LIVERPOOL. Prime Multi-Let City Centre Office Opportunity

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1 LIVERPOOL Prime Multi-Let City Centre Office Opportunity

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3 INVESTMENT SUMMARY Liverpool is the UK s fifth largest city, at the centre of the UK s second largest regional economy. Situated in the core CBD, opposite St Paul s Square and will be at the centre of the Liverpool Waters 5bn regeneration. Prime Grade A office building completed in 2003 comprising 134,665 sq ft (12,511 sq m) of highly specified, flexible accommodation arranged over ground and seven upper floors. There are 80 car parking spaces, providing an excellent car parking ratio of 1:1,683 sq ft. The property is multi-let to two investment grade tenants producing 2,430,405 per annum with a weighted average unexpired lease term of 3.9 years. The Passport Office accounts for 45% of the income and this is one of only four offices for the whole of England, servicing the North-West region. Diligenta occupy the rest of the building and are rated 5A1 by D&B. Freehold. Both tenants are fully committed to 101 Old Hall Street. There is the opportunity to work with them and secure re-gears in the future. Offers are sought in excess of 34,030,000 (Thirty Four Million and Thirty Thousand Pounds). A purchase at this price reflects an attractive net initial yield of 6.75% after purchaser s costs of 5.8% and a low capital value of 253 per sq ft. The vendor is able to sell the shares in a Guernsey SPV, in which case the net initial yield would rise to 7.02%.

4 A565 SITUATION Situated at the corner of Old Hall Street and Brook Street, immediately opposite the St Paul s Square mixed-use development. This is the core business location and supported by the council as the business quarter. Old Hall Street connects directly from the main inner city ring road linking with the Mersey tunnels and eastbound route to the M62. The property benefits from excellent links to public transport and the city centre retail amenities are nearby. The property is located next to the Radisson Blu 194 bedroom hotel and the iconic Beetham Tower, which rises to 90m over 29 floors. The building is set back from the site boundary, surrounded by its own landscaped plaza and orientated to take advantage of the river views, an important factor for Liverpool occupiers. WATERLOO ROAD A59 KINGSWAY A5038 A59 A59 SCOTLAND ROAD COMMUNICATIONS Liverpool is situated 217 miles (349km) north-west of London, 98 miles (157km) north-west of Birmingham and 34 miles (54km) west of Manchester. Sat Nav: L3 9BD BATH ST. A41 QUEENSWAY A570 OLD HALL ST. A59 A5053 LEEDS STREET Liverpool James Street A5036 STRAND STREET Carlisle CHAPEL ST. VAUXHAL L ROAD Moorfields /9 DALE ST. VICTORIA ST. Liverpool One M61 A57 LORD ST. WHITECHAPEL 4 A666 RENSHAW ST. Bolton ST. ANNE STREET HUNTER ST. Liverpool Lime Street LIME ST. RENSHAW ST. Liverpool Central 1 2 Road The M62 lies 4.5 miles (7km) east, accessed by the A5047 from the city centre, providing direct access to the M57 to North Merseyside, the M58 to Wigan and to the M6, the backbone of Britain s motorway network. The Wirral is also easily reached from the city centre via the Kingsway (Wallasey) and Queensway (Birkenhead) tunnels leading to the M53, which serves Chester to the south. Rail From Liverpool Lime Street station, regular services serve multiple regional and national destinations including Manchester, Birmingham and London Euston in a quickest time of 2 hours. Liverpool also benefits from the Merseyrail Loop system which links Liverpool Lime Street station to Moorfields, Central and James Street stations, connecting the city centre to the Merseyside suburbs in addition to the Wirral and Chester. M53 A565 Birkenhead A59 Liverpool A550 A561 M John Lennon Airport 15 Chester M56 A Wigan M6 A Warrington 5 A580 M62 20/9 A556 Northwich The Midlands 19 3 M6 15 1/ /18 Manchester A537 7 Manchester Airport Air Liverpool John Lennon Airport is situated 6 miles (10km) south-east of the city centre and has established itself as one of the UK and Europe s fastest growing airports. Manchester Airport is 36 miles (57 km) to the east of the city and is the UK s third largest airport. Sea Mersey Ferries operate direct cross-river services 7 days a week between Pier Head and Seacombe (Wirral) with a journey time of 10 minutes. P&O and Norfolkline Irish Sea also offer daily services to Dublin, Belfast and Douglas (Isle of Man).

5 LIVERPOOL Liverpool is the UK s fifth largest city, the commercial and administrative capital of Merseyside and one of the UK s fastest growing economic regions. Over 1.5 million people live within 30 minutes of the city centre and 5 million within a 1 hour drive (CACI). Liverpool is at the centre of the UK s second largest regional economy with immediate access to seven million customers, an economy worth more than 121 billion and 252,000 businesses. Liverpool and the surrounding region is the number one recipient of foreign direct investment in the UK after London and the South-East. More than 3,000 companies have chosen the area as their base of operations, compelling evidence of the region s business environment and its commercial opportunities. The city of Liverpool has undergone one of the most remarkable transformations of any European city over the past decade, with over 5 billion of inward investment delivered through public and private partnership. The city is the third largest wealth management centre in the UK and home to a number of major financial institutions and public bodies including Royal Sun Alliance, Royal Liver, Liverpool Victoria, Ford, Jaguar, Barclaycard and HM Revenue and Customs. Liverpool continues to invest and develop in its own future. Liverpool Waters is one of the most ambitious regeneration projects in the UK comprising over 1.3 million sq m of mixed use space, an investment of 5.5bn and will create in excess of 15,000 new jobs over 30 years within the site and a further 22,000 jobs across the Liverpool region. It will regenerate a 60 hectare historic dockland site to create a world-class, mixed-use waterfront quarter in central Liverpool. Perhaps the biggest symbol of Liverpool s regeneration is the completion of Liverpool One. The retail led development by Grosvenor included the redevelopment of 42 acres of Liverpool city centre and is anchored by John Lewis, Debenhams, a 14-screen Odeon Cinema along with restaurants, apartments, offices and public open space. The city is now ranked 3rd of major UK cities in terms of its retail offer. (Source: PMA). LIVERPOOL LIME STREET M62 Motorway / Manchester / Liverpool Football Club LIVERPOOL CENTRAL Liverpool One Shopping Centre MOORFIELDS Albert Dock/ Echo Arena / Tate Liverpool LIVERPOOL JAMES STREET St Paul s Square development Royal Liver Building Beetham Tower Radisson Blu Hotel Princes Docks

6 DESCRIPTION The building provides 134,665 sq ft of Grade A office accommodation over ground and seven upper floors. The property was constructed in 2003 and the reception has recently been refurbished. Internally, the property provides open plan offices set out in a letter C configuration, which have been finished to a modern specification. The atrium is designed to allow natural light to penetrate deep into the floor plates, which have been designed to provide open plan, flexible office accommodation. The southern face overlooks the docks and River Mersey to the south, and is a major draw for Liverpool occupiers. SPECIFICATION The property benefits from the following specification: LG7 lighting 4 pipe fan coil air-conditioning Floor to ceiling height of 2.7m Full access raised floor Four 12-person passenger lifts Male and female WCs on each floor 24-hour staffed reception 80 car parking spaces equating to an excellent town centre ratio of 1:1,683 sq ft

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8 ACCOMMODATION Area Floor Use sq m sq ft Old Hall Street Old Hall Street Seventh Offices 1, ,008 Sixth Offices 1, ,136 East Fifth Offices 1, ,126 Fourth Offices 1, ,126 Third Offices 1, ,841 Brook Brook Street Street Second Offices 1, ,277 First Offices 1, ,693 West Ground Offices 1, ,458 Total 12, ,665

9 TENURE Sub Sta Freehold. TENANCY West Tower 8 to 10 Hotel The property is fully multi-let producing a rent of 2,430,405 pa and has a WAULT of 3.9 years. BROOK STREET 101 to m OLDHALLSTREET 100 to Tenant Demise Area sq ft/ no. spaces 5th, 6th & Diligenta Ltd 7th & Pt Bst incl. 30 CPS* Diligenta Ltd 4th Flr incl. 8 CPS* Radisson SAS Hotel Ltd Hill Dickinson LLP 3rd Flr East Wing 3rd Flr West Wing 2nd Flr East Wing 2nd Flr West Wing 1st Flr East Wing Grd & 1st Flr West Wing Car Parking Spaces Car Parking Spaces Car Parking Spaces Rent Per Annum Rent psf/per space Lease Start Lease Expiry Break Option Unexpired Term % of Rent 50, , /02/ /04/ % 17, , /02/ /04/ /02/ % 8, , /06/ /06/ /03/ % 8, , /02/ /02/ % 8, , /01/ /01/ % 9, , /01/ /01/ % 7, , /01/ /01/ % 25, , /01/ /01/ % 6 7,200 1,200 18/08/ /01/ % 25 35,200 1, ,800 1,800 Licence terminable on 28 days notice Licence terminable on 28 days notice Totals 134,665 2,430, WAULT % * Car Parking spaces at a rent of 1,000 pa per space 1.4% 0.1%

10 COVENANT INFORMATION The First Secretary of State accounts for 45% of the income and occupy the building as one of four Passport Offices located in England, servicing the North-West of the country. The Passport Office has come under public scrutiny recently over the backlog in processing passports and staff shortages. Liverpool is one of their busiest offices and they are committed to the building. In response to the pressure on processing times they have recently taken a lease on the 3rd floor East wing. They are an undoubted covenant. Diligenta accounts for 53% of the income and are rated 5A1 by Dun & Bradstreet. Established in 2005, Diligenta, a UK-based FCA regulated subsidiary of Tata Consultancy Services (TCS), specialises in the provision of business process outsourcing (BPO) for the Life & Pensions industry. It is the second largest player in the Life & Pension BPO space and administer over 6.5 million, open and closed book, live policies on behalf of clients which include The Phoenix Group, Friends Life, Sun Life Financial of Canada UK, Old Mutual International and Guardian Financial Services. Below are their audited accounts for the last three years: 31/03/ /03/ /03/2012 Sales Turnover 292,888, ,659, ,894,000 Profit Before Taxes 36,083,000 27,836,000 10,424,000 Tangible Net Worth 72,145,000 48,957,000 31,182,000 Net Current Assets 66,889,000 44,257,000 23,774,000 OCCUPATIONAL MARKET The Liverpool office market is showing signs of improving having experienced a slow down during the recession. Total CBD office take-up in 2013 was 316,964 sq ft which was 22% higher than in 2012 and higher than the 5-year average. With 108 transactions, the total was more than double than in 2012 and the highest in 10 years. The main driving force behind the improved take-up was the return to normality for the professional services sector, which was responsible for 47% of all take-up including two substantial transactions of 29,795 sq ft and 68,000 sq ft. This is double the take- up figure for 2012 and back on par with 2011 which was notable for the sector. There is currently c.2.3 million sq ft of vacant office accommodation across the city; however a large proportion of this is such poor quality that it would be considered as un-lettable. Interestingly there is currently only c.160,000 sq ft of Grade A availability in the CBD. The decline in available Grade A space highlights the lack of Grade A development in the city centre over the last few years, combined with recent take-up. Grade A space now comprises just 7% of vacant stock in the city. Knight Frank estimate the headline refurbished ERV for the building to be in the region of per sq ft.

11 INVESTMENT MARKET The regional office market has demonstrated significant increased confidence over the past 12 months. A lack of development across most regional cities has limited the supply of new office stock, helping maintain headline rental levels and exert downward pressure on incentives. The limited number of investment opportunities coupled with strong demand for prime office buildings has led to significant yield compression across most core regional markets. The city of Liverpool characterises the scarcity of regional investment transactions with a very limited number of opportunities being brought to the market in the last few years. However, nearby in Manchester we are witnessing a surge in investment demand and activity with prime multi-let yields having compressed significantly and are now standing at 5.00% NIY. Investment demand is increasingly competitive and Knight Frank predicts further yield compression throughout the year. Recent transactions include: Date Property Tenants Term Certain Price Net Initial Yield Capital Value Sept 2014 Sept 2014 Sept 2014 Aug 2014 June 2014 May 2014 Ship Canal House, Manchester Chancery Place, Manchester Two Snowhill, Birmingham One Piccadilly Gardens, Manchester 5 St Philips Place, Birmingham Direct Line, Manchester Multi-let 4.3 years 26,000, % 358 per sq ft Multi-let 6 years 57,000,000 c.5.05% 536 per sq ft Multi-let c. 9 years c. 140,000,000 c. 5.85% 438 per sq ft Multi-let c. 5 years 75,000, % 449 per sq ft Multi-let 6.6 years 37,500, % 467 per sq ft Direct Line 7.2 years 24,280, % 399 per sq ft

12 SERVICE CHARGE Both tenants have effective full repairing and insuring leases and the service charge is fully recoverable. CAPITAL ALLOWANCES Further information is available upon request. VAT We understand the property will be treated as a Transfer of a Going Concern for VAT purposes. EPC This building has an EPC rating of C (70). PROPOSAL Offers are sought in excess of 34,030,000 (Thirty Four Million and Thirty Thousand Pounds). A purchase at this price reflects an attractive net initial yield of 6.75% after purchaser s costs of 5.8% and a capital value of 253 per sq ft. The vendor is able to sell the shares in a Guernsey SPV, in which case the net initial yield would rise to 7.02%. SUBJECT TO CONTRACT AND EXCLUSIVE OF VAT. Tim Smither T: M: E: tim.smither@knightfrank.com Freddie Owen T: M: E: freddie.owen@knightfrank.com Steve Carrick T: M: E: steve.carrick@knightfrank.com David Crawford T: M: E: david.crawford@knightfrank.com KF Important Notice SPV Sale Important Notice 1. Particulars: These particulars are not an offer or contract, nor part of one. You should not rely on statements by Knight Frank LLP in the particulars or by word of mouth or in writing ( information ) as being factually accurate about the property, its condition, its value or its ownership structure. Neither Knight Frank LLP nor any joint agent has any authority to make any representations about the property, and accordingly any information given is entirely without responsibility on the part of the agents, seller(s) or lessor(s). 2. The photographs show only certain parts of the property as they appeared at the time they were taken. Areas, measurements and distances given are approximate only. 3. Any reference to alterations to, or use of, any part of the property does not mean that any necessary planning, building regulations or other consent has been obtained. A buyer or lessee must find out by inspection or in other ways that these matters have been properly dealt with and that all information is correct. 4. VAT: Any guide prices quoted or discussed are exclusive of VAT. The VAT position relating to the property may change without notice. 5. Knight Frank LLP is not authorised by the Financial Conduct Authority to undertake Regulated Activities, other than insurance mediation, and generally acts as agent in respect of real estate property interests only. This communication is exempt from the restriction in Section 21 of the Financial Services and Markets Act 2000, on the communication of invitations or inducements to engage in investment activity by unauthorised persons, on the basis that it meets the conditions for exemption relating to such activities carried on in connection with the sale of a body corporate as set out in Article 62 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and the similar exemption relating to all Regulated Activities in Article 70 of The Financial Services and Markets Act 2000 (Regulated Activities) Order In all instances you should seek your own independent advice in relation to the sale or purchase of shares and on any corporate structure. Knight Frank LLP is not responsible for any information or opinions provided in respect of any such sale or purchase. Knight Frank LLP is a limited liability partnership registered in England with registered number OC Our registered office is 55 Baker Street, London W1U 8AN, where you may look at a list of members names. Date of particulars: October Tayler Reid I I taylerreid.co.uk