TRAVELODGE HOTEL STREETSBROOK ROAD I SOLIHULL I B91 1QY PRIME HOTEL FORWARD COMMITMENT OPPORTUNITY LET TO TRAVELODGE FOR 35 YEARS WITH RPI UPLIFTS

TRAVELODGE HOTEL STREETSBROOK ROAD I SOLIHULL I B91 1QY PRIME HOTEL FORWARD COMMITMENT OPPORTUNITY LET TO TRAVELODGE FOR 35 YEARS WITH RPI UPLIFTS

INVESTMENT CONSIDERATIONS The investment comprises a rare opportunity to acquire a prime new build Travelodge hotel in Solihull town centre, let for 35 years with 5 yearly RPI linked increases. SOLIHULL STATION Solihull is regarded as one of the West Midlands most desirable commercial and residential property locations. Situated immediately adjacent to Solihull railway station, which serves both local stations to Birmingham and stations to London along the Chiltern Line. Solihull town centre retail and leisure facilities are a short walk including Touchwood and Mell Square Shopping Centres, a large John Lewis and a Waitrose supermarket. An 82 bed Travelodge hotel with practical completion due early-mid November 2018. Freehold. Pre-let to Travelodge Hotels Limited for an unbroken term of 35 years, with a tenants option to renew. Five yearly, upwards only, RPI linked rent reviews annually compounded (collar 1% and cap 4% per annum). Initial rent of 565,850 per annum ( 6,800 per bedroom). We are instructed to seek offers for a forward commitment in excess of 10,100,000 (Ten Million, One Hundred Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield of 5.25%, assuming full purchasers costs of 6.70%. STREETSBROOK ROAD STATION CAR PARK

LOCATION Solihull is a key sub-regional centre in the heart of the West Midlands conurbation and is regarded as one of the region s most desirable office, retail and residential locations. The town is located approximately 7 miles (11km) south east of Birmingham city centre, 13 miles (21 km) west of Coventry and 14 miles (22 km) north west of Warwick. Solihull is located at the centre of the national motorway network and approximately 1 mile (1.5 km) west of junction 6 of the M24 motorway, which in turn links to the M5, M6 and M40 motorways. London is approximately 120 miles (193 km) to the south east and Manchester approximately 80 miles (129 km) to the north west. Solihull Railway Station, adjacent to the subject development, is served by both Chiltern Railways and London Midland with fastest direct journey times as follows: Birmingham (Moor Street/Snow Hill) Warwick Stratford-upon-Avon High Wycombe 15 minutes 17 minutes 28 minutes 75 minutes WOLVERHAMPTON A449 KIDDERMINSTER A448 DUDLEY 5 HALESOWEN A456 ROMSLEY 4A 4 1 BROMSGROVE 10 2 9 A41 WEST BROMWICH 3 M5 1 A456 WALSALL 8 A441 2 M6 BIRMINGHAM A38 ALVECHURCH REDDITCH SOLIHULL M42 A435 3 M6 Toll 3A T3 SUTTON COLDFIELD 6 5 A34 A41 A45 4 T3 HENLEY IN ARDEN 5 T2 4A T1 8 M42 6 4 M40 M42 A452 3A BIRMINGHAM 10 A4177 M6 WARWICK A5 COVENTRY KENILWORTH A46 London (Marylebone) 90 minutes Birmingham Airport, the seventh largest in the UK, is located 4 miles (6.5km) north of Solihull town centre, close to the intersection between the M6 and M42 motorways and is linked to both Birmingham International railway station and the National Exhibition Centre (NEC). Solihull will also benefit from the proposed HS2 station at Birmingham Airport. The airport is one of the fastest growing in the UK, handling circa 12 million passengers in 2017 and served by over 60 airlines operating scheduled and charter flights to over 125 domestic, European and transatlantic destinations. The airport continues to attract more airlines, passengers and routes.

P R TRAVELODGE I STREETSBROOK ROAD I SOLIHULL I B91 1QY DEMOGRAPHIC AND BUSINESS PROFILE Solihull Hospital Solihull Metropolitan Borough is renowned for its key economic assets, strategic transport infrastructure, high quality environment, aspirational housing and excellent schools, which are integral to its economic success. These values have ensured that Solihull is a desirable place in which to live, work and invest. The town centre is very strong, vibrant and of high regional importance containing a wide variety of shops, businesses and civic services. Solihull has a population of 206,700 (2011 census) and is considered a highly affluent borough in both the regional and national context. This is characterised by above average levels of income and home ownership and a high proportion of residents (50%) classified as belonging to the Prosperous Suburbs socio-demographic classification. STATION CAR PARK D O R C H E S FIRE STATION TER ROAD B 4 025 S T R E E TS B R O O K R O A D S T A T I O N A P P R O A C H SOLIHULL STATION Tudor Grange Leisure & Sports Centre B 4102 I N C E S WAY LO DE L A N E S TATI O N R O A D H E R B E R T R O A D MAGISTRATES COURT H O M E R RO A D POLICE STATION L B 425 L O D E P O PL A R R O A D A N E HIGH S T R E E T Shopping Centre B 4 1 0 2 WA R W I C K R OAD WA R WICK R O A D NE W ROAD Solihull School JUNCTION 5 M42 Solihull is an integral part of the West Midlands economy and the most productive in the region. The town supports Birmingham, the UK s second largest city, by being home to over 7,000 businesses employing more than 100,000 people. The workforce is recognised as being highly productive with GDP per capita of 130% of the national average, compared to the wider regional rate of 90%. The M42 Economic Gateway is a major economic growth driver in the Greater Birmingham and Solihull Local Enterprise Partnership (LEP) area and is home to key strategic assets and employers including Birmingham Airport, the National Exhibition Centre, Jaguar Land Rover, Birmingham and Blythe Valley Business Parks who draw in circa 85,000 workers to the borough on a daily basis. Solihull has a 74.5% level of home ownership Voted best place to live in the UK (uswitch survey) 7,000 businesses, employing more than 100,000 people SITUATION Tudor Grange Park MONKSPAT H H A LL R O A D P R I N C E S W A Y Golden Jubilee Gardens COUNCIL OFFICES C H U R C H H I L L R O A D N E W St Alphege Church The property is situated on Streetsbrook Road in Solihull Town Centre. The property is very well located for local public transport links, being adjacent to Solihull train station and associated numerous bus stops. The property is also very accessible by car and is less than 5 minutes walk from the town centre amenities. Solihull boasts two shopping centres. Touchwood is one of the UK s best known regional shopping destinations and has a reported annual footfall of 16 million. The scheme is anchored by John Lewis, H&M, Zara, Topshop, Next, GAP and Apple with also a 9-screen cinema and numerous restaurants. Mell Square is the traditional shopping heart of the town centre and is anchored by House of Fraser, Marks & Spencer, BHS and Sainsbury s. Furthermore, a Waitrose opened on Homer Road in summer 2016. The main office core in Solihull is situated along Homer Road/Princes Way where large offices for the likes of N Power, National Grid, Xoserve, Paragon, UK Immigration Service, West Midlands Police and Solihull Council are located. R O A D

TRAVELODGE I STREETSBROOK ROAD I SOLIHULL I B91 1QY 1 2 3 SOLIHULL TOWN CENTRE 7 6 8 4 5 10 9 STREETSBROOK ROAD 1 2 3 4 5 6 7 8 9 10 11 12 13 House of Fraser Marks & Spencer Mell Square Shopping Centre John Lewis Premier Inn Touchwood Shopping Centre Council Offices Solihull Police Station Waitrose Prime Office Pitch Solihull Station Decked Station Car Park Solihull Fire Station 11 13 12 FUTURE RESIDENTIAL DEVELOPMENT

FF-101 FF-123 Stair Core 01 13 m² 4 m² 11 m² FF-129 Bar Store 11 m² 40 m² 17 m² FF-102 Accessible Room 16 m² 46 m² 2 m² FF-126 Reception 5 m² FF-119 Circulation 1 29 m² 9 m² FF-103 FF-120 Linen Store 21 m² FF-132 Dining Room 110 m² FF-104 FF-105 14 m² FF-106 FF-107 FF-108 FF-109 FF-110 FF-111 FF-112 FF-113 FF-118 Circulation 2 23 m² FF-114 FF-115 FF-117 Stair Core 02 15 m² FF-116 13 m² SF-201 SF-218 SF-220 SF-222 SF-224 17 m² SF-202 Accessible Room 16 m² SF-228 Lift Lobby 43 m² SF-226 Stair Core 03 16 m² 2 m² SF-203 SF-231 Circulation 29 m² SF-230 Linen Store 20 m² SF-217 SF-219 SF-221 SF-223 SF-225 SF-204 SF-205 14 m² SF-206 SF-207 SF-208 SF-209 SF-210 SF-211 SF-212 SF-213 SF-232 Circulation 23 m² SF-214 SF-215 SF-233 Stair Core 02 15 m² SF-216 13 m² TRAVELODGE I STREETSBROOK ROAD I SOLIHULL I B91 1QY PROPOSED DEVELOPMENT PROPOSED FIRST FLOOR PLAN PROPOSED SECOND & THIRD FLOOR PLAN The development comprises an 82 bedroom Travelodge hotel with associated facilities over ground and three full floors and one half floor above. Ground Floor Undercroft parking for 17 vehicles and entrance to the hotel 1st Floor 12 x standard double rooms 3 x family rooms 1 x accessible room Bar, café / restaurant, kitchens, office and storage space IWWC FF-124 Staff FF-125 Lift L-01 Lift L-02 Foyer FF-122 Riser FF-121 Lift L-01 Lift L-02 Riser SF-229 2nd & 3rd Floors (per floor) 4th Floor 12 x standard double rooms 12 x family rooms 1 x accessible room 12 x double rooms (Super Room) 3 x family rooms (Super Room) 1 x accessible room (Super Room) Kitchen FF-131 Office FF-127 FF-133 Stair Core 03 14 m² Lobby FF-130 Bar FF-128 Bedrooms Bar, cafe, kitchens, office and storage SF-227 Circulation 30 m² A Super Room is a premium offer room with upgraded bed and room facilities. There are 17 undercroft and 35 surface car parking spaces making a total of 52. DEVELOPMENT TIMETABLE The enabling works commenced in December 2017 and the main construction works are scheduled to last 47 weeks. Practical completion is anticipated in early-mid November 2018 and is currently on track. A full development timetable is available in the data room. EPC Based on the proposed specification, it is anticipated that the property will have an EPC rating of B 33. Further details are available upon request.

DEVELOPMENT TEAM Developer Employers Agent Main Contractor Highways Engineer Structural Engineer Architect M&E Consultant PLANNING Historically the Travelodge site formed part of the adjacent Sapphire Court office development. The two sites have now been divided and the main Sapphire Court site sold for residential development. On 1 July 2015, a hybrid planning permission was granted for the erection of a 99 bed hotel, the renovation of the Sapphire Court office property, with access, parking, and associated works (PL/2012/01081/FULM). Outline permission was granted for the hotel element of the application and full planning permission was granted in respect of the office renovation. On 24 March 2017, a reserved matters application for the hotel (layout, appearance, scale, landscaping) was approved (PL/2016/02802/PPRM). On 8 August 2017, a non-material amendment to allow phasing of the development and to allow the hotel element to progress ahead of the office was approved (PL/2017/01911/NONMC). For the purpose of the Agreement for Lease, the tenant accepted and acknowledged that the Unconditional Date in respect of obtaining a satisfactory planning permission under the terms of the Agreement for Lease was 22 November 2017. STANDARD ROOM Planning information can be found in the data room.

TENURE Freehold. The site area is approximately 0.51 acres. TENANCY The property has been pre-let to Travelodge Hotels Limited for a term of 35 years, with a tenant s option to renew at expiry for a further 35 years (subject to breaks in the 10th, 20th and 30th years in the renewal lease). Assuming that 82 bedrooms are completed in line with the development specification, the initial rent will be 557,600 per annum (equating to 6,800 per room) plus 8,250 per annum to reflect the enhanced specification for the Super Rooms. The total rent therefore will be 565,850 per annum. The lease is subject to five yearly, upwards only, RPI linked rent reviews, annually compounded with a collar at 1% per annum and a cap at 4% per annum. The tenant will be granted an initial 6 month rent free period, which will be topped up by the vendor. Super Room

COVENANT Travelodge was founded in 1985 and is the second largest hotel brand in the UK based on number of hotels and number of rooms operated. As at 31st December 2017 they operated 42,110 rooms in 558 hotels, with 99% of these in the UK and the remainder split between Ireland and Spain. They opened 15 new hotels in 2017. The company attracted 18 million customers annually and employs around 10,000 people. Since December 2015 the company has spent 100m on a modernisation program which has upgraded more than 35,000 rooms. This has been reflected in the recent positive financial statement for their 31st December 2017 accounts (unaudited) whereby the company saw their revenue increase by 6.6%, their RevPAR increase by 2.9% and their EBITDA increase by 2.3m to 112.4m. Also their average room rate increased by 2.8%, whilst occupancy remained constant at 76.1%. The company expects to open an average of around 20 hotels a year over the next three years and furthermore are in the next phase of rolling out their Super Rooms, with 990 already completed by the end of 2017. A copy of the latest D&B Credit Report and Company Accounts are available upon request. Travelodge Hotels Limited (company number 769170) has a Dun & Bradstreet rating of 5A1 representing a minimum risk of business failure. 31 Dec 2016 GBP (000 s) 31 Dec 2015 GBP (000 s) 31 Dec 2014 GBP (000 s) Sales Turnover 587,700 552,100 489,900 Profit / (Loss) Before Tax 46,800 ( 545,300)* 83,900 LEASED HOTEL MARKET Rents in the leased hotel market have seen strong performance in recent years. In Central London 10,000 per room was seen as a rental ceiling around three years ago, however subsequently there has been a 30% increase so that now rents of 13,000 per room have been achieved at a number of new hotels. This rental growth has filtered out into the regions where new rents are often seen in excess of 6,000 per room in the best locations. Investor demand for long dated fixed income / indexed linked real estate is currently at an unprecedented level as it is considered an attractive portfolio option amid the current low interest rate environment. The key operators in the budget hotel sector continue to offer such lease terms and coupled with strong covenants are therefore highly sought after by investors. Hotel investment activity in 2017 was circa 5.5bn, well above the long run average of 3.4bn. Of this amount over 3.0bn was traded outside of London, with the West Midlands having the highest average price per room of any region in the order of 115,000. Yields show the confidence in the sector and furthermore the weaker pound has been stimulating interest from international capital who are competing with domestic UK institutions, family trusts and private wealth. Looking forward the sector is expected to continue to perform strongly due to the weight of available funds to place in the sector. The regional hotel market remains attractive to investors, further supported by strong operational performance over the last 3 years. Examples of recent similar hotel transactions are shown in the table below: Property Date Rooms/Rate Travelodge, Portsmouth Central (funding) Travelodge, Harrow Current Current 152 / 6,611 101 / 6,750 Unexpired Term 25 34 Rent Review Price NIY 5 yearly CPI (1-4%) 5 yearly RPI (uncapped) u/o c. 18.8m u/o c. 17m u/o c. 5.00% u/o c. 3.80% Tangible Net Worth 257,400 213,600 763,900 Travelodge, Brighton Seafront Nov-17 159 / 7,000 31 5 yearly RPI (uncapped) c. 28m c. 3.75% *Drop in profits due to exceptional costs of 611.2m. Adjusted profit would be 61.2m. Premier Inn, Birmingham Aug-17 152 / 6,557 20 5 yearly CPI (0-4%) 26.5m 4.12%

VAT The development is elected for VAT. CAPITAL ALLOWANCES Capital allowances may be available by way of separate negotiation. DATA ROOM There is a data room for the property which contains a copy of the Agreement for Lease, Lease, title plan, planning information and development timetable etc. Please request access if required. PROPOSAL We are instructed to seek offers for a forward commitment to purchase in excess of 10,100,000 (Ten Million, One Hundred Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level will reflect a net initial yield of 5.25%, assuming acquisition costs of 6.70%. FURTHER INFORMATION Should you require further information or wish to view the property please contact: Matthew Brown Tel: 020 7493 3330 Mob: 07836 724 420 Email: mbrown@lewisellis.co.uk James Caddick Tel: 020 7493 3330 Mob: 07771 882 860 Email: jcaddick@lewisellis.co.uk David Kos Tel: 020 7493 3330 Mob: 07709 813 267 Email: dkos@lewisellis.co.uk Lewis Ellis LLP for themselves or nominees or lessors of this property whose agents they give notice that: (1) the particulars are set out as a general outline only for the guidance of the intending purchasers or lessees, and do not constitute part of an offer or contract; (2) all descriptions, dimensions, references to condition and necessary permissions for use and occupation, and other details are given in good faith and are believed to be correct, but any intending purchasers or tenants should not rely on them as statements or representations of fact but satisfy themselves by inspection or otherwise as to the correctness of each of them; (3) no person in the employment of Lewis Ellis LLP has any authority to make or give any representation or warranty whatever in relation to the property. April 2018. Designed and Produced by Creativeworld. Tel: 01282 858200.