Prime Retail Investment Opportunity. Valentine LINCOLN

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1 Prime Retail Investment Opportunity Valentine

2 Valentine a leading retail destination

3 Valentine Prime Retail Investment Opportunity Investment Summary City - Lincoln is an attractive and historic cathedral city, and is the administrative centre of the county of Lincolnshire. Place making - Valentine is one of the leading retail destinations in the city, with a strong furniture, convenience and comparison retail offer. Captive catchment - there is a captive catchment, with the nearest main shopping competition being over an hour s drive away. Total catchment population of 582,966 people. Large footfall - annual footfall estimated at 2.4 million. Modern floor space - a resilient and continually evolving retail offer utilising the scheme s flexible layout with a further improvement to the scheme currently on site. Strong trading profile - consistently robust trading performance. Institutional income stream - secured from strong covenants including Next, TK Maxx, Asda, DFS, Costa and Hobbycraft, with a low average rent of per sq ft and a WAULT of 8.3 years to expiry and 6.4 years to break. Further potential - potential for further value enhancement with flexible store layout and scope for further units to be created. Price - a price is sought of 46,300,000, reflecting an attractive net initial yield of 5.96%, after allowing for purchaser s costs of 6.78%.

4 Location Lincoln is a cathedral city and the commercial and administrative centre for the county of Lincolnshire. Lincoln is located approximately 142 miles north of London and benefits from a captive and distinct catchment population lying 41 miles northeast of Nottingham, 45 miles east of Sheffield and 40 miles north of Peterborough. Lincoln developed from the Roman town of Lindum Colonia. By 1150, Lincoln was reputed to be among the wealthiest towns in England. The city became a major trading hub, exporting to the continent and thereafter drawing from the wealthy agricultural hinterland, the city became renowned for delivering engineering solutions, which were adopted worldwide. Lincoln s major landmarks are Lincoln Cathedral, a famous example of English Gothic architecture, and the 11th-century Norman period Lincoln Castle. The aptly named Steep Hill forms a northern extension of the high street and forms the historical quarter of the city, leading to the cathedral standing at the top of hill, overlooking the rest of the city. The cathedral is one of the most frequently visited in the UK and the city generates 4 million visitors per year, producing 190 million of spend in the local economy and supporting 2,500 jobs. The city is now home to the University of Lincoln and Bishop Grosseteste University. The University of Lincoln has over 13,000 students, and has developed strongly over recent years, having had a 200 million investment in the campus, with a further 130 million spend planned over the next few years. The university is estimated to be worth more than 300 million to the local economy, doubling local economic growth rates, and creating more than 3,000 new jobs. The university s award-winning business incubation centre, Sparkhouse, has supported more than 300 new and growing businesses to establish themselves in the region and created over 450 new jobs. Lincoln opened the UK s first purpose-built engineering school in 25 years in collaboration with Siemens plc. The service sector as a whole accounts for 53% of total employment in the city; the professional & business services and finance sectors together account for 8.6% and the retailing and leisure sectors 27.0% of total employment. Lincoln has a strong advanced engineering sector. Siemens Industrial Turbomachinery have a large facility in the city employing some 1,300 people. The city is expanding within the high tech industries sector, with firms such as Dynex and E2V benefiting from the strong and historic links to the MOD/RAF. Lincoln s second largest private employer is James Dawson UK; a belting and hose manufacturer.

5 Castleford Batley M Dewsbury 40 Wakefield A52 A6 A38 M M1 37 Hemsworth SHEFFIELD A61 Chesterfield A50 EAST MIDLANDS A A38 DERBY 1 A1 Rotherham M M M Mansfield 21 3 A1(M) M62 37 M18 6 Thorne A6 A1 NOTTINGHAM A607 LEICESTER 2 M180 A46 A52 Goole Retford A47 A M181 A1 A607 A159 Gainsborough A156 Newarkon-Trent Grantham Scunthorpe A1 M180 4 A15 A43 A631 A15 A52 Stamford A15 A46 5 A158 HULL A605 A15 A16 A17 Peterborough A46 Immingham Grimsby Spalding A16 A16 A151 Cleethorpes A17 A47 Louth A16 Boston A52 March A17 A17 A47 Wisbech King's Lynn A10 A10 The University of Lincoln is estimated to be worth more than 300 million to the local economy, doubling local economic growth rates and creating more than 3,000 new jobs

6 The city benefits from a captive catchment, with the nearest main shopping competition being over an hour s drive away HUDDERSFIELD BARNSLEY DONCASTER SCUNTHORPE GRIMSBY CHESTERFIELD Catchments Primary Secondary Tertiary Quaternary MANSFIELD NOTTINGHAM DERBY BEESTON BURTON UPON TRENT LOUGHBOROUGH

7 Strong Demographics Valentine Prime Retail Investment Opportunity Valentine provides a convenient and accessible shopping environment, aligned to the daily needs of the local community. The retailer mix complements the strong demographics and this is reflected in the frequency of use by the catchment population. Scheme specific indicators are: Average drive time to the scheme of 19 minutes. 26% 42% The city benefits from a relatively captive catchment, with the nearest main shopping competition being over an hour s drive away. There is a total catchment population of 582,966 people. CACI state that Affluent Achievers comprise 26.0% of the catchment, in comparison to the 21.5% UK average. Comfortable Communities make up 41.5% of the catchment, as compared to the 26.6% UK average. 30.3% of customers visit Valentine at least once a week and 80% visit Valentine at least once a month. Estimated annual footfall of 2.4 million people, with an average dwell time of 50 minutes. Catering spend potential of 29.3 million. 8 average catering spend. Over 51 average retail spend per shopper. Within the CACI 20 minute drive time, there are just over households, of which 46,249 are owner-occupied. 79.2% of the drive time catchment have access to a car, as compared to the UK national average of 75.5%. Comparison goods spend potential of million. 16.9% of core catchment market share of comparison goods. 33 visits per year on average per person. 1,336.7 million of total catchment comparison goods expenditure. 45% 45% of customers live within a 10 minute drive from Valentine.

8 A15 Ideal Situation for a Retail Scheme SAXILBY ROAD West Common The scheme forms the premier location for large format retailing in the city and is anchored by a 30,000 sq ft Next, a 20,000 sq ft TK Maxx, Asda Living, Hobbycraft and DFS. Lying adjacent are Wren Kitchens and The Range, and to the north is a B&Q Warehouse totalling 100,000 sq ft. On the opposite side of the road, just to the north, is the 124,000 sq ft Tritton Retail Park, with occupiers including Currys PC World, HomeSense, Carpetright, Home Bargains, ScS and Pets at Home. Between Valentine and the city centre is St Marks, which is anchored by Debenhams, Argos Extra, Sports Direct, Mothercare, Homebase, and Gap Outlet. Lidl (17,000 sq ft) and BHS (30,000 sq ft) were previously represented here until the former found a larger standalone site and the receivership of the latter. This scheme has paid parking and has struggled, with the owners, Aberdeen Standard, having gained planning permission to demolish the existing retail park to the west of the canal and replace it with a mall style arrangement and multi storey parking with 1,100 spaces. Also planned are 150 new residential units, up to 1,100 new student residences, and a hotel with 130 rooms. According to the scheme s website, construction is likely to begin in 2020, with the development taking 3 years to complete and Aberdeen Standard investing over 150 million. C Tritton Road is a dual carriageway and forms one of the main routes to the south, linking up with the A46 Newark Road. There is all ways access and egress to the development to and from Tritton Road via a traffic light controlled junction. This gives access to Valentine Road, which forms a slip road off the dual carriageway, and onto the scheme. Limited Retailing Competition n BRADFORD LEEDS M Batley Penistone A6 Matlock A52 M1 Lincoln faces below average competition from surrounding regional retail centres, due to its distance from them, with the nearest main shopping competition being over an hour s drive away. A61 36 A Stocksbridge 35 A61 Chesterfield Wirksworth A38 Ashbourne DERBY 30 M62 Alfreton Garforth A M Pontefract Wakefield Hemsworth Castleford A638 Rotherham SHEFFIELD 36 Selby A63 3 A645 A1(M) 34 A A631 A1 A63 36 Bawtry Ollerton 37 Thorne DONCASTER Mansfield M18 M180 A46 2 Retford A52 A614 M62 Goole NOTTINGHAM 3 38 A1079 M181 SCUNTHORPE 5 M180 A156 A1 A159 A57 A17 4 Gainsborough A607 A164 Hessle Barton- upon- Humber Brigg A15 A631 A46 NEWARK-ON-TRENT A15 Sleaford Beverley A63 A165 A160 Caistor Market Rasen Washingborough HULL GRIMSBY A158 A17 A46 Horncastle Coningsby Immingham A1121 A52 A16 A16 Valentine Lincoln B1003 TRITTON ROAD to A46, A1 & M1

9 LONG LEYS ROAD Whitton Park B1273 NETTLEHAM ROAD Claytons Sports and Social Club A15 YARBOROUGH ROAD Lincoln Castle Lincoln Cathedral EASTGATE GREETWELL RD WRAGBY ROAD ARHOLME ROAD S TEEP HILL THE AVE WEST PARADE LINDUM RD B1308 MONKS ROAD TRITTON ROAD Tri on Retail Park University of Lincoln BRAYFORD WAY NEWLAND St Marks hopping WIGFOR D WAY igh treet Waterside hopping ST MARK ST TENTERCROFT ST HIGH STREET B1262 Lincoln Central BROADGATE CANWICK ROAD Tri on etail ark 124, s Tenants include: Home Bargains, Home Sense, Halfords, Currys PC World, Pets at Home t arks hopping 43, s Units to be redeveloped. Maplin, Sofology, Toys R Us. Other retailers include: Gap, JD, Argos, Debenhams, Boots, PureGym COULSON RD BOULTHAM AVE B1003 BOULTHAM PARK ROAD DIXON STREET B1262 SOUTH PARK Lincoln City Football Club S PARK AVENUE B118 CANWICK ROAD B118 WASHIN GBOROUGH RD

10 Contemporary Retailing Valentine provides a modern, high quality shopping environment, in-line with current retailer requirements and consumer needs. Following completion of a pre-let redevelopment and additions to the scheme, Valentine will comprise 133,177 sq ft, generally arranged in 2 facing terraces. The 531 surface level and free car parking spaces (1 : 250 sq ft) provided, combined with the ease of accessibility via Tritton Road, allow frequent visits here from the catchment population. The tenant mix here, combined with the retailing environment, means that Valentine has a higher than average proportion of shoppers using click and collect alongside shopping in stores; 4.1% compared with the average of 1.9%. The majority of retailers on the scheme provide an omni-channel service allowing the customer to take full advantage of the benefits this provides. This results in frequent visits, with 80% of shoppers visiting at least once a month and 36% being on a single item pick up mission when shopping. Leading fashion and general merchandise retailers Next, TK Maxx and Asda Living anchor the scheme and there is a strong home and furniture range offered by DFS, Harveys, Dreams and AHF Furniture, with the line-up completed by Hobbycraft (to open in spring 2018), American Golf, Carphone Warehouse and Costa. The existing scheme has been refurbished over the last 7 years to provide new frontages and entrance features, with all the larger units having sufficient headroom within which to install mezzanine floors. The new unit for Hobbycraft is being built to a high specification, being fully glazed with an attractive and inviting frontage. The modern and attractive design creates a contemporary, high quality retailing experience. The existing scheme has been refurbished over the last 7 years to provide new frontages and entrance features with all the larger units having sufficient headroom within which to install mezzanine floors

11 Valentine Prime Retail Investment Opportunity Tenure The scheme is held freehold with the demise outlined in red on the plan below. A full title plan is available on request. Planning Consent The units occupied by Next, Asda Living, Carphone Warehouse, Costa, TK Maxx and the new Hobbycraft benefit from an open non-food consent; unusual for the city. The new American Golf unit has a wide bulky goods consent, but allows the sale of golfing clothing and footwear. The remaining units generally have a bulky goods only restriction. Full details can be supplied on request. Tank El Sub Sta El Sub Sta VALENTINE ROAD Indicative plan

12 Valentine Prime Retail Investment Opportunity Tenancy Schedule Unit Tenant Name GIA (sq ft) Lease Start Date Lease Term (years) Lease Expiry Date Break Date Next Rent Review Unit 1&2 Next Holdings Limited t/a Next 29,730 27/09/ /09/2025 N/A 27/09/2020 Unit 2A The Carphone Warehouse Limited 2,740 07/08/ /08/ /08/ /08/2018 Unit 2B Costa Limited 2,025 19/08/ /08/2023 N/A 19/08/2018 Unit 3 Dreams Limited 5,597 10/06/ /06/2026 N/A 10/06/2021 Unit 4 Steinhoff UK Group Properties Limited t/a Harveys 11,409 30/05/ /05/2027 N/A 30/05/2022 Unit 5 DFS Trading Limited 20,290 30/09/ /09/ /09/ /09/2021 Unit 6 Hobbycraft Trading Limited 7,522 19/02/ /02/ /02/ /02/2023 Unit 7 Anglia Home Furnishing Limited 10,050 10/10/ /10/ /10/ /10/2021 Unit 8&9 Asda Stores Limited t/a Asda Living 19,977 16/08/ /08/2022 N/A 16/08/2017 Unit 10 TJX UK t/a TK Maxx 20,258 09/01/ /06/ /09/ /06/2019 Unit 11 American Golf Discount Centre Limited 3,579 14/07/ /07/2027 N/A 14/07/2022 TOTAL 133,177

13 Institutional income stream - secured from strong covenants including Next, TK Maxx, Asda, DFS, Costa and Hobbycraft, with a low average rent of per sq ft and a WAULT of 8.3 years to expiry and 6.4 years to break Current Rent (per annum) Current Rent (per sq ft) Comments 565, , Tenant only break subject to 6 months notice. 3 month penalty on break. 96, Turnover rent - 14% of turnover above base rent of 65, which is calculated at 1/14% x base rent. Estimated turnover rent of 30,975 pa based on annual turnover of 691,338. No other coffee pod on the scheme before 6th anniversary or Costa have the right to break. 151, Area of 5,585 sq ft assumed in lease. 256, Rent reviews capped at 2.5% per annum compound. 356, , rent review agreed at this level, with previous rent at 304,185 pa, and memorandum out for signature. Tenant only break clause, subject to 3 months notice. Rent reviews capped at 2.5% per annum compound. Break date at year 11 subject to 6 months notice. Rent based on per sq ft, not to exceed 198,750 per annum. 211, Rent increased at 2016 review from 190,000 per annum ( per sq ft). 542, , Rent review cap of 115%. Tenant only break, subject to 6 months notice. 80, New relocated unit. 2,944,

14 n Potential for Further Value Enhancement Valentine has benefited from significant investment with the creation of additional units, and refurbishment of the existing units. However, we believe more can be achieved to enhance the retailing offer and tenant mix over the medium term, satisfying retailer requests from customers and further underpinning Valentine s position at the top of the retail hierarchy. Furthermore, the redevelopment of St Marks should present opportunities, as some of the retailers there will be required to relocate elsewhere in the city. These tenants could include: Furthermore, there should be demand from Smyths Toys, as with Toys R Us demise, the city would lack a volume toys retailer, and this was a top category 1 store for Toys R Us. Scheme Opportunity Further asset management opportunities are as follows: otential to create a furt er unit or units it in t e rear car ark Site for student housing to be developed ortunit to do nsi e S and su di ide t eir unit Tank S ace to create a food offer or od unit El Sub Sta otential to su di ide t e unit at lease ex ir El Sub Sta VALENTINE ROAD

15 Valentine Prime Retail Investment Opportunity ERV New lettings have been undertaken to Dreams, Harveys and Hobbycraft, which help to underpin the rental tone across the scheme, and provide evidence for uplifts for some of the other forthcoming reviews. Dreams took their 5,597 sq ft at a headline rent of per sq ft in exchange for 12 months rent free. The Harveys letting is at per sq ft, also with 12 months rent free. Hobbycraft are taking a 7,500 sq ft new build unit at per sq ft. On the basis of these lettings, the AHF rent increased at the October 2016 review to a rent reflecting per sq ft from per sq ft. Following this, the DFS September 2016 review was settled at a rent reflecting per sq ft, on increase from per sq ft, demonstrating significant rental growth.

16 Valentine Prime Retail Investment Opportunity Tenants Covenants Valentine provides a secure income, with 75% of the rent attributable to tenants with 5A1 D&B rated covenants. The overall income weighted average unexpired lease term is over 6.4 years to break and 8.3 years to expiry. Lease Expiry Profile by Income D&B Rating by Income 7% 10 Years + 10% >4 Years 9% 4A1 15% Other 75% 5A1 47% 4-7 Years 36% 7-10 Years

17 British Land is one of Europe s largest publicly listed real estate companies with 19 billion of retail, office and residential assets under management. Their properties cover 28.8 million sq ft and are home to 1,200 organisations. 64,000 people work across their Office Portfolio and 322 million visit their Retail Sites. Their Offices and Residential Portfolio is focused on London. They provide a range of working and living space across their campuses and distinctive standalone properties, which combine with retail and leisure to create attractive, well-located and well-managed environments. Their Retail & Leisure Portfolio is focused on large, retail-led, multi-let assets. They provide high quality retail alongside a growing leisure offer and best in class services to deliver environments for modern consumer lifestyles. Their strategy is focused on 2 types of retail destinations Locals and Regionals. They are based on the different shopping missions of their customers and align with their retailers strategies. Whilst the assets are shopped differently, the basics of a high quality and engaging environment are consistent, and are essential to both of their success. People interact and visit their assets for many different reasons, reflecting modern consumer lifestyles, which are full of choices. Physical retail is an essential part of shopping for planned trips to experience led destinations, as well as convenient and accessible regular trips to centres at the heart of the local community British Land, through the redevelopment of Valentine, have created a place people prefer, with customer orientation being the main focus here. Being a local centre, it attracts a high frequency of local shoppers, Click & Collect usage and convenient leisure and grocery trips, due to its convenient and accessible location.

18 Environmental Report and Building Survey Valentine Prime Retail Investment Opportunity RPS have undertaken a Phase 1 Environmental Report for the property and Martin Bates Consultancy has undertaken a building survey. Both surveys are assignable to the purchaser and are available on request. Service Charge The current service charge is low at 1.02 per sq ft. Further details are available on request. EPC EPC s for the individual properties are available on request. Proposal A price is sought of 46,300,000, reflecting an attractive net initial yield of 5.96%, after allowing for purchaser s costs of 6.78%. A top up will be sought on settlement of the outstanding rent review. VAT The property is elected for VAT and we would expect the transaction to be treated as a Transfer of a Going Concern. Contact Ellie Kirkby T: M: E: e.kirkby@wilkinsonwilliams.co.uk Paul Wilkinson T: M: E: p.wilkinson@wilkinsonwilliams.co.uk Wilkinson Williams Heathcoat House 20 Savile Row London W1S 3PR Tim Bradford T: M: E: tim.bradford@bankslong.com Banks Long & Co 26 Westgate Lincoln LN1 3BD MISREPRESENTATION NOTICE. Wilkinson Williams LLP and Banks Long & Co give 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 of representation or 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 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 the 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 an intending purchaser. 7. Descriptions of the property are inevitably subjective and the descriptions contained herein are given in good faith as an opinion and not by way of statement of fact. Plans are published for convenience of identification only and although believed to be correct, their accuracy is not guaranteed and they do not form part of any contract. March Designed and produced by Creativeworld Tel: