Syndicated Commercial Property Investment.
Units 5 & 6, The Cube M4 Business Park
The Cube M4 Bristol Syndicate Unit 1, 2, 5 & 6 The Cube M4 Business Park, Old Gloucester Road, Parkway, Bristol, BS16 1FX (“the Property”)
• A 7.85% p.a. return, distributed quarterly in advance. • Two modern self-contained office buildings, designed to be occupied on a floor by floor basis or as four individual offices. • Occupied by three tenants providing covenant diversification. • Potential for rental growth and enhanced capital value through tenant lease re-gearing. • Located on Bristol’s prime office park between the M4/M5 interchange and the M32 motorways.
Rougemont Limited is authorised and regulated by the Financial Conduct Authority. Ref No. 516918 October 2017 Important Legal Notice This document describes a syndicated commercial property investment. An investment of this nature involves risk; it is illiquid in nature and may not be suitable for certain investors. Investors must be prepared to bear the risk of an investment in the Property for an indefinite period, and be able to withstand the loss of all or part of their investment. All reasonable care has been taken to ensure the information contained within this document is true and accurate, but it should not be construed as advice upon which reliance should be placed.
The Cube M4 Bristol Syndicate - Key Points
The Property Two modern self-contained office buildings, designed to be occupied on a floor by floor basis or as four individual offices. The Property totals 12,353 sqft, plus 36 external car parking spaces and was constructed in 2007.
The Property is located on Bristol Parkway between the M4/M5 interchange and the M32 motorway 4 miles north of Bristol city centre. Bristol Parkway has a mainline railways station, which provides an electrified service to London Paddington in 1 hour 10 minutes. The new Bristol Parkway MetroBus Network terminal is a 5 minute walk away and provides an efficient public transport service around the city centre and surrounding conurbations.
Tenancies The Property is being acquired freehold with the benefit of a fully recoverable estates charge that is paid by the other freehold owners within The Cube M4 Business Park. The estate charge is fully recoverable from the occupational tenants. The four buildings are let to three tenants on separate full repairing and insuring leases in accordance with the tenancy schedule detailed on page 5.
Syndicate Return 7.85% p.a. distributed quarterly in advance.
Syndicate Price £2,325,000 (Two million, three hundred and twenty five thousand pounds).
Minimum Investment £50,000 (Fifty thousand pounds).
Structure The freehold legal title to the Property will be held by both Intertrust Fund Services (UK) Limited, acting as the FCA authorised Professional Independent Trustee and by Rougemont Limited, acting as Managing Trustee. Syndicate members may purchase a percentage holding within the Trust and will become a registered legal beneficial owner of the title pro-rata to their initial investment.
All substantive management decisions will be taken by a majority representing 75% by value of the syndicate price. The structure is suitable for Sophisticated and High Net Worth investors and has received approval from a number of SIPP and SSAS pension trustee/administration companies. A syndicate member may sell their holding at any point (see ‘Individual Liquidity’ Page 10).
Exit Strategy The acquisition is being made with a medium to long term exit strategy of 5 – 10 years, depending on market condition and the tenants continued occupation.
The multi-let nature and location of the Property provides an opportunity to increase the average rental tone of c.£14.50 per sq.ft. to £16.00 per sq.ft. and improve the existing lease terms through active lease re-gearing . If the rent of £15.50 per sq.ft, currently payable on units 1 and 2, was to be achieved on units 5 and 6 (currently £13.50 - £14.00 per sq.ft.), it would increase the Syndicate’s return to 9.00% p.a. At the appropriate time an exit from the investment can be considered by way of a sale of the individual buildings, or the whole, after enhancing the rent receivable to maximise value.
Funding The acquisition will be made entirely from funds provided by syndicate members; consequently, no borrowings will be allowed to be secured against the property and no charges will be permitted to be taken over the property unless prior agreement is obtained. The minimum investment per syndicate member will be £50,000.
2 The Cube M4 Bristol Syndicate Location
Bristol is known as a centre of excellence in the technology and creative sectors. The city stands as the 5th largest conurbation in the UK and is the regional capital of the South West. The city’s pivotal location at the intersection of the M4 and M5 motorways makes it the gateway to the South West and South Wales and allows easy access to the West Midlands. Bristol International Airport, Bristol Docks, Temple Meads and Bristol Parkway stations provide excellent domestic and international access for personal travel and freight. The Property has an elevated position visible from the M4 motorway. Junction 1 of the M32 motorway is within 1½ miles and junction 16 of the M5 within 3 miles. Bristol Parkway Railway Station is approximately 1 mile away and has direct pedestrian and cycle access; there are direct connections to London Paddington with a journey time of circa 1 hour 10 minutes. The new Bristol Parkway MetroBus Network terminal is a 5 minute walk from the Property. The Property is located on Cube M4 office park, a small office park that forms part of the northern business and residential fringe of Bristol between the M5, M4 and M32 motorways. Other large occupiers within the northern business fringe are; BAE Systems, Airbus, Rolls Royce, Thales and MOD Abbeywood (National Procurement HQ). There is also a strong financial services and technology base with occupiers including; Hewlett Packard, EE, AXA and RAC, the University of the West of England and the Cribbs Causeway Regional Shopping Area are close by.
Other occupiers in close proximity to Cube M4 are; Mitsubishi, NHS, Amcor, Salvation Army, Anana, Vinci Construction and the national headquarters of Oasis Healthcare Ltd. Also within close proximity are; a Sainsbury and Tesco supermarkets, a Health & Fitness Club, a Day Nursery and a Farmhouse Inn.
BRISTOL PARKWAY
METRO BUS PARKWAY STOP
NEW M4 STOKE GIFFORD BY-PASS
M32/M4 BRISTOL CITY CENTRE - 4 MILES INTERCHANGE M32
3 The Cube M4 Bristol Syndicate The Property
Two modern self-contained office blocks, designed to be occupied as four individual units and let floor by floor. The Property comprises 12,353 sqft in total plus 36 external car parking spaces. The Property was constructed in 2007 and was held and operated as a serviced office estate by the developer until the summer of 2016 when the developer went into administration. The administrator subsequently sold units 3 and 4 to the existing tenant, Anana, and the remainder of the estate was sold to the vendor in January 2017. Since then the vendor has improved the estate’s common areas and let the Property to the three tenants demonstrating the strength of demand from occupiers. The vendor has also recently sold units 7 and 8 (which are let Mitsubishi) to a private investor.
UNIT 3
UNIT 7 UNIT 4
UNIT 8
UNIT 5
UNIT 1
UNIT 6
UNIT 2
K Y:
The Property
Units &4 - Let to Anana and owned by Anana
Units 7&8 - Let to Mitsubishi and owned by a private investor
4 The Cube M4 Bristol Syndicate Tenure and Tenancy
Tenure The Property being acquired is the freehold estate, including all common areas but excluding units 3,4,7 and 8. Each unit on the estate is subject to an estate charge which covers maintenance and security.
Tenancy: The Property has been let on full repairing and insuring leases as illustrate below:
Unit 1 and 2 Cube M4
Floor Area Tenant Lease Fixed Lease Current Rent Per Rental Security Notes SQ FT Start Date Rent Review Expiry Date Rent SQ FT Deposit
Ground 7,109 Simwood July 2017 July 2022 July 2027 £110,200 £15.50 6 months 20 car & First eSMS Ltd to £121,210 deposit parking spaces
Unit 5 and 6 Cube M4
Floor Area Tenant Lease Break Lease Current Rent Per Rental Security Notes SQ FT Start Date Option Expiry Date Rent SQ FT Deposit
Ground 2,622 HiLight March 2017 March 2020 March 2023 £36,708 £14.00 8 car parking Semi- spaces and conductor lease Ltd contracted out of the Landlord & Tenant Act 1954
First 2622 Optimum Jan 17 Jan 21 Jan 22 £35,397 £13.50 6 months 8 car parking SME deposit spaces and Finance lease Ltd contracted out of the Landlord & Tenant Act 1954
5,244 £72,105
Notes: • The total passing rent is £182,305 per annum increasing to £193,315 per annum following the fixed rental increase on Unit 1 and 2 in July 2022.
• The tenants leases on units 5 and 6 have been contracted out of the security of tenure provisions of the Landlord and Tenant Act 1954. Accordingly the tenants are expressly prevented from having the usual tenant’s right to renew their lease, save as to the rental level. Therefore at each lease expiry the landlord will have the ability to ask the tenant to vacate providing an element of strength to any continued lease negotiations.
5 The Cube M4 Bristol Syndicate Tenant’s Covenants
Simwood eSMS Ltd (co.no. 03379831) Simwood eSMS Ltd are a leading provider of international carrier services with wholesale IP telephony and a portfolio of quality managed services. Simwood have been established 20 years and recently moved from Southampton to Bristol.
www.simwood.com
HiLight Semiconductor Ltd (co.no. 08324226) Hilight Semiconductor specialises in the manufacture of the world’s highest performance PMD and PHY data cabling in advanced CMOS nodes for the telecommunications and data centre industry.
www.hilight-semi.com
Optimum SME Finance Ltd (co.no. 10508987) Optimum Finance specialise in providing bespoke invoice finance solutions for SMEs and is a new business established in February 2017.
www.optimumfinance.co.uk
As two of the tenants are relatively small / new businesses, in order to strengthen their leasehold commitment, they have both provided a six month rental deposit as illustrated within the Tenancy tables on page 5. On completion these deposits will be held in an escrow account by the Syndicate’s Property Manager. These funds would be forfeited to the Syndicate in the event of a tenant default.
6 The Cube M4 Bristol Syndicate Market and Rental Analysis
The international property agency and valuer JLL provided the following summary of the Bristol out of town office leasehold market in September 2017.
“Occupier take up in the out-of-town market is a very steady performer averaging 300,000 sq ft per annum over the last 5 years. 2017 is showing no exception with H1 take up at 149,000 sq ft albeit Q2 fell slightly below the quarterly average. There is no particular reason for this as enquiry levels have been constant. So far this year there have been 5 deals over 10,000 sq ft against 8 deals over this size for the whole of 2016. All of these have been in North Bristol and the largest was at Bristol Business Park with a letting to Boeing totalling 18,400 sq ft. Take up is dominated by smaller transactions with 90% below 10,000 sq ft, and 80% below 5,000 sq ft.
The out-of-town market as a whole, but particularly the northern fringe, has a broad range of occupier sectors which is a great strength. Demand comes from house building and construction industries, consultants particularly within aerospace, engineering, nuclear and oil, technology – mostly around telecoms, and serviced office providers.This contrasts with the city centre where the Technology Media and Telecoms sector has been the most active.
There has been no significant construction for 10 years in all areas of the market. Overall vacancy is now at its lowest since 2008 at circa 600,000 sq ft, 165,000 sq ft of which is in one building in South Bristol, although this may be converted to residential. Vacancy rates hover at around 10% of stock.”
The below table illustrates three leasehold transactions within Vantage Business Park next to Cube M4 Business Park and the Property within the last 18 months.
Tenant / Property Area Term Rental Rent Date Purchaser SQ FT Incentive
Avon Data A3 Vantage Business 2,017 10 year lease, £16.25 6 months rent free Q1 2017 Systems Park, Bristol 5 year break
Rock Solid 1F – C2 Vantage Business 2,007 5 year lease, £16.00 4 months rent free Q3 2016 Knowledge Park, Bristol 3 year break
Salvation GF – B1 Vantage Business 1,497 5 year lease, £15.75 4 months rent free, Q2 2016 Army Park, Bristol 3 year break a further 2 months on expiry of break option
The below table illustrates a number of leasehold transactions on similar property within business parks north of Bristol during the last 18 months.
Tenant / Property Area Term Rental Rent Date Purchaser SQ FT Incentive
Rhinemetal 7 Woodlands Court, Bristol 3,640 2 year lease, £18.00 No rent free Q2 2017 Defence no break
Rhinemetal 6 Woodlands Court, Bristol 2,861 5 year lease £14.50 9 months rent free Q2 2017 Defence
Crowthorne Part GF Equinox North, 1,542 5 year lease, £14.50 3 months rent free Q2 2017 Associates Bristol 3 year break option
Evolved Unit 8 Woodlands Court, 5,832 5 year lease £16.00 10 months rent free Q1 2017 Intelligence Bistol
7 The Cube M4 Bristol Syndicate Capital Value Analysis
The out of town office market of Bristol has seen a number of comparible multi-let investment sales in the past year that are detailed below and which support the purchase of the Property:
Location Tenant Area Average Average Net Price Capital Date SQ FT unexpired Rent Initial Value lease term (£ per SQ FT) Yield % (£ per SQ FT) (break option) obtained
Woodlands Court Multi-let 37,952 5.38 yrs £15.00 7.97% £6.55m £173.00 Q3 2017 Bristol Parkway (3.77 yrs)
540 Bristol Capita IT 7,582 9.00 £16.20 6.34% £1.93m £255.00 Q1 2017 Business Park Services
920 Aztec West Multi-let 29,830 5.00 £19.00 7.80% £7.30m £244.00 Q2 2016 Business Park (4.03) Bristol
2510 Aztec West Multi-let 10,142 3.4 £19.35 7.69% £2.57m £252.00 Q2 2016 Business Park (2.0) Bristol
Aztec Centre, Multi-let 54,555 6.29 £13.30 7.00% £10.37m £190.00 Q1 2016 Aztec West (3.01) Business Park Bristol
The Syndicate Price for the Property is £2,325,000 reflecting a capital value per sqft of £188 and a Net InitialY ield/Syndicate Return of 7.85% per annum
8 The Cube M4 Bristol Syndicate Syndicate Price
£2,325,000 (Two million three hundred and twenty five thousand pounds).
Syndicate Return
The annual return to syndicate members, inclusive of all Syndicate Fees, will be 7.85% per annum, distributed quarterly in advance.
Income Distribution and Taxation
Rental income will be distributed quarterly in advance. Syndicate member are responsible for their own tax arrangements. A quarterly rental remittance advice, detailing each rental distribution, will be provided by the Property Manager (Harlow Property Management Ltd).
Funding
The acquisition will be made entirely from funds provided by syndicate members. The minimum investment per Syndicate member is £50,000 (fifty thousand pounds). There will be no borrowings attached to the Syndicate and no security charges will be permitted to be taken over the property.
Units 1 & 2, The Cube M4 Business Park
9 The Cube M4 Bristol Syndicate Rationale for the Purchase
The Syndicate Return of 7.85% per annum is reflective of the short-term nature of the Property’s leases, and is typical of the location and nature of the building. The Property was acquired vacant from an administrator earlier this year by the vendor and was fully let within 7 months at rental values that provides the opportunity for rental growth in the short term. Should the rental tone increase to £15.50 per sq ft this would reflect an increase in the Syndicate’s return to 9.00% per annum.
The uncertainty surrounding the impact of Brexit on the UK economy is causing national occupiers to defer decisions to relocate until the situation becomes clearer. Consequently, Landlords who provide flexible lease solutions, which are not as expensive as serviced offices, are seeing an increase in occupational demand.This increase in demand is illustrated by the fact that all three of the Property’s leases were completed within 7 months of the office accommodation being marketed.
There is growing evidence of robust growth in the Technology, Media and Telecoms (‘TMT’) sector. Bristol has long been renowned for accommodating a number of large technology and creative occupiers who make use of the areas excellent communications and benefit from the low cost alternative to being located within London. Occupiers of this scale and size often attract smaller businesses in the same industry and the location of the Property enables smaller occupiers to position themselves alongside these larger occupiers.
In 2011, the TMT sector overtook finance and insurance as the largest source of demand for Central London offices. The outcome from this was a sharp increase in rental growth. Growth in the TMT sectors is now becoming a national pattern. The recent Office for National Statistics figures shows that within the second quarter of 2017, 12.4% more people worked within theTMT sectors than in the finance and insurance industry. The occupier take-up for the regional office markets reached 4.1 million sq. ft. in the first half of 2017, a 14% fall on the first half of 2016. The TMT sector accounted for 24% of take up and was the most active whereas the financial sector accounted for 8%.
Building costs continue to escalate with inflation making it increasingly less viable for developers to build offices of a similar quality in this location, unless rental values of in excess of £18.50 per sq. ft. plus are achieved. Consequently, with office accommodation in short supply further rental growth pressure is being seen on existing offices. In addition, when further development does occur it may also provide new comparable evidence to support a further increase in the general rental tone north of Bristol.
(Source: JLL Office Agency Department Review September 2017 / Proponomics, Knight Frank Research – September 2017 and Savills Research Market Watch, UK Regional Offices – Summer 2017)
Proposed Strategy
The acquisition is being made with a medium to long term exit strategy of 5 – 10 years, depending on market condition and the tenants’ continued occupation. Should the tenants remain in occupation the Property provides security through its multi-tenanted nature and a scenario where all the tenants may vacate at the same time, thereby creating a sizeable void, is unlikely.
There is an opportunity to gradually undertake a lease re-gearing exercise to improve the business park’s rental tone in line with neighbouring parks. By improving the rental tone and lease structures an exit from the entire investment may be considered. Alternatively, the syndicate may decide to sell the buildings individually as and when the opportunity arises. Any decision to sell will be subject to a syndicate vote (detailed in How Syndicated Property Works, No. 7, Page 13).
Individual Liquidity
A syndicate member can sell, or transfer, their holding to whomsoever they wish, as long as the acquiring party qualifies as being a suitable ‘Exempt Person’. A sale, or transfer, of a holding can occur at any point during a Syndicate member’s ownership and does not require the sale of the whole property at that time. As Managing Trustee, Rougemont is authorised to co-ordinate and assist in the sale of a syndicate holding by promoting it to its approved client base. An administration fee of £550 plus VAT (including all legal documentation) is payable for this service.
Other than between other syndicate members and Rougemont’ s client base, there is no established secondary market for the sale of a holding in a property purchased under these arrangements and there can be no guarantee that a holding will sell. As with any property, values can vary at any given time and will depend on factors such as; economic conditions, tenant covenant and length of lease remaining. For further information regarding the above please see ‘Investor Eligibility’ and ‘How Syndicated Property Works’ on page 13.
10 The Cube M4 Bristol Syndicate The Professional Team
Managing Trustee & Syndicate Operator – Rougemont Estates (‘Rougemont’) Rougemont is a niche property investment company which is authorised and regulated by the Financial Conduct Authority to promote and operate Non-Mainstream Pooled Investments, including syndicated commercial property investments. Rougemont is an Exempt CAD firm and has the permitted exception to transmit orders with Non-MIFID Independent Financial Advisors. In the case of this purchase Rougemont will act as the regulated operator and Managing Trustee. Further information can be found at www.rougemontestates.com
Professional Trustee – Intertrust Group Intertrust Fund Services (UK) Limited is an FCA regulated independent fiduciary company. The company is specifically regulated to hold in trust the assets of its private clients. In the case of this purchase Intertrust Fund Services (UK) Limited London office will independently hold along with the Managing Trustee the legal title to the property in trust for the benefit of each syndicate member. Further information can be found at www.intertrustgroup.com
Syndicate Solicitor – Gosschalks Solicitors, Hull Gosschalks is a leading full-service law firm operating from purpose-built offices in Kingston upon Hull. Gosschalks client base stretches to all corners of the UK and includes a diverse range of business types from individuals to large PLCs.
Further information can be found at www.gosschalks.co.uk
Property Management – Harlow Property Management (‘HPM’) HPM is a company under common ownership with Rougemont and is regulated by the Royal Institute of Chartered Surveyors. HPM will undertake the day to day property management and administration for the Syndicate including, collection and distribution of rent.
Syndicate Fees
The following costs and fees have been used in calculating the annual Syndicate Return.
Property Transactional Fees: Property transaction costs associated with the acquisition of the Property including, but not limited to, Stamp Duty, Legal & Professional fees, acquiring Agent’s Fee, VAT registration and Survey fees.
Managing Trustee & Operator Fee: Rougemont’ s fee, based on 4.30% of the Syndicate Price, payable on completion. No further Managing Trustee & Operator fees will be due payable during the life of the syndicate unless agreed in advance with the Syndicate.
Professional Trustee Fee: Intertrust Fund Services (UK) Limited fee of £10,000 for the period from completion until 12 July 2022 (“the Initial Period”).
Property Management Fee: Harlow Property Management’s fees representing 4% of the annual rent (i.e. £7,292 per annum) for the Initial Period.
11 The Cube M4 Bristol Syndicate VAT
The property purchase will be undertaken by way of a transfer of a going concern (‘TOGC’) therefore no VAT will be payable on the purchase transaction; however, VAT is chargeable on the Tenants’ rent and therefore a new VAT registration for the Syndicate will be applied for. HPM will be responsible for the registration of the Syndicate with HMR&C. It will also be responsible for administering the Syndicate’s ongoing VAT returns.
Rental payments will be distributed exclusive of VAT and all VAT payments will be accounted for to HMR&C. Rental Distribution and Taxation Rental income will be distributed quarterly in advance. Syndicate members are responsible for their own tax arrangements and a quarterly rental remittance advice, detailing each distribution, will be provided by HPM.
Annual Valuation
It is the intention to have the property independently valued (annually) by a firm of independent Chartered Surveyors.The cost of this annual valuation, estimated at £600 (incl. VAT), will be deducted pro-rata from the annual rent.
Availability
The Property is available for syndication with a minimum investment of £50,000 (fifty thousand pounds). Interested parties are therefore invited to review the Important Legal Notice on page 14 and to make a formal reservation by completing the Reservation Form on page 15 & 16. On receipt of a Reservation Form Rougemont will issue a purchase pack for completion.
12 The Cube M4 Bristol Syndicate ow Syndicated Property orks
A syndicated commercial property investment is one whereanumber of private individuals, corporate entities, or pension funds collectively pool their capital to ac uireaspecific tenanted commercial property. Syndicate members ownapercentage of the beneficial interest in either the property or the corporate vehicle owning the property pro-rata to the amount of their investment. In return members receive their share of the rental income and future capital growth. Rougemont s operating structure has received approval fromanumber of major SIPP and SSASPension Trustee/Administrators however, investors should contact their own pension fund advisors to ascertain whether such an investment is permissible within the rules of their own pension fund. FCA authorised Independent Financial Advisors should be aware that Rougemont is an empt CAD firm to which MIFID applies, e cept that it can receive and transmit orders in relation to one or more financial instruments, or in relation to investment advice. Accordingly, Rougemont is permitted to transmit orders with Non-MIFID Independent Financial Advisors and Professional bodies. As with any investment, syndicated property of this type carries the risk that the investment may fail to increase in value or may depreciate. Rental returns may not materialise. Your attention is drawn to the Important Legal Notice in this document and the need to take independent legal and investment advice. In summary the arrangements are as follows: 1. Properties are normally office, retail or factory premises let to a tenant with a good covenan t strength on a long term lease. 2. An Independent Professional Trustee will hold the legal freehold/leasehold title to the property as Trustee. Syndicate members become beneficial owners of the property, as tenants in common, in direct proportion to their investment. 3. Syndicate members are entitled to receive their pro-rata rental income from the property together with their share of the capital receipt uponasale of the Property. 4. A full legal pack containingadetailed Structure Note, a Syndicate Contract, Trust Deed and a Property Administration Agreement will be provided once a potential Syndicate member has made a formal reservation by completing the form at the back of this document. Any other relevant material will be available upon request. Potential Syndicate members must then arrange to receive advice from other independent advisors as necessary. 5. Acquisition of the property will take place only when sufficient Syndicate members have provided monies to fund the acquisition. Should insufficient funds be received the acquisition will not progress and any funds received will be returned immediately to Syndicate members. 6. An ‘Initial Period’ is set by Rougemont at the outset and in this instance the Initial Period will run from the Completion Date until 12th July 2022. 7. Rougemont is the appointed Managing Trustee and will co-ordinate the purchase and handle routine decisions in relation to the property. The Syndicate members will retain control of major decisions such as, providing consent to assign leases or deciding to carry out structural alterations to the property. These decisions will be taken by a majority representing 75% (by value) of the Syndicate Price. Syndicate members will also employ a management company, Harlow Property Management Limited, to carry out services such as collection and distribution of rent and the provision of caretaking duties. However, if the Syndicate members collectively decide to instruct Harlow Property Management Limited to provide any non-core services then additional remuneration will be payable in respect of such services. Prior to the expiry of the Initial Period Harlow Property Management Limited will provideaquote for a continuation of its services. 8. An individual Syndicate member may sell their stake at any time. The Syndicate members may decide by a majority to sell the property at any time. However, an individual Syndicate member cannot forceasale of the whole of the property until the expiry of the Initial Period and must have attempted to sell their individual stake before making sucharequest. However, ifaSyndicate member, beingapension fund, has beneficiaries who die during the Initial Period forcing the pension fund to be liquidated then the trustees of the pension fund have the right to force a sale of the property within 24 months of the death of the member in the event that the member’s interest in the property remained unsold.
Investor li ibility
All syndicated commercial property investment opportunities promoted by Rougemont constitute an Unregulated Collective Investment Scheme (“UCIS”) as defined in the Financial Services and Markets Act 2000 (“FSMA”). Rougemont is authorised by the UK Financial Conduct Authority (“FCA”) to establish, operate and wind up UCIS (Reg. No. 516918). In receiving this document you acknowledge and accept the following disclaimer: This document contains important information. It is being sent to you asacategory of person falling within The Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 (“the Order”). The sole purpose of this document is to assist the recipient in deciding whether they wish to proceed with further investigation. Recipients should review this document having first considered the Key Points (page 2) of the arrangements and the Important Legal Notice (page 2 and 16). The description of the arrangements contained within this document constitutes a summary of the arrangements. A detailed description of the syndicated structure is provided to potential Syndicate members with the legal purchasers pack which will be provided should a potential Syndicate member wish to proceed. ‘Exempt Persons’ falling within the Order include: • ‘Investment Professionals’, who are Authorised FCA Persons and who are defined, according to the Financial Services and Markets Act 2000, as having professional experience of participating in a UCIS for the purpose of their business. • ‘Certified Sophisticated Investors’ who are defined as investors who are self-certified, or who have been certified by an FCA Authorised Person as being sufficiently knowledgeable to understand the risks associated with participating inaUCIS and who have signedarequisite Certified Sophisticated Investor Declaration in accordance with COBS 4.12 of the FCA Handbook. • ‘Certified High Net Worth Individuals’, who are defined as investors who have self-certified in accordance with COBS 4.12 of the FCA Handbook or who have been certified by an FCA Authorised Person confirming that during the financial year immediately preceding the date on which the certificate was signed, held an annual income of not less than £100,000, or net assets of not less than £250,000, excluding their primary residence and benefits from life policies. • A ‘High Net Worth Company’, which is defined as a corporate entity with called-up share capital or net assets of either (a) in the case ofacompany with more than 20 members, or which isasubsidiary ofacompany with more than 20 members, not less than £500,000 or, (b) in the case of any other body corporate, not less than £5 million. Confirmation of prospective clients’ investor status must be received by Rougemont in advance of any information or promotional material in respect of an investment opportunity being provided.
13 The Cube M4 Bristol Syndicate Important Le al otice
1. Syndicated investment opportunities that are promoted by Rougemont ualify as Unregulated Collective Investment Schemes and may only be promoted to Investment Professionals, Certified High Net Worth Individuals/Companies and Certified Sophisticated Investors as detailed in COB 4.12 of the FCA Handbook (“ empt Persons”). The protections normally afforded by the FSMA and compensation entitlements under the UK Financial Services Compensation Scheme may not apply.
2. No contract is formed by the provision of this material or any subse uent oral or written communication between Rougemont and an empt Person . A contract is only formed on the completion of a valid Syndicate Contract inaform approved by Rougemont and e ecuted by both parties. The Syndicate Contract forms the entire agreement between the parties unless the Syndicate Contract is e pressly varied by the parties.
. Commentary and other materials provided to you in any manner are not intended to amount to advice on which reliance should be placed. Rougemont therefore disclaims all liability and responsibility arising from any reliance placed on such materials or by anyone who may be informed of any of its contents. Rougemont does not provide or hold itself out as permitted to provide specific investment advice. Potential syndicate members should consult with an FCA regulated Independent Financial Advisor (authorised to provide such advice under the FSMA) as to the suitability of any investment opportunity promoted by Rougemont and the risks associated with it. You are also advised to take independent legal advice.
4. Rougemont has taken all reasonable care to ensure that the information provided in any material supplied to you, or in any written or oral communication with you, is true and accurate. However, all information is capable of independent verification and we advise you to seek such verification. Copies of any documents referred to or source material are available for inspection at Rougemont s Offices. While all reasonable care has been taken no liability or responsibility is accepted for any errors and omissions within this prospectus.
5. To ma imise returns,Syndicate members may need to hold their investments onalong-term basis. Asaconse uence the arrangement is not suitable for short-term investment.
6. Other than between other Syndicate members and Rougemont s approved client base there is no established secondary market for the sale of a holding in any properties purchased under the arrangements and therefore there can be no guarantee that you will be able to readily dispose of your holding, or sell it at a particular price.
7. Property values may fall as well as rise and purchasers should be aware that property values are a matter of the valuer s opinion and are subject to market forces. There can be no guarantee as to future performance. Tenants may default, thus leaving a void in rental income, rates and service charge payments may need to be covered by Syndicate members until such default is remedied or the property is sold/re-let. There may also be costs incurred in dealing with any default, re-letting, improvement or repair works or irrecoverable costs relating to the damage or destruction of the property which the Syndicate members will be responsible for.
8. Syndicate members should appreciate that the value of property is dependent uponarange of factors many of which are outside the control of Syndicate members these include but are not limited to, fluctuations in land prices, construction costs, interest rates, changes in ta ation, changes in supply and demand, and environmental factors. The financial strength and standing of a tenant can change at any time.
9. You are only entitled to use any promotional materials provided by Rougemont for your own use. Such materials are e pressly not intended for distribution to any other party. Reproduction of the whole or any part of any materials provided is strictly prohibited.
Complaints
1. Should you wish to makeaformal complaint concerning the services provided by Rougemont then please contact, in the first instance, Rougemont Limited at The lms, Oakwood Park, Bishop Thornton, Harrogate, HG BF tel. 0142 877 910 and a copy of the company s Complaints Handling Procedure will be issued to you immediately.
2. Once a complaint has been made to us we will acknowledge receipt within 14 days and seek to resolve the issue. Rougemont Limited is regulated by the FCA and in certain circumstances you may be eligible to refer complaints to the Financial Ombudsman Service.
The lms, akwood Park, Bishop Thornton, arro ate, 3 3BF T 44 1423 877 1 mail info rou emontestates.co.uk www.rou emontestates.com
14 The Cube M4 Bristol Syndicate The Cube M4 Bristol Syndicate Reservation Form
I confirm I have read and understand the Important Legal Notice on page 14.Iwould like to ac uire a syndicate holding within The Cube M4 Bristol Syndicate and would like to be issued with the purchase pack.
Please reserveaholding in the above syndicate for: (NB. Minimum holding £50,000) £
Investor Details
I confirm I wish to make this purchase in the name of:
(Full Name in Block Capitals)
Following the completion of the syndicateIwish all future correspondence and rental remittances to be sent for the attention of:
At the following address:
Postcode:
Financial Advisers Details
Please provide details of your financial adviser (the adviser ) where applicable. If this is not applicable please tick this bo and then proceed to signing the Declaration.
Name of Adviser Contact:
Name of Adviser Firm:
Adviser Firm s FCS reference number:
Address of Adviser Firm:
Postcode:
Email of Adviser: Telephone:
15 The Cube M4 Bristol Syndicate The Cube M4 Bristol Syndicate Reservation Form
Financial Adviser s Details continued By signing this Reservation Form, I instruct you to pay my adviser (whose details have been provided) the fees (if any) indicated below.
Single Advice fee (including any VAT chargeable by the adviser) payable following completion of the purchase for advice related to this investment.
(Amount £ or “nil”)
Annual Advice fee (including any VAT chargeable by the adviser) payable quarterly in arrears following completion. The Annual Advice fee is to be deducted from my/our rental payments and paid to the adviser for undertaking annual reviews of my/our investment in the Syndicate.
(Amount £ or “nil”)
I here by instruct Rougemont to deduct the above fees from my/our rental payments and to remit the sums to my/our adviser.
I confirm that I have read and understand the terms and conditions attached to this promotion.I have considered the risk involved in proceeding with this investment and have sought all the recommended advice required. I confirm that I qualify as an Exempt Person (as defined within ‘Investor Eligibility’ on page 13).Iwould like to be issued with the purchase pack.
Signature Date / /
Name (BLOC CAPITALS)
Please return this form to:
Rougemont Limited The Elms Oakwood Park Bishop Thornton Harrogate HG3 3BF. Tel: 0142 877910, mail: info rougemontestates.co.uk mail: jcraven rougemontestates.co.uk or nsmillie rougemontestates.co.uk
16 The Cube M4 Bristol Syndicate