250 East End Road, East Finchley, London, N2 8AU

The Learning Experience 250 East End Road, East Finchley, London, N2 8AU

Flagship Day Nursery Investment Opportunity in London with 14 Years Unexpired with RPI Linked Rent Reviews The Learning Experience, Flagship Day Nursery Investment Opportunity 250 East End Road, East Finchley, in London with 14 Years Unexpired London, N2 8AU with RPI Linked Rent Reviews

INVESTMENT CONSIDERATIONS PROPOSAL

■ Recently opened Day Nursery (October 2020) in the heart ■ Full USA parent company guarantee from The Learning ■ We are instructed to seek offers in excess of the affluent London neighbourhood of East Finchley Experience Corporation, a very strong covenant who of £6,000,000 (Six Million Pounds), operate from over 250 locations across the United States ■ Moments from East Finchley Tube Station (Northern Line to subject to contract and exclusive of VAT. City & West End) ideally placed for commuters dropping off ■ 5 yearly rent reviews to the greater of OMRV or annually An acquisition at this level would provide children on their way to work indexed RPI a net initial yield of 5.28% after allowing ■ Long unexpired lease term of 14 years (no breaks) ■ Passing rent of £337,500 per annum for purchaser’s costs of 6.62%. ■ The property has recently been comprehensively ■ Let to a newly formed UK company that is a directly refurbished to a very high standard with over £2 million owned subsidiary of The Learning Experience Corporation spent on fit out ■ Freehold The Learning Experience, Flagship Day Nursery Investment Opportunity 250 East End Road, East Finchley, in London with 14 Years Unexpired London, N2 8AU with RPI Linked Rent Reviews

EAST END ROAD

MCDONALDS HQ

EAST FINCHLEY HIGH STREET STATION CAR PARK

MUSWELL HILL 1 MILE

EAST FINCHLEY TUBE

5 MILES

Aerial image taken in 2018. Outline indicative purposes only. The Learning Experience, Flagship Day Nursery Investment Opportunity 250 East End Road, East Finchley, in London with 14 Years Unexpired London, N2 8AU with RPI Linked Rent Reviews

A504 N D D RO O D R

R FNLE I P D O R R N R O L D U R IR 8 9 N 5 6 A 0 4 EAT FNLE A A50 4 ND R N O I R D FOR LOCATION A504 A406

East Finchley is an affluent suburb of North West

London, located within the London Borough of

Barnet approximately 5 Miles (8 km) north west of O

Central London. East Finchley benefits from excellent FINLY

A 1 F communications with East Finchley Underground station LL DON providing a constant service into central London via the Y NORTHWAY GARDENS Northern Line. Road communications are also strong with P O I R the A1000 linking to Central London (via the A1) in the

N O South and the North Circular and M25 in the north. O A R

R 1

Y LYTTELTON R HIGHGATE

L PLAYING FIELDS

D WOODS

N SITUATION I

8 9

The property is situated on East End Road (A504) at its 5 A

junction with Deanery Close in a predominantly residential

N area. The amenities of East Finchley High Road (A1000) are A 1

located within close proximity to the property. East Finchley P O HIGHGATE Underground Station (Northern Line) is a 2 minute walk I

GOLF CLUB R to the south with numerous regular bus services running across North and Central London available from the East N O R Finchley High Road. Adjacent to the property is Hospitality R O House which is the HQ of McDonald’s Restaurants. HAMPSTEAD D Nominated one of the “Best placesGOLF to CLUB live in London” The Times, 2019 HAMPSTEAD HEATH EXTENSION The Learning Experience, Flagship Day Nursery Investment Opportunity 250 East End Road, East Finchley, in London with 14 Years Unexpired London, N2 8AU with RPI Linked Rent Reviews

DESCRIPTION The property compromises a newly refurbished nursery within a Grade II listed former school building which dates back to the 1840s. The building provides a predominantly single storey day nursery with 13 classrooms, two play areas, two reception areas, kitchen, laundry room and further staff accommodation. To the first floor there are ancillary rooms that encompass the property’s plant equipment. To the rear of the property there are 5 car parking spaces and to the front a bike shed for approximately 14 bikes. Vehicular access is from East End Road. A comprehensive fit out to a very high standard has just been concluded on the property which was fully funded and completed by the tenant. It is The Learning Experience’s flagship Nursery in the UK and the property has been fully fitted out by the tenant in The Learning Experience’s Corporate Style. We understand the cost for the fit out has exceeded £2m. The nursery has a capacity of approximately 130 children, with operating hours from 7am to 6pm, with enrolment currently underway. Enrolment for the property began in late October 2020 and at the time of writing the Nursery had a strong lead list. There is a development site to the rear of the property (not included in the sale) that has already sold by the vendor and has retained a right of access over the subject property (please refer to plan).

TENURE Freehold.

ACCOMMODATION The property is set to provide the following Gross Internal Area (GIA):

Ground Floor: 970 sq m (10,441 sq ft) First Floor: 58 sq m (624 sq ft) Total: 1,028 sq m (11,065 sq ft) The Learning Experience, Flagship Day Nursery Investment Opportunity 250 East End Road, East Finchley, in London with 14 Years Unexpired London, N2 8AU with RPI Linked Rent Reviews

SITE AREA The site extends to approximately 0.59 acres (0.24 hectares).

TENANCY The property is let to the newly formed TLE at East Finchley UK Limited on a 15 year lease from 29th October 2019 (no break) at a rent of £337,500 pa (expiry Oct 2034). The lease is full repairing and insuring and the rent is subject to 5 yearly rent reviews to the greater of OMRV or annually indexed RPI. The reviewed rent will be capped at 110% of the passing rent before review. The lease provides for a USA parent company guarantee from The Learning Experience Corporation. The guarantee will fall away if the UK company can show that net profits are at least 3 times the rent for 3 consecutive years, but not before the end of the 5th year of the lease.

ND ROD

Future Development Site

Rear site right of access

Freehold Demise Tenant’s Demise

For identification purposes only. The Learning Experience, Flagship Day Nursery Investment Opportunity 250 East End Road, East Finchley, in London with 14 Years Unexpired London, N2 8AU with RPI Linked Rent Reviews

The Learning Experience (TLE) Corporation was established in Florida in 1980 by the Weissman family and has grown to operate from over 250 locations across the United States. The business combines child care and early child nursery education for children between the ages of six weeks and six years. The Learning Experience has generated double-digit annual growth on profits for the past 17 years, making it a clear leader in the early childhood education sector. There are another 154 centres in the pipeline in the US and TLE anticipate having 167+ centres in East USA and 120 Centres in the Mid-West and West Coast by the year end of 2021 (Total: 287+). TLE are currently opening a new centre every week. Having undertaken 4 years due diligence, the TLE spotted a gap in the UK market since educational nurseries do not exist in the UK at pre-school level. As a result, The Learning Experience is now embarking on an expansion into the United Kingdom with East Finchley and Leatherhead being their opening locations. The CEO of TLE, Richard Weissman is a director of the UK tenant company and is fully committed to expanding the business in the UK. In addition, another nursery is due to open in Greenwich shortly. In July 2018, the business was acquired by private equity firm Golden Gate Capital for an undisclosed sum. The business believes that the deal will allow for faster growth and allow them to expand internationally. Golden Gate Capital is a San Francisco based private equity investment firm with over $15 billion of capital under management. The fund is structured as an evergreen fund with no finite life meaning it does not have to sell investments within a timeframe. Other businesses they own include Red Lobster, Eddie Bauer and Bob Evans Restaurants. The 2018 Annual Report states as follows: In comparison to the previous year, this shows

Year to Dec / 2018 System wide sales $261,754,000 Total Centres 233 +19% +17% +19% +38% +35% increase in system-wide increase increase increase increase Total Enrolment (Dec) 24,678 kids sales growth to over in enrolment in company in new centre in adjusted Adjusted EBITDA $24,043,000 growth recurring development EBITDA $260 million revenue growth from prior year The Learning Experience, Flagship Day Nursery Investment Opportunity 250 East End Road, East Finchley, in London with 14 Years Unexpired London, N2 8AU with RPI Linked Rent Reviews

INVESTMENT COMPARABLES The following long let nursery investments have been sold recently:

Address Tenant Unexpired Term Sale Price NIY Date

Whytecliffe Road, Purley Bright Horizons 15 years £2,400,000 4.70% Jan-20

Bantock Way, Biggleswade Busy Bees Nurseries Ltd 18 years £2,279,000 4.83% Jun-19

Southdowns Park, Haywards Heath Busy Bees Nurseries Ltd 18 years £2,170,000 4.95% Mar-19

Springfield Road, Chelmsford Busy Bees Nurseries Ltd 24 years £2,750,000 4.50% Jun-18

Lower Richmond Road, Richmond Bright Horizons 14.5 £2,375,000 4.00% May-18

Charlton Road, Charlton, London Busy Bees Nurseries Ltd 20 £3,705,000 4.75% Dec-17 EPC VAT The property has an EPC rating of B, a copy of We understand the property which is available on the dataroom. is not elected for VAT.

AML DATAROOM A successful bidder will be required to provide information to For access to the Dataroom please use the following link: satisfy the AML requirements when Head of Terms are agreed. https://datarooms.allsop.co.uk/register/nurseryeastfinchley

PROPOSAL We are instructed to seek offers in excess of £6,000,000 (Six Million Pounds), subject to contract and exclusive of VAT. An acquisition at this level would provide a net initial yield of 5.28% after allowing for purchaser’s costs of 6.62%.

For further information or to make arrangements for viewing please contact:

Liam Stray Alex Butler Gergo Petrovics 07956 981 575 07801 219 888 07961 234 029 [email protected] [email protected] [email protected]

allsop.co.uk

Misrepresentation Act: 1. Allsop LLP on its own behalf and on behalf of the vendor/lessor of this property whose agent Allsop LLP is, gives notice that: (a) these particulars do not constitute in whole or in part an offer or contract for sale or lease; (b) none of the statements contained in these particulars as to the property are to be relied on as statements or representations of fact; and (c) the vendor/lessor does not make or give, and neither Allsop LLP nor any of its members or any person in its employment has any authority to make or give, any representation or warranty whatsoever in relation to the property. The only representations, warranties, undertakings and contractual obligations to be given or undertaken by the vendor/lessor are those contained and expressly referred to in the written contract for sale or agreement for lease between the vendor/lessor and a purchaser or tenant. 2. Prospective purchasers or tenants are strongly advised to: (a) satisfy themselves as to the correctness of each statement contained in these particulars; (b) inspect the property and the neighbouring area; (c) ensure that any items expressed to be included are available and in working order; (d) arrange a full structural (and where appropriate environmental) survey of the property; and (e) carry out all necessary searches and enquiries. Allsop is the trading name of Allsop LLP. Design CommandD www.commandHQ.co.uk 11.20