THE HAYMARKET HUB NEWCASTLE UPON TYNE NE1 7PF

PRIME MIXED USE INVESTMENT FOR SALE

INVESTMENT SUMMARY • Prime mixed use investment in the heart of

Newcastle City Centre.

• Iconic design providing 41,344sq ft of high quality office accommodation and 6,658 sq ft of retail on the ground floor.

• Strong national tenants in occupation, with the Bank of Scotland plc and Ubisoft CRC providing the majority of income.

• Weighted average unexpired lease term of 6.94 years.

• 2 years rents, rates and service charge guarantees to be provided on the vacant space.

• Total rent roll £1,009,200 per annum.

• Asset management opportunities to increase rental income upon letting the vacant upper floors and ground floor retail units.

• Long leasehold interest with 117 years unexpired at a peppercorn rent.

• Offers in the region of £14,000,000 (Fourteen Million pounds). This reflects a net initial yield of 6.75% after purchasers’ costs of 6.73% have been deducted.

LOCATION Newcastle upon Tyne is located in the North East of England, approximately 275 miles north of London, 100 miles north of Leeds and 120 miles south of Edinburgh. The city is the dominant commercial administrative, cultural and tourist centre of the North East region.

COMMUNICATIONS ROAD The city benefits from strong road links. The A1(M) which bypasses the city to the south and west is the principal arterial road to the east coast of the UK linking London to Edinburgh.

RAIL The city is located on the east coast mainline that connects London to Edinburgh and as a result benefits from excellent rail connections to the major centres of the UK, with the fastest journey time to London’s Kings Cross of 2 hours 37 mins from Newcastle.

METRO The Haymarket Hub station is one of the main city centre stops on the Tyne & Wear underground rail network that runs throughout Tyneside. It stops at 60 destinations across the city and is considered one of the most efficient public transport systems in the UK.

AIR Newcastle International Airport is approximately 6 miles north west of the City Centre and is accessed via the A167(M) and the A696. The airport has over 5 million passengers a year serving 80 national and international destinations.

The Hub is an iconic building situated over the redeveloped Haymarket Metro Station at the heart of Newcastle City Centre’s retail quarter, at the top of Northumberland Street and in close proximity to the main entrance of the Intu Eldon Square Shopping Centre.

Northumberland Street is the historic prime retail pitch within Newcastle Upon Tyne, with

the current rental tone of circa £230 per sq ft ITZA rebased significantly from the peak of £330 per sq ft ITZA. Nearby retailers include Pret a Manger, Marks & Spencer, Argos, Sainsbury’s, Costa, Outfit, JD Sports and Superdrug.

The Haymarket Metro Station is situated equidistant from Newcastle Upon Tyne’s two

universities, which together educate a total student body of 50,000. As the Haymarket lies on both lines of the Metro and serves the popular residential and student areas of Jesmond, Gosforth and Heaton, total annual passenger usage of the station is c. 6 million persons (Nexus), all of whom pass the ground floor retail elements of the subject property.

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CIVIC CENTRE

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CITY ROAD

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NORTHUM

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NORTHUMBERLAND ROAD

JOHN DOBSON ST

THE GATECHINATOWN

SITUATION

The Hub

DESCRIPTION The property provides retail units at ground floor level and Grade A offices over four floors above, accessed from a prestigious self-contained entrance lobby.

SPECIFICATION UPPER FLOORS

• Large open plan floorplates

• Floor to ceiling heights:

Level 1 - 2.54m

Level 2 - 2.75m

Level 3 - 2.4m with a perimeter double height space up to the vaulted ceiling max of 4.8m

Mezzanine floor - 2.4m with the perimeter double height space down over balcony

• Comfort cooling

• Raised floors throughout

• Suspended ceilings with LG3 and LG7 compliant lighting

• 2 x 8 person passenger lift

• High quality prestigious reception

• 24 hour office access and CCTV security

• Male and female toilets on each floor with disabled access

• Fully DDA compliant

• EPC rating of C

• Designed to “very good” BREEAM standard

TENANCY SCHEDULE

UNIT AREA (SQ FT) TENANT LEASE TERM START DATE END DATE REVIEW RENT (£PA) (BREAK DATE)

1 & 9 3,971 Bank of Scotland Plc 15 years 21/09/2009 20/09/2024 21/09/2019 380,000

2 300 Newcastle Barber Limited 10 years 25/08/2011 24/08/2021 25/08/2016 30,500

3 641 Activepraise Ltd 15 years 18/05/2009 17/05/2024 18/05/2019 54,500

4 430 H & L Ltd 20 years 06/03/2015 05/03/2035 06/03/2020 40,000

5 717 Done Brothers (Cash Betting) Ltd 15 years 23/11/2009 18/12/2024 19/12/2014 60,000 t/a Betfred (19/12/2019)

6 168 Glow Bella Ltd 5 years TBC TBC TBC 15,000

7 336 Pat Robson & Co Ltd 10 years 25/02/2013 24/02/2023 24/02/2018 25,000

8 95 Prompt Technology Services Ltd 10 years TBC TBC TBC 10,000

1st Floor 11,818 Ubisoft CRC Ltd 10 years 18/09/2017 17/09/2027 18/09/2022 102,000

2nd Floor 12,304 Ubisoft CRC Ltd 10 years 17/07/2015 16/07/2025 17/07/2020 120,000 (17/07/2020)

3rd Floor 11,205 Vacant 112,050

Mezzanine 6,017 Vacant 60,170

TOTAL 48,002 1,009,200

A copy of the Service charge schedule is available upon request.

2 years rent, rates and service charge guarantee

UBISOFT CRC LTD

Company Number - 09098750

Ubisoft CRC Ltd is a subsidiary of Ubisoft Limited, a leading creator and the third largest publisher and distributor of interactive entertainment and services, with a rich portfolio of world-renowned gaming titles. Established in 2014, Ubisoft CRC is where the company collects feedback to pass on to development teams and communicates with fans on social media, as well as conducting more traditional customer service tasks. Ubisoft CRC currently employ 140 staff, working in 14 languages and representing 24 nationalities.

31 MARCH 31 MARCH 31 MARCH 2017 GBP 2016 GBP 2015 GBP

Turnover 6.06m 4.23m 1.22m

Profit (loss) 60k 121k 27k before taxation

Tangible 502k 341k 253k Net Worth

TENURE The property is held by way of a long leasehold interest for 125 years from 9th July 2010 at a peppercorn rent.

COVENANTSUbisoft CR Ltd and the Bank of Scotland account for 60% of entire income. The remaining covenant profile comprises a mixture of regional and local limited companies.

31 DECEMBER 31 DECEMBER 31 DECEMBER 2017 GBP 2016 GBP 2015 GBP

Turnover 9.88bn 10.58bn 11.31bn

Profit 2.80bn 3.40bn 2.65bn before taxation

Tangible 15.10bn 15.18bn 2.65bn Net Worth

BANK OF SCOTLAND PLC

Company Number - SC327000

The Bank of Scotland PLC is a commercial and clearing bank registered in Scotland, with a history dating back to the 17th century and is the fifth oldest surviving bank in the UK. Bank of Scotland has been a subsidiary of Lloyds Banking Group since January 2009, when HBOS was acquired by Lloyds TSB to create the largest retail bank in the UK. The Bank of Scotland Plc currently employs 20,000 people in the UK.

MARKET COMMENTARY

Newcastle Occupier Market

OfficesNewcastle upon Tyne has a total office stock of around 9.9m sq ft which caters for a broad range of private and public sector occupiers in line with the city’s status as the regional capital of the North East. The city centre office market has continued to perform strongly throughout 2018, despite the declining supply of good quality stock.

Supply is set to dip below 100,000 sq ft of Grade A stock by the end of 2018 with headline rents pushing towards £24.00 per sq ft. Notable transactions within H1 2018 included DWF’s letting at Central Square South and Mott MacDonald’s acquisition of Time Central, both consolidating the headline rent at £23.50 per sq ft. The largest city centre letting to complete this year to date was 13,303 sq ft at Northumberland House to Newcastle University.

With supply dwindling, a number of landlords are refurbishing existing stock in order to satisfy demand. The Haymarket Hub is one of the few grade A offices in the city able to offer large open plan floorplates direct from the landlord.

Newcastle Investment MarketDemand for city centre investment is strong with most properties being brought attracting high levels of interest. We have detailed below recent office and investment transactions in Newcastle upon Tyne:

Property Size (sq ft)

Transaction Date

Price Yield Capital Value (sq ft)

Rotterdam House

35,686 April 2018 £10,100,000 6.43% £283

Gainsborough House

26,007 June 2018 £5,850,000 4.78%

£224

Gunner House 17,936 September 2017

£2,300,000 6.65% £128

Maybrook House

39,945 June 2017 £5,610,000 6.01% £140

Earl Grey House

58,883 February 2016

£11,900,000 7.60% £202

RetailNewcastle city centre has a retail floor space of approximately 2.6 million sq ft. In recent years Intu Eldon Square has undergone significant redevelopment, creating space for new stores such as Waitrose and Debenhams, and since opening the St Andrews Way entrance into Eldon Square has established itself as a prime pitch alongside Northumberland Street, historically the prime pitch.

Northumberland Street has continued to perform strongly post-recession with a number of retailers such as Primark, The Outlet, Sports Direct, Caffe Nero and Sainsbury’s taking space and reaching rental values of £330 per sq ft in terms of Zone A.

The retail profile at the north end of Northumberland Street towards the Haymarket Hub has changed significantly and is now home to a number of service provider focused retailers such as Pret a Manger, Nudo, KFC, Three and the Leeds Building Society. Rental values range from £150 - £170 per sq ft in terms of Zone A.

Energy Performance Certificate (EPC)A schedule of EPC certificates is available upon request.

VAT The property is elected for VAT and it is anticipated that the sale will be treated as a TOGC.

Proposal We are instructed to seek offers in excess of £14,000,000 (Fourteen Million Pounds) for the benefit of our client’s interest, subject to contract and exclusive of VAT.

A purchase at this level would reflect a net initial yield of 6.75% after purchasers’ costs of 6.73% have been deducted.

Subject to Contract and Exclusive of VAT © Lambert Smith Hampton Disclaimer: Lambert Smith Hampton Group Limited and its subsidiaries (“LSH”) and any joint agents where applicable for themselves and for the seller or landlord of the property whose agents they are give notice that: (i) These particulars are given and any statement about the property is made without responsibility on the part of the joint agents or the seller or landlord and do not constitute the whole or any part of an offer or contract. (ii) Any description, dimension, distance or area given or any reference made to condition, working order or availability of services or facilities, fixtures or fittings, any guarantee or warrantee or statutory or any other permission, approval or reference to suitability for use or occupation, photograph, plan, drawing, aspect or financial or investment information or tenancy and title details or any other information set out in these particulars or otherwise provided shall not be relied on as statements or representations of fact or at all and any prospective buyer or tenant must satisfy themselves by inspection or otherwise as to the accuracy of all information or suitability of the property. (iii) No employee of the joint agents has any authority to make or give any representation or warranty arising from these particulars or otherwise or enter into any contract whatsoever in relation to the property in respect of any prospective purchase or letting including in respect of any re-sale potential or value or at all. (iv) Price or rent may be subject to VAT and any prospective buyer or tenant must satisfy themselves concerning the correct VAT position. (v) Except in respect of death or personal injury caused by the negligence of the joint agents or their employees or agents, LSH will not be liable, whether in negligence or otherwise howsoever, for any loss arising from the use of these particulars or any information provided in respect of the property save to the extent that any statement or information has been made or given fraudulently by either of the joint agents. (vi) In the case of new development or refurbishment prospective buyers or tenants should not rely on any artists’ impressions or architects’ drawings or specification or scope of works or amenities, infrastructure or services or information concerning views, character or appearance and timing concerning availability or occupation and prospective buyers or tenants must take legal advice to ensure that any expectations they may have are provided for direct with the seller or landlord and the joint agents shall have no liability whatsoever concerning any variation or discrepancy in connection with such. September 2018. Ref: 6628.

Design & Production by Design 0191 284 1300

FURTHER INFORMATION EMILY WOODD: 0191 338 8316 E: ewood@lsh.co.uk

LUKE SYMONDSM: 07526 177016 E: lsymonds@lsh.co.uk

BILL LYNND: 0191 338 8294 E: BLynn@lsh.co.uk