Cheadle Royal Business ParkCheadle SK8 3GR

Prime South Manchester Business Park Office Investment

– Located on Cheadle Royal, the North West’s premier out of town business park.

– Excellent motorway connectivity.

– Modern office totalling 26,281 sq ft (2,441.59 m2).

– Let to Agilent Technologies LDA UK Limited and Micron Europe Ltd with a WAULT of 4.78 years.

– Rent passing £452,847.50 per annum, reflecting an average rent of only £17.52 per sq ft.

– Inherent rental growth potential.

– 139 car parking spaces, providing an excellent car parking ratio of 1:189 sq ft.

– Substantial on site amenities including; David Lloyd, TGI Fridays, De Vere Venues, Premier Inn and ‘Kids Allowed’.

– Long leasehold interest from 29 September 1995 at a peppercorn.

– Offers are sought in excess of £5,525,000 (Five Million Five Hundred and Twenty Five Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level would reflect a Net Initial Yield of 7.75%, after allowing usual purchasers costs of 5.8%.

EXECUTIVE SUMMARY

AERIAL

Jarden Corporation

Balfour Beatty

Regus

Blemain Group

5500 Lakeside

Kuoni

A34

Kids Allowed

Byrom

De Vere Venues

Premier Inn

TGI Fridays

David Lloyd

SainsburysAnglian Water Group

Wienerberger

John Lewis

To M60 and Manchester

LAKESIDE

OAKFIELDEntrance to park

Cheadle Royal, the North West’s premier out of town business park.

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ProposedLink Road

Cheadle Royal Business Park is situated in the North West of England, 7 miles south of Manchester City Centre.

5500 Lakeside

Cheadle Royal lies approximately 7 miles south of Manchester city centre and is immediately adjacent to the A34, the main arterial route in to the City from the south. As a consequence, the city centre and all it has to offer is within easy reach.

Manchester has the second largest urban population and the largest business centre outside London. As such, it is recognised as the financial and administrative capital of the North West. It is located approximately 34 miles east of Liverpool, 44 miles west of Leeds, 87 miles north of Birmingham and 207 miles north-west of central London.

The City benefits from an excellent transport infrastructure, with the M60 Orbital motorway connecting directly with the M56, M67 and M62 motorways. In addition, both the M56 and M62 subsequently link with the M6 motorway. As a consequence, approximately 60% of the UK’s population is within a two hour drive time.

LOCATION

CHEADLE ROYAL

It comprises over 600,000 sq ft of office, leisure and amenity space, in approximately 70 acres of mature parkland, close to the village of Cheadle and fronting the A34.

The closest town is Stockport, which is Manchester’s principal satellite town and is situated less than 5 miles to the north east. The borough of Stockport is the third most populated borough in Greater Manchester, with approximately 11,000 business and more than two million people within a 30 minute drive time.

Source: Stockport Town Centre Development Prospectus – 2nd Edition.

Originally developed by AMEC, Cheadle Royal provides a very attractive working environment and is home to major international occupiers including; Balfour Beatty, Blemain Finance, Wienerberger, Jarden Group, Regus and Freeclaim.

It benefits from unparalleled on-site amenities including David Lloyd Leisure, TGI Fridays restaurant, De Vere Venues conference centre, Premier Inn hotel and ‘Kids Allowed’ children’s day nursery. In addition, it is located adjacent to both Sainsbury’s and John Lewis.

Cheadle Royal is the North West’s premier out of town business park and is located within the prosperous commuter belt of South Manchester.

COMMUNICATIONS

AirManchester Airport is situated approximately 3.5 miles to the south east of Cheadle Royal and is the largest airport outside of London. In 2014 it was the third busiest airport in the UK and the 22nd busiest in Europe, in terms of passenger numbers. It offers flights to over 200 destinations – more than any other airport in the UK – and carries approximately 20 million passengers annually, with plans to expand capacity over the next 15 years.

The new relief road means Cheadle Royal’s connectivity to the airport will be significantly improved.

RoadJunction 3 of the M60 motorway is just 0.5 miles away and is accessed directly via the A34. In addition, the confluence of the M60 and M56 motorways is approximately 1.5 miles to the north and therefore provides swift access to the M62, M6 and wider motorway network.

By virtue of the new Manchester Airport Relief Road Scheme, Cheadle Royal’s connectivity to Manchester Airport will shortly be much improved. 6 miles of new dual carriageway will connect the existing Manchester Airport Eastern Link Road with the Airport, its junction with the A34 being just 2 miles to the south. This is currently under construction and due to complete Autumn 2017.

RailThe closest railway station to Cheadle Royal is Heald Green Station (1.6 miles away). This runs direct services to Manchester, where there are two mainline rail stations connecting directly to London, Birmingham, Edinburgh and Glasgow, as well as a host of regional and national destinations. Via Piccadilly, a fastest journey time to London of 2 hours 8 minutes can be achieved.

In addition, Stockport also benefits from a mainline rail station which provides direct links to Manchester city centre and to London Euston in exactly 2 hours.

The park benefits from excellent transport infrastructure.

DESCRIPTION

The property is located on Lakeside, the prominent first phase at the entrance to Cheadle Royal, in exceptional landscaped grounds overlooking a central lake.

It comprises a modern office building of steel frame construction with brick elevations beneath a pitched tiled roof.

Configured in an ‘L’ shape with two wings around a central core, the property offers flexible and fully divisible floor plates over ground, first and second floors.

Internally the offices are finished to a high specification, including:

– Raised floors– Suspended ceilings– Air conditioning– Gas fired central heating– Male and female WC provision to each floor

The building has the benefit of 139 car parking spaces, which provides an excellent car parking ratio of 1:189 sq ft.

ACCOMMODATION

Floor Area Sq ft Sq m

Reception 428 39.76

Ground 8,363 776.95

First 8,745 812.44

Second 8,745 812.44

Total 26,281 2,441.59

We have been provided with the following Net Internal Areas:

INDICATIVEFLOOR PLAN

Not to scale

TENANCY

Floor Tenant Area: Sq ft Lease Start Lease Expiry Rent Review Rent Pa Rent psf

Ground Reception 428

Ground & First Agilent Technologies LDA UK Limited ¹ 17,108 25/03/2012 24/03/2022 25/03/2017 3 & 4 £299,390 ² £17.50

Second Micron Europe Ltd 8,745 25/03/2012 24/03/2017 £153,457.50 £17.55

Totals 26,281 £452,847.50

The property has a WAULT of 4.78 years.

1. Lease on assignment from Agilent Technologies UK Limited.

2. The rent at lease commencement was agreed at £299,390 pa. However, the tenant benefitted from an incentive which was amortised over the first five years of the term. As such, the tenant is currently paying a ’net effective rent’ of £219,375 per annum. The vendor will top up to the headline rent of £299,390 per annum, until the next review.

3. The original lease incorporated a break option in 2017. This has been removed in return for a rental reduction of £25,000 per annum during the final five years of the term from the rent agreed at the 2017 review. Our client will top up this £25,000 from the date of the review, for the remainder of the term.

4. The March 2017 rent review is to the higher of £299,390 per annum, or open market value.

The property is currently let in accordance with the following tenancy schedule:

COVENANT

Agilent Technologies LDA UK LimitedAgilent is a world leader in life sciences, diagnostics and applied chemical markets. It was created in 1999 as a spin off from Hewlett-Packard Company and on 18 November 1999, broke records as the largest initial public offering (IPO) in Silicon Valley history. They provide laboratories worldwide with instruments, services and consumables.

The ground and first floors were originally let to Agilent Technologies UK Limited. As a result of a company restructure, the lease has been assigned to Agilent Technologies LDA UK Limited.

Agilent Technologies LDA UK Limited was incorporated on 16 December 2013 and was formed as a result of the split of the two arms of the business: life science, diagnostics and chemical analysis (LDA) and electronic measurement (EM). The split allowed greater management focus on the distinct elements of the business as well as enabling the LDA company to devote resources to the higher-growth LDA business. Two companies were formed: Agilent Technologies LDA UK Limited (the tenant) and Agilent Technologies UK Limited which was subsequently renamed to Keysight Technologies UK Limited (the guarantor).

Agilent Technologies LDA UK Limited (Company No: 08815891) are responsible for 66% of the income and have a Dun & Bradstreet rating of 3A1. For the latest accounting period they reported the following figures:

Date of Accounts 31/10/2014 £000’s

Turnover 30,031

Pre-Tax Profits -4,804

Shareholders Funds 13,863

Net Current Assets 37,936

The year ending 31/10/2014 was the companies first full year of trading and the pre-tax loss relates to exceptional costs in excess of £6m, which were incurred due to the closure of one the businesses during the restructure process. These costs are listed as exceptions in the latest company accounts and, without them, the company would have posted a Pre-Tax Profit of £1.9m.

Further information and background on the restructuring of Agilent, including a summary of the processand a copy of the respective company accounts, is available within the data room.

As part of the assignment an Authorised Guarantee Agreement was provided by Keysight Technologies UK Limited, formally known as Agilent Technologies UK Limited, in addition to a bank guarantee in the sum of £900,000.

Keysight Technologies UK Limited (Company No: 03809903) have a Dun & Bradstreet rating of 5A1. For the last three accounting periods they reported the following figures:

Date of Accounts 31/10/2014 31/10/2013 31/10/2012Turnover £000’s £000’s £000’s

Turnover 146,324 172,863 218,805

Pre-Tax Profits 9,637 -4,184 30,090

Shareholders Funds 51,088 80,256 98,176

Net Current Assets 67,422 112,298 137,283

Micron Europe Limited Micron Technology is a global leader in the semiconductor industry. Established in Idaho in 1978 the company employs 30,000 people in over 20 countries.

Micron Europe Limited (Company No: 02341071) are responsible for 34% of the income and have a Dun & Bradstreet rating of 5A1. For the last three accounting periods they reported the following figures:

Date of Accounts 28/08/2014 29/08/2013 30/08/2012 $000’s $000’s $000’s

Turnover 1,658,729 1,024,694 1,021,519

Pre-Tax Profits 18,399 10,207 7,281

Shareholders Funds 103,018 88,005 79,681

Net Current Assets 96,979 83,121 76,352

TENURE,VAT AND EPC

TenureThe property is held long leasehold by way of a 215 year (less 3 days) lease from 29 September 1995 at a peppercorn.

VATVAT will be payable on the purchase price. It is anticipated that the sale will be dealt with as a transfer of a going concern.

EPCThe property has an EPC Rating of E108. A full copy of the EPC report is available in the data room.

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SOUTH MANCHESTER MARKET

As a consequence of the increasing demand and dwindling supply, rents on Cheadle Royal are now anticipated to grow.

Despite the challenging economic climate, prime rents in South Manchester have remained stable over recent years, with headline rents of £18.00 to £19.50 per sq ft.

During this time, Cheadle Royal has firmly established itself at £18.00 per sq ft.

However, 2015 began encouragingly for South Manchester with a number of larger transactions taking place and pushing prime rents to £21.50 per sq. ft.

This has been exemplified by the recent letting of the 11,717 sq ft ground floor suite of Ocean House, Towers to Mason & Vaughan at a rent of £21.50 per sq ft, and the 8,088 sq ft letting to Cisco at Spectrum House, Towers, also at a rent of £21.50 per sq ft.

In addition, Syngenta have recently exchanged contracts on the 32,230 sq ft Crescent House, Towers, again at rent of £21.50 per sq ft.

There are also a number of other high profile occupier requirements currently in the market, likely to commit to vacant South Manchester office space within the next 12 months. This will put further upward pressure on rents.

We would highlight the following lettings as being relevant to the subject property:

Property Size (sq ft) Tenant Rent/Price Car Parking Ratio Date (per sq ft)

Crescent House, Towers 32,230 Syngenta £21.50 1 : 300 Exchanged

Spectrum House, Towers, Didsbury 8,088 Cisco £21.50 1 : 300 July 2015

Ocean House, Towers, Didsbury 11,717 Mason & Vaughan Group £21.50 1 : 300 June 2015

St Peters Square, Stockport 17,918 Sky £18.50 1 : 2,500 May 2015

Scotscroft, The Towers, Didsbury 23,883 John Lewis £20.50 1 : 300 Sept 2014

Manchester Business Park, Manchester Airport 23,543 Emirates £18.00 1 : 191 May 2014

Building 1500, Aviator Way, Manchester Business Park 38,507 Costain Ltd £19.50 1 : 184 April 2014

PROPOSAL

Offers are sought in excess of £5,525,000 (Five Million Five Hundred and Twenty Five Thousand Pounds), subject to contract and exclusive of VAT.

A purchase at this level would reflect a Net Initial Yield of 7.75%, after allowing usual purchasers costs of 5.8%.

Further Information

For further information, including access to the property data room, please contact:

Martin Hamer0161 833 999107792 00 44 67martin@edwardsandco.comMISREP: The accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and other details contained here in is not guaranteed and is for general guidance only and prospective purchasers or tenants must not rely on them as statements of fact or representations and must satisfy themselves as to their accuracy. Edwards & Co nor any of its employees or representatives has any authority to make or give any representation or warranty or enter into any contract whatever in relation to the property. Rents ad prices quoted in these particulars may be subject to VAT in addition. The reference to any mechanical or electrical equipment or other facilities at the property shall not constitute a representation (unless otherwise stated) as to its state or condition or that it is capable or fulfilling its intended function. Prospective tenants/purchasers should satisfy themselves as to the fitness of such equipment for their requirements. Designed by Studio eNaR – studioenar.co.uk