Montgomery House, Demesne Road, Manchester M16 8PH

Purpose Built Student Accommodation Investment

Furnished Study Bedroom Letting Unit

Newly Refurbished Development

Net Rental Yield 7.1+% (Gross Rental Yield 12.9%)

30% discount from RICS valuation

Price £24,500 - Leasehold (150 Years)

Cash buyers as no lending on property of this size

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Description of the Property Montgomery House is a purpose built, 248 study bedroom hall of residence principally comprising a main building (155 units) and a separate annexe building set in its own grounds including a large private garden to the south and parking spaces accessed via a driveway to the north. The elegant main building comprises two wings over four floors. Large communal kitchens and communal spaces are centred on each floor. At the end of each wing are located communal shower, bath and toilet facilities, and additional smaller kitchens.

The main building has been completely refurbished with works completed early in September ahead of the 2011/12 academic year and the first intake of student residents. The study bedroom offered represents one of the very best units within the development. Within the hub of student life in the main building, it is located on the second floor and faces south west, benefiting from very attractive views over the private garden, church and countryside beyond, as well as toward the evening sun ensuring maximum light. The room is a generous 10.2 square metres, measuring 3.72m x 2.73m, with ample room for the new furniture comprising queen size bed, desk and wardrobe. The new and very well appointed main second floor kitchen is particularly light, and also faces south.

Large attractive communal sitting rooms are located on both the ground and first floors.

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Location Montgomery House is located 1.2 miles (2km) to the south of Manchester’s city centre, in the Whalley Range area and close to the main sites of Manchester University (1.1 miles), Manchester Metropolitan University (1.4 miles), the Royal Northern College of Music (1.3 miles), and Manchester Business School (1.0 mile). The university sites are around a fifteen minute walk away, or just five minutes on the numerous and frequent bus services along Princess Road, one of the principal arterial routes into the city, and also Alexandra Road. These bus routes continue, after stopping at the university sites, for a further five minutes into the heart of Manchester City centre. The accommodation is located conveniently between two major routes into the city centre, but is quietly positioned in its own grounds with extensive private garden, and immediately adjacent to the 60 acre Alexandra Park. In addition to all the bars, clubs, shopping and entertainment available within 10 minutes at the city centre, a short walk to the south from Montgomery Hall leads to the vibrant local student scene of Chorlton. This area offers coffee shops, delis, eclectic bars, restaurants and nightclubs particularly favoured by the local student population.

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Rental Demand Manchester has the largest tertiary student population of any UK city outside London. The student population has grown year on year and has proved resilient, particularly in the economic downturn from 2008. There are more than 70,000 students at the University of Manchester and Manchester Metropolitan University alone. Montgomery House is ideally positioned a mile to the south to provide these sites with cost effective purpose built student accommodation. Student rentals in Manchester range from £75 to over £120 per week. Rooms in Montgomery House have been priced initially at £75 per week for the 42 week 2010/11 academic year. With a minimal period between refurbishment and letting in September 2011, it might be expected that in future years, with a longer marketing period, broader awareness in the student community of this new accommodation alternative, and increasingly high demand across the city, that the potential for rent in excess of this figure is considerable. Letting during the non-academic period, return from which is not assumed within this analysis, may provide enhanced returns. Evidence of Montgomery House’s desirability and affordability has been demonstrated in its first student intake in September 2011. The majority of the main building’s rooms have been let during just the weeks from completion to the start of term. Key university towns across the UK have recorded 100% occupancy in purpose built accommodation over recent years. Manchester saw student accommodation rent increases of 7% in 2010 compared with average of 5% across the UK. Science, Technology and Engineering and Mathematics (STEM) courses are the most in demand from applicants – Manchester’s universities focus significantly in these areas. The Universities The University of Manchester, with 39,438 students registered and a recent increase of 11% in demand for places, is Britain's largest single-site university. It offers students a particularly wide choice of degree programmes and options, along with excellent facilities and student support services. With some of the highest quality teaching and research and the broadest spread of academic subjects, the University competes with the best universities in the world. The Shanghai Jiao Tong University Academic Ranking of World Universities (ARWU) placed the University 44

th in the world in 2010, nine places higher than in 2004. It is ranked 9

th in

Europe and 5th in UK.

The University has four faculties, 22 academic schools and hundreds of specialist research groups undertaking pioneering multidisciplinary teaching and research of worldwide significance. The University of Manchester is the UK’s most popular university, receiving more applications for undergraduate study than any other British university (more than 55,000 in 2010). The University has more than 400 different degree courses, one of the most generous ranges of scholarships and bursaries for undergraduate study in the UK, more than 4 million printed books and manuscripts, 41,000 electronic journals and 500,000 electronic books, together with the UK’s largest students’ union. The University has embarked on the largest capital investment programme ever undertaken in UK higher education, with more than £400 million invested so far in state-of-the-art buildings, major refurbishments and public realm works. A further £250 million investment by 2015 will take the overall spend to more than £650 million. Manchester Metropolitan University (MMU) educates 33,500 students, with applications up 8.5% for 2011. It was awarded university status in 1992 and is part of the largest higher education campus in the UK and one of the most extensive education centres in Europe. With a history dating back 150 years, MMU has a combination of the traditional and the contemporary that sets MMU apart and gives it a distinct character.

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The central campus is situated close to Manchester’s city centre and, along with other sites, comprises: Faculty of Art and Design, Faculty of Health, Psychology and Social Care, Hollings Faculty, Faculty of Humanities, Law and Social Science, Institute of Education, MMU Business School, MMU Cheshire, and Faculty of Science and Engineering. MMU is the UK’s 3rd most popular University, receiving over 48,000 applications per year. Over 1,000 courses and qualifications are offered, many with a strong professional bias. It is the largest public sector provider of accountancy training in the North West, and is one of the largest providers of science, engineering and technology education in the UK. MMU educates a tenth of the UK’s food technologists. In addition to the two main universities, Manchester also is home to several other large tertiary educational establishments. These include the Royal Northern College of Music (RNCM, located close to the other two universities), Manchester Business School (again in the same vicinity), and Salford University one mile to the North of the city. Investment in Student Accommodation In recent years, and most significantly since the financial turmoil of the credit crunch, student accommodation has come to be regarded as an important asset class within the broader property investment market, owing in the main to the fact that such assets have proven to deliver steady incomes and capital appreciation. Research undertaken by Knight Frank noted that “rental growth in the student sector remains robust, recording growth of 5% per annum [which] compares favourably with growth in the commercial sector of 0.5%”. In spite of recent reforms of higher education, prompted by recommendations made in the Browne Report of 2010 which will see universities given the freedom to charge prospective UK students up to £9,000 per annum in course fees, the number of people seeking to undertake a degree course or other form of higher education is expected to continue to grow. The demand for accommodation to cater for the housing needs of this large client base (some 450,000 people per annum) means that landlords who hold good quality property in the right location should achieve high occupancy and consequently be able to enjoy steady and stable income year-on-year. Manchester is an ideal location in which to invest in this type of property asset class. Both locally and nationally there is a distinct shortfall in the number of beds provided by universities in the form of halls of residence. The four universities combined were only able to accommodate 18.7% of total students in university halls. In a recent report on student accommodation investment prospects, Knight Frank cited Manchester as ranking seventh amongst all UK university cities in terms of scope for investment returns from student property (report based on data including Land Registry, Higher Education Statistics Agency and the Good University Guide). Reasons included several key factors: limited supply of university managed halls of residence (less than 1 in 5 students in the city could be housed in such accommodation), broad and varied student demographic (21% from overseas, 17% post-graduate) and ever increasing student numbers (15% rise in student numbers between 2004-2009). Additionally, Manchester is affordable relative to the UK as a whole, despite being regarded as England’s second city. Financial Information The majority of study bedroom letting units within Montgomery House’s main building have already been let at £75 per week for a 42 week academic year over 2011/12. That such a high level of occupancy has been achieved within just a few weeks of completion and without broad awareness of this new accommodation alternative close to the universities, underlines the strength and reliability of future rental income. With a longer marketing period into 2012/13 and other favourable factors, including comparable rental rates up to £100 per week, it is entirely realistic to anticipate a weekly rental of at least £86 (RICS valuation confirms this level). There is a rental agent charge payable at 10% of rents received. With rooms let to include utility and broadband bills, the service charge is costed at £887 per annum. Ground rent is set at £200 per annum.

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The study bedroom unit offered for sale, with student tenant in place through 2011/12, will generate a gross rent per annum of £3,150 and net cash income after deductions of £1,748. These figures exclude the potential for further income during the 20% of the year classed as non-academic period summer vacation weeks. The net rental yield is over 7% at current letting rates. Rental management charges of 10%pa make the net rental figure in the left hand column £1,748 which is a net rental yield of 7.1% Valuation

A RICS valuation of a typical unit in Montgomery House attributes a value of £35,000. The

vendor's unit offered for sale represents one of the best examples in the development, in turn likely to command higher and more dependable rental income. Similar units in other developments have been priced at £35k-£40k. Conclusion Montgomery House is an attractive, completely refurbished and purpose built student residence. It is only five minutes from two of the UK’s leading and largest universities, and further five minutes from Manchester city centre. The unit, which represents one of the best possible within the development, is tenanted through 2011/12, with strong demand into the future. Priced at £24,500, this investment offers an exceptionally high net yield of 7.1% (12.9% gross)

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Terms and Conditions 1. The Purchaser understands that this does not form a contract of purchase and that all

purchase contracts will be provided by the vendor to the Purchaser’s solicitor. 2. The purchaser understands that a reservation fee of £1000 is required to take this

property off the market. 3. The Purchaser understands that when reserving a property through Broadgate

Residential Investments Ltd, any reservation fee required is non refundable unless the deal does not progress through no fault of the purchaser’s.

4. The Purchaser understands that the reservation fee reserves the property until the date of exchange outlined by the vendor. Should the purchaser not be seen to be making fair and reasonable progress to exchange on the date set The Purchaser understands that both Broadgate Residential Investments Ltd and the vendor may re-offer the property to the open market and the reservation fee and arrangement fee will remain non-refundable

5. The Purchaser understands that exchange and completion deposits are payable to his/her solicitor and not to Broadgate Residential Investments Ltd.

6. The Purchaser understands that Broadgate Residential Investments Ltd has no control over interest rates and the availability of mortgages.

7. The Purchaser understands that Broadgate Residential Investments Ltd may receive a commission payment from the vendor.

8. The Purchaser understands that the details contained in any information provided are for guidance only. Any photographs, illustrations, specifications, plans and sizes only give a general indication of the property. Developers operate a policy of continuous development and features, specifications and elevations treatments may vary. The vendor reserves the right to alter any part of the development for new properties. Particulars supplied in any information should not be relied upon as accurately describing any specific matters.

9. The Purchaser understands Broadgate Residential Investments cannot be responsible for the construction and finish of the property

10. The Purchaser understands that Broadgate Residential Investments cannot be responsible for the services provided by recommended third parties.

11. The Purchaser understands that property values can decrease as well as increase. Broadgate Residential Investments Ltd makes no express or implied income claims. The Purchaser understands that rental income achieved may not always match that predicted.

12. The Purchaser understands that the services of Broadgate Residential Investments Ltd are not regulated, we encourage all investors to seek appropriate financial and tax advice from suitable regulated sources.

BROADGATE RESIDENTIAL INVESTMENTS LTD, THEIR REPRESENTATIVES & ANY JOINT AGENTS GIVE NOTICE THAT: Whilst Broadgate Residential Investments Ltd does its utmost to verify the contents of any printed or electronic formatted document, they have no authority to make or give any representations or warranties in relation to any property. Any particulars provided do not form any part of an offer or contract and must not be relied upon as statements or representations of fact. Any areas, measurements or distances are approximate. Any text, photographs and plans are for guidance only and are not necessarily comprehensive. Purchasers must satisfy themselves by survey or otherwise. Any particulars or plans provided are prepared from preliminary plans and specifications before completion of the properties are intended only as a guide. They may have changed during construction or finishes could vary. Prospective purchasers should not rely on this information but have their solicitor check the plans and specifications attached to their contract.