North Tyneside Council Cobalt 14, Quicksilver Way, North Tyneside NE27 0QQ

Modern Government Let Office Investment Long Unexpired Lease Term with Annual Rent Reviews Investment Summary • • • • • • • • • • •

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9 o t o t n l e r e a r t i i l h ) h n s 1 o o c s l . s e e s 4 i m o l , Location A696 THE PROPERTY The property is located on Cobalt Business Park, Newcastle which is the regional capital of the North East and is located approximately 145 km (91 miles) north of Leeds, 190 km (119 miles) south-east of Edinburgh, 224 km (140 miles) north-east of A1 NORTH SHIELDS Manchester and 456 km (285 miles) north of London. A19 A69 A186 SOUTH A19 NEWCASTLE SHIELDS COBALT 14 UPON TYNE

A194(M) A1 SUNDERLAND A68 A592

A191 A186 A1(M )

COLBALT BUSINESS PARK NEW YORK INDUSTRIAL PARK A19

A1058

ORION BUSINESS A1058 PARK

By Road By Rail

s • Cobalt Business Park benefits from excellent • Cobalt is on eight local bus routes and has a • Newcastle is on the East Coast Main Line, road links to the major urban areas in the dedicated fleet of ‘Cobalt Clipper 309’ buses with a fastest journey time to London Kings n North East via the A19 which passes operating from Newcastle Haymarket Cross of approximately 2 hours 50 minutes adjacent to the south-west boundary of Interchange directly to Cobalt and the and to Edinburgh in 1 hour 40 minutes. o i the Park. North East coast to the east, running • The rail network also provides a direct t every half hour in each direction. • The A19, via the A194, provides access to route to Manchester with a fastest journey a the A1(M) and the national motorway • The R19 service runs directly through time of approximately 2 hours 35 minutes.

c network to the south of Newcastle. Cobalt and connects with every peak time By Air i Metro at Northumberland Park Interchange. • Newcastle city centre is approximately Only a 3 minute journey from Cobalt, the • Cobalt Business Park is located only 18 km n 10 km (6 miles) to the south-west of the 9/A runs from South Tyneside at Percy Main (11 miles) from Newcastle International Park via the A1058 Coast Road. u and meets every ferry at the North Shields Airport, which provides both domestic and By Bus terminal. international flights to destinations throughout Europe and to selected m • Cobalt Business Park is set in the heart of • With a service running every 15 minutes, destinations in North America, North Tyneside and is currently served by the ‘Stephenson Link’ is a rapid transport The Caribbean, Africa and the Middle East. over 29 buses an hour providing direct links link connecting the Park to the north and m to Whitley Bay, Blyth, Newcastle South south loops of the Tyne & Wear Rail

o Gosforth, Killingworth, Cramlington, Network, and providing direct access to Wallsend and key areas in Northumberland. both Newcastle International Airport and Newcastle city centre. C Cobalt Business Park is considered to be one of A wide offering of retail, restaurant and leisure facilities are the foremost Business Parks in the UK in terms of size and located in proximity. Within a short walk from Cobalt 14 is a quality. When fully developed at 3 million sq ft, it will be the Tesco Express and Greggs. UK’s largest office park on 143 acres of land. At the nearby Silverlink Retail & Leisure Parks existing The Park benefits from having an excellent location with good tenants include Next, Marks & Spencer, Outfit, Currys/ transport links and numerous on-site facilities. The high PC World and Boots amongst a number of others. Other specification offices provide head quarter style accommodation nearby occupiers include an Odeon Cinema, Pizza Hut, let to an impressive range of tenants that include the following: Frankie & Benny’s, McDonald’s and a complex of car showrooms (including Porsche, Audi, Volkswagen, Toyota and • Accenture • CBX BMW). • Formica • Balfour Beatty The property is prominently located adjacent to The • G4S • Hewlett Packard Silverlink North and lies at the north western corner of the • Everything Everywhere • Santander Park on the site known as Plot 14. • P&G • NHS Trust • Newcastle Building Society • Job Centre Plus More information on Cobalt Business Park is available at • Village Hotel • North Tyneside Council www.cobaltbusinesspark.com • Just Learning Nursery • Ramsay Health Care • Fujitsu • Equinox Demographics • LS Trillium • Chisholm • DNV Newcastle has a resident population of approximately 190,000 and around 1,400,000 live within 12 miles of the city The Park also has a unique combination of on-site facilities: centre. Cobalt Business Park is highly accessible to a large • 39 acre countryside park which was designated as a local catchment population including the conurbations of North nature reserve in 2005. Shields, South Shields, Tynemouth and Jarrow. The working • The Just Learning Children’s Day Nursery has secure play population, within the following drive times, are as follows: areas (with CCTV) and 25 staff on site providing childcare for up to 110 children aged between 2 months to 5 years. Distance (Minutes) Population • 157 bedroom Newcastle Village Leisure Hotel incorporating 10 93,159 4 star facilities, conference banqueting and business meeting 20 466,334 facilities and leisure facilities such as a 25 metre pool, sauna, 30 1,077,907 fitness studio and spa. 40 1,451,751 Source: CACI

Cobalt Business Park Site Area The property is situated on a site of approximately 3.984 acres (1.6122 hectares).

North Tyneside Council Ordnance Survey Map

New Office & Retail Development let to Tesco & Greggs

Country Park

This plan is published for convenience of identification. Any boundaries shown are indicative only and should be checked against the Title Deeds. The plan is based upon Ordnance Survey Map with the permission of the Controller of H M Stationery © Crown Copyright.

Subject Property

Floor Areas The property has been measured on a Net Internal Area basis in accordance with the RICS Code of Measuring Practice (6th Edition) and from this we calculate the approximate areas to be as follows:

Existing Building Description Sq ft Sq m Ground Floor 11,324 1,052 Level 1 11,604 1,078 Level 2 11,604 1,078 Level 3 11,604 1,078 Total NIA 46,136 4,286 Description

The property comprises a modern 4 storey office building which was completed in February 2007. The building is of steel framed construction and features a glass façade on 2 elevations of the property. The building provides large open floor plates over 4 floors with a double height feature reception area. The accommodation has been fitted out to a high specification to include: • Air conditioning • Full accessed raised floor with a clear void of 150 mm • Suspended ceilings with LG7 lighting • Double height feature reception • Two 13-person passenger lifts • 3 metres clear floor to ceiling height Car parking is provided adjacent to the building and provides 201 spaces which equates to a ratio of 1:229 sq ft (1:21.27 sq m). Tenure The property is held by the vendor on a long leasehold basis for 125 years (less 6 days) from 29th March 1996 expiring 22nd March 2121 with approximately 108 years unexpired. The purchaser will however be granted a new sub-underlease for the remainder of the 108 year term, less 1 year (expiring 22nd March 2020) at an annual peppercorn rent. Tenancy Based on the formula the rental profile is as follows: The property is let to North Tyneside Council on a A B C D E F G full repairing and insuring lease from 1st July 2009 and expiring 20th November 2032. TOTAL PAYMENTS Total Outgoings RECEIVED payable by LL - The initial rent payable is £778,889.70 per annum. Occupational Highbridge Top Up - (NTC plus CASH Includes Hard FM Surplus FM Income Total Net Receivable The rent increases annually. The Council have the Base Rent FM Income Received by way of a TOP UP) - Cost and Lifecycle received by LL Income YEAR (2.6% pa reviews) (RPIx reviewed) * deed of variation D = A+B+C Sinking Fund F = B - E G = D - E right to buy the property at the open market value. April 2013 - April 2014 5 586,913.79 293,368.23 150,869.32 1,031,151.35 224,173.22 69,195.01 806,978.12 Under the Lease Plus Agreement, the total rent payable is apportioned 68% to the base occupational April 2014 - April 2015 6 602,173.55 300,995.81 135,995.87 1,039,165.23 230,001.73 70,994.08 809,163.50 rental income and 32% for the Facilities Management April 2015 - April 2016 7 617,830.06 308,821.70 120,735.71 1,047,387.47 235,981.77 72,839.92 811,405.70 Service provision. April 2016 - April 2017 8 633,893.65 316,851.06 105,078.79 1,055,823.50 242,117.30 74,733.76 813,706.20 The 68% base Occupational Income is subject to fixed annual increases of 2.6% per annum and April 2017 - April 2018 9 650,374.88 325,089.19 89,014.79 1,064,478.86 248,412.35 76,676.84 816,066.51 currently amounts to £586,914 per annum. The 32% April 2018 - April 2019 10 667,284.63 333,541.51 72,533.13 1,073,359.27 254,871.07 78,670.44 818,488.20 FM element is subject to annual increases in line with the movement in RPIx. April 2019 - April 2020 11 684,634.03 342,213.59 55,622.94 1,082,470.56 261,497.72 80,715.87 820,972.84 The rent review formula set out in the Lease Plus April 2020 - April 2021 12 702,434.51 351,111.14 38,273.08 1,091,818.73 268,296.66 82,814.48 823,522.08 Agreement is as follows: April 2021 - April 2022 13 720,697.81 360,240.03 20,472.13 1,101,409.97 275,272.37 84,967.66 826,137.60

Pn = April 2022 - April 2023 14 739,435.95 369,606.27 2,208.36 1,111,250.58 282,429.45 87,176.82 828,821.13 (Po * %A * (1 + FG) ^ (n-1)) + (Po * %B * (RPIx April 2023 - April 2024 15 758,661.29 379,216.03 - 1,137,877.32 289,772.62 89,443.42 848,104.70 n/ RPIx o)) April 2024 - April 2025 16 778,386.48 389,075.65 - 1,167,462.13 297,306.71 91,768.94 870,155.43 and %A + %B = 100% April 2025 - April 2026 17 798,624.53 399,191.62 - 1,197,816.15 305,036.68 94,154.94 892,779.47 where April 2026 - April 2027 18 819,388.77 409,570.60 - 1,228,959.37 312,967.64 96,602.96 915,991.73 Pn = The relevant payment for the nth contract year (total rent) April 2027 - April 2028 19 840,692.88 420,219.44 - 1,260,912.31 321,104.79 99,114.64 939,807.52

Po = The relevant payment in April 2009 prices April 2028 - April 2029 20 862,550.89 431,145.14 - 1,293,696.03 329,453.52 101,691.62 964,242.51

%A = 68% (proportion of payment to have fixed April 2029 - April 2030 21 884,977.21 442,354.91 - 1,327,332.13 338,019.31 104,335.60 989,312.82 growth rate applied) April 2030 - April 2031 22 907,986.62 453,856.14 - 1,361,842.76 346,807.81 107,048.33 1,015,034.95 FG = 2.6% (the value of fixed rate of growth) April 2031 - April 2032 23 931,594.27 465,656.40 - 1,397,250.68 355,824.81 109,831.59 1,041,425.86 %B = 32% (proportion of payment to have RPI indexation applied) * For the purpose of future RPIx calculations 2.6% per annum has been applied. The same rate has also been applied to the hard FM cost in column E. RPIx n = The most recently published RPIx for the month preceding the nth contract year (246.9) RPIx o = The most recently published RPIx as at April 2009 (210.7) N = Relevant contract year (5) Grosvenor House Group PLC is a privately owned company RPIx figures: Capital Allowances established in 1984. It has 3 main offices with 14 operational We understand that there are no transferable capital allowances RPIx o –Yr 1 04/2009 210.7 facilities across the UK, employs c. 250 staff across the group, has available. RPIx n –Yr 2 04/2010 219.9 delivered over £200m of PFI projects, £300m of structured finance solutions and has a portfolio of International Private Equity RPIx n –Yr 3 04/2011 231.7 Investments. The main focus for the company is the healthcare and Plant & Machinery RPIx n –Yr 4 04/2012 240.2 residential accommodation sectors. None of the systems or equipment have been tested by Cushman RPIx n –Yr 5 04/2013 248.0 & Wakefield and purchasers may wish to make their own Tenant Information investigations to check that they are in working order. The lease plus agreement dated 1st July 2009 defines the Contract North Tyneside Council is the local authority for the Metropolitan Year as: Borough of North Tyneside. Within its bounds are the towns of VAT ‘the period from the Payment Commencement Date to the Wallsend, North Shields and Whitley Bay which form a We understand this property has been elected for VAT which will following 31st March and subsequently each period of 12 calendar contiguously built-up area with Newcastle. The borough comprises therefore be chargeable on the sale price unless the transaction months commencing on 1st April, until the final Contract Year 20,372 acres in the North East of England with an estimated can be treated as a Transfer of a Going Concern (TOGC). which is the period from the 1st April prior to the date of Expiry 198,500 residents. For the year 2011/2012 the council’s income of the Term to the Expiry of the Term’. was £396,678,000. The council advises on a number of areas including: benefits and council tax, building control and planning, Where : the Payment Commencement Date is 1st July 2009 business, employment and regeneration, schools and families, and : the Expiry of the Term is 20th November 2032. community and living, culture and tourism, environment waste and recycling and housing. Therefore, for the purpose of calculating the RPI reviews, the initial base RPIx figure is 210.7, the April 2009 RPIx figure. Thereafter the More information can be found at www.northtyneside.gov.uk RPIx figures are taken using the March RPIx figures, being the most recent month preceding the nth contract year. For the purpose of projecting the FM income, 2.6% pa has been applied to future reviews where the RPIx data is not yet available. The FM element of the rent is used to cover the cost of the FM service currently provided by Grosvenor Facilities Management Ltd, the park service charge and sinking fund provision. The landlord has recently renegotiated the FM service contract resulting in a surplus receivable by the landlord of circa £70,000 per annum. The FM contract provided by Grosvenor is reviewed annually in line with RPIx and as such mirrors the FM income profile payable by the tenant. The new FM service agreement dated 25th March 2011 is made between the Landlord and Grosvenor Facilities Management Ltd (3089465) as Service Provider and Grosvenor House Group plc (01819984) as Guarantor. More information can be provided upon request. Grosvenor Facilities Management Ltd (GFM) provide the FM service on behalf of the landlord and in compliance with the Lease Plus Agreement. All landlord FM obligations set out within the Lease Plus Agreement are passed through to GFM. Proposal We are instructed to seek offers in excess of £10,730,000 (Ten Million, Seven Hundred and Thirty Thousand Pounds) subject to contract and exclusive of VAT for a new long leasehold interest. A purchase at this level would reflect a net initial yield of 6.5% after allowing for purchaser’s costs of 5.8% when calculated against the occupational rental income of £737,783 (Occupational Income plus the Rental Top Up).

Further Information For further information on this opportunity, please contact either: Mike Burden Tel: 020 7152 5086 Mob: 07793 808086 E-mail: [email protected] Adam McMillan Tel: 020 7152 5332 Mob: 07939 018843 E-mail: [email protected] Josh Beebee Tel: 020 7152 5266 Mob: 07917 423466 E-mail: [email protected]

Cushman & Wakefield 43-45 Portman Square London W1A 3BG www.cushmanwakefield.com September 2013

The Energy Performance Certificate for this building is available to download from the Property Website. www.cushmanwakefieldinvestmentsales.co.uk/cw/cobalt-newcastle

MISREPRESENTATION ACT 1967 and PROPERTY MISDESCRIPTIONS ACT 1991 Cushman & Wakefield LLP (and their joint agents if appointed) for themselves and for vendors or lessors of this property whose agents they are, give notice that: (1) The particulars are produced in good faith, are set out as a general guide only and do not constitute any part of a contract. (2) No person in the employment of the agent(s) has any authority to make or give any Photography, Design & Production by PlusArt 0115 972 4000 representation or warranty whatever in relation to this property. (3) This property is offered subject to contract and, unless otherwise stated, all rents are quoted exclusive of VAT. (4) Nothing in these particulars should be deemed to be a statement that the property is in good condition or that any services or facilities are in working order. (5) Unless otherwise stated, no investigations have been made regarding pollution or potential land, air or water contamination. Interested parties are advised to carry out their own investigations if required.