Exeter Exeter John Lewis - Exeter

JOHN LEWIS - EXETER EXETER JOHN LEWIS - EXETER

INVESTMENT SUMMARY

• Exeter is an historic Cathedral and University city located in the south west of England and the principal commercial centre for Devon.

• Prime location fronting the High Street and Sidwell Street, directly opposite the Princesshay Shopping Centre.

• Modern department store totalling 108,460 sq ft.

• Let to John Lewis Plc for a term of 20 years from 25th September 2012 at a current rent of £925,000 per annum, with fixed increases at 5 yearly intervals.

• The only John Lewis department store in Devon and Cornwall.

• Long leasehold interest from Exeter City Council for a term of 125 years from 3rd October 2011 at a peppercorn.

• Offers are invited in excess of £19,450,000 (Nineteen Million, Four Hundred and Fifty Thousands pounds), subject to contract and exclusive of VAT. A purchase at this level will reflect the following yield profile assuming costs of acquisition of 5.8%:

Net Initial Yield: 4.50%

September 2017: 4.94% September 2022: 5.56% September 2027: 6.26%

Equivalent Yield: 5.55% JOHN LEWIS - EXETER

LOCATION Exeter is an historic Cathedral and University city located in the south west of England and the principal commercial centre of Devon. The city is located approximately 130 km (81 miles) south west of Bristol, 72 km (45 miles) east of Plymouth and 280 km (175 miles) west of London.

Exeter benefits from excellent transport links being located at the southern end of the M5 which links with the M4 and the national motorway network. To the west of Exeter is the A38 (Devon Expressway) giving direct access to Plymouth and the A30 to Cornwall. The A30 also links the A303 to the east, providing a trunk road connection to the M3 motorway and thereon to London.

The City has a comprehensive rail service which links to the national rail network from both Exeter Central and Exeter St David’s. Fastest journey times to London Paddington is approximately 2.5 hours and to London Waterloo 3.5 hours.

Exeter International Airport is located 6 miles to the east of the city with a range of UK and International flights to destinations that include Geneva, Madrid, Munich, Nice, Dublin and Edinburgh.

A49 A483 Milton Keynes M1 A429 M42 M11 A4137 Gloucester A455 A40 Oxford M5 M25 A420 Swansea A46 A34 M4 Reading Cardiff Bristol M4 LONDON A346 M25 M3 Basingstoke A303 Guildford M23 A31 M5 Bideford A303 Salisbury A3 A361 A350 A272

A303 A37 M27 A377 A27 A386 Southampton Brighton A30 Portsmouth A35 A30 Bournemouth Isle of EXETER Wight Exmouth Weymouth A386 A38

Plymouth JOHN LEWIS - EXETER

BUS STATION SITE

T E E T R S G H H I PRINCESSHAY JOHN LEWIS - EXETER

SITUATION The property comprises a flagship building that dominates the city and is prominently situated at the junction of High Street with Sidwell Street and Paris Street. This location now comprises the prime retail pitch at the northern end of the partially pedestrianised High Street opposite the Princesshay Shopping Centre. Major retailers in close proximity include Next, H&M, River Island, GAP, Boots and Debenhams.

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JOHN LEWIS - EXETER

RETAILING IN EXETER Exeter is a well-established and thriving retail centre providing one of Devon’s primary

FOOT CLINIC shopping destinations with a total floor space estimated to be in excess of 1.39 million sq ft. The prime retail pitches are located within the pedestrianised section of the High Street between the Guildhall Centre and the John Lewis department store and Princesshay Shopping Centre.

Land Securities Plc developed Princesshay Shopping Centre which opened in 2007. The centre extends to approximately 530,000 sq ft of retail space, anchored by a 130,000 sq ft Debenhams store. Other retailers within Princesshay include Top Shop, Zara, Hollister, New Look, Fat Face and Superdry.

The owners of Princesshay Shopping Centre, The Crown Estate and TH Real Estate are considering the redevelopment of the Bus Station opposite the John Lewis. It is currently proposed that the scheme would be accessed from Paris Street and comprise a mixed-use retail and leisure development. The city council are also proposing a leisure centre towards the rear of the site. This scheme will further strengthen the city’s retail and leisure offer whilst consolidating the prime retail pitch around the junction of Paris Street and Sidwell Street.

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JOHN LEWIS - EXETER JOHN LEWIS - EXETER

DESCRIPTION The property comprises the former Debenhams department store and is arranged over basement, lower ground, ground, and first to seventh floors. The building was originally constructed in the early 1960s before a comprehensive refurbishment in 2011. This refurbishment involved stripping the building back to the frame and extending the corner element fronting Paris Street and Sidwell Street. The striking curved glazed façade which extends to four floors now dominates the High Street.

John Lewis trade on lower ground, ground and three upper floors with a café at the fourth floor with external seating. The remaining upper parts are used for a combination of staff, administration and storage areas. The building is served by 3 passenger lifts, 2 goods lifts and an additional lift with escalators serving the trading areas.

The King William Street car park (425 spaces) is owned and operated by the City Council and was rebranded the John Lewis Car Park and refurbished at the time of the store refurbishment. This provides customers access to the rear of the property. Additionally the Council carried out improvement works to the public realm to the front of the property.

The property is serviced from the service yard to the rear (hatched green below). This area is owned by the Council and the property benefits from shared rights of access.

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u A 4 rs a R e ll IS 0m 25m o50m 75m f) ST REE 43.3m T ED & Ward Bdy Sh E elte a r Ordnance Survey s© Crown Copyright 2015. All rights reserved. Licence number 100022432. Plotted Scale - 1:1250 tg a Note: The teextent of the property shown edged red is approximate and shown for indicative purposes only. A plan showing the Legal Title can be provided upon request. JOHN LEWIS - EXETER

TENANCY ACCOMMODATION The property is let in its entirety to John Lewis Plc for a term of 20 years from 25th September 2012 The property was measured and the areas agreed for the pre-letting at 108,460 sq ft NIA, arranged expiring on 24th September 2032 (approximately 17 years unexpired). on basement, ground and seven floors above. We have adopted this area for the rental analysis. The building actually measures approximately 10,419 sq m (112,149 sq ft). The lease is subject to 5 yearly upward only rent reviews which are fixed throughout the term as follows:

The individual floor areas are as follows: Date Rent (per annum) Rent (per sq ft) Fixed Uplift Accommodation Net Internal Area Net Internal Area Current £925,000 £8.53 - (sq m) (sq ft) 25/09/2017 £1,017,500 £9.38 10% Basement 803 8,643 25/09/2022 £1,144,687 £10.55 12.5% Lower Ground 1,448 15,586 25/09/2027 £1,287,773 £11.87 12.5% Ground 1,391 14,973 24/09/2032 Higher of passing rent or - - OMRV assuming the tenant First 1,412 15,199 exercises the right to renew Second 1,394 15,005 the lease (see below) Third 1,387 14,929 Fourth 618 6,652 The tenant has the right to renew the lease twice on the same terms for periods of 10 years, in each Fifth 693 7,459 case subject to an upward only review at the commencement of each renewal lease and a further upward only review to open market value at the fifth year. Should the tenant exercise both rights to Sixth 676 7,277 renew the lease the rent is therefore upwards only for a period expiring on 24th September 2052 Seventh 597 6,426 (approximately 37 years). Total 10,419 112,149

The gross internal floor area is approximately 137,000 sq ft. The property is held on full repairing and insuring terms and the rent is paid on the first day of each month. JOHN LEWIS - EXETER JOHN LEWIS - EXETER

RENTAL COMMENTARY PROPOSAL The prime pitch of High Street is now 100% fully let with retail demand at a five year high. The property is jointly owned 50/50 by Ravenseft Properties Limited (Land Securities) and The Crown Estate in a leasehold arrangement. For the avoidance of doubt both long leasehold interests The fixed rental increases at each fifth year are set out above. The current rent equates to £8.53psf rising are offered for sale. to £11.87 psf in 2027 on the net internal area. In our opinion, the final rent is in line with today’s current open market rental value and with the benefit of rental growth there is the opportunity for this to be Offers are invited in excess of £19,450,000 (Nineteen Million Four Hundred and Fifty Thousand exceeded. Pounds) subject to contract and exclusive of VAT. A purchase at this level will reflect the following yield profile assuming costs of acquisition of 5.8%:

COVENANT Net Initial Yield: 4.50% John Lewis PLC (Company No.233462) is one of the UK’s leading retailers and the largest employee owned partnership in the UK. The John Lewis Partnership has approximately 93,800 full September 2017: 4.94% time members of staff who as Partners own 43 John Lewis shops across the UK (31 department September 2022: 5.56% stores, 10 John Lewis at home and shops at St Pancras International and Heathrow Terminal 2), September 2027: 6.26% 338 Waitrose supermarkets (www.waitrose.com), an online and catalogue business, johnlewis. com (www.johnlewis.com), a production unit and a farm. The business has annual gross sales of Equivalent Yield: 5.55% over £10bn. John Lewis Plc has a current D&B rating of 5A 1 and reported the following financial information for the last three years:

Year Ending 31st January 25th January 26th January 2015 2014 2013 Turnover £9,701,000,000 £9,027,800,000 £8,465,500,000 Pre-Tax Profits £193,300,000 £126,100,000 £198,000,000 Net Worth £1,182,700,000 £1,514,600,000 £1,687,500,000

The subject property is the only John Lewis department store in Devon and Cornwall. TENURE Long leasehold for Exeter City Council for a term of 125 years from 3rd October 2011 at a peppercorn rent. The property benefits from rights of way across the service yard to the rear.

VAT The property is elected for VAT and VAT will therefore be chargeable on the purchase price if it is not possible to arrange this transaction by way of a transfer of a going concern.

EPC The property has an EPC Assessment Rating of C73. FURTHER INFORMATION

For further information or to arrange an inspection to view, please contact: Julian Griffiths Rupert Guy or or Matthew Joyce Nick Morgan

Griffiths Eccles LLP Kitchen LaFrenais Morgan 23 Princes Street Langham House London 302-308 Regent Street W1B 2LU London W1B 3AT

Tel: 020 7499 0550 Tel: 020 7317 3700

[email protected] [email protected] [email protected] [email protected]

NOTICE Griffiths Eccles LLP and Kitchen LaFrenais Morgan for themselves and for the vendors or lessors of this property for whom they act, give notice that: (i) these particulars are a general outline only, for the guidance of prospective purchasers or tenants, and do not constitute the whole or any part of an offer or contract; (ii) Griffiths Eccles LLP and Kitchen LaFrenais Morgan cannot guarantee the accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and other details contained herein and prospective purchasers or tenants must not rely on them as statements or fact or representations and must satisfy themselves as to their accuracy; (iii) rents quoted in these particulars may be subject to VAT in addition; (iv) Griffiths Eccles LLP and Kitchen LaFrenais Morgan will not be liable, in negligence or otherwise, for any loss arising from the use of these particulars; and (v) the reference to any plant, machinery, equipment, services, fixtures or fittings at the property shall not constitute a representation (unless otherwise stated) as to its state or condition or that it is capable of fulfilling its intended function. Prospective purchasers/tenants should satisfy themselves as to the fitness of such items for their requirements. (vi) no employee of Griffiths Eccles LLP and Kitchen LaFrenais Morgan has any authority to make or give any representation or warranty or enter into any contract whatever in relation to this property; (vii) the information contained in these Particulars has been prepared as at July 2015.

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