CANTO COURT 122 | LONDON | EC1V 9BD

LONDON COLLEGE OF FASHION

OLD STREET UNDERGROUND STATION AND SURROUNDING ‘TECH CITY’

CASS BUSINESS SCHOOL

CANTO COURT SMITHFIELD MARKET

BARBICAN

QUEEN MARY UNIVERSITY

CANTO COURT

Inner Courtyard INVESTMENT CONSIDERATIONS ￭ Freehold student accommodation property constructed in 2008. 164 self contained en-suite studio apartments arranged as basic, classic and premium room types.

￭ The property benefits from a nomination agreement with City University London expiring June 2015. The University have taken 91 bedrooms for 2013/14, 55% of the scheme.

￭ Located within easy walking distance of four university campuses and a range of transport links.

￭ Planning permission for student accommodation in London remains challenging to secure which insulates values, drives rental growth and creates barriers to entry to the sector.

￭ Rare opportunity for representation in London, which, with a total of 41 universities, forms the largest concentration of higher education in Europe.

￭ Within London, only 62,351 (21%) of full time students have access to purpose built student accommodation. There are 303,105 full time students in London (HESA 11/12).

￭ London is home to four of the world’s leading 75 institutions: University College London (4th), Imperial College London (5th), King’s College London (19th) and London School of Economics and Political Science (68th). (2013/14 QS World University Ranking).

￭ Forecast gross rent of £2,528,332 for the 2013/2014 academic year and a net rent of £2,204,332.

￭ We are instructed to seek offers in excess of £33,900,000 for the freehold interest in the property, which reflects a net initial yield of 6.15% on the term time student income, assuming purchaser’s costs of 5.80%.

Old Street Elevation

LOCATION London is the capital city of the United Kingdom, with excellent inter-city and international travel links. The M25, which encircles the city, connects directly to routes to the North (M1, M11, M40), West (M4), South (M3, M23) and East (M2, M20) of the country. The city is supported by eight main railway stations including King’s Cross St Pancras, which connects directly to mainland Europe via the Eurostar network.

The city is supported by several major international airports including Heathrow (17 miles), Gatwick (30 miles) and Stansted (37 miles). All are easily accessible via public transport, namely coach services and express train routes. Heathrow is also linked directly to the London underground network via the Piccadilly Line (journey time from Old Street approximately 70 minutes).

London is the largest metropolitan area in the European Union and in demographic terms its population rate increased from 7,172,091 to 8,173,900 between 2001 and 2011; an increase of 14%. During this period the population of Islington increased from 175,792 to 206,125; an increase of 17.3%.

London is expected to remain at the forefront of the UK recovery given its concentration of service sectors companies. Growth output in London (nominal GVA) 2007 – 2011 was 12.40%, far out-stripping other UK regions. In labour market terms, 374,000 jobs created in the UK between 2013 and 2018 are forecast to be Inner Courtyard within London, which equates to approximately 1 in every 4 jobs (ONS).

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6 SITUATION 1 Canto Court is situated in the London Borough of Islington, directly north of the City12 of London in a very popular student area. The property is located on Old Street (A5201), in close proximity to and Hoxton and a number 7 21 of transport links, namely Old Street Underground Station and the Barbican Underground35 Station.

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The property is well situated for a number of universities; it is within19 easy walking distance of Queen Mary University, City University9 to 173 London, Cass Business School and the London School of Fashion. 29 16 6

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The property is located within 5 minutes walk34 (0.2 miles) of Old Street Underground Station (NorthernCourt Line) to the east, and within a 10 minute walk (0.5 miles) to the Barbican Underground Station (Circle, Metropolitan and

Hammersmith & City Lines) to the south36 west. is also located within 20 minutes walk (1.0 miles) to the south east. Vickery 16

Court The property is serviced by several bus18 routes; the 55 running directly to Oxford Circus, the 243 directly to London Waterloo and two night buses (N35 and N55) to Tottenham Court Road and Oxford Circus. The nearest stop is located 11 6

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138 163 134 Distance/Method and journey time Cass Business School Queen Mary University City University London London College of Fashion

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INTERCITY TRANSPORT LINKS INTERNATIONAL TRANSPORT LINKS LANDMARK DESTINATIONS

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173 171 El Sub Sta Ordnance Survey © Crown Copyright 2013. All rights reserved. Licence number 100022432. Plotted Scale - 1:1250 LOCAL REGENERATION The London Borough of Islington is set to benefit from several regeneration schemes, the most notable being the regeneration of the area around Old Street Roundabout since referred to as ‘Tech City’.

￭ Tech City, the area encompassing Shoreditch, Hoxton and Old Street, has in recent years become the major hub for the rapidly expanding TMT industry.

￭ The government announced in 2012 that £50m funding would be injected into a project to regenerate Old Street Roundabout, seeing it transformed into Europe’s largest indoor civic space, dedicated to start-ups and entrepreneurs. These announcements were accompanied by a host of major corporate commitments to the area, notably; Microsoft, IDEALondon, KPMG and IBM.

￭ According to research conducted in 2013 by UHY Hacker Young, Tech City has become the most prolific area of new business regeneration in the UK, with 15,720 new businesses set up in the last year alone.

Other current and historic regeneration schemes within close proximity to the site include;

￭ The King’s Cross Place Plan - Following the redevelopment of King’s Cross Central, currently the largest development project in Western Europe, Islington and Camden’s councils have worked in partnership to develop a Place Plan for the area aimed at delivering new services, facilities and public spaces to the community.

￭ The Basin Master Plan - Adopted in 2004, the master plan sets out a framework for the redevelopment of the City Road Basin, former industrial land. Planning has been secured for several new developments and the provision of new civic space has been met.

￭ The EC1 Public Space Strategy - The council, in partnership with EC1 New Deal for Communities (NDC), has also been working since 2004 to implement the EC1 Public Space Strategy; a scheme of works to improve public spaces in the Borough.

Studio Flat Studio Flat LONDON STUDENT MARKET STUDENT NUMBERS (HE) FOR SELECTED LONDON INSTITUTIONS (2011/2012) With a total of 41 universities, London forms the largest concentration of higher education across the whole TOTAL TIMES RANKING of Europe. The city is home to four of the world’s leading institutions according to the 2012/2013 QS World UNIVERSITY BOROUGH TOTAL FULL TIME University Ranking; University College London (4th), Imperial College London (5th), King’s College London INTERNATIONAL 2013 (19th) and the London School of Economics and Political Science (68th). City University Islington 19,340 14,360 7,515 46 The capital has experienced significant growth in student numbers over the past 10 years recording a full time (CASS Business School*) student population growth rate of 34% (HESA – based on available data) during this period. Over the same Queen Mary University, period, the international student population has increased by 61%. Tower Hamlets 14,860 13,915 4,220 38 London Just 21% of full time students currently have access to purpose built student accommodation. School of Oriental and Islington 5,400 4,820 2,515 31 African Studies

UNIVERSITY PROFILE 41 UNIVERSITIES STUDENT NUMBERS % University of the Arts, London Camden 17,300 15,715 7,110 60 (London College of Fashion**)

Total 612,715 London Metropolitan Full-time 303,105 Islington 23,280 17,315 5,435 116 University 225,980 75% of FT Student Numbers (HE) UG FT PG FT 77,125 25% of FT London School of Westminster 9,805 9,180 6,540 3 Economics Total International 106,285 35% of FT EU 36,435 34% of International London South Bank Southwark 23,350 13,190 2,055 111 Non-EU 69,850 66% of International University

University College London Camden 25,525 21,550 10,080 7

University 36,126 58% Purpose Built Student Direct Let (Private) 26,225 42% King’s College London Southwark 26,460 19,215 6,660 22 Accommodation

(PBSA) Total PBSA 62,351 University of Westminster Westminster 21,500 15,460 5,420 95

Kensington and Imperial College London 16,000 14,495 6,630 4 Supply / Demand Dynamics Supply vs Demand 62,351 / 303,105 21% Chelsea *Part of City University ** Part of University of the Arts, London Source: HESA 2011/12 Source: HESA 2011/12

STUDENT SUPPLY/DEMAND IN ISLINGTON LONDON BOROUGH OF ISLINGTON SUPPLY / DEMAND PROFILE The main universities within Islington are London Metropolitan University (North Campus only), City 6% University, Queen Mary University, University of the Arts (London College of Fashion), Cass Business School 12% and the School of Oriental and African Studies. 4% ￭ University Beds We have spoken to the primary universities within the Borough to ascertain the number of students studying in close proximity to the Property and within Islington as a whole. The students within these universities are ￭ Private Beds likely to provide the primary demand for student accommodation within the Borough. We have identified ￭ Planning Pipeline circa 42,290 full time students currently studying within the Borough (Source: HESA 11/12 and University 78% admission office). ￭ HMO’s / With Parents There are 7,690 purpose built bed spaces in Islington. 5,246 (68%) of those beds are provided by the private sector and 2,444 (32%) are provided by universities. The existing stock represents a provision level of 18% Source: HESA 2011/12, University Admission Offices, within the Borough. Local Planning Authority Portal / Savills CITY UNIVERSITY LONDON City University London is a global university whose strengths lie in business, law, health sciences, engineering, mathematical sciences, journalism and the arts. The University launched its Strategic Plan for 2012-2016 in March 2012, which will see £200 million invested across recruitment, information services, services, infrastructure, facilities and property. Internationalisation comprises one of the strategy’s key themes, with efforts to recruit and support the most able students worldwide a central aim. It is hoped that this strategy will enable the University to gain entry into the top 200 universities in the world, and top 35 universities in the UK.

QUEEN MARY, LONDON Queen Mary is one of the UK’s leading research focused universities, with specialism’s across the humanities, social sciences, law, medicine, dentistry, science and engineering. It belongs to the prestigious Russell Group; a group of 24 UK Institutions committed to maintaining the very best research, an outstanding teaching and learning experience and unrivalled links with the business and public sector.

UNIVERSITY OF THE ARTS LONDON (LONDON SCHOOL OF FASHION) The London School of Fashion is a global provider of fashion education, research and consultancy. Teaching and research within fashion design, fashion textiles and technology form the core of their expertise.

TV Room

LOCAL PRIVATE RENT COMPARABLES 2013/2014

TERM LENGTH RENT OPERATOR SCHEME AGE ACCOMMODATION (WEEKS) PER WEEK

51 £269 Studio Bronze 43 £291

51 £289 Studio Silver 43 £313

51 £309 Nido Nido Kings Cross 2007 Studio Gold 43 £335

51 £329 Studio Platinum 43 £357

51 £359 Studio Diamond 43 £390

Studio Room 51 £349 - £379 Urbanest King’s Cross 2013 Urbanest Luxury Studio 51 £399

Urbanest Hoxton 2008 Large Studio 51 £299 - £369

iQ Shoreditch 2012 Studio Flat 44 £250 - £350 iQ iQ Hoxton 2011 Studio Flat 44 £250 -£350

Common Room Inner Courtyard Kitchen

PLANNING IN THE LONDON BOROUGH OF ISLINGTON Planning permission was granted for the scheme under Application Number P061450 on the 9 October 2006. We consider that the planning condition relating to student use to be ‘wide’: “The rooms shall not be occupied other than by students or other single persons who are associated with the provision of further or higher education at a recognised institution in the London area”.

The London Borough of Islington (LBI) takes a cautious view in respect to proposed student accommodation developments and this is reflected in their proposed CIL of £450 per sq m across all parts of the Borough (due for adoption late 2013 / early 2014).

LBI seek to locate student residential around existing universities, in particular London Metropolitan University and City University through their site specific allocations. Irrespective of the London wide need for student accommodation, LBI feel that they have exceeded their quota on student accommodation in the Borough. As a result, unless the site is specifically allocated for student residential by LBI, it is considered challenging to secure new permissions for student and in our view, such barriers to entry will insulate the value of existing stock and drive rental growth.

Student housing development is also increasingly being priced out due to greater competition from residential developers. Studio Room DESCRIPTION INCOME Canto Court is a purpose built student scheme completed in 2008 and arranged over part seven/part eight There is a 2 year nomination agreement with City University expiring 28th June 2015. This agreement allows storeys. The scheme provides 164 self contained studio apartments; 13 basic studios, 131 classic studios and the University to nominate either 65, 80 or 100 bedrooms at rents of £299 per week for 40 week terms. 20 premium range studios. All rooms include a double bed, private bathroom, study area, flat screen TV and The University have nominated 91 (eleven by way of side letter) bedrooms for 2013/14 which amounts to a kitchen comprising a kettle, toaster, microwave oven and touch screen hob. Rent is inclusive of Wi-Fi, contents gross rent of £1,088,360. Under this agreement, rents will increase by RPI for the 2014/2015 academic year, insurance, all utility bills and a TV licence. subject to a rental cap of £307.97 per room per week.

The lower ground floor comprises a common room, TV/cinema room, laundry room, landscaped courtyard The remainder of the rooms are direct let to students on Assured Shorthold Tenancies (AST’s) on an and bike storage facilities. The ground floor further comprises a management office and a vacant commercial all-inclusive rental basis for predominantly 51 week terms. The weekly rent is inclusive of all Wi-Fi charges, unit with a net internal area of approximately 100 sq m. contents insurance (up to £300 per student), TV licences and utility bills. The gross income from direct letting The property has 24 hour security with secure door systems and CCTV cameras. is £1,193,964.

ACCOMMODATION SCHEDULE Further to the term time income derived from the nominations agreement and direct lets, the forecast summer income for vacant ‘City University’ rooms, is projected at £224,474 for the 2013/2014 academic year. ROOM TYPE NUMBER OF BEDS SIZE (M2) BED SIZE Additionally, there is projected sundry income of £21,533.

Basic Studio 13 17 Double The Estimated Rental Value of the vacant ground floor retail unit is £35,000 per annum. No business rates Classic Studio 131 17 Double are payable. Savills have attributed a value of £335,000 for this element, which reflects a yield of 10% on ERV.

Premium Studio 20 19 – 35 Double It is expected the property can be managed at £2,000 per bed space per annum, which equates to a total of

Total 164 £324,000 per annum.

Note: Two bedrooms are used as show rooms and are not rented. The table below sets out the income profile for 2013/2014.

GROSS RENT FOR ROOM TYPE BEDROOMS TERM LENGTH RENT PER WEEK OCCUPANCY 2013/2014

City University 91 40 £299 100% £1,088,360

Classic Studio 52 49.4* £315* 97% £784,896

Premium 1 9 51 £399 97% £177,646

Premium 2 2 51 £439 97% £43,434

Premium 3 8 51 £475 97% £187,986

Summer Income £224,474

Sundry Income £21,533

Total Gross Income £2,528,332

Management Costs -£324,000

Net Income £2,204,332

Note: 2 bedrooms, one Classic and one Premium One are used as show flats and not included in the above figures. These bedrooms can Courtyard be rented. *Average figures FLOOR PLANS

THIRD FLOOR PLAN

GROUND FLOOR PLAN Not to scale - For indicative purposes only TENURE The property is held Freehold.

EPC The property has an Energy Performance rating of B (43).

DATA ROOM Please register at www.savills.com/cantocourt for more information.

SDLT There may be the potential to claim Multiple Dwellings Relief and we would advise seeking the appropriate professional advice in this regard.

VAT No VAT is chargeable on this transaction.

PROPOSAL We are instructed to seek offers in excess of £33,900,000 for our client’s freehold interest, which reflects a net initial yield of 6.15% on the term time student income assuming purchaser’s costs of 5.80%.

CONTACTS Savills (UK) Ltd 33 Margaret Street Marcus Roberts James Hanmer Will Hyslop Lizzie Whetman London W1G 0JD [email protected] [email protected] [email protected] [email protected] 020 7499 8644 M: 07807 999 187 M: 07967 555 897 M: 07812 965 456 M: 07807 999 174 savills.co.uk

Viewing: Strictly by appointment with Savills. Important notice Savills, their clients and any joint agents give notice that: 1: They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact. 2: Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Savills have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise. 10/13 303723