The Energy Centre Le Bouet, St Peter Port, GY1 2BB

Long Income Utility Company Headquarters Opportunity INVESTMENT SUMMARY

Investment Summary Proposal

• High quality Guernsey headquarters office investment • Let in its entirety to Guernsey Gas Limited , Guernsey’s • Offers are invited in excess of £5,430,000 (Five totalling 23,640 sq ft. only gas provider, with 14.6 years unexpired term Million, Four Hundred and Thirty Thousand Pounds) certain. for the freehold interest, subject to contract. A • Excellent location in the capital of St Peter Port. purchase at this level reflects a net initial yield of • Rent passing at £355,000 per annum , which equates • Guernsey is one of the world’s leading offshore 6.44% after allowing for purchaser’s costs of 1.50%, to £15.02 per sq ft overall and only £20.00 per sq ft on banking and financial centres, home to occupiers assuming an acquisition of the SPV. the offices. including: Credit Suisse; PwC; Schroders; KPMG; Royal Bank of Canada; Deutsche Bank; BNP Paribas and • Benefit of upward only annual Guernsey Retail Price many more. Index increases (capped at 2.5% per annum) and coinciding three yearly upward only open market rent • Situated adjacent to the major development of Admiral reviews. Park, an established mixed use business park location, approximately 0.5 miles from St Peter Port’s prime • Excellent car parking ratio of 1:234 sq ft . offic e pitch , Glategny Esplanade. • Freehold . BORDEAUX HARBOUR

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R Guernsey Situation A O D U T

Guernsey forms part of the and covers The Energy Centre is prominently positioned on the east coast of E

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approximately 78 sq kilometres (30 sq miles). Guernsey is situated Guernsey, adjacent to Admiral Park, a major mixed use business

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U The Energy 50 km (31 miles) west of France’s coast, and 120 km (75 park situated approximately 0.8 km (0.5 miles) north of St Peter T S A E U N Q miles) south of Weymouth. St Peter Port, located on the eastern Port, Guernsey’s capital and main port. Admiral Park has a number C Centre N H A E B Z coast, is the island’s capital and commercial centre. of established office buildings situated to the east and north- S E eastern areas of The Energy Centre. Approximately 230,000 sq ft L Guernsey is a British Crown Dependency rather than part of the ET OU of office space is provided, with occupiers including: Northern D B P N RA I G . The island therefore benefits from its own T

R Trust; State Street Ban k; Can accord Genuity; ABN AMRO; O BOUET AZ F TE legislative assembly and is self-governing in all areas excluding N INA C NC IAL N GUERNSEY GUERNSEY SELF STORE AUTO Kleinwort Benson and Intertrust. E T HE NORTH ERN TRUST foreign affairs and defence. An independent fiscal and legal status RI COMPANY E R OAD W AITROSE ABN has established Guernsey as a leading global offshore financial A large utility plant, owned by the occupier, is strategically AMRO ADMIRAL

centre, with a large number of banking and finance sector situated adjacent to the north of the site, illustrating the B&Q PARK S

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occupiers. Guernsey has a gross domestic product of £2.355 billion importance of the location to the occupier. The site neighbours G

E O (2015 estimate) and a population of 63,001 (2015 estimate). further commercial uses to the north and north west, including a R G E ’S Waitrose superstore and B&Q warehouse, whilst eastern, southern E S The island is very well linked to the UK by sea and air with daily P L A and south-eastern boundaries are adjoined by residential premises. N A flights operating to destinations including: Gatwick; D E London City; London Stansted; Manchester; East Midlands; The Energy Centre is in close proximity to the prime office pitch, ST. PETER PORT

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Y Birmingham; Exeter and Southampton. Mainland is also Glategny Esplanade, which is located only 750m (0.46 miles) away. D N A G N E served with flights operational to Dinard, Düsseldorf and . T A L A L P S QUEEN ELIZABETH II Communication G E MARINA R OYA TE L RRA E CE GAT FRE LA Glategny Esplanade, St Peter Port 0.5 miles (0.80 km)

J. SA T GUERNSEY FR H SA A B YACHT RAS C U IN A L Y CLUB K Guernsey Ferry Terminal 0.9 miles (1.45 km) C , U LE OO 4.4 miles (7.08 km) - P G G S T, S E T THE T R GRANG O O 20 minutes LA O P B HARBOUR PETER Southampton 45 minutes

London Gatwick 50 minutes

London Stansted 1 hour 10 minutes London City 1 hour 25 minutes

DESCRIPTION

The Energy Centre

The Energy Centre was purpose built for Guernsey Gas in 2006 and comprises modern office, showroom and workshop accommodation totalling 23,640 sq ft, arranged over ground and first floors. The property is of a steel framed construction with profile cladding and PVC windows to its elevations, joint with a glazed frontage to the showroom customer entrance.

The ground floor of the premises comprises a modern expansive showroom, workshop and distribution store, whilst the first floor provides fully fitted office and ancillary space, operational as Guernsey Gas’ administrative headquarters. The office accommodation is predominantly open plan with some partitioned offices. The plan is for indicative purposes only The internal specification includes the following features:

• Quality sales showroom • Raised access floors • Passenger lift • Suspended ceilings • Air conditioning The property benefits from 101 car parking spaces providing an excellent ratio of 1:234 sq ft . Site

We understand the site has an estimated area of approximately 1.24 acres (0.50 ha) , providing a low site coverage of 31.7%.

101 car parking spaces providing an excellent ratio of 1:234 sq ft Accommodation Guernsey Retail Price Index

We have been provided with floor areas and understand that the The Guernsey Retail Price Index has averaged an annual change of property provides the following areas, in accordance with the RICS 2.3% between June 2011 and June 2016 (Guernsey Quarterly Inflation Code of Measuring Practice (6th Edition): Bulletin).

The Guernsey Policy & Resources Committee have a GRPI target rate Floor Description Basis Area (sq m) Area (sq ft) of 3%, which they hope to attain by mid-2017. A target of 3% illustrates excellent potential for maximising annual rental uplifts through Ground Showroom NIA 235.8 2,538 achieving increases at the cap level of 2.5%. Ground Workshop/Ancillary GIA 846.7 9,114

First Offices NIA 1,113.7 11,988 Covenant Information Guernsey Gas Limited (Guernsey Reg Number: 19923) Total 2,196.2 23,640 Guernsey Gas Limited was incorporated in January 1911 and supplies and distributes gas on the island. They are Guernsey’s only gas Tenure provider and have remained privatised as compared to Guernsey’s electrical and water suppliers, who are ultimately controlled by the The property is held freehold. . The company also provides gas maintenance and installation services, as well as retailing a variety of appliances and Tenancy electrical equipment at the subject property’s on-site showroom.

The property is let in its entirety to Guernsey Gas Limited for a term Guernsey Gas is one of five operating companies under ownership of of 15 years from 28th April 2016 on a Full Repairing and Insuring the International Energy Group ( IEG), who also own gas providers in Lease, expiring on 27th April 2031, providing a term certain of 14.6 the offshore centres of Jersey (Jersey Gas Company Limited) and The years unexpired . The current passing rent is £355,000 per annum (Manx Gas Limited). IEG has more than 40,000 customers (£15.02 per sq ft overall) and is subject to upward only Guernsey connected to its networks and has been supplying gas in the Channel Retail Price Index ( GRPI) increases, compounded annually and Islands and the Isle of Man since the 1830s. capped at 2.5% per annum . There is also a coinciding three yearly The International Energy Group was acquired by Ancala Partners LLP upwards only open market rent review mechanism, reviewed to the in May 2016 for its UK Infrastructure Platform. Ancala is a long-term higher of the preceding rent or market rent. infrastructure investor, investing on behalf of pension plans. The company do not disclose their financial records and are registered in Guernsey. OFFICE MARKET OVERVIEW

Guernsey Market

Guernsey’s office market is concentrated around St Peter Port at the Rents in Guernsey are higher than in Jersey and provincial UK, with the mixed use development areas of Admiral Park and Glategny Esplanade. office market underpinned by the strength of the international offshore There is very limited office provision outside of these core areas and financial services industry and the local business community. Prime supply has not changed considerably over recent years due to tight rents in Guernsey currently stand at c£40-43 per sq ft, as evidenced by planning controls limiting new build supply. rents achieved at Admiral Park and Royal Chambers.

Channel Islands Investment Market The following represent some of the more comparable investment transactions in the Channel Islands:

Area Cap Val Date Property WAULT Price NIY Purchaser (sq ft) psf

Martello Court & Dorey Court, Admiral Park Jun-15 87,400 8.75 £49,500,000 6.66% £56 6 Brockton Capital St Peter Port, Guernsey

Apr-15 Carey House, St Peter Port, Guernsey 26,813 14.00 £16,750,000 6.83% £625 Channel Islands Property Fund

Sir Walter Raleigh House, 48-50 Esplanade, Mar-15 20,871 5.56 £6,450,000 7.33% £309 Valad Europe ( VEDF) St Helier, Jersey Trafalgar Court, Admiral Park, St Peter Port Feb-15 113,713 12.10 £61,380,000 6.75% £540 Strenprop Limited Guernsey

Jan -15 Ogier House, 44 Esplanade, St Helier, Jersey 75,939 6.84 £27,000,000 7.50% £356 Standard Life

Sep -14 40 Esplanade, St Helier, Jersey 23,614 5.63 £7,700,000 7.79% £326 Channel Islands Property Fund

Jul-13 17a/18 Esplanade, St Helier, Jersey 29,235 11.00 £11,700,000 6.36% £40 0 Channel Islands Property Fund PROPOSAL

Investment Rationale

Long income opportunity offering an attractive Net Initial Yield.

Fully income producing and let to Guernsey Gas Ltd, Guernsey’s only gas provider, who occupy the premises as their headquarters.

Low base rent of £15.02 per sq ft overall and only £20.00 per sq ft on the offices.

Benefit of upward only annual Guernsey Retail Price Index increases (capped at 2.5% per annum) and coinciding three yearly upward only open market rent reviews.

Strategically located for the tenant who owns the adjoining utility site to the north of The Energy Centre.

Offers are invited in excess of £ 5,430,000 (Five Million, Four Hundred and Thirty Thousand Prominently situated a djacent to Admiral Park Pounds) for the freehold interest, subject to contract. A purchase at this level would reflect a n et initial and within only 750m walking distance of the prime office pitch in Guernsey. yield of 6.44%, after allowing for purchaser’s costs of 1.50% assuming an acquisition of the S PV.

Assuming a purchase at this level, an average annual GRPI increase of 2.5% provides an attractive running yield profile, as illustrated below: VAT Review Rent Running Yield Rent P.sq.ft. Overall Review Rent Running Yield Rent P.sq.ft. Overall Currently neither VAT nor GST (Goods and Services Tax) are Current £355,000 6.44% £15.02 Apr-24 £432,533 7.85% £18.30 applicable in Guernsey. Apr-17 £363,875 6.60% £15.39 Apr-25 £443,346 8.04% £18.75 Apr-18 £372,972 6.77% £15.78 Apr-26 £454,430 8.24% £19.22 Apr-19 £382,296 6.94% £16.17 Web Access Apr-27 £465,791 8.45% £19.70 Apr-20 £391,854 7.11% £16.58 www. cushwakesales.com/cw/energycentre Apr-21 £401,650 7.29% £16.99 Apr-28 £477,436 8.66% £20.20 Apr-22 £411,691 7.47% £17.42 Apr-29 £489,371 8.88% £20.70 Apr-23 £421,983 7.66% £17.85 Apr-30 £501,606 9.10% £21.22 OUR TEAM

Cushman & Wakefield LLP Chris Lewis Jason Pickering 43/45 Portman Square E: chris.lewis @cushwake.com E: j ason.pickering @cushwake.com London W1A 3BG T: +44 (0) 207 152 5554 T: +44 (0) 207 152 5131

Buckley and Company Simon Buckley Dermot Hughes One Esplanade E: simon@ buckleyandcompany.co.uk E: dermot@ buckleyandcompany.co.uk St Helier, Jersey T: +44 (0) 1534 880880 T: +44 (0) 1534 880880 Channel Islands JE4 8TT

September 2016 MISREPRESENTATION ACT 1967 Cushman & Wakefield LLP (and their joint agents if appointed) for themselves and for vendors or lessors of this property whose agents they are, give notice that: (1) The particulars are produced in good faith, are set out as 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 whatever in relation to this property. (3) This 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 to be a statement that 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 contamination. Interested parties are advised to carry out their own investigations if required. Production by PlusArt Limited 0115 972 4000