Jones Lang LaSalle Valuation Advisory Client: Morgan Stanley Bank N.A. Property: Citypoint, 1 Ropemaker Street, London EC2 October 2018 Property: Citypoint, 1 Ropemaker Street, London EC2 October 2018 Contents 1. Location ..................................................................................................................................... 1 1.1. Location .................................................................................................................................................................................... 1 1.2. Communications ..................................................................................................................................................................... 3 1.3. Situation .................................................................................................................................................................................... 6 2. Description ............................................................................................................................... 14 2.1. Site ........................................................................................................................................................................................... 14 2.2. Property................................................................................................................................................................................... 15 2.3. Construction .......................................................................................................................................................................... 16 2.4. Accommodation.................................................................................................................................................................... 20 2.5. State of Repair ....................................................................................................................................................................... 23 2.6. Environmental Considerations .......................................................................................................................................... 25 2.7. Sustainability Considerations ............................................................................................................................................ 26 3. Legal ........................................................................................................................................ 28 3.1. Title Review ............................................................................................................................................................................ 28 3.2. Tenancies ................................................................................................................................................................................ 32 3.3. Covenant Status .................................................................................................................................................................... 36 3.4. Income Analysis ..................................................................................................................................................................... 39 3.5. Planning .................................................................................................................................................................................. 41 3.6. Rating Assessment ................................................................................................................................................................ 43 3.7. Stamp Duty Land Tax ........................................................................................................................................................... 43 4. Market Commentary ................................................................................................................. 44 4.1. UK Economy ........................................................................................................................................................................... 44 4.2. Property Market Overview ................................................................................................................................................... 45 4.3. Local Market Review – City of London Offices Q3 2018 ................................................................................................. 46 4.4. City of London Retail Provision .......................................................................................................................................... 50 5. Valuation Commentary ............................................................................................................. 53 5.1. Rental Evidence and Considerations ................................................................................................................................ 53 5.2. Estimated Rental Value ........................................................................................................................................................ 68 5.3. Market Rent ............................................................................................................................................................................ 72 5.4. Investment Comparables and Investment Considerations ......................................................................................... 72 5.5. Valuation Approach .............................................................................................................................................................. 85 5.6. Historic Market Analysis ....................................................................................................................................................... 87 5.7. Loan Security Commentary ................................................................................................................................................ 90 5.8. Highest and Best Use ........................................................................................................................................................... 92 5.9. Suitability for Loan Security Purposes .............................................................................................................................. 92 6. Valuation .................................................................................................................................. 93 6.1. Market Value ........................................................................................................................................................................... 93 6.2. Market Value on the Special Assumption of Vacant Possession ................................................................................. 93 6.3. Reinstatement Valuation ..................................................................................................................................................... 93 6.4. Confidentiality and Publication ......................................................................................................................................... 93 © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. Property: Citypoint, 1 Ropemaker Street, London EC2 October 2018 Appendices Appendix 1 ......................................................................................................................................... Letter of Instruction Appendix 2 ........................................................................................................................ General Terms and Conditions Appendix 2 ............................................................................................................................................ General Principles Appendix 2 ............................................................................................................................... Definition of Market Value Appendix 2 .................................................................................................................................Definition of Market Rent Appendix 3 ................................................................................................................................. Location Plans and Maps Appendix 4 .................................................................................................................................................... Photographs Appendix 5 ............................................................................................................................................... Rateable Values Appendix 6 ............................................................................................................................................ Tenancy Schedule Appendix 7 .......................................................................................................................................... Valuation Print-Out © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. Property: Citypoint, 1 Ropemaker Street, London EC2 October 2018 Citypoint, 1 Ropemaker Street, London EC2 Executive Summary Key Property Facts Inspection Basis: Internal inspection Macro Location: National Micro Location: Prime Sector: Office County: London - City Total Property Area: 708,954 sq ft Tenure: Freehold Number of Tenants: 32 tenants on 50 leases / licences Percentage Vacant: 4.1%