7/11 BRIDGE STREET, GUILDFORD. well secured, freehold, mixed use investment opportunity

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1 7/11 BRIDGE STREET, GUILDFORD well secured, freehold, mixed use investment opportunity

2 Investment Considerations A prominent and busy location on Bridge Street, the primary link between Guildford Train Station and the Town Centre. Guildford is the busiest train station in Surrey. Well secured to the strong covenants of Tesco Stores Limited (Tesco Express) and ACM Commercial Limited (ACM). Future rental growth prospects. (Average Weighted Unexpired Lease Term) AWULT of 9.8 years Total rent of 113,594 pax Freehold Offers in excess of 1,900,000 (Subject to Contract & exclusive of VAT), which reflects a Net Initial Yield of 5.65% assuming purchasers costs of 5.8%. A purchase at this level reflects an equivalent yield of 6% assuming 3% RPI uplifts per annum on the Tesco income. Location Guildford is an affluent and popular commercial and administrative centre within Surrey located circa 50km (31 miles) south-west of central London, 8 miles (12.8 km) south of Woking and 37 miles (60 km) north-east of Winchester. 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 35 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 people (727,000 Guildford within a 12 mile radius). The town is particularly affluent, 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. 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.

3 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 as well as 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 recent refurbishment of Friary Street, which adjoins White Lion Walk has further improved Guilford s retail offer; Wagamama, Apple, TK Maxx, Cotswold Outdoors and Jamie Oliver s Italian Kitchen are all represented. 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. Accommodation & Tenancies Area Analysis (sq ft) Unit Description Tenant Name Bsmt GF FF SF Rent Start Date 7-11 Bridge Street Tesco Stores Ltd 1,208 2, ,594 pax ( psf) 7-11 Bridge Street ACM Commercial Ltd 1,417-2, ,000 pax ( 8.98 psf) 2,625 2,884 2, ,594pax Station Development Solum Regeneration (A subsidiary of The Kier Group) have entered into a joint venture with Network Rail to deliver a mixed use development of Guildford town centre station. They are due to submit planning shortly on a predominantly residential scheme with 20,000-25,000 sq.ft of retail accommodation below. We anticipate that M&S will relocate back into the development and space for other A1/A3 occupiers will be available. Situation The property occupies a prime trading position on Bridge Street, one of the main thoroughfares to The Friary Centre, North Street, White Lion Walk and the High Street. There are a number of office buildings and public houses located nearby which complement the holding. A pay and display car-park is located to the rear of the property on Bedford Road providing circa 70 spaces. Expiry Date Next O/S Review Comments 18/01/10 17/01/25 18/01/20 The rent review is linked to RPI subject to a cap and collar of 1 and 4%. 61.4% of the income. 05/05/10 04/05/25 05/05/15 Outstanding rent review. 38.6% of the income.

4 Car Park to the rear The Property The property lies within Guildford s Conservation Area albeit it is not listed. The property is let to Tesco Stores Limited trading as Tesco Express and ACM Commercial Limited trading as Academy of Contemporary Music. Tesco Stores Limited comprises ground and part basement floors only. ACM Commercial Limited is arranged over part basement, first and second floors. The property provides an approximate total net floor area of sq.m (8,990 sq.ft). Tenure Freehold. Tenant Covenant Status Tesco Stores Limited has one of the strongest covenants in the UK. They have a D&B rating of 5A1 and for the year ending 22/02/2014 the company reported a turnover of 42,547,000,000, a pre-tax profit of 1,696,000,000 and a tangible net worth of 3,038,000,000. We understand that this unit trades particularly well. ACM Commercial Ltd (Academy of Contemporary Music) has a D&B rating of 2A1 and was established in 1995 and has since taught over 20,000 graduates including Newton Faulkner and Amelle Berrabah (Sugarbabes). For the year ending 30/06/2014 the company reported a tangible net worth of 5,472,583 and net current assets of 3,911,982. In addition to the Bridge Street site, the academy has also opened in South Africa and USA. Current Income pax 113,594 per annum exclusive. Rental Value We devalue Tesco s rent to reflect psf and we believe there is strong potential for further rental growth. We believe the upper floors are reversionary from their current level of 8.98 psf.

5 to Guildford Train Station

6 Further Information For further information or to arrange an inspection, please contact: Service Charge There is no formal service charge, but the Landlord can claim back fair and reasonable costs from the tenant, on an ad hoc basis. EPC EPCs 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 of 1,900,000 (One Million and Nine Hundred Thousand Pounds), Subject to Contract & exclusive of VAT, which reflects a net initial yield of 5.65%, allowing for purchaser s costs of 5.8%. A purchase at this level reflects an equivalent yield of 6% (assuming 3% RPI uplifts per annum on Tesco s income). Ed Smith ed.smith@greenpartners.co.uk Patrick Over patrick.over@greenpartners.co.uk David Freeman david.freeman@greenpartners.co.uk James Baillie james.baillie@greenpartners.co.uk 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. June Adrian Gates Photography & Design