55 ROBERTSON STREET

A Prime City Centre Office or Hotel Refurbishment Opportunity INVESTMENT SUMMARY

Offers are sought in excess • A rare opportunity to acquire a core office building occupying a prime position within Atlantic Quay, in the heart of Glasgow’s of £13,250,000 (Thirteen International Financial Services District Million, Two Hundred and • 6 Atlantic Quay comprises a modern office building extending to Fifty Thousand Pounds) 78,459 sq ft with 33 car parking spaces (1:2,377 sq ft) exclusive of VAT for our client’s heritable interest, • The building offers full vacant possession and is in need of refurbishment for either office use or alternatively hotel or PRS which assuming purchaser’s use. The asset has an active planning consent for conversion to standard acquisitions costs of hotel use

6.23%, reflects a low capital • Ideally situated for Glasgow’s transport links, being only a few value of £169 per sq ft. minutes’ walk away from Glasgow Central Railway Station and Glasgow Queen Street Station

• Atlantic Quay is going through a transformation, with numerous significant developments having been announced recently or already on site. It is fast becoming the “go-to” location for Government occupiers in Glasgow with the GPU, Scottish Courts and other Government Departments committing to c 400,000 sq ft in the past 6 months

• The property is held on a Heritable title (the Scottish equivalent of English Freehold)

6AQ GLASGOW / PAGE 2 SUPERB LOCATION

Glasgow is the largest city in Scotland and the third largest in the UK. The city is known for its cultural, shopping and academic prowess and is fast becoming one of Europe’s most vibrant cities.

Glasgow is known for its retailing and is the top shopping location in Scotland and second only to London in the UK, with over half a million square metres of retail space and a shopping population of circa 2 million. The colloquially named ‘Style Mile’ is focused around Buchanan St, Argyle St and Sauchiehall Street and the Merchant City is a fashion hub, while the West End has a boutique offer.

Glasgow is one of Europe’s most dynamic to degree level. Glasgow maintains a robust skills cities with over £4.85bn of comparison goods pipeline and a talented, multilingual workforce spend available in the catchment area and is with over 130,000 students from 135 different featured in the top 20 super league of major countries. European shopping destinations by commercial expenditure. Furthermore, there are c. 2.3 million Finally, Glasgow’s conference facilities are best tourists drawn to Glasgow every year, which in class. It is home to the Scottish Event Campus increases footfall and spending. (SEC) which is the UK’s largest integrated conference and convention centre. The SEC Glasgow has an excellent reputation for has generated in excess of £1 billion through education, with 5 universities and 3 super business tourism. In addition, the Scottish Hydro colleges. The University of Glasgow is the fourth Arena was completed in 2013 and hosts around oldest university in the English speaking world 140 events every year and is currently in the top and Glasgow Caledonian University is number 2 three worldwide arena venues based on annual in the UK for student satisfaction. The city has a ticket sales. graduate level workforce above almost all major UK cities, with 46.3% of the workforce educated

6AQ GLASGOW / PAGE 3 Glasgow is the economic powerhouse of Glasgow has recently benefited from Scotland and generates £19.3 billion GVA significant investment into initiatives such as THRIVING per annum – the largest of any Scottish the International Financial Services District city and representing 16% of Scotland’s (IFSD) and the Technology Innovation output. It is the fastest growing major city Centre. This has further strengthened ECONOMY economy in the UK with growth significantly Glasgow’s service sector, which is a major outperforming all other core cities in recent part of Glasgow’s economy. The IFSD has years. The City’s GVA per capita is £32,308 become one of the largest financial districts per person compared to the UK average of in the UK and has been successful in £25,351. The most recent global financial attracting an impressive line-up of occupiers services index (March 2017) confirmed this such as AXA, JP Morgan, NFU Mutual, by putting Glasgow in the top 20 European Barclays Wealth, RBS, Lloyds Banking financial centres (ranked 16th) above other Group, Tesco Personal Finance and major cities such as Brussels, Madrid and Morgan Stanley. Edinburgh.

CITY DEAL

The Glasgow and Clyde Valley City Deal is an agreement between the UK Government, Scottish Government and the 8 local authorities across Glasgow and Clyde Valley to invest in the area in order to stimulate economic growth. The scheme will involve £1.13 billion being invested in infrastructure across the area, supporting growth in the life sciences sector, setting up programmes to help the unemployed and helping small to medium size enterprises grow and develop.

6AQ GLASGOW / PAGE 4 Road Four main motorways give Glasgow high speed UNRIVALLED road access to cities throughout the UK. The M8 motorway provides direct access into the city via six junctions located on the periphery CONNECTIONS of the CBD and lies at the heart of Scotland’s integrated motorway network, connecting directly to Edinburgh. It links with the M74 and the M73 motorways at Junction 4, offering access to Carlisle and Northern England. It also provides access to Stirling and Northern Scotland through its connection to the M80 / A80 at Junction 13.

A84 M90 Rail Glasgow benefits from having two main railway stations; M9 and Glasgow Queen Street. In A811 A92 addition to providing local services throughout Central A82 STIRLING Scotland, these stations provide regular intercity transport FIRTH OF to all major cities throughout the UK. Glasgow Central CLYDEBANK FORTH Station operates regular services to most major cities in M9 GLASGOW M80 England, whilst Glasgow Queen Street Station provides AIRPORT GREENOCK M8 LIVINGSTON EDINBURGH services to major Scottish cities such as Edinburgh, EDINBURGH Aberdeen, Dundee and Inverness. Glasgow is also served AIRPORT M8 by a subway and a local rail system which links the city A71 A68 A78 GLASGOW centre to the outlying suburban areas, making it very A737 A7 accessible for commuters. EAST M77 A721 KILBRIDE Air A71 Glasgow benefits from having three international airports A72 within 45 minutes of the city centre (Glasgow International, FIRTH OF KILMARNOCK CLYDE A77 M74 A702 Prestwick and Edinburgh) linking Glasgow to all major PRESTWICK UK, European and International destinations. International, only 15 minutes’ drive from the city centre, offers regular domestic, European, Far East and Trans- AYR Atlantic flights. Glasgow is the eighth busiest airport in the UK, with over 7.4 million passengers and 104,000 aircraft movements recorded each year.

6AQ GLASGOW / PAGE 5 WELL PLACED T

T FOR BUSINESS T

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6 Atlantic Quay is situated at 55 Robertson Street, in the heart of the highly successful Atlantic Quay development which is located in the International Financial Services District (IFSD). T

T The building is ideally placed for access to public T transport, with both Glasgow Central and Glasgow T T Queen Street Stations being only a few minutes’ walk away. It also benefits from an extensive range of bus services which run along nearby Argyle Street. Furthermore, St Enoch subway station is situated within a 5 minute walk of the property providing routes to the ST ENOCH north, south and west of the city. SUBWAY

The first phase of the new ‘Fastlink’ has now been delivered and provides a regional Bus Rapid Transit (BRT) system linking major transport hubs, events, venues, local attractions and the new South Glasgow Hospital. The route runs along the Clyde Front via the IFSD. For further information visit: www.spt.co.uk/corporate/about/projects/fastlink

TAXI RANKS T CAR PARKS 6 MINUTE WALK FAST LINK BUS ROUTES MAJOR BUS ROUTES AIRPORT BUS PICK UP AIRPORT BUS DROP OFF

6AQ GLASGOW / PAGE 6 The IFSD was initially launched in 2001 and the city deliver best in class leading extended to approximately 1km2 between standards for securing of service, value INTERNATIONAL St Vincent Street and the River Clyde. for money, future proofing and fast Following its successful growth over the reliable connectivity. In addition, a further past 15 years, the district has expanded to £50m has been invested in the public FINANCIAL SERVICES cover a wider area of Glasgow City Centre. realm, creating a high quality business Over 3 million sq ft of high quality Grade A environment. office accommodation has been developed DISTRICT (IFSD) in the IFSD since 2001. Companies such as Esure and Morgan Stanley have moved into the district and existing employers such as Barclays and BNP Paribas have expanded their The International Financial Services District (IFSD) is a project operations substantially. This has led to driven by a partnership between both the private and public positive job creation with over 15,500 new sectors. To date, over £1 billion of investment has been secured jobs within the district. – 90% of which is private sector funding. The IFSD has created the ideal environment for both local and overseas firms in the BT, an early partner in the IFSD finance and service sectors to position themselves within and it development has invested £50m in the is designed to allow fast track occupancy for their operations. broadband infrastructure which helps

6AQ GLASGOW / PAGE 7 BUCHANAN BUS STATION

BUCHANAN GALLERIES SHOPPING CENTRE 23 QUEEN STREET I STATION 22 GEORGE SQUARE 16 19 17 K 18 H 14 J 21 G 15 CENTRAL STATION 20

B F C A 13 12 L 2 M8 MOTORWAY D 8 E 11 1 3

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1. MacRoberts, ATOS 9. Scottish Government 18. Jacobs A. Radisson Blu 2. Scottish Qualifications Authority 10. Atkins, ACE Insurance UK 19. Student Loans B. Yotel Hotel Development NEARBY 3. Lloyds Banking Group 11. Ministry of Defence 20. Esure HOTELS C. Motel One 4. Clydeport 12. SAS, Teleperformance, AXA 21. JP Morgan D. Jury’s Inn 5. Secretary of State, MacTaggart 13. Scottish Ministers 22. Lloyds Banking Group E. Hallmark OCCUPIERS & Mickel 14. Morgan Stanley 23. Weir Group, CMS Cameron F. Marriot Hotel 6. Scottish Courts & Tribunals 15. AON, Morgan Stanley McKenna, Arup, Global G. Hilton Service 16. Barclays, Burness Paull, Radio, FDM Group H. Ibis Styles 7. BT BNP Paribas I. Blythswood Hotel & Spa 8. GPU Development Site 17. BNP Paribas, HSBC, Shell J. Indigo K. Grand Central

6AQ GLASGOW / PAGE 8 L. Premier Inn 1. Buchanan Wharf Development 2. Broomielaw Waterfront Development The site immediately to the south of the river Together with Drum, they will develop a new Planning permission exists for 4 leisure/restaurant pods to be ATLANTIC QUAY controlled by Drum Property Group has office hub here for the bank's technology, erected fronting the River Clyde. With all the activity in the area planning consent for a substantial mixed functions and operations teams. This will at present this will further enhance the appeal of this site to use regeneration scheme that will include create 2,500 jobs, doubling its current investors/developers. residential, hotel, office and retail / leisure Scottish workforce and Barclays current RENAISSANCE 3. Atlantic Quay 3 space. The final scheme could extend to 1 operations in Scotland are expected to million sq ft. begin transferring to the new campus from Following a comprehensive refurbishment by Moorfield, this 80,000 sq ft building was single let to The Scottish Courts & 2021. Buchanan Wharf is regarded as a Tribunal Services on a 25 year lease. The building has recently Barclays has acquired the sites earmarked benchmark development in Scotland, and been sold to Legal & General reportedly for £50.1 million and a for the 470,000 sq ft office development will deliver a new and distinctive quarter for Net Initial Yield of 3.6%. and they also have an option to extend their the city. campus by an additional 210,000 sq ft, in a 4. Atlantic Quay 1 second phase of development at the site. Following a comprehensive refurbishment by Moorfield, this 122,000 sq ft building was predominantly re-let to the Secretary of State on a 15 year lease. The building is currently under offer to an overseas investor.

5. York Street – BAM Properties and Taylor Clark Following a search of the Glasgow Office Market the Glasgow element of the Government Property Unit (GPU) has selected this site for the first phase of what could be a 600,000 sq ft requirement. The York Street site is expected to accommodate approximately 200,000 sq ft. 6 5 7 6. Argyle Street Development Site Vanguard Real Estate have recently acquired this prominent 0.8 acre site and have already drawn up plans for a 280,000 sq ft office scheme to be built on site. 8 7. Westergate Chambers – Argyle Street This office building constructed in the 1980’s is being converted 3 into a YOTEL, with 256 rooms. 2 4 8. Motel One – Argyle Street Motel One have recently opened Glasgow’s largest hotel at 374 rooms in a prime location adjacent to Glasgow Central Railway Station.

Proposed Buchanan Wharf Development

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6AQ GLASGOW / PAGE 9 The building was designed to provide the maximum amount of natural lighting, through the use of curtain 6 ATLANTIC QUAY wall glazing and a full height feature atrium. In addition, the building has also been given a contemporary design 55 ROBERTSON STREET through the use of zinc feature cladding. At present the specification of the property is varied. The upper floors (third, fourth, fifth and sixth) are vacant The property comprises a modern open plan office building with the original fit out of the previous occupier - RBS. extending to 7,289 sq m (78,459 sq ft) and arranged over ground The lower level floors, ground, first and second have and 6 upper floors, with access to a loading bay and secure been completely stripped out to a shell in readiness car parking at basement level. The property was constructed for a comprehensive refurbishment. The basement in 2003 with individual floorplates ranging from c.10,000 sq ft to car park level still has the remains of some of the RBS 12,300 sq ft. specialised plant which is due to be removed. The building is in need of a comprehensive refurbishment.

6AQ GLASGOW / PAGE 10 These proposed refurbishment works were tendered in 2015 at a cost in the region of £4.36 million, plus fees. The full landlord’s CAT A refurbishment scheme has building warrant approval – ref. no. 15/03276/BW.

The works are estimated to take approximately 6 months to complete and upon completion it is anticipated that the building will offer:

• High quality reception area with a security barrier entry system to the lift lobby • Large open plan floor plates • Seven storey, full height atrium with new feature lighting • Clear floor to ceiling height of 2.7m • Metal suspended ceilings with modular 600x600mm grid • Suspended ceilings with low brightness lighting • 4 pipe fan coil air conditioning throughout • Three 13-person passenger lifts and two service lifts • Full access raised floors (100mm) • Building energy management control system SPECIFICATION • 1 MVA power supply • Male, female and disabled toilet facilities on each floor • Loading bay and basement adjacent to the building AND KEY • 33 basement car parking spaces • 24 hr access • DDA compliance FEATURES • EPC Rating C

6AQ GLASGOW / PAGE 11 ACCOMMODATION & TENANCY INFORMATIONTION. The building has been measured in accordance with the RICS Code of Measuring Practice (6th edition) and extends to the following net internal floor areas:

Floor Size (Sq M) Size (Sq Ft) Car Space

6th 967.7 7 10,417

5th 1,034.29 11,133

4th 1,035.22 11,143

3rd 1,059.28 11,402 33

2nd 1,117.16 12,025

1st 1,144.19 12,316

Ground 931.17 10,023

Total 7,289.08 78,459 33

Commments

The original base build included 43 car spaces. Most of these were removed by the previous tenant (RBS) on installing their back up generation, 4 shower areas etc. The proposed refurbishment recreates 33 car spaces (1:2,377 sq ft), 2 brand new resited shower areas, 12 bike racks and disabled facilities.

6AQ GLASGOW / PAGE 12 On 1st September 2014, our client’s planning application (reference number 14/00954/DC) to convert the ground floor office space from FLOOR PLANS & Use Class 4 (Business) to Class 3 (Food and Drink) at ground floor only and subdivision of the ground floor space to form two Class 3 units, was approved. A copy of the application, associated plans and decision PLANNING notice is available on Glasgow city council’s planning website. A change of use to Class 1 retail was also previously obtained.

BASEMENT GROUND FLOOR TYPLICAL UPPER FLOOR

POTENTIAL SPLIT RETAIL UNIT 1

POTENTIAL SPLIT RETAIL UNIT 2

6AQ GLASGOW / PAGE 13 TITLE PLANS The property is held on a single title as shown on the plan below. Access to the basement car parking for both buildings is taken from Robertson Street. 4

ORK STREET

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We estimate the site area of 6 AQ to be 0.36 acres

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(0.14 hectares). A detailed Title Plan is available S

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E within the Dataroom. A wider estate Service B

O Charge and equating to £0.50 per sq ft is applied R for the whole Atlantic Quay development which is currently administered by the owner of AQ1. 5 2

TENURE BASEMENT CAR PARK ENTRANCE The property is held on a Heritable title (the Scottish equivalent of English Freehold). 3 1 TENANCY BROOMIELAW The building is being offered with full vacant possession.

KEY:

1 Atlantic Quay 1 5 Atlantic Quay 5 (Capella) 2 Atlantic Quay 2 6 Atlantic Quay 6 3 Atlantic Quay 3 4 Atlantic Quay 4 Site Boundary

6AQ GLASGOW / PAGE 14 HOTEL OR SERVICED APARTMENT REFURBISHMENT OPPORTUNITY On 5th August 2016, our client’s planning application (reference number 14/00974/ DC) to convert the office building from Use Class 4 (Business) to Use Class 7 (Hotel), comprising 159 bedrooms, with associated ground floor Bar Restaurant, Lounge and Business Suite, Coffee Bar, Events/Screening Room/Cinema; ’S TOURISM floor Lounge and Bar, further Business Meeting Rooms, Spa, residents Gym and 6th floor skyline bar, was approved. The consent is valid for 3 years. A copy of the application, associated plans and decision notice is available on Glasgow city INDUSTRY council’s planning website. Glasgow is one of the UK’s main leisure destinations, the third busiest entertainment arena in the world, leading to Glasgow being considered one of the world’s top five Given its proximity to Glasgow Central and the SECC / SSE Hydro, the area underpinned by an excellent retail offering, distinctive cities for sporting events. surrounding 6 Atlantic Quay is a well establish hotel location. Surrounding hoteliers architecture, world-class sporting and music venues include Motel One (374 rooms), Grand Central Hotel (230 rooms), Radisson Blu (247 and renowned museums. Voted as the eighth best UK Glasgow’s City Council has identified tourism as the rooms), Premier Inn Argyle Street (121 rooms), Indigo Hotel (94 rooms), Ibis Styles destination by the TripAdvisor Travel Choice Survey, most vital component of potential growth for the city, (137 rooms), Marriott ( 302 rooms), Jurys (321 rooms) and Yotel will take 256 rooms Glasgow is primarily viewed as a weekend-break thus leading to the City Council’s recent alignment in Westergate Chambers on Argyle Street (scheduled to open in 2020). destination with many of its visitors coming to the city for shopping, concerts and sporting events. The city is the 6th with the wider Glasgow City Region regeneration plan most visited UK city by international tourists with 2.3 million to work towards the goal of attracting a larger influx of tourist trips made to the city in 2017, which was supported overnight visitors to the city. By emphasising Glasgow’s by a total spend of £619 million. On an annual basis, the city widespread cultural presence and the city’s strong sporting attracts over 20 million day visitors with a resulting total environment, the plan intends to increase overnight leisure spend of ca. £1 billion. tourism visits by one million per year to an aggregated total of three million overnight visits per year by 2023. The 2014 Commonwealth Games was a key driver in the This increase in overnight visits is forecasted to deliver resurgence of the city’s tourism economy, resulting in an associated spend of ca. £770m, also contributing an improved infrastructure, world-class venues (i.e. The SSE additional 6,600 jobs in the city. The ultimate vision of this Hydro arena, the Emirates Arena) and transportation. tourism-centric growth plan is ultimately intended to further The event attracted a record 2.7 million domestic and solidify Glasgow’s position as a key UK and international international visitors in 2014. The massive infrastructure destination. connected to the Games in 2014 has resulted in Glasgow becoming a hub of sporting infrastructure in the United Kingdom. Most notably, the SSE Hydro arena has become

6AQ GLASGOW / PAGE 15 GLASGOW HOTEL MARKET OVERVIEW Glasgow has 71 hotels situated within the city centre. In terms of bedroom supply, 4-star and budget hotels dominate the market, accounting for 33.5% and 29.5% of all bedroom supply respectively. Whilst the 3-star accommodation supply of 33 hotels equates to approximately 29% of all hotel supply throughout Glasgow, it only consists of 1,630 bedrooms, or ca. 17% of total bedroom supply.

GLASGOW ACCOMMODATION SUPPLY BY CATEGORY

33 3,500 35 3,000 30 24 2,500 25 BEDROOM SUPPLY BY BRAND SUPPLY BY NUMBER OF BEDROOMS 21 2,000 20 15 14 INDEPENDENT 0 - 20 51 - 75 101 - 150 201 + 1,500 3,131 15

2,760 NUMBER OF HOTELS BRANDED 21 - 50 76 - 100 151 - 200

NUMBER OF BEDROOMS 1,000 10 1,630 5 500 3 5 565 679 370 218 0 0 5-STAR 4-STAR 3-STAR 2-STAR BUDGET APTS HOSTEL 9% 5% 24% BEDROOMS HOTELS 50% 50% 19%

Whilst there are 14 serviced apartments, these establishments are 23% considerably smaller as they only total 370 bedrooms and therefore 10% illustrates a gap in the market, thus providing a good opportunity for 10% incoming serviced apartment developments.

6AQ GLASGOW / PAGE 16 GLASGOW – GLASGOW HISTORIC KPI PERFORMANCE - 12 MONTHS TO JUNE 2011-2018 2011 2012 2013 2014 2015 2016 2017 2018 VAR 18/17 5 YEAR CAGR KEY PERFORMANCE Occupancy (%) 74.7% 76.1% 7 7.1% 80.5% 82.9% 81.5% 82.7% 85.1% 2.4pp 1.41% ADR £67.30 £68.26 £68.10 £71.18 £83.81 £80.71 £82.73 £87.02 5.18% 5.15% INDICATORS RevPAR £50.28 £51.94 £52.54 £57.28 £69.50 £64.74 £68.45 £74.60 8.20% 6.64% Currently, Glasgow is one of the leading hotel market in the UK, F&B RevPAR £37. 23 £36.64 £38.28 £39.41 £39.10 £38.96 £36.93 £36.88 -0.13% -1.65% where it currently achieves an 9-percentage point premium in Ancillary RevPAR £5.10 £4.99 £4.65 £4.31 £4.83 £4.89 £5.05 £5.08 0.60% 4.19% Occupancy performance above the UK Provincial average. As a TrevPAR £92.60 £93.57 £95.47 £101.01 £113.43 £109.59 £110.43 £116.02 5.07% 3.53% result, the Glasgow hotel market achieves a ca. 11% RevPAR above the UK Provincial average, which is impressive and illustrative of Departmental £41.20 £41.56 £42.44 £44.93 £46.52 £47.05 £47.7 1 £49.19 3.76% 2.29% the strength of demand and supports an argument that Glasgow is Expenses PAR currently undersupplied.

DOP PAR £51.40 £52.01 £53.02 £56.07 £66.92 £62.54 £63.02 £66.84 6.06% 4.49% In general, a market that consistently experiences Occupancy levels in excess of 80% year-on-year is considered to be undersupplied UOE PAR £21.08 £22.23 £22.76 £23.43 £24.60 £24.93 £25.34 £26.31 3.82% 2.94% and as a result upward pressure is applied on average room rates which fuels both strong RevPAR growth as well as profitability. Payroll PAP £27.86 £28.11 £28.62 £29.97 £30.90 £31.36 £31.34 £32.82 4.70% 2.30%

As a result of Glasgow’s robust leisure, conference and event and GOP PAR £30.33 £29.78 £30.27 £32.64 £42.32 £37.61 £37.68 £40.53 7.56% 5.5­6% corporate demand dynamics, RevPAR has witnessed a 5-year CAGR of 6.6% which has been largely underpinned by strong growth in ADR performance. Despite inflationary pressures, rising payroll costs as a result of the National Living Wage, given this strong revenue GLASGOW - KPI EVOLUTION: 12 MONTHS TO JUNE 2011-2018 performance and hoteliers becoming more operationally savvy in terms of cost savings in other departments, growth in GOP over the past five years has been around 5.56%, well above inflation. £90 86% £85 84% £80 82% £75 £70 80% £65 78% £60 76% £55 74% £50 £45 72% £40 70% 2011 2012 2013 2014 2015 2016 2017 2018

ADR REVPAR OCCUPANCY

6AQ GLASGOW / PAGE 17 GLASGOW OFFICE MARKET COMMENTARY - OCCUPATIONAL

• Glasgow is the third largest UK regional office • Supply levels increased slightly during the first market and Scotland’s largest, with total floor half, with a total of 1.33 million sq ft available space of 24.34 million sq ft and 13.84 million at the end of June. Supply is increasingly sq ft in the city centre. However, office supply becoming focused on secondhand space, within the City Centre is becoming more with less than 10% classified as new or early restricted, with a lack of major development marketed. activity, which is expected to continue. In particular, Grade A supply is decreasing • The lack of Grade A space in Glasgow has dramatically, currently standing at 0.30% sparked some fresh development activity. FORE (41,803 sq ft). This figure will come under even Partnership and Greenoak Real Estate have more pressure as there will be no new build commenced demolition work of Richmond offices brought to the market until at least 2020. Exchange and Epic House, at the corner of West Campbell Street and Cadogan Street. • Two large pre-lets led to a new record level of Once the site is clear it is expected that take-up for the Glasgow office market in 2018. construction of Cadworks (94,000 sq ft) will Over the first six months of the year take-up begin immediately on a speculative basis, with totalled 593,901 sq ft, 11% higher than the completion due in Q3 2020. Signal Capital are annual average for the past ten years. The first also expected to refurbish Cerium, 55 Douglas major deal was the pre-let of 1 Atlantic Square Street, following the expiry of Morgan Stanley’s (187,205 sq ft) by the Government Property lease. Also planned for this autumn is the Unit. This was followed, a few months later, by refurbishment of 50 Bothwell Street by FORE Clydesdale Bank pre-letting 110,955 sq ft at 177 Partnership and Kier Property. Bothwell Street. • The lack of Grade A space has also led to an • Serviced office operators were a prominent increase in prime rents. The Clydesdale Bank feature in H1 with Orega, taking 21,864 sq ft pre-let is rumoured to have set a new headline at 9 George Square, and Regus signing two rent over £32.50 per sq ft, up from £29.50 per sq separate deals at 1 West Regent Street and 100 ft at the end of 2017. West George Street. There has been a notable increase in requirements for office space in the city centre. The public sector continues to look for space in the Glasgow, as are a number of professional services firms.

6AQ GLASGOW / PAGE 18 GLASGOW PRIME OFFICE RENTS

MARKET £40 SNAPSHOT £35 £30

£25

£20 TYPICAL HEADLINE RENTS £15 £10

Building Type Rent £5

Prime CBD (new build) £32.50 per sq ft £0 6 7 8 5 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2019 2020 2021 2022 2000 20 1 20 1 20 1 20 1 Prime Grade A Rent (existing stock) £29.50 psf

Prime CBD refurbished £28.00 - £29.00 psf

TYPICAL INCENTIVES 2017-2018 KEY LEASING TRANSACTIONS

Property Date Tenant Size (Sq Ft) Rent (PSF) Term Certain Grade A New Build Grade A Refurbished Capella, 60 York Street (4th-5th Floors) Q2 2018 Arrow Global Ltd 21,824 £28.50 5 years 9 months 12 months 177 Bothwell Street Q2 2018 Clydesdale Bank 110,955 £32.50 10 years 15 - 18 months 20 - 24 months 1 West Regent Street Q2 2018 Regus 32,000 £28.50

Building 1, Atlantic Square Q1 2018 GPU 187,205 £24.50

TOTAL SUPPLY 9 George Square (1st – 3rd Floors) Q1 2018 Orega 21,864 £24.00

310 St Vincent Street (5th Floor) Q1 2018 COWI 6,990 £26.00 Grade A 61,026 sq ft

1 Atlantic Quay (Ground, 3rd - 5th Floors) Q4 2017 DWP 84,542 £23.00 0.30% vacancy 3 Atlantic Quay Q4 2017 Scottish Courts & Tribunals 80,498 £23.00 Grade B 1.27 million sq ft 141 Bothwell Street (3rd Floor) Q4 2017 JP Morgan 20,483 £29.00

7.94% vacancy St Vincent Plaza (7th Floor) Q4 2017 Zurich 17,222 £26.00

6AQ GLASGOW / PAGE 19 LIVE OCCUPATIONAL GLASGOW OFFICE DEVELOPMENT PIPELINE 2000 - 2020 COMPLETED UNDER CONSTRUCTION (SPECULATIVE) UNDER CONSTRUCTION (COMMITTED) LONG TERM ANNUAL AVG REQUIREMENTS 700,000 600,000

500,000 COMPANY SIZE (SQ FT) TIMING 400,000 WE WORK 40,000 TBC 300,000 RESDIARY C/O CARGILL 8,000 – 10,000 TBC

UTILITYWISE C/O SDI 20,000 TBC 200,000

H P LTD C/O JLL 9,000 – 11,000 TBC 100,000 KPMG C/O KNIGHT FRANK 15,000 – 30,000 Q3 2018 0 HMRC C/O JLL 60,000 Q3 2018 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

CIGNA C/O C&W 30,000 – 60,000 Q4 2018

MACMILLAN CHARITY 16,000 – 17,000 Q4 2018 C/O REAL ESTATE CONSULTANCY GLASGOW OFFICE MARKET AVAILABILITY 2000 - H1 2018 ABELLIO 15,000 – 18,000 Q4 2018

SCOTTISH MINISTERS C/O JLL 55,000 – 85,000 Q4 2018 SECONDHAND NEW & EARLY MARKETED MORTON FRASER C/O JLL 10,000 Q1 2019 2,500,000

AON C/O CBRE 10,000 – 15,000 Q1 2019 2,000,000 C/O CBRE 24,000 – 28,000 Q1 2019

GAMMA TELECOM 15,000 – 20,000 Q2 2019 1,500,000

ATKINS C/O LSH 30,000 Q2 2019 1,000,000 HILTON C/O JLL 35,000 – 40,000 Q1 2019

VIRGIN MEDIA C/O CBRE 25,000 – 30,000 Q4 2019 500,000 GPU (PHASE 2) 250,000 – 350,000 2021/2022

JPMC UP TO 200,000 2022 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 H1 2018

6AQ GLASGOW / PAGE 20 GLASGOW OFFICE MARKET GLASGOW INVESTMENT VOLUMES £M’S (AS AT END 2017) 500.0 £468 COMMENTARY - INVESTMENT 450.0 400.0 £356 £353 350.0 300.0 • Glasgow is a major centre in itself and • There is strong appetite for good quality 250.0 £234 £240 £229 £208 has attracted long term investment from a office investments from overseas buyers, 200.0 £174 diverse range of sources, most notably UK particularly those looking for modern stock 150.0 £122 Institutions, overseas funds and high net with long term income to strong covenants. £90 100.0 worth individuals. Prime city centre office Demand has increased for this type of 50.0 yields in Glasgow are currently 5.25%, which product over the past six months. Moorfield’s 0.0 represents a discount to other major cities sale of 1 Atlantic Quay, which is 86% let to 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q2 2018 in the ‘Big Six’ including Manchester (4.75%) the Secretary of State, attracted eight offers and Birmingham (4.75%). at a recent closing date, all from overseas investors. It is now under offer to a Middle • The Glasgow Office Investment Market Eastern investor for well in excess of the witnessed a record year in 2017 with asking price. GLASGOW VS PAN-EUROPEAN YIELDS £468m traded in the city centre across 24 (VALUE DIFFERENCE IN BRACKETS) transactions. This represented an increase of • The Scottish office market continues to 122% from 2016 and was significantly ahead appeal to a wide range of investors due to the 6.00% of the 10 year average for Glasgow City strong occupational sentiment, lack of stock 5.25% 4.75% Centre investment volumes. elsewhere and the higher returns generated 4.50% (11%) 5.00% 4.30% (17%) 4.30% 4.20% in Scotland in comparison to other major UK 4.00% (22%) (22%) (25%) • There have been five major office and European cities. (31%) 3.80% 3.50% (38%) transactions in Glasgow during the first 4.00% (50%) 3.30% six months of 2018, totalling £200.35m. (59%) The largest of these deals was the forward 3.00% funding on 1 Atlantic Square, pre-let to the Government Property Unit. L&G’s Annuity Fund completed at a price rumoured to be 2.00% in the region of £106m. The largest sale of a standing asset was Skypark, located within 1.00% the Digital Media Quarter, purchased for £78m by Hermes. This represented a net 0.00% initial yield of 8.3%.

LYON MILAN MUNICH WEST END GLASGOW BARCELONA MANCHESTER AMSTERDAM STOCKHOLM CITY OF LONDON

6AQ GLASGOW / PAGE 21 RECENT OFFICE INVESTMENT TRANSACTIONS

Capital Value Property Date Initial Yield Capital Value Purchaser Comments Per Sq Ft

5.70% £48,000,000 1 Atlantic Quay Under Offer £394 (quoting) Overseas 86% let to The Secretary of State. WAULT of 12.2 years to expiry and 11.8 year to breaks. (quoting) (quoting)

Multi-let to tenants inclduing Morton Fraser, Syntel Europe, and Aviva Central Services 145 St Vincent Street Aug-18 6.80% £11,200,000 £295 RJ Holdings with a WAULT of 3.8 years to the expirires and 2.4 years to the breaks.

Forward fund of 187,000 sq ft development pre-let to the Government Property Unit Building 1, Atlantic Square Feb-18 4.29% £105,000,000 £561 Legal & General (GPU) on an annuity style lease.

Scottish Ministers (Scottish Courts and Tribunal Service) have taken the whole building 3 Atlantic Quay Nov-17 3.60% £50,100,000 £621 Legal & General on a 25 year lease wih guaranteed rental uplifts.

Multi-let to tenants including CBRE, Big Lottery Fund and Ernst & Young, with a WAULT Pacific House, Wellington Street Nov-17 7.68% £11,350,000 £222 Ediston of 3.43 years to the breaks.

80,739 sq ft. Multi-let to Morgan Stanley and Secretary of State for Defence with Cerium, 55 Douglas Street Oct-17 - £16,300,000 £202 Signal Capital 0.77 years unexpired. Both tenants due to vacate at lease expiry.

Knight Frank Deal completed in early 2018 upon practical completion. Off market transaction. Pre-let 122 Waterloo Street Oct-17 5.60% £65,500,000 £422 Investors to Morgan Stanley on a 10 year lease.

30-40 St Vincent Place Oct-17 5.68% £13,000,000 £264 Redevco Let to Clydesdale Bank until 2024.

Granite House, 31 Stockwell Street Oct-17 7.29% £33,700,000 £226 ICG Longbow Multi-let offices with ground floor retail.

Multi-let to tenants including KPMG, Registers of Scotland and Zurich. WAULT of 10.52 St Vincent Plaza Oct-17 5.75% £76,200,000 £446 Starwood years to the earliest breaks. Initial yield reflects a corporate acquisition.

Capella, 60 York Street Sep-17 6.54% £43,500,000 £372 Wirefox Multi-let with a WAULT of 9 years to expiry, 5.4 years to breaks.

Cuprum, Argyle Street Feb-17 6.84% £28,000,000 £288 Credit Suisse Multi-let with a WAULT of 11 years to expiry, 7.26 years to breaks.

6AQ GLASGOW / PAGE 22 Offers are sought in excess of £13,250,000 (Thirteen Million, Two Hundred and Fifty Thousand VIEWING AND FURTHER Pounds) exclusive of VAT for our client’s heritable interest, which INFORMATION assuming purchaser’s standard Viewing strictly by prior appointment via the joint selling agents: acquisitions costs of 6.23%, reflects a low capital value of £169 per sq ft.

Martyn Brown Colin Finlayson T: +44 (0)141 204 7703 T: +44 (0)131 301 6721 EPC E: [email protected] E: [email protected] The property has an EPC rating of C. A copy of the EPC Camille Casey Alex Fraser T: +44 (0)141 204 7718 T: +44 (0)141 567 6670 certificate is available in the Data Room. E: [email protected] E: [email protected]

Audrey Dobson Alistair Reid T: +44 (0)141 204 7763 T: +44 (0)141 567 6630 VAT E: [email protected] E: [email protected] The asset is elected for VAT which will therefore be payable on this transaction, however it is anticipated that the sale will be treated as a Transfer of a Going Concern For confidential debt enquiries please contact: (TOGC). Victoria Hill David Barry T: +44 (0)161 233 4516 T: +44 (0)207 087 5626 DATA ROOM E: [email protected] E: [email protected] Further information can also be found at Further information is available in the Data Room. Access details are available upon request. www.6atlanticquayglasgow.com

MISREPRESENTATION ACT: CBRE for themselves and for the vendors of this property whose agent they are, give notice that: These particulars do not constitute, nor constitute any part of, an offer or a contract. All statements contained in these particulars as to this property are made without responsibility on the part of CBRE or the vendors or lessors. None of the statements contained in these particulars as to this property are to be relied on as statements or representations of fact. Any intending purchasers must satisfy themselves by inspection or otherwise as to the correctness of each of the statements contained in these particulars. The vendors do not make or give and neither CBRE nor any person in their employment has an authority to give any representation or warranty in relation to this property. September 2018