Prime Retail Investment

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EDINBURGH – 115 PRINCES STREET

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2INVESTMENT SUMMARY

• Edinburgh is the capital city of Scotland and one of the Top 10 Retail Centres in the UK

• The property is located in the 100% prime retail pitch at the eastern end of Princes Street

• Provides well configured floorspace

• Let to the excellent covenant of Lush Retail Ltd

• The lease has recently been regeared and extended

• Rebased, post-Covid rent of £185,000 per annum (£162 Zone A)

• Seeking a price of £2,485,000, reflecting a NIY of 7%.

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LOCATION

Edinburgh is the capital city of Scotland and the historic, administrative and financial centre of the country, as well as the home of the Scottish Parliament. The city has the most buoyant economy in the UK outside of London.

Edinburgh has a population of 537,000 people, which extends to 1.6 million people in the broader city region. Over a 10 year period to 2018, the city’s population increased by 13.1% compared with a UK average of 4.5%.

As a capital city, Edinburgh benefits from excellent transport links. By road the M90 provides access to the north, the M8 and M9 provide access to the west and the A1 links to the south.

The city has two mainline railway stations, which connects with most of the major cities in the UK. The fastest journey time to London Kings Cross is 4 hours 30 minutes and there are trains to Glasgow every 15 minutes, with a journey time of 50 minutes.

Edinburgh’s tram service opened in May 2014 and consists of a 9 mile line linking the city centre to the airport. The route comprises 16 stops with trams running every 7 minutes at peak times. Princes Street tram stop is located close to the subject property.

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Kilmarnock

Paisley

Cumbernauld

Falkirk

Dunfermline

Kirkcaldy

Livingston

East KilbrideWishaw

Peebles

Clydebank

Stirling

Balloch

Greenock

GLASGOWGLASGOW

EDINBURGH

Douglas

GLASGOW

RETAILING IN EDINBURGH

Edinburgh has a compact prime retail core comprising Princes Street, George Street and two shopping centres. Prime retailing is focussed on Princes Street which is home to a wide variety of major national and international occupiers.

At the eastern end of Princes Street, Nuveen Real Estate are on site with St James Quarter, which is due to open shortly. This mixed-use development will comprise a John Lewis department store, a multi-screen Everyman cinema, a 4 Star aparthotel a W Hotel and 152 residential units. Once open the scheme is expected to further strengthen this section of Princes Street and enhance the city’s retail catchment and tourist appeal.

The city is a major tourist destination and there were an estimated 4.7 million visitors in 2019 (Source: ONS Travel Trends), contributing £1.53 billion to the local economy.

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4SITUATION

The subject property is located within the 100% prime retail pitch of Princes Street and nearby occupiers include:

The Debenhams store nearby is subject to redevelopment proposals by Legal & General and has recently received planning permission. A £50m scheme is proposed which will include a hotel and leisure space including a rooftop bar. These uses should proved to be complimentary to the Lush Spa concept.

DESCRIPTION

The property comprises modern retail premises which form part of a substantial office and retail building.

The unit provides well configured sales accommodation on the ground floor and basement, with ancillary accommodation at mezzanine level.

Lush operate their spa concept from the unit, which they only have in a small number of their stores in cities such as; London (Oxford Street), Cardiff, Birmingham, Bath, Liverpool and Leeds.

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ACCOMMODATION

The property comprises the following approximate net internal floor areas:

sq ft

Ground Floor Sales 1,398

Basement 1,165

Mezzanine 122

ITZA 1,147

Total 2,685

TENURE

Heritable – Scottish equivalent of freehold.

TENANCY

The property is let to Lush Retail Limited on a FRI lease for a term of 10 years from 22 October 2012. A minute of alteration was completed in December 2020 which rebased the rent from £265,000 per annum to £185,000 per annum and extended the lease by 3 years so that the expiry date is 21 October 2025. The tenant was granted 6 months rent free from March 2020 to cover the Covid lockdown period.

Recently regeared lease at a post-Covid rent

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6Lush Retail Limited has a Creditsafe rating of 75/100 representing “Very Low Risk” and in the past three years has reported the following figures in their annual accounts:

30/06/2019 30/06/2018 30/06/2017

Turnover £153,720,000 £151,525,000 £139,921,000

Pre-tax profit £4,265,000 £1,825,000 £12,866,000

Shareholder’s funds £11,666,000 £25,071,000 £23,499,0000

TENANT’S COVENANT

Lush was established in the 1970’s and opened their first store in 1995. The company operates in 49 countries, both as a retailer and manufacturer of cosmetics and beauty products, with an emphasis on ethically sourced ingredients. It has production facilities in the United Kingdom, Canada, Croatia, Germany and Australia. They trade from 105 stores in the UK and more than 900 around the world.

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50 metres

Edinburgh - Princes Street

For more information on our products and services:www.experian.co.uk/goad | goad.sales@uk.experian.com | 0845 601 6011

Experian Goad Plan Created: 15/12/2020 Created By: Fawcettmead

Copyright and confidentiality Experian, 2020. © Crown copyright and databaserights 2020. OS 100019885

EPCThe EPC certificate is available upon request.

VAT The property is elected for VAT and it is proposed that the sale will be treated as the Transfer of a Going Concern (TOGC).

RENTAL ANALYSISThe lease was regeared last December and the passing rent reduced from £265,000 per annum, which equated to £231 Zone A, to £185,000 per annum, which equates to £162 Zone A.

The last rent review on the subject property was in in October 2017 when the rent increased from £175,000 per annum to £265,000 per annum. In recent times, rents in this pitch reached £230-£250 Zone A, as evidenced by; a rent review on 99b Princes Street (Thomas Sabo) in July 2017, a rent review on 113 Princes Street (Hotter Shoes) in June 2017, a letting of 98-99 Princes Street to Cath Kidston in June 2017 and a rent review of 100a Princes Street (Swarovski) in June 2017.

The rent on the subject property has been rebased is a truly “post-Covid” rent.

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Misrepresentation Act: The particulars in this brochure are believed to be correct, but accuracy cannot be guaranteed and they are expressly excluded from any contract. SUBJECT TO CONTRACTDesigned by Graphic Outlines Ltd 2021

FURTHER INFORMATION

PROPOSAL

We are seeking a price of £2,485,000 (Two Million Four Hundred and Eighty Five Thousand Pounds), subject to contract and exclusive of VAT, for our client’s heritable interest. A purchase this level would reflect a net initial yield of 7%, after purchaser’s costs of 6.37%.

Richard Bashfordrichard@fawcettmead.co.uk020 7182 749707774 619 204

Craig Cawthorne craig@fawcettmead.co.uk020 7182 74980781 1141 407