142/162 KILBURN HIGH ROAD LONDON, NW6 4JD FREEHOLD RETAIL & OFFICE INVESTMENT WITH FURTHER DEVELOPMENT POTENTIAL

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1 142/162 KILBURN HIGH ROAD LONDON, NW6 4JD FREEHOLD RETAIL & OFFICE INVESTMENT WITH FURTHER DEVELOPMENT POTENTIAL

2 INVESTMENT SUMMARY LOCATION The property occupies a prime trading position on the east side of Kilburn High Road between the junctions with Quex Road and Kingsgate Place close to other multiple retailers including Claires Accessories, The Link, H Samuel, Dolland & Aitchison and Birthdays. DESCRIPTION The property comprises a supermarket of 21,086 sq ft, 6 shop units totalling 25,997 sq ft and 27,851 sq ft of offices on a site of 0.68 acres. The total floor area is therefore 74,934 sq ft. TENANCIES The property is let by way of 26 separate leases on effective FRI terms to tenants who include Somerfield Stores Ltd, Oxfam, Vodafone Ltd, Poundstretcher Properties Ltd and The Peacock Group Plc. RENT The total present income is 755,900 per annum exclusive. TENURE The property is held freehold. INVESTMENT FEATURES 61% of income secured by the excellent covenants of Somerfield, Oxfam, Vodafone, Poundstretcher and The Peacock Group 35% of income secured until 2018 Unbroken parade Multi-let retail & office with immediate substantial reversionary potential Estimated rental value 1,163,400 per annum Potential to refurbish and extend upper parts Potential for change of use of upper parts from offices to residential. 1

3 PROPOSAL Our clients are seeking offers in excess of 15m subject to contract for the freehold interest. A purchase at this level reflects a net initial yield of 4.76%, an immediate reversion to 5.99% on settlement of various outstanding lease renewals and rent reviews, a reversionary yield of 7.33% by December 2008 and a true equivalent yield of 7.42% (7.1% nominal) allowing for purchase costs of 5.75%. 2

4 LOCATION Kilburn High Road is a busy well established retail centre situated approximately 3 miles northwest of Central London. The subject property is situated on the east side of the High Road midway between its junctions with Quex Road and Kingsgate Place. Nearby retailers include Claires Accessories, The Link, H Samuel, Dolland & Aitchison, Birthdays Cards & Gifts, Shoefayre, Footlocker, Specsavers, Boxclever and McDonald s. Kilburn High Road is well served by Public transport with numerous bus routes available nearby providing quick and easy access to London s West End and the north west suburbs. A number of mainline and underground stations are within easy walking distance including Kilburn High Road (London Euston), Brondesbury (London Marylebone), Kilburn and West Hampstead Underground Stations (Jubilee Line) and Kilburn Park Underground Station (Bakerloo Line). The A406 North Circular Road and junction 1 of the M1 motorway are approximately 2 miles to the north west. 3

5 DESCRIPTION The property occupies a 0.68 acre (0.275 hectares) site having a 230 ft (70m) frontage to Kilburn High Road and is bounded to the rear by Kingsgate Place and Kingsgate Road which provide access for servicing. The property comprises a late Victorian parade of 8 shop units and supermarket with offices over arranged on basement, ground and three upper floors providing a total of 74,934 sq ft (6,961.5 sq m) of accommodation. The accommodation is split as follows:- Retail 25,997 sq ft 2,415.1 sq m Supermarket 21,086 sq ft 1,959.0 sq m Offices 27,851 sq ft 2,587.4 sq m Total 74,934 sq ft 6, sq m The offices comprise three elements:- Prosper, serviced offices of 5,396 sq ft (497.0 sq m) accessed from Kilburn High Road;, comprising 13,408 sq ft (1,245.7 sq m) also accessed from Kilburn High Road; and Kingsgate comprising 7,150 sq ft (664.3 sq m) accessed from the rear of the property in Kingsgate Place. Prosper is finished to a basic specification whilst and Kingsgate have the following common specification:- Part raised access floors/perimeter trunking Suspended ceilings Carpeting throughout Kitchenettes Male and female W/C s Excellent natural light Part comfort cooling/central heating 4

6 TENURE TENANCIES Freehold The property is let in accordance with the attached tenancy schedule and produces a current income of 755,900 pa exclusive. With the exception of the Somerfield Supermarket and No. 152 Kilburn High Road all retail unit leases expire by March In addition the lease of No. 152 Kilburn High Road is subject to a review effective 6 th August 2004, No. 158 is subject to a review effective 25 th March 2002 and the leases of No. 148 (Discount ), No. 154 (Oxfam) and No. 156 Kilburn High Road (Vodafone Ltd) have expired and the tenants are presently holding over. The majority of the leases in Kingsgate and have expired and the tenants are holding over. All leases are on effective full repairing and insuring terms and expenditure on the exterior and common parts is recoverable through the service charge. ASSET MANAGEMENT POTENTIAL The property presents considerable scope for refurbishing and extending the upper parts or possibly conversion to residential use to include the construction of an additional floor at roof level subject to the usual consents. In addition the present layout is inefficient and could be improved significantly by the rationalisation of the common areas and various staircases. The majority of the office accommodation is occupied by the same tenant under a number of different leases many of which have recently expired. The tenant has previously indicated a wish to renew its various leases under a single new lease at a rent to be agreed. There may also be scope for restructuring the Somerfield supermarket lease and taking back the office accommodation on 1 st to 3 rd floors which is presently sub-let. 5

7 RENTAL VALUE Retail The retail units are presently let off Zone A rents of between 35 and 59. Recent open market letting evidence suggests the current rental value is in the region of 100 Zone A. We understand that the former Bank of Ireland unit is to be redeveloped to provide two units which are rumoured to of been let off ZA rents of 100 psf. However, we are awaiting confirmation of this. This property is situated on the west side of Kilburn High Road to the south and is considered to be in an inferior trading position to the subject premises. In arriving at our estimated rental value we have conservatively adopted Zone A rents of between 80 and 85. Supermarket The current rent paid by Somerfield Food Stores Ltd of 220,000 per annum analyses to per sq ft taking the ancillary areas at 2.60 per sq ft. The Sainsbury Supermarket at No. 88/92 Kilburn High Road to the south of the property was the subject of a rent review which was settled at per sq ft with effect from September We believe the current appropriate rate is psf and adopting this results in an estimated rental value of 324,000 per annum. Offices This accommodation is presently let off rents in the range of 5.24 per sq ft to per sq ft. Most recent lettings within the building suggest that the current rental value is in the range of 10 to 12 per sq ft which would place an overall estimated rental value on the offices of 290,040 per annum. 6

8 PROPOSAL Our clients are seeking offers in excess of 15m subject to contract for the freehold interest. A purchase at this level reflects a net initial yield of 4.76%, an immediate reversion to 5.99% on settlement of various outstanding lease renewals and rent reviews, reversionary yield of 7.33% by December 2008 and a true equivalent yield of 7.42% (7.1% nominal) allowing for purchase costs of 5.75%. As an alternative our clients are in a position to sell their SPV which on the assumption of purchase costs of 1.75% which will have the effect of enhancing the net initial yield to 4.95% with an immediate reversion to 6.22% a final reversionary yield of 7.62% and a true equivalent yield of 7.71% (7.37% nominal). VAT VAT will be payable on the purchase price. FURTHER INFORMATION To request further information or to arrange an internal inspection of the property please contact: JONATHAN GILBERT BSC MRICS ACIARB SARAH TAYLOR Bsc (Hons) MRICS Hartnell Taylor Cook LLP Hartnell Taylor Cook LLP 12/13 Conduit Street 12/13 Conduit Street London W1S 2XH London W1S 2XH Tel: Tel: Fax: Fax: jonathan.gilbert@htc.uk.com sarah.taylor@htc.uk.com SUBJECT TO CONTRACT AND EXCLUSIVE OF VAT 7

9 RETAIL TENANCY SCHEDULE DEMISE TENANT FLOORS AREAS SQ FT SQ M LEASE RENT PA REVIEW EXPIRY NOTES Kilburn High Road 148 Kilburn High Road Somerfield Stores Ltd Phlip Simmons & Hylton Spencer Treisman t/a Discount Bst, Grd, 1st, 2nd, 3rd Grd & Bst Retail Office TOTAL Grd ITZA Bst Sales Bst Storage TOTAL 21,086 1,947 23,033 1, ,778 3,529 7,051 1, , yrs from 21/2/ yrs from 27/8/ ,000 21/02/ yearly. 20/12/2018 Effective FRI lease. The offices on 1 st -3 rd floors have been sublet. On assignment from Safeway Food Stores Ltd. 53,000 26/08/2004 Holding over. Effective FRI lease. 152 Kilburn High Road 154 Kilburn High Road Mansour Ezzati & Mahmed Agheli Grd Grd ITZA Oxfam Grd Grd ITZA 1, , yrs from 06/08/ yrs from 27/08/ ,000 06/08/ /08/2019 Effective FRI lease. Review activated. On assignment from Ryman Ltd. 36,000 26/08/2004 Holding over. Effective FRI lease. 156 Kilburn High Road Vodafone Ltd Grd Grd ITZA 1, yrs and 2 months from 25/06/ ,900 26/08/2004 Holding over. Effective FRI lease. New 5 year lease requested. 158 Kilburn High Road Poundstretcher Properties Ltd Grd & Bst Grd ITZA Bst Sales Bst Storage TOTAL 2,694 1,259 5,224 1,154 9, yrs from 25/03/ ,000 25/03/ /03/2007 Effective FRI lease. Tenant has offered 88,000 pa to settle March 2002 rent review. 160 Kilburn High Road The Peacock Group Plc Grd Grd ITZA 1, yrs from 25/03/ ,500 24/03/2008 Effective FRI lease. 8

10 RETAIL TENANCY SCHEDULE CONTINUED DEMISE TENANT FLOORS AREAS SQ FT SQ M LEASE RENT PA REVIEW EXPIRY NOTES 162 Kilburn High Road The Peacock Group Plc Grd & Bst Grd ITZA Bst TOTAL 1, , yrs from 28/06/ ,250 27/06/2007 Effective FRI lease. Subject to Bon Marche. TOTAL 49,030 4, ,650 9

11 OFFICE TENANCY SCHEDULE DEMISE TENANT FLOORS SQ FT SQ M LEASE RENT PA RENT PSF Prosper 1st - 3rd 5, yrs from 29/09/1981 Messrs Jalalian, Ghanned & Talaie Ltd REVIEW EXPIRY NOTES 28, /09/ /09/2006 Effective FRI lease. Currently used as a serviced office centre Kingsgate Hotel Bookings International Ltd 1st 3, yrs from 25/12/ , /12/2003 Effective FRI lease. Holding over. Kingsgate Expotel Hotel Reservations Ltd Pt 2nd 3, yrs from 25/03/ , /03/1998 Effective FRI lease. Holding over. Kingsgate Expotel Hotel Reservations Ltd Pt 2nd yrs from 25/03/1983 3, /03/ yrly rent reviews. Effective FRI lease Vacant 1st Suite BIAS 1st Suite yr from 19/02/ , /02/2005 Effective FRI lease. Holding over. 102A Hotel Bookings International Ltd 1st Suite 102A yrs from 25/12/1995 2, /12/2000 Effective FRI lease. Holding over. Hotel Bookings International Ltd 1st Suite 103 1, yrs from 25/03/ , /03/2004 Effective FRI lease. Holding over. 10

12 OFFICE TENANCY SCHEDULE CONTINUED DEMISE TENANT FLOORS SQ FT SQ M LEASE RENT PA RENT PSF REVIEW EXPIRY NOTES Hotel Bookings International Ltd 1st Suite 104 1, yrs from 25/12/ , /12/2002 Effective FRI lease. Holding over. Hotel Bookings International Ltd 1st Suite 105 1, yrs from 25/03/ , /03/2004 Effective FRI lease. Holding over. Hotel Bookings International Ltd 1st Suite yrs from 25/12/1982 4,400-22/03/2003 Effective FRI lease. Sub-tenant holding over. West Atlantic Airlines 2nd Suite 201 1, yr from 24/10/ , Lance Lincoln 2nd Suite 202 1, yrs from 19/02/ , /02/2007 Effective FRI lease. Hotel Bookings International Ltd 2nd Suite 203 1, yrs from 22/11/1996 9, /03/2004 Holding over. BSTO Ltd 2nd Suite 204 1, yrs from 25/12/ , /12/2004 Effective FRI lease. Holding over. Hotel Bookings International Ltd 2nd Suite 205 1, yrs from 06/03/ , /03/ /03/2002 Effective FRI lease. Holding over. 11

13 OFFICE TENANCY SCHEDULE CONTINUED DEMISE TENANT FLOORS SQ FT SQ M LEASE RENT PA RENT PSF REVIEW EXPIRY NOTES Hotel Bookings International Ltd 2nd Suite yrs from 24/06/1986 6, /06/1996 Effective FRI lease. Holding over. NA Marketing Ltd 2nd Suite months from 11/02/2004 6, /08/2004 Effective FRI Lease. Holding over. Total Office 25,904 2, ,250 TENANCY SCHEDULE SUMMARY Total Supermarket Income 220,000 Total Retail Income 317,650 Total Office Income 218,250 Total Income 755,900 12

14 TENANTS COVENANT STATUS UNIT TENANT DATE OF ACCOUNTS TURNOVER ( 000 S) PRE-TAX PROFITS ( 000 S) NET WORTH ( 000 S) 142/144 Kilburn High Road 154 Kilburn High Road Oxfam 156 Kilburn High Road Vodafone Ltd 158 Kilburn High Road Poundstretcher Properties Ltd 160/162 Kilburn High Road Somerfield Stores Ltd 24/04/04 26/04/03 27/04/02 30/04/04 30/04/03 30/04/02 31/03/04 31/03/03 31/03/02 23/02/04 22/02/03 06/07/02 31/03/04 The Peacock Group Plc 31/03/03 31/03/02 4,475,400 4,499,500 4,640, , , ,479 4,249,400 3,949,300 3,596,300 7,983 5,789 9, , , ,818 (30,700) (69,400) (64,400) (2,900) 6,200 2, , , , ,436 20,304 16,002 76, , ,600 58,700 61,600 54,388 5,264,700 5,667,400 6,195,800 7,040 6,382 6,421 41,426 26,257 48,014 Kingsgate & Hotel Bookings International Ltd 31/10/00 31/10/99 31/10/ ,713 1,850 (51) Kingsgate Expotel Hotel Reservations Ltd BSTO Ltd 31/10/03 31/10/02 31/10/01 31/03/04 31/03/03 31/03/02 89,769 81,915 59, ,241 4,605 5, (61) 2,805 1, (116) (223) (222) 13

15 MISREPRESENTATION ACT Misrepresentation Act 1967 and Property Misdescriptions Act 1991 Hartnell Taylor Cook LLP for themselves and for the vendor of this property, whose agent they are, give notice that: These particulars are set out as a general outline only for the guidance of intending purchasers and do not constitute part or whole of an offer or contract; All descriptions, dimensions, photographs, references to condition and necessary permissions for use and occupation and other details are given in good faith and are believed to be correct, but intending purchasers should not rely on them as statements or representations of fact and must satisfy themselves as to their correctness; No person in the employment of Hartnell Taylor Cook LLP has any authority to make or give any representation or warranty whatsoever in relation to this property or these particulars nor enter into any contract on behalf of the vendor; Unless otherwise stated, all prices, rents and other charges are quoted exclusive of VAT. Any intending purchasers must satisfy themselves independently as to the incidence of VAT in respect of any transaction; All plant, machinery, equipment, services and fixtures and fittings referred to in these particulars were present at the date of publication. They have not been tested and we give no warranty as to their condition or operation; No responsibility can be accepted for any expenses incurred by intending purchasers in inspecting properties that have been sold or withdrawn 14

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