LONG INCOME FREEHOLD OFFICE INVESTMENT

LONG INCOME FREEHOLD OFFICE INVESTMENT REVERSIONARY LEASE TO CIVICA UK LIMITED EXPIRING ON 27TH SEPTEMBER 2033 ENTER

INVESTMENT SUMMARY Attractive former mill building refurbished in 2001 providing good quality office accommodation totalling 28,435 sq ft (2,641.7 sq m) together with 60 car parking spaces. Prominently located at the entrance to Leeds City Centre and in close proximity to Junction 3 of the M621 motorway. Fully let to established IT services and software company Civica UK Limited on a reversionary FRI lease expiring on 27th September 2033. Civica UK Limited have an Experian Delphi rating of 100/100 Very Low Risk. Freehold. Fixed rental increase on 27/9/2018 to RPI compounded annually, with a collar of 2% and a cap of 4%. Upward only Open Market reviews on 27/9/2023 and 27/9/2028. Additional income provided by an advertising hoarding let to JC Decaux UK Limited until November 2016 at a rent of 5,000 per annum, rising to 6,000 per annum in November 2015. Total income including the advertising hoarding is 439,900 per annum. Potential to rise to 486,165 per annum at the first review on 27/9/2018 assuming a minimum 2% per annum compounded increase or 535,122 per annum based on a maximum 4% per annum compounded increase and 6,000 per annum hoarding income. We are instructed to seek offers in excess of 5,940,000 (Five Million Nine Hundred and Forty Thousand Pounds) subject to contract and exclusive of VAT. This reflects a net initial yield of 7% assuming usual purchaser s costs of 5.8%, potentially rising to a minimum of 7.74% or maximum of 8.51% in September 2018. Low capital value of 209 per sq ft. 2

TRINITY SHOPPING CENTRE CITY SQUARE LEEDS CITY RAILWAY STATION NEW SOUTHERN STATION ENTRANCE BRIDGEWATER PLACE SITE OF PROPOSED NEW HS2 RAILWAY STATION LEEDS CITY OFFICE PARK CITY WALK CITY POINT DEVELOPMENT SITE J3 M621 3

LOCATION Leeds is the principal business and financial centre in the north of England located 44 miles east of Manchester and 194 miles north of London. Click here for Google Map The city has a resident population of 798,000 and an estimated 2.2 million living within a 30 minute drive time. Leeds is located on the M621 motorway which in turn connects to the M1 and M62 motorways and is some 6 miles to the west of the A1, Edinburgh to London Trunk Road. The City s railway station is one of the busiest in the country with over 900 trains per day serving an estimated 38 million passengers per year. The East Coast main line provides trains to London Kings Cross every 30 mins (fastest travel time - 2 hours). The Trans Pennine Route is proposed to be electrified within 5 years and connects Leeds to York (22 mins), Newcastle (1hr 33mins) and Edinburgh in some 2 hours 57 minutes. Manchester airport is 1 hour 18 minutes from Leeds with direct trains running hourly and indirect trains via Manchester City Centre every 20 minutes. Leeds Bradford International Airport lies some 7 miles to the north west of Leeds city centre and provides 70 daily flights for over 3 million domestic and international passengers a year. The proposed Leeds New Generation Transport Trolley Bus system will be the UK s largest single investment in transport infrastructure outside London. The 250 million scheme will be the first of its kind in the UK and will run between the northern and southern suburbs of the city via the city centre, with park and ride hubs at either end. Construction is due to start in 2017. New Southern Entrance to Station (Under Construction) 4

SITUATION Vanguard House is prominently situated on the southern edge of Leeds city centre close to Junction 3 of the M621 motorway which intersects with the A653 Dewsbury Road. The property fronts Dewsbury Road and backs onto Holmes Street. The area has experienced substantial regeneration in recent years, as office development has migrated southwards towards the motorway. The location is becoming increasingly popular with office occupiers including Asda who occupy their UK headquarters nearby. There have been a number of significant mixed use developments in the immediate area which have included City Walk and Bridgewater Place. City Walk comprises a 134 bed Bewleys hotel, 240 residential apartments and approximately 20,903 sq m (225,000 sq ft) of office accommodation, over 3 phases including Lateral and City Walk I and II. Bridgewater Place comprises a 32 storey landmark building completed in 2007. It provides circa 250,000 sq ft of office accommodation let to tenants including Eversheds and Ernst & Young along with 16,000 sq ft of retail and leisure. There are 165 residential flats located above. The site of the proposed HS2 train station is a short walk from the property on Great Wilson Street and a new southern entrance to the main Leeds railway station which completes in 2015 will benefit Vanguard House. Vanguard House DESCRIPTION Vanguard House is an attractive former mill building which was refurbished in 2001 to provide office accommodation over ground, first, and second floors, extending to 28,435 sq ft (2,641.7 sq m) with 60 external car parking spaces, which represents an excellent parking ratio of 1:474 per sq ft (1:44.03 per sq m). The building is of red brick construction beneath a pitched slate roof and includes the following specification: Comfort cooling plus perimeter radiators Raised carpeted floors Suspended ceilings Character brick vaulted ceilings to part Category II lighting Two (650 kg) 8 persons passenger lifts Part single/double glazed wooden frame windows Male and female WCs to each floor DDA Compliance Externally there is an advertising hoarding which is let to JC Decaux UK Limited. The tenant proposes to undertake extensive refurbishment works to the reception and ground floor of the building. Further information available on request. 5

LEEDS OFFICE MARKET Leeds City Centre Occupational Market Leeds city centre office take up reached its highest ever level of 794,000 sq ft in 2013 considerably above the 10 year average of 517,000 sq ft. Take up for H1 2014 was 244,000 sq ft and occupier demand remains strong with circa 485,000 sq ft of named larger requirements for the Leeds centre coupled with over 1m sq ft of lease events due in the next 3 years in the City Centre. Inward investment from companies outside Leeds has accounted for over 30% of take-up over the past 18 months showing the continued strength of the city. Total available supply is now 1.13m sq ft, down 7% from the previous six months and a decline of 35% from a peak of 1.76m sq ft in 2009. Grade B+/Grade A, supply remains the 2nd lowest of the major UK Cities at just 274,000 sq ft or around 1 years supply. The chronic shortage of supply is slowly being eased by the completions of refurbishments however only MEPC have broken ground speculatively so far by commencing No 6 Wellington Place which will provide 104,000 sq ft in December 2015. Prime rents remained stable during 2013 and early 2014 at 25.50 per sq ft which was achieved on the KPMG s 61,000 sq ft pre-let at Sovereign Square. As a result of the continuing supply and demand imbalance prime rents are predicted to rise to 26 per sq ft by the end of the year and continue to rise in 2015 and 2016. Rents on good quality Grade B+, refurbished space have also increased and typically stand at 21psf to 24.50 psf with rents on Grade B space at 17 psf to 20 psf. Recent city centre lettings include: 26,337 sq ft let at 15/16 Park Row to the University of Law at 20.50 psf 10,240 sq ft let at No1 Park Lane to Call Credit at 19 psf 11,146 sq ft let at City Point to Ashcourt Rowan at 25 psf 11,800 sq ft let at 100 Wellington Street to Sticky Eyes at 20 psf 7,500 sq ft let at Minerva House to Gately Solictors at 24.50 psf Leeds City Centre Office Take Up: 1995 - Q2 2014 Leeds City Centre Office Availability: 2000 - Q2 2014 Leeds City Centre Investment Market The Leeds City Centre office investment market continued to improve over the last 12 months, with overall investment volumes for 2013 reaching 169 million more than double the 2012 figure of 61 million. Leeds along with the Big Six UK regional cities of Manchester, Birmingham, Edinburgh, Glasgow and Bristol has benefitted from the overheating of the London and South East markets as investors have headed into the regions in search of opportunities. There has been a notable lack of investment stock brought to market in 2014 with only 39 million transacted in the first half of the year. This shortage of stock combined with buoyant investor interest fuelled by the strong occupational story and good rental growth prospects is driving pricing. Leeds has become increasingly popular with overseas funds from Europe and North America as well as ongoing strong interest from traditional UK funds. Prime yields currently stand at 5.75% compared to 6.50% at the start of 2013. This was demonstrated most recently with the off market sale of Lisbon House on Wellington Street let to Lloyds Banking Group for 9.75 years to The Portman Estate for 8.76m (5.58% NIY). Many expect this yield compression trend to continue, mirroring what has occurred in other larger centres such as Birmingham and Manchester where prime yields are now at 5.50% and 5.25% respectively. 6

ACCOMMODATION TENANCY The property has been measured by Plowman Craven in accordance with the RICS Code of Measuring Practice 6th Edition and provides the following net internal areas: The property is fully let to Civica UK Limited on a Full Repairing and Insuring reversionary lease expiring on 27th September 2033 without break at a passing rent of 434,900 per annum. AREAS SQ M SQ FT Ground Floor 833.4 8,971 First Floor 893.1 9,613 Second Floor 915.2 9,851 2,641.7 28,435 Total NIA The site area is approximately 0.33 hectares (0.81 acres) and includes 60 car parking spaces providing a ratio of 1:44.03 sq m (1:474 sq ft). A rent free incentive expiring on 13th May 2017 has been granted to the tenant and the landlord will top up the rent free on completion. The reversionary lease contains upward only rent reviews on the 27/9/2018, 27/9/2023 and 27/9/2028. The first rent review will be upwards to RPI compounded annually, with a collar of 2% and a cap of 4%. The 2023 and 2028 rent reviews will be upwards only to Open Market Value. The property also includes an advertising hoarding let to JC Decaux UK Limited for a term of five years from 23rd November 2011 expiring on 22nd November 2016 at a rent of 5,000 per annum subject to a fixed rental increase to 6,000 per annum on 23rd November 2015. The total income generated by the property is 439,900 per annum. Rising to 486,165 per annum at the first review assuming a minimum 2% annum compounded increase and maximum of 535,122 per annum assuming a 4% per annum compounded increase and 6,000 per annum hoarding income. TENURE The property is held Freehold. 7

COVENANT Vanguard House is fully let to the established covenant of Civica UK Limited (Registered number 01628868) whose principal activity is the supply of IT services and software. The property is Civica s northern UK office hub with over 200 employees based at the building. Civica UK Limited have an Experian Delphi Score of 100 out of 100 and have a Very Low Risk of business failure. A summary of their latest financial information is provided below: TENANT CIVICA UK LTD (Registered Number 01628868) Year Ending 30/06/2013 Year Ending 30/06/2012 Year Ending 30/09/2011 Turnover 125,298,000 109,604,000 99,591,000 Pre Tax Profit 17,449,000 12,384,000 11,451,000 Shareholder Funds 43,005,000 30,935,000 23,436,000 Further information is available at www.civica.co.uk. EPC The property has been assessed and the Energy Performance Certificate is as follows: EPC rating D (88) VAT The property is elected for VAT and it is envisaged that the sale will be treated as a Transfer of Going Concern (TOGC). PROPOSAL We are instructed to seek offers in excess of 5,940,000 (Five Million Nine Hundred and Forty Thousand Pounds) subject to contract and exclusive of VAT. This reflects a net initial yield of 7% assuming usual purchaser s costs of 5.8%, rising to a minimum of 7.74% at the first review in 2018 assuming a minimum 2% per annum compounded increase and maximum of 8.51% assuming 4% per annum compounded increase and 6,000 hoarding income. A purchase at this level would reflect a capital value of 209 per sq ft. 8

CONTACTS FOR FURTHER INFORMATION OR TO ARRANGE AN INSPECTION OF THE PROPERTY PLEASE CONTACT: Alex Whiting National Capital Markets t: 0113 394 8810 m: 07801 926 611 e: alex.whiting@cbre.com Robin Bullas National Capital Markets t: 0113 394 8817 m: 07730 507 967 e: robin.bullas@cbre.com Paul Steadman National Capital Markets t: 0113 394 8851 m: 07729 013 527 e: paul.steadman@cbre.com CBRE Limited Toronto Square Toronto Street Leeds LS1 2HJ SUBJECT TO CONTRACT Disclaimer: CBRE Limited, October 2014 Important notice relating to the Misrepresentation Act 1967 and the Property Misdescriptions Act 1991. CBRE act for itself and the vendor as agents for the vendor give notice that: 1. We provide the information contained in these particulars for guidance to intending purchasers, licensees or any other third parties and they are for your general information only and will be used at your own risk. 2. We will use all reasonable endeavours to ensure the accuracy of information, however, we do not guarantee or warrant the accuracy or completeness, factual correctness or reliability of any information in the particulars (especially as the information may have been obtained from third parties) and do not accept any liability for any errors or omission including any inaccuracies or typographical errors. 3. Any interested purchasers, licensees or any third parties should not view the information in the particulars as statements or representations of fact and should satisfy themselves that the facts and specific details in the particulars are correct and accurate especially in relation to floor areas and other measurements through inspection or other means, as appropriate, and will be responsible for taking independent surveys or valuations before entering into any legally binding transaction in respect of the property or premises that is the subject matter of these particulars. 4. We have not made any investigations or otherwise of any issues concerning pollution and potential land, building, air or water contamination. Prospective purchasers, licensees or any third parties must undertake their own enquiries and satisfy themselves in this regard. 5. Unless otherwise stated, all prices and rents are quoted exclusive of VAT. Subject to Contract: CBRE, October 2014 I All maps and plans in this document are for identification purposes only. 9