Manchester M2 1En

1 40 SPRING GARDENS

MANCHESTER M2 1EN

3 40 SPRING GARDENS PRIME OFFICE AND RETAIL INVESTMENT IN THE HEART OF MANCHESTER’S CORE BUSINESS DISTRICT 40 SPRING GARDENS 4

GRADE A OFFICE ACCOMMODATION OF EXCEPTIONAL QUALITY 5 40 SPRING GARDENS

INVESTMENT SUMMARY

• Landmark building in a prime location in Manchester’s Central Business District.

• Constructed in November 2007 beating the BCO (British Council of Offices) standard for construction.

• Contemporary design of exceptional quality.

• Total net area of 9,242.58 sq m (99,489 sq ft) comprising Grade A office accommodation arranged over ground and 8 upper floors, three ground floor retail units and two levels of basement parking.

• Substantial floor plates averaging 1,081.48 sq m (11,641 sq ft), one of the largest in the established CBD.

• Open floor layout around a central core providing efficient and flexible space.

• Impressive double height reception with a full height trapezoid atrium.

• Managed through a sustainability lens allowing occupiers to benefit from its efficient capabilities and financial savings.

• 79 basement car parking spaces, providing a car ratio of 1:1,259 sq ft, one of the best provisions in the city core.

• Multi-let producing a total rent of £3,220,553 p.a including rent guarantees.

• Manchester’s market dynamics of limited supply and sustained occupier demand are reflected in strong and continued rental growth forecasts averaging 3.29% p.a over the next 5 years.

Offers are sought in excess of £60 million subject to contract and exclusive of VAT, reflecting a net initial yield of 5.27% assuming a JPUT purchase and acquisition costs of 1.80%. A purchase at this level reflects a capital value of £603 per sq ft of above ground accommodation. 40 SPRING GARDENS 6

MANCHESTER

ECONOMIC POWERHOUSE

THE UK’S COMMERCIAL AND ECONOMIC CAPITAL OUTSIDE LONDON.

HOME TO 80 OF THE FTSE 100 COMPANIES.

MANCHESTER BENEFITS FROM A DIVERSE ECONOMY COMPRISING A STRONG BLEND OF BANKING, FINANCE, SERVICE SECTOR AND MANUFACTURING BUSINESSES.

HEADQUARTER BUILDINGS INCLUDING THE CO-OP GROUP, RBS, BBC, SIEMENS, UMBRO AND ADIDAS.

INFRASTRUCTURE

THE BUSIEST AIRPORT OUTSIDE LONDON WITH NEARLY 22 MILLION PASSENGERS IN 2014.

THE LARGEST TRAVEL TO WORK AREA OF ANY CONURBATION OUTSIDE OF LONDON CONTRIBUTING TO ITS POSITION AS THE FASTEST GROWING REGIONAL CITY IN THE UK.

2 HOURS TO LONDON WITH FAST AND FREQUENT TRAINS. 7 40 SPRING GARDENS

GLOBAL APPEAL

HIGHEST RATED CITY IN THE UK OUTSIDE LONDON IN TERMS OF IMPORTANCE TO THE GLOBAL ECONOMY.

RANKED 24TH IN THE WORLD AND SECOND IN THE UK, AFTER LONDON, IN THE GLOBAL INNOVATION CITIES LEAGUE TABLES.

GLOBAL CORPORATES INCLUDING ETIHAD, BANK OF NEW YORK MELLON, FORD CREDIT, GOOGLE, AEGIS AND EMIRATES.

GREATER MANCHESTER POPULATION 2.6 MILLION.

11 MILLION PEOPLE LIVE WITHIN A 50 MILE RADIUS OF THE CITY CENTRE. 40 SPRING GARDENS 8

COOL, CULTURED AND COSMOPOLITAN

THRIVING LEISURE, RESTAURANT AND NIGHTLIFE SCENE. MORE MUSIC VENUES, PER 100,000 PEOPLE, THAN ANYWHERE ELSE IN THE COUNTRY AND IS SECOND FOR MOST LIBRARIES AND CINEMAS.

EDUCATION & SKILLED WORKFORCE

THE CITY HAS OVER 100,000 STUDENTS, ONE OF THE LARGEST STUDENT POPULATIONS IN EUROPE.

LAST YEAR MANCHESTER UNIVERSITY WAS RANKED IN THE TOP 30 UNIVERSITIES IN THE WORLD AND HAS PRODUCED 25 NOBEL PRIZE WINNERS.

THE REGION BENEFITS FROM A SIGNIFICANT SUPPLY OF HIGHLY EDUCATED STAFF WITH ONE QUARTER OF THE LABOUR POOL EDUCATED TO DEGREE LEVEL.

THIS STRONG EDUCATIONAL REPRESENTATION PROVIDES THE CITY WITH A LEADING EDGE ON RESEARCH AND DEVELOPMENT CAPABILITY TOGETHER WITH A SOUGHT AFTER HIGHLY QUALIFIED WORK FORCE. 9 40 SPRING GARDENS

TOURISM

MOST VISITED ENGLISH CITY BY FOREIGN VISITORS AFTER LONDON.

THRIVING AND EXPANDING LEISURE INDUSTRY.

IN 2014 CHINESE TOURISTS REPRESENT 50% OF MANCHESTER’S INCOME, MORE THAN ANY OTHER VISITING SHOPPERS TO THE CITY.

FOREIGN TOURISTS ARE FORECAST TO CONTRIBUTE £1.2BN TO THE NORTH WEST ECONOMY ANNUALLY BY 2017. SPORT

TWO OF THE MOST RECOGNISABLE AND FAMOUS FOOTBALL CLUBS IN THE WORLD.

IN 2012, MANCHESTER WAS RANKED THE FIFTH BEST SPORTS CITY IN THE WORLD BY A SPORT BUSINESS GROUP ULTIMATE SPORTS CITIES REPORT.

MANCHESTER HAS HOSTED THE COMMONWEALTH GAMES AND IS THE HEADQUARTERS OF BRITISH CYCLING. 40 SPRING GARDENS 10

MANCHESTER SPINNINGFIELDS MANCHESTER ST PETER’S CENTRAL LIBRARY SQUARE

MANCHESTER TOWN HALL

A LANDMARK OFFICE IN MANCHESTER’S PRIME CORE 11 40 SPRING GARDENS

KING EXCHANGE ARNDALE MANCHESTER STREET SQUARE SHOPPING VICTORIA CENTRE

MANCHESTER M2 1EN

CENTRAL BUSINESS DISTRICT

MANCHESTER PICCADILLY t D 40 SPRING GARDENS 12 11 A Y T O A E R E E W L T R A T M E Y D D S I E T L H A I L C O IN MANCHESTER N E O R TR R R R O M S VICTORIA I S A T H T T D N R B 13 A E L E L R O SPRING GARDENS A E H T C Cathedral O L P K 8 Gardens P IL F R H R The TE E IA Manchester O D S C Printworks R Cathedral U . S H T S S S T 3 T R EE EE TR L S T 2 40 Spring Gardens is a trophy office building occupying a prime PE HA T position at the heart of Manchester’s flourishing central business C E Manchester E 9 Arndale R district, the city’s established financial and legal core. 1 T Shopping S T Centre E T M S

Planning constraints and the nature of architectural sensitive building stock within the A RE CHAPEL STREET H H T T city’s core have restricted new development to more peripheral Manchester locations. As G D S E 5 L R E a result 40 Spring Gardens represents one of the few Grade A office buildings in the CBD. M 7 HI Exchange AR O A R

KE E T

Square T T P S

Sitting adjacent to the prime retail offer and within close proximity to Manchester’s Parsonage 5 S T S Gardens E R T principal rail terminus, Piccadilly Station, the immediate location remains the city’s premier E 9 T E E R 11 3 14 S E V E business address and home to the UK’s leading financial and professional services firms. E G T N E R SALFORD E 6 S R L T R 10 E Occupying the majority of an island site, the property benefits from a prominent frontage BR T T S E I S D A CENTRAL DGE A S N to Spring Gardens and return frontage to Brown Street. Manchester’s principal retail area S R T S 8 N M O TR O A I A T A is within close proximity including the Arndale Centre and Exchange Square, home to E SG RB N E R G A L Piccadilly T N 7 E W Harvey Nichols and Selfridges. T 7 S C C 12 T Gardens E O A 8 G N N BROWN5 ST A E K N IN I U T D G S ST R O 1 6 T P F E S 13 T S 3 R 1 TRE 11 S E Q 14 T T IE E S P T P 4 S E 10 C T I U E T R E C R D E R I R R N E C T 9 E 2 T Spinningfields C P A A S B S 6 Y E L E 4 O DI R 2 S Y T T A O 2 O E C S E E O L T O C S 12 OP L E L T ER S U ST S R Y QU A T T N AY R O S S G TRE E M S E S D T E N T T R A PET L E EAN ER 1 RT E St. John’s STRE T D E O

Gardens T P OCCUPIERS Y Museum A of Science

W & Industry L

Y IV ER T PO I O L R T N OA EE MANCHESTER LOCAL OCCUPIERS POINTS OF INTERESTI RESTAURANTS D TR

R S PICCADILLY H T L

1 KPMG 1 Manchester Central Library 1 Jamie’s Italian RT O O W 2 Friends Provident 2 Town Hall 2 Piccolino T N HI 3 Zurich Insurance, Coutts Bank 3 Beetham Tower 3 Rosso W D 3 O O 4 Fentons Solicitors 4 Manchester Metropolitan 4 Croma X N University F 5 Brabner Chaffe Street 5 Chaophraya S R O A 5 Royal Exchange Theatre P D 6 NM Rothschild 6 1847 R 10 C R D K 7 RSA Insurance Group 6 Kendals 7 Room I N V S 8 Gateley LLP 7 Arndale Centre 8 Panama Hatty’s DEANSGATE C I R TR E LL 8 Manchester CathedralE S 9 Investec Bank G 9 Stock EE S E WHITWORTH STR 10 UBS 9 The Lowry Hotel E 10 Grill on New York Street EET W S S N T T T M 11 3i, Scottish Equitable 10 University of ManchesterT 11 Avalanche R R ANC UNIAN (UMIST) R E E WAY 12 Lloyds Banking Group O E E T T 13 Fortis Bank, Liverpool Victoria 11 Phones 4u Arena A SHOPPING D 12 Manchester Opera House MANCHESTER Y Friendly Society 1 M&S A 13 National Football Museum OXFORD ROAD W 14 Towers Watson 2 Selfridges N 14 Manchester Post Office IA 3 Harvey Nichols N 4 CU AD N RO A R M TE ES CH D 13 11 40 SPRINGA GARDENS Y T O A E R E E W L T R A T M E Y D D S I E T L H A I L C O IN MANCHESTER N E O R TR R R R O M S VICTORIA I S A T H T T D N R B 13 A E L E L R O A E H T C Cathedral O L P K 8 Gardens P IL F R H R The TE E IA Manchester O D S C Printworks R Cathedral U . S H T S S S T 3 T R EE EE TR L S T 2 PE HA T C E Manchester E 9 Arndale R 1 T Shopping S T Centre E T M S A RE CHAPEL STREET H H T T G D S E 5 L E M 7 HI R Exchange AR O A R

KE E T

Square T T P S

Parsonage 5 S T S Gardens E R T E 9 T E E R 11 3 14 S E V E E G T N E R SALFORD E 6 S R L T R 10 E BR T T S E I S D CENTRAL D A S N A GE S R T S 8 N M O TR O A I A T A E SG RB N E R G A L Piccadilly T N 7 E W T 7 S C C 12 T Gardens E O A 8 G N N BROWN5 ST A E K N IN I U T D G S ST R O 1 6 T P F E S 13 T S 3 R 1 TRE 11 S E Q 14 T T IE E S P T P 4 S E 10 C T I U E T R E C R D E R I R R N E C T 9 E 2 T Spinningfields C P A A S B S 6 MANCHESTERY E L E 4 O DI M2 1EN R 2 S Y T T A O 2 O E C S E E O L T O C S 12 OP L E L T ER S U ST S R Y QU A T T N AY R O S S G TRE E M S E S D T E N T T R A PET L E EAN ER 1 RT E St. John’s STRE T D E O

Gardens T P Y Museum A of Science

W & Industry L

Y IV ER T PO I O L R T N OA EE MANCHESTER I D TR

R S PICCADILLY H T L

RT O O W T N HI W D 3 O O X N F S R O A P D R 10 C R D K I N V S DEANSGATE C I R TR E LL E S G EE S E WHITWORTH STR E EET W S S N T T T MAN T R R CUNIA R E E N WAY O E E A T T D MANCHESTER AY W OXFORD ROAD N IA N 4 CU AD N RO A R M TE ES CH 40 SPRING GARDENS 14

COMMUNICATIONS

GLASGOW EDINBURGH Road Rail

The regional motorway network throughout the North Manchester is served by three stations with the busiest, West is one of the most comprehensive in the country Manchester Piccadilly, providing frequent and fast services with approximately 60% of British industry and 22 to London Euston in just over 2 hours. million consumers within a 2 hour drive. NEWCASTLE UPON TYNE The network comprises a range of interlinking M6 motorways including the M62, M57, M602, M56, M66 and M61 all interconnected by the M60 orbital motorway around Manchester. The M62 provides a link to Liverpool and Leeds whilst the M6 provides access to LEEDS

Birmingham and London in the South and Glasgow and LIVERPOOL Edinburgh to the North. SHEFFIELD There are also regular bus services along King Street including the free shuttle to Piccadilly Railway Station. M6 MANCHESTER NOTTINGHAM M1 A1(M) BIRMINGHAM

M40 Travel times and distances by road and rail LONDON 34 MILES 40 MILES 81 MILES 192 MILES 210 MILES 218 MILES M4

M25 M20

LIVERPOOL LEEDS BIRMINGHAM LONDONEDINBURGH GLASGOW

47 MINS 55 MINS 1 H 26 MINS 2 H 8 MINS 3 H 16 MINS 3 H 15 MINS

Metrolink 250 P+R Weaste 100 ECCLES 217 Langworthy P+R P+R The Metrolink is Manchester’s popular light rail transit Ladywell Broadway system which has improved access across the city Bowker 369 centre enabling a reduction in road congestion. There Vale P Prestwich P Whiteﬁeld P+R Milnrow Newbold ROCHDALE MediaCityUK BURY Harbour City Newhey TOWN are three Metrolink stops nearby providing links across P Crumpsall Heaton P Besses o’ P+R Radcli e Kingsway Rochdale CENTRE Anchorage Park th’ Barn 216 Business Park Railway the city including direct services to Piccadilly and ALTRINCHAM Abraham P Station Salford Quays Moss Derker Shaw and Victoria Stations and onwards to Manchester suburbs Navigation 270 Crompton and the airport. Road Exchange Quay Queens P+R Road P+R Pomona Oldham 251 DEANSGATE 190 Central Oldham P+R Timperley108 Dane Old Central South CASTLEFIELD Park Failsworth P+R Chadderton Westwood Mumps 81 P+R Sale Road Stretford Tra ord Tra ord Bar Victoria MANCHESTER Newton AIRPORT P P CITYZONE Monsall Hollinwood Freehold Oldham Brooklands Heath and King Street CORNBROOK Market Shadowmoss St Werburgh’s Moston Barlow Moor Firswood Street Shudehill Road Shuttle bus Road connections Robinswood 300 Chorlton available Peel Hall Road P+R Northern Moor Withington Piccadilly Etihad Clayton Cemetery 200 Ashton Benchill Roundthorn Moor Sale PICCADILLY Wythensha Road Gardens Campus Hall Road Audenshaw P+R West Town Centre Water Burton Road ASHTON- Crossacres Martinscroft Baguley Wythenshaw Park 302 UNDER-LYNE New Holt Velopark Edge Droylsden Ashton P+R Park P+R West EAST Islington Town Lane Moss 195 Didsbury DIDSBURY Didsbury Village 15 40 SPRING GARDENS

GLASGOW EDINBURGH Air

Manchester International Airport is approximately 10 miles south of the city centre and is the busiest airport in the UK outside London. The airport handles over 22 million passengers a year with over 100 NEWCASTLE airlines making more than 200 international flights every day serving UPON TYNE M6 180 destinations worldwide.

BEIJING DUBAI LEEDS MADRID LIVERPOOL NEW YORK CITY SHEFFIELD SYDNEY

M6 MANCHESTER NOTTINGHAM M1 15 + 5 A1(M) BIRMINGHAM HRS HRS

M40 LONDON M4

M25 M20

10 Flight times from Manchester Airport HRS

250 P+R Weaste 100 ECCLES 217 Langworthy P+R P+R Ladywell Broadway Bowker 369 Vale P Prestwich P Whiteﬁeld P+R Milnrow Newbold ROCHDALE MediaCityUK BURY Harbour City Newhey TOWN P Crumpsall Heaton P Besses o’ P+R Radcli e Kingsway Rochdale CENTRE Anchorage Park th’ Barn 216 Business Park Railway ALTRINCHAM Abraham P Station Salford Quays Moss Derker Shaw and Navigation 270 Crompton Road Exchange Quay Queens P+R Road P+R Pomona Oldham 251 DEANSGATE 190 Central Oldham P+R Timperley108 Dane Old Central South CASTLEFIELD Park Failsworth P+R Chadderton Westwood Mumps 81 P+R Sale Road Stretford Tra ord Tra ord Bar Victoria MANCHESTER Newton AIRPORT P P CITYZONE Monsall Hollinwood Freehold Oldham Brooklands Heath and King Street CORNBROOK Market Shadowmoss St Werburgh’s Moston Barlow Moor Firswood Street Shudehill Road Shuttle bus Road connections Robinswood 300 Chorlton available Peel Hall Road P+R Northern Moor Withington Piccadilly Etihad Clayton Cemetery 200 Ashton Benchill Roundthorn Moor Sale PICCADILLY Wythensha Road Gardens Campus Hall Road Audenshaw P+R West Town Centre Water Burton Road ASHTON- Crossacres Martinscroft Baguley Wythenshaw Park 302 UNDER-LYNE New Holt Velopark Edge Droylsden Ashton P+R Park P+R West EAST Islington Town Lane Moss 195 Didsbury DIDSBURY Didsbury Village 40 SPRING GARDENS 16

DESCRIPTION

Completed in November 2007, 40 Spring Gardens Grade A specification was designed to beat the BCO (British Council of Offices) standard for construction.

A striking contemporary design, the building comprises highly specified office accommodation over eight upper floors, accessed via a double height reception on ground floor with two levels of basement parking and three retail units on ground floor. Designed by the award winning architects, Aedas, the building is of steel frame construction, natural sandstone and aluminum curtain walling to the front and side elevations with double glazed windows throughout. 40 Spring Gardens is widely considered to provide some of the most visually stunning accommodation within the city core. The property’s external appearance is of exceptional quality providing an attractive addition amongst other architecturally sensitive buildings in the upper King Street conservation area. 17 40 SPRING GARDENS 40 SPRING GARDENS 18

OFFICES

The offices are accessed from Spring Gardens providing an impressive double height entrance leading into a reception area with a full height trapezoid atrium which acts as the focal point for the building, flooding floors with natural light.

With an average floor plate of 1,081.48 sq m (11,641 sq ft) the building provides a scale of operation rarely offered in the city’s prime business district. The open floor layout around a central core configuration allows maximum potential for efficient space planning and subdivision for multi-occupation. The top three floors in particular enjoy elevated views across the city. Its well-organised layout with highly specified components allows occupiers to benefit from its subtle efficient capabilities and financial savings. Spread over two basement levels, the property contains 79 car parking spaces providing a rare ratio of 1:117 sq m (1:1,259 sq ft) and one of the best ratio’s in the city core. Access is provided by a ramp to the basement from Brown Street.

RETAIL

The property comprises two retail units with prominence to the popular Spring Gardens and a further unit located on Brown Street, a busy cut through to Market Street and the Arndale Centre from King Street. Each retail unit benefits from full height glazing and excellent floor to ceiling heights. 19 40 SPRING GARDENS 40 SPRING GARDENS 20

SPECIFICATION

The office specification includes:

• Full height glazed feature atrium. • Full height glazing to the elevations providing excellent natural lighting throughout. • Highest standard internal finishes. • Flexible large open plan floorplates capable of sub-division. • Finished floor to ceiling height of 2.80m. • Suspended metal tiled ceiling with LG 7 compatible lighting. • Four pipe fan coil air conditioning system. • Intelligent Building Management System enabling occupiers efficient space and cost savings. • 150mm fully accessible raised floors. • 4 x 17 person passenger lifts. • 1 x 1,000 kg good lift serving all floors with separate access. • 79 basement car parking spaces at a ratio of 1:117 sq m (1:1,259 sq ft). • Base building occupation ratio of approximately 1:8 sq m with a design capability of 1:6.5 sq m. • Separate male and female W.C. facilities on each floor with high end fixtures and fittings. • AMR (Automated Meter Reading) and Sub-Metering throughout enabling half hourly online environmental performance management. • Integrated LED display located in the reception. 21 40 SPRING GARDENS 40 SPRING GARDENS 22

ACCOMMODATION

The property provides the following net internal floor areas:

Floor Description Area Sq M Sq Ft Eighth Offices 1,048.20 11,283 Seventh Offices 1,052.47 11,329 Sixth Offices 1,071.79 11,537 Fifth Offices 1,096.32 11,801 Fourth Offices 1,117.78 12,032 Third Offices 1,122.98 12,088 Second Offices 1,122.15 12,079 First Offices 1,020.23 10,982 Offices Total 8,651.92 93,131 Unit 1 – Vacant Retail 202.06 2,175 Unit 2 – Hervia Bazaar Retail 120.68 1,299 Unit 3 – Beermoth Retail 267.93 2,884 Retail Total 590.66 6,358 Grand Total 9,242.58 99,489

There are 79 car parking spaces located on two basement levels accessed via Brown Street. 23 40 SPRING GARDENS

FLOOR PLANS GROUND FLOOR 2,884 SQ FT (268 SQ M)

GROUND FLOOR 2,884 SQ FT (268 SQ M)

CAR PARK ENTRANCE

CAR PARK ENTRANCE BEERMOTH

GOODS LIFT LIFT

BEERMOTH LIFT

LIFT

GOODS OFFICE RECEPTION LIFT LIFT DISABLED LIFT SHOWER

DISABLED LIFT WC

LIFT OFFICE RECEPTION VACANT DISABLED LIFT SHOWER

DISABLED WC LET TO HERVIA

RAMP VACANT DOWN

LET TO HERVIA

RAMP DOWN THIRD FLOOR 11,955 SQ FT / 1,111 SQ M

THIRD FLOOR 11,955 SQ FT / 1,111 SQ M

GOODS LIFT LIFT FEMALE

LIFT

ATRIUM

LIFT

GOODS LIFT LIFT FEMALE MALE LIFT

LIFT

ATRIUM

LIFT

MALE LIFT

Not to scale. For identification purposes only. 40 SPRING GARDENS 24

TENURE PLANNING

Freehold. The property is not Listed but is situated within the King Street conservation area.

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Not to scale. For identification purposes only. This plan is based upon the Ordnance Survey Map with the sanction of the controller of H.M. Stationery Office. Crown Copyright reserved. 25 40 SPRING GARDENS 40 SPRING GARDENS 26

TENANCIES

The property is let in accordance with the below tenancy schedule with approximately 52% of the total income let to the undoubted covenant of Halifax Bank of Scotland and Aldermore Bank Plc.

Tenant Floor(s) Area Rent Rent ERV ERV Lease Rent Lease Tenant Comments (sq ft) (£pa) (£psf) (£psf) (£pa) Start Review Expiry Break Options HBoS 5th - 8th 45,950 £1,286,600 £28.00 £32.50 £1,493,375 06/12/2007 06/12/2017 05/12/2022 5-6th floors (17,282 sq ft) sublet to Aon outside L&T Act. Sublet with 14 car parking spaces. Aldermore Bank Plc 4th 12,032 £372,992 £31.00 £31.00 £372,992 04/09/2015 04/09/2020 03/09/2025 04/09/2022 Tenant break on 9 months notice. 7 months rent free to be topped up by vendor. Rental Guarantee 3rd 12,088 £374,728 £31.00 £31.00 £374,728 Aldermore Bank preemption for 3rd floor valid until 03/09/2016. 15 months rent rates and service charge guarantee co-terminus with 4th floor lease. Rental Guarantee 2nd 12,079 £392,568 £32.50 £32.50 £392,568 18 months rent rates and service charge guarantee. Rental Guarantee 1st 10,982 £356,915 £32.50 £32.50 £356,915 18 months rent rates and service charge guarantee. Office Sub Total 93,131 £2,783,803 £29.89 £32.11 £2,990,578 Rental Guarantee Retail 2,175 £60,000 £27.59 £27.59 £60,000 18 month rent, rates and service guarantee. Hervia Bazaar Ltd Retail 1,299 £31,500 £24.25 £24.25 £31,500 04/01/2010 04/01/2015 03/01/2025 Beermoth Ltd Retail 2,884 £65,000 £22.54 £25.00 £65,000 Agreement for lease signed. 12 months rent free. Year 2 rent 32,500 p.a., Year 3 rent £48,750 p.a. Vendor to top up rent to Year 4 rent equating to £65,000 p.a. Completion of lease imminent, 15 year term, break at year 10, reviews at years 5 and 10. Retail Sub Total 6,358 £156,500 £24.61 £24.61 £156,500 HBoS Car Spaces 40 £140,000 £3,500 £3,750 £150,000 Aldermore Bank Plc (4th) Car Spaces 9 £31,500 £3,500 £3,750 £33,750 Vacant (Aldermore Bank Car Spaces 9 £31,500 £3,500 £3,750 £33,750 Aldermore Bank PLC preemption for 3rd floor valid Plc) until 03/09/2016. 15 months rent guarantee. AON Car Spaces 2 £7,000 £3,500 £3,750 £7,500 Termination on one weeks notice. Rental Guarantee (1st) Car Spaces 9 £33,750 £3,750 £3,750 £33,750 18 months rent guarantee. Rental Guarantee (2nd) Car Spaces 6 £22,500 £3,750 £3,750 £22,500 18 months rent guarantee. Colliers Car Spaces 3 £10,500 £3,500 £3,750 £11,250 Termination on one weeks notice. Altium Car Spaces 1 £3,500 £3,500 £3,750 £3,750 Termination on four weeks notice. Parking Sub Total 79 £280,250 £296,250 United Utilities Sub-Station £1.00 27/06/2005 26/06/2105

Grand Total 99,489 £3,220,553 £3,443,328

The service charge accounts for the year ending June 2015 equated to £5.50 psf with the same amount budgeted for 2015/16. 27 40 SPRING GARDENS

Grand Total 99,489 £3,220,553 £3,443,328 40 SPRING GARDENS 28

COVENANT INFORMATION

Halifax Bank of Scotland PLC Halifax Bank of Scotland (HBOS) is a retail and commercial bank and a wholly owned subsidiary of Lloyds Banking Group. Following their purchase in January 2009, they became the largest retail bank in the UK. A significant amount of government backed support was channelled into the Lloyds Banking Group following the purchase which has led investors to view them effectively as government backed income. Further information can be found at www.halifax.co.uk and www.lloydstsb.com

HBOS Plc 31 Dec 2014 31 Dec 2013 31 Dec 2012 D&B Rating

(£000’s) (£000’s) (£000’s)

Profit/ (Loss) Before Taxes 3,180,000 1,450,000 (1,239,000)

Tangible Net Worth 20,420,000 17,925,000 17,637,000 5A1 Net Current Assets 25,852,000 24,781,000 27,161,000 (Liabilities)

Aldermore Bank Plc Established in 2009, the bank currently has 850 employees serving from 12 offices around the UK servicing over 177,000 customers and a total loan book of over £5.4 billion. Aldermore is an SME-focused bank which operates with modern, scalable and legacy-free infrastructure. In March 2015, Aldermore Group Plc’s shares were listed on the main market of the London Stock Exchange and have broken into the FTSE 250. Further information can be found at http://www.aldermore.co.uk

Aldermore Bank Plc 31 Dec 2014 31 Dec 2013 31 Dec 2012 D&B Rating

(£000’s) (£000’s) (£000’s)

Sales Turnover £272,104 £195,908 £134,273

Profit Before Taxes £51,840 £22,418 £759 5A1

Tangible Net Worth £282,188 £250,382 £163,463 29 40 SPRING GARDENS

Hervia Bazaar Limited (Guaranteed by Hervia Limited) Set up in 1993, Hervia Bazaar is a designer of clothing and accessories. Founded in Manchester, the subject store is their flagship outlet with collections from Vivienne Westwood and other high end fashion designers serving its celebrity clientele. Their other store is based on Conduit Street London. The company has net current assets of £243,191 and further information can be found at www.herviabazaar.com.

Beermoth Beermoth is an independent, specialist beer shop, established in 2013 in the Northern Quarter area of Manchester City Centre. They stock a large and continuously-evolving assortment of beers from the best breweries in the world. The company has a tangible net worth of £21,806 and further information is available at www.beermoth.co.uk.

Aon Ltd (Subtenant) Aon is one of the world’s leading risk management services, insurance and reinsurance providers operating from 500 offices in over 120 countries Aon employs 65,000 people. Aon Ltd has a Dun and Bradstreet rating of 5A1 based upon a minimum risk of business failure. Further information can be found at www.aon.com. 40 SPRING GARDENS 30

MARKET COMMENTARY

OCCUPATIONAL

Manchester is set to outstrip other competing regional cities with favorable office market dynamics forecast to provide strong rental growth over the next 5 years.

With a total floor space of 19 million sq ft, Manchester Manchester’s traditional prime core, around 40 Spring is the largest and most dynamic office market outside Gardens, is tightly defined and due to the architecturally London. sensitive building stock prohibits the development of modern high-specification buildings with large floor Occupiers are seeing regional centres as an effective way plates. of reducing occupational costs whilst attracting a talented workforce. Manchester’s strategic position and highly With only one building currently available in the city skilled workforce make it a key target outside of London. centre that could satisfy a 30,000+ sq ft requirement, 40 Spring Gardens is uniquely placed to take advantage of Strong demand has characterised the Manchester office rising rental levels. market in 2015 with almost 700,000 sq ft acquired in the first 6 months, which is over 40% higher than the long These market fundamentals have resulted in a noticeable term average. increase in headline rents and a contraction of incentives. Coupled with strong economic growth and widespread Supply of Grade A space continues to erode and is business confidence this is expected to continue currently at exceptionally low levels. The majority of throughout the rest of the year with current prime rents new developments have successfully secured pre-lets or recently achieving £34.00 per sq ft and expected to reach are under offer however this has only gone part way to £35.00 per sq ft by the end of 2015. address the high levels of demand.

Notable Grade A rental transactions are as follows:

Property Size (sq ft) Occupier Rent (£psf) Comments Date

Chancery Place 6,000 Colliers £34.00 2008 Build Under offer

2 St Peter’s Square 40,000 Ernst & Young LLP £31.50 Pre-let March 2015

No 1 Spinningfield 50,000 PWC LLP £31.50 Pre-let March 2015

One St Peter’s Square 45,000 DLA Piper LLP £32.00 2014 Build December 2014

3 Hardman Square 22,000 TLT Solicitors £30.00 2007 Build September 2014

3 Hardman Square 30,000 I2 £32.50 2007 Build September 2014

3 Hardman Square 34,000 Worldpay £29.50 2007 Build March 2015 31 40 SPRING GARDENS

INVESTMENT

Manchester remains the focal point for investment into the regional markets with the highest trading volumes outside London. The city’s strong occupational market and clear evidence of rental growth have been significant factors in continued UK and international investor demand. Demand led by UK institutions and overseas investors, namely German, Far Eastern and Middle Eastern, are actively seeking exposure to Manchester albeit frustrated by a lack of Grade A supply. As the UK’s second city with strong forecasted rental growth, this international demand is set to continue. Prime Grade Office net initial yields now stand at 5.00% however trending stronger and expected to achieve evidence by the end of the year at 4.75% NIY for high quality buildings in the city core. Recent transactions are as follows:

Property Size (sq ft) Price Yield Capital Value (psf) Purchaser Date

One St Peter’s Square, 155,071 £175m 4.85% £630 DEKA August 2015 Manchester

66 Queen Square, Bristol 61,497 £33m 4.90% £535 Aviva July 2015

1 Marsden St, 68,538 £34m 5.00% £495 Standard Life August 2015 Manchester

4 Hardman Square, 55,150 £31m 4.90% £562 Orchard Street December 2014 Manchester

14 Chancery Place, 105,000 £57m 5.05% £542 NFU July 2014 Manchester 40 SPRING GARDENS 32

SUSTAINABILITY

As part of the vendors targets for continuously improving carbon reduction in their properties, 40 Spring Gardens energy output is monitored and recorded every 30 minutes. A number of initiatives have been set up in conjunction with the tenant to drive the reduction in carbon emissions which are outlined below.

The building is multi-let therefore the landlord has direct control over the energy demand strategy through it’s appointed managing agents, MJ Mapp. A new energy metering/monitoring strategy is in place that will improve the sustainability performance of the building still further. The annual benchmarked carbon 2 output (end 2014) is 80 kgs CO2/m /year which is significantly better than “Good Practice” (Source: Econ 19 Energy Use in Offices - Air Conditioned Prestige).

• Occupier engagement including quarterly sustainability newsletter and plans to increase recycling and encourage green transport through on site bicycles. • Capex (Capital Expenditure/Fees) incurred on re-instating the 1st and 2nd floors plus HBOS retail units and ongoing energy efficiency measures 2010-2015 approximately £250,000. • Active collaboration with the tenant and establishment of a Green Group with a quarterly sustainability newsletter circulated to all the occupants in the building. • Half hourly Energy and Carbon consumption available on line and at the building enabling the landlord/tenant to record and monitor the electricity, gas, water and carbon output of the building. • Comprehensive sub metering and a ground floor reception visual LED energy use display monitor. 33 40 SPRING GARDENS

Below are the property’s current sustainability ratings:

CATEGORY RATING COMMENTS EPC Rating 63 (C ) Re-rated June 2015 BREEAM Rating “Very Good” At practical completion 2007 BREEAM access to public transport services Max 3 credits Prime CBD EAFRA (Environment agency flood risk 0.1% (1 in 1,000 or less) Asset screened for flood risk assessment) at acquisition

2 Carbon output (2014) 80 kgs Co2/m /year Better than Good Practice Total Energy Consumption (2014) 185 KWH/m2/year Better than Good Practice Electricity Consumption (2014) 145 KWH/m2/Year Better than Good Practice Gas Consumption (2014) 50 KWH/m2/Year Better than Good Practice Water Consumption (2014) 6.5 Lm3/person/annum Better than Typical Practice Waste Recycling (2014) 88% Best Practice

Current Sustainability Ratings/Benchmarking (Source: Impax Climate Property Fund 2014 Sustainability Performance Update)

The following table shows the improvement in resource reduction 2010 – 2014:

40 Spring Gardens Elec (KWH pa) Gas (KWH pa) CO2 (tonnes pa)

2010 1,701,697 956,786 1,122

2014 1,389,465 607,541 80 40 SPRING GARDENS 34

FURTHER INFORMATION

VAT CAPITAL ALLOWANCES

This property is elected for VAT. As at 31 March 2015 the capital allowances amounted to £667,295.

DATAROOM WEBSITE

A dedicated data room has been set up. www.40springgardens.com Log in details are available on request.

PROPOSAL

Offers are sought in excess of £60 million subject to contract and exclusive of VAT, reflecting a net initial yield of 5.27% assuming acquisition costs of 1.80% for the JPUT. A purchase at this level reflects a capital value of £603 per sq ft.

CONTACT

Dominic Rowe Direct Line: 020 7529 5706 E: [email protected]

David Harrison Direct Line: 020 7529 5705 E: [email protected]

www.michaelelliott.co.uk

Misrepresentations Act 1967 & Declaration:

Michael Elliott for themselves and for the vendors of this property whose agents they are given notice that: a) the particulars are set out as general outline only for the guidance of intending purchasers and do not constitute, nor constitute part of, an offer or contract; b) all descriptions, dimensions, references to condition and necessary permissions for use and occupation and other details are given in good faith and are believed to be correct, but any intending purchaser should not rely on them as statements or representations of fact but should satisfy themselves by inspection or otherwise as to the correctness of each of them; c) no person in the employment of Michael Elliott has any authority to make or give any representations or warranty whatever in relation to this property.

October 2015 (Q3224)