Components that make London stand out

Global Financial Centre• Position as a top financial center that is fit for purpose for global occupiers• Exposure to financial & business services increases market volatility• its top ranking position undoubtedly channels global capital and attracts leading global enterprise

Liquidity• Even in the worst market conditions, there is an exit strategy for investors.• perceived as a mature and transparent market, making it an attractive investor destination

Stock• London is the biggest market in Europe – there is quality real estate stock readily available, with new leases to

high caliber occupiers

Lease Lengths

• Institutional nature of UK real estate has created an investment market geared towards the investor. • Leases are typically longer than for the rest of the UK, and in many cases secured on a better quality of building

than in other global markets

Cont…

Tenure• Freehold is the most desired tenure for many, but more experienced overseas investors are embracing the

leasehold structure

Transparency • Independent research, data and industry scrutiny from the press, advisors and equity analysts all serve to

create a very transparent and comprehensible market. • The Jones Lang LaSalle Transparency index ranks the UK as the 3rd most transparent real estate market

globally

Professional Advice • the law firms and surveying practices operating in London often come with a platform which enables a

consistent level of advice across the globe. • In such a competitive market it is also a source of comfort that there is no monopolistic practice

Tax • UK investment offers an investor-friendly regulatory framework and tax regime to overseas investors, with

no barriers to real estate ownership and to the transfer of funds in and out of the country

Cont…

Currency• The devaluation of Sterling after the 2008 global economic crisis made the price of UK real estate

even more competitive• With recent uncertainty in the Eurozone, Sterling has increased its appeal to many global

investors

Familiarity • In London, this has sometimes rather patronizingly been described as a “monopoly board

mentality”, but in reality it derives from investors already having strong cultural (or even colonial) links with London.

• as well as a working knowledge of assets and strategy, either directly or from contemporaries

Heritage, Culture & Language • multi-cultural London, heritage, quality of life (especially for higher net worths) and the English

language make London an attractive place to invest, work and live

Top UK based luxury brands financial performance

Company

nameSelection of luxury

brand

FY14 luxury goods sales

(US$mil

FY14 total revenue (US$mil)

FY14 luxury goods sales

growth

FY14 net profit

margin¹

FY12-14 luxury goods sales

CAGR²

Market cap*

(US$mil)

Burberry Group plc

Burberry Prorsum, Burberry London,

Burberry Brit3,160 3,160 7.6% 13.0% 15.4% 10359

Graff Diamonds

Limited

Graff689 689 11.5% 11.2% 25.5% 2865

Aurum Holdings Limited

Watches of Switzerland, Mappin &

Webb, Goldsmiths 506 506 4.9% 3.8% 8.1% 2170

Paul Smith Ltd.

Paul Smith 320 320 0.0% 6.6% 8.5% 1020

Mulberry Group Plc

Mulberry 261 261 -2.0% 11.3% 16.5% 687

Future perspective

• UK luxury sector forecast to almost double in size over the next five years from £6.6 billion in 2012 to £12.2 billion in 2017

• The UK luxury sector set to grow 12% in 2015 to £9.4 billion • British luxury brands remain optimistic about the outlook with

83% of brands expecting to see a rise in sales in 2015• Brazil and India are key target markets for UK luxury brands

looking to expand overseas • Only 16% of brands currently have operations in Brazil

however, after Olympics and World Cup, 52% of brands have an interest in entering the market

• Manchester & Edinburgh are considered to be the UK’s next most important luxury hubs, after London