OXFORD STREET, EUROPE S BUSIEST RETAIL STREET

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2 , EUROPE S BUSIEST RETAIL STREET

3 PRIME INVESTMENT ADJACENT TO BOND STREET CROSSRAIL STATION

4 INVESTMENT SUMMARY Prime double frontage retail unit on Oxford Street, Europe s busiest retail street. Situated adjacent to Bond Street Underground Station. Crossrail interchange to open immediately adjacent in 2018 significantly increasing footfall around the property. Comprising retail trading over basement and ground floors with ancillary office accommodation over five upper floors. Total net lettable area of sq m (8,367 sq ft). Long leasehold interest with 134 years unexpired at a fixed rent of a peppercorn. Entirely let to Boots UK Limited until June 2019 at a passing rent of 1,600,000 per annum ( 990 Zone A), which compares to recent evidence opposite at 1,153 zone A. Boots is the largest pharmacy health and beauty chain in the UK with over 2,500 stores and a Dun and Bradstreet rating of 5A1. Potential to convert the first floor to retail use in addition to consolidating common parts which would substantially increase the trading area, subject to necessary consents. Opportunity to acquire the SPV enabling an owner occupier to take occupation at lease expiry. Excellent prospects for rental growth with an opportunity to set a new open market rent in 2 years time. Offers are sought in excess of 67,000,000 subject to contract and exclusive of VAT, reflecting a net initial yield of 2.34% and a reversionary yield of 2.73% (June 2019), assuming purchaser s costs at 1.80% for the SPV.

5 LONDON RETAIL As a retail destination, London sits alongside the best leading global cities including New York, Paris, Milan, Hong Kong and Shanghai. Its diverse offer has global retail appeal and it is the first port of call for international brands when looking to expand into Europe. As one of the most visited retail destinations in the world, Oxford Street attracts over 193 million people every year of which over 50% are overseas visitors. Selfridges is currently spending 300m on their flagship store and has reported a sales increase of 18%, a good example of Oxford Street s continuing success. The recent fall in the value of the Sterling has led to an influx of wealthy tourist which has bolstered retail sales.

6 LONDON IN DETAIL THE WORLD S NUMBER ONE DESTINATION FOR REAL ESTATE INVESTMENT No.1 city for business, tourism 193 million international visitors US and Chinese visitors spending London has the largest Ranked alongside Paris and shopping. to Oxford Street each year. has increased 74% and 65% year on GDP of any city in Europe. and New York as a global year respectively. retail destination. The retailing gateway to Average dwell time in the West End Over 250 flagship stores Consistent year on year increase in World s most international mainland Europe. is greater than 2.5 hrs. in London s West End. footfall in mass market and luxury shopping destination with retail locations. almost 60% of international retailers having a presence. No.1 home for luxury retailers. 8.6 million population and growing. Unrivalled legal, financial and geographical attributes. 4 Unesco world heritage sites. Rents on Bond Street of 2,225ZA and 1,150ZA on Oxford Street.

7 LONDON S PRIMARY RETAIL DESTINATION One of the world s most famous shopping streets and Europe s busiest, Oxford Street provides an unprecedented and diverse retailer profile. The principal location for department and flagship stores it is home to Selfridges, John Lewis, House of Fraser, Debenhams, Nike, Gap, Boots, Adidas, Zara, Topshop in addition two Marks & Spencer s and two large Primark stores. As a result Oxford Street is widely recognised as the heart of the UK high street fashion industry. Unrivalled accessibility to key transport hubs and an extensive leisure amenity provide a platform for its continually heavy and growing footfall. Supply of retail accommodation is constricted with international brands vying for space which has resulted in strong rental growth over the last 5 years. With continuing high occupier demand this trend is set to continue.

8 PLANNED PEDESTRIANISATION Oxford Street is currently one of the West End s main east to west road transport links and one of London s most congested roads. New proposals will fully pedestrianise Oxford Street reducing congestion to zero making it more accessible in addition to accommodating a sequence of public piazza s to increase dwell time. The changes are forecast to increase footfall and significantly improve the visitor and shopping experience. The timing coincides with the opening of the Elizabeth Line and the projected increase in footfall with Bond Street Station, in particular the area around the subject property, serving as a focal point. The western section is due to be implemented by the end of 2018, with the eastern section between Oxford Circus and Tottenham Court Road becoming traffic free by December 2019 and the final part, by Marble Arch, completing after As a result, Oxford Street will become one of the world s longest prime pedestrianised retail streets further cementing its place as a leading global fashion hub. THE PRIME WESTERN SECTION OF, FROM OXFORD CIRCUS TO SELFRIDGES, IS TO BE TRANSFORMED INTO A PEDESTRIAN ONLY ZONE FILLED WITH PUBLIC ART BY THE END OF 2018.

9 NEW BOND STREET SOUTH MOLTEN STREET BOND STREET STATION JOHN LEWIS MASSIMO DUTTI HOUSE OF FRASER NEXT ZARA DEBENHAMS FOREVER 21 RUSSEL & BROMLEY MULBERRY GAP ADDIDAS SELFRIDGES

10 COMMUNICATIONS Bond Street Underground Station provides access to both the Central and Jubilee lines affording quick access across the centre of London to the City, Liverpool Street and Waterloo Stations. In addition Green Park (Jubilee, Piccadilly and Victoria lines), Oxford Circus (Bakerloo, Central and Victoria lines) and Piccadilly Circus (Bakerloo and Piccadilly lines) are also all within walking distance with numerous bus services operating along Oxford Street serving the local area. BOND STREET STATION WILL BECOME ONE OF LONDON S BUSIEST TRANSPORT HUBS. MAIDENHEAD PADDINGTON TOTTENHAM COURT ROAD STANSTEAD LIVERPOOL STREET OXFORD STREET MINSINS MINSNS MINSNS MINSNS MINSNS MINSNS MINSNS MINSNS READING HEATHROW AIRPORT BOND STREET FARRINGDON CANARY WHARF LUTON GATWICK CROSSRAIL / ELIZABETH LINE Crossrail is Europe s largest infrastructure project and once completed will directly connect all of London s main business centres linking Heathrow with Paddington, the West End, City and Canary Wharf. Due to open in 2018, it will increase London s rail capacity by 10% and dramatically cut journey times with an estimated 200 million people travelling by Crossrail each year. With passenger numbers anticipated to increase from 125,000 to 220,000 daily, Oxford Street will substantially benefit from improved accessibility and greater footfall. Computer generated image

11 SITUATED IN PRIME AND BENEFITTING FROM EXCEPTIONAL LEVELS OF FOOTFALL AND SURROUNDED BY SOME OF LONDON S MOST ICONIC BRANDS. PRIME RETAIL PITCH IZE SSOR ACCE H TOP HRIS ST C ER S E PLAC OPENING 2018 E STOR TOY OX IN VIC R TO

12 PROPERTY DESCRIPTION The property is arranged over basement, ground and five upper floors comprising an attractive red brick façade with ornate mouldings and dormer windows to the upper floors. The retail accommodation is arranged over ground and basement levels with dual frontage to Oxford Street and Bond Street Underground Station. Both levels are used for trading and are fitted out to the high corporate standards of the tenant with a consulting room and stock room located in the basement vaults. The tenant has opened up the rear of the property to connect with its store in West One Shopping Centre which sits above Bond Street Underground Station. A separate entrance on Oxford Street provides access to the self-contained office accommodation over the upper floors. The offices are solely occupied by the tenant with the first floor used as ancillary space for the retail unit including two staff rooms, two stock rooms, WC s and an office with excellent levels of natural light. The remaining floors provide cellular accommodation with suspended ceilings incorporating inset fluorescent lighting, perimeter trunking and wall mounted air conditioning units.

13 ACCOMMODATION EXISTING LAYOUT The following net internal areas were agreed at the last rent review: FLOOR USE AREA (SQ M) AREA (SQ FT) Ground Retail ,793 Ground ITZA Retail ,429 Basement Ancillary Retail ,677 Basement Vaults Sub-Total Retail ,793 1st Offices ,213 2nd Offices ,112 3rd Offices STORAGE RETAIL RETAIL 4th Offices th* Offices Sub-Total Offices ,574 TOTAL AREA ,367 *Excluded at review BASEMENT GROUND FLOOR OFFICE OFFICE OFFICE FIRST FLOOR SECOND TO FOURTH FLOORS FIFTH FLOOR

14 2 to 6 TENANCY TENURE Entirely let to Boots UK Limited on Full Repairing & Insuring terms from 29th September 2011 to 26th June The current passing rent is 1,600,000 per annum equating to 990ZA psf which was set at the September 2016 rent review and an average of 56 psf overall on the upper floors. The unique timing of lease events, a lease expiry in 2019, presents a rare opportunity to take advantage of achieving full rental value again in two years time. Leasehold for a term of years from 29th September 1951 and expiring 24th June 2151 (c.134 years unexpired) at a fixed rent of a peppercorn. Under the terms of the leasehold the demise can also be used for residential purposes (subject to the appropriate conversion works) or mixed residential/commercial uses. PLANNING Located within the Mayfair Conservation Area, the property is not listed. 21.8m MES STREET CE NE 17 to to to 12 Gees Court 22.4m Hotel BIRD STREET to 35 s 1 to to 12 8 to 12 TCBs 360 to to TCBs 376 to 384 TCB to Shelter to to m to Bond Street Station (LU) TCBs 28 PH 36 Posts 42 CB to to 20 GILBERT STREET 1 to 24 Cavendish Buildings West One Shopping Centre 75 TCBs Sth Molt Passa 22 LB BINNEY STREET Moore Buildings 25 to to m 6 WEIGHHOUSE STREET DAVIES STRE Ukrainian 1 to 5 Catholic ET e

15 COVENANT Boots is one of the UK s retailing institutions. Founded by John Boot in 1849 in Nottingham, today it is the largest pharmacy health and beauty chain in the UK with over 2,500 stores with representation in most high streets, shopping centres and airport terminals across the country. The company s parent, Alliance Boots, was bought in 2007 for 11.1 billion. This was the first ever FTSE 100 company bought by a private equity firm. In 2012, Walgreens (the largest drug store chain in the United States) bought a 45% stake in Alliance Boots with the option to buy the rest within three years. It exercised this option in 2014, and as a result Boots became a subsidiary of Walgreens Boots Alliance forming a combined business with operations in 25 countries. In April 2015, Walgreens Boots Alliance published their first post-merger update, reporting an overall rise in sales of 35%, to $26.6bn, and a 33% rise in profits compared with last year. Boots UK Limited is rated as Very Low Risk in terms of business failure with a Dun & Bradstreet Rating of 5A1. Boots have a long history in the building having been in occupation since In the year to 31st August 2016 the company reported turnover of 6.876bn, pre-tax profit of 528m and total net worth of 150m. We would consider that most investors would interpret the tenant to be of very strong covenant strength. 2,500 stores with around 640 Boots Opticians practices and over 480 Boots Hearingcare locations. 1,100 Boots UK stores in high street locations. 90% of the UK population is within 10 minutes of a Boots store 60,000 Boots UK employees. Over 20,000 healthcare providers of which around 6,600 are pharmacists. 15 million active Boots Advantage Card members of which around 90% are women. 11 million visits a month to BootsWebMD.com Boots have a long history in the subject building having been in occupation since 1987.

16 ASSET MANAGEMENT High rental levels on Oxford Street have made first floor space a valuable commodity for both landlords and retailers, the former maximising the global rent achieved from an asset and the latter providing an opportunity to expand without the expense of relocating. Boots currently utilise the first floor as offices and meeting room space. EPR Architects have drawn up a scheme to reconfigure the stair core and office entrance as well as infilling and rationalising parts of the basement. This enables the first floor to be used as retail trading space with the potential for a significant increase in rental level. All works subject to planning and landlords consent although they have received a positive pre-app response from the council. THE PROPERTY S LOCATION, CONFIGURATION AND LEASE EVENTS PROVIDE A NUMBER OF WAYS TO EFFECTIVELY ASSET MANAGEMENT THE PROPERTY TO CREATE FURTHER VALUE. The reconfiguration increases the total area by 21% and with an assumed ERV post Crossrail of 1,250ZA would reflect the following rental value: DESCRIPTION EXISTING PROPOSED PROPOSED FORECASTED ERV Name Area (Sq Ft) Area (Sq Ft) A/ ITZA Zone A Rent ( p.a.) Zone A 1,064 1, ,064 1,254 1,334,256 Zone B , ,666 Less Frontage to Depth 5.00% - 96,438 Total Ground Floor 1,793 2,022 1,543 1,832,313 Basement Sales 1,677 2, , ,959 Basement Vaults ,250 27,583 First Floor 1,213 1, , ,375 Second Floor 1,112 1, ,600 Third Floor 969 1, ,080 Fourth Floor 771 1, ,580 Fifth Floor ,220 Less Management Costs/Voids 5.00% - 24,343 TOTAL 8,367 10,628 2,579,367 First floor trading and fully glazed frontage: CGI

17 FLOORPLANS PROPOSED LAYOUT EPR Architects proposed floor layout includes the following, subject to the necessary landlord and planning consents: Combining office and retail cores creating additional accommodation and rationalising space across basement, ground and first floors Infilling at basement level extending towards the shopfront Removal of additional means of escape to create further valuable trading area on basement and ground floors New retail lift serving basement, ground and first floors Rationalising the main core for both consumers and office users allowing the first floor to be trading accommodation First floor extension and relocation of plant enlarging trading area Proposed floor plans below, subject to the necessary consents: RETAIL RETAIL RETAIL BASEMENT GROUND FLOOR FIRST FLOOR

18 MARKET COMMENTARY RETAIL MARKET Oxford Street is the principal retailing and fashion location in Central London commanding the highest rental values after Bond Street. Major national and international retailers opt for multiple stores on Oxford Street recognising the importance not only of positive sales figures but also as being imperative for the exposure of their brand. The subject property is situated in Oxford Street s prime retail pitch benefiting from the strongest footfall. In particular, the immediate location between Bond Street Station and Duke Street attracts the highest rental values. With dual frontage to Oxford Street and the West One Shopping Centre, providing direct access to Bond Street Station, the property benefits from strong 7 day footfall set to grow with the implementation of Crossrail in With a lease expiry in 2019, the investment provides an opportunity to benefit from significant pent up tenant demand and strong growth potential. The prime rental tone on the street was set earlier in the year opposite the subject property at 1,153 ZA. The arrival of Crossrail is expected to push rental levels to in excess of 1,250 ZA over the next two years. Recent Oxford Street comparable letting transactions include: DATE ADDRESS TENANT RENT ( ZA) Q Oxford Street Intimissimi 1,153 COMMENT Regeared existing unit on a new 10 year lease. WEST END INVESTMENT MARKET London continues to remain the world s number one destination for real estate investment. Despite the UK s decision to leave the European Union, Central London has demonstrated its resilience as an international market place for investment capital. The market remains characterised by an acute shortage of quality stock particularly in the West End with prime retail assets increasingly rare. Strong demand from both domestic and overseas investors have capitalised on the wealth preservation characteristics of London s prime assets, the strength of the occupational market and the weakening sterling. Favourable macro-economic conditions are expected to continue and, with an acute shortage of quality retail assets, London is set to remain a top destination for global capital. Below we set out a number of recent investment transactions: DATE ADDRESS TENANT Q Q Q Q Oxford Street 50 New Bond Street 169 New Bond Street 31 Old Bond Street SIZE (SQ FT) TENURE PRICE PSF NIY Dr Martens 2,279 FH 29.50m 12, % Russell & Bromley and Mulberry Richemont & Piaget Nirav Modi t/a Leviev 48,168 FH m 4, % 3,452 FH 65.00m 18, % 2,827 FH 36.00m 12, % Q Oxford Street Inglot 1,113 New 10 year lease. Q Oxford Street Zara 55,162 FH 183m 3, % Q Oxford Street And Other Stores 1,000 Open market letting. 15 year lease. Q Oxford Street Swatch UK Ltd 1,050 Open market letting. 10 year lease with 7 weeks rent free.

19 OWNER OCCUPATION By acquiring the off shore SPV there is the ability to owner occupy the space in 2019 on the expiry of the Boots lease. VAT The property is elected for VAT and it is proposed the transaction will take place by way of a Transfer of Going Concern (TOGC). DATAROOM A dedicated dataroom has been created providing more detailed information relating to the building. Access available on request. EPC The property has a very good EPC Rating of C 74. Certificate available on request. PROPOSAL Offers are sought in excess of 67,000,000 subject to contract and exclusive of VAT, reflecting a net initial yield of 2.34% and a reversionary yield of 2.73% (June 2019), assuming a corporate acquisition and purchasers costs of 1.80% for the SPV. CONTACT For further information please contact: Dominic Rowe Direct line: David Harrison Direct line: dominicrowe@michaelelliott.co.uk davidharrison@michaelelliott.co.uk Peter Ng Direct line: peterng@michaelelliott.co.uk

20 Misrepresentations Act 1967 & Declaration: Michael Elliott for themselves and for the vendors of this property whose agents they are give notice that: a) the particulars are set out as general outline only for the guidance of intending purchasers 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 given in good faith and are believed to be correct, but any intending purchaser should not rely on them as statements or representations of fact but should satisfy themselves by inspection or otherwise as to the correctness of each of them; c) no person in the employment of Michael Elliott has any authority to make or give any representations or warranty whatever in relation to this property. Oct TCC tccommunications.co.uk