Well Located South East Office Investment BIWATER HOUSE DORKING

Well Located South East Office Investment BIWATER HOUSE DORKING

Investment Summary Situated on Station Approach, the property forms part of the Station entrance to the main line Dorking Railway Station in Surrey The property comprises office accommodation set over 3 floors, providing a net internal area of 27,399 sq.ft. (2545.44 sq m) Let to Biwater Holdings Limited until 28 September 2021, providing over 5.5 years unexpired Held on a long leasehold for 125 years from 25 March 1984 at a passing rent of 72,000 per annum Let at a current rent of 550,000 per annum, producing a net receivable rent equivalent to 478,000 per annum, reflecting a low overall rent of 17.63 per sq.ft. Extensive car parking providing 104 spaces, affording an excellent ratio of 1:263 Offers are sought in excess of 4,500,000 (Four Million Five Hundred Thousand Pounds), subject to contract, which reflects an attractive net initial yield of 10% after purchaser s costs of 5.80% and a low capital value of 164 per sq.ft..

Key A24 North 8.6 miles to the M25 1. Biwater House, Biwater 2. Regent House, Mole Valley Housing Assoc. 3. Federated House, Highways Agency 4. Park Lodge, Oyster Petroleum 5 5. Friends Provident Life Assurance Ltd 6. Dorking Deepdene Railway Station 4 7. Dorking Railway Station A24 South 0.5 miles to Dorking High Street, under a 10 minute walk 1 7 40 minutes to Clapham Junction from Dorking Station 2 3 6 17 minutes to Guildford from Dorking Deepdeene Station 7 minutes to Reigate from Dorking Deepdeene Station

Location Dorking is an affluent commuter town, surrounded by the Surrey Hills and located approximately 21 miles (34 km) south of Central London. The town is located adjacent to both the A24 and A25 lying between Guildford, 14 miles (23 km) to the west, Reigate, 6 miles (9.5 km) to the east and Leatherhead 5 miles (9 km) to the north. Dorking benefits from excellent road connectivity, with the A24 intersecting with the M25 at Junction 9, approximately 10 miles (16km) to the North, providing easy access to London and the south east. The M23 motorway is also situated approximately 8 miles to the east. Dorking railway station lies immediately adjacent to Biwater House, and offers direct services to London Waterloo and London Victoria with travel times of approximately 50 minutes, with further excellent connectivity to Clapham Junction (40 minutes). In addition, the town is also served by Dorking Deepdene, and Dorking West, with connectivity to Guildford (22 minutes) and Gatwick (24 minutes). For air travel, Gatwick Airport lies approximately 14 miles to the south east, with Heathrow Airport lying approximately 31 miles (50 km) to the North West both are easily accessible by road and rail. Situation Biwater House is located on Station Approach, which forms the principle access to Dorking Railway Station. Access is afforded off the A24 which provides access to the High Street and Town Centre approximately 500 metres to the South and the M25 to the North. Dorking town centre, comprises a traditional high street with a good mix of both national and independent retailers, with a range of retail, restaurant and leisure facilities. Operators include Cote Brasserie, Pizza Express, Café Rouge, Waitrose, Sainsburys, Boots and a range of high street Banks. Site Plan The site comprises 4 separate elements by way of the building, the car park and additional areas, combined the site extends to 0.89 acres (0.36 hectares). High Wycombe M40 Maidenhead M3 Slough Bracknell Woking Farnham A3 Guildford RANMORE RD RANMO RE RD DORKING WEST GUILDFORD / A3 T RD M25 A25 A40 Chiswick M4 Heathrow Staines WESTCOTT RD Watford Leatherhead DORKING VIN A24 M1 Richmond A316 C HALKPIT LN. STATION RD. C HALKPIT LN STATIO N RD WEST ST Epsom A3 A110 Gatwick A406 LONDON Redhill ASHC O DORKING WEST ST. Canary Wharf A205 A23 RD ASHCOMBE RD Croydon M23 M25 HIG H ST HIGH ST. M25 A22 A20 A25 M11 A12 Dartford A2 A20 A13 M20 Tonbridge DEEPDENE A24 M26 A21 DORKING (MAIN) DORKING DEEPDENE AVE Brentwood A13 Tilbury Maidstone Sevenoaks PIXHAM LN REIGATE RD REIGATE RD. A25 HORSHAM A25

Description The property comprises a three storey office building, that we understand was built by Biwater Holdings Limited for their own occupation in 1984. The tenant extensively refurbished the property in 2004, which included an overhaul and replacement of the airconditioning system for the property. Access into the building is via Station Approach Road which leads from London Road (A24). The office accommodation is arranged over part ground floor, first floor and second floor levels, with a central courtyard / lightwell to the two storey element. The remainder of the ground floor provides Dorking railway station ticket hall and waiting area. The office accommodation provides mainly open plan floor plates with good levels of natural light. The specification includes solid floors with a carpet covering, under-floor and perimeter trunking, modern VRF air-conditioning system, suspended ceilings with LG3 lighting and double glazing. The building benefits from two passenger lifts together with separate sets of male and female toilets to each floor. The car parking for Biwater House is located to the south of the building adjacent to the railway line. Vehicular access into the car park is from Lincoln Road, which provides 104 car parking spaces, thereby providing an excellent car parking ratio of 1:263 sq. ft. Accommodation The property has been measured in accordance with the RICS Code of Measuring Practice (6th edition) and provides the following areas: Demise Sq M Sq.ft. Reception 54.00 581 Ground Floor 604.08 6,502 First Floor 1,173.95 12,637 Second Floor 713.41 7,679 Total 2,545.44 27,399

Tenure The property is held on a long leasehold basis for a term of 125 years from 25 March 1984 on full repairing and insuring terms at a current rent of 72,000 per annum from Xstro Investments Limited. The ground rent is reviewable every 5 years with the next review due on 29 September 2016. The rent review is subject to the following formula; Head Rent = 11,000 + (15% of (ERV - 147,500) Further details and a copy of the lease are available upon request. Tenancy The property is let on an FRI lease to Biwater Holdings Limited for a term of 26 years from 29 September 1995. The current rent payable is 550,000 per annum and is subject to a further upward only rent review on 29 September 2016. Whilst Biwater Holdings Limited occupies the majority of the property, they have sublet approximately 10,000 sq.ft. to G3 Baxi Partnership at rent equivalent to the passing rent. They have been in occupation since 2012 and further details are available upon request.

Covenant Biwater is a large-scale, international water and wastewater company. Since inception in the 1960s, Biwater has been active in 90 countries worldwide and currently employ between 1,800 to 2,000 staff on numerous projects around the world. They design, build, operate and maintain water companies, water supplies, effluent treatment and desalination plants. Biwater House remains the worldwide headquarters for the company, with approximately 48 personnel employed at the property. The property was originally let to Biwater Plc, we understand that this company was reregistered as Biwater Holdings Limited and we highlight their most recent accounts below. Biwater Holdings Limited Year Ending Turnover ( 000s) Pre-tax Profit ( 000s) Net Worth ( 000s) 31/03/2015 94,500 7,300 14,000 31/03/2014 51,000 ( 5,900) 9,100 31/03/2013 60,500 3,100 16,200 31/03/2012 70,800 4,100 19,800 Rental Market Commentary Biwater House is located in a prominent position adjacent to Dorking Railway Station on Station Approach. Dorking forms part of the recognised South-West M25 Market, which after a period of resurgence in take up and continued demand, is now considered relatively under-supplied, with speculative development and refurbishment projects now being delivered to supply much needed product. The principle office availability in Dorking is constrained to Dorking Business Park, which is situated to the West of the town, 1.5 miles from the station. The only currently occupiable, refurbished space available amounts to 16,863 sq ft across two floors in Glassworks Two at a quoting rent of 22.00 per sq ft. The most recent transaction of note was Frazer-Nash Consultancy Ltd taking the entirety of 7,281 sq ft in Glassworks 3 on the Business Park at a rent of 19.50 per sq ft, and agreed in September 2014. Reigate and Redhill have had a sharp increase in take-up, leading Mckay Securities to speculatively develop 48,000 sq ft in Redhill jointly with Lamron Estates to be completed in June 2016. In Leatherhead at The Square, Rawlinson and Hunter Ltd have acquired 17,262 sq ft on a 15 year lease at an achieved rent of 28.25 per sq ft agreed in August 2015. This provides an excellent platform for growth in the short to medium term as and when quality space can be supplied to the market.

Investment Market Commentary Investment demand for South East offices continued to grow through 2015 with total volumes for the year in excess of 3.9bn across 183 transactions. The 2014 total of 2.5 billion has been easily surpassed and there remains a depth of demand from investors wishing to enter the market. This is being driven by strong underlying fundamentals and long-term confidence in the strength of the South East economy, which has supported a strong performance in the occupational market. The trend is set to continue for 2016, whilst good quality office stock remains in short supply and a weight of money continues to flow into the UK market. Investors are continually being drawn to strong property fundamentals from which Biwater House benefits having a strong micro location and excellent car parking provision. Recent comparable transactions offering similar characteristics to Biwater House can be seen below: Date Address Tenant Term Certain Price ( m) Yield (%) Cap Value ( psf) Dec 15 54 Clarendon Road, Watford Regus 4.8 years 8.85m 5.82% 314 Dec 15 Wharf house, Tonbridge West Kent Primary Care Trust 5.3 years 3.1m 6.30% 238 Nov 15 Suffolk Way, Sevenoaks Multi-let 5.8 years 4.61m 6.29% 337 March 15 Warwick House, Redhill Secretary of State 6 years 5.22m 7.80% 270 May 15 Dorking Business Park Multi 1.75 years 17.28m 8.90% 156 June 15 Pioneer, Crawley Tokyo electron Ltd 4 years 4.30m 7.40% 268

VAT Offers are sought in excess of 4,500,000 (Four Million Five Hundred Thousand Pounds), subject to contract, which reflects an attractive net initial yield of 10% after purchaser s costs of 5.80% and a low capital value of 164 per sq.ft.. The property is elected for VAT and it is the intention that the sale would be treated as a Transfer of a Going Concern. EPC The property has an Energy Performance rating of D with a score of 85. A certificate is available upon request. Contact For further information or to arrange an inspection please contact: Charlie Lake T: +44 (0)20 7198 2227 clake@lsh.co.uk James Shaw T: +44 (0)20 38244692 jashaw@lsh.co.uk Matthew Jones T: +44 (0)20 7198 2393 mhjones@lsh.co.uk United Kingdom House 180 Oxford Street London, W1D 1NN T: +44 (0)20 7198 2000 F: +44 (0)20 7198 2001 www.lsh.co.uk Additional information on the property can be obtained from: www.lshinvestmentsales.co.uk Misrepresentation Act 1967: Lambert Smith Hampton Group Limited and its subsidiaries and their joint agents if any ( LSH ) for themselves and for the seller or landlord of the property whose agents they are give notice that: (i) These particulars are given and any statement about the property is made without responsibility on the part of LSH or the seller or landlord and do not constitute the whole or any part of an offer or contract. (ii) Any description, dimension, distance or area given or any reference made to condition, working order or availability of services or facilities, fixtures or fittings, any guarantee or warrantee or statutory or any other permission, approval or reference to suitability for use or occupation, photograph, plan, drawing, aspect or financial or investment information or tenancy and title details or any other information set out in these particulars or otherwise provided shall not be relied on as statements or representations of fact or at all and any prospective buyer or tenant must satisfy themselves by inspection or otherwise as to the accuracy of all information or suitability of the property. (iii) No employee of LSH has any authority to make or give any representation or warranty arising from these particulars or otherwise or ena must satisfy themselves concerning the correct VAT position. (v) Except in respect of death or personal injury caused by the negligence of LSH or its employees or agents, LSH will not be liable, whether in negligence or otherwise howsoever, for any loss arising from the use of these particulars or any information provided in respect of the property save to the extent that any statement or information has been made or given fraudulently by LSH. (vi) In the case of new development or refurbishment prospective buyers or tenants should not rely on any artists impressions or architects drawings or specification or scope of works or amenities, infrastructure or services or information concerning views, character or appearance and timing concerning availability or occupation and prospective buyers or tenants must take legal advice to ensure that any expectations they may have are provided for direct with the seller or landlord and LSH shall have no liability whatsoever concerning any variation or discrepancy in connection with such matters. Lambert Smith Hampton: February 2016 Produced By: Barbican Studio +44 (0)20 7634 9574