FOR SALE. Prime Industrial Investment with RPI linked rent reviews. 391 Kingsway & 398A Princesway, Team Valley Trading Estate, Gateshead

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1 INVESTMENT OPPORTUNITY Express Engineering FOR SALE 391 Kingsway & 398A Princesway, Team Valley Trading Estate, Gateshead Prime Industrial Investment with RPI linked rent reviews SAT NAV REF 391 Kingsway - NE11 0EG 398A Princesway - NE11 0TU

2 INVESTMENT SUMMARY Prominent manufacturing facility on Team Valley, the North East s principal commercial estate extending to 700 acres Three contiguous well specified manufacturing/warehouse units totalling 5,690 sq m (61,310 sq ft) Fully let to Express Engineering (Gateshead) Limited on two new 15 year leases from completion, subject to 5 yearly RPI linked reviews subject to a collar and cap of 1% & 3% Long established tenant with a strong position in a high value engineering sector Strong occupational market dynamics pointing to continuing rental growth Annual rent of 355,000 Heavily embedded tenant as evidenced by lease regear Total site area of 2.94 acres We have been instructed to seek offers in excess of 5,300,000 reflecting a NIY of 6.28% after deducting purchasers costs of 6.60%

3 A19 LOCATION Scotland GLASGOW Maingate A1 North & Newcastle Airport M6 Wales ABERDEEN EDINBURGH A1 CARLISLE NEWCASTLE First Avenue A692 A69 A66 MANCHESTER LIVERPOOL M6 A19 A1(M) M1 M1 M4 YORK SHEFFIELD BIRMINGHAM BRISTOL LEEDS A1(M) M1 A1(M) M40 M11 Queensway LONDON England Kingsway North Second Avenue tterburn Hexham East Coast Mainline Third Avenue Princesway Earlsway Fourth Avenue Dukesway Fifth Avenue Ponteland A696 A69 Newcastle International Airport Western Avenue Express Engineering A694 Eastern Avenue A1 Kingston Park Retail A7068 A1172 A1056 South Gosforth NEWCASTLE RIVER TYNE Consett Sixth Avenue A1 A1 Central Station Metrocentre A692 Seventh Avenue A192 Gosforth A184 Manor Walks Shopping & Leisure Cramlington Gateshead Hospital Killingworth TEAM VALLEY A1 A189 A189 A189 Durham & South Queensway A193 Kingsway South Princesway Eigth Avenue Dukesway A19 A1(M) A190 A191 A1058 Seaton Sluice A192 Wallsend A184 A194(M) A1231 Washington Ninth Av Marquis Way Dukesway West Tenth Avenue Silverlink Jarrow Eleventh Avenue Whitley Bay A191 North Shields TYNE TUNNEL Retail World Teesside & South Eleventh Avenue Tynemouth A1058 A1018 South Shields A184 SUNDERLAND A690 To A1(M) Durham & South Sainbury s Location Team Valley is regarded as the North East s principal commercial estate located approximately 2.3 miles south of Newcastle city centre. The estate is situated within Gateshead and is part of the Tyneside conurbation, the UK s 7th largest with a population of over 775,000 people. Team Valley is bounded by the East Coast Mainline to the east, and the A1 to the west, with the recent 60m upgrade to the A1 which completed in 2016, significantly improving transport links to the estate. The area is well served by public transport with Newcastle Central, a main station on the East Coast Mainline connecting the city to London in 2 hours and 50 minutes and Edinburgh in 1 hour 30 minutes. The Tyne and Wear metro comprises 60 stations throughout the county, and is the second largest system in the UK, behind the London underground. Situation The development of Team Valley began in 1935 and the estate is now one of Europe s largest commercial areas and a leading commercial hub for the North East of England. Comprising in excess of 7 million sq ft of accommodation over 705 acres, the estate is home to many national and international occupiers including De la Rue, Yodel, Screw Fix, Howdens, DHL, Doosan, Royal Mail, Parker Hannfin, Smiths News and Sevcon. To support the estate s workforce population in excess of 24,000 people, Team Valley benefits from a wide range of amenities including hotels, restaurants, supermarkets and banks. Retail World is located to the southern end of Team Valley and is one of the 20 largest retail parks in the United Kingdom, attracting occupiers such as Wren, Next, New Look, M&S Simply Food. The site benefits from dual frontage onto both Kingsway, the estates main thoroughfare, and Princesway, another key route on the estate.

4 A1 North Express Engineering Ltd A1 South Princesway Kingsway North The property is situated 2.5 miles north east of Newcastle city centre on Benton Park Road (A191) in South Gosforth, which is one of the city s most popular and affluent suburbs. Benton Park Road is in close proximity to the popular residential suburbs of Gosforth and High Heaton and is a main arterial route between Newcastle city centre and the commuter district of Longbenton. The surrounding area is primarily residential in nature with Promis identifying Gosforth as a pocket of affluence on Newcastle s northern fringe. Nearby occupiers include Majestic Wine and Sainsbury s Local. SITUATION South Gosforth and Longbenton Metro stations are both within 10 minutes walking distance providing rail links to Newcastle city centre and the rest of the North East. Kingsway South

5 DESCRIPTION The property comprises three modern warehouse / manufacturing units with both Factory 1 and Factory 2 interlinked and fronting onto Kingsway, and Factory 3 fronting onto Princesway. Factory 1 comprises a large single bay industrial unit and of steel portal frame construction with cavity block and profile metal sheet clad elevations under a pitched profile metal roof. The office elevation comprises cavity blockwork walls with a combination of brick and glazed curtain wall cladding. The office accommodation features an impressive double height atrium and is well specified to benefit from gas central heating and suspended ceilings as well as WC s, kitchen facilities and a squash court. Factory 2 is a single steel portal frame industrial unit with block and profile sheet elevations under a pitched profile metal roof incorporating translucent panels. Internally the unit has concrete floors, suspended lighting throughout with 4.5m minimum eaves rising to 6m at the apex. There is a roller shutter door to the northern elevation, which leads into the large yard shared with Factory 1. Factory 3 comprises a single bay industrial unit of steel portal frame construction, with part block, brick and profile sheet clad elevations, under a pitched metal roof incorporating translucent panels. Internally, the warehouse is well specified to include concrete floors, heating and lighting throughout and has a minimum eaves height of 5.1m rising to 7.5m at the apex. The unit benefits from 17 electrically operated doors on the north, south and west elevations into the large secure yard. The offices comprise two storeys of modern accommodation fitted out to a very high specification, including suspended ceilings with integrated lighting, air conditioning and gas central heating, WC s and kitchen facilities.

6 ACCOMMODATION The property has been scaled from plans with check measurements taken on site and reflects the following Gross Internal Area; Unit Accommodation sq m sq ft 391 Kingsway Warehouse 2, ,559 Ground Floor Offices 596 6,415 First Floor Offices 333 3,585 Total 3, , a Princes Way Warehouse 1, ,635 For indicative purposes only Ground Floor Offices ,603 First Floor Offices ,514 Total 2, ,752 5,696 61,311 Site Area The site extends to 1.19 ha (2.944 acres) and reflects a low site coverage of 43%.

7 391 Kingsway 398a Princesway TENURE For indicative purposes only Tenure Both properties are held on a long leasehold basis at a peppercorn without review. Unit 391 Kingsway is held from 25/1/1988 expiring 24/1/2113 and Unit 398a Princes Way from 29/1/1989 expiring 28/1/2114. Tenancies The properties are let to Express Engineering (Gateshead) Limited on two co-terminus FRI leases. The newly regeared leases will run for 15 years upon completion, with five yearly RPI linked rent reviews subject to a collar and cap of 1% & 3%. From completion, the tenant will pay an annual rent of 355,000.

8 TENANT S COVENANT STRENGTH Acc. Period Ending months 12 months 25 weeks Turnover 43.6m 43.4m 18.2m Operating profit before exceptional items Pre-Tax Profit Express Engineering (Gateshead) Limited Formerly Express Engineering (Oil & Gas) Limited Company Number m 9.6m 4.9m 4.3m ( 10.0m)* 9.4m 4.8m Shareholder s Funds 17.2m 26.6m 18.6m Express Engineering provides precision manufacturing solutions of complex components in exotic metals and works across aerospace, defence, oil and gas, marine and nuclear sectors. They have been based in the North East since inception and have occupied the subject property since 1988 and now employ over 200 highly skilled workers. The company have expanded into global markets significantly and have spent over 9,500,000 on machinery in the last three reported accounting periods to keep pace with demand. Clients include Rolls Royce, GE, esterline, BAE and Siemens. The company s financial accounts for the period ending 30th September 2016 show a Turnover of 43.6m with an operating profit before exceptional items of 4.3m and Shareholder s Funds of 17.2m. These figures reflect the group refocussing away from the declining Oil and Gas sector, including the closure of the group s Brazilian operations at a one off exceptional cost of 13m. The groups balance sheet has subsequently been further strengthened by a refinance which reduces the interest costs, whilst providing capital to invest in expansion into high value markets. *after exceptional items

9 ACCOMMODATION OCCUPATIONAL MARKET For indicative purposes only The North East Industrial market continues to perform well with demand outweighing supply over the last 24 months. Positive market sentiment has been highlighted through both increased activity from key regional exporters in manufacturing and engineering, and expansion in the evolving sectors of logistics and warehousing. The manufacturing and specialist engineering sectors in particular, have attracted global businesses such as Nissan, Hitachi and Caterpillar along with their respective supply chains. Nissan continues to perform very well, with their plant in Washington now recognised as Europe s most productive plant and the UK s largest car manufacturer, producing over 500,000 cars a year, with obvious spin offs for their supply chain. Enduring levels of demand coupled with little speculative development in the region have had a positive effect on rents throughout the North East with this trend expected to continue. The rental tone on Team Valley ranges widely depending on location and specification typically between 5.25 psf 6.50 psf. This level has continued to increase over the last 12 months with the most recent development on the estate at Dukesway Central achieving 7.75 psf. Date Address Tenant Sq Ft Rent March 2017 March 2017 February 2016 October 2016 July 2016 April 2016 April 2016 January 2016 Unit 1 Dukesway Central, Team Valley 380 Princesway South, Team Valley 392 Princesway North, Gateshead, NE11 0TU Unit 12, Queens Court, Team Valley Unit 14 Kingsway Interchange 270 Queensway South, Gateshead, NE11 0SD 15, Octavian Way, Gateshead, NE11 0HZ Unit 7 Stirling Court, Team Valley, Gateshead, NE11 0JY Rent (psf) Lease Length Under Offer 26, , Pyramid Displays 16,819 92, Years Gate 7 LTD 8,041 45, Years Adept Displays 11,620 94, Years Muss Media 5,018 32, Years Silver Rock 3,251 20, Years Pet Supermarket LTD 7,290 45, Years Skyline Storage 3,003 18, Years December 2015 Allan House, 5 Bamburgh Court, Team Valley The Pen Shop Limited 4,827 34, Years

10 INVESTMENT MARKET The North East Investment market continues to perform strongly as investors continue to seek higher returns than those typically found in the South East. We set out below a schedule of recent transactions; Date Address Price Yield Size (Sq ft) Review Unexpired Term Marketing Princes Park, Team Valley Q 8,000, % 98,123 OMV 4.8 to expiry (3.7 to break) July 2017 SPS Aerostructures, Sherwood Park, Nottingham 9,300, % 143,578 OMV 15 July 2017 Royal Mail, Team Valley, Gateshead, NE11 0YY 16,150, % 207,812 OMV 13.5 February 2017 SNOP UK, Rainhill Road, Washington, NE37 3HP 5,500, % 152,507 OMV 7 May 2016 AAH Pharmaceuticals, Winwick Quay, Warrington 13,950, % 131,960 OMV 15.5 September 2015 FPE Seals, Yarm Road, Darlington 3,075, % 34,002 RPI 15

11 PROPOSAL We have been instructed to seek offers in excess of 5,300,000 reflecting a NIY of 6.28% after deducting purchasers costs of 6.60% EPC The properties have been assessed and benefit from the following EPC ratings; 391 Kingsway D(78) 398a Princesway D(91) Copies of the recommendation reports are available upon request. VAT The property has been elected for VAT and it is anticipated the transaction will be treated as a TOGC.

12 CONTACT Richard Turner Tel: Peter Atkinson Tel: Katy Paxton Tel: Gagan Jagpal Tel: Disclaimer MISREPRESENTATION CLAUSE Cushman & Wakefield gives notice to anyone who may read these particulars as follows: 1. These particulars are prepared for the guidance only of prospective purchasers. They are intended to give a fair overall description of the property but are not intended to constitute part of an offer or contract. 2. Any information contained herein (whether in the text, plans or photographs) is given in good faith but should not be relied upon as being a statement or representation of fact. 3. Nothing in these particulars shall be deemed to be a statement that the property is in good condition or otherwise nor that any services or facilities are in good working order. 4. The photographs appearing in this brochure show only certain parts and aspects of the property at the time when the photographs were taken. Certain aspects may have changed since the photographs were taken and it should not be assumed that the property remains precisely as displayed in the photographs. Furthermore, no assumptions should be made in respect of parts of the property which are not shown in the photographs. 5. Any areas, measurements or distances referred to herein are approximate only. 6. Where there is reference in these particulars to the fact that alterations have been carried out or that a particular use is made of any part of the property this is not intended to be a statement that any necessary planning, building regulations or other consents have been obtained and these matters must be verified by any intending purchaser. 7. Descriptions of a property are inevitably subjective and the descriptions contained herein are used in good faith as an opinion and not by way of statement of fact. The particulars were prepared in October 2017 Designed & produced by Ref: CSD1146