BERNARD MYERS HOUSE4-6 HAVIL STREET | LONDON | SE5 7RU

Building exterior

Typical Kitchen

INVESTMENT CONSIDERATIONS￭ Freehold student accommodation property constructed in 2006. 121 en-suite rooms arranged predominantly as 6 bedroom cluster flats and

2 accessible studios.

￭ The property benefits from a nominations agreement with University of the Arts London for a further 18 years, subject to a mutual break at the end

of the 2015/16 academic year. The agreement is for at least 97% of bedrooms.

￭ The asset is under-pinned by direct let rents which would be in the order of 15% higher than those currently passing under the nomination

agreement.

￭ Located within close proximity to Kings College London and University of the Arts London campuses and a range of transport links.

￭ Planning permission for student accommodation in London Borough of Southwark remains challenging to secure which insulates values, drives

rental growth and creates barriers to entry to the sector.

￭ Rare opportunity for representation in London, which, with a total of 41 universities, forms the largest concentration of higher education in Europe.

￭ Within London, only 62,351 (21%) students have access to purpose built student accommodation. There are 303,105 full time students in London

(HESA 11/12).

￭ London is home to four of the world’s leading 75 institutions: University College London (4th), Imperial College London (5th), King College London

(19th) and London School of Economics and Political Science (68th). (2013/14 QS World University Ranking).

￭ Forecast gross rent of £924,405 for the 2013/14 academic year and net rent of £715,305.

￭ We are instructed to seek offers in excess of £10,800,000 for the freehold interest in the Property, which reflects a net initial yield of 6.25%

assuming purchaser’s costs of 5.80%.

LOCATIONLondon is the capital city of the United Kingdom, with excellent inter-city and international travel links. The

M25, which encircles the city, connects directly to routes to the North (M1, M11, M40), West (M4), South (M3,

M23) and East (M2, M20) of the country. The city is supported by eight main railway stations including Kings

Cross St Pancras, which connects directly to mainland Europe via the Eurostar network.

The city is supported by several major international airports including Heathrow (17 miles), Gatwick (30 miles)

and Stansted (37 miles). All are easily accessible via public transport, namely coach services and express train

routes. Heathrow is also linked directly to the London underground network via the Piccadilly Line (journey

time from Oval Underground Station approximately 66 minutes).

London is the largest metropolitan area in the European Union and in demographic terms its population rate

increased from 7,172,091 to 8,173,900 between 2001 and 2011; an increase of 14%. During this period the

population of Southwark increased from 244,861 to 288,300; an increase of 17.7%.

London is expected to remain at the forefront of the UK recovery given its concentration of service sectors

companies. Growth output in London (nominal GVA) 2007 – 2011 was 12.40%, far out-stripping other UK

regions. In labour market terms, 374,000 jobs created in the UK between 2013 and 2018 are forecast to be

within London, which equates to approximately 1 in every 4 jobs (ONS).

SITUATIONBernard Myers House is situated in Zone 2, within the London Borough of Southwark, south east London. The

property is located on Harris Street, a predominantly residential street, with Southwark College to the north.

The property is well situated for a number of universities, including the University of the Arts London

(Camberwell College of Arts & College of Communication), King’s College London (Denmark Hill Campus)

and London Southbank University.

The nearest underground station to Bernard Myers House is Oval (Northern Line), which lies 1.4 miles (20 min

walk) to the west, whilst Denmark Hill Overground Station is a 15 minute walk to the south.

The Property is also serviced by several bus routes; the 343 runs directly past the site, providing access up to

Elephant and Castle and on to New Cross; the 12 runs directly to Oxford Circus Station and the 36 to Hyde

Park and Paddington Station (Source: Transport for London).

Typical Kitchen

ELEPHANT & CASTLE REGENERATION

Elephant & Castle is currently undergoing a major 15-year physical regeneration programme, led by

Southwark Council and its commercial partner Lend Lease.

The master-planned redevelopment is budgeted at £3 billion and covers 170 acres. A large amount of post

World War II social housing is to be demolished, including the Heygate Estate, to make way for up to 2,988

new homes (over 600 of which will be affordable).

On top of this, developments in Elephant & Castle will deliver:

￭ 7,000 new jobs (created on site construction and in new commercial space).

￭ Over £2.5 million invested in local employment and training.

￭ Central London’s largest new park in 70 years with a minimum area of 2 acres.

￭ Up to 50,000 sq ft of community space for uses such as a crèche, art gallery, museum, Council Chambers,

library, community meeting rooms and provision for a new health facility of up to 5,000 sq ft.

￭ Up to 50,000 sq ft of leisure facilities for uses such as a gym, music hall and cinema.

￭ Retail floorspace including over 50 new shops.

￭ 50,000 sq ft of office and workspace.

￭ £2.6 million towards local transport improvements for pedestrians, cyclists and motorists.

Coleby Path

HARRIS STREET

AreaPlay

33

91142

152

Neighbourhood

Housing

Office

Southwark College

46

95

Camberwell Centre

30

Rill House1 to 19

Bernard Myers House

16 32

44

1228

13 29

2812

FWW

ard Bdy

2.6m

2.8m

2.6m

LB

ESS

Stacy Path

ELMINGTON ROAD

Ballow Close

7

24

168

127

135

Rumball House

1

147

165

1 to 24

11

1

9

170

El Sub Sta

House

113 117

160

Valan

6

18

105

12

24

133

157

16

19

6

14

2

12

PH

1

7

17314

6

156

13

158156

160

4 to 6

1 to 22

156a

131

PO

0m 10m 20m 30m

Ordnance Survey © Crown Copyright 2013. All rights reserved. Licence number 100022432. Plotted Scale - 1:1052

TRAVEL TIMES

DISTANCE/METHOD AND JOURNEY TIME

LOCAL UNIVERSITIES

University of the Arts (Camberwell College)

KCL (Denmark Hill)

University of the Arts (College of

Communication)

London South Bank

KCL (Guy’s Campus)

Distance (miles) 0.4 miles 1.1 miles 1.5 miles 1.7 miles 2.2 miles

Walking / Bus 7 minutes 16 minutes 16 minutes (bus)18 minutes

(bus)29 minutes

(bus)

Cycling 2 minutes 6 minutes 13 minutes 14 minutes 15 minutes

Source: Transport for London (TFL)

FROM OVAL UNDERGROUND STATION TO:

JOURNEY TIME (MINUTES)FROM DENMARK HILL

OVERGROUND STATION TO:JOURNEY TIME

Waterloo 6 minutes Clapham High Street 4 minutes

Elephant & Castle 8 minutes Wandsworth Road 6 minutes

London Bridge 11 minutes Clapham Junction 14 minutes

Embankment 19 minutes Canada Water 12 minutes

Piccadilly Circus 19 minutes Shoreditch High Street 24 minutes

Oxford Circus 21 minutes Hoxton 24 minutes

Bank 22 minutes Stratford 33 minutes

Victoria 23 minutes Highbury & Islington 36 minutes

Paddington 30 minutes Camden Town 49 minutes

Source: Transport For London (TFL) Not to scale - For indicative purposes only

TRAVEL TIMES

DISTANCE/METHOD AND JOURNEY TIME

LOCAL UNIVERSITIES

University of the Arts (Camberwell College)

KCL (Denmark Hill)

University of the Arts (College of

Communication)

London South Bank

KCL (Guy’s Campus)

Distance (miles) 0.4 miles 1.1 miles 1.5 miles 1.7 miles 2.2 miles

Walking / Bus 7 minutes 16 minutes 16 minutes (bus)18 minutes

(bus)29 minutes

(bus)

Cycling 2 minutes 6 minutes 13 minutes 14 minutes 15 minutes

Source: Transport for London (TFL)

FROM OVAL UNDERGROUND STATION TO:

JOURNEY TIME (MINUTES)FROM DENMARK HILL

OVERGROUND STATION TO:JOURNEY TIME

Waterloo 6 minutes Clapham High Street 4 minutes

Elephant & Castle 8 minutes Wandsworth Road 6 minutes

London Bridge 11 minutes Clapham Junction 14 minutes

Embankment 19 minutes Canada Water 12 minutes

Piccadilly Circus 19 minutes Shoreditch High Street 24 minutes

Oxford Circus 21 minutes Hoxton 24 minutes

Bank 22 minutes Stratford 33 minutes

Victoria 23 minutes Highbury & Islington 36 minutes

Paddington 30 minutes Camden Town 49 minutes

Source: Transport For London (TFL)

GROUND FLOOR PLAN

FLOOR PLANS

ACCOMMODATION SCHEDULE

ROOM TYPE NUMBER OF BEDS SIZE (M2) BED SIZE

Classic Studio 2 20 ¾

Classic En-suite 121 12.5 ¾

Total 123

DESCRIPTIONBernard Myers House is a 2006 purpose built student accommodation block of part 3, 4 and 5 storeys. The

scheme provides 123 en-suite bedrooms: 121 cluster bedrooms arranged predominantly as 5 bedroom flats

and 2 accessible self contained studio units. All rooms include a 4ft bed, en-suite bathroom, desk, wardrobe

and storage facilities. Each room has a data point for a wired internet service. Each flat benefits from a shared

kitchen and lounge area.

The ancillary facilities on-site include; management office, laundry and vending machines. The Property is

secured by gated entrances, digital CCTV coverage as well as out of hours duty manager cover. There is a

cycle store for 44 bicycles.

Not to scale - For indicative purposes only

Building Exterior Building Exterior

LONDON STUDENT MARKETWith a total of 41 universities, London has the largest concentration of higher education in Europe. According

to the 2013/2014 QS World University Ranking, London is home to four of the world’s leading 75 institutions:

University College London (4th), Imperial College London (5th), King College London (19th) and London School

of Economics and Political Science (68th).

UNIVERSITY PROFILE 41 UNIVERSITIES STUDENT NUMBERS

Student Numbers (HE)

Total Full-time

UG FT PG FT

Total International EU

Non-EU

612,715 303,105

225,980 77,125

106,285 36,435 69,850

75% of FT 25% of FT

34% of International 66% of International

Purpose Built Student Accommodation (PBSA)

University Direct Let (Private)

Total PBSA

36,126 26,225

62,351

58% 42%

Supply / Demand Dynamics Supply vs Demand 62,351 / 303,105 21%

*Source: HESA 2011/12 / Savills

STUDENT NUMBERS (HE) FOR SELECTED UNIVERSITIES ACROSS LONDON

UNIVERSITY BOROUGH TOTAL FULL TIME UG FT PG FTTOTAL

INT.

TIMES RANKING

2013

GUARDIAN RANKING

2013

University of the Arts,

London

Camden / Southwark

17,300 15,715 13,925 3,375 7,110 60 53

London South Bank University

Southwark 23,350 13,190 18,275 5,075 2,055 111 104

Kings College London

Southwark 26,460 19,215 15,755 10,705 6,660 22 31

University of Westminster

Westminster 21,500 15,460 16,665 4,840 5,420 95 93

*Source: HESA 2011/12

The capital has experienced significant growth in student numbers over the past 10 years recording a full time

student population growth rate of 34% (HESA – based on available data) during this period. Over the same

period, the international student population has increased by 61%. Just 21% of full time students currently have

access to purpose built student accommodation.

UNIVERSITY OF THE ARTS LONDON (UAL)

UAL is a world-leading university for teaching and research in the fields of art, design and communication.

With over 20,000 further and higher education students spread through 14 sites around central London, it

is Europe’s largest arts university. The five component colleges became six when Wimbledon College of Art

joined in 2006, bringing an international reputation in theatre design and the UK’s largest school of theatre.

UAL’s Camberwell College of Arts has established a reputation for high quality teaching in art and design.

Specialist areas in fine art include Book Arts, Drawing, Painting, Photography, Printmaking and Sculpture.

Design areas include Graphic Design, Illustration and 3D Design. On top of this Camberwell is a world centre

for conservation.

UAL received Privy Council approval for university status in 2003 and in the last 5 years of available figures,

there has been a 13% increase in full time students and a 38% increase in international students.

KING’S COLLEGE LONDON (KCL)

KCL is one of the oldest and largest of London University’s colleges. It is Europe’s largest centre for the

education of doctors, dentists and other healthcare professionals and home to six Medical Research Council

centres. Once known primarily for science, KCL now excels in a wide range of subjects in nine schools of study.

Four language schools were rated as internationally outstanding in the latest research assessments.

KCL’s Denmark Hill Campus houses the Institute of Psychiatry, as well as further medicine and dentistry

courses.

LONDON SOUTH BANK UNIVERSITY

The main South Bank campus is in Southwark, near the Elephant and Castle roundabout. It includes the Centre

for Efficient and Renewable Energy in Buildings, a unique teaching, research and demonstration resource for

low carbon technologies, and the UK’s first inner city green technology research centre. The University now

trains 40% of London’s nurses and is ranked first for occupational therapy, second for mental health nursing,

adult nursing, diagnostic radiography, and therapeutic radiography in NHS London’s quality assessments.

LONDON BOROUGH OF SOUTHWARK SUPPLY / DEMAND PROFILE

The three main universities within Southwark are King’s College London (Guy’s & St Thomas Hospital Campus

and Denmark Hill), London South Bank and the University of the Arts (London College of Communication and

Camberwell Campus).

Students attending the three main universities in the Borough are likely to provide the primary demand

for student accommodation. There are 26,120 full time students currently studying within the Borough

(Source: HESA 11/12 and University admission office).

There are 7,379 purpose built bed spaces in Southwark. 2,519 (34%) of those beds are provided by the

private sector and 4,860 (65%) are provided by universities. The existing stock represents a provision level of

28% within the Borough.

There are 1,852 bed spaces within the planning pipeline in Southwark.

Typical Bedroom

LOCAL PRIVATE RENT COMPARABLES TABLE

OPERATOR HALL AGE ACCOMMODATIONTERM

LENGTH (WEEKS)

RENT PER WEEK

UNITE

Julian Markham House (Noms to KCL)

2004

Single En-suite 40 £167

Studio 40 £199

Moonraker Point (Noms to KCL)

2012Single En-suite 51 £211.77

Studio 51 £273.75

University of the Arts

Camberwell Campus, Peckham Road

Recent extensive

rebuild and refurbishment

Standard Plus 51 £165

Large 51 £170

Studio Standard 51 £205

Studio Standard Plus 51 £220

Studio Large 51 £230

Studio Extra Large 51 £254

Collegiate AC Academic House 2013

Standard En-suite 51 £179.50

Premium En-suite (Double Bed)

51 £187.50

Standard Studio

51 £199.50

44 £209.50

Premium Studio

51 £250

42 £250

STUDENT SUPPLY / DEMAND IN SOUTHWARK

65%

19%

10%

7%

￭ University Beds ￭ Private Beds ￭ Planning Pipeline ￭ HMO’s / With Parents

Source: HESA 2011/12, University Admission Offices, Local Planning Authority Portal / Savills

INCOMEThere is a nomination agreement with the University of the Arts London (UAL) expiring at the end of the

2030/31 academic year for at least 97% of the bedrooms. Under the agreement the University pays weekly

rents at £148.10 for en-suite bed spaces and £192.79 for studio units, for a fixed term contract of 51 weeks. This

amounts to a gross rent of £905,586 for the 2013/14 academic year. Either party may give written notice to the

other at any time of its desire to terminate this agreement at the end of the 2015/16 operating year. Rent under

the nomination agreement is reviewable annually and is to the higher of a 3% increase in prior rent passing or an

indexed rent, a sum calculated in accordance with the following formula: (AxB)/Cx1.01 where A = rent payable

prior to the review date; B = the RPI figure published in July 14 months before the review date; C = the RPI

figure in July 26 months before the review date.

The projected sundry income is £18,819 for 2013/14.

The nomination agreement is subject to a service level agreement and we are of the opinion that the asset can

be managed at a per bedroom rate of £1,700 per annum which equates to £209,100.

The net rent for 2013/14 is therefore projected to be £715,305.

We are of the opinion that if the bedrooms were direct let to students the estimated rental value for en-suite

cluster bedrooms and studios would be in the order of £170 per week and £200 per week respectively, which

under-pins the value of the asset.

The latest financial accounts date for the University of the Arts London was on 31st July 2010, where a tangible

net worth of £160,056,000 and turnover of £211,905,000 was recorded. The University has an undisclosed

financial strength and a risk indicator of 1, which represents a minimum risk of business failure.

BEDROOM BEDROOMS TERM RENT PER WEEK OCCUPANCY RENT

Cluster 121 51 £148.10 97% £886,507

Studio 2 51 £192.79 97% £19,075

Sundry Income £18,819

Total Gross Income £924,405

Management Costs -£209,100

Total Net Income £715,305

Typical Bedroom

LOCAL PRIVATE RENT COMPARABLES TABLE

OPERATOR HALL AGE ACCOMMODATIONTERM

LENGTH (WEEKS)

RENT PER WEEK

UNITE

Julian Markham House (Noms to KCL)

2004

Single En-suite 40 £167

Studio 40 £199

Moonraker Point (Noms to KCL)

2012Single En-suite 51 £211.77

Studio 51 £273.75

University of the Arts

Camberwell Campus, Peckham Road

Recent extensive

rebuild and refurbishment

Standard Plus 51 £165

Large 51 £170

Studio Standard 51 £205

Studio Standard Plus 51 £220

Studio Large 51 £230

Studio Extra Large 51 £254

Collegiate AC Academic House 2013

Standard En-suite 51 £179.50

Premium En-suite (Double Bed)

51 £187.50

Standard Studio

51 £199.50

44 £209.50

Premium Studio

51 £250

42 £250

PLANNING IN THE LONDON BOROUGH OF SOUTHWARKPlanning permission was granted on 28 June 2005 under case number TP/2229-H for ‘Construction of a

part 3, 4 and 5 storey block for student accommodation only.’

The London Borough of Southwark takes a cautious view with regard to student residential proposals and

this reflected in their proposed CIL charge of £400 per sqm within the central areas of the Borough (due

for adoption late 2013 / early 2014).

In addition, the Council’s view is that student residential schemes are taking sites away from the delivery

of affordable housing and as a result the Council will require 35% of the rooms to be provided for

affordable housing.

It is therefore considered challenging to secure new permissions for student accommodation in the

Borough and in our view, such barriers to entry will insulate the value of existing stock and drive rental

growth. Student housing development is also increasingly being priced out in competition against

residential developers.

Viewing: Strictly by appointment with Savills.

Important noticeSavills, 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. 10/13 303722

TENURE The property is held Freehold.

EPC The Energy Performance rating for the property is C (66).

DATA ROOM Please register at www.savills.com/bernardmyershouse for more information

SDLT There may be the potential to claim Multiple Dwellings Relief and we would advise seeking the

appropriate professional advice in this regard.

VAT No VAT is chargeable on this transaction.

PROPOSAL We are instructed to seek offers in excess of £10,800,000 for our client’s freehold

interest in the Property, which reflects a net initial yield of 6.25%, assuming full purchaser’s costs of

5.80%.

CONTACTSMarcus Roberts James Hanmer Will Hyslop

mroberts@savills.com jhanmer@savills.com whyslop@savills.com

M: 07807 999 187 M: 07967 555 897 M: 07812 965 456

Savills (UK) Ltd 33 Margaret Street London W1G 0JD 020 7499 8644

savills.co.uk

Lizzie Whetman

lwhetman@savills.com

M: 07807 999 174