FOR SALE

DARLEY BANK 7-11 Brook Street DE1 3PF

RARE STUDENT ACCOMMODATION LONG INCOME INVESTMENT OPPORTUNITY DARLEY BANK, 7-11 BROOK STREET, BANK, DARLEY DERBY, DE1 3PF • Rare opportunity to acquire a freehold, high-quality • Underpinned by a strong vacant possession, direct let student accommodation asset situated in Derby value reflecting c.95% of the property’s market value • Darley Bank comprises a modern, cluster-led purpose- • is rated Gold in the Teaching built student accommodation scheme with 14 studios Excellence Framework and 391 cluster bedrooms • The University of Derby has seen student population • Located on Brook Street, its prime situation offers easy growth of 25% over the five years to 2018/19 Investment access to the University of Derby and Derby City Centre • The property is let for a term certain of 28 years and 6 months, offeringsecure, index-linked income Montagu Evans are instructed to seek offers in excess of £27,500,000 Summary • Rent is reviewed annually in line with RPI, with a collar of 2% and a cap of 4% respectively (Twenty-Seven Million Five Hundred Thousand Pounds) subject to • Let to Student Residences Limited with the contract and exclusive of VAT. This reflects a low capital value of £67,901 University of Derby acting as guarantor, both benefiting per bed space and an attractive Net Initial Yield of 4% at the current from a Dun & Bradstreet Ratings of 5A1 passing rent (assuming purchaser’s costs of 6.76%) • Current passing rent of £1,177,335 (effective 1st September 2020) reflecting a rent cover ratio (on the basis of Direct Let) of approximately 1.5 times PAGE 2 DARLEY BANK, 7-11 BROOK STREET, BANK, DARLEY DERBY, DE1 3PF Derby

Derby is a major regional centre in the , situated approximately 15 miles west of Nottingham and 26 miles north- west of Leicester. The city benefits from strong road connectivity with its situation on the A52 providing access to the M1 motorway at junction 25 (Sandiacre Interchange).

• offers direct services to Nottingham • Derby’s profile as a city of sport has increased in recent in 23 minutes, Birmingham New Street in 33 minutes years, with a number of local professional sports teams and London St Pancras in 1 hour and 35 minutes. East including Championship side Derby County Football Midlands Airport is situated 13 miles south-east of Derby and Club and Derbyshire County Cricket Club offers flights to over 70 international destinations • Derby has a highly skilled workforce and is well • Under the Derby City Centre Masterplan 2030, the Council established in the advanced transport manufacturing sector, are aiming to leverage £3.5 billion in investment, create with 11.8% in hi-tech functions, four times the national 4,000 new jobs and deliver 1,900 new homes by 2030 average. A number of internationally renowned businesses, including Rolls-Royce, Toyota and Bombardier, have • Each year the City hosts various cultural events, including the substantial operations in the City Derby Book Festival and the Derby Festé. at opened in 2015 as a multi-use indoor arena • The £200m development of Infinity Park Derby is and has since hosted a range of cycling, badminton and currently in progress and aims to attract new high-tech entertainment events businesses to the city. Extending to 100 acres and set to offer 1.5 million sq ft of commercial space, it aims to create • Derby benefits from three main retail areas - Cathedral 8,000 new jobs Quarter, St Peters Quarter and the PAGE 3 (formally Derby) offering a variety of shops, cafés and restaurants DARLEY BANK, 7-11 BROOK STREET, BANK, DARLEY DERBY, DE1 3PF

Brookside Derwent Students Jurys Inn DUFFIELD ROAD

Rail Research and Innovation Centre A601 University of Derby Road Campus Peak Court Chapel Street Multistorey Car Park University of Derby

Queen’s Leisure Centre Cathedral Court University of Derby Princess Alice Court University of Derby The Croft Homes for Students

Derby Railway Station FORD STREET A601

Sir Peter Hilton Court University of Derby

Parksafe Multistorey Car Park Law School Street Campus Agard Court University of Derby Britannia Mill Campus University of Derby

BOLD LANE

FRIAR GATE FRIAR GATE Roman House Collegiate PAGE 4 DARLEY BANK, 7-11 BROOK STREET, BANK, DARLEY DERBY, DE1 3PF Situation Brook Street occupies a prime position on the edge of Derby City The Property is well situated for the University • 5 minute walk to One Friar Gate Square Centre in a mixed-use area which includes further University of of Derby, being within walking distance of the • 10 minute walk to Derby city centre Derby accommodation and academic buildings. The surrounds • 10 minute walk to Britannia Mill also include a variety of high-quality residential developments campuses. Furthermore, the University bus also runs • 14 minute walk to Markeaton Street such as Brookbridge Court, comprising converted old mill along Bridge Street to the Kedleston Road campus • 23 minute walk to Kedleston Road buildings, and Westpoint. A short distance to the south sits the with a stop in close proximity. attractive Friar Gate, one of the key retail and restaurant pitches leading to the City Centre.

Darley Bank is located amongst a number of PBSA schemes, with Peak Court to the north, Sir Peter Hilton Court and Agard Court to the south. To the west is Princess Alice Court and Nunnery Court along with the University of Derby’s Enterprise Centre. Kedleston Road The accommodation buildings are all managed by the University University of Derby of Derby. Further privately operated PBSA accommodation in the vicinity includes Brookside (Derwent Students), The Croft (Homes for Students) and Roman House (Collegiate).

Kedleston Road

Markeaton Street Britannia Mill University of Derby University of Derby

A6

A38 Ashbourne Road A61 BRIDGE STREET BROOK STREET Brook St P P Jurys Inn A601 Willows WILLOW ROW Sports Centre

A52 10 mins walk P P Derby

AR AR City Centre Derby Sta ord Street Museum Cathedral Quarter Shopping Centre A6

Derbion Uttoxeter New Road A601 Shopping Centre AR AR Derby LondonTrain Rd Station PAGE 5 STREET

SEARL STREET

STAFFORD

AGARD STREET

AR AR • The University of Derby is arranged across three main sites in its 7-11 BROOK STREET, BANK, DARLEY DERBY, DE1 3PF namesake city, with campuses at Kedlestone Road, Markeaton Street and Britannia Mill along with the self-contained One Friar Gate Square. Aiming to be ‘an applied university of today and for tomorrow’, facilities include a Forensic Training Facility, STEM Derby Centre, NHS-standard Mock Hospital Wards and a Bloomberg Financial Markets Lab. On site campus amenities include a fully equipped sports centre, library and Students Union

• The University of Derby has seen average annual full-time Student student population growth of 5.8% pa, increasing from 10,760 in 2014/15 to 13,500 in 2018/19

• The Derby PBSA market totals 3,663 beds, 2,725 of which are Market managed by the University of Derby and 938 of which are managed privately. This reflects a full-time student to bed ratio of 3.7 (above the UK average of 2.1) and that only 27% of full-time students can access PBSA

Status Full-time Student Population Growth PBSA Market

• Rated Gold in Teaching Excellence Framework 16,000 • 1st – University of the Year (UK Social Mobility Awards 2020) • 1st – Higher Education Institution of the Year (National Education 14,000 20% Opportunities Network Awards 2020) 12,000 • 1st – Social and Community Impact (Guardian University Awards 2020) • Top 10 – Postgraduate Student Experience (Postgraduate Taught 10,000 Experience Survey 2020) 7% 8,000 • Top 10 – in the world for international student learning experience 73% (Global ISB Benchmark Group 2018) Population Student 6,000

4,000

2,000

0 2014/15 2015/16 2016/17 2017/18 2018/19 University PBSA Private PBSA Not accommodated in PBSA University of Derby Academic Year

Total HE Students 19,145

Full-time Students 13,500

Undergraduates (FT) 11,895

Postgraduates (FT) 1,605

Internationals 1,555 (12% of full-time students)

Applications 4.9 per place

Ranking 91st PAGE 6

HESA 2018/19 & The Times Good University Guide 2021. DARLEY BANK, 7-11 BROOK STREET, BANK, DARLEY DERBY, DE1 3PF Accommodation Darley Bank opened in September 2013 and comprises modern purpose-built student accommodation totalling 405 beds. The Property offers an attractive accommodation mix, with 391 premium en-suite cluster rooms and 14 self- contained studios. The cluster rooms are arranged in flats of three to seven people, each with shared kitchen and social space.

Both the cluster and studio rooms offer small double beds with storage, en-suite bathrooms, workspace, wardrobes, full length mirrors and modern décor. The Property also benefits from a common room, reception, management office, cycle storage and external amenity space. Typical Floor Plan Not to scale. For illustrative purposes only.

Summary Accommodation Schedule

Room Type Number of Rooms Area (Sq M)

Economy Bronze En-suite 7 12.5

Bronze En-suite 246 13

Silver En-suite 104 13 - 13.5

Gold En-suite 34 15 - 16 Cluster room Studio Bronze Studio 4 19 - 20 Kitchen / social space Silver Studio 6 20 - 22

Gold Studio 4 23 - 24

Total 405 PAGE 7 DARLEY BANK, 7-11 BROOK STREET, BANK, DARLEY DERBY, DE1 3PF Tenancy & Covenant

Darley Bank is let under a reversionary FRI lease for a term certain of 28 years and 6 months, commencing on 1st September 2019 and expiring on 31st August 2049.

The current passing rent is £1,177,335 per annum, following a 2% increase from the initial rent of £1,154,250 per annum on 1st The subject Property is let to Derbyshire Student Residences September 2020. The rent is reviewed annually in line with RPI (Company Registration No. 03087455) with the University of Derby on the 1st September and is subject to a collar of 2% and cap (Company Registration No. 03079282) acting as guarantor. The of 4% and therefore will increase to a minimum of £1,200,882 per accommodation is operated by the University of Derby who won annum from 1st September 2021. three awards in the 2019 National Student Housing Survey Awards including Best Customer Service, Best Student Wellbeing and Best Environmental Management.

Derbyshire Student Residences Limited has a Dun & Bradstreet rating of 5A1, reflecting a tangible net worth in excess of £35,000,000 and minimum risk. Their current tangible net worth is reported by Dun & Bradstreet to be £73,471,000.

The University of Derby also has a Dun & Bradstreet rating of 5A1, and its tangible net worth is significantly higher at £400,482,000. PAGE 8 DARLEY BANK, 7-11 BROOK STREET, BANK, DARLEY DERBY, DE1 3PF Estimated Rental Value

The University has provided the following rental values at Darley Bank for the 2021/22 academic year. En-suite cluster beds have been priced at between £138.88 to £152.53 per week on the basis of 42 week contracts whilst studio beds have been priced at between £159.74 to £172.48 per week, on the basis of 51 week contacts.

From our research, we believe the below schemes to be the most comparable. They include both private and University accommodation in order to provide a holistic take on the student market in Derby. The following rental analysis reflects marketing rents for available accommodation at the time of publication for the 2021/22 academic year:

Scheme Operator Room Type Weeks Rents 2021/22 (per week)

Agard Court University of Derby En-suite Cluster 42 £152.53

Cathedral Court University of Derby En-suite Cluster 42 £152.53

43 £145 - £147 En-suite Cluster 51 £128 - £130

The Croft Homes for Students 43 £148 - £150 En-suite Cluster (Large) 51 £132 - £134

En-suite Cluster (XL) 51 £150 - £152

Twodio 51 £145

Studio (Compact) 51 £160

Roman House Collegiate Studio 51 £168 - £172

Studio (Premier) 51 £175 - £180

Studio (Ultra) 51 £185 PAGE 9 Abbey Lodge Fresh Student Living En-suite Cluster 42/48/51 £140/£130/£126 DARLEY BANK, 7-11 BROOK STREET, BANK, DARLEY DERBY, DE1 3PF

Based on our analysis of the comparable evidence, we anticipate that Darley Bank (if let on a Direct Let basis) could generate a gross rent of circa £2.57 million. Furthermore, due to the quantum of beds we would expect it to be operated at an efficient management cost per bed space.

A breakdown of our income / cost assumptions are set out in the table below.

Room Type No. Weeks Occupancy Rent (per week) Total Rent

Economy Bronze 7 44 97% £135 £40,333 En-suite

37 51 £135 £247,103 Bronze En-suite 97% 209 44 £140 £1,248,817

16 51 £140 £110,813 Silver En-suite 97% 88 44 £145 £544,597

5 51 £145 £35,866 Gold En-suite 97% 29 44 £150 £185,658

Bronze Studio 4 51 97% £160 £31,661

Silver Studio 6 51 97% £165 £48,975

Gold Studio 4 51 97% £170 £33,640

Rent Sub-total £2,527,461

Summer Income 333 7 10% £142 (Ave.) £33,121

Sundry Income 405 45 100% £0.75 £13,743

Ancillary Income £46,864 Sub-total

Gross Income £2,574,325

Management Costs 405 £1,850 £749,250

Net Operating Income £1,825,075

On the aforementioned assumptions, we would anticipate that the Net Operating Income would be in excess of the current passing rent. Based on the PAGE 10 projected NOI of £1.825 million and lease passing rent of £1.177 million, we estimate the rent cover ratio to be c.1.5 times, reflecting a highly reversionary asset. Darley Bank 7-11 Brook Street Derby DE1 3PF

Tenure Contact Information Further Freehold held under DY143792. EPC Rating

The Property has an EPC rating of B (45). A copy of the Information certificate is available in the data room. VAT

We understand that the Property is not elected for VAT. Arthur Coxon Viewings 07387 237 995 Montagu Evans are instructed to seek offers in excess [email protected] Viewings are strictly by appointment only. Please contact of £27,500,000 (Twenty-Seven Million Five Hundred Montagu Evans to arrange an inspection. Thousand Pounds) subject to contract and exclusive of VAT. Craig McPhail This reflects an attractive Net Initial Yield of 4% at the current Data Room 07818 012 459 passing rent and assuming purchaser’s costs of 6.76%. [email protected] A full suite of information is available in the data room. Please contact Montagu Evans to request access. Offers are invited on an unconditional basis, by way of an Will Hyslop informal tender. Our client reserves the right to not accept 07342 050 230 the highest, or indeed any offer received. [email protected]

Montagu Evans LLP for themselves and for the vendors or lessors of this property whose agents they are give notice that: (i) the particulars are set as a general outline only for the guidance of intending purchasers or lessees and do not constitute the whole or any 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 but without any responsibility whatsoever and any intending purchasers or tenants should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise as to the correctness of each of them; (iii) neither Montagu Evans LLP nor its employers has any authority to make or give any representation or warranties whatsoever in relation to this property; (iv) unless otherwise stated all prices and rents are quoted exclusive of VAT, and intending purchasers or lessees must satisfy themselves independently as to the applicable VAT position. (v) All the plans and maps provided within the particulars are for identification purposes only. January 2021