EAGLE STAR HOUSE 11 FRIAR LANE, LEICESTER LE1 5RB GOVERNMENT LET OFFICE INVESTMENT

EAGLE STAR HOUSE 11 FRIAR LANE, LEICESTER LE1 5RB GOVERNMENT LET OFFICE INVESTMENT

Investment Summary Attractive office building located in Leicester city centre Let to Leicester City Council with approximately 5 years unexpired Tenant has been in occupation for over 15 years Current Net Income 125,000 per annum Approx 15,028 sq ft (1,395.99 sq m) NIA Freehold Potential for alternative uses (subject to consents). There is a historic consent for restaurant, residential and/or hotel We are instructed to invite offers of 1,400,000 (one million, four hundred thousand pounds) subject to contract, for the freehold interest, reflecting a Net Initial Yield of 8.44% after allowing for purchaser s costs of 5.8%. 2

Location 1 Leicester is the second largest commercial centre in the East Midlands and the administrative capital of Leicestershire, located approximately 103 miles from London, 45 miles east of Birmingham and 27 miles south of Nottingham. A51 A518 A38 Derby A453 Nottingham 06 07 Grantham The city affords excellent communication links lying immediately to the east of the motorway, adjacent to junctions 21 and 21a. Local infrastructure, including the 9 motorway, provides excellent links to the and which collectively make up the Midlands golden triangle. These communications are further enhanced with a mainline railway station providing a fastest journey time of approximately 1 hour, 10 minutes to London St Pancras, whilst East Midlands airport is approximately 17 miles northwest of the city. Leicester has a diverse socio-economic and demographic profile. The 2011 Census shows that Leicester is now the most populous urban centre with 324,000 persons; an increase of over 45,000 since 2001. Against a national trend of an ageing population, the city also has a youthful age profile with 55% of population under the age of 34. Situation The property occupies a prominent position on the corner of Friar Lane with Grey Friars in Leicester city centre. The immediate locality is a well established professional and business district benefiting from local amenities including the renowned Highcross Shopping Centre which is just a five minute walk away. Other uses in the area include residential and leisure with De Montfort University campus also being within 250m. The recently opened King Richard III Visitor Centre, a short distance away on St Martins has generated worldwide interest with an expected 100,000 visitors in the first year. A454 A441 Kidderminster A442 A448 M54 A4123 West Bromwich M5 A448 Vaughan Way A51 A435 Birmingham A38 A5 High St M40 Southgates Underpass Inner Ring Rd Vaughan Way A444 A444 Coventry Highcross Shopping Centre Southgates High St A42 A45 A423 Guildhall Lane 9 New St A5 St Martins Loseby Lane Grey Friars Richard III Visitor Centre Friar Lane Friar Lane A553 Leicester 4 Silver St 07 St Martin s Square Shopping Centre Rupert St Cank St 8 Melton Mowbray Hotel St Hotel St Market St Market Place South A45 Market Place 06 Bowling Green St Horsefair St Bishop St 05 4 Millstone Lane Marble St Pocklingtons Walk Belvoir St DMU Campus Newarke St Former City Council HQ redevelopment site Wellington St 3

Description The property comprises an attractive office building, constructed over basement, ground and four upper floors with a period façade and mansard roof. Internally, the accommodation is arranged with a mix of cellular and open plan office accommodation with concrete floors, suspended ceilings with recessed lighting, perimeter trunking and wall mounted radiators. Given the location and attractive appearance of the property, we are of the opinion that it could lend itself to alternative uses (subject to the necessary approvals) including residential, student accommodation or hotel. Indeed, planning consent has historically been granted for change of use to a ground floor restaurant with residential or a hotel to the upper floors. Planning Richard III Visitors Centre Planning policy for the subject property is governed by Leicester City Council s Revised Core Strategy which was adopted in June 2014. The subject site is identified within the City Centre Boundary and within a Strategic Regeneration Area. As a result, the local authority would support in principle both Residential and Student accommodation uses at the property. Accommodation The property has been measured in accordance with the RICS Code of Measuring Practice and provides the following approximate Net Internal floor areas: Floor Sq M Sq Ft Basement 223.87 2,410 Ground Floor 259.34 2,792 First Floor 242.02 2,605 Second Floor 248.68 2,677 Third Floor 248.68 2,677 Fourth Floor 173.40 1,867 Total 1,395.99 15,028 4

Tenure Freehold. Tenancies The property is let in its entirety to Leicester City Council on a Full Repairing and Insuring lease for a term of 10 years from 30th September 2009 until 29th September 2019 at a current rent of 125,000 per annum ( 9.33 per sq ft allowing 3.00 per sq ft for basement). Leicester City Council has occupied the building for over 15 years. Covenant The tenant provides an undoubted government covenant. The building is currently occupied by the Fostering and Adoption department. Proposal We are instructed to invite offers of 1,400,000 (one million, four hundred thousand pounds) subject to contract, for the freehold interest, reflecting a Net Initial Yield of 8.44% after allowing for purchaser s costs of 5.8%. VAT The property has been elected for VAT. It is intended that the sale will be undertaken as a TOGC. Contacts For further information or to arrange a viewing, please contact: Market Commentary Leicester s office market has experienced a robust recovery in the last 9-12 months, with activity in 2014 being the strongest for many years. Q1 2014 saw 73,000 sq ft of take-up and demand has remained strong throughout the year with Q2 witnessing 286,000 sq ft of deals. Whilst this take-up is skewed by a single 170,000 sq ft transaction at St George s Central, there was still over 116,000 sq ft of take-up. Encouragingly, this activity was fairly evenly distributed between the city centre and out of town markets (44:56) and there is now more demand for larger transactions, with 12 deals completing between 5,000 and 10,000 sq ft. This improvement in demand has led to a hardening of incentives and growth in effective rents. Adam Ramshaw Geoff Gibson 0121 237 2395 0116 255 2694 07990 564673 07711 237190 aramshaw@lsh.co.uk ggibson@lsh.co.uk Gemma Butler 0121 237 2385 07795 047402 gbutler@lsh.co.uk Lambert Smith Hampton Interchange Place Edmund Street Birmingham B3 2TA Lambert Smith Hampton 24 De Montfort Street Leicester LE1 7GB Subject to Contract and Exclusive of VAT Lambert Smith Hampton October 2014 Disclaimer: Lambert Smith Hampton Group Limited and its subsidiaries and their joint agents if any ( LSH ) for themselves and for the seller or landlord of the property whose agents they are give notice that: (i) These particulars are given and any statement about the property is made without responsibility on the part of LSH or the seller or landlord and do not constitute the whole or any part of an offer or contract. (ii) Any description, dimension, distance or area given or any reference made to condition, working order or availability of services or facilities, fixtures or fittings, any guarantee or warrantee or statutory or any other permission, approval or reference to suitability for use or occupation, photograph, plan, drawing, aspect or financial or investment information or tenancy and title details or any other information set out in these particulars or otherwise provided shall not be relied on as statements or representations of fact or at all and any prospective buyer or tenant must satisfy themselves by inspection or otherwise as to the accuracy of all information or suitability of the property. (iii) No employee of LSH has any authority to make or give any representation or warranty arising from these particulars or otherwise or enter into any contract whatsoever in relation to the property in respect of any prospective purchase or letting including in respect of any re-sale potential or value or at all. (iv) Price or rent may be subject to VAT and any prospective buyer or tenant must satisfy themselves concerning the correct VAT position. (v) Except in respect of death or personal injury caused by the negligence of LSH or its employees or agents, LSH will not be liable, whether in negligence or otherwise howsoever, for any loss arising from the use of these particulars or any information provided in respect of the property save to the extent that any statement or information has been made or given fraudulently by LSH. (vi) In the case of new development or refurbishment prospective buyers or tenants should not rely on any artists impressions or architects drawings or specification or scope of works or amenities, infrastructure or services or information concerning views, character or appearance and timing concerning availability or occupation and prospective buyers or tenants must take legal advice to ensure that any expectations they may have are provided for direct with the seller or landlord and LSH shall have no liability whatsoever concerning any variation or discrepancy in connection with such matters. 5