PALACE HOUSE

3 CATHEDRAL STREET SE1

Prime long let freehold investment opportunity Contents

INVESTMENT Summary 04 / 05 Location 06 / 13 Connectivity 14 / 15 Local Occupiers 16 / 19 Local DEVELOPMENT pIPELINE 20 / 21 Description 24 / 25 Specification 26 Accommodation 27 Floor Plans 28 / 29 Tenure and TENANCY 30 / 31 Covenant Information 32 Asset Management 33 SOUTH BANK MARKET 34 / 35 Contact & FURTHER INFORMATION 36 / 37 01-02 INVESTMENT SUMMARY

Freehold.

Located in the thriving South Bank district adjacent to . Bridge station is within a five minute walk from the property.

Currently under refurbishment by Kaplan, the property comprises 45,012 sq ft (4,182 sq m) of accommodation arranged over ground and five upper floors. The accommodation includes 43,083 sq ft (4,002 sq m) of office and ancillary accommodation and a retail unit at part-ground and part-first floor extending to 1,929 sq ft (179 sq m).

The office space is single let to Kaplan Estates Limited guaranteed by Kaplan UK Limited, a 5A1 rated company, for a term of 15 years expiring 31st August 2032, with a tenant option to determine on 31st August 2027. The overall passing rent of the office accommodation is £2,453,165.50 per annum (£57.76 per sq ft).

The retail unit is let to Nero Holdings Limited t/a Caffè Nero for a term of 15 years from 11th June 2007 expiring 10th June 2022. The rent payable is subject to a minimum base rent of £150,000 per annum and an additional turnover rent (if applicable).

Title includes St Mary Overie’s Dock and the surrounding walkways which are held leasehold from the Equitable Life Assurance Society (ELAS) for a term of 91.25 years at a peppercorn rent.

The total rent passing is £2,603,165.50 per annum (£58.63 per sq ft overall).

The weighted average unexpired lease term is 14.07 years to lease expiry and 9.36 to earliest break.

Headline rents on the South Bank in excess of £70.00 per sq ft with very limited supply of stock coming forward.

Asset management opportunities to better utilise the undercroft parking as retail or leisure use taking advantage of the heavy footfall from nearby Borough Market and longer term redevelopment potential.

Offers are sought in excess of£55,400,000 , subject to contract and exclusive of VAT. A purchase price at this level reflects anet initial yield of 4.4% and a capital value of £1,231 per sq ft, assuming purchaser’s costs of 6.78%.

PALACE HOUSE 04–05

IMAGES CLOCKWISE FROM BELOW: – SOUTHBANK CENTRE – CARAVAN (GREAT GUILDFORD ST) – CITY HALL AND

The South Bank is home to a number of London’s most popular attractions including the London Eye, and Borough Market as well as amenities along the river which attract SIGNIFICANT footfall.

OVERVIEW Palace House is located on Cathedral Street in the thriving South Bank district of London adjacent to Borough Market and within a five minute walk of London Bridge which connects the South Bank to the on the North Bank. Cathedral Street is an attractive cobbled pedestrianised street linking Montague Close and Clink Street. The property has a river frontage via St Mary Overie’s Dock, home to the Golden Hinde. CONNECTIONS

The property benefits from excellent transport links. London Bridge station is within a five minute walk from Cathedral Street which provides access via the London Underground to Canary Wharf within six minutes, Bond Street in the West End within eight minutes and King's Cross within 11 minutes. The City and the Bank of England are a short walk across London Bridge. REGENERATION

There has been significant investment into regenerating the South Bank and the success of schemes such as Sea Containers House (pre-let to Oglivy and Mather), South Bank Central (pre-let to WeWork and DNV) and 240 Blackfriars Road (let to UBM and Boodle Hatfield amongst others) has helped cement the area as one of London’s fastest growing districts and most culturally diverse. OCCUPIERS

The area continues to attract a mix of occupiers, ranging from multinational corporations to occupiers from sectors including media & tech, professional services, the public sector, serviced offices and banking. Large future developments such as Quarter (Temasek, Native Land and Amcorp Properties), Elizabeth House (HB Reavis) and eventually the redevelopment of Colechurch House near London Bridge station will further enhance the locality and its surrounds.

Strong occupational demand for South Bank has ensured it is one of London’s fastest growing sub-markets. The lack of prime Grade A space and continued shortage of supply ensures the South Bank now receives unprecedented interest from developers and occupiers alike as a consequence, particularly properties which are close to the river.

LOCATION PALACE HOUSE 08–09 Borough Market

With the earliest known records dating back to 1276, Borough Market is London’s Oldest Food Market.

It has been trading on the current site since 1756 and this extraordinary heritage makes it one of the most exciting attractions south of the river.

Borough Market is a source of British and International produce, and is London’s most renowned food and drink market. The market’s stalls, shops and restaurants reflect London’s status as a global city, with traditional British produce sitting alongside regional specialties from around the world.

It attracts significant numbers of locals and tourists, especially on weekends and remains one of London’s most visited attractions.

LOCATION PALACE HOUSE 10-11 St Mary Overie Dock and the Borough Golden Hinde YARDS

St Mary Overie Dock is home to The Golden Hinde an English galleon best known for her circumnavigation of the globe between 1577 and 1580, captained by Designed by the award-winning practice SPPARC Architecture, the Sir Francis Drake. This is the one full size replica still 190,200 sq ft Borough Yards scheme is scheduled to open in early in existence in London, located within the tenure of 2020. In addition to office accommodation, Borough Yards will provide Palace House. Over 100,000 sq ft of new retail on more than 115,600 sq ft (10,740 sq m) of retail and leisure space.

The Golden Hinde replica dates from 1973 and since Clink Street to include 35 retail The Office Group will occupy Thames House and an adjacent building, then she has travelled more than 140,000 miles taking a total of 68,500 sq ft (6,364 sq m), while the new building will (225,000 km). She has been in St Mary Overie Dock incorporate a 6,100 sq ft (567 sq m) Everyman cinema. since 1996 where she is open to the public hosting a units and 10 restaurants range of educational programmes. The project involves the redevelopment of former wine-tasting venue Vinopolis and neighbouring sites, which front onto the pedestrian path linking the to the west with Borough Market, London Bridge Station and The Shard, close by to its east.

As part of the redevelopment, a new pedestrian lane (Dirty Lane) will create access from Park Street to Bank End. Borough Yards will re-introduce some of the area’s original Elizabethan street names, such as Clink Yard and Soap Yard, celebrating the site’s heritage.

Winchester Palace

Winchester Palace was one of the largest and most important buildings in medieval London. Founded in the 12th century by Bishop Henry de Blois, brother of King Stephen, it was built to house the bishops in comfort when they visited London.

The remaining ruins which form part of the old Great Hall, some of which are incorporated into the fabric of the building of Palace House, were revealed in the 1980s and are protected by English Heritage.

LOCATION PALACE HOUSE 12–13 CONNECTIVITY

Palace House benefits from the following excellent transport connectivity;

BANK KING’S CROSS 15 minutes ST PANCRAS CITY AIRPORT 19 minutes 24 minutes

CANNON STREET MONUMENT 10 minutes 7 minutes

BOND STREET CANARY WHARF 16 minutes 12 minutes Infrastructure Improvements

London Bridge reopened in January 2018 marking the completion of P the £1bn redevelopment after more than five years of work.

Since work began in 2013, London Bridge has been transformed by Network Rail as part of the government-sponsored Thameslink Programme, while remaining open for the 50 million passengers that use London’s oldest station each year. The vast new concourse, larger than the pitch at Wembley, unites all fifteen platforms for the first LONDON BRIDGE time and modern facilities make the landmark station fully accessible 9 minutes 3 minutes for all with step free access to every platform. There are two new entrances on Tooley Street, which will connect the north and south sides of the station, while the completion of the five new platforms will allow Cannon Street services to once again stop at London Bridge.

The tracks through and around the station have been entirely remodelled to modernise the infrastructure and to allow more trains to travel through London, reducing delays and bringing more reliable journeys to more destinations than ever before. Throughout 2018 new WATERLOO GATWICK AIRPORT shops, cafés and leisure facilities will open, fuelling the reinvigoration 10 minutes 41 minutes of the area. BOROUGH 8 minutes Within 10 minutes of the property is London Waterloo Station. It is one of the busiest railway stations in Europe, providing more than half a million passenger journeys a day and 230 million a year. The station is currently being upgraded to enhance passenger capacity by 30%. This is to be done by rebuilding the former Waterloo International terminal, reconfiguring platforms and extending various platforms KEY to house longer trains with more cars. Various supporting shops, restaurants and other facilities will be incorporated into the upgrade Walk times works which are scheduled to complete in December 2018. Journey times Source: TfL

CONNECTIVITY PALACE HOUSE 14–15 Local Occupiers Bars & Restaurants Hotels Fitness

1. PwC 1. London Grind 1. Shangri-La hotel 1. Fitness First 2. Time Inc 2. Padella 2. Mondrian London 2. Soho Gym World class 3. ITV 3. Roast 3. CitizenM 3. Nuffield Health 4. Totaljobs 4. Fish! 4. London Bridge Hotel 4. Third Space 5. Mozilla 5. The Breakfast Club 5. Novotel 5. No.1 Fitness 6. News UK 6. Honest Burger 6. Ibis 6. Gymbox 7. TfL 7. Aqua Shard 7. Hilton neighbours 8. Telstra 8. Oblix 8. Holiday Inn 9. Omnicom 9. Brindisa 9. Hoxton Hotel (Q2 2018) 10. Ogilvy & Mather 10. Elliot’s 10. Travelodge 11. HSBC 11. Bedale’s 12. IBM 12. Wright’s 13. TP Bennett 13. Hutong 14. WeWork 14. Caravan 15. Boodle Hatfield 15. Whiskey Ginger 16. reForm Architects 16. Lobos Meat & Tapas 17. UBM 17. Hawksmoor 18. Tiffany & Co. 18. Hixter Kraft Heinz Duff & Phelps

R TR D EE S T

A LEET S T F EW T CANNON RE R N B E EE ET CARTER LANE E STREET 6 TR N S

LA QUEEN VICTORIA STREET H S

R A BANK RC MI KING U T D TUDOR STREET ET EE D STATION E LE TR TR S S W T BLACKFRI IME CH M EM L ILLIAM ST LO R A MBARD R P HU K RACECH LE C L STREE G N A TEMPLE AVENU QUEEN VICTORI N M L FE A STREET T E A A I N R 10 N U E O N R DEL ST MANSION HOUSE R EE C I ANNON STREET E T STATION T S R EE S E E FENCHURCH STREET R ET BLACKFRIARS ST

N STATION S STATION EE AR U I C Q FR ED O TEMPLE TCH O RU P UPPER THAMES STREET C E VICTORIA EMBANKMENT R’ NE S 10 STATION A R L O

CANNON STREET G W

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EA C STATION STCHE AP IN

M 5 ENT UPPER TH KM E N N AMES A L TOWER HILL STRE K E R VICTORIA EMBA T A STATION M 3 GR 4 GE EA 3 T TO WER ST RE ET TOWER HILL

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R D EE MNER STREET UN T 15 SU GRO ER REET UPP ST 17 SU PA 2 8 MNER 17 RD STR R O EET K BOROUGH MF STREET WINCH A 4 11 ESTER W ST STREET 8 ALK HA BURRELL YARDS E ROAD T 9 1 FIEL S 4 15 16 OU DG 10 T TH I D 7 1 W E S EE ARK STREET 3 G R BR

BEAR LA T 12 S ID 6 S 9 T R BLACKFRIARS ROAD O BOROUGH B OLK N E FF Y T TOOLEY ST R N ST U E E E S 5 MARKET 6 4 R E T EE W A STREET THWARK O E GTON T 11 TR LAVIN U 2 S R T GR H 1 EE 3 18 SO 9 G 4 T 5 GR ST EA T SOUTHWARK H HI HOM 13 5 T STREET AS 1 GU G 7 EWER 13 U S 1 ET 6 TR D RE I E 7 ST 14 LD E A PELL T OU FO 5 6 R S BORO TR R FLAT IRON 8 D E

DERE RO ET S TREE LONDON BRIDGE ER 2 SQUARE 18 7 T TO BELV STATION OL SOUTHWARK EY 14 10 16 ST RE WATERLOO ROAD STATION UNION STREET UNION STREET ET

W D D IN C U N N O OR D GR ION STRE OA P R MI NW E E LL AT ET Z A W LL S ORK A UF T MA T Y ROAD L D E K FO T EA E COPPERFIELD STREET T A E R T R ST E L G T AY E O K ST TH EE S UT OM R R C W RE R E A T S S S N ST S E O WATERLOO HE RE T S ST NE TR F W EET M G A ET RO CO A D L C ME TON H I STATION N S N ED IGH R S E R R TREE H A B W T B OW H R SURREY R G E S IELDS LD W OU OWSF FIE D R SN S O OA NOW T R S BO T EE R IDGE GR R B ST B EA MA R D T K E RU FORD SU R R M ID UF FF SH O S O WA A N T

BLACKFRIARS ROAD L R K L D TH S EE S W WE S T U EA ROAD O T R EY E R E SO S T T BY S O T N OS R E R S H E C TR WE T MARS BBER R STR BOROUGH E E EET E OW T L 10 STATION 5 2

LOCAL OCCUPIERS PALACE HOUSE 16–17 THE CITY AT YOUR FEET

BANK LIVERPOOL STREET CANNON STREET THE LEADENHALL 30 MONUMENT 20 FENCHURCH BOROUGH LONDON TOWER HILL BOROUGH SOUTHWARK HMS THE NEWS LONDON BRIDGE LONDON BRIDGE TOWER THE BUILDING ST MARY AXE STREET YARDS BRIDGE MARKET CATHEDRAL BELFAST BUILDING BRIDGE SHARD

LOCAL OCCUPIERS PALACE HOUSE 18–19 LOWER THAMES STREET The South Bank is one of London’s BLACKFRIARS Local Development fastest growing sub-markets, fuelled by STATION E DG I UPPER GROUND strong occupational demand has been W ATERLOO BRIDGE

ON BR subject to unprecedented development 6 H 14 LOND O 7 L activity in recent years, with a pipeline LA N D S TR EE T C CLI to suggest this will continue. O PA NK I RK ST N ST RE pipeline 10 STREET ET R E REET ND ET SUMNER ST OU T GR 15 D

ER P P TREE SUM A UP S NER A S STR R 8 OUTHW EET K

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S WIN CHE T STER W REET AR R ALK

AMFORD H URRELL ST K STREET E 4 B ET A ST T F I E L D ET S E R

BE T S 9 ST AR K K BRIDGE L O NE BOROUGH O R L F A Y T N A BLACKFRIARS ROAD UF S O E S T MARKET R O T T EE L A STREE EY ROAD E VINGTON T E R LA HW R G STRE E T D GR R U S E T E V E T T A H L T O REE T SOUTHWA M T 5 SO RK STRE A BE S G ET S LL EW ST WATERLOO EAST UPE U R RO IL E 13 E E D T R F

I S ORM LONDON STATION TR FLAT IRON 1 2 3 EE S T TR SQUARE BRIDGE LONDON E SOUTHWARK E T STATION BRIDGE W STATION 2 AT UNION STREET UNION STREET STATION 11 E RLOO RO W D INDM C UNI N O G O O N P WATERLOO R R S N EA TR I EE ROAD W L T T ZE L T A ALL E

W S M

STATION AL UF T R RE A AD F 12 OA K COPPERFIELD STREET E O T YORK Y ST D T LK A GR ST EE THOM R W S AS T S ST R N RE E 1 EWC N ST ET THE CU E O T CROS ME TO D N S STRE E RE HIGH ET W H SURREY ROW G DS DS U SFIEL IEL D SNOW F A OWS O SN R E ET G RE BORO ST GR M B BRID D EA R R T K A E O SU RSHALS M UFF FFO O L N K HWAR D T S W W S TR U O E EY E A R E E S BLACKFRIARS ROAD SO T RO Y T S B ON S T A R OS D E H E S WE CR T R T MA BBER R R STRE BOROUGH E E ET E LOW STATION T

WESTMINSTE LONG LAN R BRIDGE E

ROA 53 GREAT SUFFOLK STREET, SE1 100 UNION STREET, SE1 251 ROAD, SE1 D LAMBETH NORTH AD STATION BOROUGH RO

G R E T AT DO ROAD EE TER BRIDGE R Morgan Capital Partners Lake Estates Oakmayne and LonE Star Real Estate WESTMINS T S V H ERST G LOND Scheme: 30,097 sq ft of office Scheme: 20,419 sq ft of office and Scheme: 33,368 sq ft of office and R GH HI EE ON U T O accommodation. Let to George retail accommodation retail accommodation R RO O A 3 B P Johnson & F B Ellmers D Completion: Q3 2017 Completion: Q3 2017 Completion: Q4 2017

4 5 6 10 11 12

BOROUGH YARDS (DIRTY LANE), SE1 COOPER & SOUTHWARK, SE1 BANKSIDE QUARTER, SE1 PARKSIDE, THE SHELL CENTRE, SE1 ELIZABETH HOUSE, SE1 185 PARK STREET, SE1 Meyer Bergman & Sherwood Thames Venture HB Reavis Temasek/Native Land/Amcorp Properties Delancey Almancantar HB Reavis Scheme: 68,500 sq ft of office Scheme: 78,000 sq ft of office Scheme: 5.3 acre (mixed use) Scheme: 163 residential units with Scheme: 790 residential units, 800,000 sq ft Scheme: 1.25 million sq ft mixed use scheme accommodation and 115,600 sq ft accommodation, whole building 22,500 sq ft of retail of office (pre-let to WeWork) and of retail and cinema pre-let to CBRE 80,000 sq ft of retail Completion: Q4 2018 Completion: Q1 2018 Completion: Stage 1 delivery scheduled for 2019 Completion: 2021+ Completion: 2019 Completion: 2021+

7 8 9 13 14 15

ONE BLACKFRIARS, SE1 20 BLACKFRIARS ROAD, SE1 WEDGE HOUSE, SHARD PLACE, SE1 BEAR GARDENS APART-HOTEL, SE1 105 SUMNER ROAD & 40 BLACKFRIARS ROAD, SE1 133 PARK STREET, SE1 Berkeley Group Black Pearl Ennismore Sellar Property Group Macro Investments Limited Land Sec Scheme: 274 residential units and Scheme: 286 residential units and Scheme: 110,000 sq ft office and hotel Scheme: 148 residential units and 19,500 sq ft Scheme: 75 bedroom hotel Scheme: 200,500 sq ft office scheme 121,000 sq ft hotel 277,000 sq ft office scheme scheme to be operated by of retail accommodation Hoxton Hotel Completion: 2018 Completion: 2020+ Completion: Q2 2018 Completion: Q2 2019 Completion: Q3 2018 Completion: 2022

LOCAL DEVELOPMENT PIPELINE PALACE HOUSE 20–21

Currently under refurbishment by Kaplan, the property comprises 45,012 sq ft (4,182 sq m) of accommodation arranged over ground and Palace House was completed five upper floors. The office accommodation comprises 43,083 sq ft (4,002 sq m) to in 1986 and provides office and include the reception area arranged over ground and five upper floors. There is also a retail unit at part-ground and part-first floor totalling retail accommodation totalling 1,929 sq ft (179 sq m).

The majority of the property provides well-specified part-open plan approximately 45,012 sq ft and part-cellular air-conditioned office accommodation. The second, fourth and fifth floors will be refurbished by Kaplan in line with the (4,182 sq m) arranged over agreed Scope of Works. ground and five upper floors. The property benefits from a double-height entrance hall accessed from Cathedral Street, and extensive roof terrace accessed via the stairwell from the fourth floor. Part of the roof is utilised by the Tenant as a terrace and benefits from views over the City to the north.

The property also benefits from surface and undercover car-parking for approximately 13 vehicles.

There is a public right of way that runs under the building, linking Cathedral Street to Clink Street.

DESCRIPTION PALACE HOUSE 24–25 SCHEDULE OF AREAS

The property has been independently measured by Plan London in accordance with the RICS Code of Measuring Practice 6th Edition and the International Measuring Standards IPMS. The survey is assignable to a purchaser and a Duty of Care letter can be provided.

Floor Accommodation NIA sq ft NIA Sq m

5th Office 1,283 119 4th Office 9,705 902 3rd Office 11,480 1,067 2nd Office 11,293 1,049 1st East Office 3,696 343 1st West Office 2,423 225 Ground Office 2,590 241 Ground & Retail 1,929 179 First Ground Reception 613 57 TOTAL 45,012 4,182

SPECIFICATION

CURRENT Specification

The current specification of the office space can be summarised as follows:

—— Substantial double height entrance hall. —— Slab to slab of 4.2 metres at ground floor level and over 3.5 metres at first floor and above. —— Male and female WCs. —— VAV Air conditioning. —— Suspended Ceilings. —— Raised Floors. —— Two 10 person lift providing access to the office space. —— One Goods lift refurbished in 2018. —— Access to terrace on the fifth floor with views over City of London and St Paul’s.

The Landlord has agreed to provide a capital contribution to the Tenant of £3,625,620 exclusive of VAT, in respect of the works to be carried out.

SPECIFICATION & ACCOMMODATION PALACE HOUSE 26–27 Floor Plans

PICKFORDS LANE

Ground floor Third floor Office 11,480 sq ft / 1,067 sq m

2,590 sq ft / 241 sq m Retail

1,386 sq ft / 129 sq m STREET STONEY Reception

613 sq ft / 57 sq m

WINCHESTER WALK Cathedral STreet Cathedral

First floor Fifth floor East 1,283 sq ft / 119 sq m

3,696 sq ft / 343 sq m West

2,423 sq ft / 225 sq m Retail (mezzanine)

543 sq ft / 50 sq m

Office Retail Core Building Footprint For indicative purposes only. Not to scale. N

FLOOR PLANS PALACE HOUSE 28–29 Tenancy Tenure & Site

Kaplan Estates Limited will occupy the whole of the office accommodation in Palace House on a floor by floor basis, guaranteed by Kaplan UK Limited, a 5A1 rated company with a parent guarantee The office space will be single let from Kaplan Inc. PALACE HOUSE IS held FREEHOLD. to Kaplan, guaranteed by Kaplan UK The office accommodation is to be occupied on the ground, first and third floors on a new 15 year term from 4th June 2017, with a 10th year Limited and Kaplan Inc for a term tenant option to determine. The total rent agreed over these three floors is £1,160,867.50 per annum, equating to £57.50 psf. st of 15 years, expiring 31 August 2032 Kaplan Estates Limited have agreed to a lease over the second, fourth Little and fifth floors. The tenant will begin works on-site from March Winchester with a tenant only break option on 2018, and will have 6 month’s to undertake a refurbishment of the Wharf st accommodation in line with the agreed Scope of Works. 31 August 2027. st The lease start date for these floors will be 1 September 2018 and Old Thameside Inn Horseshoe will be co-terminus with the other Kaplan leases, with a tenant’s Wharf (PH) option to determine on 31st August 2027. Pickfords Wharf

The total rent passing for these floors will be £1,292,298 per annum, equating to £58.00 psf. The tenant will be granted an 18 month rent Clink Street free period from Lease Commencement. St Mary The retail unit is let to Nero Holdings Limited t/a Caffè Nero for a Winchester Palace Overie Dock term of 15 years from 11th June 2007 expiring 10th June 2022. The rent (Rems of) payable is subject to a minimum base rent of £150,000 per annum and, by way of additional rent, the Turnover Rent.

The Turnover Rent is the sum equal to the amount, if any, by which the Turnover Percentage (12%) of the Gross Turnover exceeds the Base Rent of £150,000.

Tenant Floor Use Area Lease Lease Next Tenant Rent Comments Start Expiry Review Option PALACE Sq Ft Sq M £PAX £PSF HOUSE

Winchester Square

Rent commencement Kaplan Estates 31.08.22 1st March 2020. Outside the 5th Office 1,283 119 01.09.2018 31.08.2032 31.08.2027 £74,414 £58.00 Limited 31.08.27 security provisions of the L&T 1954 Act.

Rent commencement Cathedral Street Cathedral Kaplan Estates 31.08.22 1st March 2020. Outside the th Winchester 4 Office 9,705 902 01.09.2018 31.08.2032 31.08.2027 £562,890 £58.00 New Hibernia Limited 31.08.27 security provisions of the Stables House L&T 1954 Act.

Rent commencement Winchester Walk Kaplan Estates 31.08.22 4th September 2018. Outside 3rd Office 11,480 1,067 04.06.2017 31.08.2032 31.08.2027 £660,100 £57.50 Limited 31.08.27 the security provisions of the L&T 1954 Act.

Rent commencement Kaplan Estates 31.08.22 1st March 2020. Outside the 2nd Office 11,293 1,049 01.09.2018 31.08.2032 31.08.2027 £654,994 £58.00 Limited 31.08.27 security provisions of the The Freehold boundary is shown edged red. L&T 1954 Act. The Long Leasehold is edged blue. For identification only, on the Ordnance Survey plan. 1st East Office 3,696 343 Rent commencement Kaplan Estates 31.08.22 4th September 2018. Outside 04.06.2017 31.08.2032 31.08.2027 £351,842.50 £57.50 Limited 31.08.27 the security provisions of the st 1 West Office 2,423 225 L&T 1954 Act. St Mary Overie’s Dock and the surrounding walkways are held leasehold from the Equitable Life Assurance Society (ELAS) on a lease Rent commencement expiring 9th June 2109 at a fixed rent of a peppercorn. ELAS in turn Kaplan Estates 31.08.22 4th September 2018. Outside Ground Office 2,590 241 04.06.2017 31.08.2032 31.08.2027 £148,925 £57.50 hold their lease from the Port of London Authority, the Freeholder. Limited 31.08.27 the security provisions of the L&T 1954 Act.

Part The rent payable is subject Caffè Nero Ground & Retail 1,929 179 11.06.2007 10.06.2022 — — £150,000 £77.76 to a minimum base rent and Part First a turnover rent (if applicable).

TOTAL 44,399 4,125 £2,603,165.50 £58.63

Notes: Kaplan Estates Limited benefits from 18 months’ rent free from 1st September 2018. The vendor will top up any outstanding rent free period upon completion.

TENANCY & TENURE PALACE HOUSE 30–31 Covenant Asset Information Management

Kaplan is one of the world’s largest and most diverse education providers. Throughout their 75-year history, Kaplan has been a beacon for expanding educational access and a leader in instructional innovation. Kaplan has over 1 million students worldwide in over 30 countries, employing over 19,000 people and partners with over 2,600 business clients and 1,000+ educational partners.

Kaplan Estates Limited is guaranteed by Kaplan UK Limited who have a D&B rating of 5A1, the highest financial strength rating available. In addition, the lease is also guaranteed by Kaplan Inc.

The Dun & Bradstreet ratings for Kaplan Estates Limited and its first guarantor are as follows:

Company D&B Rating

Kaplan Estates O 2 - O – indicates a financial strength Limited which is undisclosed and 2 indicates a lower than average risk of business failure.

Kaplan UK Limited 5A1 – based on a tangible net worth of £78,033,000 and a minimum risk of business failure.

Kaplan is owned by the Graham Holdings Company, a publicly listed American conglomerate listed on the New York Stock Exchange. Graham Holdings Company also owns the online magazine Slate, Graham Media Group, (formerly Post-Newsweek Stations), a group of five large-market television stations and the now closed Trove (formerly WaPo Labs)— the developers of a news reader app. Graham Holdings Company also owned cable television and internet service provider Cable One until it Consideration has also been given to a comprehensive redevelopment was spun off in 2015. of the site creating a new building comprising approximately 80,834 sq ft (7,509 sq m) of net internal area as set out below: Moody’s rates the company Ba1 as at May 2017. Palace House offers immediate More information can be found at www.ghco.com opportunities to add value as well Floor NIA sq ft NIA sq m as longer term potential to increase 5th 4,037 375 4th 11,002 1,022 the massing to almost double the 3rd 13,090 1,216 existing net area. 2nd 13,090 1,216 Nero Holdings Limited t/a CafFè Nero 1st 6,717 624 Ground 6,717 624 Nero Holdings Limited was founded in 1997 and now operates more Basement 13,090 1,216 than 800 coffee houses across Europe. Nero Holdings Limited have a D&B rating of 5A1. In the short term additional value can be created by converting the Lower Basement 13,090 1,216 undercroft parking at ground floor level into retail or leisure use. Total 80,833 7,509 SODA architects have produced a scheme which illustrates that Company D&B Rating between 1,356 sq ft (126 sq m) and 2,077 sq ft (193 sq m) of additional The feasibility study for the new build scheme can be accessed on retail space could be created. The total amount of additional area the data room. Nero Holdings Limited 5A1 – based on a tangible net worth created will depend on the repositioning of the sub-station. t/a Caffè Nero of £191,791,000 and a minimum risk of business failure. SODA have also explored a number of longer term options to add massing through the rationalisation and extension of the 5th floor. An indicative CGI has been produced by Silver Shadow Studio to illustrate these options.

COVENANT INFORMATION & ASSET MANAGEMENT PALACE HOUSE 32–33 South Bank Market

OCCUPATIONAL INVESTMENT PRIME RENTS IN EXCESS OF £70.00 PER SQ FT

The South Bank office market remains one of Central London’s According to Union Street Partners total investment volumes on the strongest performing sub-markets. Take-up in 2017 surpassed the South Bank totaled around £2.2bn in 2017, approximately 350% up on long term average with approximately 1.3m sq ft leased across the 2016. Institutional investor interest has been driven by a strengthening year. Availability is amongst the lowest across any sub-market in occupational market and lack of good quality supply. VACANCY RATE OF c.2.8% Central London with only 725,000 sq ft of stock available and a vacancy rate of c.2.8%. As the sub-market matures and the impact of the improvement to infrastructure to London Bridge and Waterloo stations starts to be The professional sectors remain the dominant type of occupier felt by local occupiers, it is anticipated that demand will increase however the South Bank has also seen a growth in the TMT sector throughout 2018, particularly from overseas buyers. 2017 INVESTMENT VOLUMES particularly in the areas around Union Street and Great Suffolk Street. With schemes like Borough Yards expected to enhance the retail and In-fact overseas investors accounted for c.63% of investments into the UP 350% ON 2016 amenity offering closer to the River we also expect rents in this immediate South Bank in Q4 2017, a total of £266m (up c.20% from the previous location to increase. three years), reinforcing the increasing attractiveness of the location as a core London sub-market. Excluding the Shard which has achieved lettings in excess of £100.00psf, prime office rents south of the river are now consistently The table below sets out investment transactions across Central in excess of £70.00psf, as exemplified by recent lettings within the London with a similar leasing profile to the subject property; £2.2BN OF INVESTMENT INTO Blue Fin Building, 240 Blackfriars and the breakdown in rents for the upper floors at HB Reavis' Cooper & Southwark Building. THE SOUTH BANK IN 2017

The following tables shows occupational comparables for both retail and office lettings on the South Bank;

Retail Occupational Comparables Investment Comparables

Property Tenant Floor Size Rent Psf Address Tenure Area (sq Tenant Wault to Lease Rent Price Capital Value Iy Purchaser Completion ft) Expiry (Breaks) £ / sq £ / sq ft Date 81 Black Sheep Coffee G+LG 1,229 £75,000 £61.03 ft Unit 15, Bankside Joe & The Juice G 957 £85,000 £88.82 38 Chancery - FH 73,793 70% to WeWork 17.80 (16.90) £58.64 £90,000,000 £1,216 4.50% Sinar Mas Land Under offer Winchester Walk Hawksmoor G+LG 4,668 £400,000 £89.69 Cursitor, WC2

Porters Wharf, 8-14 FH 44,107 Single let to Macmillan 11.25 (16.25) £52.40 £48,000,000 £1,088 4.51% KIRKBI Exchanged Crinan Street, N1 Publishers Limited

Office Occupational Comparables 99 Gresham Street, FH 95,717 Multi-let 7.00 (6.30) £61.88 £136,200,000 £1,423 4.07% Million Cities Dec-17 EC2 Property Tenant Floor Size Psf Term Break Incentives Comments Date 240 Blackfriars, SE1 FH 226,271 Multi-let 8.40 £49.50 £266,500,000 £1,176 3.94% Al Gurg Family Dec-17 61 Southwark Street CBRE Whole 75,000 £64.00 15 years 12th year 26 months rent free £70.00 on top floor Jan-18

240 Blackfriars Road Peninsular Business 17th 11,387 £72.50 - - Undisclosed Sublease Dec-17 Cspace, 37-45 City FH 63,536 Multi-let to 2 tenants 75% 12.00 (9.00) £57.42 £74,000,000 £1,165 4.60% Meadow Partners Nov-17 Services Road, EC1 of the space let to creative agency, MullenLowe and 240 Blackfriars Road SAP 8th 11,964 £65.00 - - Undisclosed Sublease Dec-17 25% to NeuLion The Blue Fin Building Undisclosed Part 9th 11,513 £71.00 7 years - 16 months rent free - Dec-17

100 Union Street Kimble G 3,574 £65.00 5 years - Undisclosed - Dec-17 8 Bouverie Street, EC4 FH 47,183 Single let to Tipall Ltd 11.90 £44.79 £48,003,000 £1,017 4.12% Harbor Group Aug-17 with a surety from International th Clink Street The Clearing 5 2,747 £65.00 5 years - 3 months rent free Private roof terrace Nov-17 Euromoney Institutional Consultancy Limited Investor Plc Union House Ren Ltd 5th and 6,351 £66.50 10 years 5th year Undisclosed - Nov-17 Mezz 9-13 St Andrew Street, FH 16,772 Single let to Rosenblatt 9.80 £50.86 £20,780,000 £1,252 3.80% Get Nice London Aug-17 EC4 (Hong Kong Investor) 16 Winchester Walk Howden M&A 1st 3,575 £64.00 10 years 5th year 6 months - Aug-17

nd 90 Union Street Planning-INC 2 3,969 £62.50 5 years - 9 months rent free - Jul-17 67 Lombard Street, FH 93,640 Multi-let to 6 tenants and 10.20 £56.54 £129,300,000 £1,381 4.10% Ho Bee Land Jun-17 The Blue Fin Building The Crown Agency Part 7th 14,931 £67.50 8 years - 15 months - May-17 EC3 over 50% let by income to Arthur J. Gallagher The Blue Fin Building Savio Limited 12th 6,442 £74.00 10 years 5th year Undisclosed - May-17

90 Union Street Sonnedix 3rd/4th 4,805 £66.00 10 years 5th year 8 months rent free Private roof terrace Apr-17 Rose Court, FH 157,144 Single let to WPP 15.00+ £50.91 £190,000,000 £1,209 4.14% M&G Real Estate Feb-17 up front. Further RF Southwark Bridge post break Road, SE1

SOUTH BANK MARKET PALACE HOUSE 34–35 Planning Contacts The property is located in The London Borough of Southwark. It is not listed, but is situated within the Borough High Street conservation area.

Capital

Allowances For further information, access to the data Capital Allowances can be made available to the purchaser. room or to arrange a viewing please contact: James Abrahams 020 7588 4433 VAT [email protected]

The property is elected for VAT. It is anticipated that the transaction Chris Room will be treated as a Transfer of a Going Concern. 020 7588 4433 [email protected] EPC Marsha Rabinovich 020 7588 4433 The property has an EPC rating of C. A copy of the certificate is [email protected] available upon request.

Proposal

Offers are sought in excess of £55,400,000, subject to contract and exclusive of VAT. A purchase price at this level reflects a net initial yield of 4.4% and a capital value of £1,231 per sq ft, assuming purchaser’s costs of 6.78%.

Data Room

Further information can be found on the online data room. Please contact the vendor’s agents to request access. DISCLAIMER: Allsop LLP on its behalf and for the Vendors or Lessors of this property, whose Agents they are, give notice that: These particulars are set out as a general outline only for guidance to intending Purchasers or Lessees, and do not constitute any part of an offer or contract. Details are given without any responsibility and any intending Purchasers, Lessees or Third Parties should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise as to the correctness of each of them. No person in the employment of Allsop LLP has any authority to make any representation or warranty whatsoever in relation to this property. Unless otherwise stated, all prices and rents are quoted exclusive of VAT. March 2018.

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CONTACT & FURTHER INFORMATION PALACE HOUSE 36–37