Appendix A: Maps and Plans Cushman & Wakefield | Morgan Stanley Bank N.A. Valuation of: Holiday Inn Express, Edinburgh Waterfront, Valuation Date: 1 May 2019 Ocean Drive, Edinburgh, EH6 6LA APPENDIX A: MAPS AND PLANS 19 About Cushman & Wakefield Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop and live. The firm's 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for our clients. Cushman & Wakefield is among the largest commercial real estate services firms, with core services of agency leasing, asset services, capital markets, facility services, global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter. © Cushman & Wakefield 2017 Ordnance Survey © Crown Copyright 2017. All rights reserved. Licence number 100022432. Plotted Scale - 1:1000000 Holiday Inn Express Edinburgh Waterfront, Britannia Way, Ocean Drive, Edinburgh, EH6 6JJ Ordnance Survey © Crown Copyright 2017. All rights reserved. Licence number 100022432. Plotted Scale - 1:7500 Holiday Inn Express Edinburgh Waterfront, Britannia Way, Ocean Drive, Edinburgh, EH6 6JJ Holiday Inn Express, Edinburgh Waterfront, Ocean Drive, Edinburgh, EH6 6LA 8 1 P O R TL A W N D O R G D A N R A D L E T N 7 S 2 Sports Facility 0 2 1 o t 6 3 1 6 1 E Hotel V I R 10 D 1 N A E 4 5 C O m 9 1 . 95 t 4 o 2 00 El Sub Sta e 6.4m TCB 150 4 2 Po 3 rt 2 la 2 n 5.5m 2 d Pl 1 ac 14 PH 2 e 8 0 2 o t 8 1 1 7 1 14 PH 16 6 o Posts t 3 14 7 3 1 1 Posts to 4 4 0 0m 25m NORTH50m 75m1 9 9 9 Shelter 1 1 1 LEITH Gov ern 4.9m 14 me 2 Ordnance Survey © Crown Copyright 2019. All rights reserved. Licence number 100022432. Plotted Scale - 1:1454 This plan is published for convenience of identification. Any site boundaries shown are indicative only and should be checked against Title Deeds. About Cushman & Wakefield Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop and live. The firm's 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for our clients. Cushman & Wakefield is among the largest commercial real estate services firms, with core services of agency leasing, asset services, capital markets, facility services, global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter. © Cushman & Wakefield 2017 Valuation of: Holiday Inn Express, Exeter Business Park, Guardian Road, Exeter EX1 3PE Prepared for Morgan Stanley Bank N.A. Valuation Date: 1 May 2019 1 Executive Summary Cushman & Wakefield | Morgan Stanley Bank N.A. Valuation of: Holiday Inn Express, Exeter Business Park, Valuation Date: 1 May 2019 Guardian Road, Exeter EX1 3PE TABLE OF CONTENTS Executive Summary ........................................................................................ 1 Property Record .............................................................................................. 3 1. Location ........................................................................................................................... 3 2. Description & Accommodation ........................................................................................ 4 3. Structural Condition and Repair ...................................................................................... 6 4. Statutory Enquiries .......................................................................................................... 7 5. Tenure and Management ................................................................................................ 8 6. Operational Structure ...................................................................................................... 8 7. Local Hotel Market Analysis ............................................................................................ 8 8. Business Analysis ......................................................................................................... 10 9. C&W Trading Projections .............................................................................................. 13 10. Principal Valuation Considerations ............................................................................... 16 Appendix A: Maps and Plans ........................................................................ 19 2 Executive Summary Cushman & Wakefield | Morgan Stanley Bank N.A. Valuation of: Holiday Inn Express, Exeter Business Park, Valuation Date: 1 May 2019 Guardian Road, Exeter EX1 3PE EXECUTIVE SUMMARY This summary is strictly confidential to you as the Addressee. It must not be copied, distributed or considered in isolation from the full report. Property Summary Location The hotel lies less than three miles away from Exeter airport and approximately three miles away from Exeter St David’s Train Station. Description The hotel comprises 149 guest bedrooms with ancillary Great Room and one conference and two syndicate rooms. The property was constructed in approximately 1998. Condition Good Tenure Long leasehold Operating Structure Owner operator Trading Performance Year 2017 2018 2019 (2+10) forecast Occupancy 87.50% 86.58% 86.63% ADR £65.85 £65.42 £67.68 RevPAR £57.62 £56.64 £58.64 Total Revenue £3,409,169 £3,378,006 £3,491,474 NOI (post FF&E)* £1,286,991 £1,305,410 £1,087,856 Profit Margin 37.8% 38.6% 31.2% *2019 figures include the proposed ground rent payable. C&W Trading Projections Year Year 1 Year 2 Year 3 Occupancy 86.00% 86.00% 86.00% ADR £69.00 £70.38 £71.79 RevPAR £59.34 £60.53 £61.74 Total Revenue £3,533,106 £3,603,768 £3,675,843 NOI (post FF&E and £1,039,098 £1,059,880 £1,081,077 ground rent) Profit Margin 29.4% 29.4% 29.4% Market Value and Yields Valuation Date 1 May 2019 Market Value £11,900,000 Capitalisation Rate 8.75% Discount Rate 10.75% 1 Executive Summary Cushman & Wakefield | Morgan Stanley Bank N.A. Valuation of: Holiday Inn Express, Exeter Business Park, Valuation Date: 1 May 2019 Guardian Road, Exeter EX1 3PE Gross Initial Yield 8.75% Capital expenditure None deducted from gross valuation Loan security We consider the Property represents adequate security against a loan over the proposed period. Liquidity Reasonable subject to the comments in the property record and the head report. Key Investment / Market Considerations for Loan Security Strengths / Opportunities • Well located; • Strong hotel demand in local area; Weaknesses / Risks • Hotel older than several competitors; • New Atlas hotel now open in Exeter city centre. 2 Property Record Cushman & Wakefield | Morgan Stanley Bank N.A. Valuation of: Holiday Inn Express, Exeter Business Park, Valuation Date: 1 May 2019 Guardian Road, Exeter EX1 3PE PROPERTY RECORD Inspection The Property was subject to an external inspection, from ground level and an internal inspection, on 8 May 2019. The inspection was undertaken by Ian Thompson. 1. Location 1.1. Location General The hotel is well located, lying near junction 29 of the M5 to the east of the Honiton Road roundabout, where the A30 becomes the A3015. The hotel lies less than three miles away from Exeter airport and approximately three miles away from Exeter St David’s Train Station. Exeter is one of two large urban centres within the rural county of Devon, alongside Plymouth (Exeter Council,2019). The city is on the River Exe, about 37 miles (60 km) northeast of Plymouth, and 70 miles (110 km) southwest of Bristol. According to the latest estimated in mid- 2017, Exeter count a resident population of 128,916 (ONS, 2017). Around 35,000 people commute into Exeter on a daily basis, from nearby surrounding towns and the Council records that there are 4,877 registered companies registered for business rates in the City (Exeter City Council, 2019). Exeter provides services, employment and shopping for residents within the city limits and from nearby towns in Teignbridge, Mid Devon and East Devon, together sometimes known as the Exeter & Heart of Devon area (EHOD). The Met Office, the main weather forecasting organisation for the United Kingdom and one of the most significant in the world, relocated from Bracknell in Berkshire to Exeter in early 2004. It is 3 Property Record Cushman & Wakefield | Morgan Stanley Bank N.A. Valuation of: Holiday Inn Express, Exeter Business Park, Valuation Date: 1 May 2019 Guardian Road, Exeter EX1 3PE one of the three largest employers in the area (together with the University of Exeter and Devon County Council). Although Exeter contains a number of tourist attractions, the city is not dominated by tourism. Exeter’s transport hubs include Exeter St Davids railway station, Exeter Central railway station, the M5 motorway and Exeter International Airport connecting the city both nationally and internationally. Site Boundary The plan above is shown for indication purposes only and many not accord strictly with the title plan which we have reviewed. 2. Description & Accommodation Summary The hotel comprises 149 guest bedrooms with Great Room and one conference and two syndicate rooms. The property was constructed in 1998 and comprises ground and three upper floors of brick construction underneath a pitched tiled roof. The fenestration comprises UPVC framed double