Saltire Court

SALTIRE COURT

EDINBURGH

A LANDMARK OFFICE INVESTMENT OPPORTUNITY

Saltire Court offers a unique investment opportunity: the chance to acquire a rarely marketed, trophy office in the heart of Edinburgh city centre. 01 SALTIRE COURT EDINBURGH

CASTLE TERRACE, EH1 2EN PRIME MULTI-LET INVESTMENT

04 EXECUTIVE SUMMARY 29 FLOOR PLANS Contents 08 EDINBURGH 31 COVENANT INFORMATION 13 LOCATION 33 INCOME ANALYSIS 15 COMMUNICATIONS 35 EDINBURGH OCCUPATIONAL MARKET 17 DESCRIPTION 39 EDINBURGH INVESTMENT 20 SPECIFICATION MARKET 21 ASSET MANAGEMENT 40 KEY INVESTMENT PLAN TRANSACTIONS 25 TENANCY SCHEDULE 42 INVESTMENT OVERVIEW 27 ACCOMMODATION 43 FURTHER INFORMATION 28 TENURE 46 CONTACT INFORMATION

02 Edinburgh is held in equally high regard as both an exciting tourist destination and a global commercial centre. A bustling business district lies amongst the medieval Old Town and elegant New Town, and visitors from the world over are attracted for work and pleasure.

03 SALTIRE COURT EDINBURGH PRIME MULTI-LET INVESTMENT

Executive Summary

Saltire Court is a striking Grade A office building in a prime location with a blue chip tenant line up.

PRIME LOCATION ASSET MANAGEMENT

Located within the Exchange District, the hub Saltire Court offers numerous asset of Edinburgh’s commercial sector, less than management angles, including the opportunity 5 minutes’ walk from Edinburgh’s prime retail to regear leases, action reversionary rent reviews offer on Princes Street. and refurbish the common parts in order to further enhance the appeal of the building.

UNRIVALLED VIEWS TENURE Positioned at the base of Castle Rock, Saltire Court benefits from unique views of the iconic Heritable Interest (Scottish Equivalent of Edinburgh Castle. English Freehold).

ENDURING APPEAL CAPITAL EXPENDITURE

Saltire Court is let to an outstanding range of Saltire Court has been exceptionally well tenants including leading international firms maintained and managed since its construction, with over £1.7 million having been invested in the such as Deloitte LLP, KPMG LLP and CMS building in recent years. Much of the original plant Cameron McKenna LLP. 85.3% of occupiers by and machinery has been replaced/renewed, thus current contracted rent are original tenants, minimising future capital expenditure. which is a clear endorsement of the desirability of the location and property to occupiers. INVESTMENT PROPOSAL

We are instructed to seek offers in excess of INCOME PROFILE £69,000,000 (Sixty Nine Million Pounds The current rent is £4,794,996 per annum Sterling), subject to contract and exclusive of excluding VAT. The vendor will provide a VAT for our client’s Heritable Interest (Scottish 2 year rent, rates and service charge guarantee Equivalent of English Freehold). on the vacant office and storage accommodation. A purchase at this level would reflect an The property has a Weighted Average Unexpired attractive net initial yield of 6.54% allowing for Lease Term of 9.2 years to expiries and purchaser’s costs of 6.29%, and a capital value of * 8.7 years to breaks . 98% of the income is secured £379 per sq ft. against tenants rated by Dun & Bradstreet as “minimal risk”. The average office rental is £26.94 per sq ft.

* Excluding rental guarantees. 04 05 06 07 SALTIRE COURT EDINBURGH PRIME MULTI-LET INVESTMENT

Edinburgh - Scotland’s capital and one of the UK’s strongest cities

The capital of Scotland since the 1400s, Edinburgh is the country’s political and legal seat, home to the Scottish Parliament and Scottish Government.

The city is categorised as one of the UK’s Big • Most Productive Regional City (highest GVA per Six cities, and outperforms its other regional capita - City of Edinburgh Council). counterparts in a number of measures. Edinburgh’s strength and appeal will be boosted • Best Place to Live in the UK (awarded by The by the Edinburgh and South East Scotland City Telegraph in 2014, 2015 and 2016). Region Deal. The city council is working on a bid to secure £1 billion funding from the UK and Scottish • Most Talented Workforce (55% of residents Government to invest in infrastructure, skills and educated to degree level or above, higher than innovation. any other UK city including London - City of Edinburgh Council).

08 09 SALTIRE COURT EDINBURGH PRIME MULTI-LET INVESTMENT

Edinburgh has the highest Gross Value Added of all regional UK cities at £34,500 per capita

POPULATION HIGHER EDUCATION

Edinburgh has a population of c. 500,000. There are eight universities and further This accounts for 9.3% of the total Scottish education colleges in Edinburgh, with a student population, and is expected to grow to population of almost 80,000. The prestigious 619,000 by 2037. (National Records of University of Edinburgh has been ranked 5th best Scotland) in the UK, 6th in Europe and 21st in the world. (QS 2015)

TOURISM PRODUCTIVE ECONOMY

Two UNESCO world heritage sites and Edinburgh has a highly skilled workforce and a host of international events attract the highest Gross Value Added of all regional approximately 4 million visitors a year, UK cities at £34,500 per capita. (City of injecting £1.32 billion into the local economy. Edinburgh Council) (Invest Edinburgh) International companies based in Edinburgh include:

TRANSPORT

The city has an exceptional transport and communications network providing easy access to the city’s key locations. Over half of city residents use public transport, walk or cycle to work each day. (City of Edinburgh Council)

10 An international commercial hub

Edinburgh has been described as the ‘Best Mid-Sized European City of the Future’ with the ‘Best Foreign Direct Investment Strategy’ for 2014/15 by the Financial Times, as well as the ‘FDI City of the Year’ in the Business and Finance Awards 2015.

The city continues to have worldwide appeal and in Many internationally renowned companies have set 2015 attracted the second highest level of foreign up bases and headquarters in Edinburgh, across a direct investment in any regional UK city, as well as range of sectors. creating the most jobs as a result.

FINANCIAL SERVICES TECH SECTOR

The UK’s largest regional financial centre by Edinburgh has had the fifth highest growth in digital both Gross Value Added (£4.2 billion in 2014 employment (2010-2014) and significant growth - City of Edinburgh Council) and employment in average digital salaries (Tech City UK). The city (56,800 in 2014 - TheCityUK), Edinburgh’s is home to the UK’s largest tech incubator, as well financial service sector plays a leading role in as an active community encouraging start ups and Scotland’s economy. innovation.

LIFE SCIENCES RENEWABLES

With a community of internationally renowned The Edinburgh city region is at the forefront of academics, Edinburgh has some of the best developing means to meet Scotland’s target of life science research in the world, attracting generating 50% of electricity from renewable world leading companies to form partnerships sources by 2020. The city is home to over 230 in the city. companies involved in renewables.

11 12 Location QUARTERMILE Saltire Court is situated in a unique position within EDINBURGH WAVERLEY the Exchange District, EDINBURGH CASTLE with unobstructed views THE MEADOWS of Edinburgh Castle.

SALTIRE COURT

USHER HALL THE EXCHANGE DISTRICT As a response to the financial sector’s rapid PRINCES STREET GARDENS expansion in the 1990s, the Exchange District was developed to the south of Edinburgh’s West End. EDINBURGH INTERNATIONAL Both purpose built and speculative schemes were PRINCES STREET CONFERENCE CENTRE constructed to meet the modern requirements of occupiers who could not be accommodated in Edinburgh’s traditional office core. GEORGE STREET The Exchange is formed around the West Approach Road, allowing direct connections to the west of LOTHIAN ROAD Edinburgh, Edinburgh International Airport and Scotland’s motorway network. THE ROXBURGHE HOTEL

OCCUPIERS SHERATON GRAND HOTEL & SPA Standard Life, Clydesdale Bank and Scottish Widows all have headquarter offices in the WALDORF ASTORIA Exchange District. Other international companies in the immediate vicinity include PwC, Bank of New York Mellon, Hymans Robertson and BlackRock.

AMENITIES Occupiers of the Exchange District benefit from a wide-ranging, high quality list of amenities and services on their doorstep, including the retail and CHARLOTTE SQUARE leisure facilities of Princes Street, George Street and the Royal Mile. This includes more Michelin starred restaurants than any UK city outside London, two iconic five star hotels, and a broad range of bars and nightlife opportunities. Lothian Road has growing appeal to leisure operators, with Byron Hamburgers and Topolabamba examples of new entrants.

13 SALTIRE COURT EDINBURGH PRIME MULTI-LET INVESTMENT

QUARTERMILE

EDINBURGH WAVERLEY

EDINBURGH CASTLE

THE MEADOWS

SALTIRE COURT

USHER HALL

PRINCES STREET GARDENS

EDINBURGH INTERNATIONAL PRINCES STREET CONFERENCE CENTRE

GEORGE STREET

LOTHIAN ROAD

THE ROXBURGHE HOTEL

SHERATON GRAND HOTEL & SPA

WALDORF ASTORIA

CHARLOTTE SQUARE

14 MORAY PL AC E ET W STRE T RO EEN Communications ERIO QU H Queen Street H

A Gardens N

V Q ER U Saltire Court has a unique position within the Exchange S E T FR E R E N Dean T E EE E S R D ST T E District. Immediately south of Princes Street Gardens, F Gardens N ET EE RI RE E QU ST C S R CE R K RIN

Y S P T

Edinburgh’s prime retail offer and transport connections R R D E E N T C O

H ET R are just a short walk away. A RE T T RL S E RG H ND EO RA O O G L P T T B H EE T R R C T L E S Y R ES I

N S INC D E Q R D P Edinburgh G O U C E H A Waverley PL RE S Scottish National N D Gallery G H G T ET REE EU RE T ST H S ST RKE E A S C M N M I PR

U T R E ILE D M E A L OY R R

T T Edinburgh’s tram system is one of the most The nearby West Approach Road offers direct P S S S AL R E O E LL Princes Street modern in Europe, having commenced access to Scotland’s motorway network. This M T I U S V E L Gardens ET TH R HE E TRE operations in May 2014. The network runs from provides connections to Glasgow (via the M8), C M H S S IG St Giles’ T H B O Cathedral R Edinburgh Airport to York Place in the city centre, Aberdeen/Inverness (via the M90/A9) and the south N St Mary’s I D PLA Cathedral E SALTIRE C G with stops in various commercial and residential east/Borders (via the A1 and A7). A C L E E M P COURT Edinburgh hubs. The nearest tram halt to Saltire Court is at A K N IC The Queensferry Crossing, due to complete in May W Castle O D Shandwick Place. R N C L 2017, is an additional bridge carrying the M90 across P A A E L H O S AC S T RR TH LE TE Over 5.38 million passengers used Edinburgh the Firth of Forth, reducing traffic congestion. T N E TO TE I R S A A R N COWG A JOH N Trams during its second 12 months of operation, CE Numerous bus routes have stops in the vicinity of Old R which equated to a 9.3% increase year on year. O T College Saltire Court, providing connections across A KE D R A National B700 T M Tram times Edinburgh and its suburbs. E SS Museum of E Usher E A C D R GR A Hall T Scotland St Andrew Square 9 mins A S R Edinburgh has the highest proportion of regular R O L E R A T T Edinburgh Airport 32 mins T T N H I OR O P P cyclists in Scotland - 12.2% of the population cycle C International T FT MORRISON STREET S ES 10 mins LI A Conference Centre W O College to work, compared to the national average of 6%. C R of Art E P BREAD ST C B7 A (Transport Scotland) P 00 L Haymarket A P T T S EVIO E T G E W A G University R LACE D ID N P N ISTO

R AUR of Edinburgh E B L N R I TON PLA A RIS CE ’ U S T LA

C U R O G E F A T R EE S E 7 TR O 0 S C ON VE T E 0 ICH 0 N CR 7 A S T T P R O E E N G T T E O N O R

GE S G ID T E R Mainline rail services to London, other key UK Edinburgh Airport is Scotland’s busiest airport. D INB S A Q A NT A O OU 7 U F A cities and commuter towns run from Waverley Located less than 8 miles from the city centre, S R 0 E H 0 R CR C E N A and Haymarket train stations. Each have over 30 airlines provide direct services to over 120 IA O ON R ED P undergone multi-million refurbishment and destinations throughout Europe, North America CAL P A T S upgrading programmes to support increased and the Middle East. The airport has seen record E

W CE T A E E PL passenger numbers. 20 million people travel passenger numbers across 2015 and 2016, and the OR E

M R GIL T S through Edinburgh Waverley each year, owner, Global Infrastructure Partners, has pledged to E

M The Meadows making it the second busiest mainline station support this growth. O ET M E H E R V LV ST IE IL in the UK. W LE EE D Flight times D F RI N O VE DU R T E Rail times London 1 hr 10 mins H C LA P E Glasgow 45 mins Amsterdam 1 hr 20 mins R O M IL Manchester 3 hrs 15 mins Frankfurt 1 hr 55 mins G A70 Birmingham 4 hrs 20 mins New York 6 hrs 30 mins 0 London 4 hrs 21 mins Abu Dhabi 7 hrs 30 mins

15 SALTIRE COURT EDINBURGH PRIME MULTI-LET INVESTMENT

MORAY PL AC E T REE ROW ST IOT EEN HER QU Queen Street H

A Gardens N

V Q ER U S E T FR E R E N Dean T E EE E S R D ST T F Gardens N E ET EE RI RE E QU ST C S R CE R K RIN

Y S P T

R R D E E N T C O

H ET R A RE T 15 mins T RL S E RG H ND EO RA O O G L P T T B H EE T R R C T L E S Y R ES I

N S INC D E Q R D P Edinburgh GE OC U H A Waverley PL RE S Scottish National DN Gallery G H G T ET REE 10 mins EU less than RE T ST H S ST RKE 5 mins E A S C M N M I PR

U T R E ILE D M E A L OY R R

T T

P S S S AL R E O E LL Princes Street M T I U S V E L Gardens EET T R HE E TR H C M H S S IG St Giles’ T H B O 5 mins Cathedral R N St Mary’s I D PL Cathedral E SALTIRE C G A A C L E E M P COURT Edinburgh A K N IC W Castle O D R N C L P A A E L H O S AC S T RR TH LE TE T N E TO TE I R S A A R N COWG A JOH N CE Old R O T College A KE D R A National B700 T M E SS Museum of E Usher E A C D R GR A Hall T Scotland A S R R O L E R A T T T T N H I OR O P P C International T FT MORRISON STREET S ES LI A Conference Centre W O College C R of Art E P BREAD ST C B7 A P 00 L Haymarket A P T T S EVIO E T G E W A G University R LACE D ID N P N ISTO

R AUR of Edinburgh E B L N R I TON PLA A RIS CE ’ U S T LA

C U R O G E F A T R EE S E 7 TR O 0 S C ON VE T E 0 ICH 0 N CR 7 A S T T P R O E E N G T T E O N O R

GE S G ID T E R D INB S A Q A NT A O OU 7 U S R F 0 A E H 0 R CR C E N A IA O ON R ED P CAL P A T S E

W CE T A E E PL OR E

M R GIL T S

M The Meadows

O ET M E H E R V LV ST IE IL W LE EE D D F RI N O VE DU R T E H C LA P E R O M IL G A700

16 Description

Located in the heart of the Exchange District and with unrivalled views towards Edinburgh Castle, Saltire Court is truly one of Edinburgh’s iconic office buildings.

1877 1920s

The property was bought The building was run as a in 1877 by the United full-time cinema, the first Presbyterian Church and venue in Edinburgh to show continued life as the Synod “talkies” in the 1920s. and Theological Hall.

1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

1875 1902

Sir James Gowans, J. Murray The building returned to Bell and F. T. Pilkington use as a leisure destination, designed plans for a west with the Poole family end theatre incorporating a renting the venue out to winter garden. show myrioramas.

THEN The site at Castle Terrace’s a leisure destination, with the 1987. After a public exhibition, history dates back to 1875, when Poole family renting the venue a “Scottish financial centre” architects Sir James Gowans, out to show myrioramas. Latterly scheme by Campbell & Arnott J. Murray Bell and F. T. Pilkington it was run as a full-time cinema, was selected after receiving 49% designed plans for a west end the first venue in Edinburgh to of a public vote. theatre incorporating a winter show “talkies” in the 1920s. Completed in 1991, Saltire garden. Although a grand The cinema closed its doors in Court was designed as a great auditorium was completed, the 1965 and was demolished to example of late 20th century property was bought in 1877 by make way for an opera house architecture. The building the United Presbyterian Church which was never built. received critical acclaim in early and continued life as the Synod 90s architectural reviews and and Theological Hall. After those plans failed under was considered to represent a successive city councils, Following acquisition by the significant contribution to the developers were invited to Edinburgh Corporation in 1902, civic architecture of the city. submit proposals for the site in the building returned to use as

17 SALTIRE COURT EDINBURGH PRIME MULTI-LET INVESTMENT

1993

Saltire Court is acquired by Abu Dhabi Investment Authority - the only time the building has traded. 1987 Developers were invited 2016 to submit proposals for the site in 1987. Scottish Original occupiers including Metropolitan were appointed CMS Cameron McKenna to develop a multi-let and KPMG remain in the office building. building and have recently extended their leases.

1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

1965 1991

The cinema closed its Completed in 1991, doors in 1965 and was Saltire Court was demolished to make way designed as a great for an opera house which example of late 20th was never built. century architecture.

NOW The 181,872 sq ft office a café on ground floor and a building faces on to Castle contemporary brasserie on Terrace, enjoying unrivalled the first floor. This element of views of Castle Rock and the building is accessed from Edinburgh Castle. The office Cambridge Street, through a accommodation, on lower dramatic rotunda entrance ground, ground and five upper which complements the adjacent floors, is predominantly fitted Usher Hall. out to Grade A specification. The property also features two Large individual floor plates of full height atria at both the 30,000 sq ft are suitable for Castle Terrace and Cambridge sub-division. Street entrances. At the western side of the An underground car park building, the Traverse Theatre provides 74 spaces, with occupies the first, ground and additional car parking available three lower ground floors. at the NCP Castle Terrace car Productions by emerging writers park, directly opposite the are staged in its two auditoriums. property. The leisure offering also includes

18 DELOITTE MEETING ROOMS

19 SALTIRE COURT EDINBURGH PRIME MULTI-LET INVESTMENT

Specification

Saltire Court is finished to a high quality specification:

• Striking stone façade with imposing curved colonnade design along Castle Terrace • Two spacious full height atria creating a light concourse between the office and leisure elements of the building • Individual floorplates of 30,000 sq ft • Manned reception desk with access control system and automatic glazed security gates at each atria entrance • 24 hour security • VAV air cooling and heating system with 4 pipe fan coils in part • General office floor to ceiling height of 2.74m • Five passenger lifts and one goods lift • Efficient BMS system • Full raised access floors • Tiled suspended ceilings with LG7 compliant lighting • Male and female WCs on each floor • Secure basement parking for 74 cars, providing a ratio of 1: 2,457 sq ft on lettable accommodation

Capital Expenditure

Saltire Court has been exceptionally well maintained and managed since its construction, with a pro-active approach to maintenance having been employed by the building management team. Over £1.7 million has been invested in the building over the past 6 years, which includes:

• Replacement chillers • Replacement of BMS outstations • Refurbishment of second floor south office • Refurbishment of fourth floor west office • Replacement lift motors

20 Asset Management Plan - The Next Generation

COFFEE SHOP

TRAVERSE THEATRE ACCESS

CAMBRIDGE STREET ENTRANCE NEW RECEPTION

PUBLIC ACCESS

LINKED ATRIA - PRIVATE FOR TENANTS

REFURBISHED RECEPTION

CASTLE TERRACE ENTRANCE

POTENTIAL GROUND FLOOR PLAN

THE OPPORTUNITY RENTAL INCOME AND TERM BUILDING IMPROVEMENTS CERTAIN IMPROVEMENTS Prospective purchasers will identify a number of • Saltire Court is a large building and the service value-add initiatives which could be enacted to • Letting the recently refurbished office charge can withstand innovative improvements drive both rental and capital growth in the building. accommodation at a benchmark rental level on and increased amenities for modern tenants. These include: institutional terms. • There is the opportunity for a new owner to • Refurbishment of common areas and • KPMG LLP will renounce their West and refurbish and upgrade the internal and external creation of a new identity for the building. part South suites on the 3rd floor as of branding of the building in order to create a • Letting the vacant office accommodation. 01/08/2017. This accommodation could be new identity for the asset. refurbished and let at benchmark rental levels • Improving the headline rental tone. • Overhaul of the entrance lobbies, atria and on institutional terms. other common areas in line with architects • Regearing leases with upcoming lease • Secure additional income from the letting of proposals could improve the flow of the expiries and break options. the second floor (19,024 sqft), ground floor building and create a more attractive • Actioning reversionary rent reviews. (2,534 sqft), lower ground floor (10,740 sqft) environment. office accommodation and ground floor A historically strong tenant retention rate, high • Introducing facilities such as bike storage, (1,440 sqft) storage accommodation. calibre list of occupiers as well as a thriving local showers and car charging points could be used market will ensure success of such initiatives. • Future lease events provide the opportunity for to assist in letting the vacant space and create regear potential as tenants have no security of an enhanced tenant experience. tenure under Scots Law. • A feasibility study for the reception areas has • Release the asset’s reversionary potential been prepared by Michael Laird Architects and at upcoming rent reviews. 3% of the current is available for review within the data room. contracted rent is subject to review in 2016, 56% in 2017, 7% in 2018, 5% in 2019 and 23% in 2020.

21 ARCHITECTS IMAGES - CAMBRIDGE STREET ENTRANCE OPTION 1

ARCHITECTS IMAGES ARCHITECTS IMAGES - CASTLE TERRACE ENTRANCE ATRIA OPTION 1 - CASTLE TERRACE ENTRANCE ATRIA OPTION 2

TENANT AUDIT

Saltire Court has enduring appeal to occupiers, • Neither Shoosmiths nor Quilter Cheviot having secured Deloitte LLP, KPMG LLP, Martin have indicated any desire to exercise their Saltire Court is one of Currie Investment Management and Dundas & 2018 break options. The rent free period they Wilson (now CMS Cameron McKenna LLP) as will receive if not exercised will appeal in only three buildings in the current market environment of reduced pre-lets. CMS Cameron McKenna LLP have recently Edinburgh city centre completed a 16 year extension on their 4th and incentives. 5th floor space, and Dunedin LLP chose not to • Deloitte LLP are a committed tenant and which has available exercise their 2016 break option. have recently comprehensively refurbished Grade A space of A high level analysis of the current occupiers their Ground and 1st floor suites. 15,000 sq ft + on a suggests the following medium-term scenarios: • Martin Currie Investment Management • KPMG LLP have recently agreed a 10 year are a committed tenant and have recently single floorplate. extension on their 3rd North and part refurbished their Lower Ground to 1st floor South space. suites. • CMS Cameron McKenna LLP have shown • Dine are a new tenant in the building and interest in further expansion within the have completed fit-out of a high quality building, most likely to include part of the restaurant and champagne bar. vacant 2nd floor space. • Close Asset Management are in discussions for a new lease on the 3rd West suite they currently sub-let from KPMG.

22 23 DELOITTE MARTIN CURRIE RECEPTION

SECOND FLOOR SOUTH MARTIN CURRIE RECEPTION

24 Tenancy Schedule

Area Tenant Floor (NIA Sq Ft unless Car Parking Lease start Lease expiry Break option Next rent review Current rent Rent (per sq ft) Comments stated otherwise) (per annum) 5th (Whole) 6,351 5 (1 at £2,500 per space, 2 at £1,876 per space, Deloitte LLP 2 at £1,667 per space 10/09/1993 31/07/2022 02/02/2019 £197,000 £25.29 Area stated in lease as 7,300 sq ft. Open market rent review. Multiple floors held on one lease. 4th South 1,061 included in rent) 4th North & South stated in Minute of Variation as 28,733 sq ft and gallery rooms stated as 372 sq ft. Rent commencement date is 27/02/2018. Rent free period to be topped up 5th Gallery Rooms 404 by vendor. Multiple floors held on one lease. 15 at £2,750 per space £788,607 £25.70 For the next rent review date (02/02/2017), the rent agreed shall not be greater than £27 exclusive of VAT per square foot for the 4th North and 4th South; £13.50 exclusive of CMS Cameron McKenna LLP (included in rent) 17/10/1991 31/07/2032 02/02/2017 4th North & South 28,678 VAT per square foot for the 5th Gallery Rooms; and £3,000 exclusive of VAT in respect of each car parking space. This cap shall only apply to the rent review on 02/02/2017 and the next review on 02/02/2022 shall be reviewed at open market without a cap.

1 at £2,750 per space 18/07/2017 Area stated in lease as 3,700 sq ft. Open market rent review. 2017 break option subject to not less than 6 months written notice. Quilter Cheviot Limited 4th West 3,795 (included in rent) 18/07/2012 17/07/2022 - Tenant only 18/07/2017 £100,800 £25.84 Tenant will benefit from 6 months rent free if break option not exercised. With effect from 18/07/2012, the lease is subject to an initial service charge cap of £24,050 exclusive of VAT and subject to annual RPI increases on 18/07.

KPMG LLP 3rd West 3,997 12/01/2001 31/07/2017 £131,622 £32.93 Ongoing discussions with the sub-tenant Close Asset Management regarding a new lease from 01/08/2017.

KPMG’s lease has been extended until 31/07/2027 but only in respect of 3rd North and part 3rd South (the area they currently occupy). The remaining 3rd South and the separate 3rd West lease will be renounced to the Landlords as at 01/08/2017. The car parking spaces will also be reduced from 12 to 8. The rent will be reduced to £644,134 as at 01/08/2017. The tenant is entitled to a 21 month rent free period in respect of the 3rd North and part 3rd South office accommodation from 01/08/2016, but will still be obliged KPMG LLP 3rd North & South 32,320 12 at £2,000 per space 05/11/1991 31/07/2027 02/02/2020 £934,400* £28.17 to pay for the car parking spaces and the rent due for the 3rd Floor South and 3rd West lease until those areas are renounced. Rent free period to be topped up by the vendor. (included in rent) Also with effect from 02/09/2016, the service charge will be capped at £8.75 per square foot exclusive of VAT subject to annual CPI increases on 02/09. A licence to occupy is being taken by the tenant in relation to an atrium area at a nominal rent of £1 per annum. Area stated in current lease as 32,761 sq ft. Part 3rd floor South to be renounced in Minute of Variation is 10,428 sq ft. 1 at £2,750 per space Dunedin LLP 2nd West 3,940 (included in rent) 12/09/2011 11/09/2021 12/09/2016 £107,000 £26.46 Rent commencement date is 12/03/2017. Rent free period to be topped up by vendor. Area stated in lease as 4,008 sq ft. Open market rent review. 4 at £2,750 per space 04/02/2018 Area stated in lease as 11,325 sq ft. Open market rent review. 2018 break option subject to not less than 9 months prior written notice. 10 month rent-free period from the break Shoosmiths LLP 2nd North 11,381 (included in rent) 04/02/2013 03/02/2023 - Tenant only 04/02/2018 £294,125 £24.88 date, if break not exercised (excludes car parking spaces).

Vacant 2nd South 19,024 £504,136 £26.50 2 year rent, rates and service charge guarantee to be provided by vendor. Refurbished.

Area stated in lease as 3,375 sq ft. Rent commencement date is 18/04/2017. Rent free period to be topped up by vendor. From 18/09/2020 until 17/09/2025, rent is increased to £85,000 per annum exclusive of VAT. From 18/09/2025, rent is increased to £95,000 per annum exclusive of VAT. Dine Scotland Limited 1st West 3,320 18/09/2015 17/09/2030 N/A - see comments £75,000 £22.59 Lease is subject to an initial service charge cap of £13,500 per annum exclusive of VAT, but subject to annual RPI increases on 18/09. Tenant has paid a total rent deposit of £37,500.

1st North 10,881 Lower Ground North stated in lease as 10,563 sq ft, Ground North stated in lease as 5,550 sq ft and 1st North stated in lease as 10,740 sq ft. Martin Currie 12 at £2,500 per space Open market rent review. Investment Management Limited Ground North 5,504** (included in rent) 11/10/1991 31/07/2027 02/02/2017 £720,000 £25.63 Multiple floors held on one lease. With effect from 11/11/2015, the lease is subject to an initial service charge cap of £229,304.50 exclusive of VAT but subject to annual CPI increases on 11/11. Lower Ground North 10,537

Martin Currie Investment Management Limited Shop Unit 4 2,104** 22/02/1993 31/07/2027 11/11/2017 £58,000 £27.57 Open market rent review. With effect from 11/11/2015, the lease is subject to an initial service charge cap of £17,884 exclusive of VAT but subject to annual CPI increases on 11/11.

1st South 11,489 Ground South stated in lease as 10,537 sq ft. 1st South stated in lease as 11,307 sq ft. Deloitte LLP 10 at £2,000 per space 17/10/1991 31/07/2022 02/02/2017 £610,225 £26.90 Open market rent review. Ground South 10,456 (included in rent) Multiple floors held on one lease.

Ground £59,549 £23.50 (shop units 1-3) 2,534

Vacant Ground (Store) 1,440 £7,200 £5.00 2 year rent, rates and service charge guarantee to be provided by vendor. Unrefurbished.

Lower Ground South 10,740 £182,580 £17.00

Stepped rental increases rather than open market rent. From 01/07/2017, the rent will increase to £10,000 per annum exclusive of VAT. Part Ground Traverse Theatre has the right to extend the licence for a further 5 years by giving not less than 6 months’ prior written notice prior to 30/06/2018. In the event that the licence Traverse Theatre (Scotland) Limited (Café Kiosk) 302 01/07/2013 30/06/2018 N/A - see comments £7,000 £23.18 is extended, the licence fee shall be increased to £12,000 per annum exlusive of VAT but subject to annual RPI increases. With effect from 01/07/2013, the Licence is subject to an initial service charge cap of £1,000 exclusive of VAT but subject to annual RPI increases on 01/07.

The City of Edinburgh Council Theatre 25,145 (GIA) 11/10/1991 27/10/2141 £1 Sub-let in whole to Traverse Theatre.

SP Distribution Limited Sub-Station 28/06/2007 27/06/2067 £1 Rent only payable if asked for.

Terminated by either party at any time KPMG LLP Car Parking 2 02/02/2002 providing not less than £4,000 Licence operates on a 6 monthly basis with a licence fee of £2,000 per 6 month period. 6 months’ notice. Terminated by either Deloitte LLP party at any time Car Parking 2 29/06/2009 providing 30 days’ £5,500 notice. Terminated by either party at any time £8,250 Close Asset Management Holdings Limited Car Parking 3 01/10/2012 providing 30 days’ notice.

Vacant Car Parking 7

TOTALS 180,258 74 £4,794,996 £26.94 (average) Average office rent excluding vacant accommodation.

* Rent will reduce to £644,134 on 01/08/2017. 10,057 sq ft sublet to CMS will be renounced. **Quoted area based on historic records. Areas not separately measured as no longer sub-divided. Combined measured floor area of 7,643 sq ft.

SUB TENANTS Area Tenant Floor (NIA Sq Ft unless Car Parking Lease start Lease expiry Break option Next rent review Current rent Rent (per sq ft) Comments stated otherwise) (per annum) 4 at £2,000 per space D.W. Property Edinburgh Limited (CMS) 3rd South (part) 10,057 (included in rent) 01/03/1996 31/07/2017 £297,880 £28.82 Sub-let from KPMG. Sub-let from KPMG. Close Asset Management Holdings Limited 3rd West 3,997 23/04/2012 30/07/2017 02/02/2017 £102,960 £25.76 Open market rent review. Sub-let from The City of Edinburgh Council. Traverse Theatre (Scotland) Limited Theatre 25,145 (GIA) 11/10/1991 27/10/2141 £ 1 Rent paid by the sub-tenant includes a turnover element of 12.5% of the gross turnover of the Theatre.

TOTALS 14,054 4 £400,841

25 SALTIRE COURT EDINBURGH PRIME MULTI-LET INVESTMENT

KPMG LLP 3rd West 3,997 12/01/2001 31/07/2017 £131,622 £32.93 Ongoing discussions with the sub-tenant Close Asset Management regarding a new lease from 01/08/2017.

Vacant 2nd South 19,024 £504,136 £26.50 2 year rent, rates and service charge guarantee to be provided by vendor. Refurbished.

Ground £59,549 £23.50 (shop units 1-3) 2,534

Vacant Ground (Store) 1,440 £7,200 £5.00 2 year rent, rates and service charge guarantee to be provided by vendor. Unrefurbished.

Lower Ground South 10,740 £182,580 £17.00

The City of Edinburgh Council Theatre 25,145 (GIA) 11/10/1991 27/10/2141 £1 Sub-let in whole to Traverse Theatre.

SP Distribution Limited Sub-Station 28/06/2007 27/06/2067 £1 Rent only payable if asked for.

Vacant Car Parking 7

TOTALS 180,258 74 £4,794,996 £26.94 (average) Average office rent excluding vacant accommodation.

TOTALS 14,054 4 £400,841

26 Accommodation

The property has been measured by Plowman Craven in accordance with International Property Measurement Standards (IPMS 3) and with the RICS Code of Measuring Practice (Sixth Edition), their report is available in the data room. The measured areas are as follows:

NET INTERNAL AREAS

Area (IPMS 3) Area (Sixth Edition) Floor Suite Use Tenant Sq M Sq Ft Sq M Sq Ft Whole Office Deloitte LLP 599.8 6,456 590.0 6,351

Fifth Gallery Rooms Office CMS Cameron McKenna LLP 18.6 200 18.5 199

Gallery Rooms Office CMS Cameron McKenna LLP 19.2 207 19.0 205

West Office Quilter Cheviot Limited 356.5 3,837 352.6 3,795

Fourth North & South Office CMS Cameron McKenna LLP 2,706.1 29,128 2,664.3 28,678

South Office Deloitte LLP 106.5 1,146 98.6 1,061

West Office KPMG LLP 382.4 4,116 371.3 3,997

North Office KPMG LLP 2,105.6 22,664 2,068.3 22,263 Third South Office KPMG LLP 946.8 10,191 934.3 10,057

Atrium Base 60.1 647

West Office Dunedin LLP 377 4,058 366.0 3,940

Second North Office Shoosmiths LLP 1,068.6 11,502 1,057.3 11,381

South Office Vacant 1,784.9 19,212 1,767.4 19,024

West Retail Dine Scotland Limited - - 308.4 3,320 Martin Currie Investment First North Office Management Limited 1,024.7 11,030 1,010.9 10,881 South Office Deloitte LLP 1,081.3 11,639 1,067.4 11,489 Martin Currie Investment North Office Management Limited 721.3 7,764 710.1 7,643 South Office Deloitte LLP 984 10,592 971.4 10,456

Ground Traverse Theatre (Scotland) Café Kiosk Retail Limited - - 28.1 302 Part Ground Office Vacant 236.4 2,545 235.4 2,534

Store Storage Vacant 133.8 1,440 Martin Currie Investment North Office Management Limited 992.9 10,687 978.9 10,537 Lower Ground One South Office Vacant 1011 10,882 997.8 10,740

Lower Ground Two BMS 89.2 960 86.6 932

Total 16,612.8 178,816 16,896.5 181,872

GROSS INTERNAL AREAS

Area (Sixth Edition) Floor Use Tenant Sq M Sq Ft

First Leisure 16.1 173

Ground Leisure 45.4 489

Lower Ground One Leisure City of Edinburgh Council 714.3 7,689

Lower Ground Two Leisure 271.7 2,925

Lower Ground Three Leisure 1,288.5 13,869

Total 2,336 25,145

27 Edinburgh City Centre.

Castle Burial Ground Terrace Gardens 's rk n a ria M ta t ni ch S U ur

9 El Sub Sta 8 Castlebarns Statue

Steps

1 Stone

0 1

2 IN 1 G 'S S TA BL

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S 0 E 2 G ID R B Traverse M A C Theatre Saltire Court

Posts

Tenure 1

5 7 2 Usher Hall

s Place l 1

Su 1

b t The purchaser will o

ta 1 5

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A t o W 9 N interest of Saltire Indicative purposes only Royal Lyceum Theatre R O C

Posts 3 Court, as per the P Steps 1 1 H K 7 IN 1 G 'S

3 1

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4 T

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4 B

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1 R

8 3

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7 D 6 3 1 t 3 o GR

7 4 1 ND 7 5 0 3 L

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The City of Edinburgh Council holds a long 2 TR 11 8 E P

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4 leasehold interest in the Traverse Theatre 3 C 7 3 A

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4 1 Multistorey Car Park 7 8 0 L

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5 1 E 5 4 expiring 20th October 2141 at an annual rent 1 5 T University E Posts 1

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i 2 7 p StudentsT A 1 of £1 per annum. An indicative plan of the long 8 s E C 0m 109 m 20m 30om E E H 6 R Association 5 9 T 7 1 P S 2 7 leasehold interest is opposite. H 0 t o E 9 G 3 6 D Traverse 5 I PH R OBrdnance Survey © Crown Copyright 2016. All rights reserved. Licence number 100022432. GMetmapping plc 2016. Plotted Scale - 1:1250 A Saltire Court C 66.1m This plan is published for convenience of identification. PCB ts s Any site boundaries shown are indicative only and o should be checked against Title Deeds. P

ES 753998 7 2 1 5 L O Usher Hall CA T 2 S El 6 TE T H L Su 5 27 R R E I Posts b 1 A A 2 C S o 8 E N Tower ta T t E 1 LB R E 1 29 O R T to A Shelter 3 S Legend 2 D L L 9 A o t R oyal Lyceum Theatre W 5 Traverse Theatre TCBs N R O 3 69.2m C Saltire Court 3

Level -3 long leasehold7 demise - indicative purposes only 3 4 1 3 5 7 to 3 R eproduced by permission o3 f Ordnance Survey on 4 behalf of HMSO. 8 4 1 7 2 PH 68.9m © Crown copyright and datab5ase right 2016. All rights reserved. Ordnance S urvey Licence number 100049184 36 34 13

MARTIN CURRIE BREAK OUT AREA

28 Floor Plans*

5TH FLOOR 4TH FLOOR

2ND FLOOR 1ST FLOOR

LOWER GROUND 1 LOWER GROUND 2

CAR PARK

CMS CAMERON KPMG DELOITTE MCKENNA MARTIN CURRIE SHOOSMITHS DUNEDIN

29 * indicative SALTIRE COURT EDINBURGH PRIME MULTI-LET INVESTMENT

3RD FLOOR

GROUND FLOOR

LOWER GROUND 3

CAR PARK

QUILTER DINE TRAVERSE CLOSE ASSET DUNEDIN CHEVIOT SCOTLAND THEATRE VACANT MANAGEMENT BMS

30 Covenant Information Saltire Court has consistently attracted and retained occupiers of the highest calibre – 85% of the current contracted income is from original tenants, demonstrating the building’s enduring appeal. Deloitte LLP, KPMG LLP, Martin Currie Investment Management and CMS Cameron McKenna LLP (formerly Dundas & Wilson LLP) have occupied the building since its completion.

DELOITTE LLP KPMG LLP CMS CAMERON MCKENNA LLP Deloitte are a world leading professional KPMG was the result of a merger between CMS Cameron McKenna LLP is the UK arm of services firm with origins dating back to 1849, Peat Marwick International and Klynveld Main CMS Legal Services EEIG, a global legal and when William Deloitte led the first independent Goerdeler in 1987, however the origins of its tax service organization headquartered and financial audit of a company. Deloitte LLP are a original member firms can be traced back founded in London. The firm’s heritage can member of Deloitte Touche Tohmatsu Limited. to 1870. KPMG LLP is a professional services be traced back to 1779 and through a series of Over 220,000 people are employed by the firm and member of KPMG International acquisitions and mergers, the firm has grown to group in more than 150 countries and territories Cooperative. The company employs 174,000 5,500 members of staff, including 800 partners globally. people worldwide. and 3,000 lawyers, in 60 offices across 34 countries. For the financial year to 31st May 2015, the For the financial year to 30th September company reported a turnover of £2,827,000,000 2015, the company reported a turnover of For the financial year to 30th April 2015, the and profit before taxes of £433,000,000. They £1,958,000,000 and profit before taxes of company reported a turnover of £259,169,000, have a Dun & Bradstreet rating of N1, indicating £383,000,000. They have a Dun & Bradstreet profit before taxes of £61,840,000 and tangible a minimum risk of business failure. rating of N1, indicating a minimum risk of net worth of £54,969,000. They have a Dun & business failure. Bradstreet rating of 5A1, indicating a minimum risk of business failure.

SHOOSMITHS LLP QUILTER CHEVIOT LIMITED DUNEDIN LLP Shoosmiths is a major UK law firm, with 10 Quilter Cheviot invests on behalf of over 37,500 Dunedin LLP is a leading UK mid-market private offices across the country, formed of 144 clients from 13 offices across the UK, Dublin and equity provider. It is headquartered in Edinburgh partners and 697 legal advisers. The firm Jersey, and as of 31st March 2016 has £18 billion with an additional office in London, comprising represents a large range of clients, including of assets under management. Quilter Cheviot 16 investment professionals. The firm has over international corporates and government has a heritage which can be traced back to 1771 £400 million under management and invests departments, and provide advice on a variety and was acquired by Old Mutual Wealth, a FTSE in sectors including business and financial of sectors including employment law, litigation 100 company, in February 2015. services, energy and healthcare. and real estate law. For the financial year to 31st December For the financial year to 31st March 2015, For the financial year to 30th April 2015, the 2014, the company reported a turnover of the company reported a turnover of £10,185,000 company reported a turnover of £102,660,000, £143,877,000, profit before taxes of £26,729,000 and profit before taxes of £3,175,000. They have profit before taxes of £16,841,000 and tangible and tangible net worth of £82,557,000. They a Dun & Bradstreet rating of H1, indicating a net worth of £3,308,000. They have a Dun & have a Dun & Bradstreet rating of 5A1, indicating minimum risk of business failure. Bradstreet rating of 2A1, indicating a minimum a minimum risk of business failure. risk of business failure.

31 MARTIN CURRIE INVESTMENT MANAGEMENT LIMITED Saltire Court is the head office of Martin Currie Investment Management, an independently managed investment affiliate of one of the world’s largest asset management firms, Legg Mason. The firm is an active equity specialist focused on managing money for a wide range of global clients. For the financial year to 31st March 2015, the company reported a turnover of £47,918,000 and tangible net worth of £21,481,000. They have a Dun & Bradstreet rating of 4A1, indicating a minimum risk of business failure.

DINE SCOTLAND LIMITED Dine Edinburgh opened in November 2015 and is operated by the former executive chef of the Forth Floor Restaurant at Edinburgh’s Harvey Nichols, Stuart Muir, and business partner Paul Brennan. The restaurant offers relaxed, brasserie style eating and Edinburgh’s first dedicated 30-seat champagne lounge. A rental deposit of £37,500 is currently held by the landlord.

32 Income Prole by Tenant Income by Lease Length

19% 20%

32%

20% 57%

26% Income Analysis 11% 7% Saltire Court is let to 10 tenants on 12 occupational leases 2%(excluding 3% car parking licences). All of the leases are26% drawn KPMG on full repairing3% Dunedin and 11% 0-5 Years 20% Deloitte 2% Quilter Cheviot 32% 5-10 Years 20% CMS Cameron McKenna 2% Dine Scotland 57% 10-15 Years insuring terms. The vacant accommodation19% Martinwill Currie be covered0% by SP Distribution a 2 year vendor’s rent, rates and service charge7% Shoosmiths guarantee. 0% Traverse Theatre

INCOME PROFILE BY TENANT INCOME BY D&B RISK INDICATOR GRAPH The income profile by tenant is diverse, and backed 98% of the income is secured against tenants rated Income Prole by Tenant Income by Lease Length by strong covenants. by Dun Income& Bradstreet by D&B as Risk“minimal Indicator risk”. Income by Term Certain 2% 2%

19% 20% 22%

32%

20% 57% 57% 21% 26% 11%

7% 98% 2%

3% 26% KPMG 3% Dunedin 1 (Minimum11% 0-5 riskYears of business failure) 21% 0-5 Years 20% Deloitte 2% Quilter Cheviot 4 (High32% risk 5-10 of Years business failure) 22% 5-10 Years 20% CMS Cameron McKenna 2% Dine Scotland 57% 10-15 Years 57% 10-15 Years 19% Martin Currie 0% SP Distribution 7% Shoosmiths 0% Traverse Theatre

INCOME BY LEASE LENGTH INCOME BY TERM CERTAIN Excluding rental guarantees, Saltire Court has a Weighted Excluding rental guarantee, 57% of the income is secured for Average Unexpired Lease Term to Expiries of 9.2 years and a 10-15 years, 23% for 5-10 years and 20% for 0-5 years. WeightedIncome Average by D&B Unexpired Risk Indicator Lease Term to Breaks of 8.7 years. Income by Term Certain 57% of the income is secured2% against a lease length of 10-15 years,Income 32% forIncome 5-10by lease years by andleaselength 11% length for 0-5 years. IncomeIncome by Term by TermCertain Certain

£2,500,000£2,500,000 £2,500,000£2,500,000 22%

£2,000,000£2,000,000 £2,000,000£2,000,000

£1,500,000£1,500,000 £1,500,000£1,500,000

£1,000,000£1,000,000 57%£1,000,000£1,000,000 21%

£500,000£500,000 £500,000£500,000 98% £- £- £- £- 10-15 Years10-15 Years5-10 Years5-10 Years0-5 Years0-5 Years 10-15 Years10-15 Years5-10 Years5-10 Years0-5 Years0-5 Years 1 (Minimum risk of business failure) 21% 0-5 Years 33 4 (High risk of business failure) 22% 5-10 Years 57% 10-15 Years MARTIN CURRIE OFFICE AREA

34 Edinburgh Occupational Market

Edinburgh is one of the UK’s ‘Big 6’ office centres and benefits from strong market fundamentals. With limitedAvailability supply by grade (million and sq ) a shortage of new developments, the market is primed for1.6 further rental growth. 1.4 Availability by grade (million sq )

1.2 1.6

1.41.0 TAKE-UP AND DEMAND AVAILABILITY1.20.8 AND SUPPLY 1.00.6

Edinburgh has enjoyed a buoyant occupational market in recent At0.80.4 the same time, available accommodation has been decreasing, years. Take-up for 2015 totalled 692,000 sq ft in the city centre, standing0.60.2 at 840,900 sq ft at the end of Q2 2016, which reflects a the second highest transaction volume since 2000. The strong vacancy0.40.0 rate of 7.16% in the city centre. City centre Grade A space, occupational performance has continued into 2016, with total city the0.2 preferred option amongst key occupiers, is in short supply, at

0.0 Q1 2013 Q1 2015 Q1 2016 Q1 2014 Q3 2013 Q3 2015 Q3 2012 Q2 2013 Q2 2015 Q2 2012 Q2 2016 Q4 2013 Q3 2014 Q4 2015 377,400 sq ftQ4 2012 at the end of the quarter, 17%Q2 2014 below the 10 year average. centre take-up in H1 of 229,600 sq ft. Recent key lettings are shown in Q4 2014 the table below: At the current take-up rate, only 1.54 years of Grade A supply remains. Q1 2013 Q1 2015 Q1 2016 Q1 2014 Q3 2013 Q3 2015 Q3 2012 Q2 2013 Q2 2015 Q2 2012 Q2 2016 Q4 2013 Q3 2014 Q4 2015 Q4 2012 Q2 2014 CompetitionGrade A fromGrade alternative B Gradeuses isC further constrainingQ4 2014 Grade A Size (sq and B supply. Pre-lets have become prevalent, with the next wave of Date Address Tenant Grade A Grade B Grade C ft) availableAvailability space (years not of supply)due to complete until Q4 2017.

People’s Postcode 4.5 Availability (years of supply) Q2 2016 28 Charlotte Square 33,000 AVAILABILITY (YEARS OF SUPPLY) Lottery 4.0 4.5

4.03.5 3.0 Q1 2016 Quartermile Four Cirrus Logic 70,041 3.5 3.02.5 2.52.0 Q4 2015 Exchange Crescent Morisons LLP 10,513 2.01.5 1.51.0

1.00.5 0.5 0.0 Q3 2015 Quartermile Four FanDuel 58,567 0.0 Q1 2011 Q3 2011 Q1 2013 Q1 2015 Q2 2011 Q1 2012 Q1 2016 Q4 2011 Q1 2014 Q3 2013 Q3 2015 Q3 2012 Q2 2013 Q2 2015 Q2 2012 Q2 2016 Q4 2013 Q3 2014 Q4 2015 Q4 2012 Q2 2014 Q4 2014 Q1 2011 Q1 2013 Q3 2011 Q1 2015 Q1 2012 Q2 2011 Q1 2016 Q1 2014 Q4 2011 Q3 2013 Q3 2015 Q3 2012 Q2 2013 Q2 2015 Q2 2012 Q2 2016 Q4 2013 Q3 2014 Q4 2015 Q4 2012 Q2 2014 Q4 2014 Atria One, Years of Grade A Years of Grade B Q2 2015 Law Society 19,079 Years of Grade A Years of Grade B 144 Morrison Street ANNUALAnnualAnnual take-up take-up TAKE-UP and and new new supplyAND supply (million NEW (million sqSUPPLY ) sq ) (MILLION SQ FT) Capita Business Q2 2015 145 Morrison Street 26,896 Services 0.8 0.7 Calton Square, 0.6 Q1 2015 Baillie Gifford 22,292 22 Greenside Row 0.5

0.4 0.3 Westport 102, 0.3 Q1 2015 Audit Scotland 15,188 0.2 Lady Lawson Street 0.2 0.1 0.1 0.0 Standard Life 0.0 07 08 09 10 11 12 13 14 15 16 17 Q4 2014 6 St Andrew Square 108,000 07 08 09 10 11 12 13 14 15 16 17 Investments Take-Up New Supply Take-Up New Supply A number of key requirements remain live, at a total of 415,000 sq ft, indicating an active occupational market for the remainder of the year and into 2017. These include: RENTAL GROWTH These market conditions have contributed to rising rents in Edinburgh with prime rents standing at £32.50 per sq ft, and incentive packages also reducing. Cushman & Wakefield forecast prime rents will continue rising towards £34.50 per sq ft by 2020. The competitive market has also made regears and renewals at existing properties more attractive to tenants.

35 36 DELOITTE MEETING ROOMS

DINE CHAMPAGNE BAR

37 CASTLE TERRACE ENTRANCE 38 Edinburgh Investment Market

Edinburgh’s strong local economy and its standing as a financial hub has continued to appeal to a diverse range of investors in recent years.

The supply and demand factors are The 2015 transaction volumes reflect indicative of a buoyant occupier market the confidence in the Edinburgh market, that offers superior returns, particularly outperforming the total Scottish when coupled with the fact that investment market, as well as the UK Edinburgh trades at a discount to other regional office market as a whole. 2016 regional cities such as Birmingham and Edinburgh office investment volumes Manchester. have already exceeded the 15 year annual average.

UK PRIMEUK OFFICE Prime Oce YIELDS Yields (Q2 2016)

5.75% 5.50% 5.25% 5.00% 4.75% 4.50% 4.25% 4.00% 3.75% 3.50% 3.25% 3.00% London London Birmingham Leeds Manchester Bristol Edinburgh Glasgow (West End) (City)

EDINBURGHEdinburgh OFFICE INVESTMENT Oce Investment VOLUMES Volumes

£600,000,000

£500,000,000 Edinburgh Prime Oce Yields £400,000,000

7.50% £300,000,000 7.00% 6.50% £200,000,000

6.00% £100,000,000 5.50% £0 5.00% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (YTD) 4.50% 4.00% 39 Jun-11 Jun-13 Jun-15 Jun-12 Sep-11 Jun-16 Jun-14 Dec-11 Jun-10 Mar-11 Sep-13 Sep-15 Sep-12 Dec-13 Dec-15 Dec-12 Sep-14 Jun-07 Sep-10 Dec-14 Jun-03 Jun-05 Jun-02 Mar-13 Mar-15 Mar-12 Dec-10 Sep-01 Jun-08 Jun-09 Jun-06 Mar-16 Jun-04 Mar-14 Dec-01 Mar-10 Sep-07 Sep-03 Sep-05 Dec-07 Sep-02 Sep-08 Sep-09 Dec-03 Dec-05 Dec-02 Sep-06 Sep-04 Dec-08 Dec-09 Mar-07 Dec-06 Dec-04 Mar-03 Mar-05 Mar-02 Mar-08 Mar-09 Mar-06 Mar-04

Edinburgh Prime Oce Yields Average 15 Year Yield SALTIRE COURT EDINBURGH PRIME MULTI-LET INVESTMENT

Key Investment Transactions

With limited prime investment stock available on the market, Saltire Court provides an excellent opportunity to acquire a trophy multi-let city centre office in one of the UK’s strongest office markets.

Net Capital Sales Date Address Tenancies Initial Value Comment Price Yield per sq ft

V: Aerium Princes Exchange U/O at U/O at P: Hyundai Fire & Marine Bank of Q3 2016 & New Uberior circa circa c. £442 Insurance Scotland Plc House, Edinburgh £70.0m 5.25% Single let until December 2025 V: M&G Amazon, Waverleygate, P: TRIUVA Q3 2016 Microsoft, £63.0m 5.69% £304 Edinburgh NHS, H&M Wault of 8.49 years to expiry and 5.13 to break.

FanDuel V: M&G Quartermile Four, Q2 2016 Limited, Cirrus £68.0m 5.20% £525 P: TRIUVA Edinburgh Logic Ltd WAULT of 10.00 years

Brewin V: City of Edinburgh Council Dolphin, PwC, P: Deka Immobilien Atria One and Two, Alliance Trust, Q1 2016 £105.25m 5.35% £520 Edinburgh UK Green WAULT of 16.15 years to Investment expiries and 14.21 years to Bank, Aon breaks V: Standard Life Standard Life Standard Life Investments Q4 2015 Employee £93.75m 5.08% £341 House, Edinburgh P: Overseas client of HSBC Services Single let until July 2031 V: Trinova Real Estate 1 Brindleyplace, P: GLL Real Estate Q4 2015 Deutsche Bank £36.72m 5.25% £540 Birmingham Single let until February 2028 V: Mosley Street Ventures Two St Peters Ernst & Young Q3 2015 £100.0m 5.25% £621 Square, Manchester (pre-let) P: Deutsche Asset and Wealth Management UBS, Lloyds V: Ares Management 1 Marsden Street, Development Q3 2015 £34.0m 5.00% £496 P: Standard Life Manchester Capital, Bank of Ireland WAULT of 2.25 years V: Benson Elliott NFU, ADP, 10 Templeback, P: St James Place Pension Q3 2015 Colliers, Mott £58.50m 5.34% £471 Bristol Fund c/o Orchard Street Macdonald WAULT of 4.00 years

Michael Page, V: CS Euroreal 3 Hardman Square, i2 Offices, Q1 2015 £92.0m 5.75% £527 P: M&G Manchester Towergate, World Pay, TLT WAULT of 6.80 years

V: Aberdeen Asset Management Port Hamilton, Lloyd’s Bank Q4 2014 £105.0m 5.08% £387 P: Overseas client of HSBC Edinburgh Plc Single let until 2039 with break option in 2029

40 41 Investment Overview

Saltire Court is a trophy office building in the prime office district of Edinburgh, one of the UK’s strongest cities.

• Saltire Court has a unique micro location within Edinburgh’s prime office district, with unrivalled and unobstructed views of the world famous Edinburgh Castle. • Edinburgh’s status as a European capital city, global tourist destination and a thriving commercial centre has continually attracted both domestic and overseas capital – providing a purchaser with a liquid and attractive market in which to invest. • 85% of the contracted income is derived from Saltire Court’s original tenants, highlighting the enduring appeal of the building. • Multi-let office building with an impressive tenant line-up including Deloitte LLP, KPMG LLP and CMS Cameron McKenna LLP. • 98% of income secured against tenants with a minimal risk of business failure as defined by Dun & Bradstreet. • Saltire Court is one of only three buildings in Edinburgh city centre which has available Grade A space of 15,000 sq ft + on a single floorplate. • Numerous value add opportunities for prospective purchasers. • The asset provides a purchaser with a Weighted Average Unexpired Lease Term of 9.2 years to expiries and 8.7 years to breaks, providing a robust and durable income stream. • The quoting price shows a capital value of £379 per sq ft, which is low relative to recent comparable regional office deals.

42 Further Information

SERVICE CHARGE The current service charge budget for the year ending 10th November 2016 is £1,291,000, equating to approximately £6.67 per sq ft for the office accommodation. Further details can be provided on request.

VALUE ADDED TAX The property has been elected for VAT and therefore VAT will be payable on the purchase price. However it is anticipated the sale will be treated as a Transfer of a Going Concern (TOGC).

EPC The property has an EPC rating of E. A full report can be provided on request.

DEBT AND STRUCTURED FINANCING Cushman & Wakefield Debt & Structured Finance provides market leading debt solutions for real estate investors. We have wide ranging expertise in senior debt and mezzanine arrangements for investment and development projects. Further information is available on the Saltire Court sales website (address below).

DATA ROOM A data room has been set up and details can be provided by the selling agents to interested parties. For further information log into www.saltirecourt-edinburgh.co.uk

43 DELOITTE BOARDROOM

44 45 SALTIRE COURT EDINBURGH PRIME MULTI-LET INVESTMENT

Investment Proposal

We are instructed to seek offers in excess of£69,000,000 (Sixty Nine Million Pounds Sterling), subject to contract and exclusive of VAT for our client’s Heritable Interest (Scottish Equivalent of English Freehold). A purchase at this level would reflect a net initial yield of6.54% , allowing for purchaser’s costs of 6.29%, and a capital value of £379 per sq ft.

Contact

Steven Newlands Jason Winfield +44 (0) 131 222 4510 +44(0) 207 152 5920 [email protected] [email protected]

Calum Cowe David Davidson +44 (0) 131 222 4517 +44 (0) 141 223 8767 [email protected] [email protected]

MISREPRESENTATION ACT: Cushman & Wakefield gives notice that: These particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute any part of an offer or contract. Details are given without any responsibility, and any intending purchasers, lessees or third parties 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. No person in the employment of Cushman & Wakefield as any authority to make any representation or warranty whatever in relation to this property. Purchase prices, rents or other prices quoted are correct at the date of publication and, unless otherwise stated, exclusive of VAT. Intending purchasers and lessees must satisfy themselves independently as to the incidence of VAT in respect of any transaction relating to this property. Date of publication September 2016. Designed and Produced by Creativeworld Tel 01282 858200.