UNIVERSITY LET STUDENT ACCOMMODATION INVESTMENT CROSSTREND HOUSE. 10a Newport, Lincoln, LN1 3DF. lsh.co.uk

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1 UNIVERSITY LET STUDENT ACCOMMODATION INVESTMENT CROSSTREND HOUSE 10a Newport, Lincoln, LN1 3DF lsh.co.uk

2 Investment Summary Student development comprising 72 en-suite studio rooms and 4 shared facility rooms and 25 on site car parking spaces Fully let to Bishop Grosseteste University College Lincoln for a term of 21 years expiring on 23rd September 2033 Located approx 500m from the university campus Only off campus student block in partnership with the university Gross rent of 400,800 per annum, effective from 23rd September 2017 (rent to be topped up by Vendor from completion) The Landlord is responsible for specific repairing, cleaning, maintenance and management responsibilities Net Operating Income estimated to be 320,000 per annum 5 yearly RPI linked reviews Tenant only Break Option on 22 September 2022 and 2027 Freehold We are seeking offers in excess of 5,000,000 for the freehold interest, subject to contract, reflecting a yield of 7.52% against the gross rent and 6.00% against our estimate of Net Operating Income. Purchaser s costs assumed to be 6.59% 02

3 A1 A180 Scunthorpe M180 M180 M1 A1[M] A15 Sheffield A18 A1103 Gainsborough A156 Location Grimsby A1173 Doncaster Market Rasen Worksop A614 M1 Lincoln is a cathedral city and county town of Lincolnshire. Lincoln s major landmarks Mansfield Newark-on-Trent Bishop Grosseteste University and University of Lincoln. Boston Leys R Long West Common Lincoln B1273 ERS NK BU Longdales Rd res hc oug bor Yar Rd Rasen Ave skin Ru Loughborough A1 B1398 A158 B1182 Newport Rd census. It is ranked 4th in the Experian East Midlands retail rankings. d Rd Y RD SAXILB Ne ttle ha m A57 A17 Grantham A52 RD BY XIL SA Hykeham and Waddington has a population of 130,200 according to the 2011 UK Derby The non-metropolitan district of Lincoln has a population of 93,541 people according to the 2011 UK census. The entire Lincoln urban area, including North Sleaford Nottingham d ys R g Le Lon A57 and A1(M) and 37 miles south west of Grimsby via the. A52 A17 Riseholme Rd 28 miles south of Scunthorpe via the A15, 37 miles south east of Doncaster via the Skegness A15 are Lincoln Cathedral and Lincoln Castle. The city is also home to the fast growing Lincoln is located 18 miles north east of Newark-on-Trent on the A1 via the, Lincoln A1 A16 A158 B1131 Monks Rd L HIL RD BY AG WR Greetwell Rd CAR HO LM ER D A158 Greetwell Rd Monks Rd Riv er W itha m River Witham B1262 B1003 Image courtesy of University of Lincoln - B1360 A15 B1190 e Av ark SP 03

4 The Cornerstone Building: Bishop Groseteste University Campus Situation Crosstrend House: 500m Crosstrend House is situated approximately 500m south of Bishop Groseteste University s main campus with close proximity to Lincoln City Centre and Lincoln s main retail offer. The property is situated on Newport which can be easily accessed via the from the north and Upper Long Leys Road connecting from the B1273. The campus of Bishop Grosseteste University is a short walk from the property with regular bus services also servicing the route. Surrounding amenity include Lincoln s old town, High Street and the Waterside Shopping Centre. Bishop Grosseteste University s latest acquisition is St Hugh s House. The building is being refurbished over the next 12 months and is to be used for a Research and Innovation Faculty. 04 St Hugh s House, 23 Newport.

5 Description Site The property comprises a freehold student block extending to a total gross internal area of approximately 1,982 Sq m(21,339 Sq ft). It is developed over ground and two upper floors with 25 on site car parking spaces behind a gated entrance. It is of concrete frame construction with brick elevations beneath a flat roof. The building was converted from office to student accommodation in 2012 and provides 76 beds in total. Access is via a communal reception served by one 8 person passenger lift. The property is equipped with the main amenities including common rooms, communal kitchens and a laundry room. In addition, there is parking to the rear and a bicycle storage area. The property occupies a regular shaped site extending to approximately hectares (0.42 acres). Crosstrend House Initial plans have also been carried out for a potential additional floor to be constructed to facilitate the high level of student demand. Indicative CGI below: 05

6 Accommodation Room Type No.of beds Demise Approx.GIA 1st floor plan: Rooms Non En-suite 4 Sq m Sq ft Single Studio 10 Standard Double Studio 22 Large Double Studio 40 Total 76 Ground 748 8,051 1st 653 7,029 2nd 581 6,254 Total 1,982 21,334 The property was measured in accordance with the RICS Code of Measuring Practice (6th Edition) Ground floor plan: Rooms nd floor plan: Rooms

7 Tenancy Tenant Information The property is let in its entirety to Bishop Grosseteste University College Lincoln for a term expiring 23 September The lease has a Tenant only Break Option on 22 September 2022 and 22 September The passing rent is 364,672 pa and is reviewed 5 yearly in line with RPI. Based on current Indices, the rent is therefore expected to increase to a minimum of 400,800 pa at the next review in September The vendor intends to top the rent up to this level. The rent is paid in three equal instalments in advance on 30 September, 31 January and 30 April. The Landlord has the potential to receive further rent equal to 12 per week per room where accommodation is let for longer than 44 weeks by the Tenant. Within the lease, the Landlord is responsible for Repairs and Decoration and is also required to provide various Services for the tenant. Given the typical annual expenditure the Landlord has incurred since the commencement of the lease, we anticipate that the net income will be circa 320,000 pa. Further information is available upon request. Bishop Grossetese University has been based in the centre of Lincoln for over 150 years. Having begun life in 1862 as an Anglican teacher training college for women, this single campus university achieved full university status in 2012 and now educates over 2,000 students in a wide range of subjects from foundation degree level to PhD. It was ranked 2nd of public universities in England for student satisfaction (Source: National Student Survey 2016) and is a top 3 UK university for student employability (Source: Destinations of Leavers from Higher Education Survey 2014/15). The university has, since its inception been an unincorporated association, regulated by the Charities Commission and the Higher Education Funding Council. The Lincoln Diocesan Trust is a custodian trustee and the University Council members are the managing trustees of the University. The University has no linked charities and its charitable objectives are to provide the services of education/training of young people and the general public. For the year ending 31 July 2015, Bishop Grosseteste University reported Income of 20,087,000; Expenditure of 17,246,000 and a Surplus of 2,841,000. Income increased 16.5% on the previous year. Net Assets were 26,674,000 Further information can be found at by searching for charity number or 07

8 University Accommodation Tenure Bishop Grossetese University is a single campus university with a student population of over 2,000. It has relatively little purpose built accommodation on-campus with only two halls of residence; Constance Stewart Hall and Wickham Hall. Constance Stewart Hall is the older of the two blocks and has shared facilities including kitchens, bathrooms and showers. It comprises a total of 91 study bedrooms with each room equipped with washbasin only. Wickham Hall is a newly built block with a total of 126 en-suite rooms in cluster flats. Each cluster has six ensuite rooms and communal kitchen and living area. With a total of 217 rooms, the on-campus accommodation can satisfy just 10% of the University s students. 2017/18 Pricing for this accommodation is below. Rent per academic year Rent per week Wickham Hall* En-suite Rooms 4, Constance Stewart* Share Facilities 3, Crosstrend House Non En-suite 4, Crosstrend House is the only off campus student block in partnership with the university and offers enhanced services compared to some of the on-campus stock. Other off-campus demand is satisfied by privately owned houses which are typically let on a shared housing basis. Single Studio 4, Standard Double Studio 5, Large Double Studio 5, *Wickham Hall and Constance Stewart Rents are based on 39 week terms. Crosstrend House is based on a 44 week term. The property is held freehold EPC The property has an EPC rating of D and a score of 89. A copy of the EPC and Recommended Report is available upon request. VAT The property is elected for VAT. It is anticipated that the transaction will be treated as a TOGC. 08

9 Proposal We are seeking offers in excess of 5,000,000 (Five million pounds) for the Freehold interest, subject to contract, reflecting a yield of 7.52% on the gross rent and 6.00% against our estimate of Net Operating Income. Purchaser s costs assumed to be 6.59%. Alternatively, we are instructed that the Vendor will consider a sale of the Shares in the holding company Crosstrend House Ltd (No ) which will reduce the normal purchaser s costs stated above and which also includes other taxation advantages. Further information is available on request. Contacts Adam Ramshaw Lambert Smith Hampton aramshaw@lsh.co.uk Ankur Chadha Lambert Smith Hampton achadha@lsh.co.uk Sam Elkington Lambert Smith Hampton selkington@lsh.co.uk Lambert Smith Hampton June Details of Lambert Smith Hampton can be viewed on our website This document is for general informative purposes only. The information in it is believed to be correct, but no express or implied representation or warranty is made by Lambert Smith Hampton as to its accuracy or completeness, and the opinions in it constitute our judgement as of this date but are subject to change. Reliance should not be placed upon the information, forecasts and opinions set out herein for the purpose of any particular transaction, and no responsibility or liability, whether in negligence or otherwise, is accepted by Lambert Smith Hampton or by any of its directors, officers, employees, agents or representatives for any direct, indirect or consequential loss or damage which may result from any such reliance or other use thereof. All rights reserved. No part of this publication may be transmitted or reproduced in any material form by any means, electronic, recording, mechanical, photocopying or otherwise, or stored in any information storage or retrieval system of any nature, without the prior written permission of the copyright holder, except in accordance with the provisions of the Copyright Designs and Patents Act Warning: the doing of an unauthorised act in relation to a copyright work may result in both a civil claim for damages and criminal prosecution. 09