSBC and Aon Insurance. The retailing pitches of Mill Street, Market Square and the High Street are all situated within a few minutes walk of the property offering a broad range of amenities. MILL COURT PRIME MULTI LET OFFICE INVESTMENT

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9 08/09 TAXATION REAL ESTATE Personal & Corporate Tax The Bailiwick of Guernsey has its own system of personal and corporate taxation. The long-standing, fair and competitive tax regime meets OECD standards and has allowed Guernsey to develop an international reputation as a first class global operational centre. There is no Corporation Tax*, Capital Gains Tax, Inheritance Tax or VAT and a flat rate of Income Tax at 20%. Social insurance contributions are generally lower than in the UK and Customs & Excise duties are also low. We recommend that interested parties seek independent taxation advice regarding the acquisition of Mill Court. * The only exceptions to this are income from banking, domestic insurance, regulated fiduciary, insurance intermediary and insurance manager businesses, which are taxed at 10%. Income from trading activities regulated by the Channel Islands Competition and Regulatory Authorities (CICRA) and income from the ownership of land and buildings in Guernsey are also taxed at 20%. A number of key legislative differences exist between Guernsey and the UK. Privity of Contract On assigning a lease registered in Guernsey, the original tenant remains liable for the remainder of the term, as was the position in England before The tenant must therefore seek release from any obligation on assignment. Landlords are not obliged to give release but often agree if they are satisfied with the strength of covenant of the incoming tenant. Security of Tenure Guernsey has no equivalent to the Landlord and Tenant Act Business tenancies therefore have no security of tenure. However, if an eviction order is served, occupiers can apply for a stay of eviction. The length of stay can vary depending on multiple circumstances but in the case of a commercial property, the stay of eviction is unlikely to be for very long. Document Duty Document Duty is payable on prescribed documents that are presented to the Court and is set by the States of Deliberation by way of an Ordinance. From 1 January 2017 the following Document Duty rates are payable on the acquisition of commercial real estate: Forfeiture As in England, landlords have forfeiture rights for non-payment of rent, breach of covenant or insolvency. However, in Guernsey, tenants have no protection to apply for relief, although they can apply for a stay of eviction. 2% on up to 250,000 of the transaction value 3.25% on up to the next 150,000 (i.e. the portion from 250,001 to 400,000) 3.5% on up to the next 350,000 (i.e. the portion from 400,001 to 750,000) 3.75% on up to the next 250,000 (i.e. the portion from 750,001 to 1,000,000) Tax on Real Property There are no Business Rates in Guernsey. There is tax on Real Property and Parish Rates but these are less than 10% of equivalent UK Business Rates and equate to approximately 3.42 per sq ft for offices occupied by regulated finance entities. 4% on the remaining amount (i.e. the portion above 1,000,000) PRIME MULTI LET OFFICE INVESTMENT

10 MILL COURT DESCRIPTION CAR PARKING Mill Court is a self-contained Grade A headquarters office building arranged over ground and four upper floors totalling 37,041 sq ft. The property was built in 2003 and is of steel frame construction with attractive polished stone and glazed façades under a shallow hipped slate roof. The property benefits from a total of 170 car parking spaces located in a secure, two storey, underground facility to the rear of the property. This allocation provides the building with one of Guernsey s best car parking ratios of 1:215 sq ft on the office accommodation. The building provides modern, open plan accommodation with ultimate flexibility to be let as a whole, on a floor-by-floor, or part floor-by-floor basis such that Mill Court can serve a wide range of occupier requirements. The property benefits from excellent natural light to all elevations and the high quality internal specification includes: Raised access, carpet tiled floors Suspended ceilings Floor to ceiling height of approximately 2.6 metres VRV heating/cooling & ventilation system Attractive reception area 3 x passenger lifts Shower facilities Male, female and disabled WCs on each floor

11 10/11 ACCOMMODATION Mill Court has been measured by Pure Real Estate Services Ltd in accordance with the RICS Code of Measuring Practice (6th Edition). The survey, which is assignable to the purchaser, provides the following net internal floor areas: Description Use Area (sq m) Area (sq ft) Ground Reception Ground L3 Front Right Office ,759 Ground L3 Front Left Office ,630 Ground L3 Rear Office ,973 First L4 Front Right Office ,544 First L4 Front Left Office ,182 First L4 Rear Office ,712 First L4 Rear Office ,962 Second L5 Front Right Office ,742 Second L5 Front Left Office ,632 Second L5 Rear Office ,969 Third L6 Whole Office ,363 Fourth L7 Whole Office ,069 Total 3, ,041 FIRST FLOOR The property has also been measured in accordance with the new International Property Measurement Standards (1st Edition, May 2015). A breakdown of these areas is available on request. PRIME MULTI LET OFFICE INVESTMENT

12 MILL COURT TENURE TENANCIES The property is held freehold. The property is multi let to nine tenants providing a diverse and well balanced income profile, as outlined in the tenancy schedule below. The rent on completion will total 1,384,471 per annum, providing a low average rent of per sq ft on the office accommodation. The WAULT is an attractive 7.2 years to expiry (2.5 years to break). Description Tenant Area (sq ft) Car Parking Spaces Lease Start Next Rent Review Next Break Ground L3 Front Right Gentoo Holdings Ltd 2, /12/ /12/ /12/2019 Ground L3 Front Left JLT Insurance Management (Guernsey) Ltd 2, /12/ /12/ /12/2018 Ground L3 Rear Vacant (Providence Global Ltd in administration) 3, First L4 Front Right Cinven (Guernsey) Services Ltd 2, /03/ /03/ /03/2020 First L4 Front Left Vacant 3, First L4 Rear Longview Partners (Guernsey) Ltd 1, /11/ /08/ /11/2021 First L4 Rear Vacant 1, Second L5 Front Right The Catholic National Mutual Ltd 1, /01/ /01/ Second L5 Front Left Alternative Risk Management Ltd 3, /12/ /02/ /12/2019 Second L5 Rear Aquitaine Holdings Ltd 3, /12/ /02/ /12/2019 Third L6 Whole Credit Suisse AG 6, /12/ /12/ /12/2019 Fourth L7 Whole Gentoo Holdings Ltd 2, /12/ /12/ /12/2019 Car Parking Spaces BDO Ltd /06/ Car Parking Spaces The Catholic National Mutual Ltd /08/ Car Parking Spaces Price Bailey Ltd /02/ Car Parking Spaces Cinven (Guernsey) Services Ltd /03/ /03/ /03/2020 Total 36,537* 170 * Total area excludes reception

13 12/13 MULTI LET TO NINE TENANTS INCLUDING CREDIT SUISSE, PROVIDING A DIVERSE AND WELL BALANCED INCOME PROFILE Lease End Passing Rent ( pa) Office Rent ( psf) Comments 25/12/ , /12/ , , /03/ , Rent review outstanding. Car parking spaces rentalised at 1,600 pa in respect of 11 spaces with unrestricted access and 800 pa in respect of 3 spaces with restricted access. Rent review outstanding. Lease guaranteed by JLB Group Holdings Ltd. Car parking spaces rentalised at 1,600 pa in respect of 10 spaces with unrestricted access and 800 pa in respect of 2 spaces with restricted access. Providence Global Ltd is in administration and not in occupation. 18 months rent, TRP and service charge guarantee to be provided by the Vendor from completion. A 6 months' rent deposit has been provided by the tenant. 03/03/2020 break option is subject to a 39, break penalty. Car parking spaces rentalised at 2,000 pa in respect of 4 spaces with unrestricted access , months rent, TRP and service charge guarantee to be provided by the Vendor from completion. 31/10/ , Car parking spaces rentalised at 1,850 pa in respect of 5 spaces with unrestricted access and 925 pa in respect of 3 spaces with restricted access. - 74, months rent, TRP and service charge guarantee to be provided by the Vendor from completion. 31/12/ , /12/ , /12/ , /12/ , /12/ , Rent review outstanding. Car parking spaces rentalised at 1,650 pa in respect of 3 spaces with unrestricted access and 825 pa in respect of 3 spaces with restricted access. Rent review outstanding. Car parking spaces rentalised at 1,600 pa in respect of 12 spaces with unrestricted access and 800 pa in respect of 6 spaces with restricted access. Rent review outstanding. Car parking spaces rentalised at 1,600 pa in respect of 15 spaces with unrestricted access and 800 pa in respect of 3 spaces with restricted access. Car parking spaces rentalised at 1,600 pa in respect of 24 spaces with unrestricted access and 800 pa in respect of 4 spaces with restricted access. Rent review outstanding. Car parking spaces rentalised at 1,600 pa in respect of 8 spaces with unrestricted access and 800 pa in respect of 2 spaces with restricted access. * 10,000 - * Licence determinable by either party by providing not less than 1 months notice in writing. * 3,600 - * Licence determinable by either party by providing not less than 1 months notice in writing. * 10,000 - * Licence determinable by either party by providing not less than 2 months notice in writing. 02/03/2026 4,000 - Licence determinable by either party immediately upon termination of the lease of First L4 Front Right. 1,384,471 PRIME MULTI LET OFFICE INVESTMENT

14 MILL COURT COVENANT PROFILES Companies registered in Guernsey are not obliged to file annual accounts at the Guernsey Registry (the UK equivalent of Companies House). Set out below is a profile of each tenant at Mill Court. Further financial information is available on request. Gentoo Holdings Ltd Gentoo Holdings Ltd is a Guernsey registered company which was formed in The Group specialise in the administration of regulated and unregulated funds and family office structures as well as offering depositary and a range of corporate and domiciliation services. The Group is regulated by the Guernsey Financial Services Commission and have offices based in Luxembourg and Guernsey. Further information can be found at Cinven (Guernsey) Services Ltd Cinven (Guernsey) Services Ltd is a leading international private equity firm, founded in 1977, with offices in London, Frankfurt, Guernsey, Hong Kong, Luxembourg, Madrid, Milan, New York and Paris. Funds managed by Cinven acquire Europe-based companies that require an equity investment of 100 million or more. Cinven has a strong and consistent investment track record and is currently investing in a sixth fund. Cinven is regulated by the Guernsey Financial Services Commission. Further information can be found at JLT Insurance Management (Guernsey) Ltd JLT Insurance Management (Guernsey) Ltd is part of Jardine Lloyd Thompson Group Plc, one of the world s leading providers of insurance, reinsurance and employee benefits related advice, brokerage and associated services. The organisation has offices in 40 territories worldwide and has more than 10,000 staff, serving clients in over 135 countries. The Group recorded a total revenue of 1.3 billion and Net Profit of 90.8 million for year ending 31 December JLT Insurance Management (Guernsey) Ltd is licenced by the Guernsey Financial Services Commission. Longview Partners (Guernsey) Ltd Longview Partners (Guernsey) Ltd is regulated by the Guernsey Financial Services Commission and is also registered with the SEC. Its wholly-owned subsidiary, Longview Partners (UK) Ltd, acts as Managing Member of Longview Partners LLP. Longview Partners is a specialist asset management firm, focused on the management of global portfolios. The Group was founded in 2001 and has 34 employees based in their offices in London and Guernsey. Further information can be found at Further information can be found at

15 14/15 The Catholic National Mutual Ltd The Catholic National Mutual Ltd (CNM) was established in 1979 as a mutual insurance company to participate in the insurance of the property and liability risks of the Catholic Church in Scotland, England and Wales. As the Catholic Church s own insurance company, CNM offers Catholic organisations wide-ranging cover with generous limits and few policy conditions. CNM is based in Guernsey and is regulated by the Guernsey Financial Services Commission. Aquitaine Holdings Ltd Aquitaine Holdings Ltd was formed in 2003 and is an independent Guernsey-based fiduciary group providing services to international clients and families. The Group is regulated by the Guernsey Financial Services Commission. Further information can be found at Further information can be found at Alternative Risk Management Ltd Alternative Risk Management Ltd was founded in 1992 and provides claims administration services for employee benefit plans. The company has circa 30 employees and is headquartered at Mill Court. Alternative Risk Management Ltd is regulated by the Guernsey Financial Services Commission. Further information can be found at Credit Suisse AG Credit Suisse AG is headquartered in Guernsey and was established in The Company is part of the global Credit Suisse Group, providing clients with a gateway to the Group s global private banking, investment banking and asset management businesses. Credit Suisse is a Swiss-based international financial company and is one of the largest universal banks in Switzerland. It operates in over 50 countries worldwide and has circa 47,150 employees. Credit Suisse AG s Net Revenue was CHF 19.8 billion with Total Equity of CHF 41.5 billion for the financial year ending Further information can be found at PRIME MULTI LET OFFICE INVESTMENT

16 MILL COURT OFFICE MARKET The Guernsey office market is concentrated in St Peter Port, providing approximately1.8 million sq ft of accommodation. Prime office stock is principally located along Glategny Esplanade and at Admiral Park with numerous banks, law firms and financial services providers located in these areas. High profile occupiers include Barclays, Deutsche Bank, Credit Suisse, BNP Paribas, Rothschilds, PwC, EY, Royal Bank of Scotland, Investec, Cazenove, Deloitte and KPMG. Headline rents for prime offices currently stand at per sq ft. Headline rents for secondary accommodation range between per sq ft, dependent on location and specification. Guernsey has a restrictive planning regime and there is currently no new office accommodation under construction or with detailed consent. With the current availability of prime office accommodation equating to just 23,000 sq ft, the island is severely lacking stock to fulfil the requirements of the finance sector. The current supply shortage and increasing demand for prime office accommodation is expected to lead to reduced incentives and rental growth in the short to medium term.

17 16/17 KEY BUSINESS SECTORS Guernsey is a leading International Finance Centre (IFC) with over 40 years experience in servicing clients from around the world. The finance industry employs approximately 21% of the total workforce and represents a direct contribution of 40.7% of Guernsey s GDP. Guernsey s status as a globally recognised offshore finance economy is predicated on the island s internationally compliant low tax regime, world class professional services, highly skilled workforce and agile, pro-business government. There are four key pillars to Guernsey s finance industry: Banking Many of the most highly respected names in international banking have chosen to locate in Guernsey. There are more than 30 international licensed banks based on the island with deposits in Guernsey banks standing at 81.3 billion (as at March 2016). Wealth Management Guernsey provides globally mobile individuals and families with facilities to place their wealth and assets in structures that are legally robust and tax efficient. The island has over 150 licenced fiduciaries and has significant expertise in providing international pension planning arrangements. Investment Funds The international marketplace for Guernsey investment funds is illustrated by the fact that they are now promoted or sponsored by leading institutions in more than 55 finance centres. At the end of September 2016, the overall value of funds under management in Guernsey stood at billion. Insurance Guernsey s insurance industry is renowned for its innovation and professionalism in providing a range of risk management solutions. Guernsey is the largest captive insurance domicile in Europe and fourth largest in the world. The island is home to 804 international insurance entities. PRIME MULTI LET OFFICE INVESTMENT

18 MILL COURT INVESTMENT RATIONALE Rare opportunity to acquire a prime office building in one of the world s premier offshore centres. Guernsey s economic diversity, favourable taxation structures, political stability, AA- credit rating and highly skilled workforce have helped secure the island s reputation as a leading international centre and pro-business environment. The island is viewed as a safe haven for financial services following the UK s vote to leave the EU and is well placed to ensure that any impact that Brexit might have on its trading relationships is minimised. There is currently only 23,000 sq ft of Grade A space on the market in Guernsey. The current supply shortage and increasing demand for prime office accommodation is expected to drive rental growth in Guernsey in the short to medium term. The property benefits from one of the best car parking ratios in Guernsey.

19 18/19 The average rent of per sq ft on the office accommodation reflects a 32% discount to prime rents in Guernsey which demonstrates the strong reversionary potential of the income profile. Opportunity to capitalise on the positive sentiment created by the new letting to Cinven (Guernsey) Services Ltd which has set a new benchmark rent for the building. Opportunity to continue the rolling refurbishment programme to set a new benchmark rental tone for the property. Additional asset management opportunities include letting the vacant space, re-gearing the existing leases to improve the WAULT and driving income returns through upcoming and outstanding rent reviews. The regional office investment market has witnessed a significant improvement over the past 24 months and is currently experiencing strong investor appetite. Guernsey offers a significant discount to other major regional centres. Low transaction costs relative to the UK mainland. PRIME MULTI LET OFFICE INVESTMENT

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21 20/21 NUMEROUS ASSET MANAGEMENT OPPORTUNITIES TO IMPROVE THE WAULT AND DRIVE INCOME RETURNS CAPITAL ALLOWANCES SERVICE CHARGE The benefit of any unclaimed capital allowances could be made available to the purchaser. EPC The total service charge budget for the year ending 31 December 2017 is 369,873 per annum. Further information can be found in the data room. DATA ROOM Energy Performance Certificates are not a legal requirement in Guernsey. Access to the data room is available on request. VAT PROPOSAL There is no VAT payable in Guernsey. TAX ON REAL PROPERTY We are instructed to seek offers in excess of 13,130,000 (Thirteen Million, One Hundred and Thirty Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level reflects an attractive net initial yield of 10.00% exclusive of purchaser s costs of 5.44%. A breakdown of the Tax on Real Property and Parish Rates can be found in the data room. PRIME MULTI LET OFFICE INVESTMENT

22 PRIME MULTI LET OFFICE INVESTMENT MILL COURT CONTACTS To arrange a viewing, or to obtain access to the data room, please contact: Noel Lander JLL +44 (0) (0) noel.lander@eu.jll.com Tom Woolven JLL +44 (0) (0) tom.woolven@eu.jll.com Joanna Watts Watts & Co Ltd +44 (0) (0) jo.watts@wattsandco.co Wing Lai Watts & Co Ltd +44 (0) (0) wing.lai@wattsandco.co Disclaimer Jones Lang LaSalle Limited (JLL) and Watts & Co Ltd (W&Co) for themselves and for the vendors or lessors of this property whose agents they are, give notice that:- a. the particulars are a general outline only for guidance 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 believed to be correct, but any intending purchasers, tenants or third parties should not rely on them as statements or representations of fact but satisfy themselves that they are correct by inspection or otherwise; c. no person in the employment of JLL or Watts & Co has any authority to make or give any representation or warranty whatever in relation to the property; d. the photographs show only parts of the property as they appeared when taken; e. unless otherwise stated, all prices are quoted exclusive of VAT, if applicable; f. reference to any mechanical or electrical equipment or other facilities at the property shall not constitute a representation (unless otherwise stated) as to its state or condition or that it is capable of fulfilling its intended function; 2017 Jones Lang LaSalle IP, Inc and Watts & Co Ltd. All rights reserved.