Property Management. Real EstateUpdate MARKET PERFORMANCEREPORT. #OPMRealUpdate

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1 2017MARKET PERFORMANCEREPORT

2 INTRODUCTION Throughout 2017, the Real Estate industry begun going through a seismic change. A range of factors in 2017, both political and economic have played a significant role in shaping the market into what it is today. We have seen radically altered percentages in capital growth and rental yields across the UK. This shifting paradigm continues to persist as we look back on the struggles of the prime London property market and the thriving economy of cities in the North of England. Welcome to our annual Real Estate Report, we hope you enjoy the read. Klaudia Bacinska Brand Manager klaudia@fitzp.com Tel: AboutThisReport (OPM) employs a specialist team of property professionals, independently skilled in a variety of fields. It is our duty to keep up to date with the latest trends and patterns of the Real Estate Market. This document was created to share our knowledge with those who share the same passion and curiosity about the property market as we do. Using trusted external research in the likes of RICS, National Office for Statistics, ARLA etc. as well as our own internal data, our team have collated a review of the real estate market in the past 12 months focusing on the objective performance in the UK, London, as well as a more acute review of the current up and coming London investment area- Royal Victoria. MEET THE TEAM WhoWeAre OPM is an award winning boutique estate agency offering sales, lettings and comprehensive management services for properties across East and Central London. Part of a development company, OPM was formally established as an Estate Agency in 2008 following the completion of "The ", a luxurious new build complex in London Docklands. Our goal is to syndicate traditional values and services with contemporary advances and sophisticated marketing tools to provide each one of our clients with a unique service, tailored to meet individual needs and aspirations. Thanks to the long standing relationships we have developed over the years, today we are an established point of call for all commercial and residential needs. MORE ABOUT US

3 RealEstateVariables RealEstateVariables CONTENTS The Headlines Page 02 The Royal Institute of Chartered Surveyors (RICS) have confirmed that recent political uncertainty and the aftermath of tax changes are central obstacles hindering the UK housing market. Take a look at the key 2017 headlines which have shaped the Real Estate Market. PAGE 01 TAKE ME THERE Real Estate Variables Impact Page 04 An insight into the impact of political and economic variables on the Real Estate Market. 2017YearInReview 2017YearInReview RoyalVictoriaInvestment RoyalVictoriaInvestment PAGE 05 TAKE ME THERE UK Property Performance Page 06 An insight into Market Performance across the UK in the last 12 months. London Property Performance Page 08 Examine London Borough performance over the past 12 months Market Forecast Page 10 Potential movement of the Real Estate market in PAGE 11 TAKE ME THERE Why Royal Victoria Page 13 Indicators of why Royal Victoria is a worthwhile future investment. Royal Victoria Developments Page 14 List of current and upcoming developments likely to have a positive impact on property in Royal Victoria. Royal Victoria Property Peformance Page 15 A review of property performance in Royal Victoria.

4 RealEstateVariables The value of Real Estate capital in both sales and rental terms is influenced by external variables which drive the UK housing market has hosted a number of such variables both political and economic, which have laid the foundations for its performance over the last 12 months and in the months ahead.

5 RealEstateVariables 2017 HEADLINES Key Political & Economic Variables: "Perhaps not surprisingly in the current environment, the term uncertainty is featuring more heavily in the feedback we are receiving from professionals working in the sector. This seems to be exerting itself on transaction levels which are flatlining and may continue to do so for a while particularly given ongoing challenges presented by the low level of stock on the market." Simon Rubinson RICS Chief Economist Source: Business Insider, July 2017 The UK Real Estate Market has lived through a challenging year. A range of factors have colluded to deliver more moderate capital growth and income yields and are set to do so in the years to come. The Royal Institute of Chartered Surveyors (RICS) have confirmed that recent political uncertainty and the aftermath of tax changes are central obstacles hindering the UK housing market. The EU referendum and Brexit negotiations, general elections, stamp duty changes, a rise in interest rates amongst other political & economic events are all factors which have led the real estate market into a state of "uncertainty". Here is a round up of key 2017 headlines responsible for the markets current position. BREXIT NEGOTIATIONS The future movement of the Real Estate market depends on the course Brexit negotiations take, which at this stage are still uncertain. There is much speculation over what will happen next, theories predicting both decline and growth in the market. Consequently there is less movement on the horizon as those wishing to sell, invest, buy, let or rent become more cautious and hesitant in making the smallest financial decisions. This has played a significant role in capping market growth since the EU Referendum results were announced in June GENERAL ELECTIONS Building up to the snap General Elections on the 8th June 2017, followed by a hung Parliament result, the political standing has generated further stances of uncertainty causing ancillary stagnation in the UK Real Estate Market. RICS Market Survey in June 2017 showed that 44% of respondents nationally believe domestic political uncertainty is the biggest factor explaining the current state of the market compared to 27% who highlighted Brexit as the cause. INTEREST RATES For the first time in more than 10 years, the Bank of England raised interest rates, lifting from 0.25% to 0.5% in November Mark Carney, governor of Bank of England predicts the UK economy will grow at about 1.7% in the next few years, which would require two more events where interest rates increase over the next three years. The uplift has raised higher mortgage repayments for nearly 4 million households across the UK on a variable mortgage deal. Depositors should see the meagre returns they currently receive on their current account deposits improve slightly. AUTUMN BUDGET 2017 The November Autumn Budget announcement by Chancellor Philip Hammond promised to fix the housing market with investment, planning reform and tax cuts for first time buyers. Stamp duty was scrapped for first time buyers on properties up to 300,000. In London and other property hotspots, stamp duty would be axed on the first 300,ooo to 500,000 purchase price. This will generate more movement on the demand side and will potentially lead to a rise in asking prices which have seen a record decline in CONTINUED >>

6 "Solving the housing challenge takes more than money. It takes planning reform. We will focus on the urban areas where people want to live and where most jobs are created.and commit to building 1 million homes by 2050." Chancellor Philip Hammond The Autumn Statement Wednesday 22 November 2017

7 Update Real Estate RealEstateVariables << CONTINUED FISCAL POLICY The UK's inflation rate climbed to its highest in more than five years in August 2017, running above the governments' target of 2%. The containment of inflation will be achieved through marginal bank rate increases. Following the November 2017 increase, two more interest rate increases are predicted in the coming years to help cool the rise of UK s inflation rates. This, in essence, is likely to discourage some buyers with higher mortgage rates from lenders. RealEstateVariables-Impact The 2017 RICS UK Residential Market Survey showed clear signs of these real Estate Variables in effect. Both demand and sales continue to soften at the national level, with most regions displaying a flat to negative trend in the latest results. SALESMARKET National PricesRICS Economics, October 2017 POPULATION GROWTH The UK population grew to an estimated 65.1 million in 2015, the largest ever increase (over half a million) within a year*1. Recent uplifts in population growth have generally coincided with an increase in the number of countries holding EU membership. With Brexit negotiations in place, population growth has eased and is predicted to grow more steadily in the coming years. This will ease off the high demand for housing and create a more competitive market for both sales and lettings. Source: *1- National Office for Statistics LETTINGSMARKET National Tenant DemandRICS Economics, October 2017

8 2017YearInReview Investing for growth or income? Realising a profitable return on property investment is becoming increasingly more difficult. Prospective landlords need to go into property investment armed with statistical facts which help them determine if their investment is set for growth or income.

9 UK PERFORMANCE Key Real Estate figures of 2017 Over the last 12 months, the market has experienced both an interesting and hostile environment. Using research and external data, to follow are a number of performance highlights from the last 12 months. CAPITALGROWTH Capital growth performance across United Kingdom in the last 12 months.* 2 RENTALINCOME Yield performance across United Kingdom in the last 12 months.* 1 YIELDHOTSPOTS Top 10 Buy-To-Let Property Hotspots Source: Rank Postcode Town/City Average Rental Value Average Sales Value Yield 1 L7 Liverpool 1, , % 2 L6 Liverpool , % 3 L15 Liverpool 1, , % 4 PL4 Plymouth 1, , % 5 TS1 Cleveland , % 6 PR1 Preston 1, , % 7 DY5 Dudley 1, , % 8 NG1 Nottingham 1, , % 9 BD1 Bradford , % 10 L1 Kirkcaldy , % YIELDCOLDSPOTS Bottom 10 Buy-To-Let Property Coldspots Source: Rank Postcode Town/City Average Rental Value Average Sales Value Yield 10 BR7 Bromley 1, , % 9 B15 Birmingham , % 8 NW11 London 2,456 1,523, % 7 EX8 Exeter , % 6 SL1 Slough 1, , % 5 BH14 Bournemouth 1, , % 4 N6 London 2,899 1,971, % 3 B70 Birmingham , % 2 N2 London 3,702 2,994, % 1 BH13 Bournemouth 1,714 1,456, % LIVERPOOL +4.3% Identified as the current top location for UK buy-to-let, property prices in Liverpool are expected to rise 22.8% by (JLL).Capital growth in the last 5 years: 18.78%. LONDON -1.8%* 3 London property prices have seen capital growth of 43.41% in the last 5 years. BOURNEMOUTH +4.9% Capital growth of 31.34% in the last 5 years , % LIVERPOOL HIGHEST RENTAL YIELDS currently found toward the North of the UK. Liverpool's L7 postcode dominates the buy-to-let yield list. 2, 4, 8, 10 Source: *1- Research by totallymoney.com *2 Data from zoopla.com *3 Rightmove House Price Index LONDON 4% No postcodes from London or the Home counties make the top 25 buy-to-let yielding postcodes thus the capitals performance has been below average in the last 12 months. BOURNEMOUTH 1.41% 1,5 LOWEST RENTAL YIELDS cover Canford Cliffs, Sandbacks and Branksome Park, Pooles' BH13 postcode offers a yield of just 1.41%.

10 Property prices in the north-west of England are forecast to see an average increase of 18% between according to Savills. Cities like Liverpool and Manchester have shown a promising growth rate in the last 12 months and are forecast to outperform London in the next 5 years. Donovan O'Connor Operations Manager * Data from Research by Savills

11 LONDON PERFORMANCE Key Real Estate figures for 2017 Average prices in London have fallen by 1.8%* 1 for the first time since the financial crisis. As the capital, London is prone to feeling the impact of major political and economic variables, resulting in stagnation and moderate growth. CENTRAL LONDON The prospects of continued uncertainty associated with Brexit, general elections, legislation changes and the sudden uprising of interest rates have all slowed down the market, the biggest hit seen in Kensington, Chelsea and Westminster.* 2 GREATER LONDON Outer London Boroughs have seen the biggest growth as Central London becomes increasingly out of reach for the average buyer. Outer boroughs appear to attract the interest of new developments, infrastructure and regeneration schemes. Rank SALES ASKING PRICE* 1 Annual Change RENTAL ASKING PRICE* 2 1 Camden (19.2%) Bexley (5.8%) 2 Newham (9.8%) Hillington (0.6%) 3 Merton (6.5%) Newham (0.4%) SALESPRICE Diagram shows percentage change in asking price for 1-2bed properties across London Boroughs over the last 12 months* % to 8% + 4% to 6% + 2% to 4% + 0% to 2% -2% to 0% -4% to -2% RENTALPRICES Icons show rental asking price for average 1 bed property across London Boroughs over the last 12 months * 2. 6% to 8% 4% to 6% 2% to 4% 0% to 2% -2% to 0% -4% to -2% Source: *1- Rightmove House Price Index 2017 *2 Research by totallymoney.com Data from zoopla.com -4% to -6% -6% to -8%

12 "As we forecast, the London market is slowing and that is beginning to filter through to surrounding locations. By contrast, a stronger market is being seen further afield, for example in the Midlands, reflecting the stage in the market cycle." Lucian Cook Head of Residential Research, Savills Source: Business Insider, July 2017

13 2018MARKETFORECAST Over the past 12 months, the Real Estate Market has experienced both an interesting and hostile environment has shown signs of a shifting market as prices adjust to set course for a new housing paradigm. This shift in dynamics is giving less strength to the drivers of higher house prices and greater weight to the drags on prices, shaping a future of more moderate growth. London in particular has projected negative performance with the price of property coming down by an average of 1.8%*1, specifically at the top end of the market where Westminster, Chelsea and Kensington have experienced the biggest decreases in both sales and rental. It is not all bad news, take a look at our forecast UK The National Average forecast for growth in property asking prices is predicted to be 1%*1. This is very much objective as capital growth varies between all areas of the UK. What is interesting to see is the growing positive performance of cities in the north of England has seen an economically vibrant rise in Northern cities such as Manchester which have welcomed an average 7.3%*2 rise in property prices, compared to the 5.4%* 2 national average. Savills predicts an 18% increase in house prices in the North West by 2022, whilst Knight Frank also tip the region for the highest house price growth in the same period at 16.4%. Manchester itself is tipped for 28.2% price growth (JLL). If you're looking for an income investment outside of London, our advice is to park your money in the heart of a city in the North. Alongside Liverpool, take a look at Manchester and Chester, all projecting healthy capital and growing yields London Objectively speaking, following an uneasy year, London is likely to see a further decline in 2018 due to the current ongoing state of uncertainty. It is home to the majority of migrants, one third international*3 to be precise. 51%*4 of London households are rented (vs. 37% *4 of the UK population), meaning the capital is more vulnerable should Brexit result in hard borders. With further interest rate rises expected, the cost of living escalating and an uncertain political standing the property market is likely to dampen further. But its not all bad news. London is still the financial capital for worldwide property investment and not by coincidence may I add. Despite the stagnation and soft decline of 1.8%*1 in property prices, when growth is weighed against income, historically speaking, London properties still promise the best returns, even if it means waiting on a property a few years, particularly in the constantly evolving East (Newham). Of course you'd expect no less than for us to promote our catchment area. But figures don't lie, and so far they indicate a much healthier projection (5%*5 average yield, 3.4%*5 asking price growth) in comparison to the other parts of London. Along with other boroughs plotted on the Crossrail line, Newham (Custom House in particular) will continue to receive an uplift for demand and supply. What s more, with a 3.7 billion regeneration injection which is still ongoing, Newham is certainly worth looking into. Market Segment London UK 2017 Capital Growth -1.8%*1 5.4%* Best Performing Yield Area Newham*4 North England (Liverpool, Manchester etc.) 2017 Best Performing Capital Growth Area Newham* North England (Liverpool, Manchester etc.) FORECAST 2018 Capital Growth -2%*1 + 1%* Best Performing Yield Area Properties along the Crossrail Line Manchester, Liverpool and surrounding areas 2018 Best Performing Capital Growth Area Properties along the Crossrail Line Manchester, Liverpool and surrounding areas 2018CAPITALGROWTH Forecast for capital growth: Donovan O'Connor Operations Manager do'oconnor@oxygen.co.uk Tel: Source: *1- Rightmove House Prime Index 2017, *2 Office for National Statistics, *3 JLL UK Residential Research 2017, *4- Rightmove Little Blue Book, June 2017,* 5- Research by totallymoney.com, *6- Land Registry Data 6% to 8% 4% to 6% 2% to 4% 0% to 2% -2% to 0% -4% to -2% -4% to -6% -6% to -8%

14 RoyalVictoriaInvestment Located in the London Borough of Newham, Royal Victoria is London's "hidden gem" location. Close to Custom House Crossrail station and very much a part of a 3.7 billion regeneration scheme, the location presents an investment opportunity to satisfy capital growth and rental income.

15 Of course you'd expect no less than for us to promote our catchment area. But figures don't lie, and so far they indicate a much healthier projection in comparison to the other parts of London. Along with other boroughs plotted on the Crossrail line, Newham (Custom House in particular) will continue to receive an uplift for demand and supplynewham is certainly worth looking into Octavia Rolle Sales & Lettings Negotiator * Data from Research by Savills

16 WhyRoyalVictoria London Borough of Newham is not only on the Crossrail line radar but is equally the ongoing focus of a 3.7 billion regeneration, a clear indicator of investment and development heading eastwards from the centre of the city. 35,000 new homes are coming into the area in the next few years. According to Council data, in 2016 there was demand for 120,133 homes, but supply of only 107,763, leaving a shortfall of 12,370 units. Delivering 35,000 new homes will still fall short of the forecast household growth, creating a shortfall of properties across the borough between 7% to 11%, as construction continues to struggle to keep up with growing demand. Despite increased residential stock, demand is forecast to continue to grow resulting in around 27.4% rental growth by 2020.* 6 Royal Victoria is a 5 minute walk from Custom house, and is already enjoying the benefits Crossrail brings with it. New build properties at Royal Victoria have seen a n average 53%* 2 capital growth in the last 5 years. Regeneration of the local area is placing Royal Victoria on the map for those who never considered living in the area before. As popularity grows, so will the price of property. Capital growth is likely to increase some 29.5% by 2020* 1. Octavia Rolle Sales & Lettings Negotiator orolle@oxygen.co.uk Tel: RealEstateVariables-Newham&RoyalVictoria Politics & Economy The Royal Institute of Chartered Surveyors (RICS) have confirmed that political uncertainty and the aftermath of tax changes are obstacles hindering the UK housing market. The EU referendum, general elections, stamp duty changes, a rise in interest rates amongst other political events are all factors which have led the real estate market into a state of "uncertainty". Despite these drivers, properties in the London Borough of Newham have seen the biggest price increase in the last 12 months when compared to other London Boroughs. Local Regeneration The 2012 Olympic Games hosted in London marked the start of East London s regeneration. As development and investment in the UK's capital moves steadily eastwards, Newham is becoming a hotspot for rejuvenating projects. The 10 year Newham Council regeneration plan for Custom House and Canning Town is a long term commitment opening opportunities for residential and business ventures and is bound to have an impact on property and rental prices in the area. Crossrail The multi million pound Crossrail infrastructure project has had a profound effect on property investment since its announcement in With a projected 30% capital and 6% yield growth in prime locations along the line, the scheme will have a positive impact on the value of your property in both rental and sales terms.* 3 Source: *1- ip-global, 2*Data from Zoopla.com, 3*- JLL Crossrail Report.

17 RoyalVictoriaDevelopment Key dates which have/will have an effect on the real estate capital of properties in Royal Victoria and Custom House. City Airport EU REFERENDUM June 2016 UK votes to leave the EU. 01 CITY ISLAND CANNING TOWN April 2017 First apartments released for Sale. Development will house the British School of Ballet and London Film School. Custom House DLR 06 HOOLA COMPLETES Partial completion March 2017 Development completes and is sold to private and investment owners. 02 SNAP ELECTION June 2017 UK votes for new Government. 07 ROYAL GATEWAY (3 a ) Winter 2017 Completion of Royal Gateway Development which includes residential and commercial units. SILVERTOWN Winter 2018-Phase 1 A 3.5 billion regeneration site creating 3000 homes and commercial spaces. EXCEL CAR PARK Future development The London International Exhibition Center has announced plans to build 1,000 new homes in place of it's current multi-storey car park. A joint venture with Mount Avril 03 a PUMP HOUSE Winter 2018 Completion of high rise residential block in Royal Victoria. ABP PHASE 1 March 2019 Phase 1 completion of the 1.7 billion pound business district. CROSSRAIL Winter New trainline steps in place decreasing London transport capacity by 10% ROYAL WHARF 2020 Inspired by Belgravia & Mayfair, a new residential and commercial riverside development Royal Victoria DLR office Emirates Cable Cars

18 RoyalVictoriaPropertyPerformance "Newham Council wants to see this historic area returned to its former glory as the beating business heart of the capital. We will work with the developers to ensure that our residents will benefit from this regeneration." Supported by the ongoing developments in the local area, Properties in Royal Victoria, Newham, continue to project growth, regardless of the -1.8%*1 average backdrop in capital growth across London. As developers ourselves, we have seen this first hand having built two major developments in the area, The Grainstore and The. On average, property prices have risen by 53%*2 in capital growth over the last 5 years. With developments such as the Asian Business Port well underway, we foresee percentages will continue to rise in the years to come. Cllr Ken Clark Cabinet Member for Regeneration and Planning at Newham Council The Wharf "We are creating a new piece of our capital that addresses the need for new homes and creating affordable workspaces alongside corporate HQ buildings." Newham properties Properties in Newham have seen the biggest price increase in comparison to all other London boroughs in the last 12 months.*1 Simon Webster Chief Executive of The Silvertown Partnership The Wharf Source: *1-Rightmove House Price Index *2- Zoopla Data, *3- Rightmove Little Blue Book 2017, AskingPricePerformance Based on our internal data, over the past 12 months sales and lettings asking price percentages indicate a positive movement in Royal Victoria Docks. SALES +3.4% Sales asking price increase in the last 12 months. LETTINGS +0.4% Lettings asking price increase in the last 12 months. Sales & Lettings Asking Price across all London Boroughs over 5 years*3:

19 The docks are coming back. East London is where the land and the opportunity are. People are starting to see just how exciting it is. Sadiq Khan Mayor of London July 2017

20 ThankYou Thank you for reading our Real Estate Update We hope you found this report useful and that it provided you with an insight on the UK Real Estate Market. regularly produce Real Estate Literature to satisfy our property curiosity, including Property Magazine. To stay informed, follow us on social media, visit our website or contact our Marketing Department. To find out more about the UK s' 2017 Property Performance or Royal Docks Investment opportunities please contact our team on or visit our website Please note this document was created for informative purposes only based on a collaboration of external research, rates may vary. The information contained is not an invitation to invest and may not be relied upon in connection with any investment decision. Individuals should seek independent financial advice before making any investment decisions.. Follow us on social media by clicking on the links below: Click here to visit our website: VISIT OUR WEBSITE

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