THE OUTLET CENTRE FOR NEWCASTLE

SAVE CLOSE An established retail and leisure destination… 2 OUTLET CENTRE

SAVE CLOSE INVESTMENT CREDENTIALS

 A well-established retail investment Approximately 135,521 sq ft (12,590 sq m) with 740 parking spaces

 Highly populated catchment Access to over 500,000 people within a 20-minute drive -time, rising to 2.5 million within a 60-minute drive-time

 High annual footfall Attracting over 1.4 million visitors

 International and national tenant line-up Tenants include Clarks, Nike, GAP, Poundland, Next, The Body Shop, Subway and Costa

 Affordable rents Estimated average centre effort rate of less than 13%

 A responsive asset-class Numerous opportunities to exploit the strong performance of sports and outdoor brands whilst pursuing new sources of growth through retail and leisure initiatives

 High yielding investment opportunity Estimated current net income in the region of £1,191,310

ROYALFESTIVAL QUAYS PARK OUTLET | EBBW CENTRE VALE NORTH | NP23 SHIELDS 8FP 3 3

SAVE CLOSE FACTORY OUTLET RETAILING

A highly successful retailing format for customers, retailers and investors.

£ £ £

CUSTOMERS RETAILERS INVESTORS

Broad range of branded Modern shopping Low occurrence of merchandise environment overrenting    Energising retail format Aligned interest with Active asset management landlord   Value orientated offer  Sales growth feeds High degree of brand through to rent protection

A responsive asset class…

“The factory outlet sector is rapidly establishing a reputation as a defensive yet responsive subsector and is increasingly attracting new entrants.”

4 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS

SAVE CLOSE HIGHLY POPULATED CATCHMENT WITH LOCAL STRENGTH

Royal Quays Outlet Centre (“Royal Quays”) is located in North Shields, , a commercially strategic location, situated approximately 5 miles (8 km) to the east of 295,800 and 0.6 miles (1 km) to the west of the Port of Tyne International total population Passenger Terminal. 71% economically active

LONDON 17m visitors Population to grow in 2015 by 1.5% by 2022 0.9% 59% employment growth to March 2018 aged between 20 and 64

A189 £140 Blyth total weekly comparison spend A1 per household KEY DEVELOPMENT INITIATIVES A696 Low unemployment North Tyneside Local Plan 2017 A19 of 3% Potential 8,838 additional homes by 2032

A69 Source: CACI Newcastle (40-minute catchment) Upon Tyne Murton Gap Moor

Chester 3,000 homes 2,000 homes -le-Street A19 1,000 sq m retail 500 sq m retail

17 ha employment land Drive-time Population Durham (2017) / education facilities

20 mins 0.6 million 40 mins 1.6 million Stockton 60 mins 2.5 million -on-Tees

ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS 5

SAVE CLOSE R U E E N D S T R EE North Shields... LOCATION & T SYSTEMAX COMMUNICATION a well-connected commuter town

Royal Quays is well located in North Shields, A

1 approximately 5 miles (8 km) east of Newcastle City Centre and 9 miles (14 km) North of the . Newcastle Meadow International Well The Scheme is positioned strategically 0.6 miles Percy (0.5miles) A 8 (1 km) to the east of the A19, which provides the RO 1 Main 105 ET 9 A A (0.6miles) North 6 M only road access across the Tyne to the east of 9 AR Shields 6 E W Newcastle’s City centre. TYNE A ND

Gosforth

The A19 provides access north to the A1, which 20 min drive leads directly to Edinburgh approximately 122 22 min drive 1 8 Port of A 05 miles (196 km) along the Northumberland Coast. A1 Tyne A 16 7 South To the south, the A19 links with the A194 and Shields from there the A1(M), giving access to the wider A Newcastle 1 motorway network. upon Tyne 9 Newcastle Locally, North Shields is easily accessible via the Central Metro network, which provides A1 84 regular services running through North Tyneside to A 24 min drive 1 4

9 1 , Newcastle City Centre, Newcastle 4 A A

9 1 6 0 A Airport, Gateshead and . 1 A184 East Boldon 8 Newcastle’s International Airport is the largest in

A A194(M) the North East and is located 13 miles (21 km) 1 A 1

2 9

9 to the North West of Royal Quays. The airport is 6 A a significant economy driver, contributing £1.16 GTON IN WAY S ES billion into the regional economy every year and W

A1 supporting 3,450 on site jobs and a further 15,425 A1231 across the region (Source: Newcastle International Sunderland

Washington

Airport). A 1

A1(M) 9

6 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS

SAVE CLOSE Over 400,000 sq ft of local retail and leisure s critical mass .5 mile 9 1 A1 < COB LE D EAN

CO BL E D EAN

Growing leisure critical mass…  H

Whilst Royal Quays offers an established 0.5 mile A retail centre with a range of comparison Y H and convenience shopping, it also occupies O L a strategic position in the heart of a growing E R leisure destination. O A  In addition to a broad choice of established adjacent D leisure attractions including a bowling alley, gym, water park, marina and hotel, further complementary attractions are proposed.

The adjacent property of approximately 155,000 sq ft, situated to the south east, is proposed to be opened as a five-a-side football complex and multi-use activity centre. Proposed five-a-side Royal Quays has established its own leisure success with the football complex and c.20,000 sq ft “Kidz Kingdome” attraction, comprising a trampoline multi-use activity centre. Royal Quays is perfectly positioned to benefit from the leisure centre. location’s growing reputation for leisure with the introduction of further family attractions. ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS 7

SAVE CLOSE ROYAL QUAYS OUTLET CENTRE

Opened in 1996 and remodelled in 2001, Royal Quays comprises an established 44 factory outlet centre with a broad range of Get me a kitchen a me Get value orientated merchandise. The centre bathroom a me Get is arranged with open paved malls around 1 2 3 4/5 6 41 42 43 7 46 47 49 a broad circuit configuration. 45a 38 The malls are easily accessible through 8 37 45b 48 two principal entrances from the parking 36 facilities to the north and east of the centre. 51 50 34/35 53

The centre comprises 51 units and is 33 54 52 anchored by Nike, Next, Poundland and 32 55 31 GAP. The largest occupiers are strategically 30 9-12 29 28 positioned throughout the centre to 27 26 promote customer flow. Central areas SOFA 13 25 within the scheme have been laid to lawn 14 with mature planting and benches which 24 creates an attractive village aesthetic and 15 focal point within the centre. 23 16 Free parking is provided immediately 135,521 sq ft adjacent to the north and east of the across 51 units 17 scheme for approximately 740 cars. 22 126,821 sq ft 18 of retail

8,700 sq ft of food and beverage 20/21 19

2,710 sq ft 18b average unit size

740 free parking spaces

8 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS

SAVE CLOSE Notes Rev Description Date By

Subway

Centre for Advanced Industry

ROTARY WAY TENURE OUTLET LEASE ROAD COBLE DENE Redburn Dene STRUCTURE FB The buildings and car park are held freehold.

39 PC 40 Whilst the terms of individual agreements vary throughout 41 LB COBLE DENE The area shaded blue comprises an area demised to 38

44 1 El Sub Sta Royal Quays, leases typically comprise the following key 6 North Parade Premier Inn Ltd until 2121 including exclusive rights over

45

33 TCB 7

1 54 components:

50 that proportion of the car park. 8

28

South Parade

25 El Sub Sta

24 PC The “Kidz Kingdome” leisure facility is leased to Ensco Limited

Dene Walk Rent DW

17 for a term of 15 years (the “Ensco Lease”) which is, in turn, El Sub Sta

HAYHOLE ROAD 21 20 Tourist Mast Infomation Office 19 sublet to the ultimate leisure operator, Funderworld Limited Rents comprise a combination of Base and Turnover Rent with Turnover Rent representing a prescribed percentage Depot for a term of 10 years from June 2018 (the “Funderworld (disused) Sublease”). The Ensco Lease is expected to be surrendered of the tenant’s turnover. The total rent payable by a tenant El Sub Sta whilst the benefit of Funderworld Sublease is expected to comprises the greater of Base Rent or Turnover Rent.

be assigned byN Ensco Limited to the ultimate purchaser of

1:1000 Service Charge 0 10 20 10 the40 50m freehold100m interest.150m Path (um) For indicative purposes only This drawing is copyright. All dimensions and details are to be verified on site. Any discrepancies are to be notified to the Architect prior to work commencing. Do not scale from drawings.

Content EXISTING SITE PLAN Client North Shields Investment Properties Ltd

Project Royal Quays Proposed Leisure and Retail Project 6 Manor Place, Edinburgh, EH3 7DD [email protected] Date 03.09.18 Drawing Scale 1:1000@ A1, 1:2000@A3 www.covellmatthews.co.uk t:0131 226 3366 Service charges are typically recovered from tenants on a Ordnance Survey, (c) Crown Copyright 2015. All rights reserved. Licence number 100022432 Paper size A1 Drawn by Checked HB - Project Code 801 Drawing No. SK16 Revision -- pro rata basis, according to floor space occupied. In some PLANNING instances, tenants benefit from a capped service charge.

The service charge budget for 2018 amounts to £653,108 The original planning application was permitted for: per annum, equating £4.85 per sq ft per annum. A unit (Unit • 135,980 sq ft of Class A1 Factory Outlet use 18 - 869 sq ft), previously used as an Information Centre • 8,471 sq ft of Class A3 Food and Drink use and excluded from the service charge area has recently • 3,283 sq ft of Ancillary uses been returned to retail use and is expected to be included within the centre service charge area for 2019. In 2016, a consent was granted to extend Unit 39 up to 20,000 sq ft of factory outlet A1 retailing construction. This A detailed tenancy schedule is available upon request within has not been implemented and the consent is currently the marketing data room. being renewed.

The site has been subject to numerous additional permissions on individual units since the original consent was granted. Parties are encouraged to review the appropriate planning consents which are available publicly.

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SAVE CLOSE TENANTS Key representation… Major national and international brands service a large and growing A strong mix of national and local population; providing an international retailers… excellent opportunity to boost performance with further The tenant line-up reflects a robust mix of fashion and homeware brands with exciting potential to complimentary retail and leisure introduce further brands whilst extending the sports, occupiers... fashion and outdoor offer. 1.4 million Total Annual Footfall

£16.7 million Total Annual Turnover (Year to July 2018)

700

600

500

400

300

200

100

0

Top 5 tenants by turnover Top 5 tenants by turnover density Top 5 tenants by estimated rent (Excludes units of less than 500 sq ft)

Detailed historic tenant by tenant turnover data is available within the marketing data room.

10 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS

SAVE CLOSE 44 Get me a kitchen a me Get Get me a bathroom a me Get

1 2 3 4/5 6 41 42 43 7 46 47 49 45a 38 8 37 45b 48

36

51 50 34/35 53

33 54 52 32 55 31 30 9-12 29 28 27 26 13 25

14

Sofa U Like

24 15

23 16 Low estimated average effort 17 rate of less than 13%… 22 18 Effort Rates

35%+ 20/21 19 25–35%

15–25% 18b

< 15%

Note: Effort rates reflect the proportion of a tenant’s total turnover that its rent, service charge and business rates obligations represent.

ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS 11

SAVE CLOSE VALUE ENHANCEMENT

The centre’s outlet lease structure provides the freedom to 5 Enhance the food and beverage offer pursue numerous opportunities to enhance value: Capitalise on the success of Subway and Costa by introducing other complimentary food & beverage 1 Lease vacant units operators to improve the family experience, dwell- Target a variety of high density complementary times and spend per visit. fashion, sports and outdoor brands to grow turnover. 6 Introduce further leisure 2 Introduce new anchor brands Capitalise on the appeal and footfall generated within Target new national value orientated anchor brands/ the centre and by neighbouring leisure attractions, major space users to evolve the tenant mix, drive to enhance the family “day out” experience. Potential increased footfall, further increase dwell times and opportunity for Unit 39. ultimately spend per visit. Potential target for Unit 39. 7 Update marketing targets 3 Capitalise on the demand for sports and Refocus marketing to convert additional potential outdoor clothing footfall from touristic shoppers traveling through the Target additional international sports and outdoor international passenger terminal and the expected clothing brands to follow the strong turnover increase in local visitation following completion of performance of Nike and Mountain Warehouse. the major 2-year A19/A1058 junction improvement in early 2019. 4 Extend home and interior cluster In addition to these specific initiatives, the scheme lends itself Introduce further Family orientated home and interior to the following opportunities to grow net income on a day to operations under the “Get Me...” branding, leveraging day basis: off the success of Get Me A Bathroom. Various

additional deals are proposed. • Reduce service charge voids • Reduce service charge caps • Reduce vacant rates • Introduce mall income attractions

By way of a guide, the adjacent plan on Page 13 identifies potential opportunities for value enhancement.- Reduce

12 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS

SAVE CLOSE UNIT 4/5

Strong performer Introduce more footwear UNIT 39 2 Proposed 20,000 sq ft Anchor A1 unit 1 4 6 7 4 4 1 UNIT 25 1 4 4

Strong performer 3 Introduce more 5 1 F&B 1 UNIT 22

1 Strong performer UNIT 8 A3 opportunity Introduce more 3 Home & Interior 6

UNIT 19 UNIT 13

Proposed 25-year lease to neighbouring Strong performer Strong performer leisure operator Introduce more Introduce more Outdoor wear Sports wear

ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS 13

SAVE CLOSE ESTIMATED CURRENT • Proposed transactions with [1st for Fabric (Unit Rental Income: 8), Get Me A Hot Tub (Unit 44), Get Me Trade Total Rent £1,432,878 NET INCOME Supplies (Unit 45b), Get Me Décor (Unit 48), Get Ancillary Income £168,000 Me Lighting Unit 50] are concluded in accordance Gross Rent Income £1,600,878 In estimating Current Net Income, the following with expectations. headline assumptions have been adopted: Service & Insurance Charge: • Ancillary Income of £168,000 per annum, Service & Insurance Charge Income £312,488 • Contracted base rents and turnover percentages including the occupational income from the Kids Service & Insurance Charge Budget (£653,108) for existing tenants apply Activity Dome and separate Mall Income Business Rates: • Actual individual tenant turnover for the year to • Budgeted service charge expenditure for the Non-recoverable Business Rates (£68,948) the end of July 2018 has been adopted. year to January 2019 of £653,108 per annum. Irrecoverable Property Costs (£409,568) • Where tenants have been in occupation for • Irrecoverable business rates payable by the less than 12 months, an annualised assumption Landlord are based upon the 2018-19 uniform Estimated Current Net Income £1,191,310 of turnover has been adopted. business rate multipliers in of 48.0p for Notes small businesses and 49.3p for large • Where tenants have been in occupation for Due to the fluid nature of occupancy in the outlet sector and the variable less than 3 months, an average centre turnover businesses. nature of turnover rents, the Estimated Current Net Income is likely to periodic revision. density has been adopted.

14 ROYAL QUAYS OUTLET CENTRE NORTH SHIELDS

SAVE CLOSE SAVE CLOSE FURTHER CONTACTS INFORMATION ALEX POUND EPCs Partner – Retail Investment Royal Quays has been assessed for energy Direct: +44(0)20 7152 5557 performance and Energy Performance Certificates Mobile: +44(0) 7810 631 427 are available upon request within the marketing [email protected] data room. DOMINIC BARNARD VAT Surveyor – Retail Investment The property is registered for VAT and it is proposed Direct: +44(0) 207 152 5970 that the asset transaction will be treated as a Mobile: +44(0) 7970 761 972 ‘Transfer of a Going Concern’. [email protected]

PROPOSAL PETER ATKINSON Offers are invited for the freehold interest in Partner – Investment Royal Quays Outlet Centre and the benefit of the Direct: +44(0) 191 223 5715 Funderworld Sublease. Mobile: +44(0) 7718 251 493 [email protected]

DISCLAIMER Cushman & Wakefield, as agent for the vendors or lessors of this property, gives notice that: (i) These particulars are set out as a general outline for guidance only, do not form any part of an offer or contract and must not be relied upon as statements or representations of fact; (ii) All descriptions, dimensions, photographs, references to condition and necessary permissions for use and occupation and other details are given in good faith and are believed to be correct, but intending purchasers or lessees should not rely on them as statements or representations of fact and must satisfy themselves as to their correctness; (iii) No person acting on behalf of Cushman & Wakefield has any 43-45 Portman Square authority to make or give any representation or warranty whatsoever in relation to this property. Cushman & Wakefield accepts no responsibility for any statement made in these particulars; (iv) Any areas, measurements or distances given are approximate. Unless otherwise stated, all purchase prices, any rents or outgoings are correct at the date of London W1H 6LY publication, and unless otherwise stated, are quoted exclusive of VAT; (v) Images may be computer generated. Photographs show certain parts of this property as they appeared at the time they were taken; and (vi) Any descriptions given of this property cannot be taken to imply this property is in good repair, has all necessary consents, is free of contamination, or that the services and facilities are in working order. Intending purchasers or lessees are advised to carry out their own investigations. Publication Date: October 2018 | Cushman & Wakefield LLP | Regulated by the Royal Institution of Chartered Surveyors. Brochure by Mango 020 7060 4142

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