ONE CITY SQUARE

LANDMARK CITY CENTRE OFFICE INVESTMENT INVESTMENT SUMMARY ■ ■■ ■ ■ ■ ICONIC MULTI LET OFFICE investment 45% OF THE ACCOMMODATION SECURELY ■ Average passing rent on the office ■ We are instructed to seek OFFERS IN EXCESS , one of the “Big 4” dominating City Square and immediately LET TO DELOITTE LLP accommodation of ONLY £18.37 PSF, compared OF £30,000,000 (THIRTY MILLION UK accounting practices, benefitting from opposite . to PRIME HEADLINE RENTS OF £30 PSF. POUNDS), subject to contract and exclusive 9.5 YEARS UNEXPIRED. of VAT. ■ ■ ■ VIBRANT LOCATION at the gateway into ■ EXCEPTIONALLY STRONG OCCUPIER MARKET Leeds’ commercial district and retail core. ■■ Multi let to seven tenants with an income with record levels of take-up, minimal Grade A ■■ After allowance for usual purchaser’s costs WAULT OF 7.63 YEARS TO EXPIRY; 7.01 YEARS supply and very limited development pipeline. of 6.77%, an acquisition at this level reflects ■ TO BREAKS. ■ LANDMARK PROPERTY, developed in 1997, 6.51% NIY ON THE INCOME AND £200 PSF and comprising 12 storeys of Grade A offices ■■ Current void rate of 23%, with the potential CV ON THE VACANT ACCOMMODATION. ■ extending to approximately 107,934 sq ft ■ CURRENT RENTAL INCOME OF £1,744,717 for the Landlord to increase this to at (inclusive of average turnover rent from ■ (10,027.4 sq m) with basement parking at an PA least 41% by June 2019, providing exciting ■ ATTRACTIVE CAPITAL VALUE OF £278 PSF Citibase). excellent ratio of 1:930 sq ft. REFURBISHMENT, REPOSITIONING AND OVERALL compared to Leeds’ prime level of VALUE ADD OPPORTUNITIES. £525 psf.

■ ■ CAPABILITY, UPON REFURBISHMENT, TO COMMAND THE HIGHEST RENTS IN LEEDS. THE PREMIER BUSINESS ADDRESS IN LEEDS THE UK’S FASTEST GROWING CITY LEEDS HAS ONE OF THE MOST DIVERSE ECONOMIES AND IS THE DRIVING FORCE BEHIND THE CITY REGION’S £64.6 BILLION ECONOMY. Located at the heart of the UK and the Northern Leeds is widely recognised as the LARGEST CENTRE LEEDS IS RANKED THE 5TH LARGEST RETAIL , which has been consolidated Powerhouse, Leeds is the UK’s 3rd largest city, with FOR FINANCIAL AND LEGAL SERVICES OUTSIDE CENTRE IN THE UK by the development of two landmark shopping a resident population of 779,000 which increases and is home to 20 FTSE100 headquarters to 3 million within the city region and with a and in excess of 30 National and International centres: Trinity (2013) and Victoria Gate (2016). The latter saw the arrival of the city’s first John Lewis, WORKFORCE OF 1.37 MILLION. banks. Companies with more than 1,000 employees based in Leeds include Asda Group, First Direct, their largest store outside London. In total, nearly £1 billion has been invested into Leeds’ retail and Leeds has a GVA OF £21.3 BILLION WITH 32,600 Centrica, Ventura, BT, Direct Line Group and leisure sector which has also included the First BUSINESSES AND 6,110 SMALL & MEDIUM Bank. Direct Arena, Europe’s first purpose built, state of ENTERPRISES, reflecting the diversity and resilience the art ‘super theatre’ which has spearheaded the of the economic base. The number of businesses Leeds has EIGHT UNIVERSITIES, TWO WORLD transformation of the entertainment and leisure has increased by 11.4% since 2014, comparing CLASS BUSINESS SCHOOLS, 14 FURTHER offer in Leeds. The tourist industry, both leisure favourably to the national average of 8%. Over the EDUCATION COLLEGES and Europe’s largest next 10 years, the economy is forecast to grow by teaching hospital trust. The City has a very high and business, generates approximately £2 billion 21%. student retention rate providing an excellent pool for the local economy. of skilled labour. Leeds is behind only London and Cambridge for Inward investment in Leeds continues unabated the number of fast growing firms, defined as The attraction of Leeds as a city extends beyond with over £7 billion of property schemes currently companies which have achieved three years of its growing economic base to providing a strong under construction, ensuring Leeds’ sustained expansion and firmly placing it on the global map. 20% growth in revenues or employees (Enterprise “QUALITY OF LIFE”. LEEDS IS THE HIGHEST- Research Centre). It is therefore no surprise that RANKING UK CITY, according to Arcadis, on this Leeds saw THE FASTEST RATE OF PRIVATE SECTOR measure that takes into account health, education, JOBS GROWTH OF ANY UK CITY, INCLUDING housing and living costs and work-life balance. LONDON (2016). Lancaster

Driffield Skipton

M6  Keighley LEEDS A1M Tadcaster AIRPORT Blackpool M65 M55 Bradford M1 Preston M65 LEEDSM621 A63 Blackburn A1M M62 Hull Halifax M65 M62 M62 M62 Chorley Rochdale M62 M18 M6 M66 Bolton Scunthorpe M61 M180 A1M M180 Barnsley Wigan Oldham M18 M58  M60 DONCASTER M1 AIRPORT COMMUNICATIONS M6 M57 A1M M62 M18 UNRIVALLED CONNECTIVITY M60 M60 M62 Warrington Stockport

 M56 Sheffield ROAD AIR LIVERPOOL AIRPORT  M1 M53 MANCHESTER Leeds is strategically located at the heart of the is situated approximately 8 M56 AIRPORT Worksop Knutsford UK benefiting from excellent road communications. miles north west of the City centre. It is the largest

M6 Chesterfeld Lincoln The City is located just 6 miles (9.6 km) from the airport in Yorkshire, providing international and

Chester M1 M1 and M62 intersection, the principal north-south domestic flights to over 70 direct destinations in

Mansfield and east-west motorways. The M621 links the key 30 countries across Europe, North America and motorways into from the south. Asia. The airport has trebled in size since 1996 to M6 M1 Newark-on-Trent The M1 runs to south and east of Leeds, joining around 3.7 million passengers per annum and is 219 miles (4 hr 10 mins) with the A1(M) at Junction 46. forecast to continue to expand to approximately Stoke-on-Trent 3 hr 4 mins Boston 8 million passengers by 2026. The airport has 221 miles (3 hr 51 mins) Nottingham just announced a further £12m extension to the 4 hr 45 mins Grantham

M1 terminal building.

Manchester International Airport and Doncaster- Sheffield Airport can both be reached within approximately one hour of Leeds. EDINBURGH GLASGOW MANCHESTER 43 miles (1hr 11 mins) 55 mins HULL 61 miles (1 hr 10 mins) 55 mins NEWCASTLE LIVERPOOL 72 miles (1h 45 mins) 1 hr 32 mins LEEDS LONDON 194 miles (3 hr 51 mins) MANCHESTER 2 hr 10 mins SHEFFIELD 119 miles (2 hr 31 mins) 1 hr 23 m (estimate) 2 hr 02 mins 57 min (estimate)

BIRMINGHAM

CARDIFF LONDON PARIS 5 hr 17 mins 4 hr 30 mins (estimate) RAIL HS2 Leeds Railway Station is the busiest railway station The proposed HS2 will be a fundamental driver of in the North of England, with over 38m passengers economic growth for Leeds and reduce journey passing through every year. It is served by the East times to London to under 1 hour 30 minutes. HS2 Coast Mainline which provides high-speed links is forecast to deliver 19,700 potential new jobs and to London Kings Cross with a journey time of just boost the economy by £7.8 over 2 hours. Direct services also operate to a host billion a year. of regional cities including Birmingham, Manchester, Liverpool, Sheffield and Newcastle. The proposals are to integrate HS2 with the current train station in a £500m remodelling of the station to create a “world class gateway” at the heart of the . This includes transforming the City Square and Bishopgate Street entrances to act as the principal high quality entrance into the Integrated Station. This will create a major new public realm in front of the station with enhanced public transport links but otherwise predominantly pedestrianised. This phase of the redevelopment is proposed as one of THE STATION HAS UNDERGONE A MODERNISATION the first stages of the transformation, scheduled PROGRAMME WITH THE OPENING OF THE NEW for 2021-2023, and prior to the arrival of HS2. £20M SOUTHERN ENTRANCE IN JANUARY 2017.

Click or scan for more images/info: Permission for the use of this : image has been approved by Atkins. CGI of proposed City Square/ Bishopsgate remodelled station entrance MAGISTRATES COURTS TOWN HALL CIVIC QUARTER THE LIGHT SITUATION THE HEADROW

THE HEADROW THE PROPERTY DOMINATES CITY SQUARE, IMMEDIATELY OPPOSITE PARK SQUARE THE RAILWAY STATION AND AT THE PARK ROW THE CORE GATEWAY INTO THE HEART OF VICTORIA QUARTER ST PAUL’S STEET VICTORIA EAST PARADE ONE GATE LEEDS’ COMMERCIAL DISTRICT. ALBION PLACE CITY City Square forms the nucleus of Leeds’ city centre, at CENTRAL BUSINESSPARK PLACE DISTRICTINFIRMARY ST

 ALBION ST SQUARE the confluence of key arterial routes into Leeds, the bus BRIGGATE network and immediately opposite the railway station. YORK PLACE QUEBEC ST KIRKGATE KIRKGATE MARKET QUEENS ST RETAIL CORE The Property sits at the forefront of the prime office district. This extends to the north and west behind the TRINITY WELLINGTON STREET KING STREET CITY SQ Property along Park Row up to the Headrow and to the west to Queen Street and along Wellington Street. Key nearby occupiers include HSBC, NatWest, Pinsent

EXITS Masons, Redmayne-Bentley, DLA Piper and Zurich BOAR LANE CORN EXCHANGE WEST END Insurance, to name a few. STATION CONCOURSE The micro location has witnessed many highly successful EXIT office refurbishments including 9 Bond Court, Capitol WHITEHALL RD EAST THE CALLS House and Minerva House. The office redevelopment to create Platform, opposite 1 City Square, has been a huge LEEDS STATION MALMAISON success, regularly setting rents of at least £30 psf and 95% let within a year of practical completion. The only EXIT two developments to complete in the next 12 months, SOVEREIGN QUARTER Majestic and 34 Boar Lane, also encircle City Square, HILTON further driving interest and rents in the immediate area. DOUBLETREE HILTON Recent developments have significantly boosted the quality of Leeds’ office accommodation, raising the profile of the City overall, firmly placing it on the global map and attracting inward investment from URBAN VILLAGE ASDA SOUTH BANK CENTRAL new occupiers including Burberry, Blacks Solicitors, Shoosmiths and Reed Smith. ‘NEVER PREVIOUSLY BROUGHT TO THE INVESTMENT MARKET’

UNIVERSITY

LEEDS ARENA

TOWN HALL MILLENNIUM SQ

THE HEADROW THE LIGHT PARK SQUARE ONE CITY PARK ROW SQUARE

BUS STATION 

WELLINGTON STREET

TRINITY STATION CONCOURSE

LEEDS STATION CITY SQUARE A VIBRANT LOCATION Leeds’ retail core sits immediately to the east of Quebec’s and Leeds’ newest and highest rated City Square, with a key entrance into Leeds’ largest hotel, Dakota Deluxe. shopping centre, Trinity, off City Square. A KEY DRIVER OF TENANT DEMAND WILL Leisure amenities are plentiful with Restaurant Bar ALWAYS REMAIN PROXIMITY TO THE TRAIN & Grill and Banyan Bar & Kitchen adjacent, both STATION AND CITY CENTRE FACILITIES, FOR of which benefit from having the rare amenity of WHICH THERE IS NO BETTER POSITION THAN ample outside seating. 1 CITY SQUARE.

Some of Leeds’ top hotels are in the immediate vicinity including the iconic Queens Hotel, DESCRIPTION 1 CITY SQUARE IS AN ICONIC PART OF THE LEEDS CITY SKYLINE

Built in 1997, 1 City Square is a landmark office central atrium. A typical upper floor plate extends building constructed over ground and eleven upper to approximately 10,200 sq ft with the flexibility to floors with its striking architecture featuring a full subdivide into two suites (circa 6,000 sq ft and height atrium and wall climber lifts topped with a 4,200 sq ft). tensile roof. There is basement parking for 116 cars, providing an 1 City Square comprises approximately 107,934 sq excellent ratio of 1:930 sq ft. ft (10,027.4 sq m) configured around a full height MALE FEMALE MALE WCs WCs WCs FEMALE WCs

Ground Floor Typical Upper Floor

THE PROPERTY HAS BEEN PART REFURBISHED AND PRESENTS AN EXCELLENT OPPORTUNITY FOR FURTHER REFURBISHMENT.

Internally, the floors benefit from the following specification: ■■ Four pipe fan coil conditioning ■■ Full access raised floors ■■ Metal tile suspended ceilings ACCOMMODATION ■■ Floor to ceiling height of 2.7m FLOOR NIA (SQ FT) NIA (SQ M) ■■ 4 x 16 person passenger lifts Ground 7,667 712.3 ■■ Upgraded WC facilities First 9,858 915.8 ■■ Basement car parking providing an excellent ratio of Second 10,380 964.3 1:930 sq ft (116 spaces). Third 10,079 936.4 Fourth 10,061 934.7 ■■ On site commissionaire. Fifth 10,083 936.7 The 6th-10th floors were refurbished in 2012/13. This Sixth 10,061 934.7 included replacement of the chillers, replacement of 2 air Seventh 9,988 927.9 handling units, a new BMS system, new fan coil units and Eighth 10,009 929.9 upgraded lighting. Ninth 9,090 844.5 Tenth 9,090 844.5 In 2015, part 3rd and 5th floors were refurbished to Eleventh 1,568 145.7 include LED lighting, the ground floor WCs upgraded and a basement unisex shower room installed. Full TOTAL 107,934 10,027.4 details of the refurbishment undertaken can be provided An assignable measured survey has been undertaken. A upon request. copy of this is available in the data room. TENANCIES

The Property is currently let to seven tenants £2,500 per annum per car parking space. The first and second floors are let to CBLH plc, Citibase are available in the data room. under eight leases, with 24,459 sq ft vacant trading as Citibase, providing serviced offices. (23% by floor area). The majority tenant is Deloitte LLP who occupy The lease expires on 31/5/19 with the ability The rent received from Citibase has been 6th-10th floors equating to 45% of the building for the Landlord to obtain vacant possession £199,579 (year ending 31/5/18), £180,009 (2017) The current income is £1,744,717 per annum, by floor area. They occupy by way of two leases sooner if desired. Their yearly rent is a and £46,040 (2016), averaging at £147,406 adopting the 3 year average turnover rent from with an attractive unexpired term of 9.5 years. The peppercorn (if demanded) plus a Turnover Rent. pa. This equates to only £4.74 psf, offering Citibase of £141,876 pa. This equates to a low income WAULT is 7.63 years to expiry, 7.01 years to The calculation of the Turnover Rent is set out considerable scope to increase the income in average passing rent of sub £19 psf, allowing breaks (as at 30.9.18). in the lease. The lease and full accounts from the future from 18% of the floor area. LEASE RENT TENANT CURRENT DEMISE TENANT SQ FT CPS LEASE EXP CURRENT RENT PA COMMENTS START REVIEW BREAK RENT PSF* Part ground (right) AIB Group (UK) plc 2,232 2 10/08/15 09/08/25 10/08/20 10/08/20 £56,428 £23.04 Break penalty of £25,714. Break operable on not less than 6 months notice. Part ground (right) Vacant 1,450 1

Part ground (rear) GDS Link (UK) Ltd 1,016 28/06/16 27/06/21 £21,096 £20.76 Rent deposit of £18,986. Outside of the security provisions of the 1954 Act. Part ground (left) Vacant 1,278 1

Part ground (left) R Cole, S Drake, I Howard, C Brown 1,691 06/08/12 05/08/17 £38,192 £22.59 Tenant holding over. t/a Broadway House Chambers Terms for new lease agreed and available on request. 1st & 2nd CBLH plc 20,238 19 01/06/14 31/05/19 £141,876 (average) £4.74 Pure turnover rent. t/a Citibase Landlord can call upon Tenant to surrender any part of its interest at any time and as many (Yr to 31/5/16: £46,040) times as required. (Yr to 31/5/17: £180,009) Limited tenant repair clause; no ability to serve schedule of dilapidations. (Yr to 31/5/18: £199,579) Outside of the security provisions of the 1954 Act. NIA includes balcony of 321 sq ft. Part 3rd A Vacant 4,208 4 £0 Currently occupied by Watson Burton who have served break notice effective on 02/11/18.

Part 3rd B Vacant 5,872 6

Part 4th (left) Mills & Reeve LLP 6,440 19/12/14 18/12/24 19/12/19 24/12/19 £159,175 £24.72 Break penalty of £39,794. Break operable on not less than 6 months written notice. If break not exercised, tenant benefits from half rent for 12 months. Service charge cap of £45,479 pa + RPI indexation (current level of cap £48,786). Part 4th (right) Lloyds Bank plc 3,621 3 31/07/14 30/07/19 £95,100 £24.19 Service charge cap of £21,600 pa + RPI indexation (current level of cap £23,437).

5th Vacant 10,083 10

6th & 7th Deloitte LLP 20,049 20 20/04/13 19/04/28 20/04/18 £499,633 £22.43 Rent review not activated.

8th, 9th & 10th Deloitte LLP 28,189 29 20/04/13 19/04/28 20/04/18 £704,217 £22.41 Rent review not activated.

11th Vacant 1,568 1

Car spaces Vacant 8

Car spaces FR Evans (Leeds) Ltd 10 16/05/18 15/05/19 £25,000 Annual licence.

Car spaces Members of Broadway House Chambers 2 06/08/12 05/08/17 £4,000 Licence determinable on any payment date upon 3 months written notice.

Substation Yorkshire Electricity Group plc 01/09/98 31/08/58 £0

TOTAL 107,934 116 £1,744,717 £18.37 Total rent received (inclusive of Citibase average rent) * assuming £2,500 per cps pa. TENURE SERVICE CHARGE SINKING FUND Freehold. The current service charge budget equates to £8.58 There is a sinking fund of approximately £858,723 psf. This comprises a base rate of £7.46 psf plus which will be passed across to a Purchaser. an additional rate of £1.13 psf which predominantly comprises contributions towards the sinking fund Full details available in the data room. and adhoc works. CAPITAL ALLOWANCES There are two leases which are subject to service The tax written down value of the capital allowances charge caps, (noted above). Only the cap within totals £730,072 (as at 31.12.2017). These can be made the Lloyds lease is forecast to create a shortfall in available by way of separate negotiation. 2018 of £1,681. COVENANTS

YEAR ENDING YEAR ENDING YEAR ENDING YEAR ENDING YEAR ENDING YEAR ENDING 31/5/2017 31/5/2016 31/5/2015 31/12/2017 31/12/2016 31/12/2015 £’000 £’000 £’000 £’000 £’000 £’000

Deloitte LLP is the UK member firm of Deloitte Sales/ Turnover 3,503,000 3,140,000 2,827,000 Sales/ Turnover 10,201,719 13,659,408 13,069,868 Touche Tohmatsu Ltd (DTTL), the global company employing tens of thousands of professionals to Profit Before Taxes 416,000 571,000 433,000 Lloyds Bank plc, founded in 1765, is part of the Profit Before Taxes 3,286,801 1,752,627 1,410,713 provide audit, consulting, financial advisory, risk Lloyds Banking Group which includes household Equity Shareholders Equity Shareholders (1,141,000) (961,000) (988,000) names such as Halifax, Bank of and 6,473,571 3,107,487 1,707,464 management and tax advice under the “Deloitte” Funds Funds brand. Deloitte is one of the “Big 4” accountancy Scottish Widows. The accommodation is occupied Tangible Net Worth (1,192,000) (1,002,000) (1,023,000) practices in the UK employing over 16,000 people. by LDC, a leading player in the private equity mid- Tangible Net Worth 6,436,437 3,063,996 1,657,217 market since 1981.

has been recognised YEAR ENDING YEAR ENDING YEAR ENDING Broadway House Chambers GDS LINK 31/12/2017 31/12/2016 31/12/2015 since 2010 by the Legal 500 UK as a “Top Tier Set”, £ £ £ the highest accolade a Chambers can achieve. They have been established for over 90 years with GDS Link (UK) Ltd is a global provider of credit Sales/ Turnover 865,055 741,228 risk management solutions offering technology offices in Leeds and Bradford, specialising in 6 solutions, analytical and consulting services Profit Before Taxes 24,675 (28,349) 111,000 practice areas. The lease is held in the names of four individuals. to a wide range of clients, particularly lending Equity Shareholders 29,565 15,914 1,614,000 institutions. Launched in 2006 by two former Funds Scorex executives, and headquartered in Texas, the Tangible Net Worth 29,565 15,914 1,611,000 company has a further 8 offices across the globe. is a wholly AIB Group (UK) plc YEAR ENDING YEAR ENDING YEAR ENDING owned subsidiary of Allied Irish 31/12/2017 31/12/2016 31/12/2015 Banks plc. AIB was incorporated £’000 £’000 £’000 in 1966 as a result of the Sales/ Turnover 317,000 334,000 354,000 amalgamation of three long established Irish banks. AIB plc reported a stable Profit Before Taxes 106,000 170,000 111,000 profit of Euros 762m in H1 2018. They undertake Equity Shareholders commercial finance from the premises. No cash is 1,760,000 1,703,000 1,614,000 Funds held on site. Tangible Net Worth 1,735,000 1,692,000 1,611,000

(trading as Citibase) CBLH plc YEAR ENDING YEAR ENDING YEAR ENDING is a serviced office provider, 28/02/2018 28/02/2017 29/02/2016 operating since 1993, with £ £ £ approximately 40 centres across Sales/ Turnover 10,201,719 13,659,408 13,069,868 the UK. It is predicted that by 2021, 30% of the total office market will be let Profit Before Taxes 3,286,801 1,752,627 1,410,713 under flexible terms and is a strong growth market. Equity Shareholders 6,473,571 3,107,487 1,707,464 Funds Tangible Net Worth 6,436,437 3,063,996 1,657,217

YEAR ENDING YEAR ENDING YEAR ENDING 31/5/2017 31/5/2016 31/5/2015 Mills & Reeve LLP is a top 50 UK law firm, employing £’000 £’000 £’000 over 1,000 people across 6 locations in the UK. They Sales/ Turnover 94,115 87,679 81,323 have the largest private tax team outside of London and one of the largest family teams in the world. Profit Before Taxes 326 1,160 30,034 Equity Shareholders 34,776 29,929 27,952 Funds Tangible Net Worth 34,736 29,849 27,832 OCCUPATIONAL MARKET STRONG OCCUPATIONAL MOMENTUM IS RESULTING IN A SHORTAGE OF PRIME STOCK, CONTINUING THE UPWARDS PRESSURE ON RENTS. THE PINCH POINT IN SUPPLY CREATES AN IDEAL OPPORTUNITY FOR A REPOSITIONED 1 CITY SQUARE TO TAKE ADVANTAGE OF INCREASINGLY STRONG MARKET CONDITIONS.

TAKE-UP RENTS Leeds TAKE-UP IN 2017 EXCEEDED 1 MILLION SQ RENTS CONTINUE TO RISE WITH £30 PSF FT for the first time. The 380,000 sq ft pre-let at HEADLINE RENT set on the letting to Burberry at Wellington Place to the Government Property Unit 6 Queen Street. Lettings at Platform, Bruntwood’s Hub was a highlight of the year. This transaction comprehensive refurbishment above the train is predicted to bring 6,000 civil servants into Leeds station, regularly achieve in excess of £30 psf with city centre by 2020 and is the largest pre-let a deal currently in legals at a headline rent at £34 transaction outside London in the past 10 years. psf. Over the last 12 months, 68% of deals by floor area were concluded at rents reflecting £25 psf This momentum has continued with take-up to or more. end of Q3 in excess of 528,000 sq ft. Key deals include 76,000 sq ft let to Walker Morris at 33 DEMAND Wellington Street, 48,272 sq ft let to the Dart There is a significant number of active requirements Group at The Mint and 60,000 sq ft to HMRC at in the market, with 3 Wellington Place. The letting to Walker Morris 280,000 SQ FT OF NAMED

is the largest private sector pre-let in the Leeds REQUIREMENTS OF ABOVE 20,000 SQ FT currently unsatisfied within the market. The market for 15 years. Year to date take-up comprised professional sector remains a key driving force. in excess of 100 deals, indicating that there remains Further significant demand stems from the Media strong activity across all suite sizes. and Finance sectors and the emerging digital technology sector, with Leeds being selected as SUPPLY one of a few “UK Gigabit Cities”. AVAILABILITY IS AT AN ALL-TIME LOW at approximately 350,000 sq ft Grade A, equating to only an average year’s Grade A take-up. ONLY TWO DEVELOPMENTS WILL ADD TO SUPPLY in 2019: Majestic (65,000 sq ft) and 34 Boar Lane (57,000 sq ft), both quoting in excess of £30 psf and focusing attention around City Square. TAKE-UP AVAILABILITY (Q3 2018) Key: ■■■■■ 10 year average city centre take-up ■■■■■ Prime headline rents 700,000 £30 £30 1,100,000 £30.00 600,000 £26 £27 £25 £25 £25 Pre-let / Under Offer 825,000 £22.50 500,000 450,000 1,012,885 Available 400,000 798,256 Size (Sq Ft) Size 550,000 £15.00

Size (Sq Ft) Size 300,000

680,105 200,000 545,526

275,000 528,000 £7.50 435,012 409,217 100,000 178,693 169,773 123,000 0 £0 0 2012 2013 2014 2015 2016 2017 Year to date Under Construction New Builds Grade A

11%

TAKE-UP BY RENTAL LEVEL 31% (Q1 2017 TO Q2 2018) 58% ■ £25+ psf ■ Under £25 psf ■ Freehold

KEY RENTAL TRANSACTIONS

DATE ADDRESS AREA (SQ FT) TENANT RENT (PER SQ FT) LEASE LENGTH

June 18 3 Wellington Place 20,402 Investec £28.00 15 years, break at 10th. 1.0

0.8 Sept 18 Platform 4,948 Experian £30.00 3 years. 0.6

Sept 18 Platform 2,773 i-View £29.50 3 years.

Aug 18 6 Queen Street 12,194 Murray Harcourt £29.50 10 years.

Feb 18 St Paul’s House 6,534 Sedulo £26.00 10 years, break at 7th.

Dec 17 Central Square 5,497 Crisp Thinking £30.00 10 years, break at 5th.

Aug 17 Central Square 25,710 Sky Subscription Services £28.00 15 years, break at 10th.

June 17 6 Queen Street 45,000 Burberry £28.00 -30.00 15 year, break at 10th.

April 17 9 Bond Court 4,258 Carter Jonas £27.00 10 year, break at 5th.

Despite rising rents, Leeds still offers a significant centres such as Manchester (£34 psf), Birmingham discount and occupational saving to other regional (£33 psf), Edinburgh (£33 psf) and Bristol (£32.50 psf). INVESTMENT MARKET

Office investment outside Central London reached £7.7bn in 2017, 30% more than in 2016. The majority UK CITY PRIME OFFICE YIELD of the transactions were focused in the latter part of Birmingham 4.75%

2017, building momentum into 2018 and firmly placing Bristol 4.75% regional office investments on investor’s radars. The sector is favoured by a wide range of investors due to Cardiff 5.50% strong occupier fundamentals and providing relative Edinburgh 4.75%

value both on a pan-European level and in context Glasgow 5.50% with Central London and the South East. With a lack of available opportunities, there is pent up demand Leeds 5.00% which is driving pricing. Within the regional context, Manchester 4.75% prime yields in Leeds offer an attractive discount Newcastle 5.75% to other centres and at a discount to peak yields, supporting potential for further capital growth. Sheffield 6.00%

INITIAL CAP VAL DATE ADDRESS PRICE SIZE FT² WAULT (YEARS) YIELD £ / FT² September 2018 Aurora, Bristol £62.13m 4.75% £649 95,771 9.1 (to breaks)

August 2018 Minerva House Leeds £21,930,000 5.81% £374 58,606 7.4

July 2018 Greenside 12 Blenheim Place Edinburgh £17,570,000 5.27% £464 37,828 8

June 2018 1 Park Row Leeds £35.6m 4.43% £450 79,124 11

April 2018 City Point Leeds £26.05m 5.78% £424 61,379 3.7

February 2018 6 Queen Street Leeds £37.2m 5.41% £525 71,649 6.5 THE AVERAGE PASSING RENT AT 1 CITY SQUARE IS January 2018 5 St Philips Place Birmingham £45M 4.7% £555 81,046 3 January 2018 3 Hardman Square Manchester £107.25m 4.90% £601 178,399 5 SUB £19 PSF January 2018 One Cathedral Square Bristol £33.5m 4.98% £598 56,059 12.4 (7.6 to breaks) Leeds has had an exceptionally strong start to market was the primary focus, accounting for 45% 2018 with over £500m of commercial property of this activity, and placing downwards pressure transactions in H1, the highest volume for almost on yields. three years and 32% up year-on-year. The office INVESTMENT RATIONALE ■■ Opportunity to acquire Leeds’ premier VAT business address. The property is elected for VAT. It is envisaged that ■■ The property has never been brought to the the sale will be treated as a Transfer Of A Going investment market until now. Concern (TOGC). ■■ Exceptional location. ■■ Iconic building with exciting refurbishment and EPC repositioning opportunities. The building has a rating of D(77). Copy certificate is available in the data room. ■■ Excellent income growth potential with low passing average rent of sub £19 psf, current void rate of 22%, with the potential to PROPOSAL increase to at least 41% by June 2019. We are instructed to seek offers in excess of , ■■ Capability, upon refurbishment, to command £30,000,000 (THIRTY MILLION POUNDS) subject to contract and exclusive of VAT. the highest rents in Leeds, currently at £30 psf. After allowance for usual purchaser costs, an ■■ Core income from Deloitte LLP anchors acquisition at this level reflects6.51% ON THE the current income profile and mitigates INCOME AND £200 PSF CV ON THE VACANT letting risk. ACCOMMODATION. ■■ Mid-term regear potential with Deloitte LLP. ■■ Attractive overall capital value per sq ft of £278 compared to Leeds’ prime rate of £525.

A FLAGSHIP TROPHY ASSET NEVER PREVIOUSLY BROUGHT TO THE INVESTMENT MARKET FURTHER INFORMATION

Rebecca Farnsworth Simon Rickards +44 113 297 2420 +44 20 7861 1158 [email protected] [email protected]

Henrie Westlake Henry Wyld +44 113 297 2413 +44 20 7861 1520 [email protected] [email protected]

Knight Frank Knight Frank 9 Bond Court 55 Baker Street Leeds, LS1 2JZ London, W1U 8AN Tel +44 (0) 113 246 1533 Tel +44 (0) 20 7629 8171

Baker Street 020 7629 8171 KnightFrank.co.uk

Important Notice 1. Particulars: These particulars are not an offer or contract, nor part of one. You should not rely on statements by Knight Frank LLP in the particulars or by word of mouth or in writing (“information”) as being factually accurate about the property, its condition or its value. Neither Knight Frank LLP nor any joint agent has any authority to make any representations about the property, and accordingly any information given is entirely without responsibility on the part of the agents, seller(s) or lessor(s). 2. Photos etc: The photographs show only certain parts of the property as they appeared at the time they were taken. Areas, measurements and distances given are approximate only. 3. Regulations etc: Any reference to alterations to, or use of, any part of the property does not mean that any necessary planning, building regulations or other consent has been obtained. None of the services or appliances have been tested and no warranty is given or is to be implied that they are in working order. A buyer or lessee must find out by inspection or in other ways that these matters have been properly dealt with and that all information is correct. 4. VAT: The VAT position relating to the property may change without notice. nightK Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members’ names. October 2018 Quest Design 01606 892615