*For Sale

16 18 Potterrow EH8 8BL

Prime Student Residence Investment Investment Summary 16 18 Potterrow Completing in August 2014 Edinburgh EH8 8BL

Prime student residence development specified to a high standard

Situated in the heart of the ’s “Central Area Campus”

151 bedrooms arranged over forty cluster flats (10 x 3 bed, 29 x 4 bed, 1 x 5 bed)

Nominations Agreement with the University of Edinburgh from 8 September 2014 until 1 September 2015

Guaranteed gross income of £916,419 in year 1 (estimated net income: £689,919)

Anticipated increase in net income to £945,100 following expiry of Nominations

Ryden are instructed to seek offers in excess of £13.00M for the long leasehold interest

Based upon estimated and anticipated net income: net initial yield of 5.02% and reversionary yield of 6.87% in year 2.

2 16 18 Potterrow Edinburgh EH8 8BL Aerial View 17 18

16 18 14 Potterrow

The Potterrow Student 02 Centre: Student Association(EUSA: 08 Chaplaincy Centre

03 The University Health Centre

16 04 11 10

The University Visitor Centre, 05 Information, exhibition and shop

06 02 07 George Square

08 Old College 03

09 McEwan Hall 15 10 Festival Theatre 04

11 National Museum of 12 09 05 12 George Heriot's School 06

13 Quartermile

14 National Library of Scotland University 15 Unite - Lady Nicolson Court of Edinburgh 16 The Grassmarket Central Campus 13 17 Princes Street 07

18 Waverley Station

3 Location and Situation

Edinburgh is the capital city of Scotland and The property is extremely well located for is recognised as one of the UK’s leading Edinburgh’s main tourism area being within cities for higher education boasting 5 a short walking distance of Edinburgh’s higher education institutions. The city has a historic Old Town and the main tourist population of approximately 495,000 (2011). attractions such as , The city is located in Scotland’s central belt National Museum of Scotland, Holyrood and benefits from excellent transport links Palace and the . to the rest of the UK and beyond via road, The property is also well served by public rail and airport connections. Edinburgh transport with numerous bus routes within International Airport is served by more than a short walking distance of the property and 40 airlines to 100+ destinations handling Edinburgh’s main Waverley Station being in excess of 9million passengers per year. approximately a half mile to the north. The Edinburgh’s Waverley train station provides University’s dedicated shuttle services to a direct link to the east coast mainline to the Kings Building and Western General London and the south east of the UK. campuses run along Potterrow providing The subject property is located on Potterrow excellent access to the wider university which forms part of the main arterial route campus areas. leading into the city centre from the south. The property is situated on the corner of Importantly, the property is also located at South College Street and West College the heart of the University of Edinburgh’s Street fronting onto Potterrow as it sweeps designated central area campus, sitting round towards Teviot Place. Adjoining and directly opposite the Potterrow Student surrounding buildings include the Festival Centre (Student Association (EUSA) and Theatre, National Museum of Scotland and Chaplaincy Centre). The property presents University of Edinburgh’s Old College and an unrivalled location for access to the Buildings. University’s central campus. Interested parties should also note that the The city is located in University of Edinburgh has a long term ambition to redevelop their Potterrow Scotland’s central belt and Campus to create a better link between benefits from excellent the Old College and their George Square transport links to the rest of Campus. A Masterplan has been produced that proposes moving the road, creating two the UK and beyond via road, further development sites and a new square rail and airport connections. directly in front of the subject property.

4 16 18 Potterrow Edinburgh EH8 8BL St Andrew’s Bus Station

South St Andrew Street A900

t e e University of St Andrew tr S Square h it e L

Edinburgh George Street Waterloo Place A 1 R ege Central Campus nt Road Princes Street 16 18

Waverley Bridge Potterrow 1 Paterson’s Land 37 William Robertson Wing Waverley Station New Street RSA A7 North Bridge 2 St Leonard’s Land 38 Chrystal Macmillan Building Princes Street Gallery

3 Old Kirk 39 Hugh Robson Building The Mound to Western 4 Charteris Land 40 Wilkie Building General Hospital National Gallery 5 Simon Laurie House 41 Market Street Je‹ery Street 6 St John’s Land 42 6 8 5 St John Street 7 7 Dalhousie Land Student Union Cockburn Street Canongate 9 8 Old Moray House 43 7 George Square St Mary’s Street

City Blackfriars Street 4 9 Thomson’s Land 44 1 George Square Bank St Chambers High Street (Royal Mile) 10 Centre for Sport and Exercise 45 Dugald Stewart Building 1 Mound Place25 Tron 25 3 11 Pleasance 46 University Visitor Centre: Kirk St Giles’ 12 High School Yards information, exhibition Holyrood Road Cathedral South Bridge 2 13 Chisholm House and shop Lawnmarket George IV Bridge 14 Old Surgeons’ Hall 47 Informatics Forum Castle The National 20 Edinburgh Esplanade t Library of Cowgate12 ree 15 Old High School 48 Inspace St Scotland 13 Castle a ri 15 Holyrood 16 1 Drummond Street 49 o 18 t 14 Campus c i 19 10

17 1–7 Roxburgh Street 50 57 George Square V 21 16 22 Pleasance 18 13 Infirmary Street 51 50 George Square Johnstone Terrace Infirmary Street Candlemaker Row 24 11 R 19 11 Infirmary Street 52 David Hume Tower Lecture o x 17 Chambers Street Roxburgh Pl b 20 St Cecilia’s Hall Theatres Grassmarket u King’s Stables Road 23 r

g

Drummond Street h

21 53 David Hume Tower S

22 Charles Stewart House 54 33 Buccleuch Place: Greyfriars A7 Nicolson Street 27 t Kirk Pedestrian Underpass 23 Old College and Talbot Rice International Office; Student Richmond Pl West Port Festival Gallery Recruitment & Admissions Bristo Place Theater Surgeons’ 24 Minto House 55 University of Edinburgh 68 Road Forrest Hall Lady Lawson Street 66 33 26 Pedestrian 65 access 30 25 New College Business School 34 Potterrow Nicolson Keir Street Heriot Place 32 26 Alison House 56 George Square Lecture Theatre George Lothian Street 29 Heriot’s School 31 Marshall StSquare 27 The Lister Postgraduate 57 Main Library; Careers Service; Bristo Teviot 36Place Edinburgh 35 Square Institute Student Counselling Service; 67 45 Cental Mosque

29 MacKenzie House (34 West Student Disability Service Lauriston Place Walk Meadow Middle W Richmond St 41 42 46 Richmond Street) 58 16–22 George Square Lauriston 37 48 Lauriston Gardens 40 47 Building Quartermile 44 St Leonard’s Street 30 The Potterrow Student Centre: 59 27–29 George Square 69 43 development 39 Students’ Association (EUSA); 60 17–30 Buccleuch Place Crichton Street49 W Nicolson St 38 Chaplaincy Centre 61 14–16 Buccleuch Place 50 Chalmers Street W Cro 31 7 Bristo Square: Centre for 62 7–13 Buccleuch Place 51 sscauseway E Crosscauseway 58 Professional Legal Studies; 63 1–6 Buccleuch Place 52 Buccleuch Street Institute for Academic 64 Hope Park Square George Square 54 Development 65 ECA Main Building 55 53 56 A7 Clerk Street 32 The University Health Centre 66 Lauriston Architecture Building 59 57 63 Buccleuch62 Place 33 67 Hunter Building 61 60 34 5 Forrest Hill 68 Evolution House Meadow Lane 35 McEwan Hall 69 Edinburgh Dental Institute The Meadows Rankeillor Street 64 36 Old Medical School

5 16 18 Potterrow Edinburgh EH8 8BL (Architecture)

53 to 59

20

SOUTH BRIDGE

23 CHAMBERS STREET

60 to 61

Crown Office

62 to 64

Old College

University of Edinburgh

PH 19 to 17

65 to 67 3 16

Old College 1 University of Edinburgh 14 to 11

WEST COLLEGE

10 STREET 8

PH 2 6

SOUTH

Site Plan COLLEGE ST 2 to 6

1

Royal Museum of Scotland 1

Old College Laboratory Forbes 3

4

3

9 to 11 to 9

5 to 8 to 5 PH 8 to 10 5

SOUTH COLLEGE 7 STREET

National Museum of Scotland 11 12 to 16

20 x 166 = 3,316 17 17 x 162 = 2,760 Hall Surgeons 1615 1413 121 110 9 87 65 43 21

Festival

10 20 x 166 = 3,316 W

W Theatre 8

6 Festival

29 to 39 to 29 9 BRIGHTON STREET Theatre

Works

Congress Hall Congress 7

33 to 41 to 33 18

Adventist POTTERROW Church

Alison House 20

Lothian Street Lothian Music Library 43

University 22 3 47 to 41 to 26

2 Chaplaincy PH 45 BRISTO PLACE St Francis Centre 1

of Assisi 2 1 Alison Bank

RC Church

3 28

49

House 21

to 53 Music Library 4 to 6 30 2 Bank Student Centre NICOLSON SQUARE

7 to 11 55

4 12 to 15

14 3 1

NICOLSON 36 to 38

5 SQUARE 22 23

15 to 19 to 15 37

University Health Centre 1 to 3 to 1 24 20 33 31 PC NICOLSON SQUARE 6 27

and Refectory NICOLSON STREET

Charlesfield

4 to 6 to 4 30

MARSHALL STREET 16

7

55 to

Bank 51 El 6

Sub 59

Sta 57

25

El Sub Sta 63 61

El Sub Sta

Hall Reekie's Ct Reekie's

Memorial McEwan Hall Church Higher Education in Edinburgh

Edinburgh is recognised by QS as the 32nd Queen Margaret University is the newest best student city in the world and hosts 4 addition to Edinburgh’s Universities, Students enrolled in higher education institutions in Edinburgh 2012/13 of Scotland’s 18 universities. The University becoming a full University in 2007. It is of Edinburgh, Edinburgh Napier University, ranked 71st in the UK by the Times Good By level of study Queen Margaret University and Heriot-Watt University Guide 2014. The key campus University currently have approx. 57,000 sits out of Edinburgh’s City Centre at Institution University of Edinburgh/ Edinburgh Queen Heriot-Watt Total students, which is the largest number of Musselburgh, and the University enrols Napier Margaret University students in any Scottish City. just under 5,500 students. The University University University specialises in the Arts, Social Sciences, and Undergraduate 19,125 10,720 3,430 6,830 40,105 The University of Edinburgh is ranked Health Sciences. 17th in the world, the highest position Postgraduate 8,565 2,130 1,905 4,235 16,835 scored by a Scottish University (QS), and is Heriot-Watt University is ranked 38th Total 27,690 12,850 5,335 11,065 56,940 ranked 22nd in the UK by the Times Good in the UK by the Times Good University University Guide 2014. The University was Guide 2014. It is situated outside of the founded in the 16th Century and many City Centre of Edinburgh, at Riccarton. The By domicile of the City’s ancient buildings are in its Riccarton Campus has enough student ownership. More students are enrolled at residences to house all full-time first year UK 18,545 10,045 4,240 7,030 39,860 the University of Edinburgh than any other students. It also has a strong presence Other EU 3,100 1,615 610 1,180 6,505 University in Scotland, with just under in the Scottish Borders with a School of 30,000 students. Textiles and Design. The University has a Non EU 6,045 1,190 485 2,860 10,580 significantly large proportion of students Total 27,690 12,850 5,335 11,070 56,945 Edinburgh Napier University is Edinburgh’s from outside the EU relative to its UK second largest University with around domicile student population. 13,000 students in taught programmes. It is ranked 100th in the UK by the Times Good University Guide. The University attracts a diverse array of students from over 100 countries around the world. The University is a relatively recent addition to Scotland’s Universities after its modification from a polytechnic college to a University early in the 1990’s. The University’s estates portfolio has recently benefited from a £100 million investment, mainly focusing on the Sighthill and Merchiston Campuses.

7 16 18 Potterrow Edinburgh EH8 8BL The University of Edinburgh

16-18 Potterrow sits at the heart of the Edinburgh University Students by Domicile The University of Edinburgh’s central campus. Whilst the University has campuses Grouping at Start of Programme located throughout the city, the central campus within which Potterrow sits, is considered the principal University area and includes a number of central services. The University has invested heavily in new buildings within the central campus area in recent years which complement many of the historic buildings in the area also within their ownership. 26%

The Holyrood Campus and Edinburgh 37% College of Art building (part of the University since 2011) are located just outwith the Central campus but within easy walking distance of Potterrow. The Kings Buildings, Scotland Little France, Easter Bush and Western Other UK General Campuses are dispersed around the 24% city but linked by a combination of public 13% EU transport and University shuttle buses. Overseas

The University’s reputation as one of the Source: University of Edinburgh strongest further education institutions in the world is now firmly established. This is evidenced by the growing number of overseas students attending the University of Edinburgh. The data below illustrates, just under 40% of the 27,690 students enrolled at the University are from outside the UK.

8 Purpose Built Student Accommodation in Edinburgh

Edinburgh City Council identify that in Planning permission will be granted for Edinburgh, 14,000 (25%) students live purpose-built student accommodation Key Property Bed Type Weekly Rent 2014/15 Term Academic Year at home, 29,000 (54%) stay in private where: Rent 2014/15 rented accommodation, and 11,000 a) The location is appropriate in terms (21%) live in purpose built student 1 Chalmers Street (Unite) Non En-suite Cluster £149 44./51 £6,556 - £7,599 of access to public transport and accommodation (2012). The City of 2 Portburgh Court (Unite) En-suite Cluster £146-£161 43 £6268 - £6923 university and college facilities: and Edinburgh Council have acknowledged 3 Fountainbridge (Mansion) Non En-suite Cluster £140.50 43 £6,042 that the number of purpose built student b) The proposal will not result in an houses granted planning permission excessive concentration of student 4 Beaverbank (Mansion) En-suite Cluster £125 43 £5,375 has struggled to keep up with the fast accommodation in any one locality Studio £140-£165 43 £6,020 - £7,095 paced growth experienced by the higher The second point is key in considering education sector between 2002-2009. 5 Sugarhouse Close (CRM) Non En-suite Cluster £136.50 44/50 £6,006 - £6,825 the investment opportunity at Potterrow This raised concerns about the loss of En-suite Cluster £143 44/50 £6,292 - £7,150 as the Council is now resisting the family housing resulting in increased development of new student housing HMO’s, less stable communities, rapid 6 Wellgate House (Ziggurat) En-suite Cluster £175 43 £7,525 developments in areas closest to the turnover of population and vacant Studio £229-£275 43 £9,847 - £11,825 University campus where the designated properties outwith term time. This 30% threshold of student population has led to the introduction of a local has been exceeded. This is pushing the plan policy (Policy Hou 10), specific to development of new student housing in Student Housing. This policy states that: the city into more peripheral areas.

This should benefit developments in prime locations, such as Potterrow, which is adjacent to the University Central Campus.

Outlined opposite are is some relevant comparable rental evidence for purpose built student accommodation in Edinburgh

9 16 18 Potterrow Edinburgh EH8 8BL Description and Accommodation

The property comprises a purpose built The building is of precast concrete The average floor area of the bedrooms The ground floor incorporates a large private student residence development construction clad externally in sandstone is approx. 11.05 sq m (119 sq ft) with the reception area, large common room, laundry built over ground and six upper floors. The block work. Whilst essentially a single smallest being approx. 10.2 sq m (109 sq ft) (Circuit laundry for 1 year), communal toilets property has been developed as part of a building it has been designed in two blocks and the largest approx. 12.8 sq m (137 sq ft). and bin store. The basement area provides larger project with the adjoining Festival that wrap around the corner of Potterrow secure bike storage for 104 bicycles and The common living/kitchen areas average Theatre that included the creation of a new and South College Street. The South College plant room. in size from 20.2 sq m (217 sq ft) up to rehearsal space and rear stage access/yard Street elevation incorporates a pend leading 31.5 sq m (339 sq ft). via a pend on South College Street. into the Festival Theatre yard and stage door.

The development sits within the Southside Internally the property will provide 151 Conservation Area, the boundary of bed spaces arranged in a series of 3, Old Town Conservation Area and within 4 and 5 bed cluster flats. Each flat will have Each bedroom is equipped with the Each living/kitchen area is equipped with Edinburgh UNESCO World Heritage Site. its own shared toilet, bathroom and living/ following: the following: Accordingly, the development has adhered kitchen accommodation. The 5 bedroom flat Ceramic floor tiles throughout kitchen, Door entry system to rigorous design standards through the which is situated on the 6th floor, will also hallway and bathroom planning process and this has resulted in incorporate a shower room with toilet. Single bed with under bed drawers a high quality development reflecting its Modern integrated appliances A summary of the accommodation is important position within the city. Built in 3 door wardrobe (incl. dishwasher) provided in the schedule below: Built in desk/worktop and chair Freestanding fridge/freezer Book case Soft seating for each occupant Black out blinds Coffee table CAT5 cabling to each flat and a WIFI Dining table and chairs service throughout (min of 8MB speed Book case per occupant) Level 3 bed 4 bed 5 bed Total All cutlery, crockery, pots/pans and Each bathroom is equipped with a cooking utensils Beds Flats bathtub with over head shower Ground 1 1 0 7 2 1st 1 4 0 19 5 2nd 2 5 0 26 7 3rd 2 5 0 26 7 4th 2 5 0 26 7 5th 2 5 0 26 7 6th 0 4 1 21 5 10 29 1 151 40

10 Ground Floor Plan Second, Third and Fourth Floor Plan

EDINBURGH UNIVERSITY

Festival

Theatre

S O U T H C O L L E G E S T R E E T

EDINBURGH EDINBURGH FESTIVAL FESTIVAL THEATRE THEATRE SERVICE YARD SCENE DOCK

TH

E-NOR

18 x 169 = 3,035

18 17 16 15 14 13 12 1

1

10 9 8 7 6 5 4 3 2 1

BIN 20 x 166 = 3,316 STORE DW

RS

20 x 166 = 3,316

DW

TALL

F

DW

STUDENT F

LOUNGE HOB DRY

HOOD OVER RISER

WHEELCHAIR WAITING STUDENT SPACE (ALLOW FOR) SERVICES W

W

8

F

POTTERROW

*Full Plans for all seven storeys are available on request.

11 16 18 Potterrow Edinburgh EH8 8BL Tenure Planning Long leasehold Detailed planning consent for the development, including the creation The site and buildings are held by Arduni Ltd by way of a long lease from the City of Edinburgh Council. of the new rehearsal space for the University of Edinburgh was The principal terms of the lease are as follows: granted on 30th June 2011 (ref 10/01478/FUL).

Duration: 29 April 2013 to 28 April 2138 Nominations Agreement Rental: £1 per annum Arduni Ltd has entered into a standard Nominations Agreement in Use: Housing block for residential student accommodation and holiday lets with not more than 1,100 sqft of retail relation to the completed development with The University Court space at ground floor. In relation to change of use: of The University of Edinburgh for a tenancy period commencing 8 September 2014 and expiring 1 September 2015. The University For years 0-10: consent is required (ie discretionary) will make a guaranteed payment of £916,419 for the benefit of For years 11-25: consent not required for additional use as hotel/office/serviced apartments/holiday lets with no the accommodation and in return Arduni Ltd (or its successor) board and service. will be responsible for operating the residences and providing certain services. For years 26 onwards: consent not to be unreasonably withheld for any proposed use. The guaranteed payment will be made by way of three instalments Assignation: Consent is required and is not to be unreasonably withheld in the case of a responsible and respectable assignee on 8 September 2014, 8 January 2015 and 8 April 2015. A copy of the who in the reasonable opinion of the landlord is of sound financial standing and demonstrably capable of fulfilling Nominations Agreement can be provided upon request. the tenants obligations under the lease. Alterations Consent is required for external alterations. Other terms The lease contains other commercial terms, including obligations relating to the initial construction of the development and the development agreement; the ongoing maintenance of the development; and reinstatement of the development in the event of damage or destruction.

The site boundary is shown for indicative purposes only on the site plan. Within the site there is an electricity substation and a pend providing access to the adjacent Festival Theatre. A copy of the lease can be provided on request.

Income Bed Type No of Beds Tenancy Average Rent per week Assumed Occupancy 2015/16 Projected Income The Nominations Agreement between Arduni Ltd and The University Court of The University of 3 bed non en-suite cluster bed 30 44 £150 100% £198,000 Edinburgh which is effective from 8 September 4 bed non en-suite cluster bed 116 44 £150 100% £765,600 2014 until 1 September 2015 provides for a 5 bed non en-suite cluster bed 5 44 £150 100% £33,000 guaranteed payment of £916,419. Gross Student Income £996,600 If we assume a management cost of £1,500 per Projected Net Summer Income £175,000 bedroom per annum (£226,500 per annum), the net income for 2014/2015 is estimated at Total Gross Income £1,171,600 £689,919 per annum. Projected Management Cost of £1,500 per bed £226,500 The income is considered to be highly reversionary and based upon comparable Total Projected Net Income £945,100 evidence, we estimate that the projected income for the development in the year from September 2015 could be £945,100 calculated as follows: *For reference the total gross income of £1,171,600 over a 51 week period equates to £152 per bedroom per week.

12 Developer and Project Team Capital Allowances The Developer, Arduni Ltd has significant It is anticipated that any available experience in the procurement, delivery allowances will pass to the Purchaser. and management of high quality student The Developer has commissioned an residence developments. Ardmuir (one assessment and a copy of this can be of the partners in the joint venture) is provided upon request. Aberdeen’s largest private provider of quality student accommodation and has EPC been in operation for over 15 years. (Ref. www.ardmuir.co.uk). An Energy Performance Certificate will be provided once the development has The Purchaser will benefit from a reached practical completion. comprehensive package of collateral warranties including contractor and certain project team members. VAT The property is not elected for VAT. Contractor Ogilvie Construction Limited Proposition Project Manager/Employers Agent Sweett Group Ryden are instructed to seek offers in excess of £13,000,000 for the Heritable Architect interest. Based upon a net income of LDN Architects LLP £689,919 per annum in 2014/2015 rising Structural and Civil Engineer to £945,100 per annum in 2015/2016, a Buro Happold purchase at this level would offer a net Services Engineer initial yield of 5.02% rising to 6.87% in year Blyth and Blyth Consulting Engineer Limited 2 assuming purchasers costs at 5.8%. Cost Consultant A purchase price of £13.00M would equate CBA to a capital rate per bedroom of £86,093. CDM Co-ordinator Abbey Construction Consultants

Timescale The development is scheduled to achieve practical completion by 18 August 2014. The Nominations Agreement will take effect from 8 September 2014 and expire on 1 September 2015.

13 16 18 Potterrow Edinburgh EH8 8BL Viewing and Further Information Viewing is strictly by appointment. Please contact the sole selling agent,

Ryden LLP 46 Castle Street Edinburgh EH2 3BN Tel: 0131 225 6612

Ford Swanson Email: [email protected] DD: 0131 473 3236

David Fraser Email: [email protected] DD: 0131 473 3273

Nick Armstrong Email: [email protected] DD: 0131 473 3223

Messrs Ryden for themselves and for vendors or lessors of this property whose agents they are give notice that: 16 18 (i) the particulars are set out as a general outline only for the guidance of intended purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract; (ii) all descriptions, dimensions, reference to condition and necessary permissions for use and occupation, and other details are given without responsibility and any intending Potterrow purchasers or tenants 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; (iii) no person in the employment of Messrs Ryden has any authority to make or give any representation or warranty whatever in relation to this property. June 2014. Edinburgh EH8 8BL

14