PRIME SOUTH WEST MULTI LET DISTRIBUTION INVESTMENT Langage One, Langage Business Park, Western Wood Way, Plymouth PL7 5BG

PRIME SOUTH WEST MULTI LET DISTRIBUTION INVESTMENT Langage One, Langage Business Park, Western Wood Way, Plymouth PL7 5BG

2 investment summary Langage One forms part of the Langage Business Park, 1.1 miles (1.8 km) north of the Deep Lane Junction of the Devon Expressway (A38), on the eastern edge of the Plymouth/Plympton conurbation. The property consists of 6 units providing a GIA of 121,964 sqft (11,330.84 sqm). Individual unit sizes range from 9,215 sqft to 46,458 sqft. The weighted average unexpired lease term is 5.1 years to break and 7.0 years to expiry. The current rent passing is 601,280 pa; rents range from 4.51 per sqft to 5.07 per sqft. 89% of the income secured against D&B 5A1 rated tenants. Offers are invited in excess of 8,050,000, subject to contract and exclusive of VAT. A purchase at this level would reflect a Net Initial Yield of 7.00%, after allowing for purchaser s costs of 6.67% and a low capital value of 66.00 per sqft. Units 2 & 3 External

3 LOCATION SWANSEA M5 MIDLANDS M4 LONDON Langage Business Park is located just 7.5 miles (12.1 km) East of Plymouth city centre on the eastern edge of the residential conurbation of Plympton. Plymouth is, after Bristol, the largest commercial centre in the South West of England and is located within the county of Devon, 45 miles (72 km) south west of Exeter, 120 miles (193 km) south west of Bristol and 215 miles (346 km) from London. The City is a key commercial centre and administrative hub for the region and serves as a gateway location for the whole Cornwall (554,000 people) and the majority of Devon (780,000 people). PADSTOW NEWQUAY NEWQUAY AIRPORT A30 BARNSTAPLE EXETER A38 CARDIFF MINEHEAD TAUNTON TORQUAY EXETER AIRPORT M5 A303 BRISTOL ARIPORT BRISTOL A37 WEYMOUTH A303 A35 THE SOLENT M3 SOUTHAMPTON PORTSMOUTH The whole of Devon and Cornwall can be reached within a 3-hour drive time of Plymouth. HAYLE PLYMOUTH PENZANCE FALMOUTH LOCAL TOWNS & CITIES Travel Times FROM PLYMOUTH: CONNECTIVITY: NEWQUAY 50 MILES FALMOUTH 65 MILES PLYMOUTH BARNSTAPLE 60 MILES EXETER 45 MILES TORQUAY 33 MILES BRISTOL 120 MILES Exeter Airport (A38 by car) Exeter City Centre (A38 by car) Torquay (A38 by car) Newquay Airport (A38 by car) Bristol City Centre (A38/M5 by car) London Paddington (by train) Morlaix, France (by ferry) St Malo, France (by ferry) 55m 59m 1h 4m 1h 7m 2h 18m 3h 20m 7h 34m 9h 29m Road: The A30 and the A38 dual carriageways run either side of the Dartmoor National Park providing access to the national motorway network at junction 31 of the M5 motorway at Exeter. Rail: There are direct rail services from London Paddington (3 hours 20 minutes), Birmingham New Street (3 hours 30 minutes), Bristol Temple Meads (2 hours) and Exeter (55 minutes). Port: The Port of Plymouth is a busy leisure and commercial port. Home to Brittany Ferries providing regular services to France and Spain to over 450,000 passengers a year. The port also handles around 250,000 tonnes of cargo each year with extensive storage facilities across the 46-acre site. Air: Exeter Airport is only 48 miles away with regular flights to most major UK cities and many Eurpoean destinations.

4 DEMOGRAPHICS & ECONOMIC PROFILE The City has a population of 260,000 within the primary catchment, rising to over 1.1m within a 3-hour drive. Key employment facts: There are 131,400 people in employment within the catchment, the nearest competing centres by size are Bournemouth & Poole (127 miles), and Portsmouth (171 miles). Employment in Manufacturing and Transport & Storage in Plymouth stood at 18,000 people or in percentage terms, 13.7% of total employed; above the national average assessed by ONS of 10.7%. Financial & Business Services employment is aligned with the national average at c.5.0%, while Public Services has a 27.6% share (17.2% nationally). Plymouth s unemployment rate was 5.0% June 2016 June 2017, which was 1.3% higher than the South West average and 0.3% higher than the average for Great Britain. Major employers: Defence: the Plymouth economy has traditionally been linked with maritime defence with over 12,000 people employed and approximately 7,500 in the armed forces. Devonport Dockyard is the UK s only naval base that refits nuclear submarines and the Navy estimates that the Dockyard generates about 10% of Plymouth s income. Plymouth has the largest cluster of marine and maritime businesses in the south west with 270 firms operating within the sector. Acting as the regional hub Plymouth hosts the city council plus the Devon and Cornwall Business Council. The public sector is the prominent employer for the city with a higher number of employees in health, education, administration and defence. Other substantial employers include the University of Plymouth with almost 3,000 staff, the Plymouth Gin Distillery and Plymouth Science Park which employs 500 people across 50 companies. POPULATION GROWTH ESTIMATE 290,000 285,000 280,000 275,000 270,000 265,000 260,000 255,000 250,000 2016 2021 2026 2031 2036 CURRENT AGE DEMOGRAPHIC Aged 81-90 (3%) Aged 90+ (1%) Aged 66-80 (16%) Aged 19-65 (63%) Aged 0-18 (17%) Based on statistics from Durham University and Denton House Research Taken from PWC Devon & Cornwall Population Analysis 2014

5 PLYMOUTH HOUSING: 2016-2021 Proposed Development Area New Development Linden Homes Plymouth is a major residential expansion area; the local Government are promoting a target build of 5,000 new homes by April 2021. As part of the process to enable this to happen Plymouth have created a fast track planning process, provided key sites for development and are offering loan facilities for schemes with majority affordable housing. The City s largest residential project is at Sherford, a 1,200-acre site targeting 5,500 new homes located on the eastern flank of the city. Planning permission was granted in November 2013 for the new Sherford community some 5 miles to the east of Plymouth city centre and approximately 1.2 miles south west of Langage Business Park. Sherford is being constructed by Red Tree, the project founder, and a consortium of developers including Taylor Wimpey, Linden Homes and Bovis Homes. The first phase of 600 homes are complete with the first houses sold in November 2016. With such dramatic increases in the nearby population, general consumption will increase, demand for household services will increase which should further fuel occupier demand required to serve these needs. In turn, this should lead to a period of rental growth in industrial distribution rents in the area. KEY 1 Residential Development 2 Phase 1 Residential Development 3 Local Centre (Mixed-Use) 4 Employment 5 Park and Ride 6 Primary School 7 Secondary School 8 Community Park 9 Sport Hub 10 Vehicular Access Point 11 Main Street 12 Brixton Road (part retained) 13 Existing Lanes 14 Community Park Green Corridors 15 Proposed Areas for Attenuation Sherford Masterplan 16 10 9 19 6 7 2 A38 DEVON EXPRESSWAY 10 19 11 15 3 6 19 1 19 12 14 15 13 17 12 4 19 13 19 Langage Business Park 1.2 Miles 18 5 10 6 16 9 16 Sports Pitches 8 17 Community Farm 18 Proposed Footpath routes 10 19 Land within third party ownership

6 SITUATION WAYCON HOUSE Langage One is positioned at the north east corner of Langage Business Park, accessed directly from Western Wood Way which links onto the B3416 to meet with The A38 Devon Expressway within 1.1 miles (1.8 km). The dual A38 links directly into Plymouth city centre with a travel time of only 17 minutes. The site is rectangular is shape and is bound to the east by farmland, to the south by the new Phase II Langage Business Park, a speculative industrial development funded by Plymouth City Council, and to the west and north by neighbouring distributors/hauliers. ESS 1 6 5 4 LANGAGE BUSINESS PARK LANGAGE ONE 2 3 B3416 GLEN ROAD SHOPPING CENTRE STEER PARK ROAD B3416 SANDY ROAD LANGAGE MOTOR VILLAGE LANGAGE OFFICE CAMPUS BEECHWOOD WAY HOLLAND ROAD WESTEEN WOOD WAY LANGAGE INDUSTRIAL ESTATE LANGAGE ENERGY PARK ESS DEEP LANE A38 DEVON EXPRESSWAY EXETER PLYMOUTH SHERFORD DEVELOPMENT AREA Southern Elevation Western Elevation

7 SHERFORD DEVELOPMENT AREA A38 DEVON EXPRESSWAY DEEP LANE B3416 SANDY LA NE HOLLAND ROAD WESTERN WOOD WAY PHASE II BEECHWOOD WAY LANGAGE ONE

8 DESCRIPTION ACCOMMODATION Langage One is of mid 1980 s construction and was built as one unit and then divided in 2007 into six self-contained units of varying size. As part of the reconfiguration the property was stripped back to frame and fitted with new roof and elevations. Unit sizes range from 9,215 sqft to 46,458 sqft with an eaves height of 5.25m 6.75m. Two double units run full span at each end of the property, each well specified with six full height loading doors. The middle section is split into four units running to mid-floor plate, two of these units to the southern elevation are now linked and let as one. The property has been measured in accordance with the RICS Property Measurement (1st Edition) providing a total gross internal floor area of 121,964 sqft (11,330.86 sqm). TENURE This property is held Freehold. Unit 1 Internal Units 2 & 3 Internal All six units benefit from solid concrete floors, 3-phase electricity, insulated steel clad external elevations and roofs and roller shutter door access. Unit 1 Smiths News, is the only unit to include internal offices at first floor level. These formed part of the developers works in the original Agreement for Lease. Site area of 7.56 acres (3.06 hectares) providing a low site cover of 37%. The property is positioned in the middle of the site. All units are accessible from the circulation road around the perimeter of the premises providing excellent yards and ample circulation for lorry and staff access. Yard depth to the southern elevation is between 30m and 40m, to the northern elevation yard depth is 20m. Unit 4 External

9 TENANCIES Langage One is fully let to five tenants, 89% of the total income is secured against companies with D&B ratings of 5A1. The current weighted average unexpired term to break is 5.1 years, rising to 7.0 years to expiry. The current rents range from 4.51 per sqft to 5.07 per sqft; the average is only 4.93 per sqft. Unit 4 Internal Units 2 & 3 Internal Unit Tenant Area Area Lease Rent Break Lease Rent Rent 1954 D&B Comments No. (Company Number) sqft sqm Start Review Option Expiry p.a. psf Act Rating 1 Smiths News Trading Limited Gd 27,490 2,765.91 02/02/2007 - - 01/02/2022 150,815 5.07 In 5A1 First floor offices (15% content) form part of developers works in (00237811) 1st 2,283 Agreement for Lease. Smiths currently occupy approx. one third of the TOTAL 29,772 unit, remainder recently underlet on short licence to Amazon. 2/3 DX Network Services Limited (05026914) 23,091 2,145.23 19/11/2013 19/11/2018 19/11/2018 18/11/2023 104,220 4.51 In 5A1 Break on 6 months written notice. Break penalty of 26,055. 4 Encon Insulation Limited (01377342) 46,458 4,316.09 31/03/2007 31/03/2022-30/03/2027 233,145 5.02 In 5A1 Agreed 5 year reversionary lease in 2016 to extend to 30/03/2027. 5 Carillionamey (Housing Prime) Limited (05428732) 9,215 856.10 11/08/2016-10/08/2019 10/08/2022 46,030 5.00 Out 5A1 Break on 6 months written notice. Rent increases to 48,332 p.a. on (Amey plc (02379479)) (Amey) 11/10/2019. Rent free from 11/08/2019 to 10/10/2019. 6 Dreams Limited (08428347) 13,428 1,247.50 27/10/2017 27/10/2022 27/10/2020 26/10/2027 67,070 4.99 In 3A2 Recently refurbished. Break on 6 months written notice. First break 27/10/2022 penalty of 47,508, second break penalty of 33,535, rent paid monthly. *Half Rent to and including 26/10/2019. TOTAl 121,964 11,330.84 601,280 4.93 *Half Rent will be topped up by the vendor SERVICE CHARGE A service charge is in place to cater for the common areas across the estate. The year-end accounts for December 2017 are yet to be finalised. The budget for the year, and for 2018, is 28,000 which equates to 0.23 per sqft. Leases are effective full repairing and insuring with external repairs and maintenance claimed via the estate service charge. Unit 4 Internal Unit 4 Internal

10 COVENANT INFORMATION Year End Turnover Pre Tax Profit Net Assets Aug-16 1,441,700,000 36,400,000 624,200,000 Aug-15 1,477,100,000 33,300,000 595,700,000 Aug-14 1,522,000,000 43,300,000 572,600,000 A leader in time sensitive logistics, serving 30,000 customers from 43 distribution centres across the UK. Smiths News are the UK s number one wholesaler in the large newspaper and magazines market. Smiths News run an overnight distribution operation from their unit, providing no further delivery traffic after 10 am and ensuring a 24 hour presence on the industrial estate. Year End Turnover Pre Tax Profit Net Assets Dec-16 269,544,000 31,430,000 28,152,000 Dec-15 225,865,000 13,493,000 4,587,000 Dec-14 193,575,000 378,000 ( 6,646,000) Established in 1985, Dreams is the UK s number one specialist bed retailer. The Dreams Bed Factory in Oldbury manufactures over 200,000 mattresses a year and over 160,000 beds. These products are then distributed via nine dedicated distribution centres to customers anywhere in the country via a fleet of over 100 Dreams delivery vans. Year End Turnover Pre Tax Profit Net Assets Jun-16 279,300,000 7,700,000 99,400,000 Jun-15 227,900,000 ( 43,000,000) 93,600,000 Jun-14 120,200,000 10,500,000 141,900,000 Established in 1975, DX provides next day delivery services for mail, parcels, high value and heavier items requiring two-man services. The delivery area for the Langage One unit encompasses the whole of Devon and Cornwall with the nearest additional distribution facility located in Exeter. Year End Turnover Pre Tax Profit Net Assets Jul-16 212,170,000 8,580,000 38,554,000 Jul-15 213,293,000 5,451,000 31,915,000 Jul-14 182,750,000 3,300,000 27,937,000 Encon Insulation is the leading independent UK distributor of thermal and acoustic insulation, fire protection and roofing materials from well-known manufacturers. Encon cover Devon and Cornwall with a customer base reaching as far as Penzance to the South West and Taunton to the North East. Carillion have been placed into immediate compulsory liquidation effective on 18th January 2018, all joint ventures are now to be taken over by the joint venture partner, in this case Amey. The terms of the joint ventures arrangements mean that Amey will continue the services and is committed to ensuring continuity of service to the Defence Infrastructure Organisation (DIO) and Ministry of Defence (MOD). Year End Turnover Pre Tax Profit Net Assets Dec-16 2,232,461,000 119,772,000 376,800,000 Dec-15 2,230,551,000 218,756,000 519,800,000 Dec-14 2,167,911,000 263,900,000 488,900,000 Amey, employs 19,000 people internationally, it s core business is designing, building, maintaining and investing in the UK s services and infrastructure in partnership with their client base. Core services include corporate utilities, transport, engineering, justice, defence, environmental and waste services, and facilities management. Amey is owned by Ferrovial who are one of the world s leading infrastructure management and investment companies. Langage One is used as a storage depot to supply furniture and equipment for local MOD and DIO contracts.

11 PLYMOUTH INDUSTRIAL MARKET Total industrial stock for Plymouth stands at around 10.75m sqft. Aside of the docks and associated spread of industrial facilities, Langage is one of Plymouths largest Industrial areas. Only 0.6% of total industrial stock is new, i.e. having been built within the last five years. A very low proportion compared to both a national average of 4.5% and the average for similar sized UK centres of 1.1%. (PMA). Current vacancy stands at around 3.5%. Availability in Plymouth fell during 2016 by 10.2% over the same period, to stand at 353,000 sqft. (Plymouth Council) Demand from distributors is steadily increasing across the region with a number of current live requirements. The largest share of take up over the last 5 years has been for units of between 10,000 to 30,000 sqft. Rents for good quality industrial accommodation traditionally leased at around 5.00 per sqft are now achieving rents in excess of 6.00 per sqft. The only new development on Langage Business Park is the Plymouth City Council funded speculative development on Beachwood Way, situated immediately south of Langage One. The nine-unit Phase I was completed in 2015 and the entire 30,000 sqft block was leased to one tenant, up-market food producer Dartmouth Foods Ltd. Phase II is currently under construction; the scheme will provide units from 2,000 sqft up to a maximum of 30,000 sqft and is due for completion summer 2018. Units under 10,000 sqft will be launched at quoting rents of 8.00 per sqft, the larger units at 7.00 per sqft. Northern Elevation ESTABLISHED SOUTH WEST RENT psf 8 6 4 8.50 8.00 8.50 8.00 7.00 7.50 8.00 2 0 Bath Bridgwater Bristol Exeter Plymouth Taunton Truro Unit 1 Internal Unit 6 Internal Unit 6 Internal

12 OCCUPATIONAL MARKET 53 Sisna Park Road Tenant: Under offer Rent: 6.75 psf (Feb 18) Area: 2,438 sqft Plymbridge House, Estover Close Tenant: Under offer Rent: 5.50 psf (Jan 18) Area: 9,493 sqft KEY Langage Business Park Newnham Industrial Estate Parkway Industrial Estate Sisna Park Industrial Estate Cattedown Industrial Area Oceansgate 2-4 St Modwen Road Tenant: Blue Tech Rent: 7.50 psf (Jan 18) Area: 6,028 sqft LANGAGE ONE Hearder court, Beechwood Way Tenant: Dartmouth Foods Rent: 8.00 psf (Feb 16) Area: 30,000 sqft (9 units) Oceansgate Development providing 270k sqft of new commercial space. Unit 3 Breakwater IE Tenant: Jet Sports Rent: 5.00 psf (Apr 16) Area: 9,694 sqft Drakes Court, EAGLE WAY Tenant: Dash Direct Rent: 6.40 psf (Jul 16) Area: 8,439 sqft

13 Investment Market Commentary Prime South East yields for multi let estates are now firmly sub 5% with mid-tier, multi let modern product in the South West consistently achieving yields of between 5.0% - 6.0%. Occupier demand in the South West region has been robust and coupled with an under supply of units is now filtering through to good levels of rental growth, which in turn, has fuelled investor interest. EPC EPC certificates are available upon request. VAT Property Date Price NIY Size No of Units WAULT Average Rent Cap Val (sqft) (Tenants) (Exp/Bks) (psf) Faraday Mill Trade & Business Park, Plymouth U-O c. 12,000,000 8.15% 192,169 68(65) 6.16/4.85 5.52 62.44 Meridian Industrial Estate, Peacehaven, East Sussex Jan-18 8,300,000 6.20% 98,012 24(16) 1.50/4.50 6.10 84.68 Units C & D, Plymouth Trade Park dec-17 1,945,000 6.70% 15,927 2(2) 6.16/4.85 6.76 122.12 Orpen Park, Almondsbury, Bristol Nov-17 7,000,000 6.52% 79,858 7 6.19/3.56 7.10 87.66 Lansdown Industrial Estate, Cheltenham Jul-17 16,130,000 7.00% 328,467 32(26) n/a 6.25 49.11 Kings Business Park, Bristol mar-17 5,270,000 5.09% 59,673 7(6) 6.40/4.40 5.92 88.31 Carvers Trading Estate, Ringwood Aug-17 7,060,000 4.93% 51,346 14(12) 6.20/3.70 9.02 137.50 Corinium Centre, Cirencester Jul-17 8,400,000 5.58% 120,445 8(4) 4.40/10.80 4.22 69.74 Units 1-8, Abbeywood Park, Bristol Apr-17 5,800,000 5.09% 42,803 8(5) 3.20 7.36 135.50 IO Centre, Avonmouth Jan-17 9,255,000 6.46% 104,303 11(9) 5.87/2.88 5.98 88.73 We understand that the property is elected for VAT and therefore anticipate that the transaction will be treated as a transfer of a going concern. Unit 6 Internal Unit 4 Internal

14 Proposal We are inviting offers in excess of 8,050,000 subject to contract and exclusive of VAT. A purchase at this level would reflect a Net Initial Yield of 7.00%, allowing for purchaser s costs of 6.67%. This reflects a capital value of 66.00 per sqft. FURTHER INFORMATION Should you require further information or would like to arrange a viewing, please contact: George Freeman: george.freeman@claystreet.co.uk Rob Atkins: rob.atkins@claystreet.co.uk Chris Dickin: chris.dickin@claystreet.co.uk Telephone: 020 7935 2831 DATAROOM: Additional information to support the sale is held via a secure data site. Access details can be provided upon request. IMPORTANT INFORMATION: 1. No description or information given by Clay Street Ltd whether or not in these Particulars and whether written or verbal ( information ) about the property or its condition or its value may be relied upon as a statement or representation of fact. Neither Clay Street Ltd (nor any joint agents) have any authority to make any representations and accordingly any information given is entirely without responsibility on the part of the agents or the seller. 2.These particulars do not constitute, nor constitute part of, an offer or contract, nor shall they merge in any offer or contract which may hereafter be made between the sellers or lessors and the recipient of the information. 3.The photographs show only certain parts of the property at the time they were taken. Any areas measurements or distances given are approximate only. 4. Any reference to alterations to or use of any part of the property is not a statement that any necessary planning, building regulations or other consent has been obtained.these matters must be verified by any intending buyer. 5. Any buyer must satisfy themselves by inspection or otherwise as to the correctness of any information given. Designed and produced by Diablo: www.diablodesign.co.uk February 2018