A Rare High Profile CBD Refurbishment Opportunity

31 Temple Street | B2 5BD

INVESTMENT SUMMARY

► High profile freehold office re-positioning opportunity, offering a unique full redevelopment in the heart of Birmingham’s Central Business District

► The building is fully stripped out offering a ‘blank canvas’ opportunity to deliver a new best in class office redevelopment with a ground floor commercial unit.

► Fronting Temple Street, in close proximity to New Street Station

► Proposed redevelopment to provide 5,286 sq m (56,895 sq ft) of office and ground floor commercial accommodation, arranged over ground, six upper floors, lower ground and two basement car parking levels

► Flexible floorplates from 6,964 - 9,084 sq ft offering a range of suite sizes to capture growing occupier demand in Birmingham

► 36 secure basement car parking spaces at a generous city centre ratio of 1:1,580 sq ft

► Full planning has been granted under application number 2020/03196/PA for the comprehensive refurbishment and reconfiguration of the building

► Freehold

► Prime headline rents in Birmingham currently stand at £37.00 per sq ft against a backdrop of Grade A supply of just 285,000 sq ft. This equates to enough supply to meet the demand for just over half a year’s average Grade A take-up. This is the lowest level of supply of Grade A space on We are instructed to seek offers in excess of£15,000,000 (Fifteen Million Pounds) which record offering excellent scope for further rental reflects a low capital value of £263 per sq ft. growth. Birmingham is the UK’s second city and is the geographical heart of the country; two major reasons why it continues to attract numerous businesses, professionals, birmingham tourists and students alongside huge investment from a worldwide audience. A Truly Global City

Birmingham benefits from Birmingham is home to Birmingham has the largest Gross Value Added of UNRIVALLED 5 RENOWNED PROFESSIONAL £28.1bn INFRASTRUCTURE making Birmingham one of the strongest UNIVERSITIES SERVICES regional economies within Europe INVESTMENT and 65,000 HUB OUTSIDE OF alongside several large regeneration projects that continue to change the STUDENTS with over Birmingham will host the face of this vibrant city 100,000 employed in the city 2022 COMMONWEALTH GAMES 45.7% of people are under the age of Population of 30 making Birmingham Europe’s youngest city 1.1M birmingham A Truly Global City Three national Railway Stations with Birmingham New Street Station has Over 49 MINUTE HS2’S 47.9m 700 TRAVEL TIME TO CURZON STREET PASSENGERS INTERNATIONAL LONDON STATION DUE TO TRAVELLING THROUGH BUSINESSES (HS2) BE COMPLETED BY THE STATION in the city 2026 ANNUALLY Home to over £56bn 75,000 to be invested into HS2 in the city COMPANIES with 26,000 jobs created M90

EDINBURGH Location & Connectivity AIRPORT M8 EDINBURGH Map Key Birmingham is the regional capital of the West Midlands and is the UK’s second M77 Motorways city, strategically located approximately 117 miles north of London and 70 miles M74 Railway Lines south of . HS2 Phase One

NEWCASTLE UPON TYNE HS2 Phase Two

E Air Routes D

The city is at the heart of the national motorway network located at the I N

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R junction of the M6, M5 and M42 motorways, which in turn provide access G H M6 BEL FA ST to the M1, M40 and M54. INTERNATIONAL AIRPORT A1(M) Darlington

Birmingham is served by three principal railway stations, New Street, Snow

Hill and Moor Street, providing direct regional, local and national services. B EL FA S T The development of HS2 will deliver Curzon Street Station, a 4th state of Hull Preston NE the art station to the city that already has the highest number of railway W Y ORK commuters outside of London. M62 DUBLIN AIRPORT

LIVERPOOL MANCHESTER D AIRPORT M6 UB M1 Birmingham New Street Station serves the West Coast Mainline linking LIN Birmingham to London, Manchester, Leeds, Edinburgh and Glasgow whilst Snow Hill and Moor Street stations provide regular services to a variety EAST MIDLANDS AIRPORT Norwich of destinations including Solihull, Leamington Spa, Warwick and London

M6 Marylebone. BIRMINGHAM BIRMINGHAM AIRPORT

M42 COVENTRY Cambridge AIRPORT M1

Birmingham Airport is the UK’s third busiest airport outside London, located M5 M40

STANSTEAD DU just east of Birmingham city centre off the M42 motorway and accessible AIRPORT BA LUTON I AIRPORT in less than 10 minutes by rail from New Street Station. The airport offers M25 M4 Swindon

direct flights to the Far East and West Coast of America with over 50 M4 LONDON CITY AIRPORT BRISTOL HEATHROW airlines travelling to 143 destinations daily and carried just under 13 million AIRPORT M25 M26 passengers during 2019. M3 M23 GATWICK Folkestone AIRPORT

SOUTHAMPTON The West Midlands Metro tram system currently links the west of Birmingham M5 Exeter G B E to the city centre. Starting in Wolverhampton the route passes through the A N R P E A C V R E A I L S Black Country area before travelling into the city centre and New Street O Plymouth N A Station. An additional extension linking the station with Broad Street, with a stop outside Arena Central, opened in 2019 and from 2021 the line will run along Broad Street and terminate at Edgbaston opposite New Garden Square. This will further enhance cross city connectivity and expand the boundaries for the city’s traditional business district. Birmingham Airport 15 mins 7 miles London 1 hr 23 mins Manchester 1 hr 40 mins 70 miles London via HS2 (in 2026) 49 mins Birmingham is one of the few European cities to be truly multi-modal benefitting from Tram, Rail, Air and Vehicle connectivity all combining London 2 hrs 10 mins 117 miles Manchester 1 hr 29 mins through a number of key infrastructure hubs. Edinburgh 5 hrs 245 miles QUEENSWA LANCASTER DS Y AH CIRCUS C ST ST PAUL’S SQUARE LI V ER S ASTON Situation Y STR N

LUDGAT OW J UNIVERSITY A A M E H L E ILL E E S HILL T T The property occupies a very central position on Temple Street, between New Street to E Q W . HOUSE L RE A E T D A ST T the south and Temple Row to the north. Temple Street forms an important link as the SNOW HILL STE O N RD SWAY COLMORE Q A

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E AT E S E major commuter route between Birmingham’s northern end of the traditional office

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H O E TE STREET MARY ANN STRE ET S N ET U P W NJ OT R R A E CH O Y J MILLENNIUM core, located around St Philips cathedral and New Street Station. The passing footfall C S T POINT CHARL R ES ST RE EE LIONEL STREET RL T using Temple Street has meant that it has become a vibrant and popular location for B ULL CHA THE P EET ST RIORY QU restaurant/leisure occupiers including The Ivy, Oyster Club, Las Iguanas, Revolucion R GREAT EE ST OW NSW ND E R AY de Cuba, Flight Club, San Carlo and Fumo all located within close proximity to the ORE ROWST PHILI PS PL M EM EDMU T ND SQUARE E COL EASTSIDE property.

CITY PARK PARADISE DALE ST CIRCUS OO T FAZ S STREET TERL ELEY STRE Temple Street also represents a core office location within Birmingham. Buildings such WA N IO QUEENSWAY ET LE N ST VICTORIA O T N ST A T as Cheltenham House, Somerset House and 10 Temple Street are all adjacent to the SQUARE EMP ORAT C T OR

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CENTENARY NEW CORP MO K PI ST H property and are established and popular office buildings with a variety of high-profile H REE R N T SQUARE I FOL A L CAN P L HIG W D S S TEPHENSO E corporate occupiers. T ST N REET N S T MOOR STREET BO R D E S L EY BR T S S TR I E D ION E T T GE S A GRAND CENTRAL U VIG FFOLK A SHOPPING CENTRE T S ST N BULLRING E T E tenure

RE DAY SHOPPING CENTRE R LI NEW STREET ET ST ST HOL H N Q E U I IL Freehold. E D E L E ST Y N DI R A E S R G WA W B EET M E M T S O TH S Y N A N E T R E LAN VE U THE MAILBOX E Q S K T E T OO AN S DIG E BET TE S PERS D H A LLBR R G PE BU SMA P U OOD T H L E LCH H BIRMINGHAM F OE STREE TRE UR S COACH STATION H L E HOLLOWAY S IG A R T H THE CUBE ST ST ST CIRCUS DERITEND R BR COMMERCI EE T ADFORD T STR HEAD ST EET E OWAY HOLL OMSGROV BR 6

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12 1 New Street 7 Paradise O ce Station Development

2 Bullring 8

3 Grand 9 Snow Hill Central Station

4 Mailbox 10 Selfridges

5 Platform 11 Moor Street 21 Station

31 Temple 12 HS2 Birmingham Street Curzon

6 Brindley 13 New Street Place Description

31 Temple Street was constructed in the mid-20th century and underwent a major refurbishment in the late 1990s. Incorporating a listed façade, the property is a statement office building arranged over lower ground, ground, six upper floors and two levels of secure basement car parking.

The Property is currently vacant save for the ground floor retail unit which is due to be vacated on 10 November 2020. Following which the Property will be fully vacant, offering a unique full refurbishment and re-positioning opportunity. The building has been stripped back to frame ahead of a comprehensive planned refurbishment programme which already has an approved planning consent.

Internally the specification includes:

• Open plan floor plates from 6,965 – 9,085 sq ft • Slab to Slab height of 3.52m • Large reception area with communal space and amenities • 3x 8 person passenger lifts • 24 hour access and security

The two levels of secure basement car parking, provide 36 spaces at an excellent city centre ratio of 1:1,580sq ft.

Planning Application

Detailed planning consent was secured in July 2020 for a Grade A office refurbishment scheme.

The planning application number for the new scheme is 2020/03196/PA. Refurbishment Opportunity

As part of the planning consent a full refurbishment scope of works was approved. The key elements of the 3 proposal are summarised below:

3

The upper floors will be comprehensively refurbished 3 and reconfigured in order to provide modern, open- 3 plan office accommodation.

Full refurbishment and / or replacement of existing M+E to provide enhanced energy-efficient servicing 3 and ventilation to support a high-quality office offer.

3

3 Remodel of the ground floor front elevation and the 2 associated internal areas in order to provide a more prominent entrance and reception area. 2 Ground floor will be reconfigured to provide a co- working / shared facilities and an independent unit with a dedicated entrance, which will have consent for flexible planning uses. 1

A new cycle centre will be formed in the basement, 1 with cycle storage and associated shower / changing facilities. 10 car parking spaces will be removed to create space for this facility (total car parking post redevelopment - 36 spaces).

Further documentation is provided within the dataroom. Grade A Specification The target specification includes:

Sustainability • Target BREEAM rating: Very Good • Fitwel 2 Star Certification

Mechanical and Electrical • Fully programmable building management system • VRF heating and cooling system throughout • Access control, with installation of glazed speed gates within reception • Comprehensive refurbishment of existing lifts and provision of new passenger lift in reception

Internal Accommodation • Finished floor to finished ceiling thresholds of over 3m • Fully LG7 compliant lighting system with feature linear fittings • Installation of feature raft ceilings and part exposed services • Design Occupancy of 10sq.m per person for comfort cooling and sanitary accommodation

Redevelopment Programme The redevelopment is a 30 week programme.

A copy of the detailed programme is contained within the data room.

Redevelopment Costs / Contractor Tenders In conjunction with their professional team, the Seller has prepared tender documentation and received back tenders from 5 reputable contractors.

Full details of the tender submissions and costings will, subject to the contractor’s consent, be made available to the prospective Buyer.

On the basis of the tenders received it is anticipated that the redevelopment costs will be in the region of £100 per sq ft. Accommodation

The property has been measured in accordance with the RICS code of measuring practice 6th Edition and the approved scheme will comprise the following net internal floor area: Cycle Centre

EXISTING EXISTING PROPOSED PROPOSED Lower Ground Floor FLOOR USE AREA SQ.M AREA SQ.FT AREA SQ.M AREA SQ.FT Lower Commercial 138.00 1,485 138.00 1,485 Ground Unit / Ancillary Cycle Commercial Centre Ground 648.00 6,975 432.00 4,650 Showers Unit

First Floor Offices 850.00 9,149 839.00 9,031

Second Floor Offices 854.00 9,192 844.00 9,084

Third Floor Offices 854.00 9,192 844.00 9,084 Break Out Area

Fourth Floor Offices 816.00 8,783 804.00 8,654

Fifth Floor Offices 741.00 7,976 738.00 7,943 Ground Floor

Sixth Floor Offices 652.00 7,018 647.00 6,964

Reception Total 5,553 59,772 5,286 56,895

O ce Accommodation Birmingham Office Market Overview

Birmingham’s office market comprises a wide cross section of occupiers from the Legal and Financial Services Sector, to Real Estate and Technology, through to Public Services and Government Departments. Birmingham is home to both regional and international office occupiers, representing one of the most diverse tenant mixes outside of London.

Occupier Demand and Mobility

The growing preference amongst young, skilled graduates to live and work in city centre locations is a key and pertinent social trend. The preference for a city centre environment is having a direct impact upon the occupational decision making of occupiers, from both the public and private sectors. A key example being the Government Property Unit Hubs which are designed to centralise government departments in key regional cities, where they have access to skilled graduates as opposed to occupying a number of provincial satellite offices.

One of the key attractions for occupiers is the quality and scale of the universities in Birmingham. There are five universities in the city, with over 65,000 students. The growing proportion of graduates choosing to remain within Birmingham (61%) following university is further evidence of the city’s compelling proposition in this regard.

Birmingham also offers a significant cost advantage as a city. When compared to the City or West End of London, Birmingham’s Grade A office accommodation is offered at a discount of circa 70%, whilst salaries are typically circa 30% lower in the UK regions compared to London. Such financial headlines remain important considerations particularly as the UK emerges from Covid-19. Occupiers such as HSBC and Deutsche Bank who have already moved a significant amount of operations to Birmingham from London continue to reap the rewards.

With HS2 now fully committed and construction underway at Curzon Street for the new gateway station, Birmingham will continue to attract global occupiers. Occupiers will be able to take advantage of the cost, labour and skills benefits Birmingham has to offer without the loss of any connectivity usually attributed to travel to London. take-up The take-up of Grade A accommodation repeatedly accounts for the majority of activity within Birmingham, in part driven by the size and profile of the occupiers located within the CBD but also driven by smaller, aspirational occupiers seeking to raise the profile of their business and enhance their staff recruitment potential.

Birmingham city centre office take-up reached 780,000 sq ft in 2019, outperforming 2018’s total take-up of 755,000 sq ft and exceeding the ten-year average by 5%. Demand continued into 2020 Q1 with BT Group signing the largest ever letting in the Birmingham market, taking 283,000 sq ft at Three shortly before the Covid-19 pandemic significantly reduced activity during Q2. Since then however the headline rent within Birmingham has remained robust, with many experts forecasting this to continue to grow. The latest deal at 2 Chamberlain Square to Knights Plc, let at £37.00 per sq ft, only reinforces this.

There were 119 transactions that took place in 2019 at an average size of 6,725 sq ft. With floorplates of 6,964 - 9,084 sq ft and offering flexibility to accommodate suites of varying sizes 31 Temple Street can cater perfectly for Birmingham’s hotspot of market activity. 25 deals took place between 3,000 sq ft to 9,000 sq ft with a further 22 deals agreed between 2,000 sq ft and 3,000 sq ft. The amount of activity within this size bracket is not just unique to 2019 but reflective of the Birmingham market each year with deals of this nature regularly accounting for between 35-45% of all office take-up per annum.

Despite Covid-19, demand remains positive, as evidenced by the Mazars letting of Two Chamberlain Square in August but as we start to enter a ‘new normal’, occupiers will factor flexible working into their office requirements as many employees find they can work remotely for at least part of their time. This may result, in some cases, in a reduction in the amount of operational desk space required with a preference for increased collaboration space and meeting rooms.

For many, the role of the office is likely to evolve and adapt to focus around collaboration, meeting and knowledge sharing. 31 Temple Street offers the ability to capture these new emerging trends and if a number of larger requirements downsize, the asset will be able to meet the needs of those occupiers as well.

Building Tenant Rent Per Sq Ft Size Date

2 Chamberlain Square Knights £37.00 18,000 sq ft Q3 2020

2 Chamberlain Square Mazars £34.50 11,728 sq ft Q3 2020

Three Snowhill BT c.£32.00 283,000 sq ft Q1 2020

2 Chamberlain Square DLA Piper £34.50 40,277 sq ft Q4 2019

55 Colmore Row WeWork £34.00 55,092 sq ft Q2 2019

The Colmore Building Irwin Mitchell £32.50 46,750 sq ft Q1 2019 supply At the end of Q2 2020, total availability in Birmingham city centre sat at 1.8 million sq ft, having reduced by 18% since the end of 2019. Prime Grade A supply has fallen by 53% since the end of 2019 and now sits at just 285,000 sq ft. This equates to enough supply to meet the demand for just over half a year’s average Grade A take-up. Anything less than two years is classed as an undersupply. This is the lowest level of supply of Grade A space on record. With much of the new supply coming through development activity and focussing on large scale floorplates, much of which has already been pre-let, it has been refurbished buildings that have been absorbing the majority of the occupational requirements and where some of the city’s highest rents are currently being set. The remaining available stock is predicted to continue to further erode and will put the city at a historic low for availability at a point when demand from all sectors and inward investment has never been higher. The direct impact on rents is forecast to see growth accelerate to new highs and put increased pressure on the pipeline.

Development Pipeline In 2019 four new schemes were developed, with 775,000 sq ft of new and refurbished office space delivered. One and Two Chamberlain Square form part of the new Paradise development and together they have provided 333,000 sq ft of new office space. One Chamberlain Square was pre-let in its entirety to PWC and Two Chamberlain Square is part pre-let with completion due for early 2021. Good progress continues to be made on the 223,000 sq ft 103 Colmore Row building, set for completion in 2021 and set to be Birmingham’s tallest tower with 24 floors. Whilst 2019 was a landmark year for office completions, 2020 is likely to see the delivery of more than 600,000 sq ft. A substantial proportion of this space is already let, including the development of the Government’s new Midland’s hub, consisting of 240,000 sq ft within the Arena Central scheme. Of the four new starts in 2019, three are major refurbishments of existing buildings. Two of these schemes are for serviced office providers as they continue to add to the growing amount of flexible workspace to meet the demand from businesses for shorter term arrangements and the ability to vary space requirements at very short notice. Construction has started on phase 2 of the Paradise development. One Centenary Square will offer 280,000 sq ft of office space to the market along with 500 bicycle storage spaces. The cycle storage will become Birmingham’s first cycle hub, in line with the city council’s Birmingham Transport Plan. The development is expected to complete in Q3 2022.

O ce development pipeline (sq ft)

900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Completed Available U/C Let U/C Average

Source: Deloitte Real Estate Investment Market Commentary Regional office investment volumes reached £1.3 billion in Q1 2020, which was a 24% increase on volumes recorded in Q1 2019. There was recognisable momentum and positivity within the market with a number of headline transactions agreed prior to the coronavirus lockdown at the end of March. The initial impact of the coronavirus pandemic naturally resulted in an element of investor caution although there is still good demand for prime and long income assets based on the strong occupational fundamentals of the regional office market.

As of September 2020, Birmingham has seen a return to normality with a number of significant transactions either having completed or being at an advanced stage as investor confidence returns to the city. Birmingham’s core office market has now become established globally with not only UK institutions investing in the city but European institutions, Middle Eastern sovereign funds and Far Eastern capital all drawn to the market. With prime long-income stock in short supply, investors are increasingly turning to value-add opportunities, where they have the opportunity to build on the strong occupational market. Prime yields within the city currently stand at 5.0%

There have been a number of recent high-profile transactions across Birmingham and key regional UK cities, set out below:

AVERAGE RENT LOCATION TENANT PRICE £ NIY CV £ PSF TERM AREA SQFT DATE £ PSF

55 Colmore Row, Birmingham Pinsent Masons, RICS, Savills £105.00m 4.64% £666 7.25 Years 157,563 £33.10 Under Offer

Cushman & Wakefield, EY, Hays No1 Colmore Square, Birmingham £89.0m 6.04% £439 5.7 years 202,663 £29.18 Sep 2020 Recruitment

Hartwell House, 55-61 Victoria Street, Bristol SN Systems, Hays Recruitment, RSM UK £28.15m 5.18% £500 4.3 Years 56,198 £27.75 Oct 2019

45 Church Street, Birmingham Mazars, BGF, JLL, QBE £61.00m 5.32% £498 2.6 Years 122,483 £28.26 Oct 2019

1 Queen Street, Bristol Bevan Brittan £35.00m 5.15% £393 7.75 Years 89,010 £21.64 July 2019 VAT The property is elected for VAT and VAT will be payable on the purchase price.

DATA ROOM A data room has been set up to provide details of all the property and legal information. This will include the following:

• Title information • Planning documents • Design Access Statements • Employers Requirements & Scope of Works • Employer’s Tender Documents • Construction Documents • Marketing details FURTHER INFORMATION

ANTI money laundering Should you require further information or wish to arrange an inspection please contact: In accordance with Anti Money Laundering Regulations, two forms of identification and confirmation of the source of funding will be required from the successful purchaser. BEN BLACKWALL proposal 0121 513 0893 / 07798 647 836 [email protected] We are instructed to seek offers in excess of£15,000,000 (Fifteen Million Pounds) which reflects a very low capital value of £263 per sq ft. JAMES HEMSTOCK 0121 513 0894 / 07540 142 171 [email protected]

Franck Steier Price Ltd Third Floor, Victoria House, 114-116 Colmore Row, Birmingham, B3 3BD

Misrepresentation Clause: The accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and other details contained herein are not guaranteed and are for general guidance only and prospective purchasers or tenants must not rely on them as statements of fact or representations and must satisfy themselves of their accuracy. Neither Franck-Steier Price Ltd nor any of their employees or representatives has any authority to make or give any representation or warranty or enter into any contract whatever in relation to the property. Prices and rents quoted in these particulars may be subject to VAT in addition. The reference to any mechanical or electrical equipment or other facilities at the property shall not constitute a representation (unless otherwise stated) as to its state or condition or that it is capable of fulfilling its intended function. Prospective tenants/purchasers should satisfy themselves as to the condition of such equipment for their requirements.