65/66 North Street & 23/27 Market Street GUILDFORD GU1 4AH. Prime, Reversionary, Well Secured, Freehold Retail Investment

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1 65/66 North Street & 23/27 Market Street GUILDFORD GU1 4AH Prime, Reversionary, Well Secured, Freehold Retail Investment

2 Investment Summary A prime location on the corner of North Street and Market Street and within the immediate vicinity of The Friary Centre and the High Street. Prominent corner position in close proximity to national multiple occupiers such as House of Fraser, French Connection, East, Laura Ashley, Reiss and Argos. An established retailing pitch which will improve with the new North Street Development located directly opposite once completed. Well secured to the strong covenants of Nero Holdings Limited (Caffe Nero) and Bravissimo Limited (Bravissimo & Pepperberry). Rebased rents from 2013 with excellent rental growth prospects. AWULT of 8.67 years. Total rent of 200,000 pax with fixed minimum uplifts in Freehold. Offers in excess of 3,600,000 (Subject to Contract & exclusive of VAT) which reflects a Net Initial Yield of 5.25%. A guaranteed Reversionary Yield of 6.20% (incorporating the fixed minimum increases in 2018), with an ultimate Reversionary Yield (based on an ERV of 150 Zone A) of 8% and an Equivalent (Nominal) Yield of 7.5%. Location Guildford is an affluent and popular commercial and administrative centre within Surrey located circa 50km (31 miles) south-west of central London, 59km (37 miles) north-west of Crawley and 48km (30 miles) east of Basingstoke. Road communications are excellent. The town is situated adjacent to the A3 (Dual Carriageway) which provides direct access to the M25 (J10) some 13km (8 miles) to the north-east and the M27 circa 64 km (40 miles) to the south-west near Portsmouth. The A31 also passes through the town which links with J4 of the M3 (via A331) at Frimley 23km (14 miles) to the north-west and to Winchester 62km (38 miles) to the south-west. Guildford is served by regular rail services to London (Waterloo & Victoria) with a fastest journey time of approximately 40 minutes. Heathrow Airport is circa 43km (22 miles) to the north and Gatwick Airport is circa 54km (33 miles) to the south-east. Demographics Guildford has a borough population of circa 135,700 persons with a primary catchment of approximately 472,000 and an estimated 727,000 within a 12 mile radius. The town is particularly affluent, Guildford ranked 5th in the UK on the PMA Affluence Indicator, and has a significant over representation of the AB and C1 social groupings. Guildford is also a popular commuter town and is synonymous with its internationally renowned education offer. Statistics from the Office of Rail Regulations revealed that over 8 million people used the station in 2012/13 making it the busiest train station in Surrey. Economically Guildford is a thriving commercial town and accommodates global operations including Phillips Electronics, Ericsson, Colgate-Palmolive, Allianz and Sanofi.

3 Retailing in Guildford Guildford is a dominant and popular retail destination. A recent Experian Survey concluded that the town is the fashion capital of the UK (excluding Central London), based on data relating to levels of consumer spending, household income, demographics and the penetration of online retail. Guildford attracts an impressive annual retail spend of circa 900m with 6,878 households on incomes of between 100,000 and 150,000. The town has an estimated shopping population of 244,000 persons. Footfall along the High Street has increased year on year with the target customer profile being between the ages of and predominantly A, B, C1 female. The prime retail offer is focused on the busy and popular pedestrianised High Street where there is a high concentration of major UK multiples including M&S, House of Fraser, Debenhams, Next, Boots, WH Smith, Gap, H&M and Superdrug. In addition, the town has a strong representation of quality fashion retailers including Karen Millen, Gant, Links, Hugo Boss, Reiss, Superdry, Ted Baker, LK Bennett, Whistles and Jo Malone. The external frontages of Friary Street, which acts as a thoroughfare from Friary Centre to the High Street, have recently been refurbished and has further improved Guilford s retail offer. The recent letting to Five Guys complements earlier lettings to Wagamama, Gourmet Burger Kitchen, Nandos, Superdry, Apple, TK Maxx, Cotswold Outdoors and Jamie Oliver s Italian Kitchen.

4 65/66 north street & 23/27 market street, guildford print North Street Development Guildford Borough Council in conjunction with M&G Real Estate and their chosen developer partner Land Securities are proposing to develop a site adjoining the Friary Centre on North Street, known as The North Street Development. While development plans are yet to be finalised, we understand that it will comprise circa 400,000 sq. ft. of retail, leisure and residential space to include an anchor department store, mooted to be John Lewis Partnership. In addition, many retailers have been targeted for the scheme and are rumoured to be the likes of Next, H&M and Arcadia. The scheme would enhance the town s already extensive existing retail offer and have a positive impact upon the subject property. Situation The property occupies a prime trading position on North Street at the junction with Market Street and benefits from a return frontage. The premises are immediately adjacent to House of Fraser on North Street and Reiss on Market Street, with other national retailers in close proximity including French Connection, East, Laura Ashley, Fat Face, Poundland, Argos and Mothercare. The Property The property lies within Guildford s town centre Conservation Area and is not listed. The property was previously let on a single tenancy to Blacks but has since been split and re-let to the current tenants. Caffe Nero comprises ground floor only and benefits from a return frontage onto Market Street. Bravissimo is arranged over ground floor and ground floor mezzanine (staff room and ancillary), first floor, first floor mezzanine and second floor (ancillary). Proposed North Street Development

5 Accommodation The property provides an approximate total net floor area of sq.m (6,903 sq.ft). A breakdown of the areas can be seen in the tenancy schedule. Tenure Freehold Tenant Covenant Tenant Nero Holdings Limited Bravissimo Limited D&B Date of Pre-Tax Rating Accounts Turnover profit/loss Net Worth 5A1 31/05/ ,496,000 22,538, ,676,000 3A1 31/08/ ,463,517 2,524,576 7,815,669 Tenancy Schedule Unit Description 65/66 North Street 23/27 Market Street Tenant Name Area Analysis (sq ft) Area ITZA Total sq ft Rent ( pax) ( psf Zone A) Nero Holdings Limited GF 1, , , ,000 ( 87 Zone A) Bravissimo Limited GF Sales 728 GFMezz 1,477 (A/10) FF Store 584 (A/20) FF Mezz 1460 (A/30) SF Store 798 (A/40) , ,000 ( 114 Zone A) ERV ( pax) ( psf Zone A) Start Date Expiry Date 190,350 ( 150 Zone A) 118,350 ( 150 Zone A) Next Rent Review Comments 07/10/ /10/ /10/2018 Minimum uplift to 120k at review. 02/09/ /09/ /09/2018 Minimum uplift to 115k at review. 200, ,700 AWULT 8.67 years Caffe Nero have 566 outlets in the UK and target to open 90 stores annually over the next five years. The multinational company have 84 branches overseas and the new openings will be split between the UK and international outlets. The retailer has the highest D&B rating of 5A1 reflecting a Tangible Net Worth of 144,676,000 and a low risk of business failure. Bravissimo, according to Zolfo Cooper Growth Retailer Report, is the 6th fastest growing retailer in the UK. The original online lingerie, swimwear and nightwear for D-L cup women now trade from 23 stores with plans to open a further 2 stores in the next financial year. Turnover increased by 4% in the year to August 2013, while operating profit was up by 40% to 2,524,576.

6 Current Income pax 200,000 per annum exclusive. Rental Value The subject property is within the prime pitch on North Street, of which the tone is established at 150 psf Zone A, and is therefore highly reversionary. In addition, rental growth prospects are excellent over the medium to long term with the North Street Development being developed directly opposite. Based on 150 psf Zone A, the current ERV is 308,700 pax, (Caffe Nero - 190,350; Bravissimo - 118,350 pax). This represents an attractive discount to the High Street, where prime rents currently reflect psf Zone A. EPC EPC s are available upon request. VAT The property has been elected for VAT and any disposal will be by way of a Transfer of a Going Concern (TOGC). Proposal We have been instructed to seek offers in excess of 3,600,000 (Three Million and Six Hundred Thousand Pounds), Subject to Contract & exclusive of VAT, which reflects a net initial yield of 5.25%, allowing for purchaser s costs of 5.8%. A purchase at this level would produce the following yield profile: Net Initial Yield 5.25% Guaranteed Reversionary Yield (2018) 6.20% Ultimate Reversionary Yield (2018) 8.00% Equivalent Yield (nominal) 7.5%

7 UNDER OFFER 65/66 north street & 23/27 market street, guildford THE GATE BOUTIQUE MAURICE BARBERS Further Information For further information, please contact: David Freeman James Baillie Ed Smith Patrick Over MISREPRESENTATION These particulars do not constitute an offer or contract. They are intended as a guide to prospective purchasers. All reasonable care has been taken in the preparation of these particulars but their accuracy is not guaranteed. The purchaser should satisfy himself and as to the correctness of these details. Neither the agents nor the vendors or lessors are to be or become under any liability or claim in respect of these particulars. These particulars are supplied on the understanding that all negotiations are conducted through this office. March Adrian Gates Photography & Design