Valuation Report

VALUATION REPORT

Project Maroon Shopping Centre Portfolio

For: Goldman Sachs International Bank

Valuation Date: 3 November 2017

CONTENTS

1. VALUATION REPORT 3

SCHEDULE OF MARKET VALUES 9 SCOPE OF WORK & SOURCES OF INFORMATION 10 VALUATION ASSUMPTIONS 13

2. MARKET COMMENTARY 18

3. PROPERTY REPORTS 25 THE RUSHES, LOUGHBOROUGH THE VANCOUVER CENTRE, KINGS LYNN THE KINGSGATE CENTRE, DUNFERMLINE

4. APPENDIX A ENGAGEMENT LETTER

The contents of this Report may only be relied upon by:

(i) Addressees of the Report; or

(ii) Parties who have received prior written consent from CBRE in the form of a reliance letter.

This Report is to be read and construed in its entirety and reliance on this Report is strictly subject to the disclaimers and limitations on liability on page 17. Please review this information prior to acting in reliance on the contents of this Report. If you do not understand this information, we recommend you seek independent legal counsel. 3

PART I VALUATION REPORT 4

VALUATION REPORT

CBRE Limited Henrietta House Henrietta Place London W1G 0NB

Fax +44 (0)20 7182 2001 Switchboard +44 (0)20 7182 2000

Report Date 29th November 2017

Addressee The Directors Goldman Sachs International Bank Investment Banking Division 133 Fleet Street London EC4 2BB

For the attention of: Alessandro Luca The Properties Shopping Centre Portfolio.

Property Description Please see individual property reports attached in Section 3

Ownership Purpose Investment

Instruction To value the unencumbered freehold and leasehold interest in the properties on the basis of Market Value as at the valuation date in accordance with the terms of engagement entered into between CBRE and the addressee dated 22 November 2017.

Valuation Date 3 November 2017

Capacity of Valuer External Valuer, as defined in the RICS Valuation – Global Standards 2017

Purpose Loan Security only.

Market Value £104,700,000 (ONE HUNDRED AND FOUR MILLION SEVEN HUNDRED THOUSAND POUNDS) excluding VAT, as shown in the Schedule of Capital Values set out below.

Where a property is owned by way of a joint tenancy 5

in a trust for sale, or through an indirect investment structure, our valuation represents the relevant apportioned percentage of ownership of the value of the whole property, assuming full management control. Our valuation does not necessarily represent the 'Market Value' of the interests in the indirect investment structure through which the property is held.

Our opinion of Market Value is based upon the Scope of Work and Valuation Assumptions attached, and has been primarily derived using comparable recent market transactions on arm’s length terms.

We have valued the Properties individually and no account has been taken of any discount or premium that may be negotiated in the market if all or part of the portfolio was to be marketed simultaneously, either in lots or as a whole.

Suitability of the We have not been provided with details of the loan properties as security amount and loan terms proposed and therefore for mortgage cannot comment on the suitability of the property for purposes the proposed loan. We recommend that the Bank provides us with these details for our comment. We consider that the properties are suitable for use as loan collateral, although only at a suitable Loan to Value Ratio and with ongoing asset management. Should the assets not be positively managed, and vacancy rates or shortfall costs increase, the value will be negatively affected. The Dunfermline car park requires maintenance and repair work (outlined in the appended report). We recommend this is completed as quickly as possible to avoid further damage being caused during use, and potential for increased costs. We refer you to the individual property reports appended to this document which outline salient points regarding the individual properties and their suitability for loan security.

Compliance with The valuation has been prepared in accordance with Valuation Standards the RICS Valuation – Global Standards 2017 including the International Valuation Standards and the RICS Valuation – Professional Standards UK January 2014 (revised April 2015) (“the Red Book”).

We confirm that we have sufficient current local and national knowledge of the particular property market involved, and have the skills and understanding to undertake the valuation competently. Where the knowledge and skill requirements of The Red Book have been met in aggregate by more than one valuer within CBRE, we confirm that a list of those valuers has been retained within the working papers, together with confirmation that each named valuer complies with the requirements of The Red Book. This Valuation is a professional opinion and is expressly not intended to serve as a warranty, assurance or guarantee of any particular value of the subject property. Other valuers may reach different conclusions as to the value of the subject property. This Valuation is for the sole purpose of providing the intended user with the Valuer’s independent professional opinion of the value of the subject property as at the valuation date.

Assumptions The property details on which each valuation is based are as set out in this report. We have made various assumptions as to tenure, letting, town planning, and the condition and repair of buildings and sites – including ground and groundwater contamination – as set out below.

If any of the information or assumptions on which the valuation is based are subsequently found to be incorrect, the valuation figures may also be incorrect and should be reconsidered.

Variation from None. Standard Assumptions

Verification We recommend that before any financial transaction is entered into based upon these valuations, you obtain verification of any third-party information contained within our report and the validity of the assumptions we have adopted.

We would advise you that whilst we have valued the Properties reflecting current market conditions, there are certain risks which may be, or may become, uninsurable. Before undertaking any financial

transaction based upon this valuation, you should satisfy yourselves as to the current insurance cover and the risks that may be involved should an uninsured loss occur.

Valuer The Property has been valued by a valuer who is qualified for the purpose of the valuation in accordance with the Red Book.

Conflicts of Interest We confirm that we carried out the valuation of these properties on behalf of the previous lender last in October 2016 for Loan Monitoring purposes. Notwithstanding this, you have agreed that we should carry out this valuation on your behalf. Copies of our conflict of interest checks have been retained within the working papers. CBRE provide agency services to a wide range of retail occupiers and as such, CBRE may represent tenants within the subject properties. An information barrier exists between the Agency and Valuation teams and therefore we consider any conflict to be managed. CBRE have carried out Building Surveys on each of the properties, most recently in 2017 for Loughborough and Kings Lynn. CBRE also provided a report relating to the Dunfermline car park in 2015.

Reliance This report is for the use only of the party to whom it is addressed for the specific purpose set out herein and no responsibility is accepted to any third party for the whole or any part of its contents.

Publication Neither the whole nor any part of our report nor any references thereto may be included in any published document, circular or statement nor published in any way without our prior written approval of the form and context in which it will appear.

Such publication of, or reference to this report will not be permitted unless it contains a sufficient contemporaneous reference to any departure from the Royal Institution of Chartered Surveyors Valuation – Professional Standards or the incorporation of the special assumptions referred to herein.

Yours faithfully Yours faithfully

Peter Stoughton-Harris MRICS Max Field MRICS Executive Director Director RICS Registered Valuer RICS Registered Valuer

For and on behalf of CBRE Ltd For and on behalf of CBRE Ltd T: +44 020 7182 2675 T: +44 020 7182 2684 E: [email protected] E: [email protected] 9

SCHEDULE OF MARKET VALUES Properties Held for Investment

Address Freehold Part Freehold/ Part Leasehold Market Value Leasehold The Rushes Shopping Centre, Loughborough £30,300,000 £30,300,000 Vancouver Centre, Kings Lynn £34,100,000 £34,100,000 Kingsgate Centre, Dunfermline £40,300,000 £40,300,000 £104,700,000

NOTE: All Leaseholds are over 50 years unexpired.

SCOPE OF WORK & SOURCES OF INFORMATION

Sources of We have carried out our work based upon information Information supplied to us within a dataroom populated by London & Associated Properties and Sabal, as set out within this report, which we have assumed to be correct and comprehensive.

The Property Our report contains a summary of the property details on which our valuation has been based.

Inspection We have inspected the properties on an external basis and retain a schedule of the dates of our inspections within our working papers.

Areas We have not measured the Properties but have relied upon the floor areas provided to us in the dataroom, which we have assumed to be correct and comprehensive, and which you have advised us have been calculated using the relevant basis from measurement methodology as set out in (the RICS Code of measuring practice (6th edition) / RICS property measurement (1st edition, May 2015).

Environmental We have not undertaken any environmental audit or Matters other environmental investigation or soil survey which may have been carried out on the properties. We have had regard to Environmental Review reports completed by Ambient Environmental and have commented on the individual reports in the reports appended to this document.

We have not carried out any investigation into the past or present uses of the Property, nor of any neighbouring land, in order to establish whether there is any potential for contamination and have therefore assumed that none exists. A Previous incident of Japanese Knotweed was reported at Loughborough, although the site appeared to now be clear and the borrower regularly inspects and treats the area. Should the Knotweed return to the site it may have a negative effect on both the fabric of the building and the value of the property.

Services and We understand that all main services including water, Amenities drainage, electricity and telephone are available to the properties. None of the services have been tested by us.

Repair and Condition We have not carried out building surveys, tested services, made independent site investigations, inspected woodwork, exposed parts of the structure which were covered, unexposed or inaccessible, nor arranged for any investigations to be carried out to determine whether or not any deleterious or hazardous materials or techniques have been used, or are present, in any part of the Property. We are unable, therefore, to give any assurance that the Property is free from defect. The car park at Dunfermline is subject to elements of poor construction and subsequent poor maintenance. We have commented on this within the appended report. We have relied on the remediation costs of £3,440,000 supplied to us by the borrower and have reflected these within our valuation.

Town Planning We have not undertaken detailed planning enquiries.

Titles, Tenures and Details of title/tenure under which the Property is held Lettings and of lettings to which it is subject are as supplied to

us. We have not generally examined nor had access to all the deeds, leases or other documents relating thereto. Where information from deeds, leases or other documents is recorded in this report, it represents our understanding of the relevant documents. We should emphasise, however, that the interpretation of the documents of title (including relevant deeds, leases and planning consents) is the responsibility of your legal adviser. We have not conducted credit enquiries on the financial status of any tenants. We have, however, reflected our general understanding of purchasers’ likely perceptions of the financial status of tenants

VALUATION ASSUMPTIONS

Capital Values The valuation has been prepared on the basis of “Market Value” which is defined as:

“The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion". No allowances have been made for any expenses of realisation nor for taxation which might arise in the event of a disposal. Acquisition costs have not been included in our valuation.

The valuation represents the figure that would appear in a hypothetical contract of sale at the valuation date. No adjustment has been made to this figure for any expenses of acquisition or realisation - nor for taxation which might arise in the event of a disposal.

No account has been taken of any inter-company leases or arrangements, nor of any mortgages, debentures or other charges.

No account has been taken of the availability or otherwise of capital based Government or European Community grants.

Rental Values Rental values indicated in our report are those which have been adopted by us as appropriate in assessing the capital value and are not necessarily appropriate for other purposes nor do they necessarily accord with the definition of Market Rent.

The Property Where appropriate we have regarded the shop fronts of retail and showroom accommodation as forming an integral part of the building.

Landlord’s fixtures such as lifts, escalators, central heating and other normal service installations have been treated as an integral part of the building and are included within our valuations.

Process plant and machinery, tenants’ fixtures and specialist trade fittings have been excluded from our

valuations.

All measurements, areas and ages quoted in our report are approximate.

Environmental In the absence of any information to the contrary, we Matters have assumed that:

(a) the Property is not contaminated and is not adversely affected by any existing or proposed environmental law;

(b) any processes which are carried out on the Property which are regulated by environmental legislation are properly licensed by the appropriate authorities.

(c) in England and Wales, the property possesses current Energy Performance Certificates (EPCs) as required under the Government’s Energy Performance of Buildings Directive, and that they have an energy efficient standard of ‘E’, or better. We would draw your attention to the fact that under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 it will be unlawful for landlords to rent out a business premise from 1st April 2018 unless the site has reached a minimum EPC rating of an ‘E’ or secured a relevant exemption. In Scotland, we have assumed that the property possesses current Energy Performance Certificates (EPCs) as required under the Scottish Government’s Energy Performance of Buildings (Scotland) Regulations, and that it meets energy standards equivalent to those introduced by the 2002 building regulations. We would draw your attention to the fact the Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016 came into force on 1st September 2016. From this date, building owners are required to commission an EPC and Action Plan for sale or new rental of non-domestic buildings bigger than 1,000 m2 that do not meet 2002 building regulations energy standards. Action Plans contain building improvement measures that must be implemented within 3.5 years, subject to certain exemptions.

(d) the properties are either not subject to flooding risk or, if they are, that sufficient flood defences are in place and that appropriate building insurance could be obtained at a cost that would not materially affect the

capital value.

Repair and Condition In the absence of any information to the contrary, we have assumed that:

(a) there are no abnormal ground conditions, nor archaeological remains, present which might adversely affect the current or future occupation, development or value of the property;

(b) the Property is free from rot, infestation, structural or latent defect;

(c) no currently known deleterious or hazardous materials or suspect techniques, including but not limited to Composite Panelling, have been used in the construction of, or subsequent alterations or additions to, the Property; and

(d) the services, and any associated controls or software, are in working order and free from defect.

We have otherwise had regard to the age and apparent general condition of the Property. Comments made in the property details do not purport to express an opinion about, or advise upon, the condition of uninspected parts and should not be taken as making an implied representation or statement about such parts.

Title, Tenure, Unless stated otherwise within this report, and in the Lettings, Planning, absence of any information to the contrary, we have Taxation and assumed that: Statutory & Local (a) the Property possesses a good and marketable title Authority free from any onerous or hampering restrictions or requirements conditions;

(b) all buildings have been erected either prior to planning control, or in accordance with planning permissions, and have the benefit of permanent planning consents or existing use rights for their current use;

(d) all buildings comply with all statutory and local authority requirements including building, fire and

health and safety regulations;

(e) only minor or inconsequential costs will be incurred if any modifications or alterations are necessary in order for occupiers of each Property to comply with the provisions of the Disability Discrimination Act 1995 (in Northern Ireland) or the Equality Act 2010 (in the rest of the UK);

(f) all rent reviews are upward only and are to be assessed by reference to full current market rents;

(g) there are no tenant’s improvements that will materially affect our opinion of the rent that would be obtained on review or renewal;

(h) tenants will meet their obligations under their leases, and are responsible for insurance, payment of business rates, and all repairs, whether directly or by means of a service charge;

(i) there are no user restrictions or other restrictive covenants in leases which would adversely affect value;

(j) where more than 50% of the floorspace of the Properties are in residential use, the Landlord and Tenant Act 1987 (the “Act”) gives certain rights to defined residential tenants to acquire the freehold/head leasehold interest in the Properties. Where this is applicable, we have assumed that necessary notices have been given to the residential tenants under the provisions of the Act, and that such tenants have elected not to acquire the freehold/head leasehold interest. Disposal on the open market is therefore unrestricted;

(k) where appropriate, permission to assign the interest being valued herein would not be withheld by the landlord where required; and

(l) vacant possession can be given of all accommodation which is unlet or is let on a service occupancy.

(m) Stamp Duty Land Tax (SDLT) – or, in Scotland, Land and Buildings Transaction Tax (LABTT) – will apply at the rate currently applicable.

LEGAL NOTICE

This valuation report (the “Report”) has been prepared by CBRE Limited (“CBRE”) exclusively for Goldman Sachs International Bank (the “Client”) in accordance with our terms of engagement dated 22 November 2017 (“the Instruction”). The Report is confidential and it must not be disclosed to any person other than the Client and as expressly permitted in the Instruction without CBRE's prior written consent. CBRE has provided this report on the understanding that it will only be seen and used by the Client and no other person is entitled to rely upon it, unless CBRE has expressly agreed in writing. Where CBRE has expressly agreed that a person other than the Client can rely upon the report then CBRE shall have no greater liability to any party relying on this report than it would have had if such party had been named as a joint client under the Instruction.

CBRE’s maximum aggregate liability to all parties, howsoever arising under, in connection with or pursuant to reliance upon this Report, and whether in contract, tort, negligence or otherwise shall not exceed the lower of:

25% of the value of the property to which the Instruction relates on the Valuation Date; or £20 million Twenty Million Pounds; and

CBRE shall not be liable for any indirect, special or consequential loss or damage howsoever caused, whether in contract, tort, negligence or otherwise, arising from or in connection with this Report. Nothing in this Report shall exclude liability which cannot be excluded by law.

PART II MARKET COMMENTARY 19

MARKET COMMENTARY

UK ECONOMIC OVERVIEW

On 23 June 2016 the UK population voted by 51.9% to 48.1% to leave the European Union. Turnout was 72%, with a record 46.5 million people eligible to vote, causing Prime Minister David Cameron to resign. In voting to leave the EU, the UK has made probably its most profound economic and political decision in 60 years. Article 50 has been signed and delivered on 29 March 2017, triggering the official Brexit process. Political uncertainty was heightened further by the result of the General Election in June 2017, which could hinder the UK’s Brexit negotiations whilst likely adding to economic and financial volatility. Most economists fear Brexit’s impact on the UK economy, although the main economic indicators have thus far held up well with GDP still growing and retail sales over 2016 recording good levels of growth. The main cause of short term negative impacts is likely to be uncertainty about how the UK’s relationship with the EU will now work, and this uncertainty is likely to hit investor, occupier and consumer confidence. The triggering of Article 50 and the terms agreed will shape the economy for the next few years. Financial services, professional services, and the tech industries look most likely to be affected by a Brexit. Already the fallout emanating from this uncertainty has been seen, with the pound dropping to a 31 year low against the dollar, equity prices of UK banks falling, 10-year government bonds falling to record lows and many property funds suspending trading immediately in the aftermath. The UK economy is now more than 4% larger than its pre-crisis level. GDP was estimated to have increased by 0.3% in Q2 (Apr to June) 2017, the same rate as in Q1 (Jan to Mar). This slower than average growth in 2017 was mainly due to services, growing by 0.3% compared with growth of 0.8% in Q4 (Oct to Dec) 2016. The October IMF report projects that UK growth of 1.70% in 2017, before declining to 1.5% in 2018. Inflation is expected to reach 2.5% in 2017 due to the pound’s depreciation and the increase in energy prices, before it gradually subsides to the Bank of England’s target of 2% in the next few years. The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 2.8% in October 2017, up from 2.7% in May. The rate has been steadily increasing following a period of relatively low inflation in 2015 and is at its highest since April 2012. This has been influenced by rising prices for recreational and cultural goods and services (particularly games, toys and hobbies). Labour Force Survey estimates show that between February to April 2017 and May to July 2017, the number of people in work increased, unemployment fell and there was a further decrease in the number of people aged from 16 to 64 not working and not seeking work (economically inactive). The unemployment rate was 4.3%, down from 4.9% year-on-year and the lowest since 1975. Wage growth is currently running at around 2.1%, although better than a predicted 1.8% in real terms this still means a 0.4% fall in real wages. UK 5-year swap rates are 1.082% as at October 2017. While 10 year UK gilt rates have increased recently, reaching 1.40% at the 25th October 2017 from 1.33% as at 25th April. On 2 November the Bank of England increased interest rates for the first time in 10 years. Rates rose 0.25%, from 0.25% to 0.50%, in an attempt to stem inflation, reduced levels

of borrowing and potentially provide the Bank of England with the ability to reduce rates if future economic circumstances dictated. The underlying pattern in the retail industry is one of growth, three-months on three-months the quantity bought has increased by 0.6%. This does however represent a 0.8% decrease on Augusts growth, showing a trend of steady growth in sales volumes following a weak start to the year. Store price increases have been widespread throughout the year at 3.3%, representing the highest year-on-year price growth since 1992. This has been inevitable due to rising inflation increasing the pressure on retailers. The quantity bought in non- store retailing was the main contributor to growth on the year, followed closely by non- food stores. Household consumption grew by 0.2% in Q1 2017 when compared with the previous quarter, according to the ONS (September 2017), while household consumption expenditure experienced a decrease from 0.4% in Q4 2016 to 0.2% in Q1 2017. In August 2017, the quantity bought in the retail sales industry increased by 1.0% compared with the previous month. Internet sales continue to grow, accounting for 17% of all retail spending in September 2017 compared with 15.6% in September 2016., with an average weekly spend in September 2017 of £1.2 billion. Online spending in August 2017 accounted for 16.4% of all retail spending (excluding automotive fuel), showing an increase up from 15.0% of April 2017. It should be noted that it is too early to truly see the impact of the EU referendum on published statistics, but uncertainty in the UK economy remains and is expected to impact performance in the short-term.

OCCUPATIONAL MARKET COMMENTARY

In the aftermath of the UK referendum there has been significant uncertainty in the retail property market; although the occupational market initially proved more resilient than the investor market. Consumer spending is being squeezed by inflation, caused largely by the fall in sterling, and real wage growth is not matching inflation, although the November interest rate rise seeks to stem inflation, it also begins a signal to shoppers that the period of historic low rates and cheap borrowing may be coming to an end. The impact these factors may have on rents remains to be seen. UK retailers continue to face the challenge of increased costs and decreased consumer spending. Retailers in strong locations, particularly London, are benefiting from tourist spend in the UK, due to the fall in the value of the sterling. With retailers showing a strong bias toward new or majorly refurbished locations. Secondary locations continue to prove more challenging with occupier demand being more selective and rental values remaining uncertain in many locations. Despite this, retailer demand for acquiring new stores remains reasonably strong despite the

referendum, although some have used Brexit as a tool to renegotiate terms. Expanding retailers find themselves in a strong negotiating position once again, and are increasingly able to negotiate turnover elements to their leases and rent free periods. Across the wider UK market, polarisation has been a consistent theme as retailers continue to favour larger, dominant retailing locations. Consumers are travelling less frequently to carry out comparison goods shopping, but they are spending more money and time on each visit, taking in dining and leisure activities at the same time. As a result, major national fashion multiples have focussed on consolidating by closing smaller units in peripheral locations and opening stores with larger floorplates in major destinations and a small number of affluent towns. New Look and River Island continue to look at upsize opportunities from 17,000-25,000 sq ft, whilst Inditex and H&M continue to prioritise larger stores of 30,000-40,000 sq ft. Furthermore, Next continue to look to secure priority upsize requirements of around 65,000 sq ft and Primark remain very active with requirements of 50,000-100,000 sq ft. Much of the damage being done to physical retail results from the growth in internet sales, the strongest performing retailers have adopted multi-channel retailing and now offer a choice of in-store, online and click and collect options for shoppers. Online sales were estimated to account for approximately 22% of sales, of which 19% were through home delivery and 3% were through click-and-collect. Market conditions had remained positive for occupiers with the number of failing retailers reducing year on year for the past four years. However, 2016 saw a number of high profile administrations such as BHS and Austin Reed, which has contributed to the number of failing retailers and store closures exceeding 2015 levels. Determining a rental tone is becoming more difficult. Where there is an oversupply of space in town centres, landlords will agree leases that may be below the estimated rental value of the unit simply to mitigate void costs. This has also led to an increased number of temporary lettings to fill space. As a result, it may be harder to determine a rental tone due to the greater range in terms of rent, incentives and lease terms.

UK Shopping Centre Rental Growth 6.00%

4.00%

2.00%

0.00%

-2.00%

-4.00%

-6.00% 01/01/2001 01/01/2002 01/01/2003 01/01/2004 01/01/2005 01/01/2006 01/01/2007 01/01/2008 01/01/2009 01/01/2010 01/01/2011 01/01/2012 01/01/2013 01/01/2014 01/01/2015 01/01/2016 01/01/2017 01/01/2018 01/01/2019 01/01/2020 Rental Growth Rental Growth Forecast

The outlook looks set to challenge retailers due to an increase in costs and a decrease in consumer spending. Retailers who were initially protected from the drop in value of the pound following the EU referendum are likely to experience higher costs when the foreign currency that was purchased at a higher exchange rate runs out. The 2017 business rates revaluation has also affected retailers, particularly in London where in some cases rates have increased by over 100%. The effect on national retailers has been offset by decreases in other parts of the UK. The National Living Wage, which came into effect in April 2016, is further adding to retailers’ costs. A proportion of these increased costs are being passed onto consumers.

INVESTMENT MARKET COMMENTARY

Shopping centre investment activity in 2016 showed a significant fall from the level seen in 2015 where c. £4bn was transacted. 2016 year end investment volumes stood at c.£2.6bn across 40 transactions including the sale of Grand Central and the 50% passive stake in Merry Hill. 2017 has seen this decline in investment evidence continue, with only c.£1.2bn transacting in the 10 months’ to November 2017. In H1 of 2016, many investors were deferring decisions on major acquisitions and disposals until the outcome of the EU referendum. Following the decision to exit, uncertainty within the market greatly affected Q3 investment volumes, with the only notable transactions being the sale of Whitefriars Shopping Centre to Canterbury City Council and Manor Walk, Cramlington to Arch Commercial Enterprise. Both of these purchases were from local authorities and highlight their role as key purchasers of shopping centres in 2016.

Following an initial period of uncertainty and the absence of activity, transaction volumes did begin to rise in most sectors and, by September 2016, liquidity had returned to more normal levels. Q4 Shopping Centre Investment showed a significant pickup in activity including the sale of St James Quarter by APG and Intu Bromley by Alaska Permanent Fund Corporation. In the wake of the referendum vote, many UK retail Funds withdrew from being active purchasers of UK retail properties. A number of Funds have now returned to the market, although are tending to purchase Retail Warehousing and long income foodstores while still not currently being active purchasers of Shopping Centres. The effective withdrawal from the market of a previously active group of purchasers has arguably decreased the level of liquidity of shopping centres, especially those falling outside of the margins of the ‘very best’ and ‘highest yielding’; which the subject properties fall outside of. Activity in 2017 remains limited. Currently there is c.£900m of stock available in the market. The most interesting transactions in H2 of 2017 have been a small (7.5%) stake in the Prime Bluewater Shopping Centre which transacted at around 4.50% NIY, below valuation. Additionally, Manchester City Pension have exchanged contracts to purchase a 50% stake in Intu Chapelfield in Norwich. We understand pricing is in line with the December 2016 valuation, placing it around 5.20% NIY. Investor interest in secondary stock has wavered since the result of the EU referendum, with little transactional evidence in the secondary and tertiary sectors of the market. This has resulted in a number of these schemes being withdrawn from the market and considerable price chips, for example at the Antonine Centre in Cumbernauld and The Strand in Bootle. As such, the CBRE benchmark yield for secondary shopping centres has moved out to 8.50% and is trending weaker. Whilst the UK will remain fundamentally attractive to foreign investors, the heightened uncertainty arising from the election result may have some short-term impacts on UK funds and investors as confidence and activity reduces until the progress and tone of the Brexit negotiations becomes clearer.

The Marketing of the Subject Properties in 2017 Most relevant to the subject properties is the earlier attempted sale of the same assets as a single portfolio. We understand the USA parent of the JV Partner sought to liquidate its UK property holdings in the wake of Brexit and the uncertainty surrounding it. In March 2017 Savills were instructed to sell the portfolio and marketed it at a reported £120,000,000. We understand from the borrower that they received interest in the portfolio and were in negotiations to sell for in the region of £109,000,000 before the company’s plans were reconsidered and the decision was made to withdraw the portfolio

from sale, instead choosing to complete the development works at Kings Lynn and benefit from the increased income this will provide.

PART III PROPERTY REPORTS THE RUSHES, LOUGHBOROUGH The Rushes Shopping Centre, Loughborough

EXECUTIVE SUMMARY PROPERTY REPORT

Inspected By Date of Inspection Report Checked By

Sam Brown MRICS 08/11/2017 Max Field MRICS

Opinion of Value – Valuation Date: 3 November 2017

Market Value: £30,300,000. Market Rent: £2,421,127 per annum exclusive.

Net Initial Yield: 7.42% Equivalent Yield: 7.25% Reversionary Yield: 7.24%

Current passing rent (Gross): £2,481,870 per annum. Current passing rent (Net): £2,408,013 per annum.

Tenure: Freehold

Suitability for use as Loan Collateral:

 The asset is a Freehold shopping centre, however the income is heavily weighted by the Tesco making up 29.79% of Gross Passing Income and 31.68% of Gross Rental Value. Within the valuation we have made the assumption that Tesco break their lease in February 2020 and renegotiate their current lease which is RPI linked, to an open market review lease. This would result in Tesco retaking the lease at £9.50 psf, and should be prioritised as a key asset management objective in order to preserve value.

 The current base rent of the car park is £20,000 pa, with an addition of turnover rent. There are two outstanding rent reviews, which should be triggered and the reversion of £234,101 secured.

1 The Rushes Shopping Centre, Loughborough

 The current Weighted Average Unexpired Lease Term (WAULT) for the scheme is healthy at 9.21 years till expiry, however the Weighted Average Unexpired Term Certain (WAUTC) is 5.07 year. We are aware that the borrower has made approaches to Tesco to re-gear the lease, however efforts have so far been rejected due to the length of time to the break. It is also likely that since the Sainsbury’s purchase of Argos, they will activate their break in September 2020 and relocate within the towns Sainsbury’s supermarket. We have assumed an expiry void of 12 months following the tenants break to account for re-letting and incentive. There has been positive asset management by removing the M&S break, in return for four months rent free, this has positively affected the WAUTC and provides more security of income.

 The last EPC measurement was in 2012 and is therefore valid until 2022, however Tesco was rated F and therefore as of 1st April 2018, this unit would no longer be able to be let under the Minimum Energy Efficiency Standards (MEES). It is therefore vital that works are undertaken to improve the efficiency of the unit. It would also be advisable to review the efficiency of units 13-14, 15 and 18 which were all measured at ‘E’.

 Overall the centre benefits from good sized and well configured units, let in the majority to strong national multiples. There are good asset management opportunities, which would be attractive to potential investors looking to drive values. We believe there would be a good appetite for this asset, on the condition of appropriate pricing.

PROPERTY SUMMARY

Location & Situation

 Loughborough is a market town situated in the Charnwood Borough of Leicestershire, to the north of the county. The town sits within the Leicester, Nottingham and Derby triangle and is home to one of the country’s top twenty universities.

 The town is located approximately 12 miles to the north of Leicester and 16 miles to the south of Nottingham and has good road communications with Junction 23 of the M1 motorway located some 3.5 miles to the west and Junction 24 of the M1 lying some 6 miles to the north (accessed via the A6).

 Loughborough has a direct rail connection to London with a fastest journey time of approximately 1 hour and 13 minutes to St Pancras Station and the service also runs to Leicester, Sheffield and Leeds.

 The town in located in close proximity to East Midlands Airport which lies approximately 8 miles to the north west.

 The Rushes Shopping Centre is located at the northern end of the retail pitch within Loughborough and is bounded by Bridge Street to the north, Fennel Street to the east, Biggin Street to the south and The Rushes (A6) to the west.

 The Subject Property is located on the edge of the prime retailing area, although comprises the highest density of fashion retailers and large format retailing space and links to Market Place via Biggin Street which is a secondary retailing location. The area surrounding the Subject Property is a mix of residential, retail and pubs/bars.

The Rushes Shopping Centre, Loughborough

Description

 The Property comprises a pedestrianised L-shaped open air shopping centre built in 2003 around a central square with a feature sculpture.

 The Property comprises a large detached food store on ground and part first floor with a retail unit (let to Sports Direct) occupying the remainder of the first floor with a feature circular glazed entrance from the main square.

 A single, open, retail mall leads from the food store area to Biggin Street with units trading on multiple levels.  There is a 400-space car park which serves as the main car park for the town on lower ground and ground floors which sits adjacent to the food store.

Competition

Local Competition:

 Overall, Loughborough town centre faces above average competition from competing retail centres and ranks 162 out of 200 PROMIS centre on the PMA competition indicator (a rank close to 1 reflects a low level of competition).

 The main competition for the subject property comes from within Loughborough, with the Carillion Shopping Centre situated 100m south of the subject property. The shopping centre includes strong high street retailers, including WH Smith, Pandora and Topshop.

 There is further local competition from Market Place and the High Street, with the strong footfall driver Primark and usual high street operators including HSBC, McDonald’s and Poundstretcher. The high street was well let and had strong footfall at the date of our inspection. Regional Competition:

 Loughborough faces competition from competing town centres, most notably Leicester and Nottingham and out of town schemes such as Fosse Shopping Park, Enderby.

 The primary catchment area of Loughborough is 144,000, however the estimated shopping population is 78,000. The shopping population is the estimate number of people who regard the town as their main shopping destination. This shows that a substantial proportion of the catchment identify competing centres as their main shopping destinations.

 Nottingham is located approximately 18 miles north of Loughborough and has a drive time of approximately 31 minutes, via the M1. Nottingham has a shopping population of 598,000 and town centre floor space is estimated at 2,880,000 sq ft. The main retailing provision is at Intu Victoria which has benefitted from recent refurbishment and a strong retail and leisure offering in the city centre. To the south of the city is The Broadmarsh Centre, which is undergoing a re-development anchored by a 32,000 sq ft, 9 screen cinema. There is also The Cornerhouse which is a Leisure based scheme including a Cinema, Casino, bars and restaurants

 Leicester is located approximately 11 miles south of Loughborough and has a drive time of approximately 20 minutes, via the A6. Leicester has a shopping population of 495,000 and town centre floor space is estimated at 2,490,000 sq ft. the main retailing provision is from Highcross and Haymarket shopping centres, which consist of approximately 1,185,000 sq ft and 250,000 sq ft respectively. High Cross is anchored by John Lewis and Debenhams, while Haymarket is anchored by Primark.

 In comparison to Loughborough which has a PMA Retail Provision Score of 97, Nottingham has a rating of 509 and Leicester has a score of 391. This clearly demonstrates the difference in quality of retail offering between the three locations.

The Rushes Shopping Centre, Loughborough

Floor Areas

 We have relied upon the floor areas supplied to us within the data room. We set out below the floor areas which we assume have been calculated in accordance with the RICS Code of Measuring Practice 6th Edition:

Floor Sq m Sq ft Unit 1 7,245 77,986 Unit 2 2,353 25,325 Unit 3 218 2,350 Unit 4 1,897 20,424 Unit 5,6 & 7 382 4,107 Unit 8 1,618 17,413 Unit 8a 71.6 771 Unit 9 310 3,333 Units 9a-11 & 16 1,145 12,323 Unit 12 & 13 1,079 11,619 Unit 14 96 1,037 Unit 15 679 7,309 Unit 17 & 18a (Grd) 553 5,957 Unit 18 127 1,367 Unit 18a (1st) 308 3,313 Total 18,082 194,634

Site Area

 The site area is approximately 2.68 ha (6.62 acres) and includes a 400 space multi storey car park.

Building Condition

 CBRE have not undertaken a structural survey, nor tested the services. We have undertaken only a limited inspection for valuation purposes.

 From our basic inspection for valuation purposes, it can be noted that the Property appears to be in a reasonable condition for its age and nature.

 We have been provided with a Building Survey Report dated 28 February 2017. The report states that the Property is considered to be in a good condition commensurate with its age of construction. The property appears to be receiving a good level of reactive maintenance although the Centre Management but they are not currently working to a Planned Preventative Maintenance Programme.

 The Building Survey Report dated 28 February 2017 recommends the following capital expenditure:

o Potential Tenant Liabilities - £268,000 ex VAT o Potential Service Charge Works - £365,000 ex VAT o Potential Landlord Liabilities - £0 ex VAT  We have assumed the costs fall to the tenants both directly and through their service charge and therefore have applied no element of the cost to our valuation.

The Rushes Shopping Centre, Loughborough

Services

 From the extent of our inspection, we understand that most mains services are available at the Property including electricity, mains water and drainage.

Environmental Considerations

 We have reviewed the Phase 1 Environmental Review dated October 2017, prepared by Ambiente International LLP, and which states: ‘The level of environmental risk associated with the continued current use of the subject property is assessed to be acceptably low and no further environmental investigation or assessment is considered necessary’. We therefore consider there to be no negative impact to the valuation.

 We have reviewed the Environmental Agency’s flood risk map, which stated that part of the Property is in flood zone 3, meaning that the area has a greater than 1% chance of flooding each year due to river of sea water. The greatest risk would appear to be from part of the Grand Union Canal which runs through the town and the subject property. The Property is listed as a flood warning area, although the risk of groundwater flooding is minimal.

 Based upon CBRE’s own inspection and planning enquires, we have not identified any environmental risk factors which, in our opinion, would affect value. However, CBRE give no warranty as to the absence of such environmental risk factors.

 We would highlight that unit 1 (Tesco) currently has an EPC Rating of ‘F’, which would not comply with the Minimum Energy Efficiency Standards effective from 1st April 2018. We made the assumption that £50,000 capital expenditure would give sufficient scope to improve the rating and have applied this amount to our valuation as a capital cost.

 Furthermore unit 13-14 (M&S), unit 15 (The Amber Rooms) and unit 18 (vacant) are all rated ‘E’, meaning they are in danger of becoming non-compliant should the EPC regulations change or they are reassessed. We would recommend the borrower undertake works to ensure the units mentioned are compliant by 1st April 2018.

 We understand there had been a previously reported growth of Japanese Knotweed on the border of the site. The borrower has informed us that this was previously treated and eradicated and, as part of good estate management, the borrower has commissioned monthly checks of the site with preventative treatment completed quarterly. There was no visible sign of knotweed growth on our site inspection or during the inspection carried out as part of the Environmental Survey in 2016.

Planning

 The property lies adjacent to but is not part of the Church Gate Conservation Area in the jurisdiction of Charnwood Borough Council.

 It is apparent that the Borough Council considers the need for an increase in retail floor space. A target of approximately 8,800 sqm of new food retail space and between 32,800 - 41,600 sqm of non-food floor space has been set out in the 2011-2028 Charnwood Core Strategy.

 The council aim to improve the town centre in a number of ways, including encouraging the diversification of uses within the town centre, supporting improvements to the public realm and supporting regeneration of the town centre through mixed use initiatives.

The Rushes Shopping Centre, Loughborough

 The planning permission for the existing shopping centre was granted in May 2001 and for units 13/14 in March 2003.

 Various planning applications have been granted in relation to Unit 1 at the Subject Property since Woolworths vacated, including the removal of the external travellator enclosure and erection of a glass canopy and alterations to shop fronts in March 2008, the installation of a new refrigeration, heating and ventilation plant on the existing balcony area (former garden centre) in November 2009 and amendments to car park, service yard, lobby and main entrance door and insertion of a new means of escape door in front elevation in November 2009.

 In May 2007, a planning application was granted in respect of Unit 18A permitting the use of offices (B1) or retail (A1) or public house/bar (A4).

Occupational Costs

 The changes to business rates on the 1st April 2017 has resulted in an increase to the rateable value for the overall property by £245,350.

 The centre benefits from a low service charge of £2.85 psf, mainly due to the nature of the open scheme. This is considerably less than the service charges found in enclosed schemes and also lower then average service charge for an open scheme according to JLL which is £2.96 psf.

 The Property has seen the following Rateable Value changes. ADDRESS OCCUPIER RV 2010 RV 2017 % CHANGE Unit 1 Tesco Stores Limited £595,000 £600,000 0.84% Unit 2 Sportsdirect.com Retail £188,000 £174,000 -7.45% Limited Unit 3 J W Carpenter Limited £80,000 £86,000 7.50% Unit 4 LA Leisure Limited £166,000 £154,000 -7.23% Unit 5,6 & 7 Argos Limited £116,000 £116,000 0.00% Unit 8 NBC Apparel £200,000 £188,000 -6.00% Unit 8a Subway Realty Limited £21,750 £21,750 0.00% Unit 9 Poundworld Retail Limited £58,000 £58,000 0.00% Units 9a -11 & 16 Next Group PLC £86,500 £86,500 0.00% Unit 12 & 13 Marks and Spencer PLC £165,000 £267,500 62.12% Unit 14 Foodco UK LLP £27,750 £27,750 0.00% Unit 15 JD Wetherspoons PLC £110,000 £184,000 67.27% Unit 17 R Paul Limited £56,000 £56,000 0.00% Unit 18 Vacant £39,250 £37,500 -4.46% Unit 18a Vacant £11,250 £13,500 20.00% Car Park National Car Park Limited £109,000 £208,000 90.83%

 The Uniform Business Rate for 2017/2018 is 47.9 pence per pound.  We have reflected that The Borrower is responsible for £73,857 per annum in shortfalls.

The Rushes Shopping Centre, Loughborough

Tenure

The Property is held freehold under three titles:

 Land on the south side of Fennel Street - LT337087  Land lying to the north east of The Rushes - LT294338  The Blue Boar Public House, 39 The Rushes - LT247143

Land on the south side of Fennel Street - LT337087 Two covenants exist dating to 1936 and 1960 which state that various part of the Property are to be used as a licenced property. A right of way over part of the Property exists which relates to a 2002 transaction. Additionally, various rights of access exist in respect of services and cables and to maintain land and boundary walls. It is covenanted that the height of the boundary wall should not be altered and additionally that the transferee and transferor comply with any environmental breach notices and to indemnify the transferor and its successors from and against all costs incurred by the transferor in any remediation or clean-up of the land and any claims relating from any past contamination or pollution. Land lying to the north east of The Rushes - LT294338 The report on title states that the land is subject to restrictive covenants which may have been imposed prior to 1st August 1997, although does not state what these might be. We have assumed that no onerous provisions exist although suggest your legal advisors confirm this and advise as to whether any title insurance is required. The Blue Boar Public House, 39 The Rushes - LT247143 It appears that there are no restrictive covenants made against this land, as the report on title does not make comment on any. The Blue Boar public house is no longer standing and the site of the former building has now been redeveloped and forms part of The Rushes Shopping Centre

Having reviewed the reports on title and red flag report, we can confirm there is nothing which would affect our opinion of value.

Tenancies

 The Centre is subject to 15 retail tenancies of varying natures. We have summarised the income stream below:

 The top five tenants in the scheme account for 67.22% of the annual gross rent, as shown in the table below.  The top five tenants are all national multiple retailers taking large space on long leases.  Tesco is the largest tenant by a considerable margin, making up 29.86% of total income over 77,986 sq ft. However, Tesco is also the greatest expiry risk, with an option to break in 2020. We have assumed that Tesco will use their strong negotiation position to re-gear their lease at the break and remove their RPI based rent review clause, making their lease subject to less onerous review terms.

 We have also assumed that on break Tesco will agree their passing rent, reflecting a conservative rate of £9.48 and a 6-month rent free period.

 Should Tesco exercise their break and leave the scheme, we understand the borrower has plans to create two or more retail units in the space. We have not been supplied with the costs of carrying out this work, nor the likely terms of new tenancies. The borrower has suggested 2 new fashion retailers would be targeted as

The Rushes Shopping Centre, Loughborough

prospective tenants. It is too early to comment on the details of these plans, but they indicate a forward- thinking asset management strategy, and should these tenants replace Tesco, the tenant mix would be improved, although at the expense of an RPI linked lease and at an unknown capital cost.

 Strong Asset management has resulted in the removal of Marks & Spencer’s significant expiry risk, in exchange for four months’ rent free. This has secured 11.48% of the Centre’s total income until 2023.

 Following Sainsbury’s corporate purchase of Argos, it is likely they will be break their lease in September 2020 and relocate within the Sainsbury’s supermarket outside the scheme. We have assumed this and reflected appropriate voids to the income stream.

 The current base rent of the car park is £20,000 pa, with the addition of turnover rent. There are two outstanding rent reviews, which should be triggered in order to secure the reversion of £234,101 per annum. Our valuation assumes the full £234,101 per annum is payable today.

 In addition to the outstanding rent review, we are aware of the negotiationsthe Borrower is undertaking in regard to the drafting of NCP’s rent review clause; effectively the borrower believes the drafting of the NCP lease allows for a higher level of turnover than the ‘spirit of the lease’. This could lead to increased turnover rent as well as £2,125,408 of ‘back rent’. We have only reflected the outstanding turnover amount we believe to be most certain and ‘in the spirit of the lease’ as we understand it. We have not applied any value to the potential ‘back rent’ or disputed higher level of turnover. We recommend your lawyers confirm our understanding is correct, and the amount of turnover we have applied to the income stream (£234,101 per annum) is as per the lease.

 The car park income reflected is 80% of the net income, which from our understanding of the lease is the Gross Revenue, minus the amount (if any) in any year of the first fifteen years of the term by which the service charge and insurance added together exceed £7,500 index linked. Should in reality, the mechanism of the deduction differs from our understanding, then we reserve the right to amend our valuation.

 Unit 3 (Cargo) are no longer in occupation of their unit, however they have a lease until November 2019 and there has been interest from retailers including JD Sports, Deichmann and The Entertainer; all of whom have been acquisitive through 2017. We have assumed their rental payment continue until lease expiry.

 There should be an element of caution over the financial strength of LA Leisure Limited (trading as Pure Gym). Experian ranks them as maximum risk, with a Delphi score of 15 out of 100. LA Leisure Limited make up 7.59% of total ERV.

 At present, there are two vacant units, Unit 18 and Unit 18A, which make up 2.24% of the total ERV.  We are aware that 108 World Buffet are in substantial arrears and collection of these arrears or any future rent is unlikely, we have therefore reflected this within the valuation as a void unit.

 The average weighted unexpired lease term (AWULT) at the centre is 9.21 years to expiry and 5.07 years to earliest determination.

TENANT EXPIRY / BREAK RENT (£ PA) % OF TOTAL DELPHI SCORE INCOME 83 (Low Risk) Tesco 15/02/20 739,326 29.79%

Marks & 100 (Very Low 22/09/23 285,000 11.48 % Spencer plc Risk) 100 (Very Low NCP 23/10/28 234,101 9.43% Risk) 97 (Very Low TK Maxx 25/08/23 215,000 8.66% Risk)

The Rushes Shopping Centre, Loughborough

LA leisure Ltd 15 (Maximum 19/08/28 195,000 7.86% t/a Puregym Risk)

Total £1,668,427 67.22%

MARKET CONTEXT

Local Occupational Market

 In terms of retail hierarchy, Loughborough has an average volume and quality of retail provision relative to the size and affluence of its shopping population (144,000).

 Loughborough is forecast to see significantly above average percentage growth in the available pool of comparison spending up until 2021, whilst per capita retail spending levels are comparable to the current PROMIS average.

 The Subject Property is the second shopping centre in the town centre, with Carillion Court constructed in 1971, providing the majority of shopping centre competition, and Market Place providing the majority of high street retail competition.

 Total town centre retail floor space within Loughborough stands at approximately 765,000 sq ft.  Loughborough’s largest competing retail centre is Nottingham which is situated 15 miles away. However, the town centre also faces competition from Birmingham, Leicester and Derby as well as The Fort, Beaumont District Centre, Fosse Shopping Park and East Midlands Designer Outlet. Vacancy

 Loughborough overall currently has a retail vacancy rate of c8%, which is lower than the national town centre average of 9.3% (April 2017), indicating a good level of occupier demand within the town.

 The Rushes Shopping Centre by comparison currently has a 2.24% vacancy rate, highlighting the attractiveness of the Property within the prime retailing area of Loughborough. However, it should be considered that ‘108 World Hot Buffet’ are in substantial arrears and Cargo have vacated their unit, despite the lease term remaining and rent being paid. With both of these units the vacancy rate could increase to 5.73%. There is also the possibility of Tesco and Argos vacating, which would have a far greater impact on the overall vacancy rate of the scheme, if the units were not backfilled. We understand the borrower is working up plans to split the Tesco space to provide two or more large retail units if they vacate, although it is too early to comment on the likely success of the plans. Rents

 According to PROMIS, as at mid-2017, prime rents within Loughborough are circa £55 psf Zone A. This represents no change on the end 2016 level of prime rents in the town. Current rental levels remain 31.3% below the pre-recession peak of £80 psf ZA.

 Recent lettings within the town include: Address Date £psf ITZA Details 58 Market Street June 2017 £45.59 New letting at £17,500 per annum 7 Churchgate Mews June 2017 £28.35 New letting at £10,000 per annum 60 Market Street August 2016 £57.00 Local agent advised very strong deal above tone – Lease renewal.

 Recent lettings within The Rushes Shopping Centre are as follows:

The Rushes Shopping Centre, Loughborough

Unit Tenant Date £psf ITZA Details Unit 14 Muffin Break Oct 2017 £40.98 Lease re-gear. 10 year lease at £42,500 pax Unit 8A Subway Oct 2015 £38.91 New letting. 15 year lease with 6th year break option. £30,000 pax. Unit 9 Poundworld Dec 2014 £37.46 New letting. 10 year lease with 5th year break option. £75,000 pax.

ERV

 Due to this high level of competition on the Tesco store from the Sainsbury’s and larger Tesco store nearby, we believe that an ERV of £9.50 per sq ft is appropriate. This equates to £739,326 pa.

 We have spoken with local agents and understand the general tones within Loughborough town centre are as follows: Location Zone A Rental Tones (per sq ft) Market Place/Market £52-53 Street Carillion Court £45

Having regard to the above evidence we have applied the following rates when calculating our opinion of ERV:

Description ERV (per sq ft) Standard Retail Units £40 Zone A A3 Units fronting The £10 psf overall Rushes Tesco £9.50 psf overall

 We have reflected the outstanding rent reviews on the car park, showing the outstanding reversion to be £234,101 per annum

 We have assumed commercialisation to be rack rented.  This equates to a gross rental value of £2,421,127 per annum.

Investment Market

 We have examined a number of comparable transactions in order to ascertain our opinion of the Market Value of the Property. Having a mix of a shopping centre and retail parade characteristics, a range of comparable evidence has been considered. We have had regard to a number of transactions, most specifically the following:

31-32 Market Place, Loughborough – Sold July 2017 This asset was brought to auction with a guide price of £950,000-£1,000,000 reflecting a NIY of 7.00%. The property is a well secured parade of 3 retail units including a Max Spielmann, The Barber Shop and Subway. There are also vacant ancillary uppers. It sold in July 2017 for £1,090,000 reflecting 7.09% NIY. This property is situated in close proximity to The Rushes, providing the majority of the town’s prime high street retail. The property has an inferior term certain to The

The Rushes Shopping Centre, Loughborough

Rushes, with a WAUTC of 4.21 years to expiry compared to The Rushes WAUTC of 5.07 years.

Kings Walk Shopping Centre, Gloucester – Sold March 2017 The property was brought to the market for £22,500,000 at a NIY of 8.5%. The property comprises 175,769 sq ft of retail accommodation with 290 car parking spaces. Anchors include Iceland and WH Smith, with 94% of the income secured against national covenants. This scheme is very similar to The Rushes in terms of size and covenant strength, with both properties having a large proportion of income secured against national covenants. The main difference between the two is in regards to location, with Loughborough likely to be viewed as a better retail destination than Gloucester. The property sold in March 2017 for in the region of £20,000,000, reflecting a 6.50% NIY.

The Market Shopping Centre, Crewe – Sold June 2016 The Market Shopping Centre was sold in June 2016 for £20,300,000 at an 8.8% NIY. The property comprises approximately 170,000 sq ft of covered and external units, with tenants ranging from Wilko’s, Peacocks and Argos, alongside a 294 space car park. The Market Shopping Centre would be viewed as having poorer security of income than The Rushes, with a WAULT of 5.15 years compared to 9.21. Loughborough is regarded as slightly superior retail location, despite both towns having similar shopping populations.

Carillon Court Shopping Centre, Loughborough – Sold March 2015 This property was sold in March 2015 for £14,200,000 at a NIY of 8.5%. The property is approximately 100,000 sq ft of lettable space, with 145 surfaced and 340 covered parking spaces. At the time of the sale the centre was anchored by Boots and New Look, with other tenants including H Samuel and Vodafone. This property lies within the main retail destination of Loughborough. Both properties have good national multiple retailers as tenants; however The Rushes would be viewed as having greater covenant strength due to M & S and Tesco as anchors. Carillon Court is much older than The Rushes with a more dated appearance.

Sainsbury’s, Trinity Walk Shopping Centre, Wakefield The Sainsbury’s within Trinity Shopping Centre, Wakefield was sold separately from the shopping centre and is currently on the market quoting £39,200,000, reflecting 6.00% NIY. The property is held on a virtual freehold and the lease to Sainsbury’s is subject to 5 yearly open market reviews. The property benefits from a greater term certain then the Tesco at Loughborough and this has been taken account. It provides a good comparable of supermarkets for sale within shopping centres, which rarely trade.

 The CBRE benchmark yield as at November 2017 for recent transactions in the secondary high street market is 9%, whilst November shopping centres are at 8.50%. Best Secondary Shopping Centres are at 6.75%. Both shopping centre sub sectors are trending ‘weaker’. 11

The Rushes Shopping Centre, Loughborough

 Based on the evidence listed above, we have arrived at our opinion of Market Value by applying the following capitalisation rates:

o Supermarket – 6.75% o Shopping Centre – 7.50% o Car Park – 7.50%  The blended yield profile is as follows:

o Initial Yield – 7.42% o Reversionary Yield – 7.24% o Equivalent Yield – 7.25%

SWOT

Strengths Weaknesses

 It is a well let shopping centre in a busy town  Loughborough is a small town somewhat centre location. overshadowed by Leicester and Nottingham.

 The scheme is let to strong range of established  The Tesco and Sportsdirect units are very large national multiple retailers. with limited alternate users if the current tenants were to leave.  Open scheme, which generally keeps service charge levels lower than enclosed schemes,  Two units are vacant, with void holding costs making total occupational costs for retailers lower. directly affecting net income.

 Low vacancy rate by ERV.  108 World buffet are in severe arrears and look unlikely to pay arrears of future rent.  WAULT of 9.21 years to expiry  The Property is brick with substantial metal and  Student population increases trade levels during glass facades which are not of standard university term time. construction, possibly creating additional repairing  Scheme is diversified through the presence of liabilities in future years. retailers, supermarket and leisure operators.

Opportunities Threats

 Potential to create value through letting vacant  Tesco have an option to break in 2020. If they are units, reducing shortfall costs and increasing net to vacate and the borrowers plans to create new income. retail units in the space are unsuccessful, 29.79% of the total income will be lost.  Refurbishment of the current vacant units  The car park rent is subject to outstanding rent  Re-gear Tesco lease to ensure income security and reviews based on a turnover mechanism, if these stability. reviews are to a lower level than our assumptions  The creation of additional retail units if Tesco the value could be negatively affected. choose to vacate.  Carillion Court is a competing shopping centre located 100m away. Tenants include WH Smith, Boots and Topshop.

The Rushes Shopping Centre, Loughborough

 There is a free two hour Sainsbury’s car park located in close proximity to Subject Property.

 Argos likely to break in September 2020 and relocate within Sainsbury’s supermarket.

ASSET MANAGEMENT

 Asset management opportunities in regard to Tesco. With their break option in 2020, an incentive of 6 months rent and removal of RPI increases should be suggested.

 Settle the outstanding car park rent reviews.  Address the marketing strategy for the scheme to increase footfall in the area.  Ensure the service charge for the scheme is managed effectively so not to impact the net rent.  Re-gearing of leases that are coming up for renewal.  Although it is an open scheme, potentially introduce an increased level of commercialisation within the centre.  Surrender of the Cargo unit and reletting to a national multiple.  Identification of replacement tenant for Argos, with their break in September 2020.

FUNDAMENTAL RISKS

Market Risk Property Risk

 Loughborough is a fairly small retail location  Tesco’s break option in 2020 – if they were to compared to the large cities of Leicester and vacate and create a void, it could take Nottingham. considerable time to re-let the space, and the value will fall if the unit becomes vacant.  Prime Zone A rents have decreased at a much faster rate than the PROMIS average.  Considerable expenditure would be needed to separate the Tesco unit into separate units if they  Carillion Court, a competing shopping centre is were to vacate and there may not be strong tenant situated in immediate proximity to The Rushes demand.  Secondary shopping centres have been the subject  The scheme car park has higher tariffs than of outward yield movement and many of the competing car parks within Loughborough. For traditional buyers are currently not acquisitive, example, Sainsbury’s car park offer up to 2 hours limiting the liquidity of the asset class. free car parking, while there is further car parking available ranging between £0 for street parking and £1.80 for 2 hours. The equivalent for the NCP car park is £3 for 2 hours.

 Two units are currently vacant.

The Rushes Shopping Centre, Loughborough

VALUATION METHODOLOGY

Market Rent (Headline)

 In arriving at our opinion of Market Rent we have made the following assumptions:  The Subject Property is on the edge of the prime retailing area and the large format retailing space, means Zone A’s will be lower then the prime town centre rents ranging from £52-£53 per sq ft Zone A.

 Having regard to the above evidence we have applied the following rates when calculating our opinion of ERV;

Description ERV (per sq ft)

Standard Retail Units £40 Zone A

A3 Units fronting The £10 Rushes Tesco £9.50

 We have assumed all other income including the car park and commercialisation to be rack rented.  This equates to a gross rental value of £2,421,127 per annum.

Market Value

 In arriving at our opinion of Market Value we have made the following assumptions:  We have relied upon the tenancy information supplied by the asset manager.  The current net rent passing is £2,408,013 per annum.  All tenants vacate at the end of their leases and activate any break clauses at the earliest opportunity.  Units falling vacant within 2 years have an expiry void applied to the income stream.  We have applied a permanent void rate of 2.50%, which is in the region of the current vacancy rate of 2.24%.  New lettings are let on leases between five to ten years dependent on the unit.  We have assumed Tesco will use their break option to re-gear their lease, taking 6 months rent free as an incentive, removing their RPI based reviews and agree a conservative rent at passing of £739,326 pa, reflecting £9.50 psf.

 We have applied £50,000 in capital expenditure for works to improve the energy efficiency of unit 1 (Tesco).  Due to the severity of arrears, we have assumed that the borrow will receive no income from 108 World Buffet. We have therefore assumed a void rate of 12 months and allowed an incentive of 12 months for re-letting of the property. We have assumed the purchaser would take on the service charge and insurance liability with immediate effect and have delayed business rates payable in line with business rates relief; by three months.

 We have assumed Argos will vacate using their break in September 2020.  Net income is capitalised at a suitable capitalisation rate and purchasers costs are reflected at 6.77%.  We have applied landlord shortfalls in accordance with the information provided.  We have assumed re-letting and void periods ranging from 6-12 months, depending on the size, location and configuration of the units.

The Rushes Shopping Centre, Loughborough

 The Market Value of £30,300,000 reflects a net initial yield of 7.42% and an equivalent yield of 7.25%.

Marketability and Potential Purchasers

 As a secondary scheme the subject property will appeal to purchasers that are seeking higher risk/return assets and are prepared to take an active asset management role maximising value through future development opportunities.

 We believe the small lot size would mean that there would be demand from a range of purchasers, principally debt-driven purchasers, developers and equity backed asset management houses. This demand is likely muted given the lack of investment activity in the current market.

 We believe that it would be possible to affect a sale within six to nine months if priced appropriately in the market.

 If the portfolio as a whole to include the Subject Property as well as Vancouver Centre, Kings Lynn and Kingsgate Shopping Centre, Dunfermline, we believe it would be possible to affect a sale within six to nine months if priced appropriately in the market.

 We are aware that the portfolio was brought to the market in March 2017, as mentioned in the market commentary.

 We have not valued the assets as a portfolio and have not considered a portfolio premium within our valuations.

The Rushes Shopping Centre, Loughborough

PHOTOGRAPHS

Photo 1: Muffin Break Frontage Photo 2: Eastern Entrance

Photo 3: Tesco Frontage Photo 4: Vacant Unit 18 & 18a

16 Description Tenant Name Lease Start Years Expiry Date Next Review Breaks Current Rent pa Rental Value pa Current Void Expiry Void Comments

Unit 1 (Grd & Tesco 15/02/2010 20 14/02/2030 . . 15/02/2020 (LT) 739326 739326 0 6 Assumed lease will be re-geared at break at 1st) passing (£9.50 psf), and removing the RPI uplifts within the rent review clause. Unit 2 (1st) Sportsdirect 31/10/2011 10 30/10/2021 . . None 147083 146900 0 0 Unit 3 (Grd) JW Carpenter t/a Cargo 11/11/2004 15 10/11/2019 . . None 95000 84600 0 9 Tenant vacated, however contractually committed to lease and therefore paying rent. Understand there is interest from Deichmann, The Entertainer and JD Sports.

Unit 4 (1st) LA Leisure Ltd t/a Puregym 20/08/2003 25 19/08/2028 20/08/2018 None 195000 183800 0 0 LA Leisure Limited have a Maximum risk rating from Experian. Unit 5,6 & 7 Argos 06/09/2010 15 05/09/2025 . . 06/09/2020 (T) 162360 147900 0 12 Likely to break in September 2020 and (Grd) relocate within the Sainsbury's in the town. Activated break and applied 12 expiry void for void and incentive. Unit 8 (Grd, 1st) TK Maxx 26/08/2003 20 25/08/2023 26/08/2018 None 215000 181500 0 0

Unit 8a (Grd) Subway 26/10/2015 15 25/10/2030 26/10/2020 26/10/2021 (T) 30000 30800 0 0 Unit 9 (Grd) Poundworld Retail Ltd t/a 08/12/2014 10 07/12/2024 . . 08/12/2019 (T) 75000 80100 0 6 Poundworld Units 9a -11 & Next 19/09/2011 10 18/09/2021 . . Not Activated 150000 144900 0 0 16 Unit 12 & 13 Marks & Spencer plc 23/09/2003 20 22/09/2023 23/09/2018 Not Activated 285000 232000 0 0 (Grd, Lwr, 1st)

Unit 14 (Grd) S&M Coffee ltd t/a Muffin 06/10/2017 10 05/10/2027 06/10/2022 None 42500 37300 0 0 Re-geared their lease in October 2017, Break reflecting £40.98 ZA. Unit 15 (Grd, JD Weatherspoon t/a Lloyds 01/09/2003 35 31/08/2038 01/09/2018 31/10/2023 (T) 95000 60600 0 0 Break activated due to being significantly over- Lwr, 1st) No 1 rented. Unit 17 & 18a R Paul t/a 108 03/11/2018 10 02/11/2028 03/11/2023 Not Activated 0 46500 12 0 In severe arrears and therefore assumed no (Grd, Lwr, 1st) income will be payable - treated as void unit.

Unit 18 (Lwr, Vacant (Unit 18) 03/11/2018 10 02/11/2028 03/11/2023 None 0 41000 12 0 12 month void and 12 month rent free applied. Grd) Car Park NCP 24/10/2003 25 23/10/2028 24/10/2013 Not Activated 234101 234101 0 0 The current base rent of the car park is £20,000 pa, with an addition of turnover rent. There are two outstanding rent reviews, which should be triggered and the reversion of £234,101 secured. Commercialisati Commercialisation 03/11/2017 3 02/11/2020 . . None 15000 15000 0 0 on Metro House - Rushes Management 29/09/2003 125 28/09/2128 29/09/2018 None 1500 1500 0 0 Brook House & Limited Highland Court

Unit 18a (1st) Vacant (Unit 18a) 03/11/2019 5 02/11/2024 . . None 0 13300 24 0 24 month void and 24 month rent free applied. More difficult to let given access issues and being on the first floor. Kiosk 1 Frederick Charles & Lindy 06/05/2011 10 05/05/2021 . . None 0 0 0 0 Louise Harris (Kiosk 1) Kiosk 2 Frederick Charles & Lindy 18/12/2008 20 17/12/2028 18/12/2018 None 0 0 0 0 Louise Harris (Kiosk 2) Management Non Income producing 20/09/2006 5 19/09/2011 . . None 0 0 0 0 Suite 2481870 2421127 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

Property

Address The Rushes 2017,Loughborough File/Ref No

Gross Valuation £32,434,197 Capital Costs -£119,703 Net Value Before Fees £32,314,494

Less Stamp Duty @4.97% of Net Value -£1,502,842 Agent Fee @1.00% of Net Value -£363,202 Legal Fees @0.50% of Net Value -£181,601

Fees include non recoverable VAT @ 20.00 % Net Valuation £30,266,848 Say £30,300,000

Equivalent Yield 7.2467% True Equivalent Yield 7.5870% Initial Yield (Deemed) 7.4167% Initial Yield (Contracted) 6.7573% Reversion Yield 7.2423%

Total Contracted Rent £2,267,769 Total Current Rent £2,481,870 Total Rental Value £2,421,127 No. Tenants 21 Capital value per ft² £155.68

Running Yields

Date Gross Rent Net Rent Annual Quarterly 03-Nov-2017 £2,481,870 £2,408,013 7.4167 % 7.7737 % 03-May-2018 £2,481,870 £2,381,189 7.3341 % 7.6830 % 03-Nov-2018 £2,481,870 £2,418,578 7.4493 % 7.8094 % 03-May-2019 £2,481,870 £2,445,402 7.5319 % 7.9002 % 03-Nov-2019 £2,569,370 £2,485,301 7.6548 % 8.0355 % 11-Nov-2019 £2,474,370 £2,390,301 7.3622 % 7.7138 % 08-Dec-2019 £2,399,370 £2,315,301 7.1312 % 7.4607 % 15-Feb-2020 £1,660,044 £1,575,975 4.8540 % 5.0049 % 08-Jun-2020 £1,740,144 £1,656,075 5.1007 % 5.2676 % 11-Aug-2020 £1,824,744 £1,740,675 5.3613 % 5.5459 % 15-Aug-2020 £2,564,070 £2,480,001 7.6384 % 8.0175 % 06-Sep-2020 £2,401,710 £2,317,641 7.1384 % 7.4686 % 26-Oct-2020 £2,402,510 £2,318,441 7.1408 % 7.4713 % 06-Sep-2021 £2,550,410 £2,466,341 7.5964 % 7.9712 % 19-Sep-2021 £2,545,310 £2,461,241 7.5807 % 7.9539 %

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

31-Oct-2021 £2,545,127 £2,475,399 7.6243 % 8.0019 % 03-Nov-2021 £2,558,427 £2,488,699 7.6652 % 8.0470 % 26-Aug-2023 £2,524,927 £2,455,199 7.5621 % 7.9334 % 23-Sep-2023 £2,471,927 £2,402,199 7.3988 % 7.7540 % 31-Oct-2023 £2,437,527 £2,367,799 7.2929 % 7.6378 % 06-Oct-2027 £2,432,327 £2,362,599 7.2768 % 7.6202 % 20-Aug-2028 £2,421,127 £2,351,399 7.2423 % 7.5824 %

Yields based on £32,467,349

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 Page 2 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

Tenants

Tenant name File / Ref No Next Review Expiry Date Current Rent ERV Method ERV Cap.Group Val.Meth. Yield 1 Yield 2 Gross Value Freehold Argos NA 05-Sep-2025 £162,360 Rounded £147,900 SC Hardcore 7.500 £1,853,130 Commercialisation NA 02-Nov-2020 £15,000 Manual £15,000 SC Hardcore 7.500 £73,007 Frederick Charles & Lindy Louise Harri NA 05-May-2021 £0 Unrounded £0 Private Hardcore 8.000 £0 Frederick Charles & Lindy Louise Harri 18-Dec-2018 17-Dec-2028 £0 Unrounded £0 Private Hardcore 8.000 £0 JD Weatherspoon t/a Lloyds No 1 01-Sep-2018 31-Aug-2038 £95,000 Rounded £60,600 SC Hardcore 7.500 £951,846 JW Carpenter t/a Cargo NA 10-Nov-2019 £95,000 Rounded £84,600 SC Hardcore 7.500 £1,070,986 LA Leisure Ltd t/a Puregym 20-Aug-2018 19-Aug-2028 £195,000 Rounded £183,800 SC Hardcore 7.500 £2,478,571 Marks & Spencer plc 23-Sep-2018 22-Sep-2023 £285,000 Rounded £232,000 SC Hardcore 7.500 £3,271,377 NCP 24-Oct-2013 23-Oct-2028 £234,101 Manual £234,101 Car Park Hardcore 7.500 £3,053,822 Next NA 18-Sep-2021 £150,000 Rounded £144,900 SC Hardcore 7.500 £1,906,821 Non Income producing NA 19-Sep-2011 £0 Unrounded £0 Private Hardcore 8.000 £0 Poundworld Retail Ltd t/a Poundworld NA 07-Dec-2024 £75,000 Rounded £80,100 SC Hardcore 7.500 £1,002,735 R Paul t/a 108 03-Nov-2023 02-Nov-2028 £0 Rounded £46,500 SC Hardcore 7.500 £486,208 Rushes Management Limited 29-Sep-2018 28-Sep-2128 £1,500 Manual £1,500 SC Hardcore 7.500 £19,567 S&M Coffee ltd t/a Muffin Break 06-Oct-2022 05-Oct-2027 £42,500 Rounded £37,300 SC Hardcore 7.500 £522,078 Sportsdirect NA 30-Oct-2021 £147,083 Rounded £146,900 SC Hardcore 7.500 £1,868,942 Subway 26-Oct-2020 25-Oct-2030 £30,000 Rounded £30,800 SC Hardcore 7.500 £399,715 TK Maxx 26-Aug-2018 25-Aug-2023 £215,000 Rounded £181,500 SC Hardcore 7.500 £2,520,893 Tesco NA 14-Feb-2030 £739,326 Manual £739,326 Supermarket Hardcore 6.750 £10,409,500 Vacant (Unit 18) 03-Nov-2023 02-Nov-2028 £0 Rounded £41,000 SC Hardcore 7.500 £439,261 Vacant (Unit 18a) NA 02-Nov-2024 £0 Rounded £13,300 SC Hardcore 7.500 £105,740 Total £2,481,870 £2,421,127 £32,434,197

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 Page 3 THE VANCOUVER CENTRE, KINGS LYNN Vancouver Quarter, Kings Lynn

EXECUTIVE SUMMARY PROPERTY REPORT

Inspected By Date of Inspection Report Checked By

Colm Foley MRICS 03/11/2017 Max Field MRICS

Opinion of Value – Valuation Date: 03 November 2017

Market Value: £34,100,000 Market Rent: £2,813,220 per annum exclusive.

Net Initial Yield: 7.75% Equivalent Yield: 7.50% Reversionary Yield: 6.85%

Current passing rent (Gross): £3,020,235 per annum. Current passing rent (Net): £2,815,937 per annum.

Tenure:

- The Centre and the Walkways are held leasehold interest through a number of ground leases from the Local Authority for terms of 999 years at a peppercorn without review.

- The head lease for the Iceland/new development block is for a term of 150 years from March 1983 (116 years remaining) at a geared ground rent of 25% of net rents received. There will be a surrender and regrant of the head lease on completion of the new retail development. A new 200 year lease will be granted at a geared ground rent of 25% of net rents received.

Vancouver Quarter, Kings Lynn

Suitability for use as Loan Collateral:

 Vancouver Quarter faces local competition from the nearby High Street and retail parks. The scheme currently has 3 vacant retail units with the addition of 5 new units as part of the Vancouver Quarter re-development. In order to maintain value, it is imperative that intensive marketing takes place to ensure minimum voids. There is also a number of temporary lettings in the scheme that should be secured on longer term leases.

 Part of the investment value is derived from the ongoing development. We have applied construction costs as supplied to us by the borrower and recommend these costs and the construction process is monitored as an increase in costs or overrun could negatively affect the value.

 There a number of asset management initiatives that can be undertaken to maximise value such as intensive marketing of the vacant units and negotiating lease renewals in a timely manner.

PROPERTY SUMMARY

Location & Situation

 King’s Lynn is located in the north west corner of Norfolk, close to the border with Cambridgeshire. The Town is approximately 43 miles north west of Norwich, 45 miles north of Cambridge and 35 miles north east of Peterborough, all of which are more than 50 minutes’ drive away.

 King’s Lynn benefits from reasonable road communications, with connections south of the Town Centre onto the A47. The A47 links with Norwich to the east and Peterborough to the west and with the A10, which links with Cambridge to the south. The closest motorways are the M11 at Cambridge and the A1(M) at Peterborough, approximately 45 and 40 miles away respectively.

 There is a direct hourly service from King’s Lynn to London Kings Cross with a journey time of approximately 1 hour 40 minutes. The centre is situated adjacent to the town’s main bus station and includes one of the town’s principal car parks.

 Retailing in King’s Lynn is focused on a circuit comprising High Street, Norfolk Street, New Conduit Street and Broad Street. The subject property forms part of this loop.

 The property is situated within the pedestrian retail zone within Kings Lynn and comprises terraced retail units along most of Broad Street and the majority of New Conduit Street to the south, together with a small spur off towards the bus station and car park to the east.

 The prime retail pitch is located on the High Street, between Primark and Marks & Spencer. Next, Topshop and River Island are all located in this area. The southern end of the High Street is more secondary in nature.

 The surrounding area is predominantly retail with many national multiples in addition to some local traders.  The town’s bus station is located immediately east of the subject property, which generates footfall past Sainsbury’s and into the centre.

 The centre’s car park is also located to the east of the site, again generating footfall through the site towards the town centre.

 The centre is in a good secondary location and forms part of the pedestrianised town centre. The car park and bus station help to maintain pedestrian flow through the town centre.

Vancouver Quarter, Kings Lynn

Description

 Vancouver Quarter Shopping Centre comprises a purpose-built open air ‘J-shaped’ shopping centre with associated car parking. The centre was constructed in two phases, the original element opened in the 1960s and was extended in 2004/5. The centre forms part of the Town Centre and blends in to the main shopping high streets in Kings Lynn. The subject property is distinguishable by signage and uniform floor tiling.  The centre comprises 52 units and is anchored by Poundland, New Look, Wilkinson’s, Bargain Buys and Peacocks Clothing. 27 units, plus the H&M development site (former Beales Department Store), are located on Broad Street, seven units plus Sainsbury’s are on the mall leading to the car park and 18 units are on New Conduit Street. Sainsbury’s does not form part of the property and the unit includes three sub-let kiosks.

 The centre includes the multi-storey car park adjacent to Sainsbury’s providing 430 car parking spaces, which is one of the major car parks for the town.

 The subject property is the only managed shopping centre in the town, although is open and joins the other retailing pitches seamlessly.

 King's Lynn ranks 1 on the PROMIS PMA Competition Indicator, which reflects that the town has the lowest level of retail competition in the country, effectively this means there are few easily accessible town centres nearby.

 Competition to the subject property is reflected on the high street and out of town retail parks.  Photographs of the property are attached at the end of the report.

Competition

Local Competition:

 As the only shopping centre in town, the main retail competition for the Vancouver Centre is represented on High Street. High Street is the prime retail pitch in King’s Lynn and houses Debenhams, M&S, Primark, Iceland and Sainsbury’s. Major national multiples that are also represented on the High Street include Topshop, HMV, Next and River Island.

 There are two retail parks in Kings’s Lynn; Hardwick Retail Park, which comprises approximately 134,000 sq ft and is anchored by Argos, Tesco, Currys/PC World, The Range and Boots.

 Pier Point Retail Park comprises approximately 85,000 sq ft and tenants include Homebase, Next and DFS.  Other retail parks in the surrounding area include:  Cromwell Retail (Hybrid) Park, Wisbech is owned by Tesco Stores. Comprised of 77,000 sq ft, tenants include Iceland, Poundworld and Sports Direct.

 Belgrave Retail Park, Wisbech. Comprised of 57,000 sq ft, owned by Highcroft Investments. Tenants include Carpetright, Currys PC World and Halfords.

 Campbells Meadow Retail Park, owned by Aviva Investors. The park is comprised of 51,000 sq ft, tenants include Dreams, Halfords and Maplin.

 St Nicholas Retail Park, owned by Prestbury Capital Ventures. Comprised of 60,000 sq ft, tenants include Home Bargains and Wickes.

 The Peel Centre, Wisbech, is owned by Aberdeen Asset Management. It comprises 47,000 sq ft and tenants include B&Q and Morrisons.

Vancouver Quarter, Kings Lynn

Regional Competition:

 The main retail locations competing with King's Lynn are Peterborough, Norwich and Cambridge. We have detailed below the retailing provision of each of these locations:

 Peterborough is located 35 miles south west of King's Lynn, around an hour’s drive. The total population within the Peterborough primary catchment area is 684,000, with an estimated shopping population of 322,000 who consider it their usual destination. Peterborough is relatively isolated and therefore retains a relatively high proportion of its residents and in addition, draws visitors in from a wider area. City centre retail floor space is estimated at 1,410,000 sq ft.

 Norwich is located approximately 43 miles south east of King's Lynn, reached via the A47 with a journey time of approximately 70 minutes. The total population within the Norwich primary catchment area is 866,000, with an estimated shopping population of 521,000. Norwich is relatively isolated and therefore retains a relatively high proportion of its residents and in addition, draws high-spending visitors in from a wider area. City centre floor space is estimated at 2,220,000 sq ft. Norwich has several extensions of existing shopping centres in the pipeline, including Castle Mall and Anglia Square, which will further increase floor space.

 Cambridge is located approximately 45 miles south of King's Lynn, reached via the A10 in approximately 75 minutes. The total population within the Cambridge primary catchment area is 545,000, with an estimated shopping population of 356,000. Cambridge is relatively isolated and therefore retains a relatively high proportion of its residents and in addition, draws tourists in from a wider area. City centre retail floor space is estimated at 1,490,000 sq ft.

Car Parking:

 According to Kings Lynn and West Norfolk Council, there are a total of 17 car parks in the town centre albeit some are very minor. The largest of these is St James Multi Storey which has 645 spaces. The total number of spaces in the town centre is 2,492 of which 430 form part of the subject property.

Local Economy

 Historically King’s Lynn was a centre for fishing and the seafood industry. Today the main industry is focused on agriculture-related manufacture, including food processing. Although agriculture is a key sector in the borough, the legacy is a low-wage economy across Norfolk.

 Nevertheless, the economic base is changing and the borough is now home to world-leading businesses in pharmaceuticals, precision and aerospace engineering and advanced manufacturing sectors including commercial refrigeration, robotics, electronics and specialist chemicals. The town also maintains a role as an import centre, with facilities for dry bulk cargo such as cereals and liquid bulk products such as petroleum.

 The key employment sectors now fall within advanced engineering and manufacturing, added value food activity and tourism due to tracts of unspoilt coast, attractive countryside and numerous historic settlements and buildings.

Population

 The total population within the Kings Lynn primary catchment area is 234,000, of which 151,000 consider King’s Lynn as their primary shopping destination. Kings Lynn is projected to see above average growth in population over the period 2016-21.

Vancouver Quarter, Kings Lynn

 From the latest PROMIS report, the age profile of the Kings Lynn primary catchment includes a particularly high proportion of retired persons aged 65 and over; older working age adults aged 45-64 are also over-represented. In contrast, children aged 0-14, young adults aged 15-24 and adults aged 25-44 are particularly under- represented.

 The Kings Lynn catchment population is not particularly affluent, but the level of car ownership is significantly above the national average with a high proportion of 2 car households.

 From the above, we note the relative decline in the working population compared to the national average.

Employment

 The service sector as a whole accounts for 46% of total employment in Kings Lynn, slightly below the Retail PROMIS average; the Professional & Business Services and Finance Sectors together account for a below average 6.7% of total employment, while the retailing and leisure sectors account for 26.7% of total employment, around the Retail PROMIS average.

 The manufacturing centre in Kings Lynn accounts for 11% of total employment, slightly above the Retail PROMIS average.

 In September 2017, the local claimant count was 0.6% of the population aged 16-64, compared to the national claimant count at September 2017 of 1.1%.

Floor Areas

 We have relied upon the floor areas provided which we have assumed have been calculated in accordance with the RICS Code of Measuring Practice (6th Edition), as shown in the tenancy schedule.

Name Non-Retail (ft²) Area-ITZA (ft²) Total Area (ft²) Name Non-Retail (ft²) Area-ITZA (ft²) Total Area (ft²) Airwave Solutions Ltd Regis UK Limited 634 529 1,163 Ann Summers Ltd 1,511 875 2,386 Robinson Group 1,235 1,235 Argos Ltd 6,636 6,314 12,950 Roman Originals 2,012 922 2,934 BB's Café 817 817 Royal Bank of Scotland 1,150 1,005 2,155 Blue Inc in Admin 3,036 1,578 4,614 Shoe Zone 1,691 861 2,552 Cards Direct 633 1,120 1,753 Sports Direct 12,726 12,726 Claires Accessories Limited 1,100 613 1,713 Sportswift Limited 1,331 893 2,224 Claysweep Ltd t/a Discount UK 36,856 36,856 Superdrug Stores plc 6,771 6,771 Coral Estates 668 668 Temp - Calendar Club 1,426 761 2,187 Costa Coffee Co. Ltd 566 1,200 1,766 The Carphone Warehouse Ltd 745 745 Deichmann Shoes UK Ltd 1,167 1,167 The Perfume Shop Ltd 515 463 978 Done Bros (Cash) Betting Ltd 686 686 Tiro Leisure 1,394 737 2,131 Evolution Beautique 590 565 1,155 Trespass 1,025 1,261 2,286 Genus UK Ltd 5,707 5,707 Vacant 581 510 1,091 Greggs Plc 536 571 1,107 Vacant 571 571 HSBC Bank Plc 2,973 1,669 4,642 Vacant 1,953 1,953 Ikon Fashions Limited 1,819 881 2,700 Vacant 1,404 767 2,171 Kings Lynn BC Warren James 636 636 Lavitta 1,023 1,023 Wilkinson Hardware Stores Limited 37,930 37,930 Mall Management Limited William Hill 515 556 1,071 Management Suite Wimprop Limited 2,437 1,111 3,548 NBC Apparel t/a TK Maxx 22,994 22,994 Yours Ltd 2,341 1,219 3,560 New Look Retailers Ltd 10,694 10,694 British Heart Foundation 1,319 1,319 Norfolk Hospice 1,167 1,167 Iceland Frozen Foods Plc 9,382 9,382 Norwich & Peterborough BS 1,803 1,167 2,970 KIngs Lynn 124 124 Nuts and Confectionary Ltd t/a Burg 2,388 2,388 Mr Pelagies Petrou 2,201 2,201 Peacocks Stores Limited 8,668 8,668 The Bakehouse Group Limited 1,030 1,030 Phone Trader Cambridgeshire Ltd 447 447 Vacant - Development Site 9,960 12,775 22,735 Poundland Ltd 8,427 8,427 Property Total 217,087 51,787 268,874

Site Area

 The site area is approximately 4.08 hectares (10.083 acres). This includes 430 car spaces.

Vancouver Quarter, Kings Lynn

Building Condition

 As instructed we have not undertaken a structural survey, nor tested the services for the purposes of this report; we have undertaken only a limited inspection for valuation purposes.

 CBRE has previously carried out a building survey of the Centre, although not for the purpose of this valuation.  The report states the property is considered to be in a fair to good condition taking account of the property age and various forms of construction. However, it should be noted there was not access to all parts of the property which is noted within the report.

 The report highlights potential future landlord liabilities of £306,000. However much of this liability is predicted to fall in the medium to long term and so can be carried out over time. Some of these costs would appear to be mainly required in the event of complete replacement. For the purposes of this valuation, it was not considered necessary to include these.

 The asbestos survey (July 2014) for Vancouver Quarter states there is asbestos present in some areas. However, it notes that the asbestos is low risk. The report recommends to monitor the condition in each instance. We have not read individual asbestos reports for each unit.

Services

 From the extent of our inspection, we understand that all mains services are available at the Property including electricity, mains water and drainage.

Vancouver Quarter, Kings Lynn

Environmental Considerations

 We have previously been provided with a Phase 1 Environmental Review prepared by Ambiente International LLP, dated 02 June 2016 and referenced SF008 – Draft V1. The report notes the following:

− The level of environmental risk associated with the continued current use of the of the subject property is assessed to be acceptably low and no further environmental investigation or assessment is considered necessary.

− No major pollution incidents have been reported/recorded for the subject property and no indications for the presence of significant contamination have been identified within the report.

 The report concludes that based on the information provided, subject to the recommendations within the report and the continued current use, the subject property can be considered acceptable security for funding from an environmental standpoint.

 The subject property is in a very low flood risk area. However, the property may be susceptible to flooding during extreme storm events.

 Based upon CBRE’s own inspection and basic planning enquires, we have not identified any environmental risk factors which, in our opinion, would affect value. However, CBRE gives no warranty as to the absence of such environmental risk factors.

 The minimum energy efficiency standards will apply from June 2018, where the EPC shows a rating of F or G, works must be carried out to the unit so it can be assessed to a minimum E rating unless an exemption applies and is registered.

 The EPC’s received have been detailed below with action required for units with a rating of F or G. We have not received EPCs for units not listed below and have explicitly assumed that these units are either rated E or above or will be brought up to this level as they are re let. Some units within the scheme have lease start dates that pre-date the introduction of EPC’s.

 14 Broad Street is the only current unit with a F or G rating. We have applied capital costs of £50,000 to our valuation to reflect an amount of the possible cost of bringing this, and potentially other units, up to the required EPC standard.

Unit Address: Rating Unit Address: Rating 3 Broad Street D 16-18 New Conduit Street D 15 New Conduit Street E 25-29 Broad Street C 18-22 St Dominic’s Sq E 15 Broad Street D 20 Broad Street D LSU6 C 24 Broad Street D 33 Broad Street D 28 New Conduit Street C 11 Broad Street C 33 Broad Street E 7 Broad Street B 9 Broad Street E 29 New Conduit Street D 14 Broad Street G 27 New Conduit Street D 16 Broad Street C 37 Broad Street D 24 Broad Street C 22 New Conduit Street C 26-28 Broad Street D 24 New Conduit Street C 14 New Conduit Street D 26 New Conduit Street C 24 St Dominic’s Square D 38 New Conduit Street D

Vancouver Quarter, Kings Lynn

Planning

 The Core Strategy was adopted in July 2011 and it sets out the spatial planning framework for the development of the borough up to 2026 and provides guidance on the scale and location of future development. It contains strategic policies on a range of topics that include: the environment, employment, infrastructure, and housing. The Core Strategy is the starting point for determining planning applications. All other Development Plan Documents must conform to the adopted Core Strategy.

 The Planning and Compulsory Purchase Act 2004, amended by the Localism Act 2011, requires local planning authorities to prepare and maintain a Local Development Scheme (LDS). King’s Lynn and West Norfolk’s first LDS was published in March 2007, and then revised and updated in May 2009. The LDS is a timetable for the production of a local planning authority’s Local Plan, and any other Development Plan Documents.

 Within the subject property, the redevelopment of 2-8 Broad Street (Application ref: 16/01541/FM) was registered on the 19 August 2016 and consented 10 November 2016 with 11 conditions which we have assumed the borrower is fulfilling. The new development, currently under construction will consist of a 20,000 sq ft unit let to H & M plus four additional units.

 In summary, we are not aware of any further issues which would adversely impact upon the value of the property or the bank’s security.

Occupational Costs

 Service Charge: The total budget for year end 2017 has decreased by £82,979 to £732,268 representing a decrease of 10.18%.

 The budget now represents an overall cost per sq. ft. of £2.15 which is below the UK average service charge for an outdoor centre of this size. According to JLL’s OSCAR (2015) report on service charge analysis, the average service charge for a scheme of this nature is £2.96 per sq ft.

 Business Rates: The current UBR rate is 47.9 p in the £, the small business rating multiplier is 46.6p in the £. This has shown a reduced multiplier from the previous year.

 We have reflected the void rates costs for the units that are currently vacant.  The Property has the following Rateable Values. However, is should be noted, any reduction will be phased out over a period of time.

Address RV 2010 RV 2017 % Change 1 Broad Street £55,000.00 £37,000 -32.73% 2-8 Broad Street £162,000 £155,000 -4.32% 3 Broad Street £25,250.00 £15,750 -37.62% 5 Broad Street £42,750.00 £26,500 -38.01% 7 Broad Street £55,500 £34,500 -37.84% 9 Broad Street £48,000 £29,750 -38.02% 11 Broad Street £37,250 £23,000 -38.26% 12 Broad Street £35,250 £21,750 -38.30% 13 Broad Street £170,000 £152,000 -10.59% 14 Broad Street £35,000 £22,000 -37.14% 15 Broad Street £86,000 £53,500 -37.79% 16 Broad Street £37,250 £22,750 -38.93% 17 Broad Street £114,000 £72,000 -36.84% 18 Broad Street £38,250 £23,750 -37.91%

Vancouver Quarter, Kings Lynn

19 Broad Street £78,000 £49,000 -37.18% 20 Broad Street £36,250 £22,250 -38.62% 21-23 Broad Street £154,000 £96,500 -37.34% 22/24 Broad Street £65,000 £40,250 -38.08% First Flr, 24 Broad St £1,600 £1,600 0.00% 25-29 Broad Street £220,000 £214,000 -2.73% 26-28 Broad Street £70,500 £43,500 -38.30% 31 Broad Street £56,500 £45,250 -19.91% 32 -34 Broad Street £131,000 £89,000 -32.06% 33 Broad Street £59,500 £39,750 -33.19% 35 Broad Street £30,750 £20,250 -34.15% 36 Broad Street £33,500 £22,250 -33.58% 8-12 New Conduit St £49,500 £38,500 -22.22% 14 New Conduit St £22,750 £15,250 -32.97% 17 New Conduit St £81,500 £33,500 -58.90% 16-18 New Conduit St £69,000 £34,500 -50.00% 19 New Conduit St £33,250 £13,500 -59.40% 20 New Conduit St £44,500 £18,000 -59.55% 21 New Conduit St £130,000 £54,000 -58.46% 22 New Conduit St £55,000 £22,000 -60.00% 23 New Conduit St £68,000 £27,750 -59.19% 24 New Conduit St £56,000 £24,500 -56.25% 25 New Conduit St £66,500 £27,250 -59.02% 26 New Conduit St £62,000 £28,500 -54.03% 27 New Conduit St £58,000 £23,500 -59.48% 28 New Conduit St £62,000 £29,250 -52.82% 30-36 New Conduit St £345,000 £257,500 -25.36% 38 New Conduit St £67,000 £30,750 -54.10% 46 New Conduit St £106,000 £72,000 -32.08% 1-5 St Dominic Sq £116,000 £72,000 -37.93% 7 St Dominic Square £109,000 £85,500 -21.56% 9 St Dominic Square £121,000 £92,500 -23.55% 12-14 St Dominic Sq £118,000 £92,500 -21.61% 16 St Dominic Square £19,750 £14,750 -25.32% 18-20 St Dominic Sq £41,750 £31,250 -25.15% 22 St Dominic Square £19,750 £14,750 -25.32%

Tenure

 We have not read the individual head leases and have applied our understanding of the terms as expressed to us by the borrower in the Overview Report. We recommend your legal advisors confirm our understanding is correct.

 The Centre and the Walkways are held leasehold under a number of ground leases from the Local Authority for terms of 999 years at a peppercorn.

 The head lease for the Iceland/new development block is for a term of 150 years from March 1983 (116 years remaining) at a geared ground rent of 25% of net rents received. There will be a surrender and regrant of the head lease on completion of the new retail development. A new 200 year lease will be granted at a geared ground rent of 25% of net rents received.

Vancouver Quarter, Kings Lynn

Tenancies

 The Centre consists of 52 units. There are currently 3 vacant units (Unit 12 & 20 Broad Street and 1st floor, 46 New Conduit Street) with a number of temporary lets in the scheme. The leases within the centre expire between 2016 and 2033. The new development will further increase the number of vacant units with completion anticipated for July 2018.

 The average weighted unexpired lease term (AWULT) at the centre is 4.15 years to expiry and 3.83 years to break.

 The centre is well let with National tenants representing 78.4% of gross income across 33 tenants. The top 5 tenants are shown below:

TENANT EXPIRY / BREAK RENT (£ PA) % OF TOTAL Covenant INCOME Strength

Wilkinson 14/03/2025 300,000 9.93% Excellent Hardware

Bargain Buys 02/01/2022 220,000 7.28% NA

TK Maxx 23/06/2025 185,000 6.13% Excellent

Poundland 23/06/2020 165,000 5.46% Very good

New Look Retailers 24/12/2019 135,000 4.47% Excellent

Total £1,005,000 33.27%

It should be noted, once H&M begin trading, they will likely be the top tenant in term of income provided the projected turnover figures are met. However, without the turnover element of their rent, H&M would still rank third. Summary:

 The covenant checks of the above 5 tenants have shown Wilkinson Hardware, TK Maxx, Poundland and New Look Retailers to be very good/excellent. However, checks of Claysweep Limited (Trading as Bargain Buys) have shown the company intended to dissolve in October 2016 only to withdraw its intention 8 days later.

MARKET CONTEXT

Local Occupational Market

 Kings Lynn has broadly the expected volume and quality of retail provision, given the size and affluence of the shopping population. Town centre retail floor space is estimated at 0.93 million sq ft, comparable with the average weak town average and ranking the town 112 of the 200 PROMIS Centres on this measure.

 Kings Lynn ranks 95 on the basis of its PMA Non-Food Retail Score and 83 on the PMA Fashion Store; the town ranks 109 on the PMA Anchor Score. Kings Lynn has broadly the expected volume and quality of retail provision, given the size and affluence of the shopping population.

 There is a further 660,000 sq ft of retail parks supply, which provides competition to the subject property and town centre. 10

Vancouver Quarter, Kings Lynn

Vacancy

 Vancouver Quarter currently has a vacancy rate of 3.29% which is low in comparison to similar type centres. However, it should be noted there is currently a number of temporary lettings within the centre which are not reflected in this figure. If these don’t convert to full leases, the vacancy rate would amount to 8.51%, which is lower than the national average of 9.3%.

 In our experience, secondary locations can have vacancy rates of 10% and above so the centre appears to be achieving occupation better than might be expected which may well be due to the quality of the accommodation at the centre compared to the rest of the town.

 There are a number of vacant units in King’s Lynn town centre, including on the prime retail pitch between Primark and Marks & Spencer on the High Street. However, the number of national fashion multiples that are located on High Street could encourage other retailers to the town centre. Rents

 According to PROMIS, as at mid-2017, prime rents within Kings Lynn are circa £45 psf Zone A. This represents no change on the mid 2016 level of prime rents in the town, however rents have decreased 47.1% below the pre-recession peak of £85 psf ZA.

 Recent lettings within the town include: Tenant & Property Address Date £psf ITZA Details Card Market - 50 High Street September £45 5 year lease – 3 months rent free. £35,000 2015 pax. 1,813 sq ft (Ground and first floor). Starbucks – 89 High Street November £49 15 year lease – 12 months rent free with 2015 tenant break at 10 years. £60,000 pax. 4,400 sq ft. Subway - 47 High Street February £58 10 year lease. £35,000 pax. 2,027 sq ft. 2015

 Recent lettings within The Vancouver Centre are as follows:

Unit Tenant Date £psf ITZA Details 14 New Eurochange Ltd Oct 2017 £31.50 New letting. 10 year lease with 5th year Conduit break option. 9months rent free. £18,000 Street pax. 20 New Claire’s July 2016 £31.50 New letting. 3.5 Year lease. £25,500 pax. Conduit Accessories Street 6 (Lv 1) Sports Direct October £3.54 (Overall) New letting - £45,000 pax. 10 year lease St 2016 Dominic Square 15 New Tiro Leisure September £32.00 New letting - £30,000 pax. 5 year lease. Conduit 2016 Street

ERV

 There is a limited amount of recent letting evidence, but we have established tones of between £30 to £40 per sq ft ITZA.

Having regard to the above evidence we have applied the following rates when calculating our opinion of ERV:

Vancouver Quarter, Kings Lynn

Location Zone A Rental Tones (per sq ft) New Conduit Street £31.50 (Lower) New Conduit Street £33 (Mid) New Conduit Street £35 (prime) Paradise Court £30 Broad Street £40 Description ERV (per sq ft)

Large Store £10 psf overall

First Floor £5 psf overall

 We have assumed all other income including the car park and commercialisation to be rack rented.  This equates to a gross rental value of £2,813,220 per annum and net rental value of £2,632,659 per annum following deductions for landlord’s marketing contribution and the permanent void assumption.

 Landlord Marketing Contribution: We have been informed by the Centre Manager that the landlords marketing contribution is £42,000 for 2017, which we have adopted as it seems reasonable.

Investment Market

 We have examined a number of comparable transactions in order to ascertain our opinion of the Market Value of the Property. Being a mix of a shopping centre and retail parade, a range of comparable evidence has been considered. We have had regard to a number of transactions, most specifically the following:

The Strand, Bootle – Exchanged May 2017 The Strand Shopping Centre exchanged in May 2017 for £32,500,000 reflecting a NIY of 8.7%. The property comprises approximately 406,382 sq ft with tenants ranging from M & S, Wilkinson, B & M, TJ Hughes and Iceland, alongside a car park of 586 car spaces arranged over 5 levels. The Strand Shopping Centre has a WAULT to expiry of 8.9 years. The Strand Shopping Centre has a 92.67% occupancy rate with 57% of income secured for 5 years or more.

Saddlers Shopping Centre, Walsall – Sold September 2017 The Property was sold in September 2017 for £12,500,000 reflecting a 9.30% NIY. The Centre comprises 193,000 sq ft with 53 tenants. There is also 480 car spaces over 3 levels. The Centre is anchored by a 60,000 sq ft Marks & Spencer secured until December 2129 (112 years unexpired). Other tenants include TJ Hughes, Burger King, Bodycare, Greggs, Costa and Clarks. 78% of the income is secured against national multiple tenants with the Centre being 93% let by ERV. There is a WAULT of 9.44 years and 7.45 years to break. Riverside Shopping Centre, Hemel Hempstead - Under offer May 2017 The property was under offer in May 2017 for £45,000,000 reflecting 6.25 NIY. This is also an open-air scheme, constructed in 2001 comprising 300,000 sq ft. The 12

Vancouver Quarter, Kings Lynn

Centre is anchored by Debenhams and TK Maxx with other tenants including H&M, Next, Waterstones, Pandora and Topshop. The Centre is 98% let with only one vacancy and 85% of income secured against national multiples. The WAULT is 10 years. We understand this sale has now fallen through.

Kings Walk, Gloucester – Sold July 2017 The property was sold in July 2017 for £20,000,000 reflecting 6.5% NIY. The property is held part freehold, part long leasehold. The leasehold element is held from The Council for a term of 150 years from 2004. The scheme consists of 285,000 sq ft (175,000 sq ft of retail accommodation). The centre is anchored by Primark, WH Smith, HMV and River Island. The WAULT is 3.9 years. Kings Walk is let with 94% of the gross income received from national multiples.

 We have had regard to the evidence above in forming our view of the appropriate equivalent yield for the subject property. As mentioned, there is a distinct lack of recent evidence for secondary schemes. We have considered comparable evidence from schemes sold in Bootle (8.7% NIY), Walsall (9.3% NIY), Hemel Hempstead 6.25% NIY (fallen through) and Gloucester (6.5% NIY).

 Of the comparables cited, Riverside Hemel Hempstead (anchored by Debenhams) did not complete, but the indicative price was very strong and is undoubtedly a better scheme than the subject property. Both Bootle and Walsall are considered poorer schemes in terms of location and have higher vacancy rates. In relation to Gloucester, this property suffered after the demise of BHS and took many months to finally sell after a new occupier, Primark, was found to occupy the former BHS space. The property eventually sold for 6.5% NIY but is located in a much stronger city.

 The subject property benefits from 78.4% of ERV let to National Multiples which is good for a scheme of this kind. There is a WAULT to break of 3.83 years which is low, however we anticipate that the letting to H&M will increase retailer demand and improve the WAULT over a period of time. The vacancy rate is currently at 3.29% but when the temporary lettings are accounted for this increases to 8.31%, however again this should improve once the H&M unit is open and trading. With regard to yield, we have considered the comparable evidence currently available, the particular characteristics of this property and the wider market. Whilst the accommodation is good in the context of the town as a whole, the Centre itself lacks critical mass and therefore struggles to compete with larger retail destinations in the region. The category of secondary shopping centres is quite wide and we believe this sits in the middle of the hierarchy, being neither good secondary nor poor secondary where, inter-alia, we would expect to see higher voids and less national multiples. In the circumstances, we believe an NIY of approximately 7.75 - 8.00% and a NEY of 7.50% is realistic for a scheme of this nature. Our valuation equates to 7.75% NIY and NEY 7.50%.

 We are aware that the property has been marketed for sale alongside Dunfermline and Loughborough. Comments in this respect are included in the Certificate.

 The CBRE Shopping Centre Benchmark Yields (October) also provides an indication of best secondary/secondary yields:

− Prime, 4.65% − Best Secondary, 6.75% − Secondary, 8.50% High Street

 The subject property is an open scheme and adjacent to the High Street. Interestingly for comparison, cccording to Promis, Prime Retail yields in Kings Lynn are at 7.25% at mid-2017, showing no change on the level 6 months previous, consistent with the flat profile, on average, across the PROMIS Towns. Prime yields in Kings Lynn remain 225 basis points above the pre-recession peak in 2006, compared to a PROMIS average of 183 basis points above peak.

Vancouver Quarter, Kings Lynn

Comparables: 34-35 High Street, Kings Lynn – Sold October 2017 £520,000 (£161.59 per sq ft) reflecting NIY 6.42%. Comprises 3 floors with total NIA 3,218 sq ft. The vendor was Gantt Investments Ltd. The entire property is let to Boots on a 10 year term from 01/04/2016 at a rent of £35,000 with a rent review at the fifth year. 52 High Street, Kings Lynn – Sold March 2017 for £372,000 (£179.97 per sq. ft.) reflecting 6.72% NIY. Comprises 3 floors with total NIA 2,067 sq ft. The vendor was Draycott Investments Ltd. The entire property is let to The Body Shop on a 5 year term from September 2016. The rent is £25,000 per annum exclusive.

SWOT

Strengths Weaknesses

 King's Lynn dominates the local retailing provision  The competing centres, albeit some distance away in west Norfolk, as the competing centres are all are all more regionally dominant and therefore more than 45 minutes’ drive away. offer a wider range of retailers.  The centre occupies a good secondary position  The gearing on part of the head lease is relatively within the pedestrian zone and the main area for high at 25% of rents received, but this is the value retailing in King's Lynn. smaller portion of the site.  The centre generally provides well-configured retail  There are 3 vacant retail units, accounting for units let to a range of established national tenants. approximately 3.29% of the estimated rental value of the property. However, there are a number of  The centre is situated next to the town’s main bus temporary lettings which could result in a rise in station and includes one of the town’s principal car vacancy rate. parks.  Downward pressure on rents continues making  The centre is open air, resulting in lower service many of the units over-rented. charge and occupational costs.  There is a relatively short WAULT to expiry at 3.83  King's Lynn ranks 1 on the PROMIS PMA years and to break at 4.14 years. Competition Indicator, reflecting the lack of retail competition.  H&M income will be linked to turnover and therefore the income can be variable.  The H&M letting will help to reduce the vacancy rate once trading.

Opportunities Threats

 Potential to create value through letting vacant  The adjacent Sainsbury’s unit does not form part of units in the existing scheme and new development, the property, albeit they are an important footfall reducing shortfall costs and increasing net income driver. There is also a threat of them vacating in and running yield. future as they have opened a large out of town store. However, we understand Sainsbury’s  Refurbishment of the current vacant units. currently sublet 25% of their space to B&M and have also completed a refurb on their remaining  Increased footfall levels due to the opening of the space which would suggest their intention to H&M unit and the letting of the adjoining units. remain in occupation. This will also raise the prospect of increasing rental levels as occupancy nears 100%.  Competition from the High Street and the rest of Kings Lynn town centre.

 Investment in the areas outside our Vancouver Quarter may take foot fall away from the scheme.

Vancouver Quarter, Kings Lynn

ASSET MANAGEMENT

 There are a number of initiatives that could be introduced at the property to maximise value including: − Let the vacant units at the centre, including the additional 4 units that form part of the new development of the former Beales unit.

− Undertake a tenant audit to ascertain which tenants want to upsize/downsize etc. − Negotiate lease renewals with the tenants that have lease expiries and break clauses in the next two years. Attract more national multiples to the re-developed Beales unit in addition to the H&M pre-let.

− Maintain a dialogue with Sainsbury’s in the adjacent unit to ascertain their occupational intentions. − Improve the food offer to draw footfall.

FUNDAMENTAL RISKS

Market Risk Property Risk

 The competing centres are all more regionally  The gearing on part of the head lease is relatively dominant and therefore offer a wider range of high at 25% of rents received, but this is the retailers. smaller portion of the site.

 Competition from the High Street and the rest of  There are three vacant retail units, accounting for Kings Lynn town centre. approximately 3.29% of the estimated rental value at the property. This excludes the units forming

part of the development of the former Beales unit.

 Downward pressure on rents making many of the units over-rented.

Vancouver Quarter, Kings Lynn

VALUATION METHODOLOGY

Market Rent (Headline)

 In arriving at our opinion of Market Rent we have made the following assumptions:  Prime rents in King’s Lynn are estimated at between £30 - £40 psf Zone A. The subject property is located just off the prime retail pitch in King’s Lynn town centre but forms part of the pedestrian shopping circuit.  Having regard to the above evidence we have applied the following rates when calculating our opinion of ERV;

Location Zone A Rental Tones (per sq ft)

New Conduit Street £31.50 (Lower) New Conduit Street £33

(Mid) New Conduit Street £35 (prime) Paradise Court £30 Broad Street £40 Description ERV (per sq ft) Large Store £10 psf overall First Floor £5 psf overall

 We have assumed all other income including the car park and commercialisation to be rack rented.  This equates to a gross rental value of £2,813,220 per annum.

Market Value

 A permanent void of 5% has been added after 24 months. This reflects the reality that the centre will unlikely to ever be fully let. This is a standard assumption in shopping centres valuation.

 We have applied landlord shortfall costs/costs in accordance with the information provided on vacant and those units with service charge caps.

 Total CapEx figure amounts to £73,835.  Vacant units have shortfall costs attached to them and letting costs of 15% of ERV on lease renewal.  There is an element of over rent in the centre from the initial leases which commenced around the opening of the centre. ERV assumptions are currently c 50% of what they were at their peak (2006/2007) and there is

Vancouver Quarter, Kings Lynn

evidence to support this. The gross rental value of the scheme is £2,813,220 which makes it 7.27% over rented.

 Net income is capitalised at 7.5% in line with market expectations and purchaser’s costs are reflected at 6.76%. This is calculated from deducting agents fee, legal fees and stamp duty costs.

 We have applied landlord shortfalls in accordance with the information provided.  Some of the anticipated future lettings that have been accounted for in the valuation are: - RBS: new 5 year lease from February 2018 at £46,000 pax with a tenant break option at year 3.

- The Carphone Warehouse: new 5 year term commencing January 2018 at £35,000 pax. - Blue Inc – New 3 year lease from January 2018 with a landlord break option from January 2019 at the current rent.

H&M Development:

 The former Beales Department Store and adjoining units are subject to a significant redevelopment which we have reflected in our valuation. The redevelopment will comprise a 20,000 sq ft H&M store as well as 4 smaller retail units which the borrower is currently marketing to a mix of national multiple retailers.

 We understand H&M have signed an agreement for lease which is based on 7% of turnover with no base rent payable. • The borrower has supplied us with a 2015 CACI report which forecasts a turnover of £4,501,286 per annum; which equates to a rent payable of c£340,000 per annum.

• The remaining retail units have a total ERV of £165,500 per annum.  We have carried out a development appraisal of the site, and applied the site value to the total valuation as a capital receipt. As would be expected, the development is in an intense period of activity and as costs are spent, the residual value of the site increases (assuming all other inputs remain constant). We have assumed the following:

 We have applied the remaining construction costs to be spent of £3,785,577 (total build costs at the outset £5,221,252), this includes professional fees.

 We have not been informed that the construction is a fixed price contract and have therefore applied an additional 5% contingency allowance.

 We have assumed a 10% profit on cost, 6% finance cost and September 2018 completion date.  We have assumed £200,000 per annum of core income from H&M is fairly secure (£2,500,000 total turnover) and have applied a 7.5% capitalisation rate to this income. The remaining forecast income of £140,000 per annum is likely subject to more fluctuation and risk and therefore we have applied a 9% capitalisation rate to this income.

 We have applied an 8% capitalisation rate to the remaining 4 units, with an assumed 6 months’ rent free period for each.

 The gross value of the site is calculated at £1,160,000 after accounting for the freeholder’s 25% interest. We have applied this amount to our overall capital value

 Combining the Investment and Development value, the total Market Value of £34,100,000.

Vancouver Quarter, Kings Lynn

Marketability and Potential Purchasers

 We believe that it would be possible to affect a sale within six to nine months if priced appropriately in the market.

 If the portfolio was to be marketed as a whole to include the Subject Property as well as The Rushes, Loughborough and Kingsgate Shopping Centre, Dunfermline, we believe it would be possible to affect a sale within six to nine months if priced appropriately in the market.

 We have not valued the assets as a portfolio and have not considered a portfolio premium within our valuations.

Vancouver Quarter, Kings Lynn

PHOTOGRAPHS

Photo 1: Frontage Photo 2: Broad Street

Photo 3: New Conduit Street Photo 4: Vacant Unit 20 Broad Street

Vancouver Quarter, Kings Lynn

PHOTOGRAPHS

Photo 5: New Conduit Street Photo 6: 16 Broad Street Temp Letting

Photo 7: Car Park Photo 8: St Dominic’s Square

Description Tenant Name Lease Start Years Expiry Date Next Review Breaks Current Rent pa Rental Value pa Current Void Expiry Void Comments

LSU 2a Superdrug Stores plc 24/06/2005 15 23/06/2020 . . None 127500 60600 0 0 LSU 2b Genus UK Ltd 16/07/2014 10 15/07/2024 16/01/2020 Not Activated 60000 48900 0 0 LSU 3 Claysweep Ltd t/a Discount UK 02/01/2012 10 01/01/2022 . . None 220000 195000 0 0

LSU 4 NBC Apparel t/a TK Maxx 24/06/2005 20 23/06/2025 24/06/2020 Not Activated 185000 184000 0 0 SU 1 St James Sofa Store 13/10/2017 1 13/10/2018 . . Not Activated 20000 40400 0 3 Temp Letting -monitor how to trade with view to new lease. SU 2 Nuts and Confectionary Ltd t/a 29/05/2008 20 28/05/2028 29/05/2020 None 60000 39100 0 0 Burg SU 3&4&5 Poundland Ltd 24/06/2005 15 23/06/2020 . . None 165000 79800 0 0 SU 6 Deichmann Shoes UK Ltd 24/06/2005 15 23/06/2020 . . None 85000 42500 0 0 E25 Megabet UK Ltd 11/02/2015 10 10/02/2025 . . Not Activated 25000 26700 0 0 LSU 5 New Look Retailers Ltd 25/12/2004 15 24/12/2019 . . None 135000 107000 0 0 LSU 6 Sports Direct 07/10/2016 10 06/10/2026 07/10/2021 Not Activated 45000 50900 0 0 E2 Vacant (Former Regis UK 03/11/2018 5 02/11/2023 . . None 0 24300 12 0 Current void - continue to market Limited) E3 William Hill 01/11/2013 10 31/10/2023 . . 01/11/2018 (T) 25000 24800 0 0 Tenant break late 2018 E4 Vacant 03/11/2018 5 02/11/2023 . . Not Activated 0 23300 12 0 Current void - continue to market E5 Greggs Plc 29/03/2017 10 28/03/2027 . . 29/03/2022 (T) 24000 25500 0 0 E6 Vacant (Former Evolution 03/11/2018 2 02/11/2020 . . None 0 25600 12 0 20 Broad St - continue to market Beautique) E7 Cards Direct 26/10/2015 10 25/10/2025 26/10/2020 26/10/2021 (T) 45000 48800 0 0 E8 FF (rear) Robinson Group 01/11/2009 10 31/10/2019 . . None 10350 12400 0 0

E8 FF (front) Management Suite 01/04/2009 100 31/03/2109 . . None 0000Nil income

E9 & E10 GF Norfolk Hospice 09/07/2007 10 31/01/2018 . . Not Activated 35000 50500 0 12 & FF E1 Blue Inc in Admin 24/04/2012 8 31/01/2021 . . Not Activated 30000 72000 0 0 In admin but still trading SU 19 Peacocks Stores Limited 24/06/2005 15 23/06/2020 . . Not Activated 100000 80300 0 0 E26 Done Bros (Cash) Betting Ltd 13/04/2005 12 31/01/2018 . . None 37500 27400 0 12 E 12 Wimprop Limited 12/08/2004 14 11/08/2018 . . Not Activated 46000 45000 0 6 Assumed will extend lease E13 Norwich & Peterborough BS 25/03/2014 10 24/03/2024 . . 25/03/2019 (T) 40000 45800 0 0 Tenant break option 2019 E14 14 New Eurochange 01/11/2017 5 31/10/2022 . . None 0 16300 0 0 New letting to Eurochange £31.50 Conduit ZA. Street

E15 Trespass 01/07/2011 10 30/06/2021 . . Not Activated 35000 44800 0 0 E16 Claires Accessories Limited 21/07/2016 3 01/01/2020 . . Not Activated 25500 24800 0 0 LSU 1 Wilkinson Hardware Stores 15/03/2010 15 14/03/2025 15/03/2020 None 300000 285000 0 0 Limited SU 16a Tiro Leisure 23/09/2016 5 22/09/2021 . . None 30000 31300 0 0 SU 16b Gifted Retail Company 09/10/2017 0 08/01/2018 . . Not Activated 17018 32400 0 3 Temp letting (Temporary) SU 17a Roman Originals 26/09/2016 2 25/09/2018 . . None 20000 40500 0 12 SU 17b Ikon Fashions Limited 28/09/2009 15 27/09/2024 . . Not Activated 54000 38200 0 0 SU 18 Royal Bank of Scotland 26/06/2006 14 31/01/2021 . . None 81000 46000 0 0 SU 7a Sportswift Limited 18/01/2008 15 17/01/2023 18/01/2018 None 78500 42400 0 0 SU 7b Warren James 10/02/2014 10 09/02/2024 . . 01/04/2020 (T) 29647 33300 0 12 SU 8 Kapelad Limited ta BBs Coffee & 01/08/2015 10 31/07/2025 . . 01/08/2020 (T) 35000 41700 0 0 Muffins SU 9 The Carphone Warehouse Ltd 15/01/2008 15 14/01/2023 . . None 52500 29800 0 0 SU 10 Costa Coffee Co. Ltd 29/09/2005 15 28/09/2020 . . None 62000 50800 0 0 SU 10a Phone Trader Cambridgeshire 17/01/2013 10 16/01/2023 17/01/2018 Not Activated 17500 15100 0 0 Ltd SU 11 Temp - Calendar Club 10/10/2017 0 01/03/2018 . . Not Activated 16800 33800 0 12 Temp letting SU 12 Shoe Zone 27/06/2014 5 26/06/2019 . . None 30000 38600 0 0 SU 13 Ann Summers Ltd 29/09/2005 15 28/09/2020 . . None 70000 38200 0 0 SU 14 HSBC Bank Plc 25/12/2016 4 24/12/2020 . . None 77500 69900 0 0 SU 15 Yours Ltd 05/10/2015 5 04/10/2020 . . Not Activated 50000 52000 0 0 SU 15a The Perfume Shop Ltd 29/09/2015 5 28/09/2020 . . None 18000 17900 0 0 46 New Cond Argos Ltd 23/06/2008 10 22/06/2018 . . None 123000 96300 0 12 St GF 46 New Cond Vacant 03/11/2018 5 02/11/2023 . . None 0 19500 12 0 Vacant unit St FF Car Park Kings Lynn BC 25/03/1983 49 10/03/2033 25/03/2018 None 33920 33920 0 0 Mall Income Mall Management Limited 01/07/2012 5 31/01/2018 . . None 75000 75000 0 12 Telecom Airwave Solutions Ltd 14/06/2012 15 15/06/2027 14/06/2022 Not Activated 5000 5000 0 0 Mast 12-14 St Iceland Frozen Foods Plc 01/02/2014 5 31/01/2019 . . None 90000 99900 0 18 Dom Sq 16 St Dom British Heart Foundation 18/04/2016 5 17/04/2021 . . Not Activated 20000 18900 0 12 Sq 18-20 St Mr Pelagies Petrou 28/06/2010 7 31/03/2018 . . None 39000 38600 0 12 Doms Sq 22 St Dom The Bakehouse Group Limited 24/06/2016 6 23/06/2022 . . 24/06/2019 (T) 10000 18700 0 0 Sq Bus Station KIngs Lynn 29/09/1973 104 29/11/2077 29/09/2018 None 4000 4000 0 0 Kiosk Standard UK Tenant 20/09/2006 5 19/09/2011 . . None 0000 3020235 2813220 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

Property

Address Vancouver Quarter - Nov 2017,King's Lynn File/Ref No

Gross Valuation £35,226,581 Capital Costs £1,086,165 Net Value Before Fees £36,312,746

Less Stamp Duty @4.97% of Net Value -£1,694,500 Agent Fee @1.00% of Net Value -£341,000 Legal Fees @0.50% of Net Value -£170,500

Net Valuation £34,106,746 Say £34,100,000

Equivalent Yield 7.5014% True Equivalent Yield 7.8730% Initial Yield (Deemed) 7.7547% Initial Yield (Contracted) 7.7547% Reversion Yield 6.8455%

Total Contracted Rent £3,020,235 Total Current Rent £3,020,235 Total Rental Value £2,813,220 No. Tenants 57 Capital value per ft² £135.48

Running Yields

Date Gross Rent Net Rent Annual Quarterly 03-Nov-2017 £3,020,235 £2,815,937 7.7547 % 8.1456 % 02-Dec-2017 £3,045,217 £2,840,919 7.8235 % 8.2215 % 09-Jan-2018 £3,003,217 £2,774,038 7.6393 % 8.0185 % 15-Jan-2018 £2,985,717 £2,756,538 7.5911 % 7.9654 % 01-Feb-2018 £2,803,217 £2,574,038 7.0885 % 7.4141 % 02-Mar-2018 £2,786,417 £2,557,238 7.0423 % 7.3635 % 01-Apr-2018 £2,747,417 £2,527,988 6.9617 % 7.2755 % 09-Apr-2018 £2,779,817 £2,560,388 7.0509 % 7.3730 % 02-Jun-2018 £2,779,817 £2,534,618 6.9800 % 7.2954 % 23-Jun-2018 £2,656,817 £2,411,618 6.6412 % 6.9263 % 01-Aug-2018 £2,674,817 £2,429,618 6.6908 % 6.9802 % 12-Aug-2018 £2,628,817 £2,383,618 6.5641 % 6.8425 % 26-Sep-2018 £2,608,817 £2,363,618 6.5091 % 6.7827 % 05-Oct-2018 £2,558,817 £2,313,618 6.3714 % 6.6334 % 09-Oct-2018 £2,558,817 £2,338,499 6.4399 % 6.7077 % 14-Oct-2018 £2,538,817 £2,318,499 6.3848 % 6.6480 %

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

01-Nov-2018 £2,538,617 £2,318,299 6.3843 % 6.6474 % 03-Nov-2018 £2,538,617 £2,439,847 6.7190 % 7.0109 % 05-Jan-2019 £2,588,617 £2,489,847 6.8567 % 7.1609 % 14-Jan-2019 £2,629,017 £2,530,247 6.9679 % 7.2823 % 01-Feb-2019 £2,691,917 £2,615,647 7.2031 % 7.5394 % 12-Feb-2019 £2,736,917 £2,660,647 7.3270 % 7.6753 % 02-Mar-2019 £2,770,717 £2,720,217 7.4911 % 7.8554 % 25-Mar-2019 £2,776,517 £2,726,017 7.5071 % 7.8729 % 01-Apr-2019 £2,815,117 £2,754,967 7.5868 % 7.9606 % 23-Jun-2019 £2,911,417 £2,851,267 7.8520 % 8.2530 % 24-Jun-2019 £2,920,117 £2,857,792 7.8699 % 8.2728 % 27-Jun-2019 £2,928,717 £2,866,392 7.8936 % 8.2990 % 16-Jul-2019 £2,868,717 £2,806,392 7.7284 % 8.1166 % 26-Sep-2019 £2,909,217 £2,846,892 7.8399 % 8.2397 % 01-Nov-2019 £2,911,267 £2,848,942 7.8456 % 8.2459 % 03-Nov-2019 £3,003,967 £2,829,563 7.7922 % 8.1870 % 25-Dec-2019 £2,975,967 £2,801,563 7.7151 % 8.1020 % 02-Jan-2020 £2,975,267 £2,800,863 7.7132 % 8.0998 % 16-Jan-2020 £3,035,267 £2,860,863 7.8784 % 8.2822 % 01-Apr-2020 £3,005,620 £2,831,216 7.7968 % 8.1920 % 24-Jun-2020 £2,791,320 £2,616,916 7.2066 % 7.5433 % 01-Aug-2020 £2,897,920 £2,698,541 7.4314 % 7.7898 % 29-Sep-2020 £2,854,820 £2,655,441 7.3127 % 7.6595 % 05-Oct-2020 £2,856,820 £2,657,441 7.3182 % 7.6656 % 26-Oct-2020 £2,860,620 £2,661,241 7.3287 % 7.6771 % 25-Dec-2020 £2,853,020 £2,653,641 7.3077 % 7.6541 % 01-Feb-2021 £2,895,020 £2,695,641 7.4234 % 7.7810 % 01-Apr-2021 £2,928,320 £2,728,941 7.5151 % 7.8818 % 18-Apr-2021 £2,908,320 £2,713,941 7.4738 % 7.8364 % 01-Jul-2021 £2,918,120 £2,723,741 7.5008 % 7.8661 % 23-Sep-2021 £2,919,420 £2,725,041 7.5044 % 7.8700 % 07-Oct-2021 £2,925,320 £2,730,941 7.5206 % 7.8879 % 02-Jan-2022 £2,900,320 £2,705,941 7.4518 % 7.8122 % 29-Mar-2022 £2,901,820 £2,707,441 7.4559 % 7.8167 % 18-Apr-2022 £2,920,720 £2,721,616 7.4949 % 7.8596 % 01-Nov-2022 £2,919,020 £2,719,916 7.4903 % 7.8545 % 15-Jan-2023 £2,913,820 £2,714,716 7.4759 % 7.8387 % 17-Jan-2023 £2,911,420 £2,712,316 7.4693 % 7.8315 % 18-Jan-2023 £2,875,320 £2,676,216 7.3699 % 7.7223 % 16-Jul-2024 £2,864,220 £2,665,116 7.3393 % 7.6888 % 28-Sep-2024 £2,848,420 £2,649,316 7.2958 % 7.6410 % 11-Feb-2025 £2,850,120 £2,651,016 7.3005 % 7.6462 % 15-Mar-2025 £2,835,120 £2,636,016 7.2592 % 7.6009 %

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 Page 2 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

24-Jun-2025 £2,834,120 £2,635,016 7.2565 % 7.5979 % 29-May-2028 £2,813,220 £2,614,116 7.1989 % 7.5348 % 25-Mar-2133 £2,633,120 £2,485,795 6.8455 % 7.1487 % 11-Feb-3005 £0 £0 0.0000 % 0.0000 %

Yields based on £36,312,746

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 Page 3 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

Tenants

Tenant name File / Ref No Next Review Expiry Date Current Rent ERV Method ERV Cap.Group Val.Meth. Yield 1 Yield 2 Gross Value Leasehold peppercorn 13-Feb-2021 10-Feb-3005 £0 £0 Airwave Solutions Ltd 004 14-Jun-2022 15-Jun-2027 £5,000 Manual £5,000 Vancouver Centre Hardcore 7.500 £64,359 Ann Summers Ltd 048 NA 28-Sep-2020 £70,000 Rounded £38,200 Vancouver Centre Hardcore 7.500 £572,465 Argos Ltd 057 NA 22-Jun-2018 £123,000 Rounded £96,300 Vancouver Centre Hardcore 7.500 £1,202,814 Blue Inc in Admin 026 NA 31-Jan-2021 £30,000 Rounded £72,000 Vancouver Centre Hardcore 7.500 £810,688 Cards Direct 020 26-Oct-2020 25-Oct-2025 £45,000 Rounded £48,800 Vancouver Centre Hardcore 7.500 £618,913 Claires Accessories Limited 033 NA 01-Jan-2020 £25,500 Rounded £24,800 Vancouver Centre Hardcore 7.500 £320,627 Claysweep Ltd t/a Discount UK 003 NA 01-Jan-2022 £220,000 Rounded £195,000 Vancouver Centre Hardcore 7.500 £2,601,594 Costa Coffee Co. Ltd 044 NA 28-Sep-2020 £62,000 Rounded £50,800 Vancouver Centre Hardcore 7.500 £682,751 Deichmann Shoes UK Ltd 011 NA 23-Jun-2020 £85,000 Rounded £42,500 Vancouver Centre Hardcore 7.500 £645,915 Done Bros (Cash) Betting Ltd 028 NA 31-Jan-2018 £37,500 Rounded £27,400 Vancouver Centre Hardcore 7.500 £339,609 Eurochange 031 NA 31-Oct-2022 £0 Rounded £16,300 Vancouver Centre Hardcore 7.500 -£312,081 Genus UK Ltd 002 16-Jan-2020 15-Jul-2024 £60,000 Rounded £48,900 Vancouver Centre Hardcore 7.500 £636,344 Gifted Retail Company (Temporary) 036 NA 08-Jan-2018 £17,018 Rounded £32,400 Vancouver Centre Hardcore 7.500 £395,645 Greggs Plc 018 NA 28-Mar-2027 £24,000 Rounded £25,500 Vancouver Centre Hardcore 7.500 £323,476 HSBC Bank Plc 049 NA 24-Dec-2020 £77,500 Rounded £69,900 Vancouver Centre Hardcore 7.500 £921,325 Ikon Fashions Limited 038 NA 27-Sep-2024 £54,000 Rounded £38,200 Vancouver Centre Hardcore 7.500 £576,353 Kapelad Limited ta BBs Coffee & Muffi 042 NA 31-Jul-2025 £35,000 Rounded £41,700 Vancouver Centre Hardcore 7.500 £521,053 Kings Lynn BC 060 25-Mar-2018 10-Mar-2033 £33,920 Manual £33,920 Vancouver Centre Hardcore 7.500 £436,612 Mall Management Limited 062 NA 31-Jan-2018 £75,000 Manual £75,000 Vancouver Centre Hardcore 7.500 £923,084 Management Suite 023 NA 31-Mar-2109 £0 Manual £0 Vancouver Centre Hardcore 7.500 £0 Megabet UK Ltd 012 NA 10-Feb-2025 £25,000 Rounded £26,700 Vancouver Centre Hardcore 7.500 £335,783 NBC Apparel t/a TK Maxx 006 24-Jun-2020 23-Jun-2025 £185,000 Rounded £184,000 Vancouver Centre Hardcore 7.500 £2,380,678 New Look Retailers Ltd 013 NA 24-Dec-2019 £135,000 Rounded £107,000 Vancouver Centre Hardcore 7.500 £1,431,097 Norfolk Hospice 024 NA 31-Jan-2018 £35,000 Rounded £50,500 Vancouver Centre Hardcore 7.500 £612,476 Norwich & Peterborough BS 030 NA 24-Mar-2024 £40,000 Rounded £45,800 Vancouver Centre Hardcore 7.500 £582,115 Nuts and Confectionary Ltd t/a Burg 008 29-May-2020 28-May-2028 £60,000 Rounded £39,100 Vancouver Centre Hardcore 7.500 £553,315 Peacocks Stores Limited 027 NA 23-Jun-2020 £100,000 Rounded £80,300 Vancouver Centre Hardcore 7.500 £1,079,921 Phone Trader Cambridgeshire Ltd 045 17-Jan-2018 16-Jan-2023 £17,500 Rounded £15,100 Vancouver Centre Hardcore 7.500 £195,365 Poundland Ltd 009 NA 23-Jun-2020 £165,000 Rounded £79,800 Vancouver Centre Hardcore 7.500 £1,225,318 Robinson Group 022 NA 31-Oct-2019 £10,350 Rounded £12,400 Vancouver Centre Hardcore 7.500 £155,936 Roman Originals 037 NA 25-Sep-2018 £20,000 Rounded £40,500 Vancouver Centre Hardcore 7.500 £475,517 Royal Bank of Scotland 039 NA 31-Jan-2021 £81,000 Rounded £46,000 Vancouver Centre Hardcore 7.500 £600,337 Shoe Zone 047 NA 26-Jun-2019 £30,000 Rounded £38,600 Vancouver Centre Hardcore 7.500 £483,961 Sports Direct 014 07-Oct-2021 06-Oct-2026 £45,000 Rounded £50,900 Vancouver Centre Hardcore 7.500 £636,874 Sportswift Limited 040 18-Jan-2018 17-Jan-2023 £78,500 Rounded £42,400 Vancouver Centre Hardcore 7.500 £554,430 St James Sofa Store 007 NA 13-Oct-2018 £20,000 Rounded £40,400 Vancouver Centre Hardcore 7.500 £494,739 Standard UK Tenant NA 19-Sep-2011 £0 Unrounded £0 Private Hardcore 8.000 £0 Superdrug Stores plc 001 NA 23-Jun-2020 £127,500 Rounded £60,600 Vancouver Centre Hardcore 7.500 £935,602 Temp - Calendar Club 046 NA 01-Mar-2018 £16,800 Rounded £33,800 Vancouver Centre Hardcore 7.500 £387,791

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 Page 4 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

The Carphone Warehouse Ltd 043 NA 14-Jan-2023 £52,500 Rounded £29,800 Vancouver Centre Hardcore 7.500 £409,697 The Perfume Shop Ltd 051 NA 28-Sep-2020 £18,000 Rounded £17,900 Vancouver Centre Hardcore 7.500 £230,859 Tiro Leisure 035 NA 22-Sep-2021 £30,000 Rounded £31,300 Vancouver Centre Hardcore 7.500 £399,333 Trespass 032 NA 30-Jun-2021 £35,000 Rounded £44,800 Vancouver Centre Hardcore 7.500 £547,154 Vacant 017 NA 02-Nov-2023 £0 Rounded £23,300 Vancouver Centre Hardcore 7.500 £247,373 Vacant 058 NA 02-Nov-2023 £0 Rounded £19,500 Vancouver Centre Hardcore 7.500 £215,987 Vacant (Former Evolution Beautique) 019 NA 02-Nov-2020 £0 Rounded £25,600 Vancouver Centre Hardcore 7.500 £273,035 Vacant (Former Regis UK Limited) 015 NA 02-Nov-2023 £0 Rounded £24,300 Vancouver Centre Hardcore 7.500 £227,933 Warren James 041 NA 09-Feb-2024 £29,647 Rounded £33,300 Vancouver Centre Hardcore 7.500 £404,255 Wilkinson Hardware Stores Limited 034 15-Mar-2020 14-Mar-2025 £300,000 Rounded £285,000 Vancouver Centre Hardcore 7.500 £3,714,799 William Hill 016 NA 31-Oct-2023 £25,000 Rounded £24,800 Vancouver Centre Hardcore 7.500 £319,407 Wimprop Limited 029 NA 11-Aug-2018 £46,000 Manual £45,000 Vancouver Centre Hardcore 7.500 £567,595 Yours Ltd 050 NA 04-Oct-2020 £50,000 Rounded £52,000 Vancouver Centre Hardcore 7.500 £658,011 Leasehold geared 01-Apr-2018 24-Mar-2133 -£40,750 £0 British Heart Foundation 054 NA 17-Apr-2021 £20,000 Rounded £18,900 Vancouver Centre Hardcore 7.500 £175,612 Iceland Frozen Foods Plc 053 NA 31-Jan-2019 £90,000 Rounded £99,900 Vancouver Centre Hardcore 7.500 £877,623 KIngs Lynn 059 29-Sep-2018 29-Nov-2077 £4,000 Manual £4,000 Vancouver Centre Hardcore 7.500 £37,902 Mr Pelagies Petrou 055 NA 31-Mar-2018 £39,000 Rounded £38,600 Vancouver Centre Hardcore 7.500 £349,705 The Bakehouse Group Limited 056 NA 23-Jun-2022 £10,000 Rounded £18,700 Vancouver Centre Hardcore 7.500 £167,501 Total £2,979,485 £2,813,220 £35,226,581

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 Page 5 THE KINGSGATE CENTRE, DUNFERMLINE Kingsgate Shopping Centre, Dunfermline

EXECUTIVE SUMMARY PROPERTY REPORT

Inspected By Date of Inspection Report Checked By

Claire Gamble MRICS 10/11/2017 Max Field MRICS

Opinion of Value – Valuation Date: 03 November 2017

Market Value: £40,300,000. Market Rent: £4,130,357 per annum exclusive.

Net Initial Yield: 9.12% Equivalent Yield: 8.51% Reversionary Yield: 5.10%

Current passing rent (Gross): £4,756,294 per annum. Current passing rent (Net): £4,293,862 per annum.

Tenure: Original Shopping Centre: Heritable Title Extension: Leasehold (Lease for a term of 175 years from and including 9 October 2006 between The Fife Council and Crosslands Properties Limited). This is subject to a payaway of £54,000 per annum.

Suitability for use as Loan Collateral: Kingsgate Shopping centre is a secondary shopping centre, which due to the tenant line up and Dunfermline being a commuter town to Edinburgh, will almost wholly serve the local population. Whilst, along with the High Street, it is the principal retail location within the town and has had some recent lettings, there are a number of vacant units, particularly to the rear of the scheme and on the first floor, where there is the likelihood of prolonged voids along

Kingsgate Shopping Centre, Dunfermline

with associated holding costs. We would expect the property to require ongoing asset management to maintain occupancy and rental levels. Overall, we consider the property to suitable for loan security purposes subject to the maintenance of a suitable loan to value ratio and active asset management.

PROPERTY SUMMARY

Location & Situation

 Dunfermline is the largest town in west Fife and provides the main shopping and commercial facilities for the area.

 The town is located approximately 17 miles north west of Edinburgh, 22 miles east of Stirling and 30 miles south of Perth.

 It has good communications links being located in close proximity to the Forth Bridges, and a 5 minute drive west of Junction 3 of the M90 motorway which links Edinburgh and Perth via the newly opened Queensferry Crossing and, for buses only, the Forth Road Bridge.

 Dunfermline railway station, to the south of the town centre, provides direct connections to Edinburgh and across Fife.

 Dunfermline bus station lies immediately to the west of the centre, off Queen Anne Street, and there are bus stops located on James Street, directly outside the south-eastern section of the centre, offering local bus routes.

 The town is located approximately 15 miles to the north of Edinburgh International Airport.  Kingsgate Shopping Centre is the only shopping centre in the town, and is located (in the town centre) on the eastern end of the High Street. This area is pedestrianised, and provides the prime retail pitch within Dunfermline town centre. The subject property is bounded by the High Street and James Street to the south, Douglas Street and Pilmuir Street to the west, Carnegie Street to the north and Market Street to the east.

 Retail occupiers in the immediate vicinity generally comprise a mix of local or small national covenants, together with a number of larger national multiples including Primark, Next and WH Smith which are all located on the High Street in close proximity to the entrance of the Kingsgate Centre.

 The area surrounding the Subject Property is a mix of retail, commercial and residential uses. Carnegie Drive Retail Park is located to the north of the property and is anchored by B&Q with other tenants including Dreams and Home Bargains.

Description

 Kingsgate shopping centre offers the main retailing provision within the town centre, providing 78 retail units over the ground and first floors, with a multi-storey car park providing 720 car parking spaces. 73% of Dunfermline’s fashion retailing and 49% of its comparison retail supply is supplied by the subject centre (Savills Retail Research Consultancy, June 2016).

 The total footfall for 2016 at Kingsgate Shopping Centre was 7,711,950.  The property comprises a purpose built ‘L-shaped’ shopping centre of concrete and steel frame construction. The first phase (known as the Original Centre) was constructed in 1985, and is of concrete frame construction under a pitched roof, incorporating glazed areas in part. This part of the centre has three retail units with frontages on to the High Street, and retail accommodation is arranged over ground floor level only.

Kingsgate Shopping Centre, Dunfermline

 Phase two (known as the Extension) was constructed in 2008 and is an extension of the original centre from its eastern side. This part of the shopping centre extends easterly along James Street and is accessed from the original centre. The extension is of steel framed construction with blockwork walls and a mix of stone and glazed external panelling. Internally the retail accommodation is arranged over ground and first floor levels.

 The main tenant within the centre is Debenhams, who anchor the scheme and are situated at the east end of the extension. Marks & Spencer occupy a large unit forming part of the original development, with frontage onto the High Street, although this unit does not form part of the demise and is held under separate ownership. Other tenants include New Look, Top Shop, Boots, H&M, River Island, Waterstones and Poundland.  Photographs of the property are attached at the end of the report. Car Park  The car park was constructed as part of the 2008 extension and comprises 3 levels (2 covered levels and 1 open level), with 720 car parking spaces. The current tenant of the car park is APCOA.

Competition

Local Competition:

 The main retail competition within Dunfermline comes from other High Street units, including the likes of Primark, WHSmith, Next, Café Nero and Costa.

 There is further competition from nearby Carnegie Retail Park situated just north of the subject property, and Halbeath Retail Park situated just outside the town centre, however these parks provide a bulky focussed tenant line-up unlike the town centre retail provision. Regional Competition:

 Overall, Dunfermline town centre faces around average competition from competing retail centres and ranks 116 out of the 200 PROMIS centres on the PMA Competition Indicator (a rank closest to 1 reflects a low level of competition).

 The scheme would be mostly used by local shoppers, and population living within the catchment area of Dunfermline. The mix of tenants, predominantly high street fashion as well as discount stores suit the demographic profile and spending habits of the catchment population, and their per capita retail spending levels, which are comparable with the PROMIS average.

 The main competition with Dunfermline is Edinburgh, the capital city of Scotland, located 17 miles south east of Dunfermline, and accessed by both road and rail in around 30 minutes. As one would expect for a major city, all of the key anchors are represented including John Lewis, Harvey Nichols, House of Fraser, Marks & Spencer and Primark. As well as traditional retail pitches of the likes of Princes Street and George Street, the key future shopping scheme in the city centre will be the ongoing redevelopment by TH Real Estate and APG of the St James Shopping Centre. To be known as St James Quarter, this will extend to 158,000 sq m (1.7 million sq ft) and will include 79,000 sq m (850,000 sq ft) of retail accommodation, 30 restaurants, a cinema, a hotel and up to 150 residential apartments as well as a 1,600 space car park, in addition to the existing John Lewis department store. Completion is currently scheduled for 2020. Other shopping centre schemes serving the city and which could impact on Dunfermline are limited and would principally comprise The Gyle on the north western periphery of Edinburgh, some 15 miles to the South.

 There is further local competition from Kirkcaldy, located approximately 15 miles east of Dunfermline. Here, as well as the High Street, there is the Mercat Shopping Centre and Fife Central Retail Park. The retail line up is similar to the subject property and whilst there may be some overlap in catchments, there is unlikely to be much leakage of shoppers from the subject property.

Kingsgate Shopping Centre, Dunfermline

 The second largest centre in the wider area is Livingston, which is located approximately 20 miles south of Dunfermline and has a drive time of approximately 30 minutes via the M90 and M8. Livingstone has town centre retail floor space estimated at 1,210,000 sq ft. The main retailing provision is provided by The Centre and The Designer Outlet Centre, extending to 925,000 sq ft and 210,000 sq ft respectively and both built in 2000. Tenants include Marks & Spencer, Debenhams, Primark, Next, Boots and BHS.

 Perth is a town located approximately 30 miles north of Dunfermline and has a drive time of approximately 30 minutes via the M90. Perth has a shopping population of 121,000 and the town centre retail floor space extends to 980,000 sq ft. The main retailing provision within the town is offered by the High Street and St John’s Shopping Centre, which extends to 116,000 sq ft. The main tenants include Primark, Poundland and TopShop.

Floor Areas

 We have relied upon the floor areas supplied to us by London and Associated Properties Limited. We set out below the floor areas which we assume have been calculated in accordance with the RICS Code of Measuring Practice 6th Edition: Unit Sq ft Sq M Unit Sq ft Sq M Unit 21 1,395 130 Unit 27 2,073 193 Unit 39 1,806 168 Unit 33 3,174 295 Unit 48 1,023 95 Unit 31 1,594 148 Unit 50 2,101 195 Unit 29 1,637 152 Unit 52 2,180 203 Units 19 & 20 4,175 388 Unit 63 3,464 322 116 High Street 2,728 253 Unit 64 1,229 114 Unit 14a 778 72 Unit 68 352 33 Unit 9c 456 42 Store B 14,076 1,308 Unit 35 & 36 2,527 235 104 High Street 5,678 528 Unit 18 1,930 179 Unit 22 1,518 141 Unit 9a 1,289 120 Unit 53 & 65 8,034 746 Unit 18a 1,951 181 Unit 49 1,524 142 Unit 26 633 59 Unit 4 1,802 167 Unit 6 1,858 173 Unit 5 1,822 169 Unit 28 1,602 149 Unit 30 1,618 150 Unit 13 3,560 331 Unit 40 6,370 592 Unit 15a 559 52 Unit 51 1,459 136 Unit 41 2,019 188 Unit 55 & 56 6,942 645 Unit 3 2,799 260 Unit 10 1,723 160 Unit 17 1,403 130 Unit 11 3,036 282 Store C 4,679 435 Unit 12 1,559 145 Unit 15b 1,656 154 Unit 9b 934 87 Unit 24 1,443 134 Unit 32 1,745 162 Unit 42 16,316 1,516 96/98 High Street 4,079 379 Store A2 & D 13,801 1,282 Unit 2 1,408 131 Unit 37 503 47 Unit 14c 409 38 Unit 66 529 49 4

Kingsgate Shopping Centre, Dunfermline

Unit 43, 44, 57-62 14,746 1,370 Unit 47 & Part 48 3,871 360 Unit 45 & 46 7,201 669 Unit 8 3,868 359 Unit 54 9,399 873 Unit 67 2,305 214 Unit 7 1,149 107 Store E 80,106 7,442 Unit 14b 345 32 Unit 1 1,923 179 Management Store A1 5,329 495 1,076 100 Suite Unit 38 1,109 103 Unit 23 - - Total 289,385 26,885

Site Area

 The site area is approximately 2.828 ha (6.988 acres) and includes a multi-storey car park with 720 car parking spaces.

Building Condition

 CBRE have not undertaken a structural survey, nor tested the services. We have undertaken only a limited inspection for valuation purposes.

 From our basic inspection for valuation purposes, it can be noted that the Property appears to be in a reasonable condition for its age and nature.

 We have reviewed the 2017 Building Surveyors Report (carried out by Savills, dated July 2017). This was carried out on the original part of the shopping centre and the extension to the centre, with the exception of the car park structure.

 The report highlights the following as a significant issue to be fully considered at pre-contract stage, where an urgent remedy is required in relation to the proposed transaction:

- The coloured rendered system used to clad the stair cores is generally in poor condition. The system is failing in a large number of areas. The system incorporates a reinforcing mesh but the base course appears of minimal thickness leading to poor adhesion of the mesh and render to the blockwork causing it to fail and spall. Immediate action is required to remove all cracked and spalling rendering. The rendering to all stairwells should be replaced with a new system within the next 12 months.

 The proposed costs of repair for these immediate works is stated in the Budget Repair Schedule as £130,000 over a 1-2 year period, and £275,000 over a 3-5 year period, and we have added these amounts to the costs within the valuation, without discount.

 The Budget Repair Schedule includes further potential landlord liabilities, falling in the medium to long term, (staged over 1-2 years, 3-5 years and 6-10 years). In order to cover any potential increase in service charge which may occur, to facilitate these repairs, we have added 15% of these stated potential costs, within the costs for the valuation, with discount.

 We have reviewed the Asbestos Surveys provided. The Asbestos Survey carried out by Watts and Partners in July 2004, covered common parts, plant rooms, escape routes and external elements, with samples of any suspect materials taken. Access for the survey was unrestricted with the exception of the pitched roofs, which were examined from ground and service deck level. The inspection revealed suspect material and these were sampled for asbestos content. All sampled areas were found not to contain asbestos. The report states that the it discharges the responsibilities of the Landlord under the current Control of Asbestos at Work Regulations 2002 and no further action need be taken.

Kingsgate Shopping Centre, Dunfermline

Car Park

 On inspection of the property, we noted that the top level of the car park is currently not being used.  The Car Park is subject to two ongoing repair issues; the top deck was constructed as per the engineer’s specifications but it transpires did not have the correct ‘rebar’ included during construction, and the lower levels have been subject to salt and water, brought in by vehicles, penetrating the concrete.

 We have been advised that during the top deck works (to install a waterproof layer) structural issues were found, and several areas did not have the proper ‘rebar’ strips enclosed in the concrete. We understand the ‘rebar’ is in the ‘as built’ drawings and were specified by the engineers.

 We have reviewed the Report on Sampling and testing of Reinforced Concrete Deck Slabs to Car Park (carried out by Charles Darley Associates in 2014) where, the top surfaces of three levels of deck to the above car park were sampled and tested.

 It was found that numerous areas of waterproof surfacing to the top deck, which is exposed to the elements, have peeled away. The result is that the concrete does not have effective waterproofing. The report also states that it appears the surface of concrete of the two lower decks, which are under cover, never had waterproofing at the surface.

 The report recommended installation of effective waterproofing to all levels, so as to prevent further ingress of chloride and allow the concrete to dry. This would benefit durability.

 We have also reviewed the 2014 Multi-Storey Car Park Report carried out by CBRE. This is dated before some remediation works to the top deck were carried out (works were commenced in 2017, which we understand has remediated some of the issues on the top deck). The 2014 report suggests total remediation costs at the time of £3,238,095.

 We have been supplied with various costs to complete the car park works, including a 2017 update of the costs which comprise £972,000 in respect of the upper deck and H16 replacement to part Level 2, £2,468,000 in respect of levels 1 and 2. This totals £3,440,000 which we have applied as a capital cost item to our valuation.

 We have reflected the total remaining costs of the works of £3,440,000 as a capital expenditure item in our valuation. This is the amount the borrower has expressed to us and we have not been able to independently corroborate the figure. If this figure increases (additional costs or more work required once work starts for example), the valuation will likely decrease be a corresponding amount, equally if the amount decreases or is paid, the valuation will likely increase by a corresponding amount (assuming all other factors remain equal).

Services

 From the extent of our inspection, we understand that all mains services are available at the Property including electricity, mains water and drainage.

Environmental Considerations

 We have been provided with a Phase 1 Environmental Review prepared by Ambiente International LLP, dated October 2017. The report concludes the following:

 Environmental Risk/ Statutory Designation: - Although the site is not registered as contaminated land by the Local Authority, there is the potential for residual contamination to be present from the historical site use.

Kingsgate Shopping Centre, Dunfermline

- The level of environmental risk associated with the continued current use of the subject property is assessed to be acceptably low and no further environmental investigation or assessment is considered necessary.

 Liability Assessment: - Subject to good ongoing management, under continued current use it is not expected that significant environmental residual liability would be realised at the property.

- Based on the information provided for review, no environmental conditions have been identified at the site (past or present) with the potential to significantly affect the value of the property.

- Based on information provided for review, no environmental conditions have been identified at the site which are expected to trigger significant enforcement or legal action for breaches of legislation or regulation, or which would require improvements, clean-up or monitoring etc. resulting in significant capital expenditure.

- No major pollution incidents have been reported/ recorded for the subject property and no indications for the presence of significant contamination have been identified within this review; therefore, under continued current use, there is considered to be a Low risk of contamination from the site significantly impacting upon third party land.

 Financial Security: - The report concludes that on the basis of the information provided for review, subject to good ongoing management and continued current use, the subject property can be considered acceptable security for funding from an environmental standpoint.

 Based upon CBRE’s own inspection and basic planning enquiries, we have not identified any environmental risk factors which, in our opinion, would affect value. However, CBRE give no warranty as to the absence of such environmental risk factors.

 The Building Surveyor’s Report (carried out by Savills in July 2017) states that to affect a sale of the Property there will need to be an EPC covering the Property as a whole. This EPC is expected to show that the Centre does not comply with the Building Regulations of 2002 and thus will need an Action Plan to be made available by the Vendor. The Action Plan is required under the terms of Section 63 of the Climate Change (Scotland) Act and this requires that owners of domestic property which does not meet the 2002 building regulations to have an Action Plan in place to reduce energy consumption.

 The cost of implementing the Action Plan, will be dependent on which measures are included within the plan. The owner has the opportunity to engage with the Section 63 Advisor in order to put the Action Plan together.

 We have not been made aware of a current Action Plan, nor been given any potential costs in regard to this. For the purpose of the valuation we have included an estimated one off cost of £50,000.

 The EPCs received have been detailed below. We have not received EPCs for units not listed below.

Unit address Rating Unit address Rating Unit address Rating 96 High Street E Unit 33 E Unit 12 E Management Suite C Unit 38 E Unit 14A E Store A1 F Unit 39 E Unit 18A E Store B E Unit 40 G Unit 21 E Unit 1 D Unit 41 F Unit 22 E Unit 2 F Unit 42 G Unit 24 D Unit 3 D Unit 49 E Unit 27 E Unit 6 D Unit 51 F Unit 28 E Unit 9A E Unit 53 F Unit 29 D Unit 9B E Unit 54 D Unit 30 D Unit 9C E Unit 55 E Unit 37 D Unit 10 E Unit 63 D Unit 47 D Unit 13 C Unit 67 E Unit 48 D

Kingsgate Shopping Centre, Dunfermline

Unit 14B E Unit 35-36 E Unit 49 D

Unit 14C D Unit 43&44 F Unit 50 D Unit 15A E Unit 45&46 F Unit 52 D Unit 15B D Store C E Unit 54 D

Unit 17 E Unit 4 E Unit 63 E Unit 18B E Unit 5 E Unit 64 B Unit 19-20 D Unit 6 F Unit 66 E Unit 26 F Unit 7 E Unit 68 E Unit 31 E Unit 8 D Unit A2 D Unit 32 F Unit 11 E Unit D F

Planning

 The property lies within the jurisdiction of Fife Council. The SESPlan (Strategic Development Planning Authority for Edinburgh and South East Scotland) from June 2013 sets out the strategic framework for the future development of fife.

 In terms of local planning decisions, the property is covered by FiFEPlan which was adopted on 21 September 2017. This replaces the Dunfermline and West Fife Local Plan which was adopted in November 2012. The local plan sets out detailed policies and proposals which will guide development in the area. It also indicates, in broad terms, development over the longer term in order to give certainty to communities, landowners and investors.

 Under Policies 1 and 6 of the plan which cover town centre uses there is nothing which would appear to impact on the current use of the property.

 The Property Enquiry Certificates disclose that the Property is located in Dunfermline Town Centre Outstanding Conservation Area and is subject to an Article 4 designation (Class I, II(1) and XII).

 The Property Enquiry Certificate in respect of New Look (Unit 42) discloses a planning permission reference 14/00144/AQ which was approved on conditions and related to the display of 7 internally illuminated fascia signs and 3 non illuminated fascia signs.

 The Property Enquiry Certificate in respect of Superdrug (Unit A1) discloses a building warrant application reference 17/02370/BW relating to internal alterations and refurbishment of existing retail unit which was received by the local authority on 22 September 2017.

 We understand that the extension was constructed with reference to planning permission Ref No: 05/02113/WFULL. The decision as issued on 21 December 2005 for the extension and alterations to the shopping centre to provide additional (class 1) retail units with associated offices, service yard and storage areas; new bus station, bus stances, taxi rank and multi-storey car park; new access and alterations to highways.

 As stated in the Red Flag report provided; the certificate of title details that consent from Marks & Spencer’s was required for the extension to the centre. The Company is unaware if approval was sought or obtained from Marks & Spencer for the construction of the Extension. For the purposes of this valuation, we have assumed that relevant permission was sought and granted from Marks & Spencer’s.

 In summary, we are not aware of any planning issues which would adversely impact upon the value of the property or the bank’s security.

Occupational Costs

 Business rates are worked out by the ‘poundage rate’ (pence in the pound) set by the Scottish Government.

Kingsgate Shopping Centre, Dunfermline

 In 2017-18, the standard poundage is 46.6 pence. This is a decrease from the rate for 2016-17 of 48.4 pence. (In 2017-18, all properties with a rateable value over £51,000 will have a 2.6 pence supplement added to the poundage).

 Service charge for the centre is approximately £4.14 per sq ft, which falls below the national average of £5.67 per sq ft (Average service charge for enclosed centres with A/C, Source: OSCAR 2015, Service charge analysis for shopping centres, Jones Lang La Salle).

 The Property has the following Rateable Values:

Pre 2017 Current Pre 2017 Current Unit Rateable Rateable Unit Rateable Rateable Value Value Value Value Unit 21 64,500 28,100 Unit 33 152,000 67,500 Unit 39 58,750 30,200 Unit 31 75,750 33,400 Unit 48 NA NA Unit 29 75,000 33,900 Unit 50 NA NA Units 19 & 20 164,000 73,000 Unit 52 NA NA 116 High Street 79,000 38,100 Unit 63 NA NA Unit 14a 60,500 26,500 Unit 64 NA NA Unit 9c 21,400 10,900 Unit 68 NA NA Unit 35 & 36 75,000 41,200 Store B 202,000 226,000 Unit 18 85,250 38,100 104 High Street 130,000 56,250 Unit 9a 78,000 33,500 Airpod Advertising x 5,000 4,100 Unit 18a 90,250 40,300 10 Store Room Zones 1-3 3,400 2,000 Unit 26 13,600 14,100 Shopmobility Office NA NA Kiosk K1 9,000 12,000 Unit 22 20,900 20,400 Unit 6 58,000 30,700 Unit 53 & 65 132,000 77,500 Unit 28 77,750 34,700 Unit 49 62,250 21,400 Unit 13 126,000 58,750 Mall Machines NA NA Unit 15a 29,400 12,700 Unit 4 51,500 26,900 Unit 41 65,000 39,400 Unit 5 55,000 28,900 Unit 3 88,000 45,700 Unit 30 74,500 34,500 Unit 17 55,250 24,000 Unit 40 127,000 75,750 Store C 110,000 61,500 Unit 51 50,750 30,200 Unit 15b 72,250 32,000 Unit 55 & 56 172,000 103,000 Unit 24 20,100 22,000 ATM 1 8,300 8,125 Unit 42 252,000 148,000 Unit 10 75,750 33,000 Store A2 & D 215,000 212,000 Sky 9,000 12,000 Unit 37 23,000 12,300 Unit 11 108,000 47,400 Mall Cafe 45,000 23,300 Unit 12 85,000 37,900 Unit 66 25,000 13,800 Unit 9b 29,900 15,400 Car Parking Area NA NA Unit 32 82,250 36,300 Unit 47 & Part 48 91,000 31,600 96/98 High Street 100,000 46,700 Unit 8 107,000 57,000 Unit 2 45,300 23,200 Unit 67 52,750 28,200 Unit 14c 30,800 14,500 Store E 587,000 718,000 Unit 43, 44, 57-62 227,000 138,000 Unit 1 52,000 26,600 Unit 45 & 46 132,000 70,750 Car Park 430,000 430,000 Unit 54 155,000 91,250 Car Park Office NA NA ATM 2 8,300 8,125 Delivery Parking Area NA NA Unit 7 50,750 26,500 Sub-Station Sites NA NA

Forum Centre Space Unit 14b 26,400 12,600 NA NA Commercialisation

Kingsgate Shopping Centre, Dunfermline

Store A1 122,000 67,750 Management Suite 16,300 13,700

Unit 38 33,800 18,900 Unit 23 9,400 8,600 Unit 27 92,250 40,200 Commercialisation NA NA

 The landlord is currently responsible for paying the vacant rates for all vacant units at the scheme, which we are informed amount to £166,035.

Tenure

The Property is held part Heritable and part Leasehold:

 Original part of the centre is held Heritable – FFE39786  Extension part of the centre is held Leasehold – FFE83092

Original part of the centre – FFE39786

 This part of the centre is held Heritable.

Extension part of the centre – FFE83092

 This part of the centre is held on a Lease between The Fife Council and Crosslands Properties, for a term of 175 years from and including 9 October 2006.

 The current rent payable for this part of the centre is £54,000 per annum.  The rent is to remain at this amount until such time as the gross rents receivable from the premises (known as the Interim Rental Period) exceed £3,960,000 per annum, where rent terms change to become part fixed ground rent, and part percentage of gross rents receivable.

 In the event that the gross rents receivable for this part of the centre reach £4,371,000, the landlord is entitled to serve a ‘Consolidation Notice’ at any time thereafter converting the rent from a combination of fixed rent and rental conditional on gross rents receivable to a rent only conditional on gross rents receivable.

 We understand that the gross rents referred to in the above paragraphs are the gross rents receivable from this part of the centre only (Extension part of the centre). The gross rent for this part of the scheme is currently £1,927,323 per annum and £54,000 per annum therefore remains the rent payable.

Summary of the rights granted to the tenant:

 The tenant has a right of first refusal in the event that the landlord intends to sell the heritable interest. The landlord must first offer to sell to the tenant on the same terms and price offered to the landlord or, if no offer has been received, the price at which the landlord would sell. The tenant shall have 21 days to accept. If accepted the landlord shall be bound to sell.

 In addition, the landlord is prohibited from selling, leasing (which would catch any proposal to grant an interposed lease) or otherwise disposing of its interest until an offer has been made to the tenant and the 21 day period has expired. If the intended sale or other disposal to a third party does not proceed to completion on the terms offered to the tenant, the landlord must offer to the tenant again before disposal. These provisions may be considered not inter naturalia (i.e. not of the nature of a Lease) and may not transmit to and be enforceable against successors in the interests of the landlord and the tenant.

 118 High Street occupies a corner position on the High Street, with direct frontage into the Kingsgate Centre. This Unit does not form part of the demise, and is under separate ownership.

Kingsgate Shopping Centre, Dunfermline

Tenancies

 The Centre is currently let to 67 tenants on leases of a varying nature. We have summarised the income stream below:

 The top five tenants in the scheme account for 38.68% of the annual gross rent, as shown in the table below.  The top five tenants are all national multiple retailers taking large space on long leases, except for Poundland whose lease expires in August 2018.

 Debenhams is the largest tenant, making up 11.97% of total income over 80,106 sq ft. They have a lease expiry date of 14/08/2033 with no breaks, and Experian ranks them as very low risk, with a Delphi score of 100 out of 100.

 Tenants generally have provisions for 5 yearly upwards only rent reviews, whereby the rent is to be reviewed to ‘full market rental value’ in an upwards only direction. Although we have not been provided with every lease within the centre, we have assumed that each lease has been granted on an institutional basis, each following this review pattern.

 Leases are full repairing and insuring subject to a service charge provision.  The permitted use is as a retail shop.  At present, there are ten vacant units, which make up 10.18% the total ERV.  Assignation of the whole unit is permitted with the Landlord’s prior written consent with consent not to be unreasonably withheld or delayed and the tenant may not assign, sublet or charge its interest in part only of the premises. However, the tenant may sublet the premises in part on a floor by floor basis. The tenant may share occupation of the premises with another member of the same group of companies.

 The landlord is to insure the premises and each tenant is to pay the landlord a sum equal to the premium (proportion) for doing so.

 The tenant is to pay an equal proportion of the service charge of the property.  The tenant is prohibited from making structural alterations or additions to the external appearance of the premises. Non-structural alterations to the premises are permitted with the landlord’s prior written consent not to be unreasonably withheld.

 The average weighted unexpired lease term (AWULT) at the centre is 8.53 years to expiry and 7.65 years to earliest determination.

 The top five tenants in the scheme account for 38.68% of the annual gross rent, as shown in the table below, along with Delphi scores as sourced from Experian:

TENANT EXPIRY / BREAK RENT (£ PA) % OF TOTAL DELPHI SCORE INCOME

Debenhams 14/08/2033 571,322 11.97% 100 (Very Low Risk) APCOA Parking (UK) 22/12/2034 530,450 11.11% 60 (Below Ltd Average Risk) New Look Retailers 22/05/2023 340,000 7.12% 100 (Very Low Risk) Limited

Kingsgate Shopping Centre, Dunfermline

Poundland 14/08/2018 205,000 4.29% 90 (Low Risk)

Boots UK Ltd 12/05/2023 200,000 4.19% 100 (Very Low Risk)

Total £1,846,772 38.68%

MARKET CONTEXT

Local Occupational Market

 In terms of retail hierarchy, Dunfermline is below average, with an estimated shopping population of 82,000. The shopping population is an estimate of the number of people who regard the town as their main shopping destination.

 The Subject Property is the only shopping centre in the town centre, with the High Street providing the majority of retail competition, and Carnegie Retail Park located 0.5 miles due north of the subject property.

 Total town centre retail floorspace in Dunfermline stands at an estimated 910,000 sq ft.  Dunfermline’s largest competing retail centre is Edinburgh which is situated approximately 19 miles to the south of the town.

Vacancy

 Kingsgate currently has a vacancy rate of 10.44% (by ERV). However, it should be noted there are currently a number of temporary lettings within the centre which are not reflected in the figure.

 There are two units on the first floor of the centre within the extension, Unit 63 and 64, which have not been let since the opening of this part of the centre, and have been boarded up to look like part of the centre.

 There are a number of vacant units in Dunfermline town centre, on the west end of the High Street between Douglas Street and Cross Wynd. The prime pitch of the High Street which surrounds the entrance to Kingsgate is mostly occupied, with the exception of the vacant unit at 104-106 High Street where McDonalds have surrendered their lease, and paid out the rest of rent from July 2017 to July 2024.

Rents

 According to PROMIS, as at mid-2017, agent sources estimated prime rents in Dunfermline at £50psf Zone A. This represents a significant increase on the end 2016 level of prime rents in the town, however rents are still 37.5% below the pre-recession peak of £80 psf Zone A.

 There are no recent lettings within the town. However the most recent include: Address Tenant Date £psf ITZA Details 42 East Port Pencig April 2016 £26.26 New letting agreed at £12,500 per annum 6 East Port Chest, Heart, March 2016 £25.29 New letting agreed at £29,200 per annum Stroke, Scotland 135 High Street Pandora Jewellery August 2015 £36.33 New letting at £42,500 per annum. 5 year Headline rent of £42.75 psf.

Kingsgate Shopping Centre, Dunfermline

 Recent lettings within Kingsgate Shopping Centre are as follows:

Unit Tenant Date £psf ITZA Details Unit 8 DH Gorn Limited Oct 2017 £29.97 New letting. 10 year lease with 5th year t/a Schmooz break option. £47,500 pax. 3 month rent free period. Store C Bon Marche Oct 2017 £23.90 New letting. 10 years lease with 5th year break option. £45,000 pax. 6 month rent free period. Unit 15A The Perfume Shop Oct 2017 £68.87 New lease agreed. 10 years lease with 5th Ltd year break option. £25,000 pax. 3 month rent free period. Unit 6 Glamour Forever July 2017 £35.19 New letting. 10 year lease with 5th year break option. £28,500 pax. 12 month rent free period. 116 Thomas Cook Mar 2017 £57.36 Lease renewal. 5 year lease. £60,000 pax. High No rent free period. Street

ERV Having regard to the above evidence we have applied the following rates when calculating our opinion of ERV: Description ERV (per sq ft) High Street Units £57psf Zone A Smaller units at front of scheme £40psf Zone A Ground Floor original and £30psf Zone A

extension New Look, H&M £10psf - Overall Ground Floor extension – masked £20psf Zone A Debenhams £7psf - Overall Starbucks £30psf – Overall First Floor £22.50 psf Zone A

 This equates to a gross rental value of £4,130,357 per annum.

Investment Market

 Serving the local population and that of the surrounding area, Kingsgate would be considered a secondary shopping centre. Within Fife, local competition will be from Kirkcaldy and the likes of Fife Central Retail Park. The principal competition will come from Edinburgh city centre and, to a lesser extent the likes of the Gyle Shopping Centre and Hermiston Gate Retail Park on Edinburgh’s western periphery and Livingston.

 The CBRE benchmark yield for recent transactions in the secondary high street market is 9%, whilst secondary shopping centres are at 8.50%.

 We have examined a number of comparable transactions in order to ascertain our opinion of the Market Value of the Property, most specifically the following:

Kingsgate Shopping Centre, Dunfermline

The Antonine Centre, Cumbernauld, North Lanarkshire – Sold April 2017 The Antonine Centre was sold in April 2017 for £14,160,000 at an 11.70% NIY. The property comprises approximately 205,000 sq ft of retail across 42 units, with tenants including Dunnes, Poundland, Next, River Island, Sports Direct, JD Sports, Boots and TK Maxx. The Antonine Centre would be viewed as an inferior scheme to the subject due to its location, approximately 20 miles North East of Glasgow, and the estimated shopping population of Cumbernauld, which is below the average for Small Towns (PROMIS).

Waverley Mall, Edinburgh – Sold March 2017

Waverley Mall was sold in March 2017 for £23,400,000 at an 8% NIY. The property comprises approximately 85,450 sq ft of retail across 35 units, with tenants including Superdry, New Look, Sainsbury and McDonalds. Waverley Mall would be viewed as a superior scheme to the subject due to its location, adjacent to Waverley train station, and being within the capital city of Scotland, Edinburgh.

Ocean Terminal, Edinburgh – Available This property is currently on the market for £56,000,000 at an NIY of 8%. The property is approximately 420,000 sq ft retail and leisure space, with two multi- storey car parks with 1,487 free spaces. Anchor tenants include Debenhams, H&M, M&S Simply Food, ex-BHS, Wagamama and Pizza Express. Ocean Terminal was formerly under offer for £57,000,000, an 8% NIY in May 2017. Whilst this property has a similar retail offering to the subject, it further benefits from leisure space with a 12-screen cinema, and gym. The location within Edinburgh also makes the property superior to the subject.

 The Unit is currently let to Marks & Spencer for a term expiring 31 March 2027, at a current rent of £668,004 per annum, with fixed annual rental uplifts of 1.95% on 29 September each year. We understand this unit has recently been sold for a Net Initial Yield of 7.25% by Sydney & London. It was listed as seeking offers in excess of £9,150,000. The fixed uplifts would be appealing to investors and we would therefore consider the asset to have a lower yield that that which we would place on the subject property.

 Based on the evidence listed above, we have arrived at our opinion of Market Value by applying an initial yield to the net income stream across the whole scheme at 9.28%. This produces an equivalent yield of 8.56%

SWOT

Strengths Weaknesses

 Dunfermline is the principal town in west Fife, and  Part of the property is held leasehold and subject is within commuting distance of Edinburgh. to a rent of £54,000 per annum.

Kingsgate Shopping Centre, Dunfermline

 The centre occupies a prime position on the  Around 11% of the centre is currently vacant, the pedestrian High Street and is the principal retail majority of which are located within the Extension. offering in the town centre.  Continuing void costs as units lay vacant, albeit a  The majority of the property is held heritable. number of units currently are not assessed for rates payments.  The centre mostly provides a mix of well configured retail units with associated car parking.  There is downward pressure on rents making many of the units over-rented.  The centre is let to a range of established national tenants, including Debenhams, Boots and  The competing centres in Edinburgh are more Waterstones. In total, all national retailers at the regionally dominant and offer a wider range of centre account for approximately 91% of the gross retailers, although the majority of shopping at the income which would be considered as excellent by subject property is assumed to be more the current investment market. convenience lead, while Edinburgh would be a comparison spend destination.  Debenhams account for over 11% of the gross income and they have 15 years and 9 months  The car park is subject to repair works which are unexpired on their current lease term. required to remediate salt and water ingress to the lower levels and rebar repairs to the top deck.  The centre has seen some recent new lettings to new national multiples including Schmooz and Bon Marche; Schmooz relocating within the centre and upsizing.

 Just less than 40% of the gross income is secured against the top 5 tenants of which only approximately 4% of this income expires in the next 5 years.

 The property has a AWULT of 8.5 years to lease expiry (based on current income), which is strong although this includes the leases to Debenhams and APCOA parking whose leases expire in 2033 and 2035 respectively, without these tenants the WAULT is circa 6 years.

Opportunities Threats

 Potential to create value through letting vacant  Competition from High Street retail units, and units, reducing shortfall costs and increasing net nearby Carnegie Retail Park. income.  Competition from nearby centres such as  New housing developments in and around Edinburgh, Livingstone, Perth and Kirkcaldy. Dunfermline increasing the local catchment  The increasing dominance of Edinburgh on the population and, consequently, retailer demand. east central Scotland retail market with the development of the St James Quarter will impact on secondary centres such as Dunfermline.

Kingsgate Shopping Centre, Dunfermline

ASSET MANAGEMENT

 Kingsgate Shopping Centre has a number of vacant units which fall primarily within the extension. We understand that the majority of these units have not been occupied since this part of the centre was constructed in 2007. The two vacant units on the first floor, Unit 63 and 64 have been boarded up to look like part of the centre, and we have made the assumption that as these have not yet been occupied, it is unlikely they will be in the future.

 The main focus for the centre would be to let up the currently vacant space and undertake lease re-gears or lease renewals on upcoming expires and breaks to make sure current tenants remain in the centre. In the short term, this could be through temporary operators that will cover the service charge and insurance shortfalls to the landlord as part of cost mitigation.

 Secondary shopping centres have seen yields drifting out to reflect more limited investor demand due to the challenging nature of the market. If the market deteriorates or sentiments towards the sector worsens further, these yields may move further outwards. Proactive asset management will be instrumental in maintaining the attractiveness of this centre to the market.

 Subject to the above, and the points made in this report we consider the property to be suitable for loan security providing a suitable loan to value ratio is adopted.

 Car Park repairs should be completed as quickly as possible.

FUNDAMENTAL RISKS

Market Risk Property Risk

 In the Scottish market, the ongoing threat of a  Ten units are currently vacant, and a number of Second Independence Referendum has created units have been vacant at the scheme since the market uncertainty which has been compounded extension was built and never been let. by Brexit resulting in a thinning of demand other  The top floor of the extension currently struggles than for prime property. and achieves lower footfall than the ground floor.  There remains a scarcity of comparable  The scheme is very much focussed on the local transactions of secondary shopping centres, and population and therefore is unlikely to be a priority therefore valuations in this sector necessitate a location for retailers. greater degree of judgement than would normally be the case.  Should any of the large units become vacant, there is the potential for prolonged letting voids  Structural change in the retail occupational market and associated holding costs during this period. has resulted in an increased focus on the dominant centres (in this case, Edinburgh) and  The Car Park is subject to two repairing issues administrations of household names, such as BHS, which require remediation. We have allowed for resulting in an increased supply of and reduction £3,440,000 to facilitate the repairs, if this amount in demand for large retail units. Furthermore, proves too little, the value of the property will be retailers continue to rationalise their portfolios as negatively affected. less coverage is required due to the rise of online and multi-channel retailing.

 Occupational demand remains strongest in prime regional centres with letting activity also increasing

Kingsgate Shopping Centre, Dunfermline

in good secondary locations. However, in secondary and tertiary locations demand remains patchy as the large fashion operators no longer require a presence.

VALUATION METHODOLOGY

Market Rent (Headline)

 In arriving at our opinion of Market Rent we have made the following assumptions:  The subject property is a secondary shopping centre. The units towards the front of the scheme are near to the prime pitch on the High Street, whilst footfall remains relatively high along the original scheme and tapers off in the extension at the back of the first mall towards the back of Top Shop, and into the extension at the ground floor. The footfall is comparatively lower on the upper floor of the extension.

 Having regard to the above evidence we have applied the following rates when calculating our opinion of ERV;

Description ERV (per sq ft)

High Street Units £57 Zone A

Smaller units at front £40psf Zone A of scheme Ground Floor £30 Zone A

original and extension New Look, H&M £10 psf - Overall

Ground Floor £20 psf Zone A extension – masked Debenhams £7psf - Overall

Starbucks £30psf – Overall

First Floor £22.50 psf Zone A

 This equates to a gross rental value of £4,130,357 per annum.

Market Value

 In arriving at our opinion of Market Value we have made the following assumptions:  We have relied upon the tenancy information supplied by the asset manager.  The current net rent passing is £4,756,294 per annum.  We are aware that Burton/ Dorothy Perkin’s lease has expired, and they are currently holding over on £0 rent. We are also aware that temporary tenants in Unit 4 and 5 are also not paying rent, although they are covering charges for the units. This would suggest that current tenants have strong negotiating power within the centre.

 For current vacant units, we have applied a current void and current rent free of 12 months for 104 High Street (the former McDonalds unit), a 36 month current void and current rent free to Store B (former 99p), and

Kingsgate Shopping Centre, Dunfermline

current void and current rent free of 18 months for all other vacant units, Unit 68, 64, 63, 52, 50, 48, 39 and 21.

 Unit 63 and Unit 64 have been vacant since the opening of the extension of the centre in 2008, and have been boarded up to look like part of the centre. We have taken the assumption that these units will not be let and therefore have not applied an ERV.

 For all current leases which expire within the next 24 months, we have applied an expiry void of between 12 and 24 months, depending on the size of the unit and location within the centre.

 We have applied a 24-month expiry and rent free void to largest units including Burton/ Dorothy Perkins, Poundland, Water Stones and River Island. This accounts for the longer incentives the asset managers will likely have to offer in order to secure proper leases on the units.

 We have applied a 12-month expiry void to Barclays Bank ATM, Sky, Forum Centre Space Commercialisation (Mall Income) and DMS Promotions Limited in Unit 14C. For all other leases which expire within the next 24 months, we have applied an 18 month expiry void.

 Where a lease has a break within 2 years, we have assumed the tenants exercises their option and have applied a 12-month void to the cashflow, before the income reverts to ERV.

 We have included a permanent void rate of 5% of rental value starting in 24 months.  Net income is capitalised at a suitable capitalisation rate and purchasers costs are reflected at the banded LBTT rate (4.5% is applied to the value that is over £350,000), agent’s fees at 1% and legal fees at 0.5%.

 We have included a landlord marketing contribution of £39,791 per annum, which is c50% of the current budget.

 We have applied a capital cost of £3,440,000 in respect of the car park repairs. If this amount was paid, and no other factors in the valuation were changed, the valuation would increase by a corresponding amount.

 The Market Value of £40,300,000 reflects a net initial yield of 9.12% and an equivalent yield of 8.51%.

Marketability and Potential Purchasers

 The subject property will appeal to purchasers that are seeking higher risk/return assets and are prepared to take an active asset management role to seek to maximise value.

 As a secondary scheme, and with the nature of the asset and the wider property, and market risks associated with it, we would expect demand to be relatively limited.

 A range of purchasers would be expected but principally from ‘value add’ type investors who seek to acquire similar assets at competitive prices which allow them to undertake active management prior to selling.

 Whilst the majority of investment product, on the basis that it is not blatantly flawed and priced appropriately, is saleable in a six month period. Given the nature of the subject property, we believe that it would be prudent to allow a period of at least within six to nine months to secure a sale.

 We believe that it would be possible to affect a sale within a similar time frame, within six to nine months, for the portfolio as a whole, to include the Subject Property as well as Vancouver Centre, Kings Lynn and The Rushes Shopping Centre, Loughborough, if priced appropriately in the market.

 We have not valued the assets as a portfolio and have not considered a portfolio premium or discount within our valuations.

Kingsgate Shopping Centre, Dunfermline

PHOTOGRAPHS

Photo 1: Extension Photo 2: Main Mall

Photo 3: First Floor Mall Photo 4: Vacant 104 High Street

19 Description Tenant Name Lease Start Years Expiry Date Next Review Breaks Current Rent pa Rental Value pa Current Void Expiry Void Comments

Unit 1 Johnsons Cleaning UK Ltd 02/08/1985 50 01/08/2035 02/08/2020 None 33744 25000 0 0

Unit 2 TUI UK Retail Ltd 21/07/2016 4 08/07/2021 . . 20/07/2019 (T) 35000 21600 0 3 Unit 3 Greggs Plc 01/08/1987 35 31/07/2022 . . None 63000 41500 0 0 Unit 4 Storell (Temp Tenant) 30/09/2017 1 30/09/2018 . . None 0 24800 0 12 Unit 5 Volrex (Temp Tenant) 30/08/2017 1 31/08/2018 . . None 0 26000 0 12 Unit 6 Glamour Forever 31/07/2017 10 30/07/2027 31/07/2022 02/11/2022 (LT) 28500 26500 0 0 Unit 7 Warren James (Jewellers) 06/05/2014 10 05/05/2024 06/05/2019 05/05/2020 (T) 30000 24600 0 0 Limited Unit 8 DH Gorn Limited t/a 31/10/2017 10 31/10/2027 . . 31/10/2022 (LT) 47500 47000 0 0 Upsized from Unit 39. Schmooz Unit 9A Ernest Jones Ltd 06/08/2010 11 08/09/2021 . . None 72000 29000 0 0 Unit 9B Thorntons Plc 28/11/1988 30 27/01/2019 . . None 25000 15600 0 9 Unit 9C Martin Retail Group Ltd 24/06/1991 35 23/06/2026 24/06/2016 23/06/2021 (T) 24900 10500 0 0 Unit 10 Game Retail Ltd 16/10/1998 20 15/10/2018 . . None 72500 31000 0 9 Unit 11 AG Retail Cards Ltd t/a 12/11/1998 20 11/11/2018 . . None 75000 42000 0 12 Clintons Unit 14A Fonecare 02/05/2016 5 01/05/2021 . . None 27500 31000 0 0 Unit 14B Ramsdens Financial Ltd 04/05/2010 10 03/05/2020 . . None 22000 13800 0 0 Unit 14C DMS Promotions Limited 18/07/2014 5 17/07/2019 . . None 20000 16300 0 9 Unit 15A The Perfume Shop Ltd 08/10/2007 20 07/10/2027 . . 08/10/2022 (LT) 25000 15000 0 0 Unit 15B Hutchinson 3G Uk Limited 08/10/2007 15 07/10/2022 . . None 75000 48000 0 0 t/a Three Unit 17 Telefonica UK Limited t/a 01/04/2003 15 02/04/2018 . . 01/04/2018 (T) 48000 46500 0 6 O2 104 High Street Vacant (Former 03/05/2019 5 27/07/2024 03/05/2024 None 0 89500 18 0 Vacant Unit on the High Street (McDonalds have McDonalds) surrendered their lease and paid out the rest of the rent from July 2017 to July 2024). Unit 18 Vision Express (UK) Ltd 22/12/2000 25 25/07/2026 22/12/2020 27/07/2021 (T) 60000 44000 0 0 Unit 18A The Works Stores Ltd 12/09/2016 5 11/09/2021 . . None 17972 45500 0 0 Units 19 & 20 JD Sports Fashion plc 14/02/2011 14 16/10/2025 14/02/2016 None 142580 82000 0 0 Unit 21 Vacant - U21 03/11/2018 8 07/11/2026 08/05/2026 None 0 40500 12 0 Unit 22 Dunfermline Arts Club 03/05/2018 5 02/05/2023 . . None 0 18900 6 12 Unit 24 William Hill Organization 12/11/2012 20 11/11/2032 12/11/2017 12/11/2022 (T) 22500 18800 0 0 Limited Unit 26 Chez n Dels (Kirkgate) 19/12/2016 10 19/12/2026 . . 19/12/2021 (T) 15000 12200 0 0 Limited Unit 27 The Carphone Warehouse 01/08/2015 10 16/08/2025 . . 16/08/2020 (T) 35000 38000 0 0 Limited Unit 28 Sportswift Ltd T/S Card 19/05/2017 5 19/05/2022 . . None 47500 31000 0 0 Factory Unit 29 EE Limited 01/08/2009 16 16/10/2025 01/08/2019 01/11/2020 (T) 67500 31000 0 0 Unit 30 Sweet Tricks 28/06/2017 1 28/06/2018 . . None 24000 31500 0 18 Unit 31 Holland & Barrett Retail 11/10/1985 35 10/10/2020 . . None 81600 21000 0 0 Limited Unit 32 Kast Retail Ltd t/a Quiz 21/03/1986 33 20/03/2019 . . None 30000 33000 0 9 Unit 33 Top Shop / Top Man 03/08/2010 9 01/08/2020 . . None 32241 64500 0 0 Properties Limited Unit 39 Vacant - U39 03/11/2018 9 18/10/2028 19/04/2028 None 0 26500 12 0 Store A1 Superdrug Stores Plc 21/06/2010 10 20/06/2020 . . None 128500 54500 0 0 RENT&T TBC Store A2/D Boots UK Limited 13/05/2013 10 12/05/2023 13/05/2018 None 200000 100000 0 0 Store B Vacant (Former 99p) 03/11/2018 5 02/11/2023 . . None 0 120000 12 0 Store C Bon Marche 08/10/2017 10 31/10/2027 08/10/2022 31/10/2022 (LT) 45000 50500 0 0 116 High Street TCCT Retail Limited t/a 25/03/2011 10 24/03/2021 . . None 60000 62500 0 0 Thomas Cook Kiosk K1 The Watch Medic Limited 22/09/2006 15 21/01/2022 . . None 20000 20000 0 0 ATM 1 Barclays Bank Plc 29/08/2013 5 28/08/2018 . . None 9000 9000 0 6 ATM 2 Royal Bank of Scotland Plc 04/08/2016 3 03/08/2019 . . None 11250 11250 0 3

Mall Cafe Kapelad Ltd t/a BB's 30/01/2004 20 29/01/2024 30/01/2019 None 50000 45000 0 0 96/98 High Mountain Warehouse 15/04/2009 12 14/04/2021 . . 15/04/2019 (T) 45000 68500 0 12 Street Limited Sky British Sky Broadcasting 02/10/2013 5 01/10/2018 . . None 25000 25000 0 9 Limited t/a Sky Mall income Forum Centre Space 20/10/2008 10 19/10/2018 . . None 121045 90000 0 0 Commercialisation Car Park APCOA Parking (UK) Ltd 23/09/2009 26 22/12/2035 23/09/2019 None 530450 506656 0 0 Car Park tenanted by APCOA. Subject to potential claim relating to the construction and subsequent maintenance. Mall Machines Noel & Helen Bardon t/a 03/05/2018 5 02/05/2023 . . None 30000 30000 6 0 Bardon Leisure LANDLORDS 21/12/2010 1 20/12/2011 . . None 0 0 0 0 MARKETING CONTRIBUTION Unit 13 Caversham Finance Ltd t/a 11/04/2012 10 10/04/2022 10/04/2022 None 80000 47000 0 0 Brighthouse Unit 12 CEX (Franchising) Ltd 01/11/2013 10 10/11/2023 . . 01/11/2018 (T) 42500 33500 0 6 RMU Mall income 31/12/1999 100 30/12/2099 31/12/2019 None 65891 95000 0 0 Units 35 & 36 The Pancake Place Ltd 22/06/1986 35 22/06/2021 22/06/2021 None 40000 40500 0 0 Unit 37 Blaze (Dunfermline) 11/09/2013 10 10/09/2023 11/09/2018 None 10000 10100 0 0 Limited Unit 38 Robertson World Travel 24/07/2015 10 23/07/2025 . . 23/07/2020 (T) 20000 23600 0 0 Ltd TBU Units 55 & 56 Poundland 15/08/2008 10 14/08/2018 . . None 205000 100000 0 18 Unit 54 Dave Whelan Sports Ltd 25/08/2014 10 24/08/2024 25/05/2019 24/08/2019 (T) 77500 75000 0 12 Units 53 & 65 Burton/Dorothy Perkins 22/02/2015 3 21/02/2018 . . None 0 105000 0 24 Properties Ltd Unit 52 Vacant - U52 03/05/2019 4 02/02/2024 . . None 0 40500 18 0 Unit 51 The Body Shop 22/08/2008 10 21/08/2018 . . None 89000 20000 0 9 International Plc Unit 50 Vacant - U50 03/11/2018 5 02/05/2024 . . None 0 30000 12 0 Unit 49 Fife Shopmobility Ltd 03/05/2018 3 02/03/2022 . . None 1 1 6 12 Store E Debenhams Properties 15/08/2008 25 14/08/2033 15/08/2018 None 571322 520000 0 0 Limited Unit 48 Vacant - U48 03/08/2018 5 02/05/2024 . . None 0 18300 9 0 Unit 47 The Entertainer 18/01/2016 10 17/01/2026 18/01/2018 None 30000 31000 0 0 (Amersham) Limited Units 45 & 46 River Island Clothing Co 06/07/2009 10 05/07/2019 . . None 125000 80000 0 24 Ltd Unit 43, 44, 57- H&M Hennes & Mauritz UK 30/07/2012 15 29/07/2027 . . 30/07/2019 (T) 150000 147500 0 18 62 Ltd Unit 42 New Look Retailers Limited 23/05/2008 15 22/05/2023 23/05/2018 None 340000 162500 0 0 Unit 41 Blackledge Plc t/a 06/06/2012 10 05/06/2022 . . None 60000 36500 0 0 Bodycare Unit 40 Waterstone's Booksellers 15/08/2008 10 14/08/2018 . . None 135000 73000 0 12 Ltd Unit 64 Vacant - U64 03/05/2019 3 02/08/2022 . . None 0 0 0 0 Vacant since this part of the centre opened (Extension) Unit 63 Vacant - U63 03/05/2019 5 02/05/2024 . . None 0 0 0 0 Vacant since this part of the centre opened (Extension) Unit 67 Starbucks 31/08/2008 20 30/08/2028 20/06/2018 None 62500 62500 0 0 Starbucks regear currently in negotaition, at the same rent. Unit 66 The Italian Cafe 05/02/2014 10 04/02/2024 . . 05/02/2019 (L) 12000 10600 0 3 Dunfermline Limited Unit 68 Vacant - U68 03/05/2018 6 02/11/2024 . . None 0 1750 6 0 Delivery Delivery Parking Area t/a 08/10/2012 25 07/10/2037 08/10/2022 None 10000 10000 0 0 Parking Area Alfred Stewart Property Foundation Unit 32 Kast Retail Ltd t/a Quiz 21/03/1986 33 20/03/2019 . . None 5258 0 0 0 Turnover Unit 8 Turnover DH Gorn Limited t/a 31/10/2017 10 30/10/2027 31/10/2022 None 13894 0 0 0 Schmooz Unit 19 & 20 (T) JD Sports Fashion plc 14/02/2011 14 16/10/2025 14/02/2021 None 53726 0 0 0

4774374 4130357 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

Property

Address Kingsgate Shopping Centre ,Dunfermline File/Ref No

Gross Valuation £47,060,596 Capital Costs -£4,231,334 Net Value Before Fees £42,829,263

Less Stamp Duty @4.50% of Net Value -£1,813,500 Agents Fee @1.00% of Net Value -£483,600 Legal Fee @0.50% of Net Value -£241,800

Fees include non recoverable VAT @ 20.00 % Net Valuation £40,290,363 Say £40,300,000

Equivalent Yield 8.5063% True Equivalent Yield 8.9880% Initial Yield (Deemed) 9.1241% Initial Yield (Contracted) 9.1625% Reversion Yield 5.1009%

Total Contracted Rent £4,774,374 Total Current Rent £4,756,294 Total Rental Value £4,130,357 No. Tenants 80 Capital value per ft² £160.34

Running Yields

Date Gross Rent Net Rent Annual Quarterly 03-Nov-2017 £4,756,294 £4,293,862 9.1241 % 9.6691 % 18-Jan-2018 £4,757,294 £4,294,862 9.1262 % 9.6715 % 03-Feb-2018 £4,757,294 £4,250,027 9.0310 % 9.5647 % 01-Apr-2018 £4,709,294 £4,202,027 8.9290 % 9.4504 % 03-May-2018 £4,698,194 £4,209,335 8.9445 % 9.4678 % 29-Jun-2018 £4,674,194 £4,194,081 8.9121 % 9.4315 % 03-Aug-2018 £4,674,194 £4,200,201 8.9251 % 9.4461 % 15-Aug-2018 £4,334,194 £3,860,997 8.2043 % 8.6429 % 22-Aug-2018 £4,245,194 £3,771,997 8.0152 % 8.4334 % 29-Aug-2018 £4,236,194 £3,762,997 7.9961 % 8.4122 % 11-Sep-2018 £4,236,294 £3,763,097 7.9963 % 8.4125 % 23-Sep-2018 £4,285,481 £3,812,284 8.1008 % 8.5282 % 01-Oct-2018 £4,331,981 £3,858,784 8.1996 % 8.6377 % 02-Oct-2018 £4,306,981 £3,833,784 8.1465 % 8.5788 % 16-Oct-2018 £4,234,481 £3,761,284 7.9924 % 8.4082 %

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

20-Oct-2018 £4,113,436 £3,640,239 7.7352 % 8.1241 % 01-Nov-2018 £4,070,936 £3,599,323 7.6483 % 8.0283 % 03-Nov-2018 £4,072,686 £3,830,569 8.1397 % 8.5712 % 12-Nov-2018 £3,997,686 £3,755,569 7.9803 % 8.3948 % 02-Dec-2018 £3,997,686 £3,778,454 8.0289 % 8.4486 % 31-Dec-2018 £3,997,686 £3,800,404 8.0756 % 8.5002 % 28-Jan-2019 £3,972,686 £3,775,404 8.0224 % 8.4414 % 05-Feb-2019 £3,960,686 £3,763,404 7.9969 % 8.4132 % 01-Mar-2019 £3,969,686 £3,772,404 8.0161 % 8.4343 % 21-Mar-2019 £3,934,428 £3,737,146 7.9411 % 8.3515 % 15-Apr-2019 £3,889,428 £3,692,146 7.8455 % 8.2458 % 01-May-2019 £3,922,928 £3,725,646 7.9167 % 8.3245 % 03-May-2019 £3,971,228 £3,854,212 8.1899 % 8.6269 % 05-May-2019 £3,981,828 £3,864,812 8.2124 % 8.6519 % 22-May-2019 £4,001,828 £3,884,812 8.2549 % 8.6990 % 25-May-2019 £4,001,828 £3,898,509 8.2840 % 8.7314 % 06-Jul-2019 £3,876,828 £3,773,509 8.0184 % 8.4369 % 18-Jul-2019 £3,856,828 £3,753,509 7.9759 % 8.3899 % 20-Jul-2019 £3,821,828 £3,718,509 7.9015 % 8.3077 % 30-Jul-2019 £3,671,828 £3,568,509 7.5828 % 7.9563 % 04-Aug-2019 £3,660,578 £3,557,259 7.5589 % 7.9300 % 15-Aug-2019 £3,733,578 £3,630,259 7.7140 % 8.1008 % 24-Aug-2019 £3,656,078 £3,552,759 7.5493 % 7.9194 % 01-Oct-2019 £3,680,878 £3,577,559 7.6020 % 7.9774 % 20-Oct-2019 £3,792,478 £3,689,159 7.8392 % 8.2388 % 03-Nov-2019 £3,822,478 £3,719,159 7.9029 % 8.3092 % 04-Nov-2019 £3,833,728 £3,730,409 7.9268 % 8.3357 % 12-Nov-2019 £3,875,728 £3,772,409 8.0161 % 8.4344 % 31-Dec-2019 £3,904,837 £3,801,518 8.0779 % 8.5028 % 15-Feb-2020 £4,004,837 £3,901,518 8.2904 % 8.7385 % 15-Apr-2020 £4,073,337 £3,970,018 8.4360 % 8.9002 % 18-Apr-2020 £4,089,637 £3,986,318 8.4706 % 8.9388 % 03-May-2020 £4,276,637 £4,173,318 8.8680 % 9.3821 % 04-May-2020 £4,268,437 £4,165,118 8.8505 % 9.3627 % 05-May-2020 £4,263,037 £4,159,718 8.8391 % 9.3498 % 21-Jun-2020 £4,189,037 £4,085,718 8.6818 % 9.1742 % 02-Jul-2020 £4,214,037 £4,110,718 8.7349 % 9.2335 % 16-Jul-2020 £4,245,037 £4,141,718 8.8008 % 9.3071 % 23-Jul-2020 £4,248,637 £4,145,318 8.8085 % 9.3156 % 02-Aug-2020 £4,280,896 £4,177,577 8.8770 % 9.3923 % 16-Aug-2020 £4,245,896 £4,142,577 8.8026 % 9.3091 % 01-Sep-2020 £4,271,896 £4,168,577 8.8579 % 9.3709 % 11-Oct-2020 £4,211,296 £4,107,977 8.7291 % 9.2270 %

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 Page 2 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

28-Oct-2020 £4,226,896 £4,123,577 8.7623 % 9.2640 % 01-Nov-2020 £4,190,396 £4,087,077 8.6847 % 9.1774 % 03-Nov-2020 £4,320,396 £4,035,979 8.5761 % 9.0563 % 21-Dec-2020 £4,353,396 £4,068,979 8.6463 % 9.1345 % 29-Dec-2020 £4,384,896 £4,100,479 8.7132 % 9.2092 % 30-Jan-2021 £4,532,396 £4,247,979 9.0266 % 9.5598 % 14-Feb-2021 £4,550,476 £4,266,059 9.0650 % 9.6029 % 22-Feb-2021 £4,655,476 £4,371,059 9.2882 % 9.8534 % 25-Mar-2021 £4,657,976 £4,373,559 9.2935 % 9.8594 % 02-May-2021 £4,661,476 £4,377,059 9.3009 % 9.8678 % 22-Jun-2021 £4,661,976 £4,377,559 9.3020 % 9.8690 % 23-Jun-2021 £4,637,076 £4,352,659 9.2491 % 9.8095 % 06-Jul-2021 £4,717,076 £4,432,659 9.4190 % 10.0008 % 27-Jul-2021 £4,701,076 £4,416,659 9.3850 % 9.9625 % 16-Aug-2021 £4,739,076 £4,454,659 9.4658 % 10.0534 % 24-Aug-2021 £4,814,076 £4,529,659 9.6252 % 10.2333 % 09-Sep-2021 £4,771,076 £4,486,659 9.5338 % 10.1301 % 12-Sep-2021 £4,798,604 £4,514,187 9.5923 % 10.1961 % 19-Dec-2021 £4,795,804 £4,511,387 9.5863 % 10.1894 % 03-Mar-2022 £4,795,803 £4,511,386 9.5863 % 10.1894 % 11-Apr-2022 £4,762,803 £4,478,386 9.5162 % 10.1103 % 20-May-2022 £4,715,303 £4,440,414 9.4355 % 10.0193 % 06-Jun-2022 £4,691,803 £4,416,914 9.3856 % 9.9631 % 01-Aug-2022 £4,670,303 £4,395,414 9.3399 % 9.9117 % 08-Oct-2022 £4,638,803 £4,363,914 9.2730 % 9.8364 % 31-Oct-2022 £4,587,803 £4,312,914 9.1646 % 9.7146 % 02-Nov-2022 £4,585,803 £4,310,914 9.1603 % 9.7098 % 12-Nov-2022 £4,582,103 £4,307,214 9.1525 % 9.7010 % 23-Dec-2022 £4,592,603 £4,317,714 9.1748 % 9.7260 % 03-Mar-2023 £4,592,604 £4,317,715 9.1748 % 9.7260 % 03-May-2023 £4,573,704 £4,298,815 9.1346 % 9.6810 % 13-May-2023 £4,473,704 £4,198,815 8.9221 % 9.4428 % 20-May-2023 £4,504,704 £4,229,815 8.9880 % 9.5165 % 23-May-2023 £4,327,204 £4,052,315 8.6108 % 9.0950 % 31-Oct-2023 £4,377,704 £4,102,815 8.7182 % 9.2147 % 30-Jan-2024 £4,372,704 £4,097,815 8.7075 % 9.2029 % 03-May-2024 £4,391,604 £4,116,715 8.7477 % 9.2477 % 17-Oct-2025 £4,277,298 £4,002,409 8.5048 % 8.9768 % 31-Oct-2027 £4,263,404 £3,988,515 8.4753 % 8.9440 % 15-Aug-2033 £4,212,082 £3,937,193 8.3662 % 8.8227 % 02-Aug-2035 £4,203,338 £3,928,449 8.3476 % 8.8020 % 23-Dec-2035 £4,130,357 £3,855,468 8.1926 % 8.6299 % 09-Oct-2181 £2,542,006 £2,400,535 5.1009 % 5.2678 %

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 Page 3 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

Yields based on £47,060,597

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 Page 4 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

Tenants

Tenant name File / Ref No Next Review Expiry Date Current Rent ERV Method ERV Cap.Group Val.Meth. Yield 1 Yield 2 Gross Value Freehold AG Retail Cards Ltd t/a Clintons 013 NA 11-Nov-2018 £75,000 Rounded £42,000 Private Hardcore 8.508 £473,643 APCOA Parking (UK) Ltd 075 23-Sep-2019 22-Dec-2035 £530,450 Manual £506,656 Private Hardcore 8.508 £6,390,761 Barclays Bank Plc 070 NA 28-Aug-2018 £9,000 Manual £9,000 Private Hardcore 8.508 £98,512 Bon Marche 062 08-Oct-2022 31-Oct-2027 £45,000 Rounded £50,500 Private Hardcore 8.508 £522,588 Boots UK Limited 060 13-May-2018 12-May-2023 £200,000 Rounded £100,000 Private Hardcore 8.508 £1,565,299 British Sky Broadcasting Limited t/a Sk 065 NA 01-Oct-2018 £25,000 Manual £25,000 Private Hardcore 8.508 £248,322 CEX (Franchising) Ltd 014 NA 10-Nov-2023 £42,500 Rounded £33,500 Private Hardcore 8.508 £373,706 Caversham Finance Ltd t/a Brighthous 015 10-Apr-2022 10-Apr-2022 £80,000 Rounded £47,000 Private Hardcore 8.508 £652,977 Chez n Dels (Kirkgate) Limited 028 NA 19-Dec-2026 £15,000 Rounded £12,200 Private Hardcore 8.508 £148,319 DH Gorn Limited t/a Schmooz 008 NA 31-Oct-2027 £47,500 Rounded £47,000 Private Hardcore 8.508 £537,087 DH Gorn Limited t/a Schmooz 008T 31-Oct-2022 30-Oct-2027 £13,894 Unrounded £0 Private Hardcore 8.508 £54,681 DMS Promotions Limited 018 NA 17-Jul-2019 £20,000 Rounded £16,300 Private Hardcore 8.508 £181,336 Delivery Parking Area t/a Alfred Stewar 084 08-Oct-2022 07-Oct-2037 £10,000 Manual £10,000 Private Hardcore 8.508 £113,855 Dunfermline Arts Club 026 NA 02-May-2023 £0 Rounded £18,900 Private Hardcore 8.508 £191,854 EE Limited 031 01-Aug-2019 16-Oct-2025 £67,500 Rounded £31,000 Private Hardcore 8.508 £446,053 Ernest Jones Ltd 009 NA 08-Sep-2021 £72,000 Rounded £29,000 Private Hardcore 8.508 £466,423 Fonecare 016 NA 01-May-2021 £27,500 Rounded £31,000 Private Hardcore 8.508 £342,735 Forum Centre Space Commercialisatio 066 NA 19-Oct-2018 £121,045 Manual £90,000 Private Hardcore 8.508 £975,551 Game Retail Ltd 012 NA 15-Oct-2018 £72,500 Rounded £31,000 Private Hardcore 8.508 £344,454 Glamour Forever 006 31-Jul-2022 30-Jul-2027 £28,500 Rounded £26,500 Private Hardcore 8.508 £309,594 Greggs Plc 003 NA 31-Jul-2022 £63,000 Rounded £41,500 Private Hardcore 8.508 £553,647 Holland & Barrett Retail Limited 033 NA 10-Oct-2020 £81,600 Rounded £21,000 Private Hardcore 8.508 £390,919 Hutchinson 3G Uk Limited t/a Three 020 NA 07-Oct-2022 £75,000 Rounded £48,000 Private Hardcore 8.508 £651,629 JD Sports Fashion plc 024 14-Feb-2016 16-Oct-2025 £124,500 Rounded £82,000 Private Hardcore 8.508 £1,223,752 JD Sports Fashion plc 024T 14-Feb-2021 16-Oct-2025 £53,726 Unrounded £0 Private Hardcore 8.508 £148,375 Johnsons Cleaning UK Ltd 001 02-Aug-2020 01-Aug-2035 £33,744 Rounded £25,000 Private Hardcore 8.508 £363,277 Kapelad Ltd t/a BB's 072 30-Jan-2019 29-Jan-2024 £50,000 Manual £45,000 Private Hardcore 8.508 £535,803 Kast Retail Ltd t/a Quiz 034 NA 20-Mar-2019 £30,000 Rounded £33,000 Private Hardcore 8.508 £325,789 Kast Retail Ltd t/a Quiz 034T NA 20-Mar-2019 £5,258 Unrounded £0 Private Hardcore 8.508 £6,585 LANDLORDS MARKETING CONTRIB 83 NA 20-Dec-2011 £0 Manual £0 Private Hardcore 8.508 -£467,684 Mall income 082 31-Dec-2019 30-Dec-2099 £65,891 Manual £95,000 Private Hardcore 8.508 £1,026,301 Martin Retail Group Ltd 011 24-Jun-2016 23-Jun-2026 £24,900 Rounded £10,500 Private Hardcore 8.508 £152,476 Mountain Warehouse Limited 064 NA 14-Apr-2021 £45,000 Rounded £68,500 Private Hardcore 8.508 £692,994 Noel & Helen Bardon t/a Bardon Leisur 074 NA 02-May-2023 £30,000 Manual £30,000 Private Hardcore 8.508 £315,024 Ramsdens Financial Ltd 017 NA 03-May-2020 £22,000 Rounded £13,800 Private Hardcore 8.508 £174,916 Royal Bank of Scotland Plc 071 NA 03-Aug-2019 £11,250 Manual £11,250 Private Hardcore 8.508 £125,771 Sportswift Ltd T/S Card Factory 030 NA 19-May-2022 £47,500 Rounded £31,000 Private Hardcore 8.508 £358,625 Storell (Temp Tenant) 004 NA 30-Sep-2018 £0 Rounded £24,800 Private Hardcore 8.508 £222,164 Superdrug Stores Plc RENT&T TBC 059 NA 20-Jun-2020 £128,500 Rounded £54,500 Private Hardcore 8.508 £788,593

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 Page 5 REPORT Valuation Summary CBRE Ltd

Report Date 29 November 2017 Valuation Date 03 November 2017

Sweet Tricks 032 NA 28-Jun-2018 £24,000 Rounded £31,500 Private Hardcore 8.508 £283,882 TCCT Retail Limited t/a Thomas Cook 068 NA 24-Mar-2021 £60,000 Rounded £62,500 Private Hardcore 8.508 £704,483 TUI UK Retail Ltd 002 NA 08-Jul-2021 £35,000 Rounded £21,600 Private Hardcore 8.508 £262,028 Telefonica UK Limited t/a O2 021 NA 02-Apr-2018 £48,000 Rounded £46,500 Private Hardcore 8.508 £508,871 The Carphone Warehouse Limited 029 NA 16-Aug-2025 £35,000 Rounded £38,000 Private Hardcore 8.508 £397,538 The Perfume Shop Ltd 019 NA 07-Oct-2027 £25,000 Rounded £15,000 Private Hardcore 8.508 £209,735 The Watch Medic Limited 069 NA 21-Jan-2022 £20,000 Manual £20,000 Private Hardcore 8.508 £227,710 The Works Stores Ltd 023 NA 11-Sep-2021 £17,972 Rounded £45,500 Private Hardcore 8.508 £430,608 Thorntons Plc 010 NA 27-Jan-2019 £25,000 Rounded £15,600 Private Hardcore 8.508 £166,119 Top Shop / Top Man Properties Limited 035 NA 01-Aug-2020 £32,241 Rounded £64,500 Private Hardcore 8.508 £658,136 Vacant (Former 99p) 061 NA 02-Nov-2023 £0 Rounded £120,000 Private Hardcore 8.508 £944,363 Vacant (Former McDonalds) 067 03-May-2024 27-Jul-2024 £0 Rounded £89,500 Private Hardcore 8.508 £751,531 Vacant - U21 025 08-May-2026 07-Nov-2026 £0 Rounded £40,500 Private Hardcore 8.508 £354,349 Vacant - U39 039 19-Apr-2028 18-Oct-2028 £0 Rounded £26,500 Private Hardcore 8.508 £222,664 Vision Express (UK) Ltd 022 22-Dec-2020 25-Jul-2026 £60,000 Rounded £44,000 Private Hardcore 8.508 £550,366 Volrex (Temp Tenant) 005 NA 31-Aug-2018 £0 Rounded £26,000 Private Hardcore 8.508 £215,724 Warren James (Jewellers) Limited 007 06-May-2019 05-May-2024 £30,000 Rounded £24,600 Private Hardcore 8.508 £291,826 William Hill Organization Limited 027 12-Nov-2017 11-Nov-2032 £22,500 Rounded £18,800 Private Hardcore 8.508 £228,683 Leasehold - FFE83092 08-Oct-2181 -£54,000 £0 Blackledge Plc t/a Bodycare 041 NA 05-Jun-2022 £60,000 Rounded £36,500 Private Hardcore 8.508 £483,944 Blaze (Dunfermline) Limited 037 11-Sep-2018 10-Sep-2023 £10,000 Rounded £10,100 Private Hardcore 8.508 £109,949 Burton/Dorothy Perkins Properties Ltd 051 NA 21-Feb-2018 £0 Rounded £105,000 Private Hardcore 8.508 £852,195 Dave Whelan Sports Ltd 052 25-May-2019 24-Aug-2024 £77,500 Rounded £75,000 Private Hardcore 8.508 £687,135 Debenhams Properties Limited 063 15-Aug-2018 14-Aug-2033 £571,322 Rounded £520,000 Private Hardcore 8.508 £6,101,182 Fife Shopmobility Ltd 047 NA 02-Mar-2022 £1 Manual £1 Private Hardcore 8.508 -£4,369 H&M Hennes & Mauritz UK Ltd 043 NA 29-Jul-2027 £150,000 Rounded £147,500 Private Hardcore 8.508 £1,437,198 New Look Retailers Limited 042 23-May-2018 22-May-2023 £340,000 Rounded £162,500 Private Hardcore 8.508 £2,530,710 Poundland 053 NA 14-Aug-2018 £205,000 Manual £100,000 Private Hardcore 8.508 £1,038,454 River Island Clothing Co Ltd 044 NA 05-Jul-2019 £125,000 Rounded £80,000 Private Hardcore 8.508 £815,356 Robertson World Travel Ltd TBU 038 NA 23-Jul-2025 £20,000 Rounded £23,600 Private Hardcore 8.508 £248,665 Starbucks 057 20-Jun-2018 30-Aug-2028 £62,500 Manual £62,500 Private Hardcore 8.508 £680,870 The Body Shop International Plc 049 NA 21-Aug-2018 £89,000 Rounded £20,000 Private Hardcore 8.508 £256,041 The Entertainer (Amersham) Limited 045 18-Jan-2018 17-Jan-2026 £30,000 Rounded £31,000 Private Hardcore 8.508 £337,514 The Italian Cafe Dunfermline Limited 056 NA 04-Feb-2024 £12,000 Rounded £10,600 Private Hardcore 8.508 £114,807 The Pancake Place Ltd 036 22-Jun-2021 22-Jun-2021 £40,000 Rounded £40,500 Private Hardcore 8.508 £439,694 Vacant - U48 046 NA 02-May-2024 £0 Rounded £18,300 Private Hardcore 8.508 £170,291 Vacant - U50 048 NA 02-May-2024 £0 Rounded £30,000 Private Hardcore 8.508 £264,061 Vacant - U52 050 NA 02-Feb-2024 £0 Rounded £40,500 Private Hardcore 8.508 £320,580 Vacant - U63 054 NA 02-May-2024 £0 Rounded £0 Private Hardcore 8.508 -£26,917 Vacant - U64 055 NA 02-Aug-2022 £0 Rounded £0 Private Hardcore 8.508 -£25,716 Vacant - U68 058 NA 02-Nov-2024 £0 Rounded £1,750 Private Hardcore 8.508 £16,505 Waterstone's Booksellers Ltd 040 NA 14-Aug-2018 £135,000 Rounded £73,000 Private Hardcore 8.508 £777,119 Total £4,702,294 £4,130,357 £47,060,596

Portfolio: Retail - PROJECT MAROON 2017 CIRCLE VISUAL INVESTOR 2.50.080 Page 6 APPENDIX A ENGAGEMENT LETTER CBRE Limited Henrietta House Henrietta Place London W1G 0NB

Switchboard 020 7182 2000 Direct Line 020 7182 2675 [email protected] Our Ref Your Ref Goldman Sachs International and 22 November 2017 Goldman Sachs International Bank (collectively Goldman Sachs) Peterborough Court133 Fleet Street London EC4 2BB

For the attention of: Alessandro Luca

Dear Alessandro,

VALUATION FOR SECURED FINANCING PURPOSES

Terms of Engagement and Scope of Services

Following our recent emails, I am writing to confirm CBREs appointment to provide a valuation of the above properties. Our appointment is to be carried out in accordance with and subject to the attached Terms of Engagement including the CBRE Valuation Standard Terms of Business and Valuation General Principles and Assumptions (sections A and B) (“VSTOB”).

Our quality of service to you as our client is of utmost importance to us. It is important therefore to cover all key aspects of the instruction at the outset, hence the detailed nature of the Terms of Engagement.

The Terms of Engagement includes an Appendix listing the information which we will require to complete the assignment.

I would appreciate it if you could review these documents and confirm your agreement by signing the copy Terms of Engagement including the CBRE VSTOB and returning them to me. On receipt of the signed copy we will be able to commence work on the instruction.

I look forward to working with you. If in the meantime, you have any questions on any aspect of the contents please do not hesitate to contact me.

Yours sincerely

PETER STOUGHTON-HARRIS EXECUTIVE DIRECTOR Valuation and Advisory Services For and on behalf of CBRE Limited

www.cbre.co.uk Registered in England No 3536032 Registered Office St Martin’s Court 10 Paternoster Row London EC4M 7HP CBRE Ltd is regulated by RICS TERMS OF ENGAGEMENT DATED 22 NOVEMBER BETWEEN CBRE AND GOLDMAN SACHS ‘PROJECT MAROON’ SHOPPING CENTRE PORTFOLIO VALUATION AS AT 3 NOVEMBER 2017

SCOPE OF THE INSTRUCTION We have been appointed to undertake a valuation in accordance with the current version of the RICS Valuation – Global Standards and the RICS Valuation – Professional Standards UK (the ‘Red Book’), incorporating the International Valuation Standards, of the properties listed below, as set out in these Terms of Engagement which shall be subject to the CBRE Standard Valuation Terms of Business and Valuation General Principles and Assumptions (hereinafter referred to as the “VSTOB”).

The Properties A list of the properties and tenures to be valued is below:

SCHEDULE OF PROPERTIES

PROPERTIES HELD FOR INVESTMENT

Address 1. The Rushes, Loughborough 2. The Vancouver Centre, Kings Lynn 3. The Kingsgate Centre, Dunfermline

A list of valuers who have been allocated to the properties is available on request. We would confirm that all named valuers are professionally qualified and suitably experienced in accordance with Red Book requirements. We will value the properties individually and no account will be taken of any discount or premium that may be negotiated in the market if all or part of the portfolio were to be marketed simultaneously, either in lots or as a whole.

Conflicts of Interest

We confirm that we have previously valued the properties on behalf of the former lender. CBRE have also provided building surveys to the borrower. We have disclosed the relevant facts to you and the other clients involved. CBRE’s Retail Agency Department advise a number of tenants in an agency capacity which may be represented at the subject shopping centres; CBRE Retail Agency is subject to an information barrier and is located in a separate part of our premises, we therefore consider any protential conflict managed.

DETAILS OF INSTRUCTION Terms of Reference Our terms of reference are as set out below. You have instructed us to act as an External valuer as defined in the current version of the RICS Valuation – Global Standards. Please note that the valuation may be investigated by the RICS for the purposes of the administration of the Institution’s conduct and disciplinary regulations in order to ensure compliance with the Valuation Standards

Page1 Terms of Facility Agreement “Facility Agreement" means the facility agreement dated 22 November 2017 to be entered into between,

(1) HRGT CROSSLANDS HOLDCO (UK) LIMITED (incorporated and registered in England and Wales with registered number 08727844), HRGT VANCOUVER HOLDCO (UK) LIMITED (incorporated and registered in England and Wales with registered number 08727313) and HRGT THE RUSHES HOLDCO (UK) LIMITED (incorporated and registered in England and Wales with registered number 08727261) (each a "Borrower"); (3) GOLDMAN SACHS INTERNATIONAL as mandated lead arranger of this Facility (the "Arranger"); (5) CBRE LOAN SERVICES LIMITED as agent of the other Finance Parties (the "Agent"); and (6) CBRE LOAN SERVICES LIMITED as security trustee for the Secured Parties (the "Security Agent").

We have not been provided with the terms of the Facility Agreement. In the circumstances, we will not be able to comment on the suitability of the properties for the loan contemplated unless we are provided with the terms prior to issue of the report. If the terms are made known to us after the report has been issued, we reserve the right to amend our advice.

Purpose and Basis of Valuation You have requested us to carry out a valuation for the purpose of: • Secured lending

The valuation will be on the basis of Market Value as defined in the current edition of the RICS Valuation – Global Standards.

Indirect Investment Structures or Joint Tenancies Where a property is owned through an indirect investment structure or a joint tenancy in a trust for sale, our valuation represents the relevant apportioned percentage of ownership of the value of the whole property, assuming full management control. Our valuation therefore is unlikely to represent the Market Value of the interests in the indirect investment structure through which the property is held.

Valuation Date and timescales We will carry out the valuation as at 3 November 2017 We will provide you with our final draft valuation report three weeks after receipt of all information and will endeavour to provide you with our draft valuation figures one week before this.

Inspections We will carry out internal inspections of the properties, although due to the nature of the properties we will not guarantee to inspect each individual retail unit or ‘back of house’ areas.

Floor Areas and Measurement We will adopt the floor areas to be provided by the borrower which we will assume to be correct and comprehensive. If, following our investigations, a material difference in floor areas is found or appears probable within the available

Page 2 sources, we will need to discuss whether a full re-referencing is required. In such an event, we would reserve the right to charge an additional fee to cover the time expended.

Reliance on Information Provided We are to rely on information which will be provided to us by the Borrower and its professional advisersas requested in the Appendix to these Terms of Engagement. Should this information not be forthcoming or available for any reason, we will qualify our report accordingly. We also reserve the right to amend our valuations if information comes to light after the report has been issued. Please note that in order to comply with the Red Book, we will require confirmation of the purchase price and the marketing history and will make reference to this in our report.

Other Investigations and Due Diligence On receipt of the requested information, we will carry out the following: 1. Review the Reports on Title 2. Review the occupational leases summaries (we will not read individual leases) 3. Review of key technical due diligence including environmental, building surveys and any other available third party reports 4. Statutory on-line enquiries into the local planning CBRE will not carry out (unless specifically instructed at a later date): 1. Measured surveys 2. Building surveys, deleterious materials investigations or tests of services 3. Environmental surveys, ground condition or other site surveys 4. Energy certificate surveys 5. Detailed planning and highways enquiries 6. Detailed enquiries into covenant strength For further detail please see the CBRE VSTOB appended to these Terms of Engagement.

Verification of Information We would recommend that before any financial transaction is entered into based on the valuations, you obtain verification of any third-party information provided. We also recommend that you check the validity of the assumptions we have adopted in our report (where we have been unable to verify the facts through our own observations or experience).

Liaising with Lawyers Where it is appropriate to do so we will liaise direct with your lawyers. However, they will be directly responsible to you for all legal work carried out by them. We will have no responsibility for their work. In particular, we will not be liable for anything contained in the legal documentation prepared by the lawyers unless we specifically state in writing that the lawyers may rely on our advice in relation to any relevant issue.

Valuation Report and Reliance We will provide you with a single valuation report comprisiong a single valuation certificate and schedule of values. Appended to this certificate will be three short format (7-12 pages) valuation reports relating to each of the properties. We will provide you with an electronic (PDF) version of the report. The report will include the bases and assumptions as set out in these Terms of Engagement and the appended CBRE VSTOB. The wording of some of the bases, assumptions and terms and conditions may be changed depending on the results of our investigations. If this occurs, then we will discuss the changes with you. The report will also include:

Page 3 1. Details of due diligence findings and recommendations (depending on receipt of the information in the appendix to these Terms of Engagement) 2. Comprehensive occupational and investment market commentaries 3. Schedules of occupational and investment comparable evidence 4. An explanation of our valuation approach together with comments on the key factors affecting value and a SWOT analysis 5. Full valuation calculations 6. Photographs and location/ site plans

We will address our valuation report to: Goldman Sachs Internation and Goldman Sachs International Bank Investment Banking Division 133 Fleet Street London EC4 2BB

For the attention of: Alessandro Luca

Subject to the below paragraphs in this section, our report and valuation will be for reliance by the Addressees only and strictly confidential to them or their professional advisers, for sole use by them. Subject to the paragraph below, we shall accept no responsibility whatsoever to any third parties for the whole or part of its contents. Neither the whole nor any part of the report, nor any reference thereto, may be published or disclosed in any way to a third party, without our prior approval of the form and context of such publication or disclosure and such parties’ acknowledgement to the terms of this letter. Nothwithstanding the above, the Addressees may disclose the report on a non-reliance basis to (i) its and its affiliates’ representatives, agents, partners, directors, officers, employees and professional advisers, (ii) potential financing sources, (iii) credit rating agencies in connection with a securitisation of the rights of the lender(s) under the Facility Agreements (a “Securitisation”), (iv) any person to whom disclosure is required to be made by applicable law, regulation, court order, or pursuant to rules or regulations of any supervisory, governmental, banking, taxation or regulatory body or in connection with any judicial, legal or arbitration proceeding, (v) to any person in contemplation of Securitisation and its professional advisers, (vi) a stock exchange, listing authority, listing agent or similary body and (vii) any person to whom disclosure is required pursuant to the rules of a stock exchange, listing authority or similar body provided that when disclosing the Report to the parties listed under (ii) and (vii) above a copy of the Non-reliance Terms and Conditions (a copy of which is at Appendix A) have first been affixed to the front end of the report before disclosure to such Non-reliance Parties. Notwithstanding the above, we also agree that reliance will be extended to the Facility Agent, among others, acting on behalf of the Finance Parties (each as defined in the Facility Agreements) provided they sign a reliance letter substantially in the form attached as Appendix B to this letter (the “Reliance Letter”), subject to any amendments agreed between the parties at that stage. We also understand that the intention of the Addressee is to potentially enter into a Securitisation. To this end, we agree to extend reliance by way of a Reliance Letter to any eventual manager, agent, issuer, security trustee, hedge counterparty, liquidity facility provider, bond or note trustee or other party who may be appointed in connection with a Securitisation provided that they also sign a Reliance Letter. You may not include the Report in any information memorandum, offering circular, registration statement or similar document in relation to Securitisation (and to refer to, and include information from, the report in an investor presentation) without our prior written consent and any such consent shall be subject to us first having approved the form and context in which the report appears in any such document. Any consents required from us in this respect shall not be unreasonably withheld or delayed. We consent in principle to you including a reference to our Report in any private information memorandum (“Information Memorandum”) to be issued to potential loan investors in connection with a syndication of the loan advanced to the Borrower pursuant to the financing. This is subject to the inclusion of the Non-reliance Terms and Conditions with any such copy or reference to the Report and further subject to our prior consent (to be given within two business days of receiving the relevant pages of the Information Memorandum) of the form and context in which the Report or reference thereto appears.

Page 4 If, at a later date, you require us to re-address the report to another party or re-issue it for a different purpose other than that stated above, we reserve the right to charge an additional fee and to require that such parties agree in writing to be bound to the limitations on liability, confidentiality obligations, and other relevant qualifications and limitations contained in these Terms of Engagement. For the avoidance of doubt, save as expressely permitted above, the report is for the use only of the party to whom it is addressed for the specific purpose set out above and no responsibility will be accepted to any third party for the whole or any part of its contents.

Legal Disclaimer The valuation report will include the following legal disclaimer: This valuation report (the “Report”) has been prepared by CBRE Limited (“CBRE”) exclusively for Goldman Sachs International Bank and Goldman Sachs International (the “Client”) in accordance with our terms of engagement dated 22 November 2017 (“the Instruction”). The Report is confidential and it must not be disclosed to any person other than the Client and as expressly permitted in the Instruction without CBRE's prior written consent. CBRE has provided this report on the understanding that it will only be seen and used by the Client and no other person is entitled to rely upon it, unless CBRE has expressly agreed in writing. Where CBRE has expressly agreed that a person other than the Client can rely upon the report then CBRE shall have no greater liability to any party relying on this report than it would have had if such party had been named as a joint client under the Instruction. CBRE’s maximum aggregate liability to all parties, howsoever arising under, in connection with or pursuant to reliance upon this Report, and whether in contract, tort, negligence or otherwise shall not exceed the lower of: 25% of the value of the property to which the Instruction relates on the Valuation Date; or £20 million Twenty Million Pounds; and CBRE shall not be liable for any indirect, special or consequential loss or damage howsoever caused, whether in contract, tort, negligence or otherwise, arising from or in connection with this Report. Nothing in this Report shall exclude liability which cannot be excluded by law.

Publication Neither the whole nor any part of our report nor any references to it may be included in any published document, circular or statement nor published in any way without our prior written approval. Any such approved publication of, or reference to the report will not be permitted unless it contains a sufficient contemporaneous reference to any departure from the Red Book or the incorporation of any special assumptions referred to above (if applicable).

TEAM AND CONTACT DETAILS The contact details for our team are as follows:

Name Position Phone No Email Direct Dial Peter Stoughton-Harris Executive Director 0207 1822675 [email protected] Max Field Director 0207 1822684 [email protected]

Additional support will be drawn from other divisions of CBRE as appropriate. We will endeavour to maintain the team as detailed above for the duration of the appointment but we reserve the right to make changes. We will nevertheless advise you of any changes in the key personnel and the reasons for the changes at the earliest opportunity.

Page 5 FEES All fees stated above are exclusive of VAT.

Amount and Calculation of Fees Our total fee for undertaking this appointment will be £40,000 plus VAT

Calculation of fees if appointment not completed Should this appointment be terminated or deferred for whatever reason, we will charge for all work carried out on the following basis:

Stage Progress Percentage of full fee 1. Inspection completed 25% 2. Draft valuation prepared 50% 3. Draft report prepared 75%

In the event that we are in breach of clause 1.2 of the VSTOB, you shall be entitled to terminate this appointment and in such case, no fees shall be payable.

Review of Fees In the event that there is an increase in the scope, a change in the project timescale or resourcing required then the parties will agree an appropriate additional fee.

Out-of-Pocket Expenses

Our fee is quoted exclusive of all out-of-pocket expenses although these will be capped at £2,000.

VAT All fees and expenses are exclusive of VAT which will be charged at the applicable rate.

Payment of fees and expenses All fees and expenses are payable on completion of the appointment. This is the date on which you receive our signed Valuation Report.

We will send our invoice, which is to be paid by the borrower, Sabal, to:

Goldman Sachs International Peterborough Court 133 Fleet Street London EC4 2BB

For the attention of: Alessandro Luca If you would prefer invoices to be sent to a different address, please let me know. Should you require us to re-issue an invoice to a different address after the invoice has been issued, we will charge an administration fee of £100. If you have a query about an invoice, please contact me within ten days of the date of the invoice. You will be responsible for payment of the fee, irrespective of whether or not you are able to recover fees from other parties.

Page 6 Valuation Standard Terms of Business and Valuation General Principles and Assumptions (“VSTOB”)

The standard assumptions upon which we will base our valuation are as set out in these Terms of Engagement and in the attached CBRE VSTOB, parts A and B.

The CBRE VSTOB cover, inter alia, assumptions on repair and condition, environmental matters, title, tenure, planning and statutory requirements and should be read carefully.

Please ensure that you review the attached CBRE VSTOB carefully – as these form part of the contract between us. In particular, please note the exclusions and limitations of liability set out in Section A, clause 5 - including a cap on liability of the lower of 25 % of the value of the property to which the instruction relates on the valuation date or £20 million

In the event of a conflict between these Terms of Engagement and the CBRE VSTOB, these Terms of Engagement shall prevail.

We would be grateful if you would acknowledge receipt and confirmation of your agreement to the contents of these Terms of Engagement, by signing and returning the enclosed copy and appended CBRE VSTOB.

For and on behalf of CBRE Limited:

PETER STOUGHTON-HARRIS EXECUTIVE DIRECTOR Valuation and Advisory Services For and on behalf of CBRE Limited

I acknowledge receipt and confirmation of my agreement to the contents of this letter and the attached Valuation Standard Terms of Business:

Signed: Date:

Name:

Position:

For and on behalf of: Goldman Sachs International

Page 7 Signed: Date:

Name:

Position:

For and on behalf of: Goldman Sachs International Bank

Page 8 Appendix - List of information required

Legal information

• Land register extract including tenure and current title holder name • Copy of existing ground lease, if applicable • Complete copies of all occupational leases (including all addenda and variations) • Copies of licenses and operational contracts, if applicable.

Environmental, Planning and Site information

• Site plan for the existing development • Listed Building status • Planning report (zoning plan, development plan, projects and infrastructure plan, planning agreement etc) if available. • Extract from the register of contaminated land • Environmental due diligence report and any soil tests • Energy Performance Certificate, if available

Building Information

• Building plans and specifications • Verified floor areas for all buildings and suites together with basis of measurement • M&E / services survey report • Building condition survey report • Details regarding capital expenditure made within the past 12 months • Anticipated future capital expenditure • Current rating tax assessment

Tenancy information

• Current schedule of lettable units and tenants including rent, use-type, floor area and location of the unit, lease start and end dates, break and extension options, rent free periods or other incentives if leases signed in previous 12 months • Details regarding any pending changes to the rent roll or pertinent information regarding the current/future status of the tenants • Details regarding any tenant improvement allowances and rent-free provided for all leases pending or signed over the prior 12 months • Service charge schedule on a tenant-by-tenant basis, including annual amounts and any shortfalls or caps

Marketing Information

• Details of any sale, contract, or listing of the properties within the past two years – including, if applicable, the agreed purchase price and underbids. • Any previous market/demand studies or appraisals • Details regarding the marketing activity for any vacant suites

General

• Contact details for physical inspection

Page 9 • Contact details for management information and any other information needed during the appraisal process • Summary of loan terms, where applicable • Any other information that might be helpful in valuing the properties

If any of the requested data and information is not available, CBRE Ltd reserves the right to extend the delivery date by the amount of time it takes to receive the requested information or make other arrangements. Please send the requested information to:

Max Field | Director | Retail CBRE Ltd Valuation & Advisory Services [email protected]

Page 10 CBRE LIMITED – VALUATION STANDARD TERMS OF BUSINESS AND VALUATION GENERAL PRINCIPLES AND ASSUMPTIONS – UK A. Valuation Standard Terms of Business

1. PRELIMINARY 5.6. We shall have no liability for any delay or failure to provide the services in accordance with this appointment to the extent that any such delay or failure is 1.1. In these Conditions CBRE Limited is referred to as "we", "us" or "our" and the client caused by either you or a third party for whom you are responsible. Where we are with whom we contract to supply services is referred to as "you" and "your”. one party liable in conjunction with others, our liability shall be limited to the share 1.2. Our responsibility is solely to you and we will perform our services with the of loss reasonably attributable to us on the assumption that all other parties pay the reasonable care, skill and diligence expected of competent and properly qualified share of loss attributable to them (whether or not they do). persons of the relevant disciplines who are experienced in carrying out such 5.7. You agree that you will not bring any claim relating to this appointment (in contract, services and will act in good faith at all times. tort, negligence or otherwise) against any CBRE Limited officer, director, employee, 1.3. Your contract is with CBRE Limited. No CBRE Limited officer, director, employee, member or consultant in their personal capacity. member or consultant contracts with you directly or assumes legal responsibility to you personally in respect of work performed on behalf of CBRE Limited. All 6. DOCUMENTS correspondence and other outputs sent to you in the course of our appointment 6.1. Unless expressly stated in our Terms of Engagement, all intellectual property rights with you shall for all purposes be treated as having been sent on behalf of CBRE in all reports, drawings, accounts and other documentation created, prepared or Limited. produced by us in relation to our appointment (including without limitation 1.4. Our services and fees are as stated in our letter dated 22 November 2017. spreadsheets, databases, electronic mail or any other electronically produced or stored documents) (the “Documents”) belong to us. 1.5. The terms of our appointment are binding between you and us and may only be

varied if mutually agreed in writing with you and accepted in writing by your 6.2. We hereby grant you an irrevocable, royalty free, worldwide licence to use, copy authorised signatory and one of our Directors who has signed our Terms of and reproduce the Documents. We shall not be liable for any use of the Documents Engagement. for purposes other than that for which they were produced. 6.3. You are not permitted to include the whole or any part of the Documents in a

2. CHARGES AND EXPENSES prospectus, offering document or other publication.

2.1. If there is a material change in the scope of our instructions, we will agree with you, in writing, an additional or alternative fee arrangement. 7. TERMINATION

2.2. Unless expressly stated in our Terms of Engagement, in addition to our fees, you 7.1. Our services under the terms of our appointment will terminate when any one of the will (subject to condition 2.3 below) be responsible for all reasonably incurred following events occurs: out-of-pocket expenses including, without limitation, advertising, photocopying, 7.1.1. The job is finished; or printing and reproduction costs, signboards, mailshots, photography, receptions, 7.1.2. If you and we consider that it is not in the mutual best interest of the two parties for plan printing charges, courier charges, travelling costs, overnight us to continue to act on your behalf; or accommodation etc., and marketing material of any kind. 7.1.3. If you do not pay our invoices as they fall due, or we reasonably anticipate that that 2.3. If we are responsible for arranging marketing material then we will obtain will be the case; or estimates for the costs of marketing materials and agree them with you before 7.1.4. With immediate effect if either you or we become subject to any sanction or order incurring the cost. whereby it would become illegal or contrary to the other parties’ interests to continue 2.4. All fees quoted in our Terms of Engagement are exclusive of VAT, which will be working together; or charged at the applicable rate. VAT shall also be payable by you on 7.1.5. If either you or us becomes insolvent, or has a receiver, liquidator, administrator or disbursements and other amounts due, where applicable. administrative receiver appointed; or 2.5. In the event of our appointment being terminated for whatever cause, we reserve 7.1.6. If either you or us ceases or threatens to cease trading. the right to charge for the work carried out (even if incomplete) in accordance with the fee basis agreed for the appointment or any subsequent agreed variations 8. MONEY LAUNDERING REGULATIONS to the terms of our appointment. 8.1. Legislation has imposed on us obligations for mandatory reporting, record-keeping and client identification procedures. We will attempt to verify your details 3. PAYMENT electronically which will include, where applicable, identifying your parent 3.1. Our invoices are due for payment within 30 days of issue. companies, major shareholders, beneficial owners and directors. On occasions we 3.2. We reserve the right to charge interest calculated on a daily basis from the 31st may need to ask you for certain identification documents to ensure we comply with day following the date of issue of the invoice at the statutory rate of interest the Regulations. Where such information is requested, you will provide such determined in accordance with the Late Payment of Commercial Debts (Interest) information promptly to enable us to proceed to provide our services. We shall not Act 1998 (as amended) and to charge any reasonable debt collection costs be liable to you or any other parties for any delay in the performance or any failure incurred by us in the recovery of any outstanding payments that are properly due to perform the services which may be caused by our duty to comply with such by you to us. requirements. 4. QUALITY CONTROL AND COMPLAINTS PROCEDURE 9. GENERAL

4.1. We have documented Quality Management Systems (QMS) which have been 9.1. We do not give legal advice. You should seek legal advice as appropriate from developed to meet the requirements of ISO 9001:2008. Enhancing client your lawyers. We have no responsibility for the content of any legal advice that is satisfaction and continual improvement are key requirements of our systems and obtained. we are dedicated to providing you with a first class personal service. 9.2. We maintain professional indemnity insurance (details available on request). 4.2. In the event that you feel that we are falling short of the high standards that we 9.3. We are regulated by the Royal Institution of Chartered Surveyors (RICS). set ourselves in the services we provide, please do let us know. Our Complaints 9.4. We comply with the Data Protection Act 1998 (as amended) in relation to your Procedure involves a full investigation of any complaints that we receive and has personal data. been designed to comply with the Royal Institution of Chartered Surveyors (“RICS”) Rules of Conduct. A written copy of our Complaints Procedure will be 9.5. The parties to the appointment shall provide all necessary cooperation to ensure made available upon request. that each party complies with the obligations of the Bribery Act 2010.

9.6. All discussions we have with you, advice we give and documentation provided by 5. LIABILITY you to us will be kept confidential, unless we agree with you otherwise, aside from 5.1. All information that has been or will be supplied to us by you or your transactional data which is shared with rating agencies and third party property data representatives has been or will be accepted as being complete and correct unless service firms for statistical reporting on industry trends. otherwise stated. 9.7. We support the Code of Practice for Commercial Property Leases.

5.2. Nothing in this appointment shall exclude or limit a party’s liability for death or 9.8. For the purposes of the Contract (Rights of Third Parties) Act 1999, you and we personal injury caused by that party’s negligence, or for fraudulent agree that it is not intended for any term of the appointment to be enforceable by misrepresentation. any third party who, but for the Act, would not have been entitled to enforce such 5.3. Neither party to the appointment shall be liable to the other party for (i) any terms.

indirect, special or consequential loss or damage howsoever caused, whether in 9.9. If at any time any part of the appointment is held to be or becomes void or otherwise contract, tort, negligence or otherwise or (ii) any loss of profits, loss of contracts, unenforceable for any reason, then that part will be deemed omitted from the loss of revenue, increased costs and expenses or wasted expenditure, whether appointment. The validity or enforceability of the remaining parts of the appointment

direct or indirect. shall not be affected or impaired as a result of that omission.

5.4. A party shall not be liable to the other party for any failure or delay in performance 9.10. The appointment, and any issues or disputes arising out of or in connection with it of its obligations under this appointment where such failure or delay is due to (whether such disputes are contractual or non-contractual in nature, such as claims reasons outside its reasonable control. in tort, for breach of statute or regulation, or otherwise) shall be governed by and 5.5. Our maximum aggregate liability to you arising from or in relation to this construed in accordance with English Law and the exclusive jurisdiction of the appointment (in contract, tort, negligence or otherwise) to you howsoever arising English Courts. shall in no circumstances exceed the lower of: (i) 25% of the value of the property to which the appointment relates (as at the Valuation Date and on the basis identified in the appointment or if no basis is expressed Market Value as defined by the RICS) ; or (ii) £20 million

CBRE Limited (registration number 3536032) trading as CBRE VSTOB (Valuation) – v10 August 2017 Page 11 CBRE LIMITED – VALUATION STANDARD TERMS OF BUSINESS AND GENERAL PRINCIPLES AND ASSUMPTIONS – UK

B. General Principles and Assumptions adopted in the preparation of Valuations and Reports Set out below are the general principles upon which our valuations and reports are prepared and which will apply unless specifically mentioned otherwise in the body of the report. We will be pleased to discuss specific variations to suit your particular requirements. These General Principles and Assumptions should be read in conjunction with our Valuation Standard Terms of Business (Part A) and Terms of Engagement.

10. RICS VALUATION STANDARDS re-let when the existing lease terminates. Market rent is not a suitable basis for setting 10.1. All valuations are carried out in accordance with the latest edition of the RICS the amount of rent payable under a rent review provision in a lease, where the actual Valuation – Global Standards and the RICS Valuation – Professional Standards UK definitions and assumptions in the lease have to be used published by the Royal Institution of Chartered Surveyors, (“the Valuation Standards”) 12. INFORMATION SUPPLIED and are undertaken by appropriately qualified valuers as defined therein. Where a valuation is undertaken or contributed to by more than one qualified valuer, a list of 12.1. We have assumed that where any information relevant to our valuation is supplied those valuers will be retained within the working papers. by you, or by any third party at your instigation, it is correct and comprehensive, and can be safely relied upon by us in preparing our valuation. 11. VALUATION BASIS 11.1. The definition of ‘Market Value’ in the Valuation Standards is: “The estimated amount 13. INSPECTIONS for which an asset or liability should exchange on the Valuation Date between a 13.1. We undertake such inspections and investigations as are, in our opinion, necessary willing buyer and a willing seller in an arm’s-length transaction after proper marketing to produce a valuation which is professionally adequate for its purpose. and where the parties had each acted knowledgeably, prudently and without compulsion.” 14. DOCUMENTATION AND TITLE 11.2. It should be noted that the interpretive commentary of the Valuation Standards makes

it clear that, amongst other things, the valuation assumes that the appropriate 14.1. Unless specifically instructed, we do not read legal documentation. Where legal marketing period had occurred prior to the Valuation Date and that simultaneous documentation is provided to us, we will have regard to the matters therein but exchange and completion of the sale took place on the Valuation Date. Our recommend that reliance should not be placed on our interpretation thereof without valuations are, therefore, based upon the facts and evidence available as at the prior verification by your legal advisors. Valuation Date. 14.2. Unless disclosed to us, we assume that there are no outstanding statutory breaches 11.3. We would also draw your attention to the fact that we are required to assume that or impending litigation in respect of the property. the buyer will purchase in accordance with the realities of the current market – and 14.3. We further assume that all documentation is satisfactorily drawn and that unless with current market expectations – and that the seller will sell the property at market disclosed to us, there are no unusual or onerous restrictions, easements, covenants terms for the best price attainable in the open market after proper marketing, or other outgoings which would adversely affect the value of the relevant interest(s). whatever that price may be. 14.4. In respect of leasehold properties, we will assume that your landlord will give any 11.4. The valuation represents the figure that would appear in a hypothetical contract of necessary consents to an assignment. sale at the Valuation Date. No adjustment has been made to this figure for any 14.5. Unless notified to the contrary we assume that each property has a good and expenses of acquisition or realisation – nor for taxation which might arise in the event marketable title and is free from any pending litigation. of a disposal. No account has been taken of any inter-company leases or arrangements, or of any mortgages, debentures or other charge. No account has 15. TENANCIES been taken of the availability or otherwise of capital based Government or European Community grants. 15.1. Unless disclosed to us or stated otherwise in the report it is assumed that: 11.5. The definition of ‘Fair Value’ within International Financial Reporting Standard 13 i. All properties are subject to normal outgoings and that tenants are responsible (IFRS 13) is "The price that would be received to sell an asset or paid to transfer a for all repairs, the cost of insurance and payment of rates and other usual liability in an orderly transaction between market participants at the measurement outgoings, either directly or by means of service charge provisions. date." ii. Rent reviews are on an upward-only basis to the open market rent and that no 11.6. The definition of ‘Fair Value’ within Financial Reporting Standard 102 (FRS 102) is questions of doubt arise as to the interpretation of the rent review provisions in "The amount for which an asset could be exchanged, a liability settled, or an equity the lease. We assume that neither the landlord nor the tenant may terminate the instrument granted could be exchanged, between knowledgeable, willing parties in lease prematurely. an arm’s length transaction”. iii. There are no tenant’s improvements that will materially affect our opinion of the 11.7. We confirm that "Fair Value", for the purpose of financial reporting under IFRS 13 rent that would be obtained on review or renewal. and also FRS 102 (UK GAAP), is effectively the same as "Market Value". iv. Vacant possession can be given of all accommodation which is unlet or is let on

11.8. The definition of ‘Equitable Value’ within the International Valuation Standards 2017 a service occupancy. is “The estimated price for the transfer of an asset or liability between identified v. There are no user restrictions or other restrictive covenants in leases which would knowledgeable and willing parties that reflects the respective interests of those parties.” It is not an appropriate basis of value for financial reporting purposes – adversely affect value. being commonly used in litigation. 16. TENANTS' COVENANT STRENGTH 11.9. The definition of ‘Investment Value’ in the Valuation Standards is “The value of an 16.1. Unless specifically requested, we do not make detailed enquiries into the covenant asset to the owner or a prospective owner for individual investment or operational s objectives”. It reflects the circumstances and financial objectives of the entity for which trength of occupational tenants but rely on our judgement of the market's perception the valuation is being produced. The difference between the Investment Value of an of them. Any comments on covenant strength should therefore be read in this context. asset and its Market Value provide the motivation for buyers or sellers to enter the Furthermore, we assume, unless otherwise advised, that the tenant is capable of meeting its financial obligations under the lease and that there are no arrears of rent market. The valuation prepared on the basis of Investment Value reflects the benefits or other payments or undisclosed breaches of covenant. received by an entity from holding the asset and, therefore, does not necessarily involve a hypothetical exchange. The Investment Value reflects the circumstances and 17. MEASUREMENTS financial objectives of the entity for which the valuation is being produced. You have

advised us that this valuation advice will be used purely for internal purposes and will 17.1. Unless specifically instructed, we do not undertake a measured site survey but not be communicated to any third party. This exercise is required in order to assist calculate site areas by reference to the identified boundaries of the property and the you to determine a price that should be accepted by you in the circumstances set out appropriate Plans. within the attached Terms of Engagement letter. We would draw your attention to the 18. TOWN PLANNING AND OTHER STATUTORY REGULATIONS fact that although we can assist you in in determining the price that should be accepted in the circumstances outlined in the attached letter, this is, ultimately, a 18.1. 18.1 Unless specifically instructed, we do not normally undertake enquiries to commercial judgment that can only be made by the vendor. Our assumption is that obtain town planning and highway information from the relevant Local Authority. We all due diligence required for marketing purposes has been carried out prior to the assume that the Properties are not adversely affected by town planning or road assumed marketing period. The figures reported assume that the Properties are sold proposals. on an individual basis and not as part of a portfolio. The figures provided are subject 18.2. Our valuations are prepared on the assumption that the premises comply with all to a significant degree of judgement and you must, therefore, be aware of this if relevant statutory enactments and Building Acts and Regulations, that a valid and up- placing reliance on these figures. to-date Fire Certificate has been issued. 11.10. The definition of ‘Synergistic Value’ within the International Valuation Standards 2017 18.3. We assume that all necessary consents, licences and authorisations for the use of the is “the result of a combination of two or more assets or interests where the combined property and the process carried out therein have been obtained and will continue to value is more than the sum of the separate values.” If the synergies are only available subsist and are not subject to any onerous conditions. to one specific buyer then Synergistic Value will differ from Market Value, as the 18.4. We assume that in England and Wales, the properties possess current Energy Synergistic Value will reflect particular attributes of an asset that are only of value to Performance Certificates (EPCs) as required under the Government’s Energy a specific purchaser. The added value above the aggregate of the respective interests Performance of Buildings Directive – and that they have an energy efficient standard is often referred to as ‘marriage value’. of ‘E’, or better. We would draw your attention to the fact that under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 it will be 11.11. Rental values will be adopted as appropriate in assessing the capital value, and are unlawful for landlords to rent out a business premise from 1st April 2017 – unless the not necessarily appropriate for other purposes. They will not necessarily accord with site has reached a minimum EPC rating of an ‘E’, or secured a relevant exemption. the definition of Market Rent in the Red Book – which is normally used to indicate the In Scotland, we have assumed that the properties possess current Energy Performance amount for which a vacant property may be let, or for which a let property may be Certificates (EPCs) as required under the Scottish Government’s Energy Performance

CBRE Limited (registration number 3536032) trading as CBRE VSTOB (Valuation) – v10 August 2017 Page 12 of Buildings (Scotland) Regulations – and that they meet energy standards equivalent 26. LANDLORD AND TENANT ACT 1987 to those introduced by the 2002 building regulations. We would draw your attention 26.1. The Landlord and Tenant Act 1987 (the “Act”) gives certain rights to defined to the fact the Assessment of Energy Performance of Non-Domestic Buildings residential tenants to acquire the freehold/head leasehold interest in a building where (Scotland) Regulations 2016 came into force on 1st September 2016. From this date, more than 50% of the floor space is in residential use. Where this is applicable, we building owners are required to commission an EPC and Action Plan for sale or new have assumed that necessary notices have been given to the residential tenants under rental of non-domestic buildings bigger than 1,000 sq m that do not meet 2002 the provisions of the Act, and that such tenants have elected not to acquire the building regulations energy standards. Action Plans contain building improvement freehold/head leasehold interest, and therefore disposal into the open market is measures that must be implemented within 3.5 years, subject to certain exemptions. unrestricted. 18.5. We further assume that there are no outstanding obligations or liabilities arising out of the provisions of the Defective Premises Act 1972, and that only minor or 27. GOVERNMENT GRANTS inconsequential costs will be incurred if any modifications or alterations are necessary 27.1. All valuations are given without any adjustment for capital based Government or in order for occupiers of each Property to comply with the provisions of the Disability European Community grants received or potentially receivable at the date of the Discrimination Act 1995 (in Northern Ireland) or the Equality Act 2010 (in the rest of valuation. the UK). 28. AGGREGATION 19. BUILDING SURVEYS 28.1. In the valuation of portfolios, each property is valued separately and not as part of 19.1. Unless specifically instructed, we do not undertake building surveys, nor do we inspect the portfolio. Accordingly, no allowance, either positive or negative, is made in the those parts that are covered, unexposed or inaccessible, or test any of the electrical, aggregate value reported to reflect the possibility of the whole or part of the portfolio heating, drainage or other services. Any readily apparent defects or items of disrepair being put on the market at any one time. noted during our inspection will, unless otherwise stated, be reflected in our valuation, but no assurance is given that any property is free from defect. We assume that those 29. VALUATION CURRENCY parts which have not been inspected would not reveal material defects which would 29.1. Our valuations will be reported in the appropriate local currency and represent our cause us to alter our valuation. opinion of the realisable value in the country of origin with no allowance made for 19.2. We assume that the services and any associated controls or software are in working the transfer of funds to the UK order and free from defect. 30. .CONFIDENTIALITY/THIRD PARTY LIABILITY

20. HAZARDOUS AND DELETERIOUS MATERIALS 30.1. Our valuations and reports are strictly confidential to the party to whom they are 20.1. Unless specifically instructed, we do not carry out investigations to ascertain whether addressed, or their other professional advisors, for the specific purpose to which they any building has been constructed or altered using deleterious materials or methods. refer. No third parties may rely upon our valuations and reports and no responsibility Unless specifically notified, our valuation assumes that no such materials or methods whatsoever is accepted to any third parties for the whole or part of their contents have been used. Common examples include high alumina cement concrete, calcium without our written approval. chloride, asbestos and wood wool slabs used as permanent shuttering. 30.2. We would draw your attention to the fact that the valuations may be investigated by 21. SITE CONDITIONS the Royal Institution of Chartered Surveyors (‘RICS’), on a confidential basis, for the purposes of the RICS’s conduct and disciplinary regulations, in order to ensure

21.1. Unless specifically instructed, we do not carry out investigations on site in order to compliance with the Valuation Standards. determine the suitability of ground conditions and services, nor do we undertake environmental, archaeological, or geotechnical surveys. Unless notified to the 31. .PUBLICATION contrary, our valuation is on the basis that these aspects are satisfactory and also that 31.1. Neither the whole nor any part of our report, nor any reference thereto, may be the site is clear of underground mineral or other workings, methane gas, or other included in any published document, circular or statement, nor published in any way noxious substances. In the case of properties that may have redevelopment potential, nor disclosed orally to a third party, without our written approval of the form and we assume that the site has load-bearing capacity suitable for the anticipated form context of such publication or disclosure. Such approval is required whether or not of redevelopment without the need for additional and expensive foundations or CBRE is referred to by name and whether or not the report is combined with others. drainage systems. Furthermore, we assume in such circumstances that no unusual Any such approved publication of, or reference to this report will not be permitted costs will be incurred in the demolition and removal of any existing structure on the unless it contains a sufficient contemporaneous reference to any departure from the property. Red Book or the incorporation of any Special Assumptions (if applicable) 21.2. We will assume that either there is no flooding risk or, if there is, that sufficient flood

defences are in place and that appropriate building insurance could be obtained at 32. LAND TRANSFER TAX / STAMP DUTY LAND TAX/LAND AND a cost that would not materially affect the capital value. BUILDINGS TRANSACTION TAX 32.1. Our valuations assume that Land Transfer Tax (or the local equivalent) will be applied 22. ENVIRONMENTAL CONTAMINATION at the rate currently applicable. 22.1. In preparing our valuation we assume that no contaminative or potentially contaminative use is, or has been, carried out at the property. Unless specifically 33. INSURANCE COMPANIES (UK ONLY) instructed, we do not undertake any investigation into the past or present uses of 33.1. As instructed, our valuations have been prepared for the purposes of the company's either the property or any adjoining or nearby land, to establish whether there is any annual accounts and therefore comply with the 2006 Companies Act. We potential for contamination from these uses and assume that none exists. Should it, understand that these valuations may also be incorporated in returns to the Financial however, be subsequently established that such contamination exists at the property Conduct Authority and that they must therefore comply with Part VIII of the Insurance or on any adjoining land or that any premises have been or are being put to Companies Regulations 1994 (the 1994 Regulations), supported by the Department contaminative use, this may have a detrimental effect on the value reported. of Trade and Industry Insurance Division Prudential Guidance Note 7/1994 issued 22.2. We assume that invasive species such as Japanese Knotweed are not present on site. in December 1994. 33.2. For the purpose of complying with the Department of Trade and Industry's regulations 23. HIGH VOLTAGE ELECTRICITY SUPPLY APPARATUS to show open market value net of expenses of sale, we suggest that a figure of 1.50% 23.1. Where there is high voltage electricity supply apparatus within close proximity to the of the total value plus VAT is deducted from the total value. property, unless otherwise stated we have not taken into account any likely effect on future marketability and value due to any change in public perception of the health 34. PENSION FUNDS implications. 34.1. We confirm that "Market Value", the term replacing "Open Market Value", produces the same figure as "Open Market Value". 24. PLANT AND MACHINERY, FIXTURES AND FITTINGS 24.1. Our valuation includes those items usually regarded as forming part of the building 35. TRADING RELATED and comprising landlord's fixtures, such as boilers, heating, lighting, sprinklers and 35.1. We will have regard to the RICS Valuation Practice Guidance Application (VGPA) 4 ventilation systems and lifts but generally exclude process plant, machinery and on the valuation of trade related properties. Key considerations under VPGA 4 are equipment and those fixtures and fittings normally considered to be the property of as follows: the tenant. 35.2. The essential characteristics of properties that are normally sold on the basis of their

24.2. Where the property is valued as a fully equipped operational entity our valuation trading or underlying trading potential is that they are designed, or adapted, for a includes trade fixtures and fittings and equipment necessary to generate the turnover specific use and the resulting lack of flexibility usually means that the value of the and profit. Valuations for investment purposes will include the landlord’s fixtures and property interest is intrinsically linked to the returns that an owner can generate from fittings but not the trade fixtures and the trade inventory where the tenant owns these. that use 25. TAXATION 25.1. In preparing our valuations, no allowances are made for any liability which may arise for payment of Corporation Tax or Capital Gains Tax, or any other property related tax, whether existing or which may arise on development or disposal, deemed or otherwise. We also specifically draw your attention to the fact that our valuation is exclusive of any VAT liability which may be incurred. Unless specifically instructed we have not taken into account the availability of capital allowances.

CBRE Limited (registration number 3536032) trading as CBRE VSTOB (Valuation) – v10 August 2017 Page 13 35.3. The valuation of the operational entity usually includes: a) the legal interest in the land and buildings; b) the trade inventory, usually comprising all trade fixtures, fittings, furnishings and equipment; and c) the market’s perception of the trading potential, together with an assumed ability to obtain/renew existing licences, consents, certificates and permits. 35.4. Trading potential is the future profit that a competent operator of a business conducted on the premises acting in an efficient manner (the Reasonably Efficient Operotor “REO”) would expect to be able to realise from occupation of the property. It excludes personal goodwill, which is the value of profit generated over and above market expectations that would be extinguished upon sale of the property, together with financial factors relating specifically to the current operator of the business 35.5. The valuation excludes consumables and stock in trade and any antiques, fine art and chattels. 35.6. The valuation is based on an estimate of the maintainable level of trade (Fair Maintainable Turnover (“FMT”)) and future profitability (“Fair Maintainable Operating Profit (“FMOP”)) that an REO would expect to achieve. FMT assumes that the property is properly equipped, repaired and maintained. FMOP is operating profit prior to depreciation and finance costs relating to the property, and any rent if leasehold 35.7. The valuation includes trade items and equipment that are essential to the running of the operational entity but which either are owned separately from the land and buildings or are leased. 35.8. If fixtures, machinery and equipment are leased or under contract, we assume that leasing costs are reflected in the trading figures supplied to us, and that all trade fixtures and fittings essential to the running of the property would be capable of transfer as part of a sale of the building and any third party consents obtained. 35.9. Unless stated otherwise within our report, our valuation assumes that the property is open for business and trading at the Valuation Date and that there will be a continuation of trading. Where the property is empty either through cessation of trade, or it is a new property with no existing trade to transfer and/or there is no trade inventory, valuation assumptions apply as will be set out in our report. The valuation is of the empty property having regard to trading potential subject to these assumptions.

CBRE Limited (registration number 3536032) trading as CBRE VSTOB (Valuation) – v10 August 2017 Page 14 Appendix A

C CBRE NON-RELIANCE DISCLOSURE TERMS AND CONDITIONS

In these terms and conditions (“Terms”) the following terms have the following meanings:

"Associated Person" means all associated partnerships, corporations and undertakings which carry the name (or related name) of CBRE;

"Client" means Goldman Sachs International Bank any of its subsidiaries or companies within its group;

"CBRE" means CBRE Limited;

"Properties" means the properties as described in the attached report;

"Reports" means the valuation report of the Properties prepared by us for the Client (including any schedules, annexures, appendices and/or attachments thereto);

1. CBRE understands that you wish to be provided with copies of the Reports. CBRE and the Client have authorised that copies of the Reports be provided to you subject to these Terms.

2. In consideration of CBRE and the Client agreeing to make the Reports available to you, you hereby agree and acknowledge for the benefit of CBRE, the Client and any Associated Person that: a. CBRE’s work in preparing the Reports was undertaken, and such Reports were produced, solely in accordance with the terms of CBRE’s engagement agreed with the Client or relevant addressee(s), and in respect of the Reports, constitute Reports to the Client or relevant addressee(s) alone;

b. CBRE will not enter into any further correspondence or communication with you in relation to the Reports, nor will the Reports be updated to take account of any events or circumstances arising after the date of such Reports;

c. in providing you with copies of the Reports, neither CBRE nor any other Associated Person has or assumes any responsibility or liability to you, or any of your directors, officers, partners, agents, employees or advisers, whether in contract, tort (including negligence) or otherwise;

d. the Reports are provided to you for information only as set out in the next sub-paragraph, you cannot and will not rely on the Reports or any facts, findings or information contained within them, and it is for you to form your own view or take your own property and other professional advice independently of and without any reliance on the Reports;

e. the Reports are provided to you only for the limited purpose of assisting you to familiarise yourself with the Properties, and you will only use the Reports for that limited purpose. CBRE makes no representations and gives no warranties as to the accuracy or otherwise of any of the facts or other information set out in the Reports;

f. the Client and its respective directors, officers, employees and agents have no liability or responsibility to you in connection with the Reports;

g. subject to the next sub-paragraph, you will keep the Reports strictly confidential and will not:

i. disclose or pass the Reports, in whole or in part, to any third parties by any means; or

ii. quote or refer to the Reports, in whole or part, in any communication with any third parties,

and neither CBRE, nor any Associated Persons nor the Client accept liability or responsibility to any third party who may gain access to the Reports; and

h. you may:

CBRE Limited (registration number 3536032) trading as CBRE i. disclose the Reports, in whole or in part, if compelled to do so by law, regulation or the order of a court of competent jurisdiction (but then only to the extent of such compulsion);

ii. disclose any information contained in the Reports to the extent that you can demonstrate that it is already in the public domain, other than by reason of a breach of any provision of these Terms by you or by any person you are permitted to disclose such information to pursuant to the terms of these Terms;

iii. provide copies of the Reports or any part thereof to your professional advisers for the purposes of seeking advice in relation to the Properties and provided that in such a case, such advisers (to the extent not bound by a professional duty of confidence) each confirm in writing to you that they will keep the Reports strictly confidential and will not disclose the Reports or any findings or information contained within them, any such disclosure to your professional advisers also being conditional on their written acknowledgement to you that neither CBRE nor any other Associated Person nor the Client nor its respective directors, officers, employees and agents accepts any responsibility or liability to them in respect of the Reports. You will as soon as reasonably practicable upon request provide CBRE with a certificate to that effect; and

iv. with CBRE’s and the Client’s prior written consent, disclose the Reports to such other person and on such terms as CBRE or the Client may specify; and

i. some or all of the Reports may contain price sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and you undertake not to use any Report for any unlawful purpose.

3. The provisions of these Terms do not operate to exclude or limit any liability (including fraud) to the extent that any such liability may not be excluded or limited by law.

4. If a provision of these Terms is found to be illegal, invalid or unenforceable, then, to the extent it is illegal, invalid or unenforceable, that provision will be given no effect and will be treated as though it were not included, but the validity or enforceability of the remaining provisions of these Terms agreement will not be affected.

5. CBRE, the Client, and any Associated Person may enforce these Terms directly against you subject to and in accordance with these Terms. No other person has any right to enforce any of these Terms.

6. These Terms may not be varied or terminated without CBRE’s and the Client’s prior written consent and, subject to such consent being received, these Terms may be varied or terminated without the consent of any Associated Person.

7. These Terms are governed by, construed and take effect in accordance with the laws of England and Wales and the courts of England and Wales have exclusive jurisdiction to settle any claim, dispute or matter of difference which may arise in any way whatsoever out of or in connection with these Terms or the legal relationships established by these Terms.

CBRE Limited (registration number 3536032) trading as CBRE Appendix B

C CBRE Loan Services Limited as Agent (the “Senior Agent”) on behalf of each CBRE Limited Finance Party defined in a facility agreement entered into or to be entered into Henrietta House between, amongst others each of the Borrowers listed therein as borrowers (the Henrietta Place “Senior Borrowers”) and Goldman Sachs International as arranger (the Senior London W1G 0NB Facility Agreement). Switchboard 020 7182 2000 Mount Street Mortgage Servicing Limited as Agent and Security Agent in Fax 020 7182 2001 relation to and as defined in a facility agreement dated on or about the date of Direct Dial 020 7182 2675 this letter between (inter alia) DRC European Real Estate Debt III No. 2 S.à r.l. [email protected] (“Mezzanine Lender”) and HRGT Shopping Centres Holdco S.à r.l. (the “Mezzanine Borrower”).

CBRE Loan Services Limited as Common Security Agent as defined in an intercreditor agreement dated on or about the date of this letter between, amongst others, the Senior Borrower. as senior obligors, the Senior Agent, Goldman Sachs International Bank as senior lender, the Mezzanine Borrower and HRGT Shopping Centres LP as mezzanine obligors, Mount Street Mortgage Servicing Limited as mezzanine agent and mezzanine security agent, the Mezzanine Lender and CBRE Loan Service Limited as Common Security Agent (the "Intercreditor Agreement")

(together the Beneficiaries and each a Beneficiary)

22 November 2017

Dear Sirs,

Valuation report dated 22 November 2017 (the Report)

1. We confirm that we were retained by Goldman Sachs International Bank and Goldman Sachs International (collectively Goldman Sachs) to prepare the Report in accordance with the terms of the appointment letter entered into between CBRE Limited and Goldman Sachs dated 22 November 2017 (the Appointment).

2. We confirm that:

a. in preparing the Report, we exercised all reasonable care and skill to be expected of a professional consultant holding itself out as having the competence, experience and resources necessary for the purposes of carrying out such activities;

b. we have in force professional indemnity insurance in an amount of not less than £ 20 million (twenty million pounds) and will maintain this level of insurance for at least as long as the term of the Facility Agreement;

c. no Beneficiary will be responsible for any fees payable in connection with the Report; and

d. in the event of any conflict, this Letter prevails over the terms of both the Report and any engagement letter entered into in connection with the Report.

3. Our maximum liability to you and the Beneficiaries shall be subject to the same exclusions and limitations as those set out under the terms of the Appointment. We shall have no greater liability to you or any Beneficiary by virtue of this letter of reliance than we would have had if you and the Beneficiaries had been named as a joint client under the Appointment.

For ease and to confirm the position:

a. our maximum aggregate liability howsoever arising under, in connection with or pursuant to the Appointment and/or the Report(s) and/or this or any other reliance letter in connection therewith,

CBRE Limited (registration number 3536032) trading as CBRE and whether in contract, tort, negligence or otherwise shall not exceed £ 20 million (twenty million pounds); and

b. we shall not be liable for any indirect, special or consequential loss or damage howsoever caused, whether in contract, tort, negligence or otherwise.

We do not limit or exclude our liability to you for death or personal injury of any person arising from our negligence or fraudulent misrepresentation.

No action or proceedings in connection with the matters set out in the Report shall be commenced against us after expiry of six years from the date of the Report.

In any action or proceedings which may arise under or pursuant to this reliance letter, we shall be entitled to rely on any limitation in the Report and to raise the equivalent rights in defence of liability as we would have had against you or the Beneficiaries as if you or the relevant Beneficiary had commissioned the Report yourself.

4. The Report is confidential to you and the Beneficiaries. Subject to the terms of Clause 5, below, neither you nor any Beneficiary may disclose the Report except with our written consent (except that you may disclose the Report to the extent that you or the relevant Beneficiary can demonstrate that it is already in the public domain (other than as a result of breach by you or any Beneficiary (or a person to whom you or any Beneficiary have disclosed the Report's breach) of the provisions of this letter or the Appointment).

This letter only entitles you and the Beneficiaries to receive the Report and rely upon it. No other person is entitled to rely upon it (and we have no liability to any person other than you and the Beneficiaries in relation to the Report) except with our prior written consent.

Neither you nor any Beneficiary shall, without our written consent, assign or transfer to a third party any benefit or obligation under this reliance letter. The rights and benefits arising out of or in connection with this reliance letter may not be assigned or transferred to any party acquiring, or who has acquired, your interest, except with our express written consent.

5. Notwithstanding the preceding clause 4 or anything in the Report to the contrary, we agree that:

a. each Beneficiary may rely on the Report as if it had been originally prepared for and addressed to that Beneficiary;

b. each Beneficiary may disclose the Report to, on a strictly non-reliance basis:

i. its officers, directors, employees, representatives, agents or professional advisers;

ii. another member of its group or any related entity of another member of its group or any of their officers, directors, employees, representatives, agents or professional advisers;

iii. in respect of the Mezzanine Lender, to DRC European Real Estate Debt Fund III L.P., its general and limited partners and professional advisers, insurers and regulators,

iv. any person in contemplation of a securitisation (or other transaction having a similar effect) relating to the rights of the Lender originally party to the Facility Agreement (a Securitisation);

v. any person in contemplation of an assignment, transfer, sub-participation, hedge or other agreement in relation to the Facility Agreement;

vi. any person who potentially invests in or otherwise finances, directly or indirectly, any person referred to in paragraph (iv) above;

vii. any person in connection with any legal or arbitration proceedings;

CBRE Limited (registration number 3536032) trading as CBRE viii. any person if required to do so under any law or regulation;

ix. a governmental, banking, taxation or other regulatory authority;

x. any rating agency;

xi. a stock exchange, listing authority or similar body; and

xii. any person to the extent that the Report is publicly available; and

xiii. each Beneficiary may also make reference to the Report, and include all or part of the Report in any ongoing investor reporting materials relating to any Securitisation,

provided, however, that the Beneficiaries may only provide any such recipient with a version of the Report with the CBRE Non-Reliance Disclosure Terms and Conditions (attached hereto as Exhibit A) affixed to the front thereof.

6. This letter may be executed in any number of counterparts, and this has the same effect as if the signature on the counterparts were on a single copy of this letter.

7. This letter, and all non-contractual obligations arising out of or in connection with it, shall be governed by English law.

8. Please sign the attached copy of this reliance letter to confirm your acceptance of the terms contained herein.

Yours faithfully,

PETER STOUGHTON-HARRIS EXECUTIVE DIRECTOR Valuation and Advisory Services For and on behalf of CBRE Limited

I acknowledge receipt and confirmation of my agreement to the contents of this letter:

Signed: Date:

Name:

Position:

For and on behalf of: CBRE Loan Services Limited as Agent on behalf of each Finance Party

CBRE Limited (registration number 3536032) trading as CBRE I acknowledge receipt and confirmation of my agreement to the contents of this letter:

Signed: Date:

Name:

Position:

For and on behalf of: Mount Street Mortgage Servicing Limited

CBRE Limited (registration number 3536032) trading as CBRE EXHIBIT A