Norwich Union House

8-12 South Parade Nottingham, NG1 2LH

Norwich Union House

Norwich UNioN hoUse

INVESTMENT SUMMARY

X A rare opportunity to secure a freehold student accommodation, retail and leisure investment in a prime position within central Nottingham

X Prime position in the heart of Nottingham’s retail area on Old Market Square

X Excellent access to both Nottingham’s universities

X Following completion of the development the investment will provide basement, ground and 5 upper floors

X The existing upper floors provide approximately 21,126 sq ft

X The site benefits from planning permission to provide 88 en-suite cluster beds with 86 proposed to be built

X The scheme will be delivered for the start of the 2017/18 academic year

X The student income is expected to provide £484,352 (gross) based off 2016/17 rents

X The retail units comprise 19,232 sq ft in two units, one let to JD Wetherspoon plc and the second to Royal Bank of Scotland plc

X The passing rent of the retail units, together with ancillary telecoms income, is £325,850 per annum

X The developer will be Gort Properties, supported by an experienced professional team

X Nottingham is the UK’s 4th largest university city with 51,745 full time students, 19% of which are international

X Good demand for third generation student accommodation in the city with a maturing student accommodation market providing varied quality of specification and location creating a more competitive environment for a balance between mirco-location and quality of product

X Savills is instructed to seek forward funding offers in excess of £10,250,000 which reflects a Net Initial Yield of 6.12% after purchaser’s costs. It is however expected that SDLT will only be payable on the land purchase

AN oppoRTUNITY To foRwARd fUNd A fUllY coNSENTEd offIcE coNVERSIoN of 88 clUSTER bEdS ANd gRoUNd & pART fIRST flooR INcoME-pRodUcINg RETAIl ANd lEISURE IN ThE hEART of NoTTINghAM cITY cENTRE

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University of Nottingham

Nottingham Trent University

The University of Nottingham

- Jubilee Campus

NOTTINGHAM

NOTTINGHAMSTATION

TOWARDS M1 (J26)

University of Nottingham,

King's Meadow Campus

TOWARDS M1 (J25)

TOWARDS M1 (J24) / EAST MIDLANDS AIRPORT

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Norwich Union House

Norwich Union House

locATIoN

Located in the centre of the UK 125 miles north of London, Nottingham is served by three junctions of the M1 motorway (24 – 26). The City is directly linked to the Midland Mainline (London St Pancras 1 hour 45 minutes), Nottingham East Midlands Airport provides direct flights to 90 international destinations and the City’s modern tram system carries an estimated 9.5 million passengers every year.

SITUATIoN

Norwich Union House is situated in the centre of Nottingham facing into Old Market Square. The scheme is in the heart of the retail area surrounded by bars, cafés, theatres, restaurants, high street retail and offices. The scheme is within 7 minutes (0.3 miles) walk of the Nottingham Trent University campus and within 15 minutes tram ride to Nottingham University’s Jubilee campus. Old Market Square is the historic heart of the city. There are a number of bus and tram stops along South Parade and Friar Lane which connect around Nottingham and beyond.

Nearby occupiers include BetFred, Nottingham City Transport, Starbucks, Burton, Dorothy Perkins, Debenhams, Five Guys, Ladbrokes and Schuh, to name but a few.

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Norwich Union House

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NoTTINghAM

The City of Nottingham lies at the heart of the UK and is regarded as the commercial and administrative hub of the East Midlands.

With an economy worth an estimated £12.1 billion, Nottingham is served by a substantial diversified workforce, with over 15 million people living within a 50 mile radius of the centre, covering an extensive area running south towards Loughborough and west towards Derby. Mansfield is to the north and Newark on Trent and Grantham to the north east and east.

The City attracts a number of international corporations with over 50 Regional and National headquarters based in the City. Nottingham is the home to Walgreens Boots Alliance, Experian, E.ON UK, Imperial Tobacco Limited, Gala Group, Siemens, Speedo, Vision Express, Games Workshop, Capital One and Paul Smith.

There are 60,115 students of which 51,745 (86%) are full-time in Nottingham. Of this, circa 19% are international students. There are some strong language schools residing in Nottingham which also contribute to the growing population.

RETAIlINg IN NoTTINghAM

City Centre retail floor space in Nottingham is estimated at 2.88 million sq ft, above the Major City average and ranking the City 5 of the PROMIS Centres on this measure, drawing from an estimated shopping population of 586,000 and primary catchment area of 1,059,000.

The prime retailing is concentrated in the INTU owned Victoria Centre and Bridlesmith Gate, further complemented by the retail thoroughfares of Clumber Street, Lister Gate and the Broadmarsh Shopping Centre.

Lister Gate is the dominant prime High Street pitch, benefiting from large, well configured shop units and the presence of retailers, including Marks and Spencer, H&M, River Island and New Look.

The INTU owned Broadmarsh Shopping Centre anchors the southern end of Lister Gate and comprises 450,000 sq ft, anchored by Boots, Wilkinson, BHS and Argos. The scheme is due to undergo substantial refurbishment and re-configuration, further details on www.intugroup.co.uk.

dEScRIpTIoN

Norwich Union House provides approximately 3,749 sq m (40,358 sq ft) of accommodation.

It comprises two large retail units on basement, ground and part first floors totalling 1,787 sq m (19,232 sq ft) let to Royal Bank of Scotland plc and J D Wetherspoon plc. Above, there are four floors of open plan office space with a passenger lift and male and female WCs on each floor. There is office/storage accommodation on the fifth floor which was previously a caretakers flat.

View over Market Square

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Norwich Union HouseTENANcY SchEdUlE ANd AccoMModATIoN

Unit Tenant lease Start Next Review lease Expiry passing Rent Area sq ft comments

Retail Royal Bank of Scotland plc 24/06/01 N/A 23/06/16 £109,000 Lease renewals discussions in hand on basis of 10 year with break at 5th year

Basement 3,790

Ground 4,129

ITZA 1,433

J D Wetherspoon plc 28/02/00 28/02/20 27/02/35 £204,750 Fixed uplifts

28/02/20 - £214,987.50

28/02/25 - £225,736.87

Tenant break on 28/02/25 Negotiations in hand to remove the break option.

Areas based on GIA

Basement 3,896

Ground 4,009

1st Floor (front) 3,408

offices

1st Floor Vacant 2,435

2nd Floor Vacant 5,866

3rd Floor Vacant 6,178

4th Floor Vacant 6,155

5th Floor Vacant 492

Telecom Services T Mobile (UK) ltd EE ltd

12/05/06 N/A 11/05/18 £12,000

Western Power Distribution (East Midlands) plc 19/09/00 N/A 28/09/21 £100

£325,850 pa 40,358

coVENANT INfoRMATIoN

The Royal bank of Scotland plc was founded in Edinburgh in 1727 and opened its Glasgow branch in 1783 followed by many more branches across Scotland. In 1874 it opened its first London office.

The Royal Bank of Scotland plc has a Dun & Bradstreet rating of 5A1 which, based on their analysis, represents a minimal risk of business failure. In the year ending 31 December 2014, it had a pre-tax loss of £2,403,000,000, a tangible net worth of £62,332,700,000 and net assets of £92,852,700,000.

J d wetherspoon plc was founded in 1979 by Tim Martin who opened the first Wetherspoon pub at Colney Hatch Lane in London. It currently has a chain of approximately 956 pubs and bars throughout the UK. They also own and run a chain of 40 hotels with 900 rooms in the UK.

J D Wetherspoon plc has a Dun & Bradstreet rating of 5A1 which, based on their analysis, represents a minimal risk of business failure. In the year ending 24 July 2015, it had a turnover of £1,513,923,000, a pre-tax profit of £58,732,000 and a tangible net worth of £192,896,000.

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Norwich Union House

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STUdENT AccoMModATIoN

The upper floor offices are consented to be converted to student accommodation providing approximately 21,126 sq ft and will be on site in March / April 2016 with a view to opening in time for the 2017/18 academic year.

The upper floors will provide 14 flats of 5-8 bed clusters, totalling 86 bed spaces. Each flat will have a shared kitchen and sitting room. The student element of the scheme will be accessed via a separate entrance on South Parade, leading straight up to the first floor accommodation via lift and stairs. A schedule of areas is set out below:

Room Size (sq m) No of beds

13 61

14 9

16 4

17 7

18 3

20 2 (accessible)

Total 86

The rooms are all designed to provide plenty of living space. Communal and amenity space is planned into the scheme. The rooms are to be built to a specification commensurate with the wider direct let market. A full specification document can be found in the data room.

SAMplE STUdENT flooR plATE

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STUdENT RENT coMpARAblES 16/17

hall Managed by: Total No of beds Room Type Term Rent 2016/ 17

Global Point Kaplan 449 Classic En Suite 50 £140.00

Classic En Suite 44 £140.00

Deluxe En Suite 44 £145.00

Platinum En Suite 44 £148.00

Minerva House Fortis 158 Premium (single bed) 44 £147.50

Premium (single bed) 51 £145.00

Premium (double bed) 44 £150.00

Premium (double bed) 51 £147.50

Superior (Single Bed) 44 £157.50

Superior (Single Bed) 51 £150.00

Superior (Double bed) 44 £160.00

Superior (Double bed) 51 £152.50

The Exchange IQ 277 En-suite type 2 45 £122.00

En-suite type 2 50 £116.00

Duplex en-suite 45 £132.00

Duplex en-suite 50 £125.00

Trinity Square Derwent Student Living 699 Single en-suite 46 £125.00

Single en-suite 51 £120.00

En-Suite plus 46 £131.00

En-Suite plus 51 £128.00

En Suit 3 bed 46 £129.00

En Suit 3 bed 51 £123.00

Nottingham 1 Derwent Student Living 994 Single En-suite 51 £121.00

Deluxe en-suite 44 £124.00

Deluxe en-suite 51 £119.00

Riverside Point Unite 486 En suite Classic 44 £119.00

En suite Prem 1 44 £129.00

Cotton Mills Hunston 274 Double En-suite 40-47 £135.00

Double En-suite 48-51 £119.00

The Glasshouse Mansion 605 Classic 4 bed En-suite 48 £123.00

Classic 5 bed En-suite 48 £123.00

Classic 6 bed En-suite 48 £123.00

Based on the comparable rents, it is our view that £125 per week is an appropriate rent based off 2016/17 rents. This assumes a gross income of £542,300 before void and bad debt allowance.

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Norwich Union HouseExisting Internal layout

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Norwich Union House

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STUdENT MANAgEMENT

A managing agent is engaged with the developer to provide a management budget for the completed building. Copies of the budget will be available on the data room.

STUdENT AccoMModATIoN MARKET IN NoTTINghAM

Nottingham is a very strong higher education city boasting two main universities. In the Times Good University Guide, the University of Nottingham is ranked 25th and Nottingham Trent University is 54th. There are 61,115 students, of which 51,745 (86%) are full-time and are likely to require student accommodation over the life of their studies. Of these full-time students, 43,685 (84%) are undergraduates and 8,060 (16%) are postgraduates. The total number of international students is 11,215 (19%) with 2,370 (21%) from inside the EU and 8,845 (79%) from non-EU countries. Kaplan International College also has a base on the Nottingham Trent campus. Combined, these universities provide strong demand for high quality student accommodation in Nottingham, especially in the city centre.

The supply and demand imbalance is likely to be intensified by an increasingly restrictive and challenging planning environment which will limit future student accommodation development impacting and consequently insulating rents and values of well located and managed existing assets. In addition, we expect a continuation in the trend of migration of students from the HMO sector to purpose built housing as legislation tightens and the price differential between the two remains narrow.

The University of Nottingham has campuses in China and Malaysia and has been invited to establish a second Chinese campus in Shanghai. Nottingham describes itself as “research led” with work carried out at the University winning two Nobel prizes in 2003. The University of Nottingham is committed to maintaining current levels of undergraduate students and maintain their position in terms of postgraduate recruitment. The University of Nottingham’s Jubilee Campus state-of-the-art facilities include the Schools of Education, Contemporary Chinese Studies and Computer Science, Nottingham University Business School, The National College for Leadership of Schools and Children’s Services, Sports Centre and Innovation Park.

Nottingham Trent University (NTU) has been consistently among the leading post 1992 universities in The Times League Table as well as one of the biggest. The University has demonstrated high quality in an unusually wide range of disciplines. Best known for Fashion and other creative arts which have the largest number of students, it also boasts one of the UK’s biggest Law Schools.

NoTTINghAM STUdENT MARKET SUMMARY

full time Students purpose built Student bed Spaces proportion of Students

University of Nottingham 28,895 8,069 28%

Nottingham Trent University 26,840 4,777 21%

Total University 51,745 10,946 25%

Private Sector Beds 9,730 18%

Total Existing 51,745 20,676 40%

Source: Times Good University Guide 2015, HESA, Savills Research.

plANNINg

The scheme was granted planning permission on 21st September 2015 for “Conversion to the rear of the first floor and all of the upper floors to student accommodation, comprising 15 apartments (87 bedrooms in total). Alterations to the front and rear elevations” (ref: 15/00951/PFUL3 (PP-04078242). Under application PP-04537796 (15/02593/PNMA) an amendment to planning permission reference 15/00951/PFUL3 was granted which increased the number of bedrooms to 88. The Section 106 has been agreed and contributions totalling £402.65 per bed space will be required.

pRoJEcT TEAM

Listed below is the project team engaged to deliver the development. Relevant case studies demonstrating track record and experience of the consultants have been uploaded onto the data room.

Pulse Associates has also secured competitive tenders ranging from £3.55million to £3.98million from four main contractors which were reported on 17th August 2015. Clegg Construction is likely to be selected as preferred bidder on the tender and after further negotiations with Cleggs a tender price of £3.16 million has been agreed. Pulse Associates / Clegg Construction have estimated that the conversion works will take 42 weeks to complete.

Project Manager Pulse Associates

Quantity Surveyor Pulse Associates

Architect Rayner Davies Architects

Structural Engineer BSP

M & E Consultant Anderson Green

Acoustic Surveyor Acute Acoustics

Building Control Consultant Turton Building Control

Management Advisor Unipol

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Norwich Union HouseView over Market Square

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Norwich Union House

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VAT

The property is elected for VAT.

Epc

The EPC rating for Norwich Union House is D90.

TITlE

The freehold property is registered under title number NT394013.

pRopoSAl

Savills is instructed on a sole agency basis to seek full funding offers of £10,250,000. This represents a 6.12% Net Initial Yield. This is after purchaser’s costs of 2.8% (assuming that Multiple Dwelling Relief is applicable) on the student element and 5.8% purchaser’s costs on the retail element. It is expected that SDLT will only be payable on the land purchase. A development appraisal is available on request.

dATA RooM

Further information is available in the data room www.savills.com/marketsquarenottingham.

fURThER INfoRMATIoN

For further information please contact:

lizzie whetman Student Investment 020 7016 3863 07807 999174 lwhetman@savills.com

Victor Ktori Commercial 0115 934 8171 07870 999467 vktori@savills.com

Michael donaghy Investment and Development 0115 934 8030 07967 555581 mdonaghy@savills.com

Important Notice

Savills, their clients and any joint agents give notice that:

1. They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact.

2. Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Savills have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise.

Designed and Produced by Savills Marketing: 020 7499 8644 | February 2016 11