Exchange Buildings Prime Leisure Investment NE1 3AE Investment Summary

• Landmark building in prime position on Newcastle’s Quayside

• Established leisure offering on one of the city's prime pitches

• Fully let to very strong covenants with a WAULT of 16.1 years

• Vibrant leisure sector seeing strong growth

• Low base rents

• Genuine asset management opportunities to regear leases and increase rent

• Offers over £4.2m reflecting a net initial yield of 6.48% after

Quayside, Newcastle upon Tyne NE1 3AE Tyne upon Newcastle Quayside, purchaser's costs of 6.55% Exchange Buildings Buildings Exchange Location

Central Motorway

A167 Exhibition Park Newcastle is the commercial and administrative capital of Hunters Moor the North East with a population of approximately 280,000 Heaton Park people [Census 2011] and forms part of the wider Dental Hospital conurbation with a total population in the region of 1.1m University University of Newcastle Library people, making it the seventh largest in the UK. Located upon Tyne The Great North Museum approximately 286 miles north of London and 105 miles south Royal Victoria of Edinburgh, the city is well connected to the wider road Aberdeen Infirmary Civic Centre

network with the A1(M) approximately 2 miles to the west of Barrack Road University the city centre and the A19 7 miles to the east. Leazes Park Haymarket

The city is very well served by public transport with Newcastle St James Park A167(M)

Eldon Central Station, a principal destination on the east coast Glasgow Edinburgh Garden mainline, offering connections to London Kings Cross in 2 Street Eldon Square Laing A1 Art Gallery hours 40 minutes and Edinburgh in 1 hour 30 minutes. The Science City St James M6 Grey’s Tyne & Wear Metro system runs throughout Tyneside and the NORTH Monument Monument Manors Carlisle A69 NEWCASTLE Eldon Square Theatre network has 60 stations extending as far as Newcastle Airport Chinatown Shopping Centre Royal The Gate Exchange 6 miles to the north west and to the south east. A66 Park A19 Buildings Newcastle International Airport provides daily scheduled Road A1(M) Rail York NEWCASTLE Quayside flights to both domestic and international locations. Leeds CITY CENTRE MILLENNIUM Manchester Law Courts M1 BRIDGE Newcastle is home to two leading universities which attract in M1 Discovery Museum excess of 55,000 students. Newcastle University is a member Liverpool Sheffield M6 The Baltic of the Russell Group comprising the leading 24 univerisites in Life Science TYNE A1(M) Centre BRIDGE the country. M1 Birmingham Newcastle Newcastle College Central Station The Sage

A167 Wales M1 The city benefits from extensive city centre retail provision A1(M) The Hilton Newcastle centered around Northumberland Street and Eldon Square M40 M11 shopping centre, with the MetroCentre, one of Europe’s largest Cardiff M4 out of town shopping centres also nearby. The city centre has Bristol London approximately 2.2m sq ft of retail space and is ranked sixth out Metro Radio Arena of the top 100 PROMIS centres in both spending available and Gateshead the number of retailers. GATESHEAD TOWN CENTRE Quayside, Newcastle upon Tyne NE1 3AE Tyne upon Newcastle Quayside, Situation The property is prominently located on Newcastle Quayside fronting the River Tyne. The surrounding area has witnessed comprehensive regeneration over the last 30 years through refurbishment of the existing historic, urban fabric and new mixed use developments such as East Quayside and Trinity Gardens. The Millennium Bridge is situated close to the property providing pedestrian access across the River Tyne to the Baltic Arts Centre and Sage Regional Music Centre. As well as being a tourist hot spot the Quayside is also one of the city’s key office pitches with occupiers such as Aecom, RBS, Bond Dickinson, St James

Exchange Buildings Buildings Exchange Place, Ward Hadaway, Barclays and the Central Law Courts, all within a very ©Tony Hall short distance. Situation

NEWCASTLE UNIVERSITY ST JAMES' PARK NORTHUMBRIA UNIVERSITY

SCIENCE CITY NORTHUMBERLAND STREET

INTU ELDON SQUARE

GREY STREET

CENTRAL STATION LAW COURTS

Exchange SAGE Buildings Quayside, Newcastle upon Tyne NE1 3AE Tyne upon Newcastle Quayside,

Exchange Buildings Buildings Exchange Coming 2018 Exchange Buildings Quayside, Newcastle upon Tyne NE1 3AE Licensed andLeisure Market and leisure industry. Quayside further cementing itas the city’s hubfor the tourism the openingof a new 120-bedroom Travelodge hotel on the upon completion to technology firmZerolight. 2018 willsee new Liveworks office andartsdevelopment beingfully let Investment continues to pour into the Quayside with the run by localfood hero Terry Laybourne. by Kenny Atkinson andCaffé Vivo, 21and The Broad Chare all quality dining, including the Michelin starred House of Tides run Music Centre andBalticCentre for Contemporary Art andhigh Hotel du Vin andHilton, the cultural offering of the Regional upper market offer, supported by hotels suchas the Malmaison, years the Quayside hasevolved into amore mature mid to capitalising on the riverfront andiconic bridgescape. Inrecent The Quayside haslongbeenakey leisure destination in the area beingpopular with students andlocals. Perdu, House of Smith, Revolution and Tup Tup Palace resulting Strip” onCollingwood Street with popular nightclubs suchas Newcastle’s nightclub market centres around the “Diamond as luxury operators suchas The Alchemist andChaophraya. operators includingSmashburger, Giraffe andBellaItaliaas well redevelopment will provide the city centre with 21new leisure Intu’s EldonSquare openinginlate 2016. The food quarter continues with the £25millionGrey’s Quarter development in universities. As aresult investment into the leisure market and the 55,000 students that are spread across the city’s two is boosted by the 2million tourists that visit the city every year As well assignificant localdemand, Newcastle’s leisure market Crowne Plaza. including Miller andCarter, The Botanist, Sky Lounge, Aveika and have beenoccupied by a variety of national andlocaloperators theatres, restaurants, clubsandbars across the city. New sites providing arenowned leisure offering with a wide range of 24 new bars andrestaurants openingin the last 18months The city centre hasexperienced strong investment with buoyant and vibrant leisure scenes. by readers of the Guardian) hasoneof the UK’s most Newcastle upon Tyne (voted “best city in the UK 2014”

Exchange Buildings Quayside, Newcastle upon Tyne NE1 3AE Description without review. upon completion at apeppercorn rent A new 175 year headleaseis to begranted Tenure to bemarketing the space by way of asub-let. in occupation andhave told us they are shortly cellar andstaff areas. The tenant iscurrently not has beenfitted out to provide ancillary kitchen, a large flexible ground floor floorplate which Tavern andmicro brewery. The unitprovides to anumber of restaurants and the Bridge central Quayside leisure offering which ishome Bar 38fronts QueenStreet, akey pitch in the the subject of asubstantial refurbishment. in the basement. The bar area isshortly to be river, with ancillary storage andkitchen facilities of the property andhas fantastic views over the The Slug&Lettuce occupies the front section this transaction. reception and two bars which are the subject of level whilst the ground floor provides thehotel hotel with 32car parkingspaces at basement The upper floors provide a152 bedPremier Inn landmark positiononNewcastle Quayside. and presents animposingbuildingina built in1866of ashlar sandstone construction Exchange BuildingsisGrade IIlisted and was Exchange Buildings Quayside, Newcastle upon Tyne NE1 3AE Tenancies t/a Slug&Lettuce Stonegate Pump Company Ltd Tenant Total Newcastle Ltd assignment from Scottish& Spirit Group Retail Ltd on expiring 28.03.2030 plus reversionary lease 25 years from 29.03.2000 Lease to 31.07.2034 35 years from 01.08.1999 Unexpired 17.75 years 13.5 years Term

(Per Annum) £290,000 £110,000 £180,000 Rent

sq ft(sq m) Areas GF: 9,636sqft(895m) Total: 6,875sqft(639m) Bsmt: 2,365sqft(220m) GF: 4,510sqft(419m)

to openmarket value 5 yearly thereafter 09.03.2000 and Review to openmarket value 5 yearly thereafter 07.01.2016 and 25 years unexpired term extending theleaseto Tenant interested in Comments Tenant notinoccupation Exchange Buildings Quayside, Newcastle upon Tyne NE1 3AE Covenant Status streets across the UK. restaurants andhotels in towns, villages andcity centre high a leadingpuboperator andbrewer runningover 3,100 pubs, 450 leasedpubs. In2015 Spirit was acquired by Greene King, John Barras. Spirithasanestate of over 750managedand whose brands includeChef &Brewer, Fayre andSquare and Spirit Group Retail isasubsidiary of SpiritPubCompany (CRN 03794854) Spirit Group Retail Ltd Shareholders Fund Pre-Tax Profit Year Ending Turnover 22.08.2015 £923.5m - -

22.08.2014 £935.1m - - 17.08.2013 £964.5m - - brands suchasStrongbow, Foster’s andBulmers. with 2,000 employees across 8sites in the UK andrecognisable Ltd. Heineken isnow the UK’s leadingcider andbeer producer incorporated into the UK business, rebranding asHeineken UK its roots back to 1749; in2008it was bought by Heineken and Scottish andNewcastle was abrewery company that can trace (CRN SCO16288) Scottish &Newcastle Ltd Turnover Year Ending Shareholders Fund Pre-Tax Profit 31.12.2015 £2,927m £74m -

£3,188.6m 31.12.2014 £63.4m - £3,125.2m 31.12.2013 £63.5m - operator in the UK. firm TDRCapitalandhasgrown to be the fourth largest pub unbranded pubs. The company was formed by private equity Yates amongst itsbrands as well asrunninganumber of bars and pubsacross the UK, itcounts SlugandLettuce and Stonegate isaleadinghospitality company with over 660 (CRN FC029833) Stonegate PubCompany Ltd Shareholders Fund Pre-Tax Profit Turnover Year Ending 31.12.2015 £561.6m £99.7m £4.2m 31.12.2014 £557.7m (£7,1m) £99.4m

31.12.2013 £470.3m £170,2m (£2.3m)

Exchange Buildings Quayside, Newcastle upon Tyne NE1 3AE Asset Management Initiatives the salequalifiesunder the TOGC regulations. VAT will bepayable onthepurchase price unless The property has beenelected for VAT andtherefore VAT the EPCregulations. The property islisted andhence itisexempt from EPC Spirit Group rent free period. the 13.5 year unexpired term to around 25 years inreturn for a would be willing to take asignificant lease extension on top of a refurbishment of thebar area andhave indicated that they Stonegate PubCompany through thefollowing: are opportunitiesfor apurchaser to further enhance returns Whilst offering extremely well secured longterm income there sub-divide andre-let at ahigher rent. would betheopportunity for alandlord to take theunitback, interested inasurrender andgiven theunit’s core location there to instruct agents to sub-let theproperty. They would be are not inoccupation of Bar 38andare expecting are investing asignificant sumin

Proposal cost of 6.55%. after allowing for purchasers show a net initial yield of 6.48% in excess of We are instructed to seek offers £4.2m which would Exchange Buildings Quayside, Newcastle upon Tyne NE1 3AE

For further information

For further information please contact:

Richard Turner Tel: 0191 223 5720 [email protected]

Gagan Jagpal Tel: 0191 223 5709 [email protected]

Peter Atkinson Tel: 0191 223 5715 [email protected]

DTZ Debenham Tie Leung Limited (the “Agents”) give notice to anyone who may read these particulars as follows: 1. These particulars are prepared for the guidance only of prospective purchasers. They are intended to give a fair overall description of the property only and do not constitute any part of an offer or contract. 2. Any information contained in these particulars (whether in the text, plans or photographs) is given in good faith but should not be relied upon as being a statement or representation of fact or that the property is in good condition or otherwise nor that any services or facilities are in good working order. 3. The photographs appearing in these particulars show only certain parts and aspects of the property at the time when the photographs were taken. Certain aspects may have changed since the photographs were taken and it should not be assumed that the property remains precisely as displayed in the photographs. Furthermore no assumptions should be made in respect of parts of the property which are not shown in the photographs. Any areas, measurements or distances referred to herein are approximate only. 4. Where there is reference in these particulars to the fact that alterations have been carried out or that a particular use is made of any part of the property this is not intended to be a statement that any necessary planning, building regulations or other consents have been obtained and these matters must be verified by any intending purchaser. 5. No person in the employment of the Agents has any authority to make or give any representation or warranty whatsoever in relation to this property. 6. This property is offered subject to contract and unless otherwise stated all rents are quoted exclusive of VAT. 7. Unless otherwise stated, no investigations have been made by or on behalf of the Agents regarding pollution, or potential land, air or water contamination. Interested parties are advised to carry out their own investigations as required. October 2016 Designed & produced by www.creativestreakdesign.co.uk ref: 1005