Prime High Street Retail Parade Investment

Prime High Street Retail Parade Investment

INVESTMENT CONSIDERATIONS Prime retail investment situated in a Cathedral and University city Exeter is a dominant retailing centre with an affluent catchment 100% prime location fronting the High Street, directly opposite the Princesshay Shopping Centre Unbroken retail parade of 5 units with 5 self-contained office suites above Retail units are fully let to strong national covenants including EE (sublet to Jessops), Saltrock, Virgin Media and Office Opportunity to refurbish and re-let the upper parts or alternatively pursue a potential residential conversion (subject to planning permission) Average Weighted Unexpired Lease Term of 4.57 years to expiry The property is held on a long leasehold basis by way of a 125 year lease, at a peppercorn rent from 30 th March 2001 PROPOSAL Income: 645,799 per annum Offers in excess of: 11,000,000 (subject to contract) Net Initial Yield: 5.50% 2

Bristol Bath Weston-Super-Mare EXETER Reading Guildford LONDON M25 Maidstone Basingstoke M5 Exmoor National Park Barnstaple M3 A303 Taunton A39 Salisbury Crawley Royal Tunbridge Wells Winchester Southampton A31 EXETER A30 Portsmouth A30 A39 Dartmoor National Park A38 Newquay Bournemouth Exmouth Hastings Brighton M5 Eastbourne Newport Weymouth Torquay Plymouth A390 St Austell A30 Penzance A394 Truro LOCATION Exeter is a historic Cathedral and University city located in the south west of England. The city is the main commercial centre for Devon and is located approximately 45 miles (72 kilometres) east of Plymouth, 81 miles (130 kilometres) south west of Bristol, and 175 miles (280 kilometres) south west of London. 100% PRIME LOCATION FRONTING THE HIGH S T R E E T, D I R E C T L Y OPPOSITE THE PRINCESSHAY SHOPPING CENTRE Exeter benefits from excellent transport links being located two miles west of the M5 motorway, with junctions 29, 30 and 31 all providing access to the city centre. To the west of Exeter is the A38 (Devon Expressway) giving direct access to Plymouth and the A30 to Cornwall. The A30 also links the A303 to the east, providing a trunk road connection to the M3 motorway and thereon to London. The city has two mainline railway stations, Central and St David s, both of which have direct services to numerous towns and cities throughout the national rail network. The fastest journey time to London Paddington is approximately 2 hours and 30 minutes. Exeter International Airport is located 6 miles (10 kilometres) to the east of the city with a range of UK and International flights to destinations that include Madrid, Munich, Dublin, Geneva, Nice and Edinburgh. 3

DEMOGRAPHIC PROFILE Exeter has an estimated primary catchment population of approximately 508,000. This population is boosted significantly by tourism as well as a large student population. The South West Tourism Alliance estimates approximately 500,000 staying visitors and over 1.5 million day visitors each year, spending in excess of 166 million per annum. In addition Exeter University is one of the top Russell Group universities in the country which, together with Exeter College, attracts in excess of 28,000 students. Exeter has an affluent catchment which ranks 31 st out of the 200 PROMIS centres in terms of the volume of comparison retail spend available in the catchment area. Exeter is also forecast to see above average percentage growth in the available pool of comparison spending between 2016 and 2021. Reflecting the demographic profile and spending habits of the catchment population, per capita retail spending levels are significantly above the PROMIS average. (Source: PROMIS). The city has strong industry and services sectors, with the Met Office being one of the three largest employers in the area, together with the University and Devon County Council. Other major businesses represented in Exeter include EDF Energy and British Telecom. 4

RETAILING IN EXETER Exeter is a well-established and thriving retail centre providing one of Devon s primary shopping destinations with a total floor space estimated to be in excess of 1.39 million sq ft. The prime retail pitches are located within the pedestrianised section of the High Street between the Guildhall Centre and the John Lewis department store and Princesshay Shopping Centre. According to PROMIS the vacancy rate in Exeter stands at just 5.9%, well below the PROMIS average. Princesshay Shopping Centre was developed by Land Securities Plc and opened in 2007. The centre extends to approximately 530,000 sq ft of retail space, anchored by a 130,000 sq ft Debenhams store. Other retailers within Princesshay include: The current owners of Princesshay Shopping Centre, The Crown Estate and TH Real Estate, are redeveloping the Bus Station adjacent to Sidwell Street. Outline planning permission has now been granted for this extension to Princesshay, which we understand will comprise a 180,000 sq ft mixed use scheme, which will include a cinema. A replacement bus station and leisure centre is also included within the plans. This scheme will further strengthen the city s retail and leisure offer whilst consolidating the prime retail pitch around the junction of Paris Street and Sidwell Street. 5

SITUATION The subject property is situated in a prime position on the north west side of the pedestrianised High Street within close proximity to the Princesshay Shopping Centre. Other nearby occupiers include: DESCRIPTION Built in the 1950 s, the property is comprised of five floors and consists of five prime retail units fronting High Street with six office suites arranged over the upper floors. The retail accommodation is arranged to provide sales accommodation at ground with ancillary accommodation at basement and part first floor. The office accommodation provides one suite on the remainder of the first floor, two office suites at second floor and three at third floor. In addition there is a basement boiler room accessed from the office core. Access to the offices are via a separate entrance on High Street, there is both staircase and lift access to all floors. The retail units can be serviced from the front via High Street and the rear via Musgrave Row. 6

ACCOMMODATION The property has been measured in accordance with the RICS Code of Measuring practice (6 th Edition) and we provide the following net internal floor areas: Retail Unit Tenant Ground Sales (sq ft) ITZA Basement Ancillary (sq ft) First Floor Ancillary (sq ft) Total (sq ft) 235 High Street EE Ltd (Sub-let to Jessops Retail Ltd) 966 507 771 1,737 237 High Street Saltrock Surfwear Ltd 941 510 702 1,643 238 High Street A Jones & Sons Ltd 1,181 658 1,037 2,218 239 High Street Virgin Media Ltd 1,086 633 911 776* 2,773 240 High Street Office Holdings Ltd 1,185 679 1,066 764 3,015 Total 5,337 4,487 1,540 11,364 *Area provided by the vendor due to lack of access Offices Unit Tenant First Floor (sq ft) Second Floor (sq ft) Third Floor (sq ft) Total (sq ft) 1 st Floor, Pearl Assurance House Manpower Plc 2,106 2,106 Rooms 5/6 & 13, 2 nd Floor, Pearl Assurance House Vacant 945 945 Rooms 7-12, 2 nd Floor Pearl, Assurance House Home Fundraising Ltd 2,822 2,822 3 rd Floor Offices, Pearl Assurance House Jamar Liner Agencies Ltd 1,252 1,252 Suite 3, 3 rd Floor, Pearl Assurance House Vacant 530 530 Suite 4, 3 rd Floor,Pearl Assurance House Vacant 1,127 1,127 Total 2,106 3,767 2,909 8,782 7

TENANCIES TENURE The property is held on a long leasehold basis by way of a 125 year lease at a peppercorn rent from 30 th March 2001, 109 years unexpired. Exeter City Council are the freeholder. Unit 235 High Street Tenant EE Ltd (Sub-let to Jessops Retail Ltd) Lease Start 237 High Street Saltrock Surfwear Ltd 23.01.15 238 High Street A Jones & Sons Ltd 25.12.03 Lease Expiry (Break) Next Review 04.05.06 03.05.21 04.05.16 22.01.25 (22.01.20) 24.12.23 (24.12.19) 239 High Street Virgin Media Ltd 16.11.09 15.11.19 23.01.20 25.12.18 240 High Street Office Holdings Ltd 25.07.05 24.07.20 25.07.15 1 st Floor, Pearl Assurance House Rooms 5/6 & 13, 2 nd Floor, Pearl Assurance House Rooms 7-12, 2 nd Floor, Pearl Assurance House 3 rd Floor Offices, Pearl Assurance House Suite 3, 3 rd Floor, Pearl Assurance House Suite 4, 3 rd Floor, Pearl Assurance House Manpower Plc 02.07.14 Vacant Home Fundraising Ltd 29.04.14 01.07.24 (02.01.19) (Vacant) 28.04.19 (29.10.18) Jamar Liner Agencies Ltd 29.09.13 28.09.18 Vacant Vacant (Vacant) (Vacant) 02.07.19 29.04.17 Current Rent per annum (Zone A) 115,000 ( 211) 90,000 ( 165) 120,000 ( 169) 116,631 ( 163) 165,000 ( 214) 15,000 ( 7 psf) 0-13,500 ( 5 psf) 10,668 ( 9 psf) 0-0 - ERV per annum (Zone A) 98,000 ( 180) 98,000 ( 180) 128,000 ( 180) 129,000 ( 180) 139,000 ( 180) 13,000 ( 6 psf) 6,000 ( 6 psf) 17,000 ( 6 psf) 8,000 ( 6 psf) 3,000 ( 6 psf) 7,000 ( 6 psf) Total 645,799 646,000 Comments EE sublet to Jessops at rent of 90,000 per annum, further information available on request The tenant has voided the first floor via a licence to alter, further information upon request Rolling tenant break option between 02.01.19 and 02.07.20 Rent inclusive of service charge, mutual break option 29.10.18 8

COVENANT EE Limited (Company No 02382161) is a British mobile network operator, internet service provider and a division of BT Group. It was established in 2010 as a 50:50 joint venture between Deutsche Telekom and Orange S.A. (formerly France Télécom) through the merger of their respective T-Mobile and Orange businesses in the UK. It is the largest mobile network operator in the UK. The company reported the following financial performance: 2015 2014 2013 Turnover 6,311,000,000 6,327,000,000 6,482,000,000 Pre Tax Profit 416,000,000-255,000,000-101,000,000 Net Worth - 551,000,000-868,000,000-661,000,000 EE Limited has a Creditsafe score of 73 out of 100 showing very low risk of business failure. Saltrock Surfwear Limited (Company No 07189003) is a major British company whose focus is clothing. Their core is built around Travel, Surf, and Adventure apparel. Saltrock provides clothing for Men, Women and Children. The Saltrock brand is found in 300 stores in the UK, Ireland and Europe. There are also 42 Saltrock retail stores and a website with an online store that ships the products all over the UK as well as internationally. The company reported the following financial performance: Jones & Sons Limited (Company No 00288766), trading as Jones the Bootmaker, is a British footwear Retailer with its first store in Bayswater, London. The company has recently been sold to Private Equity firm Endless for approximately 11 million saving 72 stores. The remaining 25 underperforming stores and 6 concessions which were not part of the sale were immediately closed. The company reported the following financial performance: 2014 2013 2012 Turnover 79,919,000 78,333,000 73,867,000 Pre Tax Profit 315,000-2,034,000-3,342,000 Net Worth 5,884,000 6,119,000 8,153,000 Virgin Media Limited (Company No 02591237) is a British company which provides fixed and mobile telephone, television and broadband internet services to businesses and consumers in the United Kingdom. Its headquarters are in Hook, Hampshire. The company has been a subsidiary of Liberty Global Plc, an international television and telecommunications company headquartered in London, since June 2013. The company reported the following financial performance: 2015 2014 2013 Turnover 504,955,000 494,550,000 466,967,000 Pre Tax Profit 627,863,000 381,057,000 1,911,396,000 Net Worth 5,001,484,000 4,380,812,000 4,110,822,000 A Jones & Sons Limited has not got a Creditsafe score at this time. Virgin Media Ltd has a Creditsafe score of 75 out of 100 showing very low risk of business failure. Office Holdings Limited (Company No 01764341) is a South African-owned company that operates the Office chain of shoe shops in the UK, Ireland, and Germany, and concessions in Las Vegas, New York City, and Chicago. The company has 105 stand-alone stores in the UK and more than 47 concessions. 2015 2014 2013 The company reported the following financial performance: Turnover 19,075,546 10,656,628 7,244,042 Pre Tax Profit 30,510 825,065 133,941 Net Worth 435,128 404,618-479,403 Saltrock Surfwear Limited has a Creditsafe score of 51 out of 100 showing low risk of business failure. 2016 2015 2014 Turnover 387,780,000 272,175,000 256,044,000 Pre Tax Profit 29,333,000 55,986,000 28,106,000 Net Worth 108,703,000 85,045,000 103,595,000 Office Holdings Ltd has a Creditsafe score of 96 out of 100 showing very low risk of business failure. 9

RENTAL COMMENTARY We are aware of the following comparable retail evidence: Address Tenant Date Transaction Type Net Zone A ( psf) 12-13 High Street Goldsmiths Jun 2016 OML 180 244 High Street Vodafone Dec 2015 OML 167 235 High Street (subject property) Jessops Nov 2015 OML 175 11 High Street Smiggle Sep 2015 OML 183 247 High Street Pret A Manger Sep 2015 OML 180 237 High Street (subject property) Saltrock Feb 2015 OML 175 OPPORTUNITY TO REFURBISH AND RE-LET THE UPPER PARTS OR ALTERNATIVELY PURSUE A POTENTIAL RESIDENTIAL CONVERSION 10

EXETER CE AN TR EN 11

PROPOSAL We are instructed to seek offers for our client s long leasehold interest in excess of 11,000,000 (Eleven Million Pounds), subject to contract and exclusive of VAT. A purchase at this level would reflect a Net Initial Yield of 5.50%, after allowing for purchasers costs of 6.70%. FURTHER INFORMATION For further information or to arrange an inspection of the property, please contact: VAT The property has been elected for VAT purposes. It is anticipated that the investment sale will be treated as a Transfer of a Going Concern (TOGC). EPC EPC s for the property can be provided upon request. Jonathan Heptonstall 020 7318 7843 jonathan.heptonstall@eu.jll.com Frankie Maddox 020 7399 5744 frankie.maddox@eu.jll.com Christopher Robinson 020 7087 5624 chris.robinson@eu.jll.com MISREPRESENTATION ACT JLL, for themselves and for the vendors of this property, whose agents they are, give notice that (i) the particulars and any further information communicated by any means to potential purchasers of the property described in the particulars, or their advisers, in connection with the possible sale of the property are provided solely for the purpose of assisting potential purchasers in deciding whether they wish to proceed with further investigation of the property and do not constitute either the whole or any part of an invitation, offer or contract for sale of the property; (ii) 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 as at the date of the particulars (or the date of the relevant information if earlier). However, potential purchasers are not entitled to rely on them as statements or representations of fact but should satisfy themselves by searches, enquiries, surveys and inspections or otherwise with regard to the accuracy of such details. No responsibility or liability is or will be accepted by JLL, the vendor(s) of the property or any of their respective subsidiaries, affiliates, directors, officers, representatives, employees, advisors, or agents for any loss or damage suffered by any party, resulting from reliance on the particulars or any other information communicated by any means to that party, or its advisers, in connection with the possible sale of the property. No person in the employment of Jones Lang LaSalle or the vendor(s) has authority to make or give any representation or warranty, express or implied, in relation to the property. References to JLL include any joint agents acting with Jones Lang LaSalle. Designed by Graphic Outlines Ltd. 2017