Blocks a & B One Port Way Port Solent Portsmouth

SOUTH COAST OFFICE INVESTMENT BLOCKS A & B ONE PORT WAY PORT SOLENT PORTSMOUTH PO6 4TY

EXCEPTIONAL ASSET MANAGEMENT OPPORTUNITY BLOCKS A & B | ONE PORT WAY | PORT SOLENT | PORTSMOUTH | PO6 4TY 02/03

INVESTMENT SUMMARY

• An exceptional opportunity to acquire two high quality headquarters office buildings, prominently located adjacent to the M27 and Port Solent Marina on a large, island site extending to 5.2 acres.

• Portsmouth is a major commercial centre on the South Coast located 21 miles east of Southampton and 73 miles south west of London.

• Port Solent is an established marina and commercial location located 4 miles north west of Portsmouth city centre.

• Unrivalled road access being just 1 mile from the M27 (Junction 12) connecting the area with key surrounding commercial towns as well as the national motorway network.

• Junction 12 of the M27 is a home to a number of national covenants including IBM, Regus, Pall Corporation, Capita, Marriott and Handelsbanken.

• One Port Way comprises two self-contained office buildings totalling 62,379 sq ft.

• 328 car parking spaces providing an excellent ratio of 1:190 per sq ft.

• Block A is currently vacant, providing asset management opportunities to drive returns.

• Block B is let to Ageas Insurance Ltd for 5.3 years’ term certain.

• Combined passing rent of £1,049,091.50 per annum equating to a low average rent of £16.82 per sq ft overall.

• Ageas Insurance Ltd has a D&B rating of 5A1, representing a minimum risk of business failure.

• Ageas, one of the largest employers on the South Coast, have recently signed a reversionary lease at the property and are undertaking a full refurbishment including the M&E demonstrating their commitment to the property.

• Port Solent offers adiscount to the neighbouring office markets of Southampton and Portsmouth where headline rents are £20.00 per sq ft and £21.50 per sq ft respectively trending upwards.

• Both buildings lend themselves to alternative use potential (subject to planning).

• Freehold.

• Offers are sought in excess of£11,000,000 (Eleven Million Pounds), subject to contract and exclusive of VAT.

• A purchase at this level reflects anattractive net initial yield of 8.94% exclusive of purchaser’s costs of 6.70% and a low capital value of £176 per sq ft.

EXCEPTIONAL ASSET MANAGEMENT OPPORTUNITY Porchester Station

A27 BLOCKS A & B ONE PORT WAY PORT SOLENT PORTSMOUTH PO6 4TY

PORT SOLENT ODEON CINEMA DAVID LLOYD LEISURE CENTRE

J12 M275

BLAKE MORGAN M27

M275

< Portsmouth

LAKESIDE NORTH HARBOUR IBM WIGGLE BOUYGUES UK BABCOCK REGUS HANDELSBANKEN

BLOCKS A & B | ONE PORT WAY | PORT SOLENT | PORTSMOUTH | PO6 4TY Southampton 04/05

M27

TESCO SUPERSTORE

PREMIER INN

HARBOURGATE BUSINESS PARK PALL CORPORATION SPACEMAKER WIGGLE

MARRIOT HOTEL

QUAY POINT

ACORN BUSINESS CENTRE

NHS SOUTH CENTRAL AMBULANCE SERVICE A27 Cosham Station

EXCEPTIONAL ASSET MANAGEMENT OPPORTUNITY PORT SOLENT IS AN ESTABLISHED MARINA AND COMMERCIAL LOCATION

LOCATION

Portsmouth is a major commercial centre on the South Coast Port Solent benefits from easy access to two railway stations; located 21 miles east of Southampton and 73 miles south Portchester (1 mile west) and Cosham (2 miles east). Both stations west of London. provide direct access to London Waterloo as well as surrounding towns. Portsmouth & Southsea railway station is just Portsmouth benefits from excellent road communications being 5 miles south east providing additional, frequent rail services. located just south of the M27 (accessed directly from the M275) linking the city to Southampton and the M3 to the west and the Regular local bus services link Port Solent to the surrounding A3(M), A27 and Brighton to the east. South Coast towns, including direct services to Portsmouth & Southsea railway station. Port Solent is an established marina and commercial location located 4 miles north west of Portsmouth city centre. The location Southampton International Airport is located 19 miles west of benefits from unrivalled road access with the A27, directly north Port Solent accessed directly via the M27 (Junction 5). It is the of Port Solent, providing access to the M27 (Junction 12) within 1 main business airport for the South Coast catering for over 18 mile connecting the area with key surrounding commercial towns million passengers each year and is an important draw for global as well as the national motorway network. occupiers as it provides access to 40 destinations across the UK and Europe. Port Solent has become an internationally recognised destination due to the development of Port Solent Marina. Completed in 1988, the £200 million scheme comprises an 808 berth marina, luxury residential housing estate and a range of retail and leisure amenities. The marina has attracted a number of national leisure and retail occupiers, including Snow & Rock, Runners Need, Prezzo, David Lloyd Leisure Centre and Odeon Cinemas.

Birmingham

Huntingdon

Northampton Cambridge

Bedford M40 A1(M) Milton Keynes Felixstowe 08/09 M11 Luton Stevenage Stansted Colchester

Harlow M1 J7 Oxford M25 J27 EXCELLENT COMMUNICATIONS LONDON Tilbury City Dartford Reading Margate M4 M4 Heathrow M2 Gillingham Bristol M3 M25 Canterbury

A338 A34 A3 Basingstoke Andover Guildford Tonbridge Farnham M20 M27 Portsmouth Southampton A303 M23 A31 Dover Ashford (Junction 12) & Southsea 19 miles Gatwick A36 1 mile 11 minutes Salisbury Winchester A3 Folkestone Portsmouth Southampton Heathrow Horsham M3 Petersfield A354 A36 Uckfield City Centre Central 68 miles A272 4 miles 29 minutes Eastleigh A338 Southampton Chichester Brighton Gatwick Southampton A3(M) Hastings 16 miles 67 minutes 76 miles A31 M27 A27 A27 Brighton Ringwood Worthing Chichester Eastbourne M275 Southampton Gatwick Airport Portsmouth 21 miles 78 minutes Bournemouth Isle of Wight Winchester London Waterloo 28 miles 95 minutes

Basingstoke Chel 42 miles M27 tenham Rd

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EXCEPTIONAL ASSET MANAGEMENT OPPORTUNITY BLOCKS A & B ONE PORT WAY PORT SOLENT PORTSMOUTH < Southampton PO6 4TY

< Porchester Station

A27

M27

BLOCKS A & B | ONE PORT WAY | PORT SOLENT | PORTSMOUTH | PO6 4TY 10/11

UNRIVALLED ROAD ACCESS CONNECTING THE AREA

Cosham Station > WITH KEY SURROUNDING COMMERCIAL TOWNS AS WELL

A27 AS THE NATIONAL MOTORWAY NETWORK

SITUATION

One Port Way is situated at the entrance of Port Solent Marina, just 1 mile from Portsmouth > Junction 12 of the M27 accessed via the A27.

Junction 12 of the M27 and its surrounds is an established commercial location and home to a number of high profile occupiers including IBM, who have their headquarters at Lakeside North Harbour, Regus, Capita, Handlesbanken, Blake Morgan and Pall Corporation who have their Aerospace, Defence & Marine principal office at Harbour Gate Business Park.

Port Solent is characterised by a mixture of residential, car showrooms, industrial and office uses. The property benefits from easy access to local amenities including Premier Inn and Marriott hotels, a Tesco Extra superstore as well as the retail and leisure offering at Port Solent Marina which is within easy walking distance.

EXCEPTIONAL ASSET MANAGEMENT OPPORTUNITY DESCRIPTION CAR PARKING

One Port Way comprises two high quality self-contained office One Port Way benefits from a total of 328 on-site car parking buildings arranged over ground and two upper floors totalling spaces providing an excellent ratio of 1:190 sq ft. 62,379 sq ft. Constructed in 1988 and subsequently modernised, the buildings are of steel frame construction with part brick and part glazed elevations, underneath a pitched tiled roof. ACCOMMODATION

The office accommodation provides modern, open plan The property has been measured by Pure Real Estate Services Ltd in accommodation with ultimate flexibility to be let as a whole, or accordance with the International Property Measurement Standards on a floor-by-floor or part floor basis such that Blocks A & B can (IPMS) 1st Edition, May 2015. The survey, which is assignable to the serve a wide range of occupier requirements. purchaser, provides the following net internal areas: Internally, the buildings benefit from the following specification: BLOCK A • Raised floors Floor Use Area (sq m) Area (sq ft) • Suspended ceilings with Cat II lighting • Air conditioning Ground Reception 58.34 629 • Passenger lifts Ground Offices 1,084.12 11,670 • Male and female WCs on each floor First Offices 1,126.49 12,126 • Disabled toilet facilities • Shower facilities Second Offices 1,126.79 12,129 Sub Total 3,395.74 36,554 The majority of the M&E in Block A was replaced/upgraded in 2005 whilst Block B is currently undergoing a comprehensive BLOCK B tenant refurbishment which demonstrates its commitment to the property. The works include: Floor Use Area (sq m) Area (sq ft) Ground Reception 47.82 514 • New VRF air conditioning Ground Offices 750.11 8,074 • New suspended ceilings to the second floor • Re-lamping of existing light fittings First Offices 800.61 8,618 • New carpets Second Offices 800.72 8,619 • Redecoration • Refurbishment of the toilets Sub Total 2,399.26 25,825 • Provision of two new showers in-lieu of existing kitchenettes Total 5,795.00 62,379

BLOCKS A & B | ONE PORT WAY | PORT SOLENT | PORTSMOUTH | PO6 4TY INTERNAL PHOTOS TAKEN OUTSIDE OF BUSINESS HOURS 12/13 SITE FOR ILLUSTRATIVE PURPOSES ONLY

The large, island site extends to 5.2 acres (2.1 ha). Accessed via Port Way directly off the M27, the site is bounded by the A27 to the north, the M27 to the east and Port Way to the south and west.

TENURE

Freehold.

LARGE ISLAND SITE WITH ALTERNATIVE USE POTENTIAL

BLOCK A

BLOCK B

BLOCKS A & B | ONE PORT WAY | PORT SOLENT | PORTSMOUTH | PO6 4TY 14/15

TENANCY SCHEDULE

AREA LEASE RENT BREAK LEASE RENT RENT BUILDING TENANT COMMENTS (SQ FT) START REVIEW OPTION EXPIRY (£ PA) (£ PSF)

18 months’ rent (£17.50 psf on the office accommodation), BLOCK A Vacant 36,554 26/05/2016 - - 26/11/2017 £628,688 £17.50 rates and service charge gurantee to be provided by the vendor from completion.

Rent reduction from 29/09/2016 Ageas - 28/09/2017 to BLOCK B Insurance 25,825 29/09/2006 29/09/2021 29/09/2021 28/09/2026 £420,403.50 £16.28 £210,201.75 will Ltd be topped up by the vendor on completion.

Total 62,379 £1,049,091.50 £16.82

COVENANT PROFILE

Ageas Insurance Ltd is part of the Ageas Group, an international insurance business providing non-life insurance products across three business areas; Insurance, Retail and Tesco Underwriting. Ageas employs 13,000 people and operates in 14 countries worldwide. It is headquartered in Brussels and listed on the Brussels Stock Exchange.

Ageas Insurance is an award-winning provider of general insurance focussed on Personal lines and Commercial lines products. It currently employ 2,500 people across the UK and in a bid to cater for its increasing customer base which currently consists of over nine million customers, it has recruited 400 new employees in the past 12 months. Ageas Insurance’s headquarters is based on Hampshire Corporate Park, Chandler’s Ford, 20 miles west of One Port Way, and is owner occupied.

The company has a D&B Rating of 5A1, representing a minimum risk of business failure. Its most recent financial results are summarised below:

31 DEC 2014 31 DEC 2013 31 DEC 2012

Sales Turnover £1,300,000,000 £1,071,100,000 £1,009,300,000

Profit Before Taxes £66,200,000 £78,900,000 £64,700,000

Tangible Net Worth £549,500,000 £494,300,000 £360,400,000

Net Current Assets £315,300,000 £289,000,000 £207,100,000

Further information can be found at www.ageas.co.uk.

EXCEPTIONAL ASSET MANAGEMENT OPPORTUNITY SOUTH COAST OFFICE MARKET

Port Solent forms part of the wider South Coast office market, The South Coast office market has changed dramatically in the comprising the town centres of Southampton, Portsmouth and last 12 months as a result of a return in market confidence. Bournemouth as well as numerous out of town business parks in Take-up increased by 18% year-on-year driven by historically low the surrounding areas. levels of vacancy coupled with a significant reduction in stock as traditional office stock is converted to alternative uses. There is Southampton is the largest and dominant office centre, with a a dearth of Grade A office space in the South Coast office market total stock level of approximately 9.2 million sq ft incorporating resulting in a Grade A vacancy rate of less than 3%. Eastleigh, Chandler’s Ford as well as Solent Business Park. However, the majority of stock in the wider South Coast area is Permitted Development Rights continue to have a significant bearing located out of town, along the M27 corridor and particularly at its on the office market and continue to compound the supply shortage. interchanges with the M3 and A27. Supply decreased by 8.6% to 1.2 million sq ft over the course of 2015 and it is expected to decrease to below 1 million sq ft by the end of Having historically been linked to maritime-related companies, 2016. This will be exacerbated with rumours that the developers of the South Coast office market is now primarily driven by the the remaining two largest prime office sites in Southampton, The service sector, in particular by finance, insurance and legal firms Bond and Aqua, are applying for alternative uses. with occupiers such as HSBC, Grant Thornton, PwC and RBS having a presence in the market. Ageas is one of the largest As a result of the increased take up and continued supply employers in the wider Southampton area.. shortage, rental levels are rising across the South Coast. Following a recent refurbishment, Mountbatten House, Southampton is now quoting £20.00 per sq ft, setting a new headline quoting rent for the centre. With a limited development pipeline and a continued erosion of supply, rental levels are expected to continue to rise over the course of the year.

INVESTMENT MARKET

The South East office investment market remained buoyant One Port Way provides an opportunity to acquire two high throughout 2015 and continues to experience unprecedented quality headquarters office buildings in an established South investor appetite. There is a wealth of demand for opportunities Coast market with asset management opportunities including where investors can add value through active asset management. alternative use potential (subject to planning). A continued improvement in the occupational market coupled with the onset of rental growth has strengthened investor confidence in the South Coast office market.

BLOCKS A & B | ONE PORT WAY | PORT SOLENT | PORTSMOUTH | PO6 4TY 18/19

SOUTH COAST OFFICE MARKET TRANSACTIONS

AREA LEASE TERM RENT DATE ADDRESS TENANT (SQ FT) (BREAK) (PSF) Mar-16 Mountbatten House, Southampton 13,890 Prestige Cruise Services 10 years (5 years) £18.50 Mar-16 Mountbatten House, Southampton 7,182 Rockfire Capital 10 years (5 years) £18.50 Feb-16 Hutwood Court, Chandler’s Ford 53,425 Utilita Energy 10 years £18.50 Jan-16 Mountbatten House, Southampton 13,400 NCL 10 years £18.50 Dec-15 Savannah House, Southampton 24,541 PwC 10 years £20.00 Nov-15 Cumberland House, Southampton 16,682 Regus 15 years (10 years) £17.50 Oct-15 Burlington House, Southampton 2,500 Sheridan Maine 5 years £19.00 Aug-15 Tagus House, Southampton 4,546 Your Move 10 years (5 years) £18.50 Jul-15 Gateway House, Chandler’s Ford 4,800 Konica Minolta 10 years (5 years) £19.00 Mar-15 Gateway House, Chandler’s Ford 12,300 KPMG 10 years £18.50 Jan-15 1 Guildhall Square, Southampton 23,760 Southampton City Council 15 years £19.15

INVESTMENT MARKET TRANSACTIONS

AREA CV DATE ADDRESS TENANT WAULT PRICE YIELD (SQ FT) (PSF) Under Offer Forum, Solent Business Park, Fareham 252,981 Multi Let 5.6 Q £42.00m 7.50% £166 Jun-16 3-7 Town Quay, Southampton 48,441 Multi Let 1.6 £7.59m 7.25% £157 Apr-16 Fusion, Solent Business Park, Fareham 157,000 Multi Let 3.7 £34.70m 7.60% £220 Jul-15 4500 Parkway, Solent Business Park, Fareham 56,033 Multi Let 5.8 £10.00m 7.43% £178 Oct-15 Link 1&2, Chestnut Avenue, Eastleigh 59,157 Cisco 1.5 £12.80m 8.25% £216 Sep-15 The Zurich Centre, Solent Business Park, Fareham 100,342 Zurich 7.8 £25.70m 6.82% £256 Jun-15 Charlotte Place, Southampton 80,857 Multi Let 4.1 £15.78m 7.60% £195 Jun-15 Oceana House, Southampton 41,564 Bond Dickinson 3.3 £10.10m 8.10% £243

EXCEPTIONAL ASSET MANAGEMENT OPPORTUNITY BLOCKS A & B | ONE PORT WAY | PORT SOLENT | PORTSMOUTH | PO6 4TY 20/21

ALTERNATIVE USE POTENTIAL

As a result of the property’s location in an attractive South Coast destination, its unique, picturesque micro location, the self-contained nature and size of the site and the underlying building appearance and characteristics, we consider that the property lends itself to longer term alternative use potential (subject to planning). Potential uses include:

• Hotel • Healthcare – care home facility or retirement living ‘village’ • Residential – conventional planning route for the entire site or change of use of Block A via PDR in the short term

INVESTMENT RATIONALE

• Port Solent is an established commercial location, benefitting from strong transport connections. • Two high quality office buildings located on a large island site – a unique product in the market. • The South Coast office market is experiencing net effective rental growth with increasing headline rents and declining tenant incentives. • Supply decreased by 8.6% to 1.2 million sq ft over the course of 2015 and is expected to decrease below 1 million sq ft by the end of 2016. • Ageas Insurance Ltd has a D&B rating of 5A1 providing a secure income stream. • Ageas is one of the largest employers on the South Coast and has recently signed a reversionary lease, demonstrating its commitment to the property. • Ageas is undertaking a full refurbishment of its building which will significantly improve the specification of Block B. • Opportunity to reposition Block A through refurbishment and reletting thereby improving the rental tone and driving returns. • Block A is the only available self-contained office building in the region of 35,000 sq ft in the M27 corridor. • Internally, the buildings offer ultimate flexibility to be let as a whole, or on a floor by floor or part floor basis. • Negotiating the removal of Ageas’ break option would extend the WAULT. • Asset management opportunities. • The site has longer term alternative use potential (subject to planning). • Excellent car parking ratio of 1:190 sq ft.

EXCEPTIONAL ASSET MANAGEMENT OPPORTUNITY BLOCKS A & B | ONE PORT WAY | PORT SOLENT | PORTSMOUTH | PO6 4TY 22/23

AN EXCEPTIONAL OPPORTUNITY TO ACQUIRE TWO HIGH QUALITY HEADQUARTERS OFFICE BUILDINGS

EPC CAPITAL ALLOWANCES

Block A has an EPC rating of D (97). The benefit of any unclaimed capital allowances could be made available to the purchaser. Block B has an EPC rating of D (83).

ESTATE CHARGE VAT

We understand the property is elected for VAT. It is the intention There is an estate charge payable by both buildings. The of the parties that the transaction will be treated as a transfer of a estimated annual charge for the year ending 28 September 2016 going concern (TOGC). for Block A is £26,280 per annum (£0.72 per sq ft).

RATES PROPOSAL

We are instructed to seek offers in excess of £11,000,000 (Eleven The rateable value of Block A totals £450,000 per annum. The Million Pounds), subject to contract and exclusive of VAT. Uniform Business Rate for 2016/2017 is 49.7p such that the total rates payable equates to £223,650 per annum (£6.12 per sq ft). A purchase at this level reflects an attractive net initial yield of 8.94% exclusive of purchaser’s costs of 6.70% and a low capital value of £176 per sq ft.

EXCEPTIONAL ASSET MANAGEMENT OPPORTUNITY SOUTH COAST OFFICE INVESTMENT BLOCKS A & B ONE PORT WAY PORT SOLENT PORTSMOUTH PO6 4TY

CONTACTS

To arrange a viewing, or to obtain access to the data room, please contact:

Noel Lander 020 7087 5336 07931 371 825 [email protected]

Laura Houghton 020 7852 4959 07738 625 165 [email protected]

Tom Woolven 020 7087 5471 07525 872 738 [email protected]

Disclaimer Jones Lang LaSalle Limited (JLL) for themselves and for the vendors or lessors of this property whose agents they are, give notice that:- a. the particulars are a general outline only for guidance 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 believed to be correct, but any intending purchas- ers, tenants or third parties should not rely on them as statements or representations of fact but satisfy themselves that they are correct by inspection or otherwise; c. no person in the employment of JLL has any authority to make or give any representation or warranty whatever in relation to the property; d. the photographs show only parts of the property as they appeared when taken; e. unless otherwise stated, all prices are quoted exclusive of VAT, if applicable; f. reference to any mechanical or electrical equipment or other facilities at the property shall not constitute a representation (unless otherwise stated) as to its state or condition or that it is capable of fulfilling its intended function; © 2016 Jones Lang LaSalle IP, Inc. All rights reserved.