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EARLSDON PARK

COVENTRY

Department for Education Building:

75,639 sq ft, BREEAM Excellent, Grade A office with 9.3 years AWULT

Former Technical College:

Mixed use refurbishment opportunity with a Premier Inn

let for 11.6 years term certain

Development Site:

2 development sites with consent for residential and commercial uses

V I E W O P P O RT U N I T Y

http://www.realestate.bnpparibas.co.uk

EARLSDON PARK

COVENTRY

Executive Summary

A rare opportunity to acquire a significant mixed use scheme providing secure income to undoubted covenants in addition to development and letting opportunities to drive significant returns.

Coventry is one of the fastest developing regional economies. Earlsdon Park is a mixed use development centred around the iconic neo-classical former technical college on Butts Road Coventry which includes a care village, offices, hotel, retail and associated amenities.

Earlsdon Park has already attracted occupiers including Extra Care, Premier Inn and Department for Education thanks to its accessible location, proximity to the city centre and public transport, since the first phase was completed in 2009.

The scheme comprises an award winning office investment, a hotel, the refurbishment opportunity of an iconic building and two cleared development sites.

The Investment Opportunity Comprises

• A 75,639 sq ft BREEAM Excellent office building let to a single tenant with a vacant ground floor available for retail occupiers

• A landmark building let to Premier Inn Hotels on the upper floors and 37,067 sq ft of vacant accommodation suitable for a variety of potential uses

• 2 development sites with consent for residential and commercial uses

Offers may be submitted for the whole or for any of the three elements.

Offers are sought in excess of £25,000,000 (Twenty Five Million Pounds).

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Former Technical College Department for Education Building

Development Sites

Secure income for a further 11.6 years to Premier Inn

One of the best office buildings in the Coventry and Warwickshire area

A rare opportunity to acquire a city centre residential development site with existing consent for 210 residential units, or include 50,000 sq ft of office accommodation

Refurbishment / change of use opportunity on 37,067 sq ft

BREEAM Excellent building let to a single government occupier for an AWUT of 9.5 years

Current interest from a significant office occupier

Opportunity to let 8,323 sq ft of retail/leisure space

EARLSDON PARK

COVENTRY

Investment Rationale

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EARLSDON PARK

COVENTRY

Coventry

Second largest city in the West Midlands

Largest employers include University of Warwick, Jaguar Land Rover, Barclays Bank Plc, Royal Mail, Severn Trent and Peugeot

10th highest city for housing stock growth

Population of

329,810

6th best city for private sector jobs growth

11th highest average wage in the UK

Home to Warwick University and Coventry University with over

50,000 students combined

Best performing Midlands city

One of only four cities outside the south east where the

population earn above the national average

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EARLSDON PARK

COVENTRY

Rail Connections

Drive Times

Airports

Station Distance Train Time to London Train Time to Birmingham New Street

Coventry 0.7 miles 1hr 3mins 21 mins

Birmingham International 10 miles 1 hr 13 mins 10 mins

Leamington Spa 10 miles 1 hr 12 mins 31 mins

Airport Distance

Birmingham 11 miles

East Midlands 40 miles

Luton 67 miles

City Distance

Birmingham 19 miles

London 98 miles

Nottingham 53 miles

Leicester 26 miles

M6

M6

M5

M4

M3

M50

M74

M77

M90

M54

M40

M42

M25

M1M11

A1(M)

M1

M1

M6

M8

100 miles

80 miles

60 miles

40 miles

20 miles

BIRMINGHAMAIRPORT

COVENTRYAIRPORT

LUTONAIRPORT

EAST MIDLANDSAIRPORT

HEATHROWAIRPORT

GATWICKAIRPORT

LONDON

MANCHESTER

LEEDS

GLASGOW

NEWCASTLEUPON TYNE

LIVERPOOL

BRISTOL

SOUTHAMPTON

CARDIFF

Leicester

Nottingham

Birmingham COVENTRY

Connections

76%of the UK population are within a 4.5 hour drive time

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EARLSDON PARK

COVENTRY

Earlsdon Park Scheme

Earlsdon Park is one of Coventry’s best known and largest mixed used developments over the last 10 years.

The scheme is highly accessible on the edge of Coventry city centre, within a 5 minute walk of Coventry Railway station and offers significant prominence onto the B4101.

Earlsdon Park is dominated by the 1935, neo-classical former technology college, although it is also notable for blending this historic building with the ultra-modern BREEAM excellent office next door, built for the Department for Education in 2009.

Earlsdon Park is situated on Butts Road (B4101), close to its junction with the Coventry Ring Road (A4053) on the western side of the city centre. The scheme is approximately 12 minutes’ walk, 0.7 miles north west of Coventry Railway station.

Income Profile

• Income – The scheme currently generates an annual income of £1,633,554 per annum

• Site Area – The investment opportunity extends to 4.40 acres

• Net Internal Floor Area – 119,572 sq ft and 100 hotels rooms

• Void Area of 37,067 sq ft

• Development Opportunity – 1.48 acres net

• Reversion – The potential reversionary position allowing for reasonable build costs on the two existing buildings is 9.98% excluding the cost of the development land and an additional potential GDV of in excess of £25,000,000 for the development sites

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EARLSDON PARK

COVENTRY

Earlsdon Park Scheme: Site plan

The scheme totals 7.55 acres and comprises:

• 104,382 sq ft of office accommodation,

• 100 hotel rooms

• 262 extra care units with full amenities (not included with sale)

• 8,324 sq ft of retail accommodation

• 1.48 acres net of residential and/or commercial consented development land, consent for 210 apartments or 90 apartments and 50,000 sq ft of offices with 476 car parking spaces

• 620 seat theatre

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Site plan

EARLSDON PARK

COVENTRY

Department for Education Building

Situation

The Department for Education building fronts Butts Road, adjacent the former technical college. The two buildings form the main frontage of the Earlsdon Park development providing a blend of historic and modern architecture that the scheme is known for.

Immediately north west of the Department for Education building is Coventry rugby clubs stadium, whilst to the rear and accessed off Albany Road is the 262 Extra Care faciliy which incorporates residential units and a range of amenities including shops, restaurants, café’s, bars and a gym. Between the Department for Education building and the Extra Care development is a commercial and residential development opportunity.

Description

The Department for Education Building is a modern, Grade A, headquarters office building completed in 2009 with an impressive double height ground floor reception, large central atrium, ground floor retail/leisure opportunity and an incorporated multi-story car park.

The high quality design of the building disguises the car park as part of the offices with external glazing and has allowed the building to achieve a BREEAM Excellent rating in part due to features such as solar panels, ground source heat pump and a heat exchanger.

The specification of the building includes:

• Raised floors with a 320mm clear void

• Chilled beam comfort cooling

• Clear floor to ceiling height of 2.7m

• Suspended ceilings with integral uplighters

• Three 13 person passenger lifts

• Triple glazed external façade high performance window system

• Vertical and horizontal solar shading

• Green roof areas

• 476 car parking spaces

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EARLSDON PARK

COVENTRY

Department for Education Building: Schedule of Areas

Occupation

The office accommodation is let to the Department for Education for a maximum term of 20 years commencing 24 July 2009, by way of four separate leases under a single agreement. The leases are for an average term of 15 years from 24.07.09, however the lease allows for any of the leases to be terminated upon not less than 12 months’ notice, subject to satisfying a “Minimum Floor Area Days Condition” to ensure the landlord enjoys the same minimum income as they would have were the tenant to have occupied all four floors until 23rd July 2024, up to a maximum term of 20 years.

The passing rent of the four occupational leases is £1,211,301 which reflects £18.00 per sq ft.

Example of the Break Mechanism

There are numerous permutations of how this clause can operate however we have provided a simple example below, which demonstrates the basic purpose of the lease:

Should the Department for Education serve notice to exercise their option to break on a single floor (say 7th) effective as at April 2016, the earliest the tenant would then be able to break on any other single floor would be 2022.

Car Parking

The Department for Education have 130 demised car parking spaces and the right to call upon a further 266 spaces.

Premier Inn have exclusive rights to over 80 spaces.

Occupational Schedule

Demise Tenant Area Comments

Part Ground Floor Vacant 8,324 sq ft Currently vacant in shell condition

Part Ground Floor Department For Education 2,322 sq ft

Part Ground Floor Car Parking 16 Spaces

1st Floor Car Parking 46 Spaces

2nd Floor Car Parking 101 Spaces

3rd Floor Car Parking 108 Spaces

4th Floor Car Parking 108 Spaces

5th Floors Car Parking 107 Spaces

6th Floor Department For Education 17,997 sq ft




Total 75,639 sq ft 476 Spaces

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Covenant InformationSchedule of Areas

EARLSDON PARK

COVENTRY

The Department for Education Building: Covenant Information


The Department for Education is responsible for education and children’s services in England, and are a Government body providing a minimum risk of failure and a D&B failure score of 100 out of 100.

Planning

The entire scheme was consented under planning reference 53847 (approved 28th August 2007), which allowed for a range of uses across the site. We therefore understand that the building has consent for offices, under the B1 use classes.

Planning consent, reference 53847/D was approved for the change of the ground floor unit of Department for Education Building (commercial unit) to use class A1 retail, subject to development commencing with 3 years of the date of permission (i.e. by October 2012) and prior approval of shop front details. It is a condition of the approval that the site is used predominantly for the sale of convenience goods.

A summary of all planning conditions can be found in the dataroom, access available on request.

EPC

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EARLSDON PARK

COVENTRY

Former Technical College

Situation

The former technical college fronts Butts Road, adjacent the Department for Education Building. The two buildings form the main frontage of the Earlsdon Park Development, providing a blend of historic and modern architecture that the scheme is known for.

The surrounding land uses include residential, offices, student accommodation, leisure and stadia in the form of Coventry Rugby Club’s ground, demonstrating the truly mixed use nature of this area of the city centre.

Description

The former technical college is an imposing four storey neo-classical building, completed in 1935. The building is in a ‘C’ shaped formation, with a theatre sitting in the centre of the ‘C’. The building is the most significant landmark in the area, which includes a 100 room Premier Inn hotel on the 2nd and 3rd floors, a 620 seat theatre and two and a half floors currently in a shell condition.

The building benefits from a full height reception which provides access to the main foyer, the ground floor dedicated reception for Premier Inn and access to the Albany Theatre to the rear.

The Premier Inn provides 100 rooms aligned with the corporate specification.

The part ground, first and second floors are currently in a shell condition and provide potential for high quality offices in a prestigious address, but also residential and student accommodation opportunities, subject to planning.

There are ongoing discussions with occupiers for the vacant office accommodation.

The Albany Theatre is an impressive, art deco style, 620 seat theatre with a part stain glassed vaulted ceiling, stage, production and preparation areas. The building was designed in 1919 and opened in 1935. The theatre was reopened as part of the Earlsdon Park development in 2013, prior to which a large amount of refurbishment had been undertaken. The theatre is home to a range of local companies as well as hosting professional productions.

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EARLSDON PARK

COVENTRY

Former Technical College: Schedule of Areas

Floor Area

Occupation

Premier Inn has a lease commencing 19 December 2011 for a term of 25 years, expiring 19 December 2036. The rent is subject to review every 5 years with reviews linked to the Consumer Price Index, capped and collared at 1% and 4%.

Premier Inn are currently paying £393,500 pa (£3,935 per room per annum).

The lease is subject to a tenant break on 19 December 2026 subject to 12 months written notice.

The National Association of School Business Management have a lease commencing 6th June 2014 expiring 5th June 2034 without break. The current rent passing is £28,753 pa (£14.27 per sq ft).

The Albany Theatre has a lease available for signing and forms part of the consent, the lease is for a term of 25 years without break, at a peppercorn rent.

Demise Tenant Area Comments

Part Ground Floor Premier Inn 4,851 sq ft

Albany Theatre 620 seats

Part Ground Floor NASBM 2,015 sq ft

Part Ground Floor Vacant 3,171 sq ft

Part Ground Floor Vacant 10,134 sq ft

1st Floor Vacant 23,762 sq ft

2nd Floor & 3rd Floor Premier Inn 100 rooms

Total 43,933 sq ft 620 seats 100 rooms

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EARLSDON PARK

COVENTRY

Former Technical College: Covenant Information

Covenants

Premier Inn Hotels Ltd. are rated by Dun and Bradstreet as a 5A1 and represent a minimum risk of business failure. The company have reported the recent financial results:

Planning

Coventry technical college is ‘locally listed’ as a building of special architectural or historic Interest

The building is subject to planning consent, reference 53847/B, permitting demolition of part of and change of use of retained college building to provide for ground floor restaurants and drinking establishments (use classes A3 & A4), first floor offices and second floor hotel accommodation: roof top extension to provide for further hotel accommodation: rear extension to retained theatre and alterations to existing car parking and service areas.

This was approved on March 2010 subject to conditions and a legal (s106) agreement.

This application has been implemented in part (i.e. demolition and the hotel development). However we are not aware of whether the first floor office element has been implemented (the original approval provided for either office or residential at first floor).

EPC

28/02/2013 (£’000)

01/03/2012 (£’000)

03/03/2011 (£’000)

Turnover 201,014 124,048 87,378

Profit 44,568 37,400 13,651

Tangible Net Worth 569,523 536,522 512,108

Net Current Assets (Liabilities)

175,061 233,952 279,534

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EARLSDON PARK

COVENTRY

Development Site

Situation

The development site is situated to the rear of the Former Technical College and accessed off Albany Road. The site is split into two separate areas, which separate the predominantly commercial uses in the buildings fronting Butts Road and the Extra Care Village at the rear of the Earlsdon Park scheme.

Albany Road is predominantly made up of residential land uses, which include traditional Victorian semi-detached houses and more modern, 1960/70s low rise apartment schemes.

Description

The development site extends to approximately 1.48 acres of cleared development sites capable of uses including offices, retail, residential and potentially student housing. Due to the current layout and the surrounding land uses, the sites would be capable of accommodating both apartments or lower density housing, although this would be subject to planning.

Planning

The planning consents regarding the development sites apply to four proposed blocks. Blocks C & D which run parallel and front Albany Road are consented for 90 residential apartments under planning consent FUL/2013/0085.

The second area of the development site which runs parallel with Butts Road, situated behind The Former Technical College, is noted in the planning application and schematic drawing as commercial building blocks E & F. Under The aforementioned planning consent Blocks E & F are consented for 50,000sq ft of offices or 120 apartments.

Area• The residential site

(blocks C & D) extends to 0.85 acres.

• Commercial blocks E & F extends to 0.62 acres.

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EARLSDON PARK

COVENTRY

Further InformationA data site has been prepared which includes a full legal pack of information including building surveys, measured surveys, and planning documentation is available upon request from the BNP Paribas Real Estate.

Pricing

We are instructed to seek offers in excess of £25,000,000 (Twenty Five Million Pounds) for the freehold interest in the subject property, subject to contract and exclusive of VAT. Yields are stated assuming standard purchasers costs of 5.8%.

Offers will be accepted on the whole or any of the three elements individually or combinations thereof.

We are instructed to seek offers in excess of £25,000,000 (Twenty Five Million Pounds) for the freehold interest in the subject property, subject to contract and exclusive of VAT. Yields are stated assuming standard purchasers costs of 5.8%. Offers will be accepted on the whole or any of the three elements individually or combinations thereof.

Contacts

earlsdonpark.co.uk

Andrew Meikle [email protected] 237 1238

Oliver [email protected] 237 1213

Simon [email protected] 237 1212

Element Price Yield Reversionary Position

Capital Value

Department for Education

£16,000,000 7.15% 9.75% £211

Former Technical College

£7,750,000 5.15% 10.1% TBC

Development Land £1,250,000 £845,000 per acre

Total £25,000,000

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http://www.earlsdonpark.co.uk

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