165 – 197 & 128 – 142 BATH STREET G2 3ER

01

INTRODUCTION

A RARE OPPORTUNITY TO ACQUIRE THE HERITABLE INTEREST IN A PRIME LONG-INCOME MIXED USE INVESTMENT ON AN ICONIC GLASGOW RETAIL STREET 02

INVESTMENT SUMMARY

THE SAUCHIEHALL BUILDING HAS AN INCOME EXPIRY PROFILE OUTSTANDING WEIGHTED AVERAGE UNEXPIRED LEASE TERM CERTAIN OF 15.8 YEARS, WITH 83% OF THE INCOME SECURED TO TENANTS WITH A DUN & BRADSTREET RATING OF 5A1 OR 5A2.

10 YEARS +

Glasgow is regarded as the second most 63% of the income is secured to tenants 8-10 YEARS important and largest retail market in the with a Dun and Bradstreet Credit Rating UK after the West End of London, this of 5A1, with a further 20% secured against 6-7 YEARS is confirmed by its consistent number 2 a 5A2 rated covenant. 3-6 YEARS position in the CACI UK Retail Rankings which also places it in the top 20 super Outstanding Weighted Average Unexpired 0-3 YEARS league of major European shopping Lease Term (WAULT) of 16.8 years to destinations by commercial expenditure. expiries and 15.8 years to break options.

Glasgow is the largest city in Passing Contracted Rent of £3,713,301 per and one of Europe’s most dynamic annum, subject to a service charge shortfall and vibrant cities with over £4.95bn of of £2,600 over unit 32 (TK Maxx) resulting comparison goods spend available in in a net income of £3,710,701. the catchment area. 26% of the income is subject to RPI linked The Sauchiehall Building comprises a full rental uplifts. city block of well configured high street Heritable Interest (Scottish equivalent retail, leisure and car park accommodation of English Freehold). TENANTS PERIOD % INCOME which was extensively altered and refurbished in the early 2000’s and has We are instructed to seek offers in excess of Q PARK, PURE GYM, SMASHBURGER 10 YEARS + 29% since benefited from further refurbishment £60,600,000 for the shares in a Luxembourg including, under the current ownership, the SPV, net of debt. A purchase at this level PRIMARK, WH SMITH, MILLETS , CHILANGO 8-10 YEARS 39% addition of three new-build leisure units. would provide a net initial yield of 6.00%, allowing for purchasers costs of 2.00%. TK MAXX 6-7 YEARS 11% The property’s immediate pitch benefits from annual footfall of 16 Based upon the approximate GIA of 313,001 SUPERDRUG , SPORTS DIRECT, ELANIC 3-6 YEARS 15% million, higher than both Buchanan sq ft, a purchase at this level would reflect Street and Argyle Street. an attractive capital rate of £193.61 per sq ft RBS, GUARANTEE AND NEWSAGENT 0-3 YEARS 5% 03

06

GLASGOW

ith a population of 650,000 Other major employers within Glasgow and an extended catchment include Glasgow City Airport, BAE population of 2.3 million Systems, Pernod Rickard, United Biscuits Wpeople, Glasgow is Scotland’s largest and the city’s three main universities. city and the third largest in the UK. The VIBRANT In 2014 Glasgow hosted The city’s comparison goods spend is £4.85 billion per annum whilst convenience Commonwealth Games, the Ryder Cup expenditure is £5.23 billion per annum. and the MTV European Music Awards. The city is a world class location for CITY The city has the largest economy in film and TV production with major Scotland and contributes substantially to international productions such as World the UK economy. Glasgow is Scotland’s War Z, Cloud Atlas, Fast & Furious 6 first city to secure the UK Government’s and Outlander filmed on location here. LOCATION City Deal worth £1.3 billion and is the In addition, Glasgow hosted the MOBO first city in the UK to implement the Awards for the fourth time in 2016. These Tax Increment Financing (TIF) scheme. events cement Glasgow’s reputation as The city generated nearly £19.6 billion one of the most vibrant and dynamic in Gross Value Added to the Scottish cities in Europe. economy in 2015, outperforming the UK average by more than a third. The state of the art SSE Hydro National Arena opened in August 2013 and is Important employers in Glasgow’s the second-busiest music arena in the banking, finance and insurance sectors world in terms of ticket sales, behind only include Santander, RBS, Lloyds Banking London’s The O2 Arena. This makes the Group, Barclays Bank, Clydesdale Bank, arena busier than the Manchester Arena JP Morgan, Morgan Stanley, Esure, Direct and the famous Madison Square Garden Line, Churchill Insurance, Aviva and in New York. Royal Sun Alliance. In addition, Glasgow has a high representation of public sector employers including the Ministry of Defence, the Department of Work and Pensions, HMRC and The Student Loans Company.

GLASGOW IS SCOTLAND’S LARGEST CITY AND THE THIRD LARGEST IN THE UK 07

No.1 £1.3bn £10.08bn PROMIS RETAIL TOTAL RANKING CATCHMENT SPEND

842,000 CITY DEAL, PROMIS SHOPPING SCOTLAND’S FIRST POPULATION AND LARGEST

1.84M 3rd £19.6BN PROMIS PRIMARY GVA (2015) - LARGEST CATCHMENT LARGEST CITY IN ECONOMY IN POPULATION THE UK SCOTLAND 08

RETAILING IN GLASGOW

GLASGOW IS THE SECOND The street is currently experiencing very high levels of tenant demand which has LARGEST AND MOST resulted in rental growth, where the Zone IMPORTANT RETAIL A rate has increased from £260 to £330 MARKET IN THE UK AFTER per sq ft over the past 12-18 months, representing an increase of 27%. LONDON’S WEST END. Sauchiehall Street is one of the strongest he city is consistently ranked retailing pitches in Glasgow and attracts number 2 in the CACI retail rankings predominately national and international and PROMIS Market Analysis ranks mass market fashion, convenience, Tthe city number 1 on the following bases: retail and leisure occupiers. The street welcomes 16m shoppers per year and has one of the UK’s strongest and most stable Primary Catchment Population: 1.84 m levels of footfall, outperforming both and Argyle Street. Estimated Shopping Population: 842,000 Glasgow’s retail core is further enhanced Volume of comparison retail spend by presence of three covered shopping available in the catchment area: £4.95bn malls, namely Buchanan Galleries, Princes Square and the St. Enoch centre.

Over 5.3 million square feet of Buchanan Galleries is Glasgow’s prime retail space can be found in Glasgow, covered shopping centre, it is anchored with prime and super prime shopping by John Lewis, Next and Boots and boasts to be had within one square mile in the fashion brands such as River Island, RETAIL city centre. Glasgow’s retail core follows Hollister and Mango as key tenants. Land a continuous Z shape in what is Securities have recently announced plans known as the ‘Golden Z’ comprising to progress with the “Southern Extension” Sauchiehall Street, Buchanan Street which will comprise a new-build MSU and Argyle Street. fronting Buchanan Street which is understood to be pre-let to Next. Glasgow’s retail sector generates more than £3.3 billion per annum The St. Enoch’s Centre was extensively supporting 17,000 full-time jobs and, refurbished in 2010 at the cost of £150m post Brexit vote, is showing no sign of and now comprises 1 million sq ft of retail weakening with H&M recently acquiring and leisure space. Major tenants include their biggest store in the UK. Debenhams, H&M, Hamley’s, JD Sports, Boots and Superdry. Buchanan Street is the undoubted prime retail pitch in Glasgow and is Princes Square has recently undergone considered to be a genuinely world a £7.5m refurbishment and is home to class retail destination. some of the city’s high-end fashion retailers including Belstaff, COS, Ted Baker and Vivienne Westwood. The centre is also one of the most popular city centre destinations for eating and drinking. 09

CACI UK RETAIL RANKINGS 2016 GLASGOW’S LEISURE AND RESTAURANT MARKET HAS EXPERIENCED CONSIDERABLE GROWTH OVER THE PAST 24-36 MONTHS AND A NUMBER OF HIGH-PROFILE OCCUPIERS HAVE ENTERED THE MARKET, DRIVING TOTAL CENTRE EXCEPTIONAL RENTAL UK RANK RF CENTRE RF SCORE COMPARISON SPEND (£M) GROWTH IN THE SECTOR. 01 London - West End 9,306 £4,772.8 he demand for high profile well-located leisure units has surged in recent years 02 Glasgow 3,960 £1,900.8 and a number of new bars, restaurants Tand cafés have opened on and around the Golden Z.

03 Manchester 3,427 £1,815.1 Notable entrants include Yo! Sushi, Five Guys, Gourmet Burger Kitchen, Vapiano, Byron Burger, Bella Italia, Revolucion De 04 Birmingham 3,150 £1,599.0 Cuba, Cote Brasserie, Hard Rock Café, Bill’s, Las Iguanas and Carluccio’s.

05 Leeds 2,950 £1,416.8 In addition to the national multiple restaurant brands, there is an established and growing independent restaurant scene 06 Liverpool 3,131 £1,316.7 in .

07 Westfield Stratford City 2,585 £1,304.9

08 Westfield London 2,594 £1,293.6

09 Bluewater 2,431 £1,233.2

10 Trafford Centre 2,167 £1,228.1 10

LOCATION

TRANSPORT HUBS HOTELS PRIME FOOTFALL The Sauchiehall Building is extremely well Several major upmarket and budget served via rail, bus and the Subway, with hotels are located in close proximity DRIVERS Buchanan Bus Station, Central Station, to The Sauchiehall Building, namely LOCATION In comparison to Argyle Queen Street Station and The Blythswood Hotel, Dakota Hotel, Street and Buchanan Street, Subway Station, all within 5 minutes’ Hampton by Hilton, Abode, Apex, Point Sauchiehall Street benefits walk. Moreover, Glasgow is well accessed A and Citizen M amongst others. THE PROPERTY OCCUPIES AN from the highest and most via a major motorway network and the stable footfall levels in scheme benefits from a 372 space Q park The concentration of nearby hotels Glasgow city centre. Total EXTREMELY HIGH FOOTFALL PRIME multi storey car park. enhances the appeal of Sauchiehall Street footfall for the year to February and its surrounding environs to visitors, 2017 was 16m, this exceptional LOCATION ON THE PEDESTRIANISED helping to maintain and improve upon level of footfall is driven by the SECTION OF SAUCHIEHALL below key factors: CULTURAL AND the excellent levels of footfall seen at the LEISURE ATTRACTIONS subject location, both during the STREET FORMING A KEY PART OF day and at night. GLASGOWS ‘GOLDEN Z’. The Sauchiehall Building is located in close proximity to several of Glasgow’s best known theatres, performance centres LARGE STUDENT and tourist attractions. These include the POPULATION GLASGOW CITY CENTRE FOOTFALL LARGE FORMAT / Theatre Royal, Pavilion Theatre, Kings The Sauchiehall Building benefits from ANCHOR TENANTS Theatre, Royal Concert Hall, The Glasgow the footfall generated by nearby major KEY LOCATION FOOTFALL P.A. School of Art, Glasgow Film Theatre, educational institutions. Over 17,000 SAUCHIEHALL STREET AT M&S 16.0M Sauchiehall Street is anchored by the O2 ABC and an 18 screen Cineworld students attend Glasgow Caledonian The Sauchiehall Building, alongside large Cinema. Of particular interest, The ARGYLE STREET AT DEBENHAMS 15.4M University which is located just a short format Boots, Marks & Spencer, Argos, Willow Tea Rooms Trust are currently on- walk from The Property, with a further BUCHANAN STREET AT GALLERIES 12.2M Tesco, Waterstones and Dunnes Stores site just 100 yards from The Property with 05 20,000 and 32,000 students in attendance BUCHANAN STREET AT KIEHLS 13.0M which collectively act as major drivers of the comprehensive £7m refurbishment of at Strathclyde University and Glasgow footfall. this Rennie-Mackintosh landmark tourist 2,000,000 City College respectively. Other nearby occupiers include Tiger, attraction. 1,800,000 Vodafone, Santander, Co-operative Food, In addition, there are 1,940 students at 1,600,000 Costa Coffee and Café Nero. , 1,580 pupils at St

1,400,000 Aloysius College and 835 students at The Royal Conservatoire of Scotland. 1,200,000 16 MILLION SQ FT OF OFFICE 1,000,000 ACCOMMODATION Given Glasgow’s large student population, the city’s student 800,000 The Property sits on the northern edge accommodations sector has seen 600,000 of Glasgow’s Central Business District high levels of activity in recent years. 400,000 which comprises 16 million sq ft of office Greystar’s 13 storey 330 bed scheme

200,000 accommodation. With access to 400,000 nearby on Bath Street recently completed workers and a further 2 million within whilst existing nearby schemes include an hour’s commute, the accessibility and the 200 bed Blythswood House and the MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB convenience of Sauchiehall Street to 70 bed Robert Owen House. Source: Footfall data provided by Springboard. workers is another key footfall driver. 11

AERIAL VIEW C

F

E

D B 06 08

03

07 08 06 05 KEY

A Sauchiehall Street HOTELS 01. Hampton by Hilton B Buchanan Street 02 04 02. Abode C Argyle Street 03. Apex Glasgow 03 04 D Buchanan Galleries 04. Point A E Princes Square 05. The Blythswood Hotel 03 06. Citizen M 06 St Enoch Centre F 07. Hilton Double Tree 08. Premier Inn

06 RETAILERS CULTURAL/TOURISM A 01. Marks & Spencer 01. The Willow Tea Rooms 02. Tesco Metro 02. Pavilion Theatre 02 07 03. Boots 03. Cineworld 01 04. Argos 04. Glasgow Film Theatre 04 01 05. Dunnes Stores 05. Theatre Royal 03 06. Waterstones 06. Royal Concert Hall 07. Royal Conservatoire LEISURE 01. Costa Coffee 01 02. Café Nero 07 Central Station 05 03. Greggs 05 04. McDonald’s Queen Street Station 02 05. Burger King St Enoch Subway 06. Bella Italia Buchanan Street Subway 02 01 07. Pret a Manger 08. Starbucks Cowcaddens Subway Buchanan Bus Station

04 12

SURROUNDING DEVELOPMENTS SUMMARISED BELOW ARE A NUMBER OF ONGOING SIGNIFICANT DEVELOPMENTS ON SAUCHIEHALL STREET AND THE SURROUNDING AREA, WHICH ARE TESTAMENT TO THE QUALITY OF THE LOCATION AND WILL FURTHER IMPROVE ITS APPEAL TO OCCUPIERS:

01 CITY DEAL PUBLIC 04 CLOCKWISE, REALM WORKS SAVOY TOWER

£6.75m in funding has been granted for Castleforge have substantially refurbished the comprehensive overhaul of the public the Savoy Tower to form flexible, creative realm on the non-pedestrianised section community workspace. The c2:concepts of Sauchiehall Street. The works will see designed space includes a café, outdoor the addition of a two way cycle lane, terrace, large conference and meeting improved pavements for alfresco dining, rooms and collaborative break out areas. better street lighting and the installation of bike stands and trees.

01 02 05 FORMER BHS BLOCK 02 THE WILLOW TEA ROOMS REDEVELOPMENT Formal Investments have submitted plans for the former BHS block on This Charles Rennie-Mackintosh landmark Sauchiehall Street for a £72m mixed- tourist attraction, located adjacent to use redevelopment. The Stallan Brand the property, is currently undergoing a designed proposal comprises 18,000 sq comprehensive £7m refurbishment. Upon ft of newly configured retail space with completion, the Tea Rooms will comprise 80,000 sq ft of offices above which will tourist, educational and conference space front Sauchiehall Street and a 130,000 sq and will draw further footfall to this section ft 12 storey office block which will front on of Sauchiehall Street, which is synonymous to Bath Street, whilst offering access from with Charles Rennie-Mackintosh. Sauchiehall Lane as well as connecting to Renfield Street via a central courtyard. 04

03 SAVOY CENTRE REFURBISHMENT 06 SOUTHERN EXTENSION, BUCHANAN GALLERIES

Castleforge have plans to substantially reconfigure the Sauchiehall Street retail Land Securities recently announced frontage of this scheme and have secured plans to progress with the “Southern planning for change of use to Class 3. Extension” of the Galleries, which will comprise a new-build MSU fronting Buchanan Street which we understand is pre-let to Next. In addition, the works will include the full refurbishment and 05 06 reconfiguration of the existing centre. 13

SITUATION

01 04 03 02

KIOSK HOT SPOT

VACANT - TO LET

TO LET

TheWorks

MOUNTAIN WAREHOUSE

01 05 04 03 02

KIOSK HOT SPOT

VACANT - TO LET

TO LET

TheWorks

MOUNTAIN WAREHOUSE

06

CHAOPHRAYA 05

06

CHAOPHRAYA 14

THE PROPERTY

DESCRIPTION THE SAUCHIEHALL BUILDING COMPRISES A MIXED-USE HIGH STREET RETAIL, LEISURE AND CAR PARK SCHEME WHICH OCCUPIES A FULL CITY CENTRE BLOCK.

The property is understood to have The building is of concrete frame been constructed in the 1970s as a construction occupying an entire multi-occupied shopping centre. It was island site with its primary frontage significantly altered and refurbished to Sauchiehall Street and secondary in the late 1990’s/early 2000’s and has frontages to Bath Street, West Campbell undergone further significant capital Street and Wellington Street. expenditure and enhancement since the vendor took ownership in 2015. The property extends to a total Gross Internal Area of approximately The property comprises 8 well configured 29,079 sq m (313,001 sq ft) according high street retail units (the majority of to the Plowman Craven survey with retail space large format), 1 gym unit, accommodation set across basement, 3 brand new leisure/restaurant units, ground, and three upper floors and a a bank branch and a 372 space multi- further 3 floors of car parking. storey car park. According to Promap, the overall site area of the title plan is approximately 2.01 acres, with the building’s footprint extending to approximately 1.49 acres.

83%

WAULT of 16.8 63% of the income years to expiries and is secured to tenants 15.8 years to break with a Dun and options Bradstreet Credit Rating of 5A1, 20% of the with a further 20% 69% of the income income is secured secured against a has in excess of 8.5 for in excess of 46 5A2 covenant. years unexpired. years to Q-Park. 15

OCCUPATIONAL TIMELINE: 2014 - 2017

THE SAUCHIEHALL BUILDING HAS AN EXCELLENT TRACK RECORD OF THE SAUCHIEHALL RETAILER PERFORMANCE, AND HAS EVOLVED OVER TIME TO MEET BUILDING HAS CHANGING RETAILER REQUIREMENTS. THE CURRENT OWNERS HAVE EVOLVED OVER TIME TO REALISED A NUMBER OF SIGNIFICANT ASSET MANAGEMENT INITIATIVES MEET THE CHANGING WHICH ARE TESTAMENT TO THE QUALITY OF THE LOCATION: RETAILER LANDSCAPE. 4. In June 2016, WH Smith 2. re-geared their existing lease, In May 2015 Pure Gym expanded agreeing to a 10 year extension into additional space, whilst re- without breaks. gearing their existing lease and agreeing to a 5 year extension. In addition, WH Smith upgraded their external facade. In addition, Pure Gym fully 7. re-fitted their unit in 2016 at The current owners have created significant capital cost of £1m and three brand new leisure units of plan further investment in their striking architectural design, two 1. shower and changing facilities. of which are prominently located TK Maxx regeared their lease on each corner of the building in October 2014, agreeing to fronting Sauchiehall Street with a 15 year extension. 5. the third accessed directly via Millets took a new 10 year lease Bath Street TK Maxx comprehensively over 4,021 sq ft of lower ground Of the three new-build units re-fit their store in 2015. retail space, without breaks, in which have been delivered, two August 2016. 3. have been successfully pre-let Sports Direct took a new 10 to new Scottish market entrants year lease over 13,368 sq ft Smashburger and Chilango, with of lower ground retail space strong interest in the third. in March 2016. 6. During the course of 2017, Q Park have invested significantly in the car park, including modernisation of entry and exit systems and the resurfacing of their exit ramp. 16 FLOOR PLANS STACK FLOORPLAN LEVEL 1

BATH STREET

KEY WEST CAMPBELL STREET T.K. MAXX SPORTS DIRECT LEVEL 8 MILLETS SUPERDRUG WH SMITH LEVEL 7 PRIMARK NEW CHILANGO UNIT NEWSAGENT

PURE GYM LEVEL 6 RBS WELLINGTON STREET NEW SMASHBURGER UNIT NEW RESTAURANT UNIT ELANIC CLINIC LEVEL 5 SAUCHIEHALL STREET - LOWER GROUND QPARK

LEVEL 2 LEVEL 4 BATH STREET WEST CAMPBELL STREET LEVEL 3

LEVEL 2

LEVEL 1 WELLINGTON STREET

SAUCHIEHALL STREET - GROUND

*Floor plans are indicative. NEWSAGENT 17

LEVEL 3 LEVEL 5

BATH STREET-GROUND BATH STREET WEST CAMPBELL STREET WEST CAMPBELL STREET RAMP DOWN FROM CAR PARK RAMP TO CAR PARK UNIT 25 WELLINGTON STREET WELLINGTON STREET

ACCESS AND EGRESS OUT FROM MULTISTOREY CAR PARK IN

SAUCHIEHALL STREET SAUCHIEHALL STREET

LEVEL 4

BATH STREET WEST CAMPBELL STREET

COMMON AREA SERVICE YARD WELLINGTON STREET

SAUCHIEHALL STREET 18 TENANCY AND ACCOMMODATION TENURE

Heritable (Scottish equivalent of English Freehold).

TENANT CONTRACTED RENTALISED LEASE LEASE RENT ADDRESS UNIT TENANT TRADING AS PCA FLOOR AREA RATE (SQ FT) BREAK COMMENTS RENT FLOOR AREA START EXPIRY REVIEW OPTION GIA SB REALTY G - 2,098 Parent company guarantee from MSG Commercial Limited. 165 Sauchiehall Street Unit 23 £125,000 3,129 (Adj. GIA) £39.95 21/07/2017 20/07/2032 - 21/07/2022 Limited 1st - 2,462 The tenant received 12 months’ rent free from 21 July 2017 which will be topped up by the vendor. T - 4,560 NIA LG -1,877 Superdrug Stores 167 Sauchiehall Street Unit 2A G - 6,046 £375,000 2,809 (ITZA) £133.51 24/06/1996 23/06/2021 - -- PLC 2nd - 478 T - 8,401 NIA Blacks Outdoor LG - 4,021 171 Sauchiehall Street Unit 2B £25,000 4,021 (NIA) £6.22 05/08/2016 04/08/2026 - 05/08/2021 Rent review capped at £28,982. Rent deposit of £15,000 (6 months + VAT). Retail Limited G - 265 T - 4,286 The lease was re-geared in December 2015 whereby the tenant agreed to an extension of 10 years in NIA exchange for 18 months’ rent free from 11 June 2016 to 11 December 2017. Any outstanding rent free is to W H Smith Retail G - 15,310 177 Sauchiehall Street Units 1-2 £325,000 3,413 (ITZA) £95.22 11/06/2001 10/06/2026 - 11/06/2021 be topped up by the vendor. Holdings Limited 3rd - 522 POST Subject to a service charge cap which increases annually in-line with RPI, capped at 3%. T - 15,832 OFFICE Based on the latest RPI figures, the cap is currently at £35,873. Rent payable monthly.

Guaranteed by TJX Europe Limited. GIA Rent reviews capped at 115%. LG - 36,875 181 Sauchiehall Street Unit 32 TJX UK £400,000 38,878 (GIA) £10.29 18/09/1996 22/10/2029 22/10/2024 22/10/2019 2&3 - 2,003 Subject to a service charge cap which increases annually in-line with RPI. T - 38,878 Based on the latest RPI figures, the cap is currently at £47,242. There is a shortfall of £2,600. Tenant required to give the landlord 6 months’ prior written notice if they are to exercise their October 2024 break option. GIA G - 24,084 Primark Stores 1st - 30,742 Subject to a service charge cap which increases annually in-line with RPI. 179 Sauchiehall Street Unit 3 £1,030,000 64,934 (GIA) £15.86 26/11/2001 25/11/2026 - 26/11/2021 Limited 2nd - 10,108 Based on the latest RPI figures, the cap is currently at £74,819. 3rd - 8,205 T - 73,139 Rent review capped at £147,083. GIA Subject to a service charge cap which increases annually in-line with RPI. SportsDirect.com LG - 13,368 185 Sauchiehall Street Unit 33 £130,000 13,368 (GIA) £9.72 29/03/2016 28/03/2026 29/03/2021 29/03/2021 Retail Limited G - 552 Based on the latest RPI figures, the cap is currently at £41,036. Rent payable monthly. T - 13,920 12 month rent penalty if the March 2021 break option is exercised, for which the tenant must provide 9 months’ prior written notice. NIA 191 Sauchiehall Street Kiosk Naeem Manzoor St Enoch News £38,000 203 (ITZA) £187.19 24/11/2003 23/11/2018 - - Tenant deposit of £21,850. G - 203 The tenant received 6 months’ rent free from 11 September 2017, which will be topped up by the vendor. GIA Subject to a service charge cap which increases annually in line with RPI, starting at £3,500. 197 Sauchiehall Street Unit 24 Mucho Mas Ltd £75,000 1,545 (Adj. GIA) £48.54 11/09/2017 10/09/2032 10/09/2027 11/09/2022 G - 1,545 Tenant required to give the Landlord 6 months’ written notice if they are to exercise their September 2027 break option. NIA G - 960 The Royal Bank 1 - 4,635 Tenant required to give the landlord 6 months’ prior written notice if they are to exercise their 128 Bath Street Unit 30 £85,000 7,301 (NIA) £11.64 28/11/1998 27/11/2023 27/11/2018 28/11/2018 of Scotland PLC 1 Anc - 259 November 2018 break option. 2nd - 2,407 T - 8,261 The lease subject to the following fixed rental uplifts: 15/06/2018 - £61,800 p.a. 15/06/2019 - £63,654 p.a. 15/06/2020 - £65,564 p.a. NIA 132 Bath Street Unit 12 Elanic Ltd £60,000 2,705 (NIA) £22.18 15/08/2012 14/08/2027 15/08/2022 15/06/2018 15/06/2021 - £67,534 p.a. 15/06/2022 - £69,557 p.a. 15/06/2023 - upwards only to OMRV G - 2,705 Tenant required to give the Landlord 6 months’ written notice if they are to exercise their August 2022 break option. GIA Rent: £185,000 p.a. from 05 November 2016 to 04 November 2018 G - 7,210 Pure Gym Then: £211,000 p.a. until the 2020 rent review. 140 Bath Street Unit 31 1 st - 7,892 £211,000 30,194 (GIA) £6.99 13/05/2010 12/05/2030 - 13/05/2020 Limited 2nd - 15,092 5 yearly RPI-linked rent reviews compounded annually with collar and cap of 2% and 4% respectively. T - 30,194 The rent will be topped-up by the vendor to provide a day 1 income of £211,000 p.a. GIA 2 year rent, rates and service charge guarantee. Practical completion of works achieved 142 Bath Street Unit 25 Guarantee - £75,000 4,668 (Adj. GIA) £16.07 - - - - 4,668 on 06 September 2017. GIA (approximate) Guaranteed by Q Park NV. Car Park Q Park Ltd £759,301 - - 29/06/2007 28/05/2064 - 28/05/2018 102,772 Annual rental uplifts in-line with RPI subject to a collar and cap of 2% and 5% respectively. Total Gross Income: £3,713,301 Service Charge Shortfall: £2,600 Net Income: £3,710,701 19 20

TENANT PROFILE

THE BELOW TABLE SUMMARISES FINANCIAL INFORMATION IN RELATION TO THE TENANTS AND IS BASED ON INFORMATION CONTAINED WITHIN DUN & BRADSTREET CREDIT REPORTS.

COMPANY % OF YEAR SALES TURNOVER PROFIT/LOSS PRE NET WORTH B&B UNIT TENANT/GUARANTOR NAME NUMBER INCOME ENDING €(£000’S) TAXES (£000’S) (£000’S) RATING

12 Sep 2015 2,890,892 295,854 349,227 Unit 3 Primark Stores Limited 00453448 28% 5A1 13 Sep 2014 2,786,250 273,952 293,718

31 Dec 2015 € € € 809,100 € 1,189,600 Car Park Q Park NV 27159273 20% € - € 5A2 31 Dec 2014 €€768,800 €€1,062,300 30 Jan 2016 41,860 125,988 Unit 32 TJX Europe Limited 03094829 11% - 5A1 31 Jan 2015 (332) 84,128 26 Dec 2015 1,105,002 56,842 50,149 Unit 2A Superdrug Stores PLC 00807043 10% 5A1 27 Dec 2014 1,058,047 38,044 138,513

31 Aug 2016 175,131 75,302 461,234 Units 1-2 W H Smith Retail Holdings Limited 00471941 9% 5A1 31 Aug 2015 169,626 62,392 472,209

31 Dec 2016 155,105 8,881 8,689 Unit 31 Pure Gym Limited 06690189 6% 3A2 31 Dec 2015 99,511 2,551 56,581

24 Apr 2016 2,063,255 302,501 1,201,706 Unit 33 SportsDirect.com Retail Limited 03406347 4% 5A1 26 Apr 2015 2,074,126 262,929 830,737 27 Dec 2015 15,421 Unit 23 MSG Commercial Limited 02829272 3% - - 4A2 28 Dec 2014 17,194 31 Dec 2015 16,392,000 (3,153,000) 35,327,000 Unit 30 The Royal Bank of Scotland PLC SC090312 2% 5A1 31 Dec 2014 18,315,000 2,403,000 62,332,700 31 Mar 2016 6,970 (1,971) 3,753 Unit 24 Mucho Mas Ltd 05944758 2% 2A3 29 Mar 2015 - - 2,190 31 Jul 2015 71 Unit 12 Elanic Ltd SC362472 2% - - D3 31 Jul 2014 81 30 Jan 2016 129,932 (3,481) (43,120) Unit 2B Blacks Outdoor Retail Limited 07795258 1% N2 31 Jan 2015 115,473 (15,036) (42,443) 21

INCOME ANALYSIS

THE SAUCHIEHALL BUILDING IS LET TO A RANGE OF HIGH PROFILE NATIONAL AND INTERNATIONAL RETAILERS AND BENEFITS FROM AN EXCEPTIONAL WEIGHTED AVERAGE UNEXPIRED LEASE TERM OF 16.8 YEARS TO LEASE EXPIRIES AND 15.8 YEARS TO BREAK EVENTS.

INCOME PROFILE BY SECTOR INCOME PROFILE BY NEAREST LEASE EVENT INCOME PROFILE BY COVENANT

SECTOR % INCOME TENANTS UNEXPIRED TERM % INCOME TENANTS D&B RATING % INCOME TENANTS

Primark, TK Maxx, Superdrug, Q Park, Pure Gym, Primark, TK Maxx, Superdrug, 10 years + 5A1 Retail 67 % WH Smith, Sports Direct, RBS, 29% Smashburger 63% WH Smith, Sports Direct, RBS Elanic, Millets, Newsagent Primark, WH Smith, Millets, 8-10 years 5A2 Q Park 39% Chilango 20% MSCP 20 % Q Park 6-7 years TK Maxx 4A2 3% Smashburger Pure Gym, 11% Gym/Leisure Superdrug, Sports Direct, 11 % Smashburger, Chilango 3-6 years 3A2 Pure Gym 15% Elanic 6% Guarantee 2 % - 0-3 years 5% RBS, Newsagent & Guarantee 2A3 2% Chilango N2 1% Millets D3 2% Elanic w

22

RETAIL AND LEISURE MARKET COMPARABLE DATA

PRIME RETAIL RENTS PRIME LEISURE SAUCHIEHALL STREET RETAIL IN GLASGOW RENTS IN GLASGOW AND LEISURE COMPARABLES *Subject to re-measurment

Buchanan Street is considered to The Glasgow leisure and restaurant ADDRESS DATE TENANT ZONE A RENT (SQ FT) be a world class retail destination market has expanded considerably over and is the undoubted prime retailing the past 24-36 months with a number of RETAIL - UNIT SHOPS thoroughfare in Glasgow, attracting high-profile new occupiers entering the 55-57 Sauchiehall Street U/O Tim Hortons £106.66 predominately upmarket aspirational market, driving exceptional rental growth fashion occupiers. in the sector. There remains active 123 Sauchiehall Street Jul-17 Bon Marche £90.00* demand from several national occupiers 10 Sauchiehall Street Jan-17 Boots £133.68 The street is currently seeing very high and the prime rent is currently £35.00- levels of tenant demand which has had £42.00 per sq ft. 42 Sauchiehall Street Aug-16 Ryman £115.30 an upward effect on rental value, where The Sauchiehall Building Jun-16 WH Smith £91.39 the Zone A rate has increased from £260 per sq ft to £330 per sq ft over the past 133 Sauchiehall Street Mar-14 Vodafone £90.85 12-18 months. H&M recently acquired LEISURE 60,000 sq ft in Buchanan Quarter, their biggest store in the UK. 55-57 Sauchiehall Street U/O Tim Hortons £63.51

Sauchiehall Street has seen strong The Sauchiehall Building Jul-17 Smashburger £39.95 demand from retailers in recent years, 85 West George Street Dec-16 YO! Sushi £41.64 with the prime rent having been rebased to £120-£125 per sq ft ITZA for well The Sauchiehall Building Sep-16 Chilango £50.88 configured unit shops on the first two 47 St Vincent Street Dec-15 Mitchells and Butler t/a Miller and Carter £40.40 blocks west of Buchanan Galleries and £90-£100 per sq ft ITZA on the next 47/49 Sauchiehall Street Sep-15 Bella Italia £39.70 three blocks, up to and including The 22-24 West Nile Street Mar-15 Bill's £35.00 Sauchiehall Building. 62-70 St Vincent Street Jun-14 Mitchells and Butler t/a All Bar One £40.29 65 St Vincent Street Jun-14 Gourmet Burger Kitchen £38.75 57-61 St Vincent Street Jun-14 Five Guys £40.41

GLASGOW RETAIL MSU / LARGE FORMAT UNIT COMPARABLES

ADDRESS TENANT DATE GIA RENT P.A RENT (SQ FT) 150 Buchanan Street H&M May-16 63,080 £1,900,000 £30.12 20-26 Buchanan Street Nike Nov-15 32,470 £1,337,500 £41.19 185-221 Buchanan Street New Look Sep-15 31,000 £1,785,000 £57.58 36-48 Argyle Street TK Maxx Aug-15 70,891 £1,470,831 £20.75 87-91 Argyle Street JD Sports Jun-15 30,000 £750,000 £25.00 23 24

COMPARABLE INVESTMENT TRANSACTIONS

SCOTLAND CONTINUES TO ATTRACT SIGNIFICANT UK AND OVERSEAS INVESTMENT WITH H1 2017 TRANSACTIONS REACHING £1.152 BN. RECENT COMPARABLE TRANSACTIONS IN GLASGOW INCLUDE:

50-74 147 BUCHANAN EMPIRE HOUSE 20-26 NIKE STORE 50/59 Q PARK SAUCHIEHALL STREET STREET & 48 TO 72 SAUCHIEHALL STREET BUCHANAN STREET BUCHANAN STREET JAMAICA STREET GLASGOW ST VINCENT STREET, GLASGOW GLASGOW GLASGOW GLASGOW This prime retail parade is GLASGOW In June 2017, George Capital In March 2017, Redevco In February 2017, a private In May 2017, a private investor currently on the market for purchased this mixed-use retail purchased this 100% prime investor purchased this 100% purchased this long-income car We understand that this prime £14.40m which reflects a NIY of and office block on Sauchiehall Buchanan Street retail unit for prime retail parade on Buchanan park investment following two mixed-use building is under offer 6.25%, with the vendor targeting Street for £17.5m which reflects a £29.27m, which reflects a NIY Street for £22.50m, which reflects rounds of closing for £11.45m, for c. £50m which reflects a sub 6.00%. NIY of 6.80%. of 4.30%. a NIY of 4.00%. which reflects a NIY of 4.64%. blended NIY of c. 5.00%. Based upon the property’s NIA, Based upon the property’s NIA, Based upon the property’s GIA, Based upon the property’s NIA, The property was let for 29.7 Based upon the property’s NIA, a a transaction at this level would this transaction reflects a capital this transaction reflects a capital this transaction reflects a capital years subject to annual uplifts deal at this level would reflect a reflect a capital rate of £543.79 rate of £388.58 per sq ft. rate of £901.45 per sq ft. rate of £2,233.47 per sq ft. linked to RPI (2% and 4% collar capital rate of £562.61 per sq ft. per sq ft. and cap). The retail and leisure element is The property is let in its entirety to Arguably the best block on A purchase at this level could The property is fully let to fully let, with a WAULTC of 9.70 Nike and is a flagship store, with Buchanan Street, the property reflect the following NIY’s: Poundland, Bank of Scotland and years and had an apportioned a Term Certain of approximately is let to Kiko Milano, Russell & 3.75% (Buchanan Street Retail); Dr Martens and has a WAULTC of NIY of c. 6.00%. 4 years. Bromley and Molton Brown. 5.00% (St Vincent Street Leisure/ 7.47 years. Banking); and 6.75% (Offices).

The property is fully let to occupiers including Apple, TSB, All Bar One and BTO with a WAULTC of 8.40 years. 25 26

INVESTMENT RATIONALE

Opportunity to acquire the Heritable Interest in a prime long income Sauchiehall Street investment located on Glasgow’s pedestrianised retail ‘Golden Z’.

Excellent fundamentals - Full city block in the UK’s third largest city and second most important retail market.

Exceptionally high footfall location - 16m per annum, higher than Argyle Street and Buchanan Street.

Surrounding occupiers include M&S, Tesco Metro, Boots, Waterstone’s and Argos.

39% of the income is anchored to Primark and TK Maxx for a further 8.60 years.

20% of the income is secured to Q Park Ltd, Guaranteed by Q Park NV, for a further 47 years with annual RPI linked rent reviews.

9% of the income is secured to WH Smith for a further 8.7 years.

6% of the income is secured to Pure Gym for a further 12.6 years with 5 yearly RPI linked rent reviews.

Long term asset management/repositioning opportunities including the potential to develop up to 4 levels of residential accommodation above the car park.

Following the 2017 rates revaluation, rateable values on this section of Sauchiehall Street have fallen by approximately 40% (from £1,500psm ZA to £900psm ZA), providing a significant boost to existing retailers and increasing Sauchiehall Street’s attractiveness and affordability to new retail and leisure entrants.

With Zone A rates having been rebased to £90-£100 per sq ft on the subject pitch, rents in this location represent a significant discount of 73% to Buchanan Street, where the Zone A rate is now at £330 per sq ft.

Prime yields on Buchanan Street are presently at 4.00% and with downwards pressure likely to continue, The Sauchiehall Building provides the opportunity to secure a prime mixed-use asset on Glasgow’s Golden Z at a level which represents significant value relative to Buchanan Street.

POST OFFICE NEWSAGENT 27 28

PROPOSAL

PRICING CONTACT We are instructed to seek offers in excess of £60,600,000 (sixty million, six hundred thousand pounds sterling), for the ADRIAN PEACHEY DOUGLAS WOOD shares in a Luxembourg based SPV net of debt. DD: 020 7312 7524 DD: 0141 227 4661 A purchase at this level would provide a net initial yield of M: 07976 423 253 M: 07826 947 231 E: [email protected] E: [email protected] 6.00%, allowing for purchasers costs of 2.00%. Based upon the approximate GIA of 313,001 sq ft, EDWARD GEORGE BEN FARRELL a purchase at this level would reflect an attractive DD: 020 7312 7489 DD: 0141 227 4643 capital rate of £193.61 per sq ft. M: 07818 012 489 M: 07973 315 189 E: [email protected] E: [email protected]

ENERGY PERFORMANCE SERVICE CHARGE CERTIFICATE ARRANGEMENTS

EPCs are available upon request. A service charge is in place to cover the costs of maintaining the common parts of the building. These costs are shared between SURVEYS the occupiers of The Sauchiehall Building by reference to floor areas and benefit. The Vendor’s measured and building surveys are service charge budget for the year to 31st available upon request. December 2017 is £298,455, which reflects £1.33 per sq ft based upon the management floor area.

Due to a cap within the TK Maxx lease, there is a non-recoverable element of service charge cost which is expected to be £2,600 for the year ending 31st December 2017. MISREPRESENTATION ACT 1967

DATA ROOM Montagu Evans LLP for themselves and for the vendor(s) or lessor(s) of this property whose agents they are, give notice that: 1. These particulars do not constitute, nor constitute any part of, an offer or contract. 2. None of the statements contained in these particulars as to the property are Further detailed information is available to be relied on as statements or representations of fact. 3. Any intending purchaser or lessee must satisfy himself by inspection or otherwise as to via a hosted data room. Access can be made the correctness of each of the statements contained in these particulars. 4. The vendor(s) or lessor(s) do not make or give and neither Montagu Evans LLP nor any person in their employment has any authority to make or give, any representation or warranty whatever in relation to this available to interested parties. property. The Business Protection from Misleading Marketing Regulations 2008 and Consumer Protection from Unfair Trading Regulations 2008: These details are believed to be correct at the time of compilation but may be subject to subsequent amendment. September 2017. 29