CELLO HOUSE, WEST STREET, FARNHAM GU9 7EQ FREEHOLD SOUTH EAST OFFICE INVESTMENT

CELLO HOUSE, WEST STREET, FARNHAM GU9 7EQ FREEHOLD SOUTH EAST OFFICE INVESTMENT

INVESTMENT SUMMARY Opportunity to acquire an attractive Grade II listed office building located within an affluent South East town. Farnham is well located, benefiting from good transport connections via road, rail and air. The property is situated along West Street, a principal thoroughfare into the town centre and main retail core. The planned Brightwells Regeneration is a short 5 minute walk from the property. The property comprises a high quality building and selfcontained studio with a total NIA of 12,652 Sq Ft. The vendor completed a comprehensive refurbishment in 2003 at a cost of c. 1,500,000. Let to is Healthcare Dynamics (Graydon 4B Low Risk) part of Cello Group Plc with an unexpired term of 3.7 years to break and 5.7 years to lease expiry. Current passing rent of 312,250 per annum reflecting 24.68 per sq ft. There is an RPI Review in April 2020. Freehold Offers sought in excess of 4,500,000 (four million five hundred thousand pounds) subject to contract and exclusive of VAT for the freehold interest in the property. A purchase at this level reflects the following: Asset purchase assuming 6.57% purchaser costs Corporate purchase assuming 1.8% purchaser costs NIY 6.51% 6.82% FREEHOLD SOUTH EAST OFFICE INVESTMENT 2

CELLO HOUSE, WEST STREET, FARNHAM GU9 7EQ

LOCATION Farnham is located within the Borough of Waverley approximately 11 miles west of Guildford, 15 miles east of Basingstoke, 24 miles south of Reading and 42 miles southwest of London. The district population stands at approximately 124,000 persons with 81% of the working age population classed as economically active. Unemployment is low at 2.5% against the current National rate of 4.5%*. ROAD A31 (runs from Guildford to Dorset) A331 (Blackwater Valley Route) (runs from Camberley to Runfold) M3 Motorway (Junction 4) RAIL FROM FARNHAM STATION TO READING DISTANCE FROM CELLO HOUSE 0.5 miles 4.0 miles 9.0 miles TRAVEL TIME 60 minutes A346 A342 A338 A303 Salisbury A36 A338 A31 A343 M27 A34 Andover A303 A34 Winchester Southampton Marchwood A33 A339 M3 Basingstoke A287 A31 FARNHAM A3 A31 M3 A3 A286 A272 Petersfield A286 A3 (M) M27 A27 Portsmouth A232 A3 A240 A322 M25 A3 Guildford A24 M23 A281 Crawley A264 Horsham A272 A272 A24 A23 A29 A24 A27 Brighton Worthing GUILDFORD LONDON WATERLOO 27 minutes 53 minutes WOKING 23 minutes Farnham train station is a 5 minute walk from the property. AIRPORTS HEATHROW GATWICK SOUTHAMPTON INTERNATIONAL DISTANCE FROM CELLO HOUSE 29 miles 45 miles 37 miles *Source NOMIS FREEHOLD SOUTH EAST OFFICE INVESTMENT 4

SITUATION The property is prominently situated along West Street, a principal thoroughfare into the town centre. Access to the A31 is within 0.5 miles. The Borough, Farnham s main retail core, is a 2 minute walk from the property. Both Sainsbury s and Lidl are 0.6 miles and 1 mile distance respectively. The Brightwells Regeneration scheme is located 0.8 miles from the property which once completed will further enhance the retail and leisure offer. Occupiers will include M&S and Reel Cinema. The area is home to a number of office occupiers, including: Crondall Ln HazWay n flete Ln ell Rd Crondall Ln West St A325 Crosby Wa y Potters Gate Beavers Rd Falkner Rd West St The Hart CELLO HOUSE Castle St A325 A325 The Borough Red Lion Ln Long Bridge Firgrove Hill East St South St A325 Brightwells Regeneration Scheme Farnham By-Pass A325 Red Lion Ln A31 Alfred Rd West St Farnham By-Pass Weydon Ln Arthur Rd Firgrove Hill A31 FREEHOLD SOUTH EAST OFFICE INVESTMENT 5

DESCRIPTION & SPECIFICATION The property comprises an attractive Grade II listed office building arranged over 3 floors and set within mature landscaped gardens. North of the main building is a separate detached studio. The property benefits from 50 car parking spaces equating to an excellent town centre ratio of 1:253 Sq Ft. In 2003 the vendor undertook a c. 1,500,000 refurbishment. Works completed include: New lighting New suspended ceilings New windows New WC and kitchen facilities Air Conditioning Overhaul of existing pitched roof areas and brickwork repointing Landscaping The Tenant has subsequently incurred additional capital expenditure fitting out their offices to a high standard. FREEHOLD SOUTH EAST OFFICE INVESTMENT 6

ACCOMMODATION The building has been measured by Lane & Frankham in accordance with the RICS Code of Measuring Practice (6th edition) to provide the following Net Internal Areas: Ground Floor Area Plan CELLO HOUSE FLOOR SQ FT SQ M Ground Floor: Reception 257 23.9 Ground Floor: Office 3,946 366.6 First Floor: Office 4,110 381.8 Second Floor: Office 3,471 322.5 Lift SUB-TOTAL 11,784 1,094.8 Lift CELLO STUDIO FLOOR SQ FT SQ M Ground Floor 617 57.3 Studio First Floor 251 23.3 SUB-TOTAL 868 80.6 TOTAL NIA 12,652 1,175.4 The building has also been measured in accordance with the RICS Property Measurement 1st Edition (incorporating IPMS 3). Assignable reports are available on request. TENURE Freehold FREEHOLD SOUTH EAST OFFICE INVESTMENT 8

SITE AREA The site is broadly rectangle with a total area of approximately 0.75 acres. TENANCY The property is let in its entirety to is Healthcare Dynamics Limited (company number 04639378) on a Full Repairing and Insuring lease from 26 October 2016 and expiring on 25 October 2023 (5.7 years). The tenant has an option to break, subject to 6 months notice, on the 26 October 2021, thereby providing an unexpired term certain of 3.7 years. The current passing rent of 312,250 reflects 24.68 per sq ft overall. The rent is subject to an RPI review on the 26 April 2020. The lease is excluded from the security of tenure provisions of the Landlord and Tenant Act 1954 Part II. Copies of the lease and other supplemental documentation can be made available on request. FREEHOLD SOUTH EAST OFFICE INVESTMENT 9

COVENANT is Healthcare Dynamics is an award-winning healthcare communications agency specializing in medical communication services to UK, EU and global healthcare clients. In 2014 the company was acquired by Cello Group Plc and merged into Cello Health, a company that provides bespoke marketing advisory services to the global pharmaceutical and health sectors. is Healthcare Dynamics now operates as a subsidiary of Cello Group Plc. The tenant has a Graydon Rating of 4B Good: Low Risk. Their last three years accounts are summarised below: 31/12/2016 31/12/2015 31/12/2014 Sales 8,265,000 6,844,000 7,464,000 Pre-Tax Profit 1,184,000-54,000 390,000 Tangible Net Worth 2,486,000 1,773,000 1,395,000 HISTORY AND OCCUPATION is Healthcare Dynamics Limited was founded in 2003. Following strong business growth, the company relocated from their former offices in Farnham to part of Cello House (formally Cheyenne House). Over time and following the acquisition by Cello Group Plc, the company now fully occupies the property employing approximately 120 staff. FREEHOLD SOUTH EAST OFFICE INVESTMENT 11

MARKET OVERVIEW Office supply in Farnham, particularly within the town centre, is notably low with the effects of office to residential conversion under Permitted Development Rights having a clear impact. MAIDENHEAD 38.00 M25 UXBRIDGE The current passing rent on Cello House is at a discount to other office locations such as Guildford. The town provides occupiers with an attractive, well connected and cost effective alternative. As a result of the general market dynamics, investors have shown strong interest towards the few opportunities that have recently become available. By way of example: Wey Court West was sold in December 2017. The M4 NEWBURY 23.50 READING 36.50 M4 BRACKNELL 23.00 M3 SLOUGH 28.00 HEATHROW 33.50 35.50 M25 property had c.10 years term certain and sold for 3.75m reflecting a Net Initial Yield of 5.60%. Wey Court East was sold in December 2017. The property had 0.8 years term certain with the tenant not in occupation. Sold for 3.3m off a M3 FARNHAM GUILDFORD M23 quoting level of 2.4m. 24.68 33.50 Source: LSH Thames Valley Office Report 2017 FREEHOLD SOUTH EAST OFFICE INVESTMENT 12

EPC Cello House: D-79 Cello Studio: C-61 ALTERNATIVE USE POTENTIAL Cello House offers the opportunity to explore a residential conversion, subject to receiving all the necessary planning consents. CORPORATE SALE It is the seller s preference to complete the sale by a transfer of the entire issued share capital of Dakota Developments Limited (company number 04887742). Further information is available on request. VAT FURTHER INFORMATION For further information including arrangement for inspection, please contact: Matthew Barker Jerry Vigus 023 8024 9181 023 8020 6111 mbarker@lsh.co.uk jvigus@lsh.co.uk The property is elected for VAT and it is anticipated that the sale will be treated by way of a Transfer of Going Concern (TOGC). PROPOSAL Offers sought in excess of 4,500,000 (four million five hundred thousand pounds) subject to contract and exclusive of VAT for the freehold interest in the property. A purchase at this level reflects the following: NIY Asset purchase assuming 6.57% purchaser costs 6.51% Lambert Smith Hampton 3rd Floor Enterprise House Ocean Way Southampton SO14 3XB Corporate purchase assuming 1.8% purchaser costs 6.82% Subject to Contract and Exclusive of VAT Lambert Smith Hampton February 2018 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. FREEHOLD SOUTH EAST OFFICE INVESTMENT 13