PENTLAND HOUSE, EDINBURGH QUALITY OFFICE INVESTMENT

PENTLAND HOUSE, EDINBURGH QUALITY OFFICE INVESTMENT

INVESTMENT SUMMARY Quality Office investment located in Scotland s Capital City Let to The Scottish Ministers with over 10 years unexpired Low passing rent offering scope for rental growth Value-adding opportunities Attractive return pofile of: Net Initial Yield: 6.75% Equivalent Yield: 7.22% Reversionary Yield: 7.34%

EDINBURGH Edinburgh is the capital of Scotland and the financial, judicial and administrative centre of the country and home to the Scottish Parliament at Holyrood. The city is Scotland s financial capital ranked second in the UK behind London and the sixth largest financial centre in Europe. Edinburgh also accommodates the headquarters of some of the world s largest companies including Standard Life, Bank of Scotland, Royal Bank of Scotland, and Scottish Widows. Edinburgh has a population of 448,370 within its urban area (source: General Register Office for Scotland, 2003 mid-year estimate) and a population of over 700,000 within 20 kilometres of the city centre. Over the past 10 years Edinburgh s population has risen by 7.1%, whilst over the same period the Scottish population as a whole rose by only 1.3%. COMMUNICATION Edinburgh is located to the south of the Firth of Forth in east central Scotland and is accessed via the M90, M8 and M9 motorways. The City Bypass and A1 trunk road provide links to the remainder of the Scottish motorway network and the south. Edinburgh International Airport is Scotland s busiest airport and is located only 8 miles west of the city centre. Over 40 airlines serve over 90 destinations and some 8.8 million passengers pass through the airport every year, a figure which is set to grow as Scotland s international connections develop. Rail services are provided by Waverley and Haymarket stations, both of which are on the main east coast rail network, with services to all main UK stations as well as the local rail network. Edinburgh is also a vibrant and cosmopolitan European centre and a major tourist destination, being the No.1 within the UK outside London. The city benefits from a strong educational offer with three Universities and numerous public and private schools. Edinburgh is also a major cultural centre being host to the annual Edinburgh Festival (the world s largest arts festival) as well as boasting several national art galleries, history and science museums. EDINBURGH A8 CITY Inverness Aberdeen Dundee Perth A702 Stirling M90 A71 PENTLAND HOUSE Glasgow Kilmarnock M74 M9 M8 Edinburgh A70 CRAIGLOCKHART

SITUATION Pentland House is situated west of central Edinburgh, strategically located between the city centre and the A720 Edinburgh City Bypass. The property lies to the south of Gorgie Road and north of Slateford Road, both of which act as main arterial routes leading west towards the city bypass and the M8 Motorway. The property lies within a mixed use area. To the north of the property are several substantial office buildings occupied by Capital Bank, BT, Lloyds TSB and The City of Edinburgh Council. To the south and west is a mixture of residential and leisure as well as an Asda supermarket. DESCRIPTION The subjects comprise a detached office building developed in 1972 of concrete frame construction and finished externally in facing brickwork with a flat asphalt covered roof with a chipped finish. The building has been designed in an H formation with the central portion of the property being six storeys in height and the two wings designed over 5 levels. Internally the accommodation comprises a mixture of open plan and partitioned offices with a central core providing four passenger lifts, stairwell, wc s and shower facilities. The specification includes solid floors with some sections in raised timber, an oil fired central heating system, aluminium casement single glazed windows and perimeter power distribution. The property is contained within a site extending to 2.338 acres (0.946 hectares) and provides car parking for a total of 180 vehicles.

ACCOMMODATION The property has been measured on a net internal basis in accordance with the 6th Edition of the RICS Code of Measuring Practice. The approximate areas are as follows: Accommodation m 2 ft 2 Ground Floor 1397.90 15047 Reception 45.89 494 First Floor 1507.52 16227 Second Floor 1561.41 16807 Third Floor 1564.38 16839 Forth Floor 1563.82 16833 Fifth Floor 919.82 9901 Total 8560.76 92148 The reception measurement has been taken at 100%. TENURE Heritable (Scottish equivalent of English of Freehold). TENANCY The subjects are let on Full Repairing terms to The Scottish Ministers from 4th December 1972 until 11th November 2017. The passing rental is 1,100,000 per annum ( 128.84 m / 11.97 ft inclusive of car parking and reception at half rate) and the next upwards only rent review is due as at 11th November 2010. The lease provides for joint and several liability (for rent only) and incorporates a 7 yearly rent review pattern.

MARKET RENT Our understanding of rental evidence from the immediate vicinity is highlighted below. Address Tenant Date New Letting/ Floor Area Passing Rent Rent Comments Rent Review m ft m ft Riverside House, Lloyds TSB Nov 2006 Rent Review 371.05 3,994 68,000 183.20 17.02 Lease 502 Gorgie Road Foundation for Scotland expires in Dec 2011 Riverside House, Trillium (Prime) Property Dec 2005 Rent Review 371.05 3,994 64,000 172.44 16.02 Lease expires in March 502 Gorgie Road Ltd Partnership 2018 with tenant only breaks in March 2010 and 2014 Riverside House, Adobe Systems Europe Apr 2005 Rent Review 742.10 7,988 128,000 172.43 16.02 Lease expires in Apr 2010 502 Gorgie Road Ltd Chesser House, City of Edinburgh Jul 2004 Rent Review 10,952.71 117,895 2,000,000 182.55 16.96 Lease expires in Jul 2014 500 Gorgie Road Council 600 Gorgie Road Capital Bank plc Nov 2003 Rent Review 3070.42 33,050 515,000 167.70 15.58 Lease expires in October 2018 with a mutual break in Nov 2008 Stevenson House, NHS May 2003 Rent Review 2204.85 23,733 296,660 134.55 12.50 Lease expires in May 2008. 555 Gorgie Road In our opinion the market rent for the property can be fairly stated as being 1,194,713 per annum ( 139.93 m / 13.00 ft ). The rental prior to the last rent review as at 11th November 2003 was 990,000 per annum. TENANT The tenant is The Scottish Ministers with occupying departments including the Department for Rural Affairs and the Scottish Fishing Protection Agency.

VALUE-ADDING OPPORTUNITIES The property affords value adding opportunities including: Refurbishment at lease expiry or potentially with the tenant to increase rental levels. Redevelopment potential for various uses at lease expiry subject to planning. VAT All figures are stated exclusive of VAT which will be chargeable on the sale price. However, it is anticipated that the sale will be treated as a transfer of a going concern (TOGC). PROPOSAL Offers in excess of 15,400,000 are sought for our client s heritable interest. A purchase at this level would provide the following yield profile assuming purchasers costs at 5.75%: Net Initial Yield 6.75 Equivalent Yield 7.22% Reversionary Yield 7.34% FURTHER INFORMATION For further information or to arrange an inspection please contact: SIMON CUSITER Tel: 0131 247 4708 Email: simon.cusiter@kingsturge.com GAVIN ABRAMS 0131 247 4728 Email: gavin.abrams@kingsturge.com Crown Copyright 2007. All rights reserved. Promap licence number 100020449. King Sturge licence number 100017659. This plan is published for the convenience of identification only and although believed to be correct is not guaranteed and it does not form any part of any contract. Misrepresentation Clause: The accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and other details contained herein is not guaranteed and is for general guidance only and prospective purchasers or tenants must not rely on them as statements of fact or representations and must satisfy themselves as to their accuracy. Neither King Sturge LLP nor any of their employees or representatives has any authority to make or give any representation or warranty or enter into any contract whatever in relation to the property. Rents quoted in these particulars may be subject to VAT in addition. The reference to any mechanical or electrical equipment or other facilities at the property shall not constitute a representation (unless otherwise stated) as to its state or condition or that it is capable or fulfilling its intended function. Prospective tenants/purchasers should satisfy themselves as to the fitness of such equipment for their requirements. Subject to Contract Exclusive of VAT October 2007