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PRIME OFFICE INVESTMENT IN

Bridge View and Consort House North Esplanade West Aberdeen AB11 5QF INVESTMENT SUMMARY

Aberdeen is ’s Bridge View and Consort Majority let to third largest city and is the House comprise two Facilities Management energy capital of Europe prime, Grade A office Group Ltd on two buildings extending to co-terminus leases until 157,780 sq ft located in 31st December 2026 Aberdeen city centre

£

The property benefits from Current passing rent of Held on two long leasehold 227 car spaces providing a £4,550,615.54 per annum interests from Palmer generous parking ratio of following deduction of Income (Aberdeen) LLP 1:695 sq ft ground rent (inclusive with a total passing rent of of rental guarantee on £118,593 per annum vacant suite)

We are instructed to seek offers in excess of £40,000,000 (Forty Million Pounds Sterling) subject to contract and exclusive of VAT for the share capital in the Jersey domiciled SPV which owns the property. There is an opportunity to buy in the landlord’s A purchase at this level would provide a net initial yield of heritable interest 10.66% and a capital value per sq ft of £253.52, based on (Scottish equivalent of purchaser’s costs of 1.80%. Offers for the asset will also freehold) in the title. be considered.

2 £8.4 BILLION of public and private investment before 2030

ENERGY CAPITAL OF ABERDEEN EUROPE

EDINBURGH

P&J LIVE ABERDEEN ARENA attacting the largest conferences Aberdeen is Scotland’s third largest city and is the and entertainment acts in the UK energy capital of Europe making it one of the most prosperous business focussed cities in the UK. The improved commuter journey times in and around the city. population of the city is estimated at 220,000 people A second harbour port is under construction and due with a catchment population in excess of 500,000. for completion in 2020. Output per worker in Aberdeen (£62,500 per annum) Aberdeen is set to become Scotland’s first city in is second only to (£68,150 per annum) and which nearly every home and business will have access also prevails over other UK regional cities including to gigabit-speed broadband. Manchester, Leeds and Bristol. Aberdeen’s new exhibition and conference centre, £8.4bn of public and private investment is due to be named P&J Live Arena, opened in August 2019. At a delivered before 2030 and with a large proportion cost of £335 million it provides a 15,000 arena capacity over the next three years. with 48,000 sq. m of flexible event space, 7 conference The Aberdeen Western Peripheral Route (AWPR) spaces able to accommodate 5,000 people, 350 on completed in February 2019 was Scotland’s largest site hotel bedrooms and 150 seat restaurant. This construction project costing £745 million to construct will provide the city with scope to attract the largest the 58 Km (36 mile) road. This has already significantly conferences and entertainment acts in the UK. 3 ABERDEEN ECONOMY & ENERGY SECTOR

Aberdeen has been at the forefront of the British names in the industry. Private capital investment offshore energy industry since the 1970s and is has reshaped the asset ownership landscape, with widely recognised as the energy capital of Europe. significant resources shifting from the supermajors Leading oil and gas companies operating from to specialist operators focussed on increasing regional headquarters in the city include BP, Shell, returns from technically challenging wells and new Total, , TAQA, CNOOC and Apache. discoveries. According to analyst Wood Mackenzie a further $13bn of private equity investment could In the last two years a wave of new private equity be deployed in the market. With a lower cost base, backed investment has entered the industry. More independents can consolidate around existing than $12bn of private equity money poured into hubs, maximise production, drive innovation, the UK backed by some of the biggest increase recovery and reduce decommission spend.

Shell approves a revamp of the Shell plans to drill 10 wells a year offshore in North Sea investment reached 3-year Shearwater platform to the east Ineos plans to pump Chrysaor has agreed to buy US the UK as operator over the next three years, high, totalling £3bn in 2018 and the of Aberdeen. Shell’s partners in £500m into operator ConocoPhillips’ North Sea including development and exploration highest level since 2015. Shearwater are BP and Exxon . key North Sea pipeline. assets in a £2billion deal. wells, as it builds its North Sea hubs.

Oct 2018 Dec 2018 Feb 2019 Apr 2019 Jun 2019

Nov 2018 Jan 2019 Mar 2019 May 2019

Azinor Catalyst discovers oil reserves Chinese state-owned company CNOOC O&G Authority reports highest UK Government backing for a estimated at around 15-50 million made a gas discovery – equivalent of oil (boe) per day produced multi-million-pound Aberdeen barrels of recoverable resources in to 250 million barrels of oil - in its since 2011 and increased underwater engineering hub to help the the northern North Sea. Glengorm project, east of Aberdeen. projections up to 2050. oil industry diversify into green energy.

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Market Street 1 3 No rth Espla nade W est Bridge View and Consort House

SITUATION The subjects are prominently situated on the corner of North Esplanade West and Market Street within the North Dee Business 1. Neptune Energy 7. EnQuest/Worley Parsons 13. Bon Accord & Quarter (NDBQ). NDBQ is an established city centre business 2. Food Standards Scotland 8. Aberdeen Rail Station & St Nicholas Centre district within easy walking distance of the city’s main bus terminus 3. PD & MS Energy Bus Terminus 14. Aberdeen Commercial Port and railway station, together with Union Square, Aberdeen’s 4. Cats/Barclays/Verus 9. Union Square 15. Marischal Square premier retail and leisure destination, including many major retailers 5. PWC/Chrysaor/Dentons 10. Trinity Centre 16. Marischal College and restaurants. It offers excellent road connections with North 6. Aberdeen Standard Investments/ 11. CNR Esplanade West and Market Street, forming part of Aberdeen’s inner Deloitte/Burness Paul 12. Sodexo/Oil & Gas UK/DNV GL ring road system, providing links to the north and south of the city. 5 G t reat S Nort hen g R n oa i Hilto d K n e d D a P r n r a ov l os p t R s u Sch E st ool Rd Dr t S n R G os lto i o eh H i l ll f D Provost Frase r R r Dr d

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i P n 44 9 g B999 A d r A944 S lv t h B ac Be B983 B983 Aberdeen Beach e Gat Aberdeen Rail Station t Bridge of Don ing’s St S A96 K & Bus Terminusne ion 15 mins walk Ske Un

Union square 10 mins walk

19 shopping centre t

P&J 1 S B9

Live Arena A96 e 5 mins walk g

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d e R sid Bridge of Dee A93 ee N D Stonehaven W T Rd u l 7 lo 7 s 0 R e e 9 o D B a e r d R i v

BRIDGE A90 6 A90 77 5 90 9 B VIEW AND A CONSORT HOUSE

6

Cove Bay COMMUNICATIONS

ROAD SEA

The motorway network provides access to both the north and south of the country. Aberdeen is home to one of the busiest commercial ports in the UK and is a vital It is approximately a 2.5 hour journey from Edinburgh and Glasgow and less than resource for the North Sea Oil and Gas industry. 4.2 million tonnes of cargo are 3 hours from Inverness. Key road links include the A96 which runs North West handled to and from nearly 40 destinations and Northlink operate passenger and to Inverness and the A90 south to , Perth (which connects to the M90), car ferries to & . There are over 14,800 vessel movements, 100,000 Edinburgh and Glasgow. crew and 155,000 passengers every year. The works for the £350 million expansion of the harbour is well under construction with completion due in 2020. The Aberdeen Western Peripheral Route (AWPR) completed in February 2019 has significantly improved commuter journey times in and around the city. By way of example a commute from Stonehaven to Dyce has been reduced by 56% and a commute from Newmachar to Altens has been reduced by 32%. Commuting in RAIL and around the city has had a notable improvement with workers and residents alike. With less traffic concentrated in the city’s main inner ring roads pollution is situated in the city centre, less than a 5 minutes’ walk levels have plummeted. Market Street has been quoted as having already seen its away from the subjects and is served by the main east coast rail network with nitrogen dioxide (NO2) rates reduce by 37% from June 2018 to June 2019. connections to all the main UK destinations.

AIR

Aberdeen International Airport is located approximately 7 miles north west of the city centre with flights to a variety of domestic and international destinations including frequent daily services to principal UK cities and direct flights to Europe including Frankfurt, Amsterdam and Paris. The airport is currently undergoing significant investment which will deliver a 50% increase in the size of terminal. Phases 1 and 2 are already complete, including an extension of the terminal and new retail and security facilities, Phase 3 is due for completion towards the end of 2019 which includes reconfiguration of the departure lounge and further catering facilities.

7 DESCRIPTION

BRIDGE VIEW CONSORT HOUSE

Consort House was completed in 2007 and Bridge View was completed in October 1999, and has adjoins Bridge View to the north-west, with been designed in two principal wings serviced from a the 2 buildings inter-connecting at two levels. central core partially incorporating a granite Grade B It is L-shaped in configuration with the main Listed landmark building. The property provides Grade entrance at the corner of Stell Road and A specification open plan accommodation. Poynernook Road. Bridge View enjoys the benefits of a spacious Consort House provides a Modern Office HQ entrance hall and reception area contained behind a facility arranged over 5 floors and benefits full height glazed atrium. This area has undergone a from the following specification: recent refurbishment by the landlord to include new lighting, new reception desk and an upgrade of the waiting facilities. Highly flexible open plan accommodation Recognising the potential tenant demand for Full access raised flooring providing a 150mm meeting and conference facilities, six allocated clear void meeting rooms are situated on ground floor level. A fully furnished and equipped conference room Floor Loadings -4.00 kN/sq.m + 1.0kN/sq.m is also located at ground floor level, capable of accommodating up to 100 delegates. Suspended ceilings throughout with integral Private car parking has been created on two levels lighting providing a generous allocation of 277 spaces. Four pipe fan coil comfort cooling system

Highly flexible open plan accommodation Various office and meeting rooms

Full access raised flooring providing 100mm clear void Tea preparation areas provided throughout

Floor loading 4.5 kN/sq.m + 1kN/sq.m

Suspended ceilings throughout with integral lighting

Four pipe fan coil comfort cooling system

Four passenger lifts with two service lifts

Comprehensive CCTV system 8 THE RECEPTION WAS REFURBISHED IN Q1 2019

COMMON PARTS SERVICE CHARGE

A gymnasium and changing rooms, furnished with The service charge for the current year ending 27th modern equipment, is available to the tenants and November 2019 is £5.40 per sq ft, a full break down is treated as part of the common parts of of the current and next years proposed service the property. charge budget are provided in the dataroom. Within the common facilities a cafeteria and shop NB: The current service charge is calculated on provide hot lunches and light snacks. This facility previous areas. also doubles as an informal meeting area within a more relaxed environment. All facilities are controlled by a full-time resident building manager. All the common facilities and meeting rooms are rentalised and associated costs are fully recoverable through the service charge. 9 ACCOMMODATION

The property has been measured in accordance with the RICS Code of Measuring Practice (6th Edition) and provides the following approximate areas:

BRIDGE VIEW CONSORT HOUSE

AREA AREA AREA AREA LEVEL USE LEVEL USE (SQ M) (SQ FT) (SQ M) (SQ FT)

Three Office 667.8 7,188 Six Office 1,195.5 12,868

Two Office (2M) 1,220.0 13,132 Five Office 1,918.3 20,648 Bridge View East 644.4 6,936 Bridge View West 1,078.2 11,606 Four Office 1,951.5 21,006 INDICATIVE FLOOR PLAN Level Two Total 2,942.6 31,674 Three Office 1,966.0 21,162

One Office (2M) 1,220.0 13,132 Ground Reception 76.2 820 Bridge View East 861.1 9,269 Ancillary 77.3 832 BRIDGE VIEW Bridge View West 1,147.2 12,348 B.M.A. 20.2 217 CONSORT HOUSE Level One Total 3,228.3 34,749 Level Ground Total 173.7 1,869

Ground Office (Meeting Room) 195.2 2,101 OVERALL TOTAL 7,205.0 77,553 B.M.A. 26.3 283 Storage 17.3 186 Ancillary 375.9 4,046 An assignable area referencing report has been produced by Plowman Craven and is Level Ground Total 614.7 6,616 included in the dataroom.

OVERALL TOTAL 7,453.4 80,227

10 Petrofac have recently enlisted the services of a specialist fit out contractor to create an “Innovation Zone” which provides functional and welcoming office space to allow effective communication between teams and their clients. 11 TENANCY

SIZE RENT RENT LEASE NEXT TENANT UNIT COMMENTS (SQ FT) (£P.A.) (£/SQ FT) EXPIRY REVIEW

Vacant Bridge View 3 years rent, rates and service charge 15,286 £351,578.00 £23.00 (Guarantee) Part 1st Floor guarantee will be provided by the vendor.

Review based on CPI, capped at 4% and collared at 2% Petrofac Facilities Bridge View 64,941 £1,945,737.40 £29.96 31/12/2026 26/06/2022 Management Ltd Areas stated in lease are: Office space 59,081 sq ft and common areas 79.19% of 6,349 sq ft.

Petrofac Facilities Consort Review based on CPI, capped at 4% 77,553 £2,371,893.14 £30.58 31/12/2026 26/06/2022 Management Ltd House and collared at 2%

Total 157,780 £4,669,208.54

Net rent following deduction of Ground Rent £4,550,615.54

TENURE The property is held on a long leasehold basis, details of which are outlined below:

EXPIRY PROPERTY HEAD LANDLORD DURATION NEXT REVIEW HEAD RENT COMMENTS DATE £13.50 psm on 5,334 sq m. Palmer Income 125 years wef 28/05/2018 Bridge View 28/11/2122 £68,008.50 (Aberdeen) LLP 28 November 1997 (outstanding) 4 yearly rent review provision from 28/05/2002 at OMRV.

£13.50 psm on 3,747 sq m. Palmer Income 116 years wef Consort House 28/11/2122 28/05/2021 £50,584.50 (Aberdeen) LLP 28 February 2006 4 yearly rent review provision from 28/05/2009 at OMRV.

£118,593.00

12 SITE PLAN

The total site area is 0.906 Hectares (2.24 acres). The sites are held by way of two separate ground leases. There is an opportunity to buy in the landlord’s heritable interest (Scottish equivalent of freehold interest) in the title. The freeholder has expressed a willingness to sell at a price satisfactory to it. Further COVENANT details are available on request.

PETROFAC FACILITIES MANAGEMENT LTD

Established in Texas in 1981, Petrofac have grown to become a leading international services provider to the oil and gas production and processing industry. Petrofac design, build, operate and maintain oil and gas facilities and have capability of delivering bespoke models for individual requirements. They employ around 11,500 people across the globe and have projects spanning over 29 countries. Petrofac have been in Aberdeen since 2002 which has enabled them to further strengthen their operations in the UK Continental Shelf (UKCS). They have an established presence in Aberdeen and services include engineering, operations, training, asset management, well engineering and late life/ decommissioning services. For further information, please visit: www.petrofac.com/en-gb/home/ Key financials are outlined below:

INDIVIDUAL 31/12/2017 INDIVIDUAL 31/12/2016 INDIVIDUAL 31/12/2015 IN THOUSANDS IN THOUSANDS IN THOUSANDS

SALES/ TURNOVER 477,819 558,739 565,237

PROFIT/ (LOSS) BEFORE TAXES (59,790) (34,568) (209,851)

TANGIBLE NET WORTH (243,655) (150,906) (173,250)

13 ABERDEEN OCCUPATIONAL INVESTMENT MARKET

Tenant demand for office accommodation With a general consensus that Aberdeen’s economy has stabilised after the downturn has increased since the beginning of 2018 experienced in 2015-2017, there has been a notable improvement in sentiment as the recovery in the local economy gained amongst investors. Consequently, the number and volume of transactions completed momentum. There has been a ‘flight to across all sectors in the market has increased. Investors are attracted to the quality’ and trend back towards the city significant yield differential relative to other key UK cities. The below table outlines centre with noticeable take-up within the notable office investment transactions: new build developments. The Capitol, The Silver Fin and Marischal Square, as well as refurbished office suites within The PROPERTY DATE PRICE YIELD Exchange and Union Plaza.

Technip FMC, Enterprise Drive, Westhill July 2019 £22.4m 6.70%

Atmosphere 1, Prospect Park, Westhill February 2019 £13.4m 8.68%

AB1 Huntly Street, Aberdeen January 2019 £13.5m 7.85%

Thermopylae House & Teekay House, Westhill, June 2018 £13.3m 7.58%

Aker UK Campus, Aberdeen International Business Park, Dyce, Aberdeen March 2018 £112.5m 6.92%

Statoil, Prime Four Business Park, Kingswells, Aberdeen January 2018 £18.7m 6.14%

West Campus, Westhill, Aberdeen December 2017 £39.38m 7.85%

14 DEBT ADVISORY DATAROOM CONTACT For further information or to arrange an accompanied Indicative debt terms are available A dataroom has been set up and access inspection, please contact the joint selling agents JLL and upon request. can be arranged for interested parties by Knight Frank: the selling agents. EPC JANEY DOUGLAS CHRIS ION PROPOSAL +44 (0)131 301 6718 +44 (0)1224 415 969 Bridge View and Consort House have EPC [email protected] [email protected] ratings of ‘E’ and ‘D’ respectively. Copies of We are instructed to seek offers in SIMON CUSITER JOHN RAE the Energy Performance Certificates are excess of £40,000,000 (Forty Million +44 (0)131 243 2203 +44 (0)141 566 6029 available in the dataroom. Pounds Sterling) subject to contract and [email protected] [email protected] exclusive of VAT for the share capital in VAT the Jersey domiciled SPV which owns the RICHARD CLAXTON property. The property has been elected for VAT. +44 (0)20 7861 1221 A purchase at this level would provide a [email protected] net initial yield of 10.66% and a capital value per sq ft of £253.52, based on purchaser’s costs of 1.80%. Offers for the asset will also be considered.

The Agents for themselves and for the vendors or lessors of this property whose agents they are give notice that:(i) the particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute, nor constitute part of an offer or contract; (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 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; (iii) no person in the employment of agents has any authority to make or give any representation or warranty whatever in relation to this property. October 2019.