NOTT1NGHAM120 - 158 CANAL STREET, NOTTINGHAM NG1 7HGFREEHOLD OFFICE AND RESIDENTIAL INVESTMENT OPPORTUNITY

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� A rare opportunity to acquire one of the most prominent buildings in Nottingham’s central business district.

� Located in Nottingham, the regional and commercial capital of the East Midlands, Nottingham is one of England’s eight core cities and home of many leading corporate and public sector occupiers.

� Nottingham One is a landmark development occupying a prominent waterfront position in Nottingham’s Southside district.

� 2016 RIBA East Midlands award winning development.

� Comprises six self-contained B1 office units and 242 residential units having been sold to the Metropolitan Housing Trust and individual owner occupiers / investors.

� The office accommodation totals 5,017.43 sq m (54,007 sq ft).

� 258 on site car parking spaces arranged over two floors.

� Tenure – held freehold (Title Number NT416665).

� The residential apartments sold on long leases for a term of 125 years with effect from 1 April 2009 having recently been increased with effect from 1 April 2019 (upward only and by reference to RPI Index).

� Total current passing rent of £843,395 per annum.

� Attractive unexpired term of approximately WAULT 7.14 years to lease expiries and WAULT 3.53 to break.

� The property has a high quality tenant line up being let to six tenants including:

– Axiell Limited

– Deep Silver Dambuster Studios Limited

– Ingeus Limited

– Mitrefinch Limited

– Finastra International Limited

– Rendall & Rittner Limited

� Exceptional income diversity with a strong overall covenant profile and underpinned by core residential ground rent income.

� Low passing rents of £14.00 per sq ft set against the current prime rent in Nottingham of £20.00 per sq ft. This offers significant future asset management potential to improve running yield and return.

�We are instructed to seek offers in excess of £11,110,000 subject to contract and exclusive of VAT. A purchase at this level reflects an initial yield of 7.75% on the office income and 4.00% on the residential ground rent income, equivalent yield of 7.09%, assuming standard purchasers costs.

Investment Summary

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NOTT1NGHAM

nottinghamPOSITIONED AT THE HEART OF THE UK, NOTTINGHAM IS THE ECONOMIC POWERHOUSE FOR THE EAST MIDLANDS, BEING THE PRINCIPAL COMMERCIAL AND ADMINISTRATIVE CENTRE FOR THE REGION.

The city has a catchment population of over 1.3 million people and forms the centre of the UK’s 8th largest urban area. It has a catchment of over 3 million people within half an hour’s drive time. Nottingham is one of eight members of the English Core Cities Group and benefits from a £12.1 billion economy.

Nottingham has a working population of over 850,000 people of which over 620,000 are in full time employment. It is also home to two of the UK’s leading universities; The University of Nottingham and Nottingham Trent University, which are attended by approximately 60,000 students. This pool of educated and skilled labour is a major attraction for businesses located in the city.

Nottingham continues to attract a number of international corporations with over 50 Regional and National headquarters located in the city.

The city has recently benefited from a number of major infrastructure projects including the £150 million upgrading of Nottingham Station to create the Nottingham Transport Hub. The £570 million extension of the NET Tram system connecting the existing line from the city centre to Toton at J25 of the M1 Motorway (adjacent to the new HS2 East Midlands Hub) and the dualling of the A453 between the M1 Motorway at J24 and Nottingham city centre. Combined, this infrastructure spend has been one of the largest in any of the regional cities in the UK and has significantly enhanced the position of Nottingham as a core regional location.

Nottingham is located approximately 125 miles (200 km) north of London, 55 miles (88.5 km) north east of Birmingham and 83 miles (133 km) south east of Manchester.

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CONNECTIVITYNOTTINGHAM BENEFITS FROM A WORLD CLASS, MULTI-MODAL INTEGRATED TRANSPORT INFRASTRUCTURE, PROVIDING EXCEPTIONAL LOCAL, NATIONAL AND INTERNATIONAL CONNECTIONS.

Excellent access to the national Motorway network by virtue of a central UK location, directly adjacent to junctions 24, 25 and 26 of the M1 Motorway, and also in close proximity to the A42 / M42 link to the West Midlands and the A50 link to the North West. Significant upgrades to the road network have been carried out with the dualling of the A453 between Junction 24 of the M1 and Nottingham city centre, completed in 2015, and the installation of smart motorway from junctions 23a to 25 of the M1, completed February 2019.

Nottingham benefits from extensive intercity and regional rail services, with regular services to London St Pancras International every 30 minutes, via the Midland main line, with a fastest journey time of 1 hour 31 minutes and connecting directly with Eurostar services to the continent. Other major cities are also served by fast direct services including Derby (21 minutes), Leicester (26 minutes), Birmingham (1 hour 14 minutes) and Manchester (1 hour 49 minutes). Nottingham Station has recently undergone a £150m refurbishment and upgrade project to create a true transport hub for the East Midlands. A dedicated HS2 station is planned at Toton to the West of Nottingham.

Nottingham Express Transit Tram System

The city benefits from the Nottingham Express Transit (NET) tram system, one of the UK’s most successful rapid transport systems. The system is formed of two lines which connect Phoenix Park and Hucknall in the north with Toton and Clifton in the south via the city centre. The southern extension to Toton via Chilwell and Beeston was completed in 2015 at a cost of £570 million.

Nottingham is served by East Midlands Airport, located 12 miles to the south west of the city. East Midlands Airport is connected to Nottingham city centre by the 24 hour Skylink bus service and direct rail services to the nearby East Midlands Parkway, with a fastest journey time of 10 minutes. It is the 13th busiest airport in the UK in terms of passenger traffic and is a major cargo hub, being the 2nd busiest airport for freight traffic after London Heathrow. It provides daily direct flights serving the principal European and International destinations.

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PETERBOROUGH

KETTERING

LEICESTER

EAST MIDLANDS

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COVENTRY

STOKE-ON-TRENTNOTTINGHAM

MANCHESTER

SHEFFIELD

DONCASTER

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STOCKPORT

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NOTTINGHAM STATION

UNITY SQ HMRC

THE MEADOWS NHS BBC

THE PARK

NOTTINGHAM CASTLE

INTU BROADMARSH

NOTTINGHAM CITY COUNCIL

LACE MARKET POINT

NOTTINGHAM COLLEGE

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SITUATIONNOTTINGHAM ONE OCCUPIES A WATERSIDE POSITION WITH EXTENSIVE LINER FRONTAGE TO CANAL STREET OVERLOOKING NOTTINGHAM CITY COUNCIL’S STUNNING HEADQUARTERS, CAPITAL ONE’S EUROPEAN HQ AND THE MIXED USE WATERFRONT PLAZA SCHEME.

The property benefits from excellent transport connectivity, being within five minutes’ walk of central Nottingham train station, NET tram station and the bus interchange which is shortly to be redeveloped as part of the Broadmarsh shopping centre.

The high profile redevelopment scheme ‘Building a Better Broadmarsh’ will significantly improve the environs of the property and Nottingham City Centre in the future. The regeneration will create a transformed southern gateway to the city, boosting the local economy by an estimated £1.1 billion GVA per annum. The extensive plans include the redevelopment of intu Broadmarsh, the demolition and reconstruction of the existing Broadmarsh Car Park and Bus Station and pedestrianisation of numerous principle streets. The £250 million programme of works is underway and is expected to be completed by Q3 2020.

In addition, the east end of Canal Street, is the Island Business District and the Eastside Regeneration Enterprise Zone, currently home to the BBC, NHS and BioCity on which the Conygar Investment Company have recently announced a resolution to grant planning permission for a mixed use scheme for development of over 2 million sq ft including offices, apartments and student housing.

Directly opposite the property, construction is currently in progress for the new Nottingham College city hub, representing a reported £58 million investment in education for the city. It will offer new facilities and resources for college students and provide community facilities such as a new training restaurant, café and performing arts centre.

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NOTTINGHAMSTATION

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DESCRIPTIONNOTTINGHAM ONE COMPRISES A STYLISH MIXED USE DEVELOPMENT BOASTING IMPRESSIVE ELEVATIONS BOTH TO CANAL STREET AND WATERSIDE AND ANCHORED TO THE EAST BY AN ELEGANT RESIDENTIAL TOWER.

Nottingham One is arranged over two basement levels, and seven upper floors (including mezzanine) in the main building and residential tower over eleven floors. The office accommodation totals 5,017.43 sq m (54,007 sq ft) and benefits from a total of 258 car parking spaces (122 Commercial) giving an exceptional city centre parking ratio of 1:442 sq ft, in respect of the commercial element. The Grade A office accommodation includes the following features:

� Lifts

� Raised access floors

� LG7 lighting

� Carpets

� Glass balustrade

� Air conditioning

�Waterfront outside seating

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TENANCY SCHEDULEThe property is let in accordance with the following tenancy schedule:

Unit No Tenant Term (Years)Start Date

Term Expiry

Rent Review Break WAULT

WAULT (to Break)

Annual Rent(£)

Annual Rent (£/sq ft)

Unit A Axiell Ltd* 10 07/07/15 30/06/25 01/07/20 30/06/20 5.75 0.74 108,934 14.00

Unit B Deep Silver Dambuster Studios Ltd 10 23/03/13 22/03/23 23/03/18 N/A 3.47 3.47 232,650 14.00

Pavilion B Deep Silver Dambuster Studios Ltd 10 23/03/13 22/03/23 23/03/18 N/A 3.47 3.47 8,400 14.00

Unit C Ingeus UK Ltd 10 23/03/16 01/04/25 23/03/21 01/04/22 6.47 0.50 183,148 14.00

Unit D Mitrefinch Ltd 10 01/12/17 30/11/27 01/12/22 30/11/22 8.16 3.16 85,512 14.59

Unit E Finastra International Ltd** 15 01/12/19 30/11/34 30/11/24 30/11/29 15.17 10.17 135,464 14.00

Unit F Rendall & Rittner Ltd 5 23/04/19 22/04/24 N/A N/A 4.56 4.56 5,432 14.00

Totals 7.14 3.53 759,540 14.06

*Notice to break served by tenant and ongoing negotiations with interested parties.**Lease commencement date pending completion of fit out works.

RESIDENTIAL GROUND RENT INCOME

In addition to the Commercial income above a further £83,855 per annum is receivable from 192 residential units, having been reviewed 1 April 2019 by reference to RPI and subject to further review on a ten yearly basis.

Metropolitan Housing Trust (MHT) retains the long leasehold interest in the balance (50) of the units, for which ground rent is waived so long as they or any other Social Landlord (as defined by the Housing Act 1985) remains Lessee.

CAR PARKING

Of the 261 car spaces, 37 spaces are available to rent and produce additional income.

As a guide covered car parking in Nottingham ranges from £1,000- £1,500pa per space.

ACCOMMODATIONThe office accommodation has been measured in accordance with the new RICS Property Measurement (First Edition), which incorporates the new International Property Measurement Standards (IPMS) and RICS Code of Measuring Practice (6th Edition) to provide the following net internal floor areas:

UNIT Sq Ft Sq M

Unit A 7,781 722.879

Unit B 16,617 1,543.770

Pavilion B 600 55.742

Unit C 13,082 1,215.358

Unit D 5,863 544.691

Unit E 9,676 898.930

Unit F 388 36.046

TOTAL 54,007 5,017.416

COVENANT

Tenant D&B Credit risk Accounts date Turnover Profit Net worth

Axiell Ltd 2A2 Lower than Average 31/12/2018 £4,001,000 (£65,000) £2,212,000

Deep Silver Dambuster Studios Ltd

2A2 Lower than Average 31/03/2019 £13,263,028 £3,226,869 £3,767,785

Ingeus UK Ltd 3A4 High Risk 31/12/2018 £118,317,000 £1,729,000 £10,934,000

Mitrefinch Ltd 2A2 Lower than Average 30/11/2018 £14,666,921 £1,777,931 £4,425,160

Finastra International Ltd

N1 Minimum Risk 31/05/2018 £222,186,000 (£27,709,000) (£13,965,000)

Rendall & Rittner Ltd A2

Lower than Average 30/06/2018 - - £448,790

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MARKET COMMENTARYTAKE-UP

Take-up within the Nottingham City Centre office market was just above 200,000 sq ft, six months to end Q2 2019, recording continued healthy levels of demand. Most notably, a 100,000 sq ft pre-let of the Crocus Place Scheme, adjacent to Nottingham Train Station was announced at the beginning of the year. The first half of the year also saw the University of Law agree to nearly 30,000 sq ft in the City Centre and web hosting company GoDaddy take the 27,000 sq ft Waterfront House in Beeston on a ten year lease.

Previously, 2018 was one of the strongest performing years in Nottingham’s recent history as HMRC pre-let the 277,000 sq ft Unity Square Development in Q4.

The lack of Grade A stock has facilitated continued refurbishment of existing office buildings, leading to a sustained period of rental growth. Grade A headline rents have now reached £20.00 per sq ft.

Principal tenant demand is drawn from professional services, followed by Government, education and manufacturing sector occupiers. Principal take-up is within the 5,000 to 15,000 sq ft range, however there have been a number of notable large transactions.

SUPPLY

There continues to be a severe shortage of Grade A supply within Nottingham City Centre and whilst new build schemes are in the pipeline, new stock is not expected to enter the market until 2020 at the earliest, the majority of which having been pre-let. The shortage of Grade A accommodation is bolstering the Grade B office market.

SIGNIFICANT TRANSACTIONS

Date Property Size (Sq ft) Tenant TermHeadline Rent

(per Sq Ft)

Q1 2019 Equinox Building 7,981 NHS 9 years £16.75

Q1 2019 1 Royal Standard Place 28,914 University of Law 15 years £20.00

Q4 2018 13 – 19 Derby Road 10,065 Wren Sterling Financial Planning 15 years £20.00

Q2 2018 Equinox Building 15,138 NHS 10 years £16.00

Q4 2017 Agora, Cumberland Place 15,096Department for Education 10 years £17.00

Q4 2016 Water Court, Canal Street 18,867 Eversheds 10 years £18.50

Q2 2016 37 Park Row 6,361 Thompsons LLP 10 years £17.00

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VAT

The property has been elected for VAT. It is anticipated the sale will be treated as a Transfer of a Going Concern (TOGC).

DATA ROOM

A data room has been prepared, containing relevant supporting documents and information. Access is available upon request.

SERVICE CHARGE

There is a service charge operating at the property. The service charge budget for the year ending 2028 is circa £1.60 per sq ft per annum plus £125.00 per annum for car parking space.

ENERGY PERFORMANCE CERTIFICATE

The Energy Performance Certificate is available to view in the data room.

ANTI-MONEY LAUNDERING (AML)

Any offer accepted is subject to completing AML checks.

PROPOSALWe are instructed to seek offers in excess of £11,110,000, subject to contract and exclusive of VAT.

A purchase at this level reflects an initial yield of 7.75% on the office income and 4.00% on the residential ground rent income, equivalent yield of 7.09%, assuming standard purchasers costs.

The Holding SPV is available thereby offering purchasers a share of the potential Stamp Duty saving.

FURTHER INFORMATION

CONTACTVIEWING AND FURTHER INFORMATION

Strictly by appointment only with the Sole Agent, Savills.

Victor Ktori vktori@savills.com 0115 934 8171

Christine Thorn cthorn@savills.com 0115 934 8152

Savills Enfield Chambers 18 Low Pavement Nottingham NG1 7DG

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 Commercial Marketing: 020 7499 8644

November 2019