Well secured, south east, retail investment with asset management opportunities. The Swan Centre, Leatherhead, KT22 8AH

Well secured, south east, retail investment with asset management opportunities The Swan Centre, Leatherhead, KT22 8AH

Well secured, south east, retail investment opportunity with asset management opportunities For illustrative purposes only Accommodation Tenure Tenancies Current Income Property Management & Service Charge VAT EPC Asset Management Opportunities Proposal Further Information ç ç è è 2

INVESTMENT SUMMARY A prominent and substantial retail holding situated within the affluent, popular and busy Surrey town of Leatherhead Well secured to a variety of popular national multiple retailers including Boots, Poundland, Card Factory, WH Smith, Next, Costa, Holland & Barrett, Vodafone, Specsavers, Burtons/ Dorothy Perkins, Timpsons and Thomas Cook The scheme is anchored by Sainsbury s Supermarket albeit this is not within the ownership Circa 70% of the income secured to National Multiple tenants 339 car parking spaces Long Leasehold Weighted average unexpired lease term (WAULT) of 5.1 years to expiry Multiple asset management opportunities Low base rental tone of 40 psf ZA Offers in excess of 8,300,000 (Subject to Contract and Exclusive of VAT) Reflecting an attractive net initial yield of 8% Accommodation Tenure Tenancies Current Income Property Management & Service Charge VAT EPC Asset Management Opportunities Proposal Further Information 3

LOCATION Leatherhead is an affluent Surrey commuter town and established retail and office location. The town is located 23 miles (37km) south west of Central London, 16 miles (26km) north east of Guildford, and 18 miles (29km) east of Woking. The town benefits from excellent road communications being located 1 mile (1.6km) south of Junction 9 of the M25 motorway, which provides access to the M3 motorway 14 miles (22km) to the west and the M23 13 miles (21km) to the east. Leatherhead Railway Station is less than a five minute walk from The Swan Centre. The terminus provides frequent services to London (Victoria and Waterloo) in a fastest journey time of 47 minutes, aswell as the rest of the UK. London Gatwick Airport is located 19 miles (30km) to the south east of Leatherhead and is the UK s second busiest airport connecting over 34 million passengers a year, to approximately 200 destinations in 90 countries worldwide. Reading M40 A31 A4010 High Wycombe A404 M4 A332 A331 Farnham A3 A413 Maidenhead Bracknell M3 Farnborough Haslemere M40 M25 A3 A40 M4 Heathrow Airport A30 A316 M25 Weybridge A3 Woking Guildford Godalming Cranleigh M1 Watford Harrow Twickenham A24 M1 A3 A24 LEATHERHEAD Dorking Horsham Epsom Gatwick Airport A406 Redhill M23 A503 LONDON Mitcham Crawley A232 A23 A22 A264 A10 A205 A22 A12 Bromley A22 A406 M25 M11 East Grinstead A2 A20 M25 A12 Romford Dagenham A13 Dartford Sevenoaks A21 Royal Tunbridge Wells Accommodation Tenure Tenancies Current Income Property Management & Service Charge VAT EPC Asset Management Opportunities Proposal Further Information 4

LOCAL ECONOMY & DEMOGRAPHIC PROFILE Leatherhead is a significant regional centre located within the Mole Valley District of Surrey within close proximity to the M25 and national motorway networks. The estimated population within a mile radius of Leatherhead is 13,465 (Experian). 36.14% of the catchment demographic is in the AB social grade, significantly above the national average. A higher than average proportion of the population is in the higher managerial, administrative and professional socio economic class, with a significant percentage of workers employed within the professional, scientific and technical occupations. Adopting Experian s Mosaic UK Consumer classifications for the 10 mile contour they compare the socio economic profile of the town to GB as follows: Classification (Groups) Leatherhead (10 Mile Contour) GB Base % Alpha Territory 19.3% 3.5% Professional Rewards 7.9% 8.7% Suburban Mind-sets 18.9% 12.4% Careers & Kids 7.4% 5.6% New Homemakers 6.3% 4.3% Industrial Heritage 1.5% 7.7% Claimant Culture 1.1% 5.9% Ex-Council Community 4.4% 9.8% Liberal Opinions 20.5% 8.4% Voices of Authority 7.5% 1.2% Business Class 9.4% 1.6% Serious Money 2.4% 0.5% Balcony Downsizers 2.1% 0.9% Garden Suburbia 13.2% 2.9% Footloose Managers 5.4% 1.5% Convivial Homeowners 10.5% 1.7% Crash Pad Professionals 7.3% 1.2% Leatherhead benefits from a dominant office market and has attracted a number of blue chip international companies to the area, providing UK Headquarter offices for CGI Logica, Kellogg Brown & Root and Unilever (UK & Ireland only). Other high profile employer s include ERA Technology, Wates Group, Exxon Mobil, Berkeley Homes, Police Federation, Babcock and NHS. Accommodation Tenure Tenancies Current Income Property Management & Service Charge VAT EPC Asset Management Opportunities Proposal Further Information 5

CLINTONS POUNDLAND Well secured, south east, retail investment opportunity with asset management opportunities To the Station MY DENTIST This Goad Plan is for identification only and not to be scaled as working drawing. No part of this plan may be entered into an electronic retrieval system without prior consent of the publisher. Crown copyright 2015. Licence number PU100017316. For full terms and of copyright conditions visit www.goadplans.co.uk/copyright KEY Long Leasehold Held Long Leasehold. Under-let on long lease to K/S Leatherhead and MVDC until 22/03/2080 at a peppercorn rental. Accommodation Tenure Tenancies Current Income Property Management & Service Charge VAT EPC Asset Management Opportunities Proposal Further Information 6

RETAILING IN LEATHERHEAD Leatherhead is a popular and compact retail destination with a loyal, affluent customer base. The town centre provides approximately 267,000 sq ft of retail accommodation, with the prime offer focussed in The Swan Centre (anchored by Sainsbury s, Boots, WH Smith and Next). This is supplemented by the High Street where a number of national multiple retailers are also located. In addition a market runs twice a week (Thursday and Saturday) along the High Street, within close proximity to the subject property. SITUATION The Swan Centre comprises a large section of Leatherhead town centre with the primary entrance located on the High Street adjacent to Argos, Travelodge and Halifax. The centre benefits from a secondary access on Swan Mews which adjoins the High Street, while the car park is accessed via Leret Way. The Swan Centre benefits from footfall generated by Sainsbury s Supermarket, which is located within the scheme albeit outside the ownership. Accommodation Tenure Tenancies Current Income Property Management & Service Charge VAT EPC Asset Management Opportunities Proposal Further Information 7

THE SWAN CENTRE The Swan Centre is centrally located forming the majority of the prime retailing offer in Leatherhead anchored by Sainsbury s (not part of the ownership) and accessed from the pedestrianised High Street. The majority of Leatherheads national multiples are sited within the scheme while the nearby High Street is occupied by a mix of national, regional and local retailers, restaurants and A2 users. Developed in the early 1980 s the predominantly open scheme presents well and is served well by the centres 339 space multi-storey car park (accessed via Leret Way). Shoppers parking here will ordinarily use the North Mall entrance where Sainsbury s, the car park lifts/ stairs and centre s public toilets are located. TRANSFORM LEATHERHEAD PROJECT Mole Valley District Council (MVDC) is working with Nexus Planning and Broadway Malyan - planning, regeneration and design specialists - to prepare a long term masterplan for Leatherhead town centre. Further information is available at www.molevalley.gov.uk/transformleatherhead Swan House Levet House Day Centre Accommodation Tenure Tenancies Current Income Property Management & Service Charge VAT EPC Asset Management Opportunities Proposal Further Information 8

ACCOMMODATION The property provides an approximate total floor area of 9,849m² (106,019 sq ft) apportioned per unit as outlined within the Tenancy Schedule. TENURE The Scheme Long Leasehold The property is held long leasehold from Mole Valley District Council for 99 years from 25th March 1981 (64.5 years unexpired). The leaseholder benefits from an option to extend for a further 26 years which effectively extends the term to 90.5 years unexpired. The head rent is subject to a minimum rent of 122,400 pax and a gearing equivalent to 20% of 99% (19.8%) of the gross rents received (excluding the net car park income) throughout the year from 25th March to 24th March. The rent can move upwards and downwards and is paid quarterly. We project the headrent for 2015/2016 will amount to circa 141,157 and that this will rise in 2016/2017 to 167,178 assuming the current tenancy information and outstanding rent free periods. The Car Park Long Leasehold The car park is held long leasehold from Mole Valley District Council (MVDC) for 99 years (less 3 days) from 25th March 1981. MVDC underlet the car park to the vendor by way of a sublease from 1st October 2001 until 24th September 2035 paying a principal rent equating to 50% of the net receipts (after permitted deductions) from the operation of the car park less the minimum rent of 60,000 per annum exclusive. The leaseholder has a right to terminate the sublease at any time throughout the term giving no less than 6 months, prior notice on the proviso that all the covenants in the lease have been satisfied. Accommodation Tenure Tenancies Current Income Property Management & Service Charge VAT EPC Asset Management Opportunities Proposal Further Information 9

TENANCY SCHEDULE Address Tenant Trading as Areas Lease Start Description Sq ft m 2 Date Lease Expiry Date Option to Determine Next Rent Review Unit 1 Boots Opticians Boots GF Sales 1,214 113 03/10/2014 02/10/2024 02/10/2019 03/10/2019 37,500 16,366 43,250 21,322 546.49 TBO on 02/10/2019 at no less than 6 months prior written Professional Services Opticians ITZA 1,022 95 (T) notice. Tenant received 9 months rent free to be topped up by Limited the vendor. First Floor Anc 401 37 Unit 2 Poundland Limited Poundland GF Sales 4,580 425 11/05/2004 10/05/2019 74,000 23,722 65,500 32,292 1,272.62 7,160 Recently assigned from AG Retail Cards Limited. Poundland ITZA 1,835 170 pay monthly rents by way of a side letter. Poundland received 6 months rent free from Clinton's. Recommend 5% for quantum Basement Anc 970 90 and 5% for frontage to depth. The tenant benefits from a service charge cap of 16,561 pax which increases with RPI annually. Unit 3 AG Retail Cards Limited Clintons GF Sales 1,953 181 21/10/2015 20/10/2025 20/10/2020 21/10/2020 35,000 15,878 31,000 15,283 471.58 New 10 year lease. TBO in year 5. Tenant received 15 months ITZA 893 83 rent free, to be topped up by the vendor. First Floor Anc 270 25 Unit 4 Sportswift Limited Card Factory GF Sales 1,882 175 30/05/2013 29/05/2023 29/05/2018 30/05/2018 40,000 16,452 38,000 18,734 533.17 10,403 TBO on 29/05/2018. The tenant benefits from a service charge ITZA 933 87 (T) cap of 6,049 pax which increases with RPI annually. First Floor Anc 255 24 Unit 5 Boots UK Limited Boots GF Sales 5,932 551 25/03/1981 24/03/2021 25/03/2016 77,500 51,461 80,500 39,687 2,125.85 Boots received 12 months rent free in exchange for a 5 year ITZA 1,893 172 GF Anc 3,837 356 First Floor Anc 492 46 Current Rent Service Charge Yr End 31/21/2016 RV (2010) Rates Payable Insurance (to 31/05/2016) Landlord Shortfalls Comments reversionary lease. RF finishes on 24/12/2015, to be topped up by the vendor. Unit 6 WH Smith Retail Holdings Ltd WH Smith GF Sales 6,087 565 24/06/1981 23/06/2021 24/06/2016 60,000 39,868 71,000 35,003 1,501.04 5 year reversionary lease from 24/06/2016 (signed in Oct 2012 ITZA 1,856 172 when tenant recieved 9 months rent free). Rent agreed at next review at 60,000 pax. Recommended allowance of 7.5% for GF Anc 920 85 quantum. First Floor Anc 92 9 Unit 7 Unit 8-12, 19-25 Swan Centre Unit 13a, 28 Swan Centre Unit 13b, 30 Swan Centre Burton/ Dorothy Perkins Properties Ltd Dorothy Perkins GF Sales 2,620 243 29/09/2013 28/09/2018 28/09/2016 40,000 20,470 59,500 29,334 699.00 TBO on 28/09/2016. Recommend allowance of 5% for return ITZA 1,436 133 frontage and 5% for lack of storage. First Floor Anc 141 13 K/S Leatherhead Sainsburys Supermarket 42,487 3,947 27/12/2001 22/03/2080 0 175,479 830,000 409,190 9,618.05 Long lease to K/S Sainsbury's who pay a head-rent to MVDC. K/S Sainsbury's have the right to extend this lease by 26 years subject to them correctly serving notice. Sub- underlet to Sainsburys Supermarkets Limited for 35 years from 25/09/2000 until 24/09/2035. Timpson Limited Timpsons GF Sales 449 42 08/04/2008 07/04/2018 16,000 3,061 15,250 7,320 122.13 ITZA 415 39 Muhammed Shakir Saleem Best Brows GF Sales 339 31 19/09/2014 18/09/2019 18/09/2016 13,500 3,061 12,250 5,880 116.13 TBO on 18/09/2016. If the tenant does not exercise their option ITZA 329 31 to determine their lease, they shall receive 3 months rent free from 19/06/2016. Tenant deposit of 3,375 + VAT. Unit 15-16 Costa Limited Costa Coffee GF Sales 1,315 122 22/08/2005 21/08/2015 39,500 9,948 39,750 19,597 378.92 10 year lease renewal agreed with the tenant. TBO in year 6. Rent ITZA 1,078 100 reduced from 44,500 pax. No incentive. Tenant is in the process of re-fitting the store. Recommend plus 5% for return frontage, minus 12.5% for frontage to depth and lack of storage. Unit 17-18, 20 Swan Centre Next Group Plc Next GF Sales 2,582 240 24/06/15 23/06/2020 24/06/2018 57,250 31,374 58,000 28,594 1,165.20 New 5 year lease recently agreed. 3 month rent penalty if tenant Unit 19, 16 Swan Centre Unit 20, 14 Swan Centre Unit 21, 12 Swan Centre Unit 22, 10 Swan Centre ITZA 1,436 133 First Floor Anc 1,694 157 exercises TBO on 24/06/2018. Rent dropped from 72,000 pax. The tenant received no rent free. Recommend allowance of 5% for frontage to depth and 2.5% for return frontage. Basement Anc 416 39 Vodafone Limited Vodafone GF Sales 1,381 128 13/04/2012 12/04/2022 12/04/2017 13/04/2017 42,000 12,243 30,250 14,913 435.08 TBO on 12/04/2017. Vodafone assigned the lease from Phones ITZA 799 74 4U Limited on 28/01/2015. Basement Anc 205 19 Holland & Barrett Limited Holland & GF Sales 1,396 130 20/04/2010 19/04/2020 20/04/2015 34,700 13,009 30,750 15,160 439.08 RR from 20/04/2015 being documented at a nil uplift. Barrett ITZA 809 75 Basement Anc 259 24 Specsavers Optical Superstores Limited Specsavers GF Sales 1,003 93 23/09/2014 22/09/2024 22/09/2019 23/09/2019 27,400 11,478 28,250 13,927 379.69 TBO on 22/09/2019. Tenant in occupation since 2004. ITZA 682 63 Basement Anc 343 32 Thomas Cook Retail Limited Thomas Cook GF Sales 573 53 29/09/2006 28/09/2016 19,420 4,591 23,750 11,709 172.20 Recommend 7.5% allowance for frontage to depth. ITZA 501 47 Accommodation Tenure Tenancies Current Income Property Management & Service Charge VAT EPC Asset Management Opportunities Proposal Further Information 10

Address Tenant Trading as Areas Lease Description Sq ft m 2 Start Date Lease Expiry Date Option to Determine Next Rent Review Unit 23, Pervez Tahir Savills Dry GF Sales 1,044 97 08/03/2011 07/03/2021 08/03/2016 9,500 1,530 7,500 3,600 53.26 Rent deposit of 3,750 + VAT. 8 Swan Centre Cleaning ITZA 913 85 Unit 24, Nicholas Robert Harrington Nicholas GF Sales 339 31 10/09/2014 09/09/2024 09/09/2019 10/09/2019 13,500 3,061 13,500 6,480 116.13 TBO 09/09/2019. Rent deposit of 3,375 + VAT. 6 Swan Centre Harrington Hairdressing ITZA 329 31 GF Anc 28 3 Unit 25, The Carphone Warehouse Carphone GF Sales 1,044 97 29/11/2007 28/11/2017 42,000 14,539 32,750 16,146 498.46 2 Swan Centre Limited Warehouse ITZA 913 85 Basement Anc 868 81 31 High Street Spicy Curry Restaurants Ltd Lal Akash GF Sales 983 91 29/09/2009 28/09/2029 29/09/2019 35,000 11,096 17,200 8,256 663.58 1,402 Rent deposit of 7,500 + VAT. RR from 29/09/2014 being Restaurant ITZA 630 59 documented at as a nil increase. The tenant benefits from a current service charge cap of 9,694, which increases with RPI FF Sales 1,151 107 annually. Basement Anc 853 79 Day Centre Mole Valley District Council GF 4,517 419 25/03/1981 22/03/2080 1 9,682 9,300 4,464 1,123.76 MVDC have the right to extend this lease by 26 years subject to them correctly serving notice. Partially refit in 2013. The tenant are demised 8 car parking spaces. Centre Manager Centre Manager 12,500 6,000 6,000.00 Rear Service Yard, 45-47 High Street Leret House Touch Associates Ltd Touch FF Office 3,400 316 05/02/2015 04/02/2020 04/02/2018 54,720 6,732 54,400 26,819 731.92 TBO 04/02/2018. Rent Deposit 13,680 + VAT. Tenant received 7.5 months rent free. The Landlord and the Tenant agree that the provisions of sections 24 to 28 (inclusive) of the Landlord and Tenant Act 1954 are excluded in relation to the tenancy created by this Lease. The tenant has an area demised in front of their entrance for car parking as well as 7 marked spaces on the service deck. Swan House Basil E. Fry & Co Limited Basil Fry & Co GF Reception 447 42 05/05/2015 04/05/2025 04/05/2020 05/05/2020 94,000 13,214 86,500 42,645 2,077.88 TBO 04/05/2020. Rent Deposit 24,000 + VAT. Tenant received GF Office 2,832 263 5.5 months rent free. The Landlord and the Tenant agree that the provisions of sections 24 to 28 (inclusive) of the Landlord and Tenant FF Office 2,425 225 Act 1954 are excluded in relation to the tenancy created by this Lease. The tenant are demised 15 car parking spaces. Storage Unit 0 Public Toilets Mole Valley District Council 25/03/1981 22/03/2080 1 1,005 2.28 MVDC have the right to extend this lease by 26 years subject to them correctly serving notice. Car Park Mole Valley District Council 25/03/1981 22/03/2080 1 MVDC have the right to extend this lease by 26 years subject to them correctly serving notice. Miscellaneous Income Exhibition & Other Income 01/06/2006 31/05/2056 10,702 Estimated net income received Y/E 12/2013 = 9,884. Net Income received Y/E 12/2014 = 11,519. Two year average = 10,702 adopted. Photo Booth Photo-Me International Plc 01/06/2006 31/05/2099 0 Car Park Income Only NILCOSC 01/06/2006 31/05/2099 11,074 19,734 109,000 53,737 153.74 Estimated net income received Y/E 12/2013 = 8,927.82. Net Income received Y/E 12/2014 = 13,220.788. Two year average = 11,074 adopted. Current Rent Service Charge Yr End 31/12/2016 RV (2010) Rates Payable Insurance (to 31/05/2016) Burton House 15,565 Separate Service Charge Schedule Substation The Southern Electricity Board 25/03/1981 22/03/2080 1 106,019 9,849 Total Gross Income 884,269 24,965 LESS PROJECTED HEAD RENT Swan Centre (20% of 99% of the income). NB: The car park head rent already accounted for in the net car park income 141,157 NET RENT (After Head Rent Deduction) 743,112 Less L/L shortfalls 24,965 LESS L/L Marketing Cost (50%) 15,000 TOTAL NET CURRENT INCOME 703,147 Landlord Shortfalls Comments Accommodation Tenure Tenancies Current Income Property Management & Service Charge VAT EPC Asset Management Opportunities Proposal Further Information 11

TENANCIES The Swan Centre is well secured to a host of national multiple tenants Boots, Boots Opticians, Poundland, Card Factory, WH Smith, Next, Costa, Holland & Barrett, Vodafone, Specsavers, Burtons/ Dorothy Perkins, Timpsons and Thomas Cook. The scheme is anchored by Sainsbury s Supermarket albeit this is not within the ownership. The leases are predominantly drawn on institutional terms with outgoings recovered through a comprehensive service charge. CURRENT INCOME The current gross contracted income is 884,269 pax We anticipate the head-rent for March 2015 - March 2016 will amount to 141,157. Accordingly, the anticipated current net income, less Landlord shortfalls, Landlord contribution to marketing and less head rent is 703,147 pax The vendor will top up outstanding rent free periods. The rental tone within the scheme is circa 40 Zone A which is very low when compared to prime rental values in surrounding towns. Accordingly, we believe there are strong prospects for future rental growth. CURRENT INCOME ANALYSIS Rental Tone (PSF Zone A) in Competing Centres in Surrey 285 285 Income Analysis by Covenant Strength 240 70% National Multiple Tenants 30% Local Operators 115 90 80 70 60 50 40 The average weighted unexpired lease term is 5.1 years to expiry. Kingston upon Thames Guildford Croydon Crawley Woking Epsom Sutton Dorking Walton on Thames Leatherhead Accommodation Tenure Tenancies Current Income Property Management & Service Charge VAT EPC Asset Management Opportunities Proposal Further Information 12

ASSET MANAGEMENT OPPORTUNITIES Look to re-gear head leases with Mole Valley District Council Proactively seek to increase the AWULT of the holding through lease re-gears and renewals Strong possibility of rental growth going forward given low vacancy rate and modest current rental tone Look to improve mall income Engage with Mole Valley District Council and their planning consultants over Transform Leatherhead Potential to partake in a larger wholescale redevelopment of the town centre PROPERTY MANAGEMENT & SERVICE CHARGE A comprehensive service charge budget is currently in operation on the property. The service charge costs are apportioned based on each occupiers Weighted Gross Internal Area as per the occupational leases. The proposed service charge budget for the year ending 31st December 2016 amounts to 529,053 per annum ( 513,527.83 in 2015). A service charge report is available upon request. The current landlord shortfall is 24,965 pax. VAT The Property has been elected for VAT and any disposal is proposed to be by way of a Transfer of a Going Concern (TOGC). EPC Energy Performance Certificates (EPCs) are available on request. Accommodation Tenure Tenancies Current Income Property Management & Service Charge VAT EPC Asset Management Opportunities Proposal Further Information 13

PROPOSAL We have been instructed to seek offers of 8,300,000 (Eight Million, Three Hundred Thousand Pounds), subject to contract and exclusive of VAT for the long-leasehold interest reflecting a net initial yield of 8% allowing for purchaser s costs of 5.8%. FURTHER INFORMATION For more information, to arrange an inspection or for access to the data room, please contact: David Freeman 020 7659 4830 david.freeman@greenpartners.co.uk Ed Smith 020 7659 4831 ed.smith@greenpartners.co.uk MISREPRESENTATION These particulars do not constitute an offer or contract. They are intended as a guide to prospective purchasers. All reasonable care has been taken in the preparation of these particulars but their accuracy is not guaranteed. The purchaser should satisfy himself and as to the correctness of these details. Neither the agents nor the vendors or lessors are to be or become under any liability or claim in respect of these particulars. These particulars are supplied on the understanding that all negotiations are conducted through this office. November 2015. Adrian Gates Photography & Design 07710 316991