PRIME OFFICE INVESTMENT Fully let to Standard Bank 47/49 La Motte Street, St Helier, , JE4 8XR

INVESTMENT SUMMARY

Location / Description

• Fully let Office HQ building in St Helier, Jersey.

• 32,183 sq ft (2,989.90 sq m) NIA of high quality office accommodation arranged over ground and three upper floors.

• 404 sq ft (37.5 sq m) of basement storage and 20 car parking spaces.

Tenure & Tenancy

• Freehold. • Let to Standard Bank Jersey Ltd with a guarantee from Standard Bank Offshore Group Ltd offering excellent tenant covenants. • Lease expiry on 13th May 2022. • Total rent of £860,000 pa reflecting a rent of £25 psf. Headline ERV for St Helier is £34psf. • Rent reviews are every 3rd year, upwards only to OMRV. • Tenant has an option to extend the lease for a further 21 years to 13th May 2043.

Proposal

• Offers are invited in excess of £11,165,000 (Eleven Million One Hundred and Sixty Five Thousand Pounds) for the freehold interest, subject to contract and exclusive of VAT. • A purchase at this level would reflect a net initial yield of 7.25% after allowing for purchaser’s costs of 6.14%. JERSEY

Location

Jersey is well established as Britain’s largest ‘offshore’ stockbrokers, advisors, custodians and fund financial centre, whose economic and physical administrators, the ‘big 4’ and other accountancy firms development has experienced rapid growth over and numerous highly regarded law firms. recent years. The Jersey Financial Services Commission is This role has been made possible by the islands responsible for the regulation, supervision and, within legal status as a Crown Dependency, which gives it its legal remit, the development of financial services the ability to conduct it’s domestic and fiscal affairs industry on the island. More information can be found independent of both the UK and the European Union. at their website, www.jerseyfsc.org. This has enabled the island to offer an attractive tax regime for both private and corporate wealth (no VAT, In addition to its financial roll Jersey is also a major Inheritance tax, capital gains or corporation tax and tourist destination with an estimated 750,000 tourists income tax at a flat rate of 20%). However, unlike many visiting the island every year which contribute 20% other ‘offshore’ centers throughout the world, this of the Islands GDP. A combination of these visitors regime is available within a stable political structure and the relatively high disposable incomes enjoyed and a strict regulatory framework. by its residents means that the island also supports a comprehensive retail offer. Other, albeit lesser As a result Jersey accommodates the offices of contributions to Jersey’s economy come from high- over 50 international banks, 200 licensed trusts and tech manufacturing and the agricultural sectors. company administrators, 100 investment managers, St Helier

St Helier is the capital and principal population centre residential and leisure complex was completed in 2002, of Jersey and accommodates virtually all of the whilst , the new transport interchange, islands prime retail and office stock. The town has a hotel, office and retail complex was completed in 2010. population of 28,000 which accounts for approximately 27% of the total population of Jersey. Numerous new office developments have taken place to accommodate the demand for larger and better Its economic growth has prompted considerable public quality buildings from financial sector tenants. and private sector development. A new marina,

Portinfer St John

St Mary A8 St Ouen Trinity Le Catel

St Martin Les Mielles Le Hurel Nature Reserve St Peter Jersey A9 A8 Archirondel A12 St Clair Maufant

THE Five Oaks Faldouët Bellozanne PROPERTY A1 La Haule A13 St Hellier La Pulente Les Creux Fauvic A4 Samarés St Helier, Je-Saint Peter Port

Poole - Jersey (St Helier) SITUATION

La Motte Street is situated in the heart of St Helier King Street, which is 350m from the subject property, with occupiers within the city including: is the prime retail pitch in the town, housing retailers including; Marks & Spencer, Next, Boots, Swarovski, - BNP Paribas JD Sports, Waterstones, New Look and Burton. - ING Bank - Ozannes 47/49 La Motte Street occupies a prominent corner - Jersey Telecom site at the junction of La Motte Street and Ann Street - RBC and has an extensive return frontage to the latter. - Dept For Social Security

7 THE 6 PROPERTY 5 4 Broad St

3 Hilary St New St

Castle St King St Ann St Ann Queen St Hilgrove St Halkett Pl St Saviour’s Rd Esplanade La Motte Street Grosvenor St 2 Hill St 7 A1 Mulcaster St 1 StDon James St Rd

8 La Colomberie

Regent Rd La Route du Fort

Green St

La Rte du Port Elizabeth A16 La Route du Fort

A4

KEY 1. Liberty Wharf 5. OGIER 2. Ernst & Young 6. Jersey Finance 3. KPMG 7. HSBC International 4. City Bank 8. Fort Regent COMMUNICATION

Jersey is situated off the north-west coast of France, 14 miles from Normandy and 85 miles from the south coast of England. It can easily be accessed via sea and air links, which mainly serve the UK, France and Switzerland.

Air Sea Jersey is well served by frequent and regular flights Fast ferries from the UK to Jersey operate a regular from airports in the UK. Journey times for flights from service from Poole, with fastest journey times of 3 hours London and are 1 30 minutes. A daily ferry departs from Portsmouth, with hour 20 minutes, and 1 hour respectively. Jersey Airport a fastest journey time of 9 hours 30 minutes. Ferries is located approximately 5 miles (8km) to the west from the UK dock in St Helier on arrival in Jersey. of St Helier.

Beresford St

Peter St

Wesley St Wesley Ann St Ann

Don Street

2 Haljkett St 3 Hilgrove St St Hilary Halkett Place

King St 4

5 THE

Bath St

Queen St PROPERTY 7 1 6 St Saviour’s Rd Church St

8 La Motte St

Hill St

La Colomberie Le Breton Lane

Fort Regent St James St

Chapel Lane La Chasse Don Rd KEY 1. Barclays Wealth 5. Next 2. Marks & Spencer 6. Waterstones 3. JD Sports 7. Boots 4. Burton 8. BNP Paribas PROPERTY OVERVIEW

The property, completed in 2001, comprises a self-contained office building arranged over basement, ground and three upper floors totaling approximately 32,183 sq ft (2,989.90 sq m). The building is of frame construction with stone and brick elevations under flat roofs. Windows are powder coated, double glazed units with a curtain wall feature over the entrance and on the third floor. Car parking, storage and plant rooms are located at basement level and office accommodation on the four upper levels with further plant areas at roof level.

The main entrance gives access to a reception area which in turn leads to the principal core which contains a spacious stair case, a 10 person lift and male, female and disabled WCs and a kitchen at each office level. To the rear of the building there is a second core with similar lift and stair facilities and male and female WCs on every floor, together with various cleaner’s cupboards, showers and tea/coffee preparation facilities.

The office accommodation benefits from the following specification:

• Excellent natural light • Carpet tiled metal encapsulated full access floors • Suspended ceilings with recessed fluorescent lights • Environmental control via comfort cooling system

There are 20 car spaces within the basement car park which is accessed via a ramp from the lane at the rear of the building.

ACCOMMODATION

The property provides flexible, open plan floorplates which are designed to appeal to a whole spectrum of occupiers.

The property areas are defined in the lease for rent review purposes as follows:

Floor Sq m (NIA) Sq ft (NIA) Third 645.49 6,948

Second 810.21 8,721

First 810.21 8,721

Ground 723.99 7,793

Total 2,989.90 32,183

In addition there is a basement storage area of approximately 37.53 m²/ 404 ft².

LIGHTWELL

STAIRS LIFT

STAIRS LIFT

Example of upper floor office configuration.

TENURE

Freehold.

TENANCY

The property is let to Standard Bank Jersey Ltd with a Floor Size Rental Total parent guarantee from Standard Bank Offshore Group Rate Limited. Office 32,183 sq ft £25.00psf £804,575 The property is let on full repairing and insuring terms Basement 404 sq ft £13.43psf £5,425 for 21 years from 14 May 2001 expiring on 13 May 2022. Storage £2,500 Car Parking 20 Spaces per space £50,000 The tenant has an option to take a new lease for a further term of 21 years at an open market rent Total £860,000 at expiry of the existing lease. The current rent is Standard Bank have sublet the third floor office £860,000 per annum which equates to £25 per square space to Consortia Partnership Ltd. Consortia are an foot, subject to upwards only rent reviews every three independent trust company who provide fiduciary, fund years (as is the custom in Jersey). The rent has been and corporate services to clients across the globe. analysed as follows:

COVENANT INFORMATION

Standard Bank Jersey Ltd (J-12999) has its registered Standard Bank Jersey Ltd is a wholly owned subsidiary office at 47/49 La Motte Street and reports its of Standard Bank Offshore Group Ltd (J-43694) who principle activities as banking and regulated financial act as guarantor. Standard Bank Offshore Group Ltd services activities including stockbroking, asset reports its principle activity as that of an investment management, investment management and custodian holding company. services. Standard Bank Offshore Group Ltd’s ultimate parent is For 2015 it reported income of £36m, pre tax profit of Standard Bank Group Ltd of South Africa which has a £7.1m and equity shareholder funds of £2.054bn. Dun Fitch rating of BBB-. & Bradstreet give Standard Bank Jersey Ltd a rating of O1, representing an undisclosed financial strength and a minimum risk of business failure. MARKET COMMENTARY

The Jersey economy has been remarkably resilient to Jersey is increasingly gaining stature as a mature, well the global downturn and has shown real and tangible regulated and sophisticated international player and signs of growth. has a AA- rating by Standard and Poors.

Despite the recent and prolonged recession in europe, the Jersey economy continues to thrive. It has an innate ability to flatten out the peaks and troughs of the UK and worldwide cycles despite being commercially intertwined with these sectors through its offshore financial services industry.

Offices

Prime office rents have, over the past decade, • Longer than average lease duration demonstrated a steady upward trend avoiding the • Multiple 3 yearly, upward only OMV or JRPI linked downturns experienced elsewhere. A robust planning indexed rent reviews regime, geographical constraints and a lack of speculative development have combined to make for • UK based commercial leases a tight supply of prime space which has traditionally • An absence of security of tenure and complex been supplied on a pre-let basis. landlord & tenant legislation

In addition to the consistently benign market • A large number of international covenants and UK conditions investors are also able to benefit from:- backed tenancies • Nominal/low property rates, usually recoverable • A pool of first class professional expertise JERSEY LETTING MARKET

Rental growth has been achieved, even in the poor where further rental increase are anticipated to move in economic climate of recent times, due to a tight planning line with current net effective rental levels of £30.00 psf. regime, limited speculative development and occupier appetite from better quality offices arising due to re- Of St Helier’s estimated office stock of 2.8m sq ft, less locations, consolidations, mergers and acquisitions. than 160,000 sq ft, (5.7% of the total) is vacant, much of this stock being second-hand space. True prime Grade No 37 Esplanade was instrumental in driving rental rates A stock is now severely limited following the letting of forward. The property was part pre-let setting a new 37 Esplanade and there is now limited availability of benchmark and the remaining “speculative” element good quality accommodation until completion of 68-72 presented a much needed opportunity for a number of Esplanade. The lack of supply coupled with anticipated businesses seeking quality offices. Demand was such that demand is putting pressure on headline rents indicating the developer was able to achieve rents of £32-34 per sq that rents in Jersey have the potential to increase further. ft (net effective circa £30 per sq ft). This rental rate is expected to be further enhanced following completion of The majority of occupier demand is for good quality, the 80,000 sq ft pre-let to Royal Bank of Canada at 68-72 Grade A accommodation in close proximity to the Esplanade. Esplanade and Waterfront. At present we are aware that a number of major, local financial occupiers are discussing Liberation House and Windward House are now let at pre-lets which should provide the catalyst for these £28 psf reflecting the market rent as at last reviews in developments. These include BNP Paribas, UBS, Jersey 2013/14. The next Reviews are due from October 2016 Trust Co, Deloitte & Sanne Group.

Recent comparable letting transactions of note:

Date Address Tenant Headline Rent (PSF)

Est £34 Apr 16 Jersey International Finance Centre BNP Paribas (pre let details TBC) Est £34 July 15 27 Esplanade Jersey Trust Company (pre let details TBC) Est £34 Jun 15 Jersey International Finance Centre UBS (pre let details TBC) Est £32-£34 May 14 68-72 Esplanade Royal Bank of Canada (pre let details TBC)

Nov 13 37 Esplanade Firs Names (Jersey) Limited £27 rising to £38

Nov 13 37 Esplanade Breven Howard £33 rising to £35

Nov 13 37 Esplanade Volaw Group Services Limited £31-£32

Jun 12 37 Esplanade Colins Stewart £34

Aug 12 37 Esplanade KPMG £32

Nov 12 37 Esplanade PWC £32 OFFICE INVESTMENT MARKET

The Jersey office market has experienced strong investor interest over the past 18 months, albeit restricted by a lack of supply as landlords are unwilling to dispose of assets which have performed well over the past 8 years.

Recent comparable investment transactions of note:

Date Property Size (Sq ft) Tenants Rent (PSF) Price (Purchaser) NIY

ca£34,000,000 Q3 16 Liberation & Windward 86,668 Multi-Let £26-£28 ca 7% House, Esplanade (Under Offer)

Q3 16 13 Esplanade - Appleby - £10,750,000 6.6%

26 New Street and Q1 15 Dumaresq House - Bedells Lawyer - £14,270,000 7% Trafalgar Court, Multilet - Northern Q1 15 - - £61,380,000 6.5% Guernsea Trust, Aztec (Stenprop) Ogier £27,000,000 Q1 15 Ogier House 75,946 Esplanade Ltd - (Standard Life) 7.5% Sir Walter Raleigh Multi Let - £6,450,000 Q1 15 House 21,114 50% vacant - (Valad) 7.33% CAPITAL ALLOWANCES

Unclaimed Capital Allowances maybe available to the purchaser. More details can be provided on request.

VAT

VAT is not applicable in Jersey. Goods and Services Tax (@ 5%) may be applicable. All figures quoted in this brochure are exclusive of GST and we would recommend that prospective purchasers make their own enquiries as to liability.

JERSEY CORPORATE STRUCTURE

Most acquisitions of Jersey commercial property are via a Jersey corporate structure. The benefits of structuring an acquisition in such a manner include:

· Significant potential Jersey stamp duty savings – the stamp duty rate for a direct purchase is 5% for properties with a value of over £2 million (with a lower rate for the first £2 million). No stamp duty should be payable on a purchase of a Jersey company holding the property (though an element of stamp duty is payable on registration of security). · More flexible ownership structure – a company enables you to have a more varied ownership structure, and makes any future changes to ownership percentages both simpler and cheaper. · Limited liability – shareholders in a company will have the usual limited liability protection that a limited company provides. · Potentially more attractive to lenders – Jersey law provides limited options for enforcing security directly over property, so holding the property via a company gives the lender potentially greater options and may therefore be more appealing to lenders. DEBT

Kimmre have secured indicative debt proposals from a number of banks which can be made available to potential purchasers.

The salient terms would be as follows:

• LTV – 55% • Margin – 2.55% over 3 month Libor • Term – 3 years

More information can be provided upon request.

PROPOSAL

Offers are invited in excess of £11,165,000 (Eleven Million and One Hundred and Sixty Five Thousand Pounds) for the freehold interest, subject to contract and exclusive of VAT / GST.

A purchase at this level would reflect a net initial yield of 7.25% after allowing for the purchaser’s costs of 6.14%.

PURCHASE RATIONALE

• A more stable occupational market that the main land UK. • 6 years unexpired to a secure international banking tenant. • Very low office vacancy rates. • High quality office accommodation. • Rental growth prospects. • Investing via a corporate structure will offer investors a tax efficient method of acquiring a secure and attractive investment. • Using the available debt package, will require equity of approximately £5.2m. • The addition of debt may enhance the equity returns over the investors hold period.

CONTACT DETAILS

For further information, or to arrange an inspection of the property, please contact:

Richard Peace MRICS Mike Burden MRICS Simon Buckley FRICS e: [email protected] e: [email protected] e: [email protected] t: +44 (0) 20 7952 6104 t: +44 (0) 20 7952 6103 t: +44 (0) 1534 880 880 m: +44 (0) 7870 649 217 m: +44 (0) 7815 305 180

5 South Molton Street, London, W1K 5QE www.kimmre.com

MISREPRESENTATION ACT 1967 Kimmeridge Real Estate Ltd and Buckley & Co on its own behalf and for vendors or lessors of this property, whose agent it is, gives notice that: 1. The particulars are produced in good faith, but are a general guide only and do not constitute any part of a contract. 2. No person in the employment of the agent(s) has any authority to make or give any representation or warranty whatsoever in relation to this property. 3. The property is offered subject to contract and unless otherwise stated all rents are quoted exclusive of VAT. 4. Nothing in these particulars should be deemed a statement that www.jrb-creative.com the property is in good condition, or that any services or facilities are in working order. 5. Unless otherwise stated, no investigations have been made regarding pollution, or potential land, air or water Hackney, London contamination. Interested parties are advised to carry out their own investigations if required. Publication Date: August 2016