FREEHOLD CITY CENTRE BLOCK INVESTMENT · Lasercare Clinics (Harrogate) Ltd (02545572) are a substantial skin care group operating around 34 clinics nationwide. They are also an NHS

FREEHOLD CITY CENTRE BLOCK INVESTMENTGALLOWTREE GATE and MARKET PLACE, LEICESTER

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INVESTMENT SUMMARY

• Prime and prominent block• Frontages to Gallowtree Gate, Market Place and Victoria Parade• Six shops with upper parts• National multiple tenants include Sk:n, Ladbrokes, Timpson• Over 90% of income from tenants rated ‘Very Low Risk’• Asset management opportunities• Total current rent £235,000 per annum• Guide Price £2,150,000 subject to contract• Attractive net initial yield of 10.3%

LEICESTER

Leicester is one of the oldest cities in the UK the second largest city in the East Midlands. It is an important commercial, industrial and administrative centre and hasan extensive retail offer embracing traditional shopping streets, covered shopping centres, fixed market and out-of-town. The popular covered market is one of thelargest in the country with over 300 stalls.

The resident population is approximately 330,000 (2011) whilst over 485,000 live within 6 miles. Leicester has two universities and a student population in the order of40,000.

Road communications are good with Junctions 21and 21a onto the M1 and M69, whilst the A6, A607,A46 and A47 provide routes to the north and east.

Rail services are available to London St Pancraswith a fastest journey time of around 1hr 10 mins.Other lines link with Birmingham and Peterborough.

Nearest international airports are East Midlands, 20miles to the north, and Birmingham.

LEICESTER – 29 GALLOWTREE GATE, 1/5 VICTORIA PARADE, 65/69 MARKET PLACE

INTRODUCTIONAn opportunity to purchase a substantial and well let, predominantly retail blockof over 12,500 sq.ft. gross, having frontages to Gallowtree Gate, VictoriaParade and Market Place, comprising six shops mostly let to national multipleoperators.

The investment provides a very attractive running yield and potential forimprovement through active management. Over 90% of the income is fromtenants rated as ‘Very Low Risk’.

LOCATIONThe block occupies a central location in Leicester city centre shopping area.

The property is located on the west side of Gallowtree Gate directly oppositeMarks & Spencer, close to branches of Dorothy Perkins, EE and Pret a Manger.

The block includes the south side of Victoria Arcade - an important and busylink between Gallowtree Gate and the extensive covered market. It alsoincludes three shops on the east side of Market Place which face directly ontothe covered market.

BRIEF DESCRIPTIONThe accommodation is predominantly arranged on ground and three upperfloors within a number of adjoining buildings all having brick elevations underpitched and flat roofs. The block comprises –

• One shop on Gallowtree Gate with a return frontage to Victoria Arcade

• Two small shops facing onto Victoria Parade

• Small upper part of 1,482 sq.ft. with entrance onto Victoria Parade

• Three shops facing onto Market Place, one of which has a substantial andprominent return frontage to Victoria Parade

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DIMENSIONSFrontages and net floor areas are set out on the schedule.

LEICESTER – 29 GALLOWTREE GATE, 1/5 VICTORIA PARADE, 65/69 MARKET PLACE

TENUREThe property is freehold and letting details are set out on the schedule.

There are seven tenancies together producing £235,000 per annum.

• Timpson had a 2016 break option which they chose not to exercise.

• The five principal tenants are all national operators with good accounts andstrong credit ratings. Most have occupied for a considerable period.

• Two leases expire in 2022 and three in 2021.

• One lease (Thomas’s) expired in December 2016 but negotiations are inhand with the tenant for a new 10 year term with a 5 year break. We canprovide further details.

• Other tenants are prepared to consider lease regears and we can providedetails.

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TENANT COVENANTSLasercare Clinics (Harrogate) Ltd (02545572) are a substantial skin caregroup operating around 34 clinics nationwide. They are also an NHS partner.For the year ended 31st August 2015 the company had a turnover of £25.1million, pre-tax profit of £2.3 million and shareholders funds of £21.2 million.Experian rate the company ‘Very Low Risk’.

Ladbrokes Betting & Gaming Ltd (00775667) are one of the largestbookmakers in the country and have branches nationwide. For the year ended31st December 2015, the company had a turnover of £830.6 million, pre-taxprofit of £29.3 million and shareholders funds of £1.94 billion. Experian rate thecompany ‘Very Low Risk’.

Thomas’s Entertainments (Leicester) Ltd (00846504) are a subsidiary ofThomas Organisation Ltd who are a national operator of amusement arcades.For the year ended 31st March 2016 the company had shareholders funds of£1.93 million. Experian rate the company ‘Very Low Risk’.

Harvey & Thompson Ltd (02636684) are a national group of pawnbrokershaving over 180 branches and a subsidiary of H&T Group plc. For the yearended 31st December 2015, the company had a turnover of £89.2 million, pre-tax profit of £7.63 million and shareholders funds of £80.5 million. Experianrate the company ‘Very Low Risk’.

Timpson Ltd (00675216) is a family company. They operate over 900 shopsundertaking shoe repairs, key cutting and engraving. It is part of the TimpsonGroup. For the year ended 26th September 2015, the company had a turnoverof £130.7 million, pre-tax profit of £10.2 million and shareholders funds of £52.3million. Experian rate the company as ‘Very Low Risk’.

Professional Eyebrows Bar Ltd (09499711) is a Leicester based limitedcompany incorporated in March 2015.

Messrs C and L White are operating the upper part as a tattoo parlour. It is anew operation and they have provided a rent deposit of £2,250.

COMMENT ON RENTThe Gallowtree Gate unit has a passing rent reflecting a Zone A rate of about£123 per sq.ft. set in the recessionary market of 2011. Prime rents in the streetapproached £200 per sq.ft. at the height of the market and have fallen backsince in response to the recession and the extension to the Highcross ShoppingCentre. Nevertheless the thoroughfare is still extremely busy and represents amajor route for shoppers.

The remaining units in Market Place and Victoria Parade have passing Zone Arates reflecting a range from £58 to £79 per sq.ft. and again, three of thesewere set in the recessionary market of 2011 and 2012.

LEICESTER – 29 GALLOWTREE GATE, 1/5 VICTORIA PARADE, 65/69 MARKET PLACE

EPCsCertificates and Reports can be provided on request.

Unit Name Location Tenant GrossFrontage

GF Area(sq.ft.)

ITZA(units)

Basement(sq.ft.)

1ST Area(sq.ft.)

2nd Area(sq.ft.)

3rd Area(sq.ft.)

29 Gallowtree Gate Front Shop - corner GallowtreeGate and Victoria Parade Lasercare Clinics (Harrogate) Ltd 22’ 1” 601 555 398 392 429

65 Market Place End shop - Market Place Ladbrokes Betting & Gaming Ltd 30’ 7” 1,213 864 1,222 341 Not used

67 Market Place Middle shop - Market Place Thomas's Entertainments (Leicester) Ltd 15’ 5” 844 396 773

69 Market Place Corner shop - Market Place andVictoria Parade Harvey & Thompson Ltd 14’ 4” 423 337 476 346 285 226

3 Victoria Parade Middle of Victoria Parade Timpson Ltd 18’ 4” 182 182 Unmeasured 164 Not used Not used

5 Victoria Parade Middle of Victoria Parade Professional Eyebrows Bar Ltd 19’ 6” 208 208

Pt 1st / Pt 2nd Floor,Unit 1a Victoria Parade

Upper part approached frommiddle of Victoria Parade Messrs. C and L White N/A 893 589

Totals 3,471 2,542 1.249 3,023 1,607

Unit Name Tenant Notes Lease Start Lease Expiry NextReview

TenantBreaks

Annual Rent(pa)

Approx.Zone A

Rate

29 Gallowtree Gate Lasercare Clinics (Harrogate) Ltd 29/09/2011 28/09/2021 29/09/2016 no £75,000 £123

65 Market Place Ladbrokes Betting & Gaming Ltd 03/09/2004 02/09/2019 no £65,000 £69

67 Market Place Thomas's Entertainments(Leicester) Ltd

They want to stay and negotiations in hand fornew 10 year lease with break at the 5th 25/12/2011 24/12/2016 no £27,500 £63

69 Market Place Harvey & Thompson Ltd 29/09/2011 28/09/2021 29/09/2016 no £31,500 £78

3 Victoria Parade Timpson Ltd Recent break option NOT exercised 16/01/2012 15/01/2022 16/01/2017 no £15,000 £79

5 Victoria Parade Professional Eyebrows Bar Ltd 25/07/2016 24/07/2021 25/07/2019 no £12,000 £58

Pt 1st / Pt 2nd Floor,Unit 1a Victoria Parade Messrs. C and L White Recent letting. Landlord has 3 months rent

deposit. 27/01/2017 26/01/2022 26/01/2020 £9,000 n/a

Total £235,000

LEICESTER – 29 GALLOWTREE GATE, 1/5 VICTORIA PARADE, 65/69 MARKET PLACE 5

LEICESTER – 29 GALLOWTREE GATE, 1/5 VICTORIA PARADE, 65/69 MARKET PLACE

Gallowtree Gate29 Gallowtree Gate

Victoria Parade Ladbrokes

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FREEHOLD CITY CENTRE BLOCK INVESTMENTGALLOWTREE GATE and MARKET PLACE, LEICESTER

MISREPRESENTATION ACTThese particulars are intended only as a guide to prospective purchasers to enable them todecide whether to make further inquiries with a view to taking up negotiations but they areotherwise not intended to be relied upon in any way or for any purpose whatever andaccordingly neither their accuracy nor the continued availability of the property is in any wayguaranteed and they are furnished on the express understanding that neither the agent northe vendor is to be, or come, under any liability or claim in respect of their contents. Thevendor does not hereby make or give nor does any Partner or employee of Smith Price LLPhave any authority to make or give any representation or warranty whatsoever as regards theproperty or otherwise. Any prospective purchaser or lessee or other person in any wayinterested in the property should satisfy himself by inspection or otherwise as to thecorrectness of each statement contained in these particulars. In the event of the agentssupplying any further information or expressing any opinions to a prospective purchaser,whether oral or in writing, such information or expression of opinion must be treated as givenon the same basis as these particulars. These particulars do not form part of any contractand, except where expressly otherwise stated, offers will be considered only subject tocontract.

Smith Price LLP is a limited liability partnership registered in England and Wales.Registered number: OC318959. Registered office: 5/7 John Princes Street, London W1G 0JN

PROPOSAL

For the freehold interest subject to the incomes, we seek a price of £2,150,000 subject tocontract to show a net initial yield of 10.3% with costs at 6.31%.

This is an opportunity to purchase a prominent city centre block, well let to mostlynational operators to provide a sound and very attractive income. There is scope forimprovement through active management, lease renewals and regears.

There may be longer term potential for residential conversion of upper parts.

The property is registered for VAT and it is expected the sale will be by way of a TOGC.The vendor wishes to retain the benefit of any capital allowances.

FURTHER INFORMATION

We can provide copy leases and floor plans. For further information please contact:

Stephen Powell020 7318 [email protected]

Mark Cherry020 7318 [email protected]

SUBJECT TO CONTRACT

Smith Price LLP | 5/7 John Princes Street | London, W1G 0JN 020 7409 2100