59 SAUCHIEHALL STREET, 108-112 RENFIELD STREET & 100-106 RENFIELD STREET

GLASGOW G2 3DA

Burger King and KFC – Prime Long-Let Leisure Investment Opportunity with 16+ years to Expiry

Executive Summary

• Glasgowranks1intheUKintermsofthevolumeoftotalretailspendavailablewithinthePrimaryRetailMarketArea.(Promis,2018).

• LocatedonSauchiehallStreetandRenfieldStreetwithinGlasgow’sprimeretaildistrict‘TheGoldenZ’andwithincloseproximitytoCineworldGlasgow(top10tradingcinemaintheUK)andBuchananGalleries.

• WAULTof16.83yearstoexpiry(9.60yearstobreak).

• Re-basedrentsprovidesfuturerentalgrowthopportunitieswithinthemicrolocation.

• BurgerKingoccupiesaprimereturnfrontageunit,withaleaseexpiryin2033.In2015,thevacantupperfloorsabovetheBurgerKingdemiseweregrantedplanningconsentfor9residentialunits.

• KFChavebeeninoccupationsince2003,andhaverecentlytakenanewleasefrom2018until2038andspentapproximately£750,000refurbishingtheirstore.

• Valueaddopportunitieswithpotentialupperfloorresidentialdevelopment,whichisavailableaspartofalargerpackageorbyseparatenegotiation.

• HeritableInterest(ScottishequivalentofEnglishFreehold).

• Totalpassingrentof£305,000perannum.

• We have been instructed to seek offers for the retail element in excess of £5,226,000, subject to contract and exclusive of VAT reflecting a NIY 5.50% assuming standard purchasers costs of 6.10%.

BUCHANAN STREET

BUCHANAN GALLERIES

BUCHANAN BUS STATION

BHS REDEVELOPMENT SITE

PAVILION THEATRE

GLASGOW QUEEN ST

GLASGOW CALEDONIANUNIVERSITY

GLASGOW CENTRAL

RENFIELD STREET

SAUCHIEHALL STREET

ROYAL CONCERT HALL

Location

GlasgowisthelargestcityinScotland,thirdlargestintheUKandisfastbecomingoneofEurope’smostvibrantandcosmopolitancities.ItislocatedintheWestofScotlandandliesapproximately400milesnorthofLondonand40milestothewestofEdinburgh.Thecityhasapopulationofalmost600,000.Theentireregionsurroundingtheconurbationhasapproximately2.3millionpeoplewithinonehour’sdrivewhichismorethan40%ofScotland’sentirepopulation.

ThetotalpopulationwithintheGlasgowprimarycatchmentareais1,867,000andthecityhasanestimatedshoppingpopulation(thosewhoregardthecityastheirmainshoppingdestination)of865,000.Glasgowranks1intheUKintermsofthevolumeoftotalretailspendavailablewithinthePrimaryRetailMarketArea.(Promis,2018).

Situation

ThepropertiesarelettoBurgerKingandKFC,locatedwithinthepedestrianisedprimeretailingpitchonthecornerofSauchiehallStreetandRenfieldStreet.

SauchiehallStreetformspartofGlasgow’sprimeretailingdistrictknownasthe‘GoldenZ.’ThestreethasfirmlyestablisheditselfasoneoftheprimeretaildestinationsoverthepastdecadeswithkeysurroundingoccupiersincludingMarks&Spencer,Primark,Starbucks,DocMartins,Sainsbury’s,PretandCineworld.Inaddition,thereistheBuchananGalleriesShoppingCentretotheeasternendfurtherincreasingfootfall.WiththestreetofferinganaturalthoroughfarefromtheCentralBusinessDistricttoBuchananBusStationandGalleries,itisoneofthebusieststreetsinthecitywithannualfootfallfiguresover16millionpeople.

RenfieldStreetconnectsdirectlytotheprimeretailingsectionofSauchiehallStreet.ItisideallylocatedclosetoCineworldonRenfrewStreet,Scotland’sbusiestcinema,ensuringitsprimelocationforrestaurantfast-foodoperators.

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Livingston

Dunfermline

GLASGOW

Edinburgh

GLASGOW

Glasgow

Edinburgh

F I R T HO F

F O R T HRiver Clyde Edinburgh

Stirling

Motherwell

Hamilton

Kilmarnock

EastKilbride

Paisley

Cumbernauld

Armadale

Airdrie

PortGlasgow

Bellshill

Kilsyth

Helensburgh

Garelochhead

Dunoon

Skelmorlie

Greenock

Clydebank

WestKilbride

Millport

Rothesay

M80

M74

M80

M90

M876

M77

M8

A80

A73

A71

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A68

A72

A77

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A82

A78

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A199

A909

A720

A811

A811

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A725

A737

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M9

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T R O S S A C H SN AT I O N A L PA R K

C LY D E M U I R S H I E LR E G I O N A L PA R K

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MORRISON STREET

BALATER STREET

EDINBURGH

GLASGOW AIRPORT

A74(M)

CHARING CROSS (GLASGOW)

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GLASGOW QUEEN ST

ARGYLE STREET

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Surrounding Redevelopment

Locateddirectlyoppositethesubject,plansfora£75millionredevelopmentoftheformerBHShaverecentlybeenannounced.Proposalshavebeensubmittedtothelocalauthorityfora12-storeyschemewhichwillinclude130,000sqftofGradeAofficespacewith18,000sqftofgroundfloorretailaccommodationfrontingontoSauchiehallStreet.Thisdevelopmentwilldrasticallyenhancethelookandfeelofthemicrolocationuponcompletion.

StallanBrandarchitectsCGI

BURGER KING & KFC

Description

Thesubjectpropertycomprisestwoadjoiningleisure/retailunitsoverbasement,groundandfirstfloorswiththeupperfloorsvacantandseparatelyaccessed.TheleisureelementsarelettoBurgerKing,frontingontoSauchiehallStreet,andKFCwhichfrontsontoRenfieldStreet.

Burger King, 59 Sauchiehall Street & 108-112 Renfield Street

ThepropertycomprisesacornerblockonSauchiehallStreetandRenfieldStreet.BurgerKinghavealeaseoverthebasement,groundandfirstfloors.TheBurgerKingelementextendstoapproximately5,077sqftNIAwithanITZAof1,775sqft.KFC, 100-106 Renfield Street

KFChaverecentlyundergonea£750,000refurbishmentinlinewiththeircorporatebrandingandextendedthecustomerareaontothefirstfloor.Theirleaseholdinterestextendsoverbasement,groundandfirstfloorsprovidingapproximately9,074sqftNIAwithanITZAof2,563sqftofaccommodation.

Residential Development Opportunity

TheupperfloorsaboveBurgerKing(2nd,3rd&4th)andKFC(2nd&3rd)arecurrentlyinshellconditionanddonotcomprisepartofeitheroccupier’sdemise.SeparateaccesstotheelementaboveBurgerKingisprovidedthroughanentrancefrontingontoRenfieldStreetwhilstaccesstothedemiseaboveKFCisviaSauchiehallLane.TheseupperpartsextendtoaGIAof13,997sqft.

In2015,thevacantupperfloorsabovetheBurgerKingdemiseweregrantedplanningconsentfor9residentialunits.(REF:15/01982/DC).AnadditionalplanningapplicationhasbeensubmittedtoGlasgowCityCouncilfortheuseofvacantupperfloorsfor12residentialflats.Thecouncilhavestatedthattheyaremindedtograntconsent.(REF:18/00186/FUL.)

ADeedofConditionhasbeengrantedtoallowahorizontalsplitofthecommercialandresidentialelement.Thisresidentialelementisavailableaspartofawiderpackageincludingthegroundfloorleisureelementorbywayofseparatenegotiation.Furtherinformationcanbeprovideduponrequest.

Tenure

HeritableInterest(ScottishequivalentofEnglishFreehold).

Tenancy

Unit

NameTenant

Area

(ITZAsqft)LeaseStart LeaseExpiry NextReview Break

Rent

(pa)

Rent

(ITZApsf)Comments/AssetManagement

59Sauchiehall

Street

CaspianFoodRetailersLtd

t/aBurgerKing1,775 02/04/2013 01/04/2033 01/04/2023 02/04/2028 £175,000 £98.59

GuaranteedbyCaspianUKGroupLtd,currentlybeingassignedtoRoyaleHoldcoLtd.TotalNIA5,077sq.ft.

100-106Renfield

Street

AlderforceSCLtd

t/aKFC

Ground

&First2,563 08/01/2018 07/01/2038 07/01/2023 08/01/2028 £130,000 £50.72

Basementissubjecttoascheduleofconditionandisexcludedforrentreviewpurposes.Totalarea9,074sqft.

Second,third&

fourthfloorsVacant

2nd

GIA3rd

4th

5,987

5,977

2,003

Anapplicationtoconverttheupperfloorsinto12residentialunitshasbeensubmittedtoGlasgowCityCouncil.

Total £305,000WAULTof16.83yearstoexpiry(9.60yearstobreak)

Covenant Analysis

TenantTurnover

2017

Profitbefore

Taxation2017

NetWorth

2017FameScore Comment

CaspianFoodRetailersLtd

t/aBurgerKing£317,800,000 £1,917,000 £2,087,000 Secure(85)

GuaranteedbyCaspianUKGroupLtd.

AlderforceSCLtdt/aKFC £14,864,590 £1,320,588 £596,900 Secure(92)

Guaranteedby

MarsdensCaterersof

SheffieldLtd.

Caspian Food Retailers Ltd

CaspianFoodRetailersLtdareoneoftheUK’slargestBurgerKingfranchiseeswithover74restaurants.TheleaseisguaranteedbyCaspianUKGroup.CaspianUKGroupwerepurchasedbyinternationalprivateequitygroupBridgepointinNovember2017.OthernotableleisureoperatorsundertheBridgepointumbrellaincludeZizziandAskItalian.

Alderforce SC Ltd

AlderforceSCLtdisnotonlyalargeKFCfranchisee,thecompanyisalsooneofthelargestCostaCoffeeandTacoBellfranchiseesintheUK.

57%

43%

BurgerKing

KFC

Income profile by tenant

MISREPRESENTATIONACT:KnightFrankLLPgivenoticetoanyonewhomayreadtheseparticularsasfollows:1.Particulars:Theseparticularsarenotanofferorcontract,norpartofone.YoushouldnotrelyonstatementsbyKnightFrankLLPintheparticularsorbywordofmouthorinwriting(“information”)asbeingfactuallyaccurateabouttheproperty,itsconditionoritsvalue.NeitherKnightFrankLLPnoranyjointagenthasanyauthoritytomakeanyrepresentationsabouttheproperty,andaccordinglyanyinformationgivenisentirelywithoutresponsibilityonthepartoftheagents,seller(s)orlessor(s).2.Photosetc:Thephotographsshowonlycertainpartsofthepropertyastheyappearedatthetimetheyweretaken.Areas,measurementsanddistancesgivenareapproximateonly.3.Regulationsetc:Anyreferencetoalterationsto,oruseof,anypartofthepropertydoesnotmeanthatanynecessaryplanning,buildingregulationsorotherconsenthasbeenobtained.Abuyerorlesseemustfindoutbyinspectionorinotherwaysthatthesemattershavebeenproperlydealtwithandthatallinformationiscorrect.4.VAT:TheVATpositionrelatingtothepropertymaychangewithoutnotice.KnightFrankLLPisalimitedliabilitypartnershipregisteredinEnglandwithregisterednumberOC305934.Ourregisteredofficeis55BakerStreet,LondonW1U8AN,whereyoumaylookatalistofmembers’names.September2018.

Proposal

Wehavebeeninstructedtoseekoffersfortheretail/leisure elementinexcessof£5,226,000,subjecttocontractandexclusiveofVATreflectingaNIYof5.50%assumingstandardpurchaserscostsof6.10%.

Inaddition,ourclientisofferingthesale of the upper floors by way of separate negotiation.Anapplicationtoconverttheupperfloorsinto12residentialunitshasbeensubmittedtoGlasgowCityCouncil(18/00186/FUL).Furtherinformationcanbeaccessedviathedataroom.

Contact

Forfurtherinformationortoarrangeaninspectionpleasecontact:

Andrew McGregor

E:andrew.mcgregor@knightfrank.comT:+442078611531M:+447970971538

Douglas Binnie

E:douglas.binnie@knightfrank.comT:+441415660885M:+447775561334

PlanningREF:18/00186/FUL-PendingUseofvacantupperfloorsas12residentialflats.

REF:15/01982/DC-GrantedUseofvacantofficesas9residentialapartments.

12/02228/DC-GrantedUseofrestaurantasrestaurantandancillarytakeaway.

02/01528/DC-GrantedChangeofusefromClass1ShopstoClass3Restaurantsandcafés.

EPCBurger KingEPCRatingF(89)ComparativeEnglishEPCRatingD(81)

KFCEPCRatingE(77)ComparativeEnglishEPCRatingC(65)

VATThepropertyhasbeenelectedforVAT.Itisanticipatedthatthesalewillbetreatedasatransferofagoingconcern(TOGC).