Regional HQ Office Investment Let to a 5A1 Covenant. EntServ UK Limited, Unit K2, Kelvin Close, Birchwood, Warrington, WA3 7PB

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1 Regional HQ Office Investment Let to a 5A1 Covenant EntServ UK Limited, Unit K2, Kelvin Close, Birchwood, Warrington, WA3 7PB

2 INVESTMENT SUMMARY Well specified office investment located in Birchwood, one of the North West s premier business locations. Self-contained office premises totalling 50,549 sq ft over ground and first floor. Single let to EntServ UK Limited on full repairing and insuring terms on a lease expiring 18 December 2020, with a guarantee from Hewlett-Packard Ltd. EntServ UK Limited are a leading global technology services company with a Dun and Bradstreet rating of 5A1 and a pre-tax profit of c. 135m. Passing rent of 607,190 per annum equating to a low psf. Significant reversionary potential and opportunity to enhance the income profile through regear, refurbishment and/or reletting. Excellent car parking ratio of 1:192 sq ft (263 spaces). Site area of approximately 1.54 hectares (3.83 acres), which reflects a very low site density of 15%. Freehold. We are instructed to seek offers in excess of 5,840,000, subject to contract and exclusive of VAT. A purchase at this level would reflect an attractive Net Initial Yield of 9.75% and a low capital value of 116 psf, assuming purchasers costs of 6.62%. 2 Unit K2 Kelvin Close, Birchwood, Warrington WA3 7PB

3 MANCHESTER BIRCHWOOD TECHNOLOGY PARK M6-2 MILES 1 LIVERPOOL Carphone Warehouse Taylor Wimpey Ashtead Plant Hire Ltd RPS Cavendish Nuclear Fujitsu Fujitsu MWH St Modwen Properties GE Energy Sellafield Wainhomes (Developments) Regal Crown Logistics Atkins Ltd Twinfix Schneider Electric Wood Plc Wood Plc Veolia WHP Your Housing Group DWP David Wilson Homes Ltd Electricity North West Serco Assurance Unit K2 Kelvin Close, Birchwood, Warrington WA3 7PB 20 BIRCHWOOD PARK

4 LOCATION Warrington town centre 4.5 miles / 10 mins Junction miles / 5 mins M6 Junction 21A 2 miles / 8 mins Blackpool Southport M55 A565 M58 M57 Preston Blackburn Knowsley M6 M61 Wigan M55 a666 M66 a646 A6033 Bolton Oldham MANCHESTER M60 BRADFORD LEEDS Halifax Huddersfield A628 M1 Ba Birchwood Train Station 1.8 miles / 7 mins Warrington Bank Quay Train Station 6.0 miles / 15 mins Manchester Airport 15 miles / 25 mins A55 A494 LIVERPOOL M53 Chester Warrington M56 A49 M6 A41 Crewe A34 A34 Stockport A523 A523 A623 A515 SHEFF Cheste A6 4 Unit K2 Kelvin Close, Birchwood, Warrington WA3 7PB

5 SITUATION The property is situated within the heart of Birchwood and is accessed via Kelvin Close, off the main Birchwood Park Avenue. The site is bounded by residential to the west, Birchwood Golf Course to the north, a contact centre occupied by Carphone Warehouse to the east and Kelvin Close to the south. Birchwood is Warrington s key office location and one of the North West s premier business destinations, home to c.200 companies and over 6,000 people. The major commercial and distribution hub is also supported by residential and shopping amenities including Birchwood Shopping Centre and Birchwood Golf Club (adjacent). Warrington has a population of 208,800 - the largest urban population in Cheshire. Three million people within a half an hour drive time - the largest workforce catchment in the UK outside London. Warrington imports more workers each day than it exports to the wider region, including Liverpool and Manchester. The Warrington & Cheshire sub-region has the second highest income per head outside of London at c. 30bn per annum. NEWTON-LE- WILLOWS A573 A579 MAJOR OCCUPIERS IN THE VICINITY INCLUDE: A574 A49 M6 J10 A574 A49 A574 BIRCHWOOD A574 M6 A50 A57 PADGATE A57 J21 WARRINGTON CENTRAL 5 Unit K2 Kelvin Close, Birchwood, Warrington WA3 7PB

6 DESCRIPTION SITE The property was constructed in 1991 to provide a self-contained office building, arranged over ground and one upper floor. The building totals 50,549 sq ft and is of steel frame construction with brick elevations and double glazed curtain walling under a pitched roof. Internally the accommodation provides a well specified open plan office with a central glazed atrium. The specification includes: Suspended ceilings Air Conditioning Raised floors CAT II lighting Goods / passenger lift Male & female WC s on each floor 263 car parking spaces (1:192 sq ft) The property is EntServ UK Limited s North West headquarters. The site extends to approximately 1.54 hectares (3.83 acres) equating to a very low site coverage of c.15%. Drain 2 El Sub Sta El Sub Sta CLOSE SMITHILLS CLOSE DSHAW 6 Unit K2 Kelvin Close, Birchwood, Warrington WA3 7PB

7 TENANCY TENURE The property is let to EntServ UK Limited with Hewlett-Packard Ltd (HP) acting as Guarantor. Hewlett Packard regeared their lease in 2015 for a further five years at an increased rent of 607,190 ( psf). HP assigned their lease to EntServ UK Limited in January 2017 as part of a company transaction who then sublet the ground floor back to HP at passing rent. The existing onsite operations have had a long standing presence at the subject property dating back to c The property is held freehold under Title Number CH Tenant Name Total Area (sq ft) Lease Start Lease Expiry Rent (pa) Rent (psf) Comments EntServ UK Ltd 50, Dec Dec , FRI terms. EntServ UK Ltd have sub-let the ground floor to Hewlett-Packard Ltd. COVENANT EntServ UK Limited (formerly Hewlett-Packard Enterprise Services UK Ltd) is a leading global technology services company delivering a broad portfolio of IT and business process outsourcing services to clients in manufacturing, financial services, healthcare, communication, energy and transportation, as well as government bodies. On 1 December 2016 the company changed its name from Hewlett Packard Enterprise Services UK Ltd to EntServ UK Ltd, and in April 2017 EntServ was announced to have merged with Computer Sciences Corporation (CSC) forming a new company called DXC Technology Company (DXC). As a result, from 1 April 2017 DXC Technology Company became the ultimate parent of EntServ UK Limited. DXC are headquartered in Virginia and operate in more than 70 countries. They employ c.170,000 people worldwide serving c.6,000 clients such as Amazon, Dell EMC, AT&T, Hitachi and Microsoft, and have a c.$25 billion turnover. DXC are listed on the NYSE with a current market capitalisation of c.$29.5 billion. EntServ UK Limited has a Dun & Bradstreet rating of 5A1 representing a minimum risk of business failure. A summary of the last three years accounts is set out below: Company No Oct Oct Oct 2014 Sales Turnover 1,954,085,000 2,159,331,000 2,127,482,000 Profit/(Loss) Before Taxes 134,784,000 30,183,000 ( 69,582,000) Tangible Net Worth 266,209, ,072, ,934,000 7 Unit K2 Kelvin Close, Birchwood, Warrington WA3 7PB

8 OCCUPATIONAL MARKET Property Size (sq ft) Tenant Rent ( psf) Term Date Birchwood is Warrington s key office location and home to c.200 businesses employing over 6,000 people. Birchwood accounted for c.50% of all leasehold deals completed in Warrington last year by sq ft and has commanded the highest rents achieved on new lettings for the past eight years. Over the past 12 months five of the largest ten deals in Warrington took place in Birchwood, demonstrating its continued appeal to large scale occupiers and provision of the best quality office accommodation in the area. First Floor, 401 Faraday, Birchwood Park 18,895 WHP years Mar-18 Cinnabar Court, Daresbury Park 10,200 Greensill years Mar-18 3 Clearwater, Lingley Mere Business Park 10,817 Asics years Feb-18 Exchange House, Birchwood 11,000 IESA years Sep Dalton Avenue, Birchwood Park 47,149 Cavendish Nuclear years May-17 Part Ground Floor, 305 Bridgewater Place, Birchwood Park 7,500 Ricoh years Feb-17 Grade A rents in Birchwood are currently 20 per sq ft plus, with refurbished space commanding 15 per sq ft plus. Part Ground Floor, 305 Bridgewater Place, Birchwood Park 7,500 Areva years Jan-17 INVESTMENT MARKET Property Sq Ft Tenant AWULT Purchase Price NIY Cap Val (psf) Date Demand for business park assets in the North West has strengthened over the past 12 months with investors attracted to the greater returns on offer and more favourable occupational market dynamics. This resulted in 2017 business park investment volumes of c. 320m, significantly ahead of the North West five year average of c. 120m. There is robust demand from investors for good quality business park assets in the area, particularly those located in Birchwood and Daresbury Park, with record investment volumes reached in Warrington Borough Council s 205m purchase of Birchwood Park from Oaktree in September 2017 is the largest investment transaction ever recorded in Warrington. Twelve other office transactions were completed in 2017 taking investment volumes to c. 250m. Mere Grange Business Park, St Helens Renaissance House, Centre Park, Warrington 46,527 Multi-let 3.19 years 4.85m 7.92% 104 Mar-18 40,679 Claremont House, Warrington 15,754 Secretary of State Claremont Group 9 years 10.5m 5.69% 258 Feb years 2.31m 8.66% 146 Jan-18 Sonova House, Warrington 43,392 Phonak 10.5 years m 4.96% 263 Dec-17 Carnoustie House & Turnberry House, Warrington No.1 Lakeside, Cheadle Royal Business Park Atlantic & Appleton House, Birchwood 11,602 Claremont Group 10 years 1.75m 8.43% 151 Dec-17 33,000 Multi-let 3.5 years 6m 8.00% 182 Feb-17 51,343 Multi-let 5 years 5.58m 8.5% 108 Nov-16 Q has started strongly with c. 50m office investments completed in Warrington and surroundings, significantly ahead of the 10 year Q1 average of c. 10.5m. Lakeside 5000, Cheadle Royal Business Park 40,049 Balfour Beatty 3.5 years 8.47m 8.93% 211 Aug-16 8 Unit K2 Kelvin Close, Birchwood, Warrington WA3 7PB

9 EPC Energy Performance Certificate is available upon request. VAT We understand the property is elected for VAT and it is anticipated the transaction will be treated as a Transfer of Going Concern (TOGC). DATA ROOM There is a Data Room providing further information on the asset. Access will be provided upon request. PROPOSAL We are instructed to seek offers in excess of 5,840,000, subject to contract and exclusive of VAT. A purchase at this level would reflect a Net Initial Yield of 9.75% and a low capital value of 116 per sq ft, assuming purchaser s costs of 6.62%. FURTHER INFORMATION For further information or to arrange and inspection, please contact the following: Leo Nicholson T: E: LNicholson@geraldeve.com Charlotte Campbell T: E: CCampbell@geraldeve.com Callum Robertson T: E: CRobertson@geraldeve.com Ross Cuthbert T: E: RCuthbert@geraldeve.com Conditions under which these particulars are issued All details in these particulars are given in good faith, but Gerald Eve LLP for themselves and the Vendors/Lessors of this property for whom they act give notice that:- 1. These particulars do not and shall not constitute, in whole or in part, an offer or a contract or part thereof, and Gerald Eve LLP have no authority to make or enter into any such offer or contract. 2. All statements contained in these particulars are made without acceptance of any liability in negligence or otherwise by Gerald Eve LLP, for themselves or for the Vendors/Lessors. 3. None of the statements contained in these particulars is to be relied on as a statement or representation of fact or warranty on any matter whatsoever, and intending purchasers must satisfy themselves by whatever means as to the correctness of any statements made within these particulars. 4. The Vendors/Lessors do not make, give or imply, nor do Gerald Eve LLP or any person in their employment have any authority to make, give or imply, whether in these particulars or otherwise, any representation or warranty whatsoever in relation to the property. The statement does not affect any potential liability under the Property Misdescriptions Act Particulars issued April Gerald Eve LLP. All rights reserved. Gerald Eve LLP is a limited liability partnership registered in England and Wales with registered number OC and its registered office at 72 Welbeck Street, London, WIG 0AY