British Airways UK Maintenance and R&D Facility Investment

British Airways Avionics Engineering Ely Meadow, , CF72 8XL Investment Considerations We are instructed to seek offers in w British Airways UK maintenance and research & w Three simultaneous fully repairing & insuring leases development facility expiring on 24th March 2024 (c.5.5 years unexpired) excess of £8,300,000 (Eight Million Three Hundred Thousand Pounds), w Strategically located adjacent to Junction 34 of the w Initial rental is £987,000 per annum, which reduces to subject to contract and exclusive and within the Capital Region, £805,011 per annum on 25th March 2019, reflecting a of VAT. one of the UK’s fastest growing commercial locations low rent of £7.25 per sq ft w Modern office campus providing three, two-storey w The landlord can request the benefit of the tenant’s A purchase at this level would equate buildings including VAV air-conditioning, raised floors, extensive fit out at lease expiry to a reversionary yield of 9.00% and a passenger lifts, suspended ceilings and atria w Major occupiers in the vicinity include The Royal Mint, net initial yield of 11.05% until March w 111,087 sq ft facility on a site area of 20.67 acres Welsh Blood Service, Renishaw, Finning CAT, Leekes, and The Royal Hospital 2019, subject to purchaser’s costs of w Let to British Airways Avionic Engineering Ltd (D&B 7.54% and reflects a low capital value w Aerospace and defence are a cornerstone of the Welsh 3A1), who have been in occupation for 25 years and of £74 per sq ft have recently signed a new reversionary leases economy, with world class training, innovation and expertise attracting some of the world’s leading aviation SUBJECT TO CONTRACT & EXCLUSIVE OF VAT and defence companies to locate within LEEDS M62

M18 LIVERPOOL M60 M56

M6 M1 A1( M)

NOTTINGHAM M54 M42 NORWICH

BIRMINGHAM M6

M11 M5 CAMBRIDGE Location - Cardiff Capital Region A1( M) M50 CHELTENHAM The British Airways facility is located within the Cardiff Capital Region, one of the UK’s fastest growing commercial locations, GLOUCESTER M40 M1 centred on Cardiff, the capital city of Wales. The Cardiff Capital Region is a highly compact area, with a 1.6m population within OXFORD a 45 minute commute to Cardiff City Centre which is the focal M25 business, commercial, economic, government and administrative M4 centre for Wales. LONDON SWANSEA M4 CARDIFF BRISTOL Key drivers of the region’s success include: Bristol Heathrow M2 Quality of Life – Cardiff is ranked the UK’s number 1 Cardi M3 M20 M23 city for quality of life. It is the closest European capital International BATH DOVER city to London and the work/life balance offered Airport across the region is exceptional. The region has a very M5 low cost of living being some 20% less than the UK SOUTHAMPTON national average while comparable salary costs are M27 approximately 40% lower than in the city of London. BRIGHTON BOURNEMOUTH Fast Growing – Cardiff’s population is projected to EXETER grow by 20% over the next 20 years, faster than any other UK city including London. Growth has already been 12% over the last 10 years.

Low Occupational Costs – Occupancy costs in the Cardiff Capital Region are up to 60% lower than prime sites in central London offering potentially huge annual savings on occupancy costs. Connectivity Transport Infrastructure – Fast developing transport networks enhance Cardiff’s position as the closest The Cardiff Capital Region has outstanding road, rail and air communications. British Airways UK maintenance and research & European capital city to London. development facility is situated on juction 34 of the M4 motorway, and lies approximately 236 km (147 miles) from London in the east. links via the M50 and M5 motorways to the Midlands and south west of England. Almost 80% of the UK World Class Retail and Leisure – The region has population lives within a 4-hour drive of the Cardiff Capital Region. outstanding retail, leisure and sporting facilities together with striking landscapes and coastline, much of which Distance by Road: National Rail Times: has National Park status. These elements combine to offer exceptional life style and leisure opportunities London 236 km 147 miles London 2 hours across the region. Bristol 69 km 43 miles Bristol 50 minutes Highly Skilled Workforce – The Cardiff Capital Region Birmingham 182 km 113 miles Reading 1 hour 35 minutes contains extensive Higher Education facilities with more Swansea 67 km 41 miles Birmingham 1 hour 59 minutes than 70,000 students studying at Cardiff University (ranked in the top 5 universities in the UK in terms of Newport 24 km 15 miles Manchester 3 hours 10 minutes the quality and impact of its research), The University of South Wales and Cardiff Metropolitan University. High speed rail services give rapid access to all major cities Electrification of the railway between London Paddington Significant numbers of students choose to remain in across the UK. The extensive Valley Line Network serves the and Cardiff Central is set to be completed in Q4 2018 the region after graduating, providing an ever increasing inland towns of south east Wales, from where a significant reducing best travel times to 1 hour 45 minutes. skilled and highly qualified work force. proportion of the city’s work force is drawn. The delivery of an integrated Metro system has been allocated up to £730m from The Cardiff Capital Region has its own international airport Inward Investment – The Cardiff Capital Region City the Cardiff Capital Region Deal. The project may include the located 19.2 km (12 miles) from the city at Rhoose. The Deal will see a £1.2 billion investment fund established, introduction of a light rail system to Cardiff alongside delivery airport serves many national and European destinations. with the target of delivering 25,000 new jobs and of a major upgrade to the existing rail network around Cardiff. leveraging £4 billion of private sector investment. This A contract was awarded to an Keolis Amey in 2018. London’s Heathrow airport is less than a two hour drive or investment is set to fund a number of major projects rail journey. including a new light rail Metro system for the region. Llantrisant Business Park Situation Forest View Royal Mint Business Park Llantrisant is a key commuter town to Cardiff and is one of the growth locations within the Cardiff Capital Region. It is located 12 miles from Cardiff City Centre and 159 miles west of London. CAT

Edwards Cardiff Airport is located approximately 28 km (17 miles) to the south and Bristol Airport circa Business Park 92 km (57 miles) east providing daily flights to both domestic and international destinations.

The facility is well located on the A4119 dual carriageway, neighbouring Llantrisant Business Park and having the benefit of proximity to Junction 34 of the M4 motorway and direct access to the city of Cardiff. H Royal Glamorgan Hospital The Welsh Blood Service and Royal Glamorgan Hospital are directly adjacent to the site and other adjacent occupiers include Premier Inn (which is being extended) and a Brewers Fayre,

Ely Valley Road plus a new Costa Coffee Drive-Thru which is under construction. Renishaw Plc occupy a major facility of around 460,000 sq ft which is located at Junction 34 of the M4 and a number of Welsh Blood Service other occupiers have established a presence in this location including Fillcare and Leekes HQ. Magden

Park To the south of the site towards the M4 is a significant retail offering including a Tesco Extra superstore and retail park that is occupied by national retailers, such as M&S, Argos, Next, Premier Inn Boots, TK Maxx and Pizza Hut.

A40 SennybridgSennybridge 470 A B4595 BLACK A

A BreBrecon 479 M5 4215 M O UNTAINS Ross-onRoss-on-WyeRossos on A40 Talbot Green C A B R ECO N BEACONS 465 466 A Retail Park NATIATIT O NAL PARK A 40 470 A Tesco Extra A465 Monmouth A473 B Glamorgan A473 A A4059 AbergAbergavennyrrggaven 4221 A40 Vale Retail Merthyrtthyr Park Glyn-y TyT l A A473 467 Raglan Coedcae NeathN th A 465 4046 A A 466 Lane Industrial 449 48 Talbot Green town centre Hirwaunwa A A 4042 Estate proposed development. A A A 65 4061 465 470 Pontypoolypoolo • 460 new houses A A A4059

A 467

9 6 9 4 5 Usk M • Retail, leisure & NNeaNeath N R commerial E Chepstow V 14 development 42 SWANSEA A4058 E A48 22 S M Pontypriddon d 4 M M48 41 26 24 4 21 41 A A468 8 23 4119 27 48 40 A Caeraeerrphillyil A Port 470 M4 39 28 20 Talbott 38 29 15 A4119 Llantrisantantt 30 NNEWPOPORT 16 49 M Leekes 36 32 17 C Avonmouththh 19 37 35 34 A A48 HQ 33 4232 B RIS TOL M4 18 2 CHA NNEL BridBridgendend 19 A4222 32 A48 M 5 A4119 CARDIFF M BRBRISTTTOLOL A 20 37 4050 7 A A Penarth 4 Airport A38 BBarryBa y 370 A M4 21 Weston-Super-Mareston-Super-MareMare Manor Hotel & 5 M Health Club

J34 Ely Meadow, Talbot Green, Llantrisant CF72 8XL Vale Resort Golf, M4 Spa & Leisure Hotel Description Accommodation

The facility comprises a complex of three buildings with associated car parking and additional The property has been measured in accordance with the RICS Code of Measuring Practice (6th land suitable for future expansion. The buildings were constructed in 1993 and are of steel frame Edition) and provides the following approximate gross internal floor areas: construction with insulated, coated steel cladding and double glazed curtain walling. Each building is constructed in two wings over two storeys, linked by a central core area and has its own services making it capable of independent and multi occupation. Building Floor Sq M Sq Ft Sq M Sq Ft Ground 1,833 19,730 A 3,498 37,653 The specification of the buildings includes: First 1,665 17,923 Ground 1,877 20,199 w Fully accessible raised carpeted floors B 3,321 35,748 First 1,445 15,549 w Suspended ceilings incorporating Cat II anti glare lighting Ground 1,832 19,714 C 3,501 37,686 w Air Conditioning First 1,670 17,972 w Modern WC facilities Total 10,320 111,087 w Double height reception/atria w One lift within each building For the purposes of the lease, the floor areas have been agreed at 3,438 sq m (37,012 sq ft) for each w Restaurant facility in Building C of Buildings A, B and C, which provides a total area of 10,315 sq m (111,036 sq ft).

The buildings were constructed to shell & core specification with all services connected and with the benefit of lifts, WC accommodation and boilers. The tenant subsequently undertook fit out works at a cost of approximately £5 million. Importantly, at the expiry of the leases the landlord can request which fit out works they wish for the tenant to leave in situ and those they wish them to remove. These works include the installation of: w Raised floors w Suspended ceilings w Water storage heaters and pipe work w Air-conditioning and chillers w Ventilation system w Compressed air facility w Fire and security alarm instillation w Construction of single storey glazed link walkways between buildings w Security gatehouse and barrier controls

The site is bounded entirely by a 3.6 m (12 ft) high wire mesh fence and there is security gate access.

Parking Typical floor plan - not to scale The property includes an extensive 299 space car park which provides a ratio of 1:372 sq ft. Site Tenancies

The property extends to The property is held on four co-terminus leases expiring on 24th approximately 8.36 hectares (20.67 March 2024 at a current rent of £987,000 per annum. The tenant acres) as edged in red the Ordnance has signed reversionary leases effective from 25th March 2019, at Survey extract. which point the rent will reduce to £805,011 per annum. There is a nine month rent free period upon the commencement of the reversionary leases, which will be topped up by the vendor. Tenure The leases are currently held under the name of ‘British Airways The property is held on a long Avionic Engineering Ltd’ by way of an assignment from ‘British leasehold basis for a term of 999 Airways Plc’ in 1996. years from 30th July 2004 at a ground rent of £100 per annum British Airways use the facility to provide its UK’s one-stop solution without review. for the repair and maintenance of a broad range of electrical, electronic and electro-mechanical aircraft components, employing some 250 people. Claw Back Provision British Airways also undertake repairs and maintenance for other If the site or part of it is used or airline operators from this facility including Airbus, Thales, Euro Air occupied for residential uses then Transport, Thomson Airways, Air Europa, Air France, Aero Flot the owner of the site is required to and Honeywell. pay 50% of the ‘Development Value’ to a previous owner of the site more particularly detailed on the title. The ‘Development Value’ is defined as the difference in value between the ‘Industrial Market Value’ and the ‘Residential Market Value’ based upon the actual ‘Residential Use’ of the ‘Conveyed Land’. ‘Residential Use’ means use or occupation for residential purposes (other than residential uses which are ancillary or incidental to the industrial or main use) or use for all or any of the uses specified in Classes A1, A2, A3, C1, C3, D1 and D2 of the Town and Country Planning (Use Classes) Order 1987.

Further details on this clawback arrangement together with all other title matters are detailed on the title to the Property which is available on request. OS Plan British Airways Avionic Engineering Limited British Airways Engineering in Wales

British Airways Avionic Engineering provide highly skilled and specialised aircraft electrical, electronic British Airways Engineering is the aircraft maintenance subsidiary of British Airways which provides and mechanical component maintenance services to both British Airways and other airlines. Their support services to British Airways and other airlines. It is responsible for the entire BA Boeing 747- South Wales maintenance facility at Llantrisant provides avionic solutions to electronical, electronic 400 fleet maintenance, cabin interior conversions and general ramp maintenance work orf both and mechanical components through the use of new diagnostics and reliable technologies their own fleet and other airlines. for a range of Boeing and Airbus Aircrafts for multiple airline carriers including British Airways. Examples of the type of services provided include in-flight technology, radio and radar and lighting. British Airways Engineering’s UK bases have a strong Welsh focus, and are as follows: The services provided at the facility supports the continuous improvement and product development to enhance future aircraft capabilities. w British Airways Engineering Headquarters – London Heathrow Airport

w British Airways Maintenance – London Gatwick Airport

w British Airways Maintenance – Cardiff International Airport, South Wales

w British Airways Maintenance – Glasgow Airport, Scotland British Airways Avionic Engineering Limited have a Dun & Bradstreet rating of 3A1 and recent financial results are as follows: w British Airways Avionics Engineering – Llantrisant, South Wales w British Airways Interiors Engineering – Blackwood, South Wales Fiscal Fiscal Fiscal Non consolidated Non consolidated Non consolidated w British Airways Distribution Centre – London Heathrow Airport 31 December 2016 31 December 2015 31 December 2014 Sales Turnover 26,334,000 31,676,000 29,368,000 Profit / (Loss) Before Taxes 2,211,000 2,114,000 1,434,000 In order to facilitate their substantial presence in South Wales, British Airways has a unique partnership with the University of South Wales. This provides graduates on the University’s Aircraft Tangible Net Worth 11,243,000 13,656,000 11,979,000 Maintenance Engineering, Aeronautical Engineering and Mechanical Engineering degrees access to real BA aircrafts to improve their career prospects, and gives British Airways staff the opportunity to develop their skills at the University. 2015 saw the opening of the Aerospace Centre at the University Further financial information can be found at www.britishairways.com. by the partnership, demonstrating British Airway’s commitment to their engineering facilities in South Wales.

EPC

The property has been assessed with a D95 rating. Further information is available upon request. Aerospace Industry in Wales Market Commentary

Aerospace and defence is a cornerstone of the Welsh economy as one of the four main The Llantrisant and Talbot Green office market is centred upon Junction 34 of the M4 Motorway industries making up the Welsh Government’s manufacturing sector strategy. The industry and is an important out of town business location within the Cardiff Capital Region. The location in Wales is thriving, and Wales provides world-class training, innovation and expertise, from provides occupiers with easy access into Cardiff city centre to the east, to the significant population university research to government and private sector projects. living in the Rhondda Valley towns to the north, and to Swansea city centre to the west, all accessible within a 30 minute drive time. Over 160 aerospace and defence companies are based in Wales, employing over 20,000 people and producing a turnover of £5 billion per annum for the Welsh economy. Some of The Llantrisant and Talbot Green area is one of the most significant public sector locations in Wales, the world’s leading aviation and defence companies are now based in Wales, including BAE with public sector bodies including The Royal Mint, Welsh Blood Service, Welsh Wound Innovation Systems, British Airways, GE Aviation, General Dynamics, Raytheon, Zodiac Seats, Qioptiq and Centre, Public Health Wales and Royal Glamorgan Hospital occupying over a 1 million square foot Airbus (who employ over 6,500 people at its aircraft wing plant in North Wales). of space within a mile of Junction 34 of the M4 Motorway. With occupiers such as the University of South Wales campus in , Cardiff Airport to the south and the GE Aviation campus at The aviation and defence focus in Wales is upon: , making Llantrisant and Talbot Green a popular location for occupiers serving these public sector industries. Defence Operations – Wales is a cornerstone of UK defence operations through provision of workforce skills and availability of secure sites and airspace Furthermore, private sector occupiers including Arthur J Gallagher (who are currently expanding in this location), NFU Mutual, Renishaw, Leekes, Fillcare, Edwards Coaches, Arthur Llewelyn Jenkins, Aerospace Maintenance Repair and Overhaul (MRO) – Wales is a major centre for MRO, Blakemore Logistics occupy over 2 million square foot of office and industrial space within a mile of with 10% of the UK’s activity managed here Junction 34 of the M4 Motorway.

Remotely Piloted Aircraft Systems (RPAS) – segregated airspace for RPAS off the coast of Prime office rents around Llantrisant and Talbot Green have been achieved at Magden Park, adjacent West Wales was the first of its kind in the world to be established to the British Airways campus, where office rents have achieved £14.00 per sq ft.

Aerospace Academic Focus – Wales produces over 6,000 science and engineering graduates a year, with the 8 Welsh universities having a wealth of aerospace focussed expertise. Investment Comparables

Area Term Property Tenant Price Yield Date (sq ft) Certain GE Campus, GE 198,055 7 years £14.80m 7.72% Mar-18 Longwood Drive, Cardiff British Airways Interiors Engineering Campus, British Airways 100,000 5 years £5.15m 7.83% Apr-17 Hawtin Park, Blackwood Airbus Campus, Celtic Springs Business Park, Airbus 153,000 6 years £26.00m 8.75% Dec-15 Newport

VAT

We understand that the property is elected for VAT and therefore VAT will be payable on the purchase price. Proposal

We are instructed to seek offers in excess of £8,300,000 (Eight Million Three Hundred Thousand Pounds), subject to contract and exclusive of VAT.

A purchase at this level would equate to a reversionary yield of 9.00% and a net initial yield of 11.05% until March 2019, subject to purchaser’s costs of 7.54% and reflects a low capital value of £74 per sq ft.

SUBJECT TO CONTRACT & EXCLUSIVE OF VAT

Further Information

For further information or to arrange a viewing, please contact either: Nick Allan Andrew Gibson Nick Lawley Graham Davies Cushman & Wakefield Cushman & Wakefield Cooke & Arkwright Cooke & Arkwright T: 0117 910 5282 T: 02920 262 246 T: 02920 346 333 T: 02920 346 371 E: [email protected] E: [email protected] E: [email protected] E: [email protected]

Disclaimer Important Notice: Cushman & Wakefield and Cooke & Arkwright gives notice to anyone who may read these particulars as follows: 1. These particulars are prepared for the guidance only of prospective purchasers. They are intended to give a fair overall description of the property but are not intended to constitute part of an offer or contract. 2. Any information contained herein (whether in the text, plans or photographs) is given in good faith but should not be relied upon as being a statement or representation of fact. 3. Nothing in these particulars shall be deemed to be a statement that the property is in good condition or otherwise nor that any services or facilities are in good working order. 4. The photographs appearing in this brochure show only certain parts and aspects of the property at the time when the photographs were taken. Certain aspects may have changed since the photographs were taken and it should not be assumed that the property remains precisely as displayed in the photographs. Furthermore, no assumptions should be made in respect of parts of the property which are not shown in the photographs. 5. Any areas, measurements or distances referred to herein are approximate only. 6 Where there is reference in these particulars to the fact that alterations have been carried out or that a particular use is made of any part of the property this is not intended to be a statement that any necessary planning, building regulations or other consents have been obtained and these matters must be verified by any intending purchaser. 7. Descriptions of a property are inevitably subjective and the descriptions contained herein are used in good faith as an opinion and not by way of statement of fact.

September 2018