1

S T U D E N T / L I V I N G

3

I N V E S T M E N T C O N S I D E R AT I O N S

• Primestudentaccommodationopportunityincorecitycentrelocation,fullyletfor2013/14

• AdditionalincomefromSainsbury’sandAskRestaurants

• 133bedroomstudioaccommodation(140beds),providinganaveragebedroomsizeof27.14sqmandexcellentcommonfacilities

• HighestspecifiedschemeinGlasgow.Thepropertyisaformerlifestyleboutiquehotel,extensivelyrefurbishedandconvertedtostudentusein2011

• Glasgowisarenownedandestablishedcentreforhighereducation,boastingthreemainuniversitiesandafulltimestudentpopulationof50,450

• ExcellentlocationwithintheheartofthecityincloseproximitytouniversitycampusesincludingGlasgowCaledonianandStrathclydeuniversities

• CommonwealthGamesinGlasgowin2014willhelpbolsterthecity’sinternationalreputation

• Potentialtoincreasefutureincomebycontinuingtomoveallstudentaccommodationcontractlengthsto51weeks

• Savillsareinstructedtoseekoffersinexcessof£16,500,000 (sixteen million five hundred thousand pounds) fortheheritabletitleoftheproperty,whichreflectsanetinitialyieldof6.40%onthestudentincome,6.00%fortheSainsbury’sand6.75% ontheAskunit,assumingpurchaser’scostsof5.80%.Theassetisforsaleinclusiveorexclusiveoftheretailelement.TheSPVisalsoavailabletopurchaseanddetailscanbeprovidedonrequest.

4

FESTIVALPARK

KELVINGROVEPARK

GLASGOWGREEN

SIGHTHILLPARK

R I V E R C L Y D E

M8

M8

RENFREW ST RENFREW ST

N

HA

NO

VE

R S

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ARGYLE ST ARGYLE ST TRONGATE GALLOWGATE

W GEORGE ST

BATH ST BATH ST

SAUCHIEHALL ST SAUCHIEHALL ST

C

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GREAT WESTERN RD

W GRAHAM ST COWCADDENS RD

GA

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SALT

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IGH

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P

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W

CA

MPB

ELL

ST

MA

RYHILL RD

CLYDESIDE EXPRESSWAY

STOBCROSS ST

ARGYLE ST

ARGYLE ST

ST. VINCENT ST ST. VINCENT ST ST. VINCENT ST

SARA

CEN

ST CRA

IGH

ALL R

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W N

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WILLIAM ST BOTHWELL ST

BISHOP LN WATERLOO ST

GEORGE ST DUKE ST

PAISLEY RD

PAISLEY RD

CLYDE PL

NELSON ST

LANCEFIELD QUAY

BROOMIELAW CLYDE ST

W REGENT ST W REGENT ST

A81A879

A82

A814

A8

QUEEN STSTATION

GEORGESQUARE

CENTRALSTATION

L O C AT I O N

GlasgowisScotland’slargestcityandoneofthelargestintheUnitedKingdomboastingfiverecognisedhighereducationinstitutions.Thecityhasseenparticularlystrongeconomicgrowthanddevelopmentinrecentyearsandhasapopulationintheorderof600,000andacatchmentareaofover2million.

ThecitywhichissituatedintheCentralBeltofScotlandbenefitsfromexcellenttransportconnectionsbyroad,railorair.AccesstotheextensivemotorwaynetworkthatsurroundsGlasgowhasbeenfurtherimprovedbythecompletionoftheM74extensionlink.TherailnetworklinksGlasgowtoawidecommutercatchmentandtrainsrunevery15minutesbetweenGlasgowandEdinburgh.Over£200mhasbeeninvestedintheairportinrecentyearsandanaverage20,000passengerspassthrougheveryday.

ThepropertyislocatednexttoBuchananBusStation,Glasgow’smainbusterminalwhichservesc.40,000passengerseachday.

Tourismisacontinuinggrowthsectorwithinthecitywithover2millionovernightvisitorsandinaddition,thecityisarapidlyexpandingconferencedestination,bothofwhichofferopportunitiestomaximisesummerincome,subjecttotermlengths.

Thecitycentreprovidesahugevarietyofretailofferfromhighstreetmultiplestoboutiquestointernationalflagshipstores.ThecityranksnumberoneonthePMAretailprovisionscoreoutoftheUK’stop200retailcentresandistheUK’ssecondlargestretailcentreafterLondon.

Nottoscale-foridentificationpurposesonly

Glasgow Caledonian University

University of Strathclyde

City of Glasgow College

University of Glasgow

The Glasgow School of Art RCS

5

S I T U AT I O N

ThepropertyislocatedprominentlyonaprimestreetcornersiteatthejunctionofPortDundasRoadandKillermontStreetoppositetheentrancetoTheGlasgowRoyalConcertHall.

ThepropertyisonthedoorstepofbothBuchananStreetandSauchiehallStreet,twoofthecity’sthreeprincipalretailthoroughfares.TheBuchananGalleriesshoppingcentreislocateddirectlyacrosstheroad.

Thisisaprimelocationwithinthecitycentre,closetoretailandleisurefacilitiesaswellasbeingeasilyaccessibletotransportlinksincludingtheM74andM8motorways.

BuchananBusStation(themainGlasgowbusterminalprovidingbusservicesacrossScotlandandsouth)liesimmediatelytotheeastofthepropertyandQueenStreetStation,providingregularrailservicesacrossthecentralbeltofScotlandandbeyond,iswithin500mtothesoutheast.

Theproperty’scentralpositionmeansthatitbenefitsfromhighfootfallandsignificant‘walk-in’studenttrade,reducingmarketingcosts.

GlasgowInternationalairportisapproximately8milestothewestofthecentreoftheCityandisaccessiblebyaregularshuttlebusserviceleavingattenminuteintervalsthroughoutthedayfromGeorgeSquare.ThepropertyalsobenefitsfromeasyaccesstoGlasgow’sSubwaynetwork,whichislocatedwithin350m.

TheassetiswithinclosewalkingdistanceofanumberofhighereducationinstitutionswithinGlasgow.ThepropertysitsonthemainpedestrianroutetoGlasgowCaledonianUniversity’scampusonCowcaddensRoad,whichrunsparalleltothenorthofKillermontStreet.ThemaincampusoftheUniversityofStrathclydeissituatedonGeorgeStreetandteachingbuildingscanbeaccessedfromthenorthofthecampussiteonCathedralStreet,theentranceforwhichisapproximately750mtothesoutheast.TheUniversityofGlasgowissituatedintheWestEndofthecityapproximately2.3kmtothewest,butiseasilyaccessedviasubway.

6

GLASGOW CALEDONIAN UNIVERSITY

CITY OF GLASGOW COLLEGE

UNIVERSITY OF STRATHCLYDE

SUBWAY STATION

GEORGE SQUARE

QUEEN STREET STATION

BUCHANAN BUS STATION

ROYAL CONSERVATOIRE OF SCOTLAND

CENTRAL BUSINESS DISTRICT

BUCHANAN GALLERIES

ROYAL CONCERT HALL

7

H I G H E R E D U C AT I O N I N G L A S G O W

Universities

TherearefiverecognisedhighereducationinstitutionsinGlasgow,withasixth-TheCityofGlasgowCollege,whichwasformedin2012throughthemergerofGlasgow’scolleges,CentralCollegeGlasgow,GlasgowMetropolitanCollegeandGlasgowCollegeofNauticalStudies.Therearethreemainuniversities;Glasgow,CaledonianandStrathclyde,allofwhomfeatureontheTimesGoodUniversityGuideandhavesignificantfulltimestudentpopulations.Alluniversitiesareinvestingheavilyintheircampuses.

Foundedin1451,theUniversityofGlasgowisthefourtholdestintheEnglishspeakingworldandwasranked51stintheQSWorldRankings2013/14.Inrecentyears,theUniversityhasworkedhardtobuilditsinternationalreputationandthishasstartedtoshowinoverseasrecruitmentnumbers.InJulyofthisyeartheUniversitysuccessfullypurchasedaneighbouringlandholding,allowingittonowreview,redevelopandexpandthemaincampus,addingtotheirextensiveon-campusinvestmentofrecentyears.

TheUniversityofStrathclydewasestablishedin1796duringtheScottishEnlightenmentandhasmaintainedastrongfocusonTechnology.Itisintheprocessofinvesting£350minitscampusandwastheTHEUKUniversityoftheYear2012.

GlasgowCaledonianUniversityhasastronginternationalpresencewithcampusesinLondon,NewYorkandBangladeshandpartnershipsinChina,India,SouthAmericaandOman.TheyhaveinvestedheavilyinfacilitiesandteachingspacesattheGlasgowcampuswhichislocatedinthetowncentreandhaveattendeesfromover100countriescurrentlystudyinginGlasgow.

TheScottishGovernmenthasabolishedtuitionfeesforallstudentsfromScotlandandtheEU(excludingEngland,NorthernIrelandandWales)whostudyatScottishuniversities.ThishaskeptapplicationnumbersfromEUstudentsparticularlystrong.

Purpose Built Student Housing in Glasgow

Thereareapproximately10,789purposebuiltstudentaccommodationbedroomsinGlasgow,includingbothUniversityownedandprivatelybuiltstock.Thisequatestoonlyc.21%offulltimestudentsbeingabletoaccesssuchaccommodationwhichissignificantlylowerthantheUKaverageandpointstoasupplyanddemandimbalancewithinthecity.Approximately60%ofpurposebuiltaccommodationisprovidedbytheuniversities,and40%bytheprivatesector.

University Total Full-time International2014 Times Ranking

Applicants Per Place

UniversityofGlasgow 26,295 20,745 5,235 25 6.9

GlasgowCaledonianUniversity

16,120 12,380 2,035 81 6.1

TheUniversityofStrathclyde

19,755 14,780 2,815 42 6.2

TheGlasgowSchoolofArt 1,720 1,655 495 - -

RoyalConservatoire 895 890 195 - -

Total 64,785 50,540 10,775

Source: HESA 2011/12, The Times 2014

Student Housing - No. of student houses in Glasgow

Current demand(full-timehighereducationstudents)

Undersupply(currentdemandminuscurrentsupply)

Current Supply (universityandprivateaccomodationcombined)

39,751

10,789

50,540

8

D E S C R I P T I O N

Thepropertyisarrangedoverbasement,ground,mezzanineandfiveupperlevelsandisofmodernsteelframeconstructionhavingelevationscomprisingsandstoneblockworkinterspersedwithdoubleglazedpanels.ThefrontagetoKillermontStreetincorporatesaglazedatriumfeature.

Theconvertedformerlifestyleboutiquehotelhasbeeninoperationasstudentaccommodationforapproximatelytwoyearsandcomprisesatotalof133en-suitestudiounitsincorporating140beds.Thesearearrangedassinglelevelstudiounitsofbetween20and28sqm,splitlevelstudiosbetween31and35sqmandtwobedroomunitsknownas“twodios”measuring47sqmplus.Thebedroomsprovidedaresignificantlylargerinsizethantypicalstudentbedroomsandarerentedonanallinclusivebasis,toincludeallutilitybills,TVlicenceand12MBbroadband.

29.9m

23 5m

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Posts

Posts

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BATH STREET

KILLERMONT STREET

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AN

STR

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SAUCHIEHALL STREET

TREET

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Car Park

DW

William Harley Library

2

12

Concert Hall

4

19

150

Multistorey Car Park

9

Building

8

13

249

2

13

108

17

1

The Galleries

236

11

8

Hotel

14

12

165

15

15

136to

14

6

PH 3

14

Bus Station

16 to 22

Bank

Britannia

238

17

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Glasgow Royal

10

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7

10

240

19 to 23

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9

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Shelter

Shelter

24

Area : 0.111 ha (0.275 acres)

0m 25m 50m 75m

The Gallery Apartments, 2 Port Dundas Place, Glasgow, G2 3LD

Ordnance Survey © Crown Copyright 2013. All rights reserved. Licence number 100022432. Plotted Scale - 1:1947

NOTE:ReproducedfromtheOrdnanceSurveyMapwiththepermissionoftheControllerofH.M.StationeryOffice.©Crowncopyrightlicencenumber100024244Savills(UK)Ltd.

9

A C C O M M O D AT I O N

ThestudiosarefinishedtoahighspecificationandsizewhichsignificantlyexceedsthatofotherexistingstudiosofferedtotheGlasgowstudentaccommodationmarket.Theaveragebedroomsizeis27.14sqm.Itisourviewthatnootherschemesarecomparableinspecificationoramenity.Allbedroomsincludekingsizedbed,wallmountedflatscreentelevisionandlargebathroom.Finishestofixturesandfurnishingsincludehardwoodveneeredwardrobesandclothesstorage,highglosslacqueredkitchenunitsandopenstoragefinishesandhardwoodtimberlaminatefloorsthroughout.

Commonareasincludegym,cinemaroom,commonroom,studyroom,laundryandcyclestore.

Thecommercialunitsareongroundandbasementlevels.TheSainsbury’scomprises277sqm(2,981sqft)ofgrossretailspaceatgroundfloorlevelwithafurther128sqm(1,382sqft)ofbasementstorage.TheAskRestaurantscomprisesatotalgrossinternalareaof411sqm(4,424sqft)withacustomerareaof277sqm(2,981sqft).

10

Room Type Number of Beds

Studio 9

ClassicStudio 77

LargeStudio 12

DeluxeStudio 8

SplitLevelStudio 14

PremiumSplitLevel 6

2bedapartment 14

Total 140

Typical upper floor

StudiosCore

A C C O M M O D AT I O N S C H E D U L E

Nottoscale-foridentificationpurposesonly

11

I N C O M E

Student Accommodation

Themajorityofbedroomsareletdirectlytostudentsandsubjectto‘standard’formshortassuredtenancyagreementsfor44and51weekoccupancyterms.Thereare16roomsundernominationagreementtotheUniversityofGlasgowfor2013/14.TheUniversitypay£136,765whichisinlinewithdirectletrentsachievedatthescheme.

Thepropertyisfullyletforthe2013/14academicyear,asitwasfor2012/13andanincomesummaryisshowninthetableopposite.

CRM,thelargestthirdpartymanagerofstudentaccommodationintheUK,currentlymanagethescheme.ThecontractwithCRMisdeterminableonchangeofownership.

Forfurtherinformationontheirmarketingofthisscheme,pleasegoto:

www.crm-students.com/crm-accommodation/glasgow/gallery-apartments/

Theestimatedrangeofoperatingcostsinrunningthepropertyincludingmanagementfeeisbetween£2,300-£2,500.

Thepropertycurrentlybenefitsfrom‘HallsofResidency’statusandisthereforenotsubjecttocounciltax.

Bedroom Type No.Average

TermAverage Rent

Per WeekOccupancy Rent

Studio 9 51 £155.00 99% £70,434

ClassicStudio 77 47.8 £172.85 99% £630,066

LargeStudio 12 49.3 £194.39 99% £113,736

DeluxeStudio 8 51 £210.00 99% £84,823

SplitLevelStudio 14 48.5 £218.24 99% £146,703

PremiumSplitLevelStudio 6 51 £250.00 99% £75,735

2BedApartment 14 48 £151.96 99% £101,099

ProjectedSundryIncome £4,490

ProjectedSummerIncome £45,092

Total Gross Income £1,272,177

ManagementCostsat£2,400perbedperannum -£336,000

Total Net Income £936,177

Retail Units

ThetwocommercialunitsongroundfloorarelettoSainsbury’sSupermarketsLimitedandAskRestaurantsLimitedrespectively.

TheretailunitislettoSainsbury’sSupermarketLimitedfor15yearsfrom10April2012oneffectivefullrepairingandinsuringterms,subjecttoatenantonlybreakatyear10onsixmonthswrittennotice.Rentreviewsare5yearlytoRPIsubjecttoacapandcollarbetween2-4%.Thecurrentpassingrentis£90,000.Therewillbeaminimumupliftto£99,369inApril2017.AsatOctober2013,Sainsbury’sSupermarketLimitedwasratedbyDun&Bradstreetas5A1representingaminimalriskofbusinessfailurewithtangiblenetassetsestimatedat£4,509,000,000.

TherestaurantislettoAskRestaurantsLimitedfor25yearsfrom7November2011oneffectivefullrepairingandinsuringterms,subjecttoatenantonlybreakatyear15onsixmonthswrittennotice.Rentreviewsareupwardonly5yearly.Thecurrentpassingrentis£90,000,whichequatestoalowpassingrentofonly£20.34/sqft.AsatOctober2013,AskRestaurantsLimitedwasratedbyDun&Bradstreetas5A1representingaminimalriskofbusinessfailurewithtangiblenetassetsestimatedat£137,816,000.

T E N U R E

HeritableInterest

P L A N N I N G

Underplanningdecisionnotice(ref:10/02753/DC)dated10thMarch2011,fullplanningconsentwasgrantedfortheParkInnHotelforthe‘Useofhotelandrestaurant/barasstudentresidenceswithrestaurantandretailunitatgroundfloorlevel’.Furtherinformationcanbeprovidedonrequest.

E P C

TheEPCratingforthestudiobedroomsisF85.Thecommercialunits,lettoSainsbury’sandASKRestaurants,currentlyhavearatingofE71andG177respectively.TheEPCcertificatesofeachindividualunitareavailableuponrequest.

VAT

Providedthebuyercomplieswiththerelevantconditions,thesaleofthepropertyshouldqualifyasaVAT-freetransferofagoingconcern(TOGC)andassuch,noVATshouldbepayableontheacquisition.

StudiosCore

12

P R O P O S A L

Savillsareinstructedtoseekoffersinexcessof£16,500,000 (sixteen million five hundred thousand pounds) fortheheritabletitleoftheproperty,whichreflectsanetinitialyieldof6.40%onthestudentincome,6.00%fortheSainsbury’sand6.75% ontheAskunit,assumingpurchaser’scostsof5.80%.Theassetisforsaleinclusiveorexclusiveoftheretailelement.TheSPVisalsoavailabletopurchaseanddetailscanbeprovidedonrequest.

C O N TA C T S

Marcus Roberts 0207016379907807999187mroberts@savills.com

Cheryl Jackson 0131247372607967555829cjackson@savills.com

C A P I TA L A L L O WA N C E S

Thereisanunclaimedpoolofcapitalallowancesintheorderof£2,200,000andthesecanbeacquiredsubjecttonegotiation.Furtherdetailsonrequest.

S D LT

ThepurchasershouldbeabletoclaimMultipleDwellingsRelief(MDR)withrespecttothestudentaccommodationelementandwewouldadviseseekingtheappropriateprofessionaladviceinthisregard.ThetableoppositedemonstratesthepotentialimpactonyieldshouldMDRbeclaimed.

D ATA R O O M

Forfurtherinformationpleaseregisterat:

www.savills.com/galleryapartments

James Hanmer 0207016371107967555897jhanmer@savills.com

Bruce Patrick 0141222587307870555816bpatrick@savills.com

Important Notice

Savills,theirclientsandanyjointagentsgivenoticethat:

1.Theyarenotauthorisedtomakeorgiveanyrepresentationsorwarrantiesinrelationtothepropertyeitherhereorelsewhere,eitherontheirownbehalforonbehalfoftheirclientorotherwise.Theyassumenoresponsibilityforanystatementthatmaybemadeintheseparticulars.Theseparticularsdonotformpartofanyofferorcontractandmustnotberelieduponasstatementsorrepresentationsoffact.

2.Anyareas,measurementsordistancesareapproximate.Thetext,photographsandplansareforguidanceonlyandarenotnecessarilycomprehensive.Itshouldnotbeassumedthatthepropertyhasallnecessaryplanning,buildingregulationorotherconsentsandSavillshavenottestedanyservices,equipmentorfacilities.Purchasersmustsatisfythemselvesbyinspectionorotherwise.

DesignedandProducedbySavillsMarketing:02074998644|November2013

Est. costs at£2,400/bed

Net Initial Yield

Reversionary Net Yield*

No MDR Purchasing Costs Value (2013/14) (2014/15)

StudentAccommodation 5.80% £13,821,991 6.40% 6.74%

AskRestaurant 5.80% £1,260,239 6.75% 7.42%

Sainsbury’s 5.80% £1,417,769 6.00% 6.51%

Total / Avg. 5.80% £16,500,000 6.39% 6.77%

Assuming MDR

StudentAccommodation 2.80% £13,821,991 6.59% 6.94%

AskRestaurant 5.80% £1,260,239 6.75% 7.42%

Sainsbury’s 5.80% £1,417,769 6.00% 6.51%

Total / Avg. 3.29% £16,500,000 6.55% 6.94%

* Note

-Studentaccommodation:itassumestoincreasetheweightedavg.rentby4%andmovetheweightedavg.termto50.3weeks;Costsareassumedtoincreaseby2.5%onavg.

-Retailunits:assumedRPIincreaseat3.3%p.a.