THE ROYLE BUILDING A HIGH YIELDING REVERSIONARY INVESTMENT OPPORTUNITY, LOCATED WITHIN ONE OF LONDON'S MAJOR REGENERATION AREAS

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1 A HIGH YIELDING REVERSIONARY INVESTMENT OPPORTUNITY, LOCATED WITHIN ONE OF LONDON'S MAJOR REGENERATION AREAS

2 INVESTMENT SUMMARY Located equidistant from two of London s most vibrant Tech Belt locations, Shoreditch and Angel, just a 10 minute walk from Tech City Attractive canal side setting, within close proximity to one of London s major mixed use regeneration areas, City Road Basin and the City Road The property provides approximately 1,080 sq m (11,579 sq ft) NIA of high quality newly refurbished office accommodation arranged predominantly at ground floor level, across two units Long leasehold interest for a term of 125 years expiring 23 June 2123 (105 years unexpired) at a nominal initial ground rent of 1,000 per annum Fully let to award winning Catapult Enterprises Ltd (t/a Propercorn), and Somesuch & Co Ltd with weighted income of approximately 6.6 years unexpired Current passing rent of 510,473 per annum which equates to a reversionary per sq ft overall. Offers are sought in excess of 7,950,000 subject to contract and exclusive of VAT A purchase at this level reflects a highly attractive net Initial yield of 6.01%, after purchaser s costs of 6.68%, and a capital value of 687 per sq ft overall 2

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4 LOCATION THE SURROUNDING AREA HAS EXPERIENCED SIGNIFICANT REGENERATION IN RECENT YEARS. The Royle Building is located equidistant from two of London s most vibrant and rapidly expanding Tech Belt locations, Shoreditch and Angel. The property offers an attractive canal side setting, within close proximity of Islington s City Road Basin regeneration zone. Old Street Roundabout and Tech City are approximately a 10 minute walk to the south east of the property and the cosmopolitan areas of Angel and Clerkenwell are located a short distance to the west and south-west respectively. The property is located on the western side of Wenlock Road, which adjoins City Road to the south, one of the main arterial roads that links the City of London with Shoreditch, Kings Cross and Euston. The surrounding area and in particular City Road has undergone significant regeneration in recent years, with numerous high quality conversions of commercial and industrial buildings to vibrant mixed use schemes comprising offices, residential, hotel, student and retail uses. Schemes such as 250 City Road, The Eagle and Canaletto have benefited from the area s proximity to the City of London, excellent public transport links and greatly improved local amenities, making this a desirable destination for urban living and working. The location is set to improve further upon the delivery of major forthcoming infrastructure projects. Old Street station is to undergo a 50m upgrade, which will convert the existing 1970s roundabout into an attractive new pedestrianised public space, including seating and trees. It will see the northwestern 'arm' of the junction by City Road closed and two-way traffic reintroduced to the gateway to Tech City as it becomes a new hub for the thousands of people who live, work and socialise nearby. 4

5 1 ANGEL ST JOHN ST UPPER ST ROSEBURY AVE 26 ELIA ST NOEL RD ST PETER S ST GERRARD RD CITY RD GOSWELL RD COMPTON ST CLERKENWELL PACKINGTON ST MORELAND ST 2 CENTRAL ST LEVER ST SEWARD ST GEE ST 24 WHARF RD DINGLEY RD PREBEND ST 25 ST PAULS ST LINTON ST WENLOCK RD CITY RD ARLINGTON AVE SHEPHERDESS WALK REES ST CROPLEY ST EAGLE WHARF RD BANNER ST NEW N RD WENLOCK ST 19 3 OLD ST NEW N RD EAST RD OLD STREET 28 CITY RD NEW NORTH RD HABERDASHER RD TABERNACLE ST PAUL ST PITFIELD ST SHOREDITCH HOXTON SQUARE OLD STREET SCRUTTON ST An unprecedented influx of technology, media, and telecommunication companies (TMT) to Shoreditch and the area surrounding Old Street Roundabout in recent years has secured its position as a major global technology hub. Shoreditch and Tech City have become distinct as London s new centre of creativity and innovation. The area serves as an incubator for start-ups in fin-tech, media, technology, fashion, music and art industries. Local occupiers include Cancer Research UK, Amazon, Google Campus, Ticketmaster, Headspace, Silicon Valley Bank, Inmarsat, Adobe Systems, Lowe Group (Interpublic), and QuidCo D1 MODELS HEADSPACE MOORFIELDS EYE HOSPITAL CBS INTERACTIVE FARFETCH INMARSAT EMC2, AKT & SPARK 44 CAPITAL ONE GOOGLE VICE MIXCLOUD L.K. BENNETT CAPCO TRANSFERWISE PIXIPIXEL KAPLAN TICKETMASTER CANCER RESEARCH UK Shoreditch and Angel provide rich amenity to the creative occupier base, offering a number of bars, restaurants, and hotels including: JAMIE OLIVER S FIFTEEN ACE HOTEL THE BREAKFAST CLUB THE HOXTON HOTEL THE TRAMSHED LOCAL OCCUPIERS THE NARROWBOAT PUB SARDINE NICHE JAMIE S ITALIAN OZONE COFFEE 5

6 CONNECTIVITY ELIZABETH LINE (CROSSRAIL) Crossrail is Europe s largest infrastructure project and is set to transform London s transport network. It is estimated that the new rail line will bring an extra 1.5 million people to within 45 minutes of Central London. Services are due to commence in 2018 with Farringdon set to become one of the key hubs and is located approximately a mile from The Royle Building. When Crossrail opens in 2018, Farringdon Station will be the only station in London that is connected to the Crossrail, Underground and Thameslink networks. Approximately one quarter of the population of England will be able to reach Farringdon Station within 45 minutes, which amounts to over million people. Farringdon Station will provide a direct link to three of London s five airports, with travel times to London destinations significantly reduced. It is also one stop to Kings Cross and the Eurostar Terminal. With 140 trains per hour forecasted to pass through the interchange, this location is expected to become an ever increasing business hub for occupiers seeking world class connectivity. CROSSRAIL 2 AND ANGEL UNDERGROUND STATION Angel Underground Station is currently included in the plans for a future north-south rail service across Greater London known as Crossrail 2. This will link Surrey and Hertfordshire via central London stations including Victoria and King s Cross St Pancras. The scheme aims to achieve Government approval in 2020, and be fully operational in the early 2030s. 61 MINS READING 27 MINS HAYES& HARLINGTON 34 MINS HEATHROW AIRPORT TWICKENHAM SHEPPERTON HAMPTON COURT SOUTHALL HANWELL KINGSTON WEST EALING 18 MINS EALING BROADWAY TOOTING BROADWAY ACTON MAIN LINE 10 MINS PADDINGTON KING S ROAD CHELSEA 7 MINS BOND STREET FARRINGDON 0.95 MILES FROM THE ROYLE BUILDING 5 MINS TOTTENHAM COURT ROAD TOTTENHAM COURT ROAD LIVERPOOL STREET ANGEL 0.3 MILES FROM THE ROYLE BUILDING WHITECHAPEL 40 MINS SHENFIELD 18 MINS ABBEY WOOD NEW SOUTHGATE STATION Old Street STRAIGHT LINE DISTANCE (DIRECTION) 0.55 miles (South east) SERVICES Northern Underground and Mainline Rail services CHESSINGTON SOUTH WIMBLEDON MOTSPUR PARK CLAPHAM JUNCTION VICTORIA EUSTON KINGS CROSS ST.PANCRAS CHESHUNT Angel 0.3 miles (West) Northern Underground services EPSOM Farringdon 0.95 miles (South west) Circle, Metropolitan and Hammersmith & City Underground services 6

7 GROUND FLOOR VACANT POSSESSION VALUES WITHIN THE LOCALITY HAVE ACHIEVED IN EXCESS OF 800 PER SQ FT

8 THE BOWER, EC1 Primary Use: Offices Developer: Helical LOCAL DEVELOPMENTS 7 ATLAS, EC1 Primary Use: Residential Developer: Rocket Investments Private Units: 301 SHOREDITCH, ANGEL AND THE CITY ROAD HAS BEEN SUBJECT TO UNPRECEDENTED DEVELOPMENT ACTIVITY IN RECENT YEARS This is largely being driven by occupational demand from rapidly growing tenants within the tech and creative sectors, but also residential occupiers seeking to be part of the exciting transformation of Shoreditch and the Tech Belt WHITE COLLAR FACTORY, EC1 Primary Use: Offices Developer: Derwent London THE ANGEL BUILDING, EC1 Primary Use: Offices Developer: Derwent London WHARF ROAD, N1 Primary Use: Offices Owner: Urban Lime Ltd SPECTRUM, 160 OLD STREET, EC1 Primary Use: Offices Developer: Ropemaker Partnership (50:50 JV between GPE and the BP Pension Fund) PROVOST & EAST, EC1 Primary Use: Offices Developer: Rocket Investments CITY ROAD, EC1 Primary Use: Residential Developer: Berkeley Homes CANALETTO, EC1 Primary Use: Residential Developer: Groveworld ST MATTHEWS & ST MARKS HOUSE, SHEPHERDESS WALK, N1 Primary Use: Offices Developer: Schroders THE LEXICON, EC1 Primary Use: Residential Developer: Mount Anvil 225 CITY ROAD, EC1 Primary Use: Residential Developer: Reuben Brothers WHARF STUDIOS, N1 Primary Use: Offices 8

9 THE ROYLE BUILDING 9

10 DESCRIPTION TWO SELF-CONTAINED WAREHOUSE STYLE OFFICE UNITS SITUATED IN AN ATTRACTIVE CANAL SIDE SETTING. 41 Wenlock Road comprises two self-contained warehouse style office units situated in an attractive canal side setting fronting the Regents Canal and Wenlock Basin. The units form part of the The Royle Building which is an attractive former print works originally constructed in 1937 of traditional brick. The property underwent a comprehensive refurbishment in 2015 to provide approximately 1,080 sq m (11,579 sq ft) NIA of modern well specified warehouse style office space, arranged predominantly at ground floor level. Unit 1 provides approximately 732 sq m (7,879 sq ft) and has extensive frontage to the canal at northern and western elevations. Unit 2 provides approximately 344 sq m (3,700 sq ft) and has a separate entrance fronting Wenlock Basin. The regular shaped floor plates benefit from vast floor to ceiling heights ( metres) and large windows, ensuring exceptional levels of natural light. ACCOMMODATION UNIT FLOOR NIA (SQ FT) NIA (SQ M) Unit 1 Ground 6, Lower Ground Basement 1, Unit 2 Ground 3, TOTAL 11,579 1, The refurbished modern specification of both Units can be summarised as follows: Attractive canal side working environment VRF air conditioning systems Exceptional floor to ceiling heights of metres Newly installed suspended lighting Outstanding natural light 9

11 FLOORS THE WENLOCK BASIN UNIT 2 GROUND 3,700 SQ FT (NIA) UNIT 1 GROUND 6,316 SQ FT (NIA) UNIT 1 LOWER GROUND 502 SQ FT (NIA) 11 11,579 SQ FT MODERN WELL SPECIFIED WAREHOUSE STYLE OFFICE SPACE UNIT 1 BASEMENT 1,061 SQ FT (NIA)

12 TENANCY SCHEDULE The property is let to Catapult Enterprises Ltd (t/a Propercorn) and Somesuch & Co Ltd on Full Repairing and Insuring Terms in accordance with the tenancy schedule set out below. The total gross rent is 510,473 per annum ( per sq ft) overall and the weighted average unexpired lease term is approximately 6.6 years. 12 UNIT TENANT DEMISE NIA (SQ FT) Unit 1 Catapult Enterprises Limited (trading as Propercorn) Ground Floor Lower Ground 6,316 LEASE START LEASE EXPIRY RENT REVIEW PASSING RENT (P.A.) PASSING RENT (PSF) 284, /03/ /03/ /02/ , Basement 1,061 13, Unit 1 Total 7, , Unit 2 TOTAL GROSS RENT Somesuch & Co Limited Ground Floor 3,700 15/04/2016 4/04/ , , , HEAD RENT - 1,000 TOTAL NET RENT 509,473 COMMENTS Rent Deposit 192, , from 3 June 2016 to 2 August , from 3 August 2017 until the review date Rent Deposit of 76,160

13 TENURE & SITE THE PROPERTY IS HELD LONG LEASEHOLD FOR TERM OF 125 YEARS EXPIRING 23 JUNE 2123 PROVIDING APPROXIMATELY 105 YEARS UNEXPIRED. The headlease is subject to stepped rental increases at the 25th anniversaries of the lease as set out below: HEADLEASE PAYMENTS FROM TO HEAD RENT Canal Period 1 24/06/ /06/2023 1,000 Period 2 24/06/ /06/2048 2,000 Period 3 24/06/ /06/2073 4,000 Period 4 24/06/ /06/2098 8,000 Period 5 24/06/ /06/ , The above plan shows approximate boundaries copied from the title plan and is for indicative purposes only.

14 COVENANT INFORMATION CATAPULT ENTERPRISES LTD (t/ a Propercorn) 14 Propercorn is a new generation health snack founded in 2011 by CEO Cassandra Stavrou and business partner Ryan Khon. Capitalising on an increasingly health conscious nation which has seen popcorn sales increase by 10% this year; their low calorie flavoured popcorn is currently one of the UK s fastest growing snack brands. The company now employs over 40 staff at their London headquarters at The Royle Building and sells their popcorn in 11 countries. The rapid success enabled the company to secure a 7m investment from the Innocent Drinks founders JamJar Investments, and Piper Private Equity in Innocent Drinks cofounder Adam Balon was appointed Chairman at this time focusing on the continued growth of the business. Propercorn is stocked in all major supermarkets including Tesco and Wholefoods. According to the Piper Private Equity website, sales of Propercorn are forecast to rise from 10m in 2015 to 15m in Propercorn also ranked fifth place in the Financial Times 1000: Europe s Fastest Growing Companies (May 2017). PROPERCORN HAS SECURED A 7M INVESTMENT FROM INNOCENT DRINKS FOUNDERS JAMJAR INVESTMENT AND PIPER PRIVATE EQUITY SOMESUCH & CO LTD Somesuch & Co is an award winning global film production company founded in 2010 by producer Sally Campbell, director Nick Gordon and video commissioner Tim Nash. The company has grown significantly to feature on the 2015 and 2017 Production Company A-List. It was also awarded the prestigious Production Company of the Year award in 2015 following its successful campaigns such as The Other Side for Honda and It Comes from Below for Under Armour. The company won its first BAFTA in 2017 for Best Short Film for Home.

15 RENTAL COMPARABLES UNION WHARF, UNIT 5 23 WENLOCK ROAD, N1 Size: 1,363 per sq ft (ground & mezzanine) Rent: per sq ft (available) 4-6 NILE STREET, N1 Size: 1,959 sq ft Rent: per sq ft INVESTMENT COMPARABLES WHARF ROAD, N1 Size: 995 sq ft (ground) Rent: per sq ft HQ SHOREDITCH, BEVENDEN STREET, N1 Size: 8,680 sq ft Rent: per sq ft 26 UNDERWOOD STREET, N1 Size: 6,214 sq ft Rent: per sq ft 15 UNION WHARF, UNIT 5 23 WENLOCK ROAD, N1 (Available, vacant possession) Size: 1,363 sq ft (ground and mezzanine) Tenure: Virtual freehold Price: 1,350,000 Price/ Sq ft: 990 per sq ft 14 SHEPHERDESS WALK, N1 Size: 4,616 sq ft (ground & lower ground) Tenure: Virtual freehold Price: 2,900,000 NIY: 3.11% Price/ Sq ft: 628 per sq ft 20 UNDERWOOD ROW, N1 (Vacant Possession) Size: 2,195 sq ft (over ground only) Tenure: Long leasehold Price: 1,900,000 Price/ sq ft: 866 psf GILRAY HOUSE, CITY ROAD, EC1 Size: 11,023 sq ft Tenure: Freehold Price: 11,000,000 NIY: 4.55% Price/ sq ft: 998 per sq ft 21 WORSHIP STREET, EC2 Size: 12,864 sq ft Tenure: Freehold Price: 14,250,000 NIY: 4.91% Price/ sq ft: 1,108 per

16 EPC The property has an EPC rating of A (54) for Unit 1 and E (106) for Unit 2. Copies of the certificates are available on the data room. DATA ROOM Further information can be found on the online data room. Please contact the vendor s agents to request access. VAT The property is elected for VAT and it is anticipated that the transaction will be treated as a Transfer of a Going Concern (TOGC). CAPITAL ALLOWANCES The benefit of any unclaimed capital allowances could be made available to the purchaser by separate negotiation. PLANNING The property is located in The London Borough of Hackney and is situated within the Regent s Canal Conservation Area. PROPOSAL We are instructed to seek offers in excess of 7,950,000 (Seven Million Nine Hundred and Fifty Thousand Pounds) subject to contract and exclusive of VAT for our client s long leasehold interest. A purchase at this level reflects a highly attractive net Initial yield of 6.01%, after purchaser s costs of 6.68%, and a capital value of 687 per sq ft. Matthew Millman matthew.millman@allsop.co.uk Christopher James christopher.james@allsop.co.uk 16 DISCLAIMER: Allsop LLP on its behalf and for the Vendors or Lessors of this property, whose Agents they are, give notice that: These particulars are set out as a general outline only for guidance to intending Purchasers or Lessees, and do not constitute any part of an offer or contract. Details are given without any responsibility and any intending Purchasers, Lessees or Third Parties should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise as to the correctness of each of them. No person in the employment of Allsop LLP has any authority to make any representation or warranty whatsoever in relation to this property. Unless otherwise stated, all prices and rents are quoted exclusive of VAT. October 2017.