QUARTERLY REPORT Reporting Period: 1Q2017

Deco 8 UK Conduit 2 plc. (Deal ticker: Deco 8 - C2X)

Mapeley II Securitisation Name DECO 8 UK Conduit 2 Plc Reporting Period: 3Q2015 Mapeley II Report Date 08/03/2017 IPD Date 20/01/2017 Loan as % of Total Pool 69.98% SNAPSHOT OF KEY UPDATES Contact Details • The re-financing of the portfolio continues to be pursued, however the feedback from possible new lenders since UK decision to leave the EU has caused some lenders to prefer to wait for a period of time, to assess any impact, and the magnitude of such, on property values. Solutus instructed a 3rd party Valuer/Agent to provide an updated opinion of where the value sits today. This was advised at a range of £176m - £184m gross. Even though the decision to leave Primary Servicer Special Servicer Note Trustee the EU has delayed matters, it is still the intention to pursue a refinance or sale of the portfolio on completion of remaining asset management initiatives which are likely to maximise the value of the portfolio and recoveries under the Situs Solutus Advisors Ltd Deutsche Trustee Company Ltd Loan;

Dan Boakes Gareck Wilson Hannah Ward • In the meantime the Special servicer has consented to the standstill/restructuring plan submitted by the Borrower, details of which were published in the RIS Notice of 30th December 2016; +44 (0) 20 7220 1850 +44 (0) 203 735 1200 +44 (0) 207 547 7629 • There have been terms agreed on three units, further detail provided within the Asset Management and Disposal [email protected] [email protected] strategy on pages 4-11;

Loan Information Property Information Loan Work Out Summary

Origination Date 13/02/2006 Location Various Date of Transfer 25/10/2012 Maturity Date 20/04/2016 Type Office Reason for Transfer LTV Breach Interest Type 3-m Number of Assets 16 Standstill Agreement Yes Current All-in Interest Rate 1.33% Number of Leases 43 Recovery Type Asset Mgmt and Sale or Refinance Origination Whole Loan Balance £208,556,250 WARLT (years)* 6.09 Administration No Origination Senior Loan Balance £208,556,250 Net Lettable Area* 1,173,790 LPA Receivership Yes Origination Junior Loan Balance £0 Current Value (OMV) 191,442,500 Appraisal Reduction ? Yes Current Whole Loan Balance £189,169,392 Current Value (VPV) TBD If (Y), Reduction Amount £5,272,957 Current Senior Loan Balance £189,169,392 Date of Valuation 27/02/2015 Swap in Place No Current Junior Loan Balance £0 NOI** £11,369,065.25 Indicative Unwind Cost N/A Loan Status Matured/Defaulted * WARLT = Weighted Average Remaining Lease Term Covenant Information ** NOI Increased due to rent free period for Tri Centre expiring.

Covenant @ Origination Previous Quarter Current Quarter Comment ICR Yes (annual projected) - > 1.25x 1.77x 3.52x 4.51x DSCR N/A 1.77x 3.52x 4.51x LTV Yes - < 90% 75.00% 98.81% 98.81%

ICR History DSCR History LTV History 5.00x 5.00x 150% 4.00x 4.00x 3.00x 3.00x 100% 2.00x

2.00x 50% Coverage 1.00x Coverage 1.00x 0.00x 0.00x 0% 2Q2016 3Q2016 4Q2016 1Q2017 2Q2016 3Q2016 4Q2016 1Q2017 2Q2016 3Q2016 4Q2016 1Q2017 Securitisation: DECO 8 UK Conduit 2 Plc Loan Name: Mapeley II Report Date: 08/03/2017 Property Address: Various - see footer

Property Strats

Title 14 Freehold / 2 long LH Lease Expiry Profile Occupancy History Occupancy by Area 82.59% Reserves £128,397 100% 100% Economic Vacancy* 33.30% 90% 90% * based on ERV's, or passing rent where ERV not available. Increase 80% 80% due to reallignment of ERV's and Tri Centre renewal. 70% 70% 60% 60% 50% Top Five Tenants 50% RENT 40% 40% 30% AREA AreaTotal % of 20% 30% Ltd 54.8% 10% 20% The Post Office 11.0% 0% 10% 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 American Express Services Europe Ltd 4.3% 0% Secretary of State for Communities 3.3% 2017 2018 2019 2020 2021 2022 2023 The Sec of State for Communities 2.9%

Top 5 Tenants as % of Total: 76%

Region Distribution East Midlands

4% East Anglia 6% 12% Valuation Information 3% 2% Greater 4% OMV / VPV (in millions) £191.4m/TBD Valuer C&W North-West Net Initial Yield 6.55% 3% Scotland Reversionary Yield Various Equivalent Yield 7.19% 2% South-East Costs of Sale as % of Purchase Price 5.75% Date of Next Valuation TBC South-West Special Assumptions: Property valued at £191,442,500 with a potential premium if sold as a Portfolio. 28% West Midlands 36% Yorks & Humberside

Oak House, Watford, WD24 4QP - Tri Centre, , SN1 1HN - Rowland House, Chesterfield, S49 1HQ - Orchard House, Blackburn, BB1 6HA - York House, Leicester, LE1 6FB - Sussex House, Burgess Hill, RH15 9AQ - Verney House, Aylesbury, HP19 8ET - Wellington House, Barnsley, S70 1WA - Southgate House, Gloucester, GL1 1DL - Friars House, Coventry, CV1 2TE - 21 Farncombe Road, Worthing, BN11 2BW - Hyde Park House, Ipswich, IP1 3LG - Stirling House, Clydebank, G81 2NT - Microsoft Buildings 1/3 & cps, Reading, RG6 1WG - Premier House, Reading, RG1 7EB - Gwent Consultancy Office, Cwmbran, NP44 3HR Securitisation: DECO 8 UK Conduit 2 Plc Loan Name: Mapeley II Report Date: 08/03/2017

Work Out History and Strategy Interest Payment Date Waterfall

Date of last Servicer site visit: Sep 14 (various dates) Income Date of last Borrower meeting: 31st October 2012 Gross Rent 3,339,842.25 Service Charge 342,762.20 History: Insurance 220,221.81 Other - • Solutus Advisors appointed end of October 2012, following the loan-to-value (LTV) event of default called by the primary servicer; 3,902,826.26 Outgoings • By market value, we had anticipated initially 65% of asset sales over 2014, with the remaining Management Fees 249,743.24 35% sold prior to loan maturity (April 2016) in line with the completion of value-add initiatives. Administration Fees - However, this was reviewed and revised based upon advice and an asset management program was pursued; Receiver Fees 123,159.86 Property Non Recoverables* 3,618,473.69 • Following the new Valuation, there remains one final ongoing matter to conclude in respect of Service Charge Costs 553,386.20 historic liabilities on the Mapeley Beta Companies, which would remove circa £14m of liabilities Insurance 216,263.73 and enable the assets along with the corporate structure to be potentially sold as one; Third Party Costs - • There is currently a capex program in place across all assets to increase letability of the vacant 4,761,026.72 units; Head Rent Net Income - 858,200.46 • The Special servicer has consented to the standstill/restructuring plan submitted by the Borrower, - details of which were published in the RIS Notice of 30th December 2016; * Includes property repairs and maintenance, utility charges and vacant unit business rates. Historic set up costs have • New lettings and heads of terms continue to be negotiated in respect of Friars House, Oak House, and Southgate House. Please see over page for progress this quarter; also been recovered this quarter.

• A valuation has been instructed and should be completed in the course of the next quarter. Securitisation: DECO 8 UK Conduit 2 Plc Loan Name: Mapeley II Report Date: 08/03/2017

Asset Management and Disposal Strategy

Microsoft Buildings, Reading Oak House, Watford

Location and Description Location and Description The property is located in Watford, which is an established office market in The property is located on Park (TVP), which is a high-tech the north M25 region. business park on the eastern outskirts of Reading, . Oak House is a detached office building extended over basement, ground Three neighbouring ‘headquarters’ styled buildings extending over ground and two upper floors, with car parking provided in the basement and and three upper floors, with Buildings 1 & 2 also benifitting from bassement level service car parking to the front and rear of the property . storage and car parking 12-18 Month Strategy 12-18 Month Strategy After the main tenant vacating the property in December 2015, over the last 12 months There is 9 years remaining on the Lease with Microsoft. Discussions are terms have been agreed and the property is now fully let with a WALT of 6.9 years (to taking place with Microsoft in relation to a re-gear to obtain a 25 year expiry). The asset is currently undergoing a refurbishment of circa £2m. certain. The tenant did not action their break option effective June 17. Securitisation: DECO 8 UK Conduit 2 Plc Loan Name: Mapeley II Report Date: 08/03/2017

Asset Management and Disposal Strategy

Tri Centre 1,2 & 3, Swindon Premier House, Reading

Location and Description Location and Description

The Tri Centre 1, 2 & 3 are three stand-alone office buildings arranged Premier House is a self-contained three storey office building. Internally the around a central square. property comprises regular shaped floor plates providing flexibility for single The property is located in Swindon, the principal town and commercial centre in the or multi occupation on a floor by floor basis. county of , located in the south west along the M4 corridor. The property is located in Reading, which is the largest economic and 12-18 Month Strategy commercial centre in the South East outside of London.

Recently FIREM agreed a Lease renewal on Tri Centre 1 and 2 with Zurich 12-18 Month Strategy Assurance Ltd on a 10 year term at £17.50sqft, with a break option on 28th September 2021. Lease renewal terms have been issued to the existing tenant. Tri Centre 3 was vacated by Zurich and a refurbishment program has commenced. FIREM have agreed a new 5 year lease with a break at year 3 with the sub-tenant who Alternatives uses are also being explored should the existing tenant not renew. occupy the 6th and 7th floors. The remaining floors (41,385 sq ft vacant) are currently being marketed with local and national agents. Additional capital expenditure required for service offices and additional refurbishment Securitisation: DECO 8 UK Conduit 2 Plc Loan Name: Mapeley II Report Date: 08/03/2017

Asset Management and Disposal Strategy

Hyde Park House, Ipswich 21 Farncombe Road, Worthing

Location and Description Location and Description

The property is a modern purpose-built office arranged upon a ground and 21 Farncombe Road is an office building over basement, ground and four two upper floors. upper floors. The property benefits from 69 car parking spaces to the front and rear of the property. The property is located in Ipswich, approximately 100 miles to Central London which can be accessed via the A12. The property is located in Worthing, West Sussex an affluent coastal town along the south coast.

12-18 Month Strategy 12-18 Month Strategy

Local and National agents are instructed to let the premises and capital expenditure of Lease renewal terms being negotiated with the existing tenant. approx. £470k has been identified in order to improve the vacant office floors to achieve lettings. Should the tenant not renew, an alternative use is being evaluated via PDR.

Serviced office being considered for the 1st floor vacant area. Additional capital expenditure required for the serviced office and to install air conditioning. Securitisation: DECO 8 UK Conduit 2 Plc Loan Name: Mapeley II Report Date: 08/03/2017

Asset Management and Disposal Strategy

Friars House, Coventry Ty Gwent, Cwmbran

Location and Description Location and Description

Friars House is a detached office building extending over ground and 10 The property is a self-contained office building on ground and two upper upper floors. floors.

The property is located within the centre of Coventry, which is 4 miles from The property is situated in the south east corner of Llantarnam Business Junction 2 of the M6 Motorway and 9 miles from Junction 6 of the M42 Park, approximately 1.5 miles south of Cwmbran town centre and 4 miles Motorway at its intersection with A45 trunk-road. north of Newport town centre.

12-18 Month Strategy 12-18 Month Strategy

The strategy is to refurbish the vacant floors to increase the gross rent and reduce There are various interested parties and negotiations are ongoing. landlords non recoverable costs. Agents have been appointed to market the space with the 9th floor currently under offer.

Further capital expenditure required for the 8th floor to provide refurbished space and 4th floor for a serviced office. Securitisation: DECO 8 UK Conduit 2 Plc Loan Name: Mapeley II Report Date: 08/03/2017

Asset Management and Disposal Strategy

Orchard House, Blackburn Rowland House, Chesterfield

Location and Description Location and Description

Orchard House is a stand-alone office block on a self-contained site, Rowland House comprises two modern, inter-connected office blocks on a providing accommodation over ground and two upper floors. self-contained site, each providing accommodation over ground and three upper floors. The property is situated within Blackburn, which is located in the North West of England, approximately 28 miles north of Manchester, 9 miles east The property sits approximately 0.75 miles to the west of Chesterfield town of Preston. centre, on the edge of the town’s commercial area.

12-18 Month Strategy 12-18 Month Strategy

The property is currently occupied by a single tenant and Solicitors have been Tenant has confirmed they want to renew the lease on Block A but vacate Block B. instructed on a lease renewal. Dilapidation and lease negotiation ongoing.

Additional capital expenditure required for ad hoc works to Block B. Securitisation: DECO 8 UK Conduit 2 Plc Loan Name: Mapeley II Report Date: 08/03/2017

Asset Management and Disposal Strategy

Southgate House, Gloucester Verney House, Aylesbury

Location and Description Location and Description

Southgate House is a self-contained office building which extends over the Verney House is a dilapidated detached office property extending over ground and three upper floors, and built as a quadrangle on the upper ground and three upper floors, and which provides regular rectangular floors. shaped floor plates. There is an extension of ground floor office accommodation, perpendicular to the main building. Gloucester lies along the between Birmingham (52 miles north) and (35 miles south). Cheltenham lies 8 miles to the east. The property lies to the west of the town centre. Aylesbury is approximately 20 miles south of Milton Keynes and north west of Hemel Hempstead. 12-18 Month Strategy 12-18 Month Strategy The strategy is to refurbish the vacant space and to increase the gross rent and reduce the landlords non recoverable costs. Further capital expenditure of approx. £485k is The strategy is to pursue a change of use to residential. We expect to obtain planning required to refurbish the vacant office space (22,795 sq ft). permission or permitted development rights (PDR) to maximise the value. We anticipate costs to obtain planning and prepare a scheme to be circa £100k. Serviced office being considered for 1st floor vacant area. Addional capital expenditure of up to £315,000 required for the serviced office. Securitisation: DECO 8 UK Conduit 2 Plc Loan Name: Mapeley II Report Date: 08/03/2017

Asset Management and Disposal Strategy

Stirling House, Clydebank Sussex House, Burgess Hill

Location and Description Location and Description

Stirling House is a purpose built office building arranged over 3 storeys, Sussex House is a 1970’s purpose built, detached office building comprising with each floor providing open plan floor plates. basement, ground and three upper levels.

The property is located within Clydebank Business Park, an established The property is located on Civic Way in Burgess Hill town centre, West office and industrial park in Glasgow, Scotland, which provides approximately 600,000 Sussex. Burgess Hill provides good transport communications being sq ft of accommodation. approximately 10 miles north of Brighton, 20 miles south of Gatwick and 45 miles south of London.

12-18 Month Strategy 12-18 Month Strategy

The property had been vacant for 3 years. FIREM have recently secured FIREM structured a lease renewal with AMEX in Dec 2013 for a term of 10 terms with Ascensos Limited on a term of 10 years from 24th June 2016 on years with a rent review in 2018 at a headline rent of £1,275,00 subject to 3 a stepped rental with a rent review on the fifth anniversary of the term and years rent free spread over the first 5 years of the term in lieu of the tenant commiting a break option on 6th anniversary. With a £120k capital contribution. to £25m to completely refurbish the asset. Securitisation: DECO 8 UK Conduit 2 Plc Loan Name: Mapeley II Report Date: 08/03/2017

Asset Management and Disposal Strategy

Wellington House, Barnsley York House, Leicester

Location and Description Location and Description

Wellington House comprises a stand-alone office building over basement, Sussex House is a 1970’s purpose built, detached office building comprising ground and two upper floors. basement, ground and three upper levels.

The property is situated to the south of Barnsley town centre. Barnsley is The property is located on Civic Way in Burgess Hill town centre, West located in South Yorkshire, approximately 12 miles north of Sheffield, 15 Sussex. Burgess Hill provides good transport communications being miles north-west of Doncaster, 24 miles south of Leeds and 32 miles east approximately 10 miles north of Brighton, 20 miles south of Gatwick and 45 of Manchester. miles south of London.

12-18 Month Strategy 12-18 Month Strategy

FIREM have completed terms with Barnsley Council and the property is FIREM structured a lease renewal with AMEX in Dec 2013 for a term of 10 now fully let. The property has been refurbished and let to strong years with a rent review in 2018 at a headline rent of £1,275,00 subject to 3 covenants years rent free spread over the first 5 years of the term in lieu of the tenant commiting to £25m to completely refurbish the asset.