London Investment Opportunities

October 2015

Why London?

London is the largest and fastest growing city in Europe. By 2020, the population will by 9m+ and by 2031 10m.

Increasing demand for housing within the city. Many opportunity areas offering brownfield sites ready for development. There is a growing interest in long-term rental markets – investors who build 500+ units for rent.

Huge transport improvements under construction. The Overground is driving capacity, tube upgrades and Crossrail (2018) will increase capacity by 30%. More opportunity areas will open up with new transport nodes.

London GDP growth has remained consistently at over 3.5% for the past three years which easily surpasses the figures for both Europe (0.5%) and the US (2.3%)

JLL City Momentum Index 120 Cities Worldwide

Source: JLL, February 2015

London 1

Nanjing 20

Tianjin 19

San Jose 2 Beijing 3 Shenzhen 4 Shanghai 5 Ho Chi Minh City 6 Boston 7 Wuhan 8 San Francisco 9 Chongqing 10 Sydney 11

Bangalore 12 Dubai 13 Dublin 14 Nairobi 15 Melbourne 16 Singapore 17 New York 18

London tops this year’s CMI 2015 with: • Robust economic fundamentals • Further boosted by large volumes of cross-border real

estate investment • Positive outlook for commercial property prices • London also continues to cement its reputation as a

global tech hub.

Global Real Estate Transparency Index 120 Markets Worldwide

Source: JLL, May 2014

OPAQUE HIGH LOW SEMI

Zurich Frankfurt Singapore Hong Kong Brussels Warsaw Madrid Johannesburg Tokyo Sao Paulo

Shanghai Istanbul Bangkok Moscow Jakarta Mumbai Seoul Wuhan Dubai Buenos Aires Lima

Bogota Riyadh Ho Chi Minh City Cairo Kiev Casablanca Beirut

Lagos Caracas Karachi Luanda Baghdad Tripoli

HIGHEST

London New York Sydney Paris Toronto Amsterdam

Direct Commercial Real Estate Investment

Key Messages - Commercial • Investor demand for prime assets in the

‘Super Cities’ has reached new heights as New York and London had their busiest first half of the year since 2006, accounting for a record 15% of global activity.

• Their scale, liquidity, transparency and ‘safe haven’ attributes are attracting significant capital from sovereign wealth funds, global institutions and HNWIs.

• Increasing volumes of overseas capital seeking joint venture partnerships

• Leasing volumes demand volumes healthy and rents are increasing

• Prime & secondary yields are constant and stable

Source: JLL

Top 20 Cities, Year to Date – Q2 2015

London Residential Real Estate Market Overview

Key Messages - Residential • Stability of UK Government

and legal system, transparent property market

• Increasingly strong rental market

• Outstanding long term capital growth

• Safe haven and wealth preservation benefits

Source: JLL, Nationwide

0

250

500

750

1,000

1,250

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

Prime Central London residential Greater London residential Commercial property Equities

Capit

al Va

lue In

dex

7.7% pa

7.5% pa

6.1% pa

Annual average growth last 30 years

2.5% pa

Central London areas and pricing

Core Outer Core

£6,250

£4,000

£3,500

£3,000

£3,500

£2,500

£1,500

£1,050

£1,250

£1,200

£1,100

£900

£850

£1,750

£1,650

£1,500

£1,300

£1,250

£1,500

£1,200

£800

£750

£700

£675

£650

£625

£950

£900

£1,000

£850

£850

£900

£850

£550

£550

£550

£500

£450

£450

MAXIMUM AVERAGE MINIMUM

PRICING £PSF

CENTRAL WEST

OUTER RIVER

WEST END

CENTRAL RIVER

CITY

CENTRAL SOUTH

CENTRAL NORTH

CANARY WHARF

NORTH

SOUTH WEST

WEST

SOUTH EAST

EAST

Source: JLL

Hackney

Battersea

Shepherd’s Bush

Waterloo

Greenwich

Canary Wharf

Notting Hill

Paddington

Hampstead

Wood Green

Shoreditch

Fulham

St John’s Wood

Regent’s Park

Golders Green

Finsbury Park Islington

Mayfair Covent Garden

Pimlico

Stratford

Canning Town

Whitechapel Clerkenwell

City

Southwark

Blackheath Dulwich

Vauxhall Nine Elms

Wandsworth Clapham

Stockwell

Acton

Hammersmith Chelsea

Kensington Knightsbridge

Source: JLL

Source: JLL

North

12.4%

East

17.3%

Central North

13.4%

West

11.4%

West End

13.0% City

18.3%

Central River

15.2% Canary Wharf

12.9%

Outer River

11.4%

South West

12.8%

Central South

15.2% South East

12.9%

Central London areas and price growth Price growth in year to Q2 2015

1.4%

All Central London

Highest

Lowest

North

1.4%

East

2.4%

Central North

0.8%

West

1.4% Central West

-1.3%

West End

0.3% City

0.5%

Central River

1.0% Canary Wharf

1.3%

South West

1.2%

Central South

0.8% South East

4.5%

Outer River

2.6%

Why invest in London Regeneration?

Large socio-economic impact

High quality pipeline

Strong developer base & government support

Flexible investment options

• Regeneration is about building communities and accelerating jobs and growth

• High quality and diverse range of opportunities

• Multi £bn worth of projects, many of which are ready for development

• Strong public and private-sector support

• Large base of international developers with local expertise, successful track-records and strong balance sheets

• UK ranked in the top 3 in the European Union for dealing with construction permits

• A range of government incentives to encourage regeneration developments

• Long term investment opportunities with a range of returns

• Investment sizes from £30m to £3bn

• Various methods of investment available

Language, legal system, track record

Strong historic performance

Global financial centre & education hub

Safe haven

Destination of choice for many wealthy individual investors

London’s growth profile

Few alternative global cities to London

Restricted supply & availability

Growing number of global wealthy individual investors

Strong capital growth prospects

Reliable rental returns

Expanding rental sector

Performing better than other assets

Tax efficient investment Expanding population

Wealth preservation

What is driving London demand?

Current Major Infrastructure Investment - Crossrail

Key Facts • Crossrail is Europe’s largest construction project – work started in May 2009 and there are currently over 10,000

people working across over 40 construction sites • 42 km (26 miles) of new tunnels, running on a total line of 118 km (73 miles) • Crossrail will transform rail transport in London, increasing capacity by 10%, supporting regeneration and cutting

journey times across the city. • Crossrail will support the delivery of over 57,000 new homes and 3.25 million square metres of commercial space.

Future Major Infrastructure Investment London Underground Extension Northern Line Key Facts • The extension of the Northern line forms part of a wider

plan to regenerate Vauxhall, Nine Elms and the Battersea area.

• Transport for London has awarded the design and build contract to Ferrovial Agroman Laing O’Rourke.

• Two new tube stations will be built, one at Battersea Power Station and another off Wandsworth Road.

• It will connect with the rest of the Northern line at Kennington and should be open by 2020.

Proposed Major Infrastructure Investment Crossrail 2 Key Facts • Crossrail 2 is the proposed new high-frequency, high-

capacity rail line running through London and into Surrey and Hertfordshire.

• It will build on Crossrail 1 to provide a north to south link through central London.

• Pending government approval construction should start in 2020 with completion proposed for 2030.

• It aims to: • Reduce crowding • Greater connectivity • Boost economic growth and regeneration • Improve transport • Greener journeys • Supports high speed rail

Proposed Major Infrastructure Investment London Underground Extension Bakerloo Line Key Facts • Transport for London is currently undergoing a public

consultation on the extension of the Bakerloo line from Elephant & Castle station through Southwark towards Lewisham, Bromley and Hayes.

• There are two potential routes, one via Old Kent Road and the other through Camberwell and Peckham.

• If approved, construction could start in 2023 with completion during the 2030s.

Housing Zones and Private Rented Sector

Why does London need Housing Zones?

• London has a growing population of approximately 100,000 people a year which poses a significant housing challenge.

• Demand is therefore high but housing supply remains way below London’s requirements that are projected to be 49,000 homes a year.

What are Housing Zones?

• These are designed to be areas where home building will be accelerated by working in innovative partnerships with boroughs, land owners, investors and builders.

• The aim of these Zones is to unblock and accelerate the provision of housing in an approach that meets the specific needs of an area.

Recent Developments…

The Mayor of London, Boris Johnson, has recently named London's first Housing Zones. The current 11 zones, spanning the length and breadth of the city, will bring forward enormous regeneration and transform key areas of the capital, with £260m of new investment to deliver 32,000 much needed new homes.

Housing Zones - Key Facts • Boost housing supply in London by delivering

50,000 homes over a period of 10 years. • £400 million available, at least half of which will

be in the form of repayable investment with the remainder in a flexible funding form, potentially as grants.

• 20 Zones to be identified across London.

Private Rented Sector Key Facts • 100% growth in rental households in last decade -

4 million households in UK • 2 million PRS tenants in London • 99% of rental homes are owned by private

individual Landlords • 10,000 new units in PRS development pipeline for

Institutions in London alone • Potential to treble the amount of institutional PRS

in London

Emerging London Centres

London Opportunities

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1. 54 Marsh Wall 2. Grand South, Vauxhall 1. Old Oak Common 2. New Covent Garden Market 3. Alexandra Palace, Tottenham 4. Hallsville Quarter, Canning Town 5. London Cancer Hub, Sutton 6. Silvertown, Royal Docks 7. Albert Island, Royal Docks

4 6

1

7

54 Marsh Wall, London E14 (1)

Quick Facts Project Owner: Freshwater (Privately owned UK investor) Development Cost: c. £100m Development Value: c. £150m Investment Type: Developer Planning: Application submitted October 2014. Planning decision due. Completion: c. 2 years Location: Canary Wharf, east London

Key Facts • Gross Development Value c. £150m • Land price c. £25m • Planning permission for 240 new homes (175 private and 65

affordable) within two towers of 29 and 39 storeys • Located immediately to the south of the Canary Wharf Estate

Site: Located immediately to the south of the Canary Wharf Estate financial centre. The site is currently occupied by a three storey office building which is to be demolished to make way for the consented residential scheme.

Opportunity: To develop a high-quality residential scheme of 240 apartments within two towers of 29 and 39 storeys, designed by Rolfe Judd Architects. The consented scheme is designed alongside a landscaped courtyard and will provide resident amenity space as well as 24 secure basement car parking spaces.

Investment Return: This development will create apartments for sale into the established and vibrant Canary Wharf market which has experienced rapid growth in demand and residential values over recent years, as the increasing provision of retail and leisure facilities, alongside the existing quantum of office accommodation, creates a genuinely mixed-use neighbourhood.

Grand South, Vauxhall (2) Key Facts • Freehold site comprising 0.86 acres

• Central London location close to Vauxhall Station

• Residential led mixed use development • Planning application for 219 units, 43 basement car parking spaces

and circa 21,000 sq ft commercial space

Site – Grand South is located on Wyvil Road, adjacent to Vauxhall Sky Gardens and Keybridge House The site is within walking distance of Vauxhall Underground and National Rail transport links. However, connectivity to the site will be dramatically improved with the introduction of the proposed Northern Line Nine Elms Extension that is due to be delivered on Wandsworth Road.

Opportunity – The proposed application, subject to planning is a residential led mixed use development in a part three/part 33/part 37 storey building to the north; single storey building to the east; and part six/part eight storey building to the south of the site (fronting onto Wyvil Road) to provide 219 residential units, also comprising new commercial and employment floorspace (flexible use class A1, A2, A3 and B1), two levels of basement car and cycle parking, and provision of areas of public realm.

Investment Return – For indicative purposes only, the potential construction cost could be £70m and the completed residential units could achieve circa £1,250 per sq ft.

Quick Facts Project Owner: Network Rail and K2 (a private landowner) Development Cost: circa £70m Development Value: TBC Investment Type: Investor / Developer Planning Status: Planning permission granted subject to Section 106 Completion: TBC Location: Central London

Quick Facts Project Owner: Multiple Ownerships on site Development Cost: TBC Investment Type: Developer, Investor Planning Status: Pre planning design stage Completion: ca. 25 - 30 years Location: West London

Key Facts • Part of the Old Oak and Park Royal Development Corporation • Up to 24,000 homes and 9m sq ft commercial space • 55,000 jobs across the Old Oak and Park Royal regeneration • Significant rail investment including the HS2, Great West Main Line

and Crossrail super-hub stations, and proposed London Overground stations nearby.

Site: The site spans 155 hectares and is located in West London amidst the opportunity areas of Vauxhall Nine Elms, Earls Court and White City. Old Oak and Park Royal will be a sustainable New Town built on brownfield land in the centre of London. With enhanced rail connectivity the site will be ten minutes from Heathrow, ten minutes from the West End and 38 minutes from Birmingham, and within an hour from five of the UK’s international airports.

Opportunity: Launched in April 2015, the Mayor has recently set up a new Mayoral Development Corporation as a local planning authority to drive forward investment and realise his vision for Old Oak and Park Royal. Earmarked as a major mixed-use development opportunity, Old Oak Common can provide up to 55,000 new jobs across Old Oak and Park Royal to create a new destination in West London, serving as an extended West End. The site has also been recognised to have the potential for 24,000 housing units.

Investment Return: Investment returns can be realised through sale of development upon completion and income derived from commercial and residential lettings. Oak Common has the potential to absorb the increasing demand for Central London space..

Old Oak Common, London (1)

New Covent Garden Market (2)

Quick Facts Project Owner: Covent Garden Market Authority (CGMA) appointed VSM (a joint venture between VINCI PLC and St. Modwen Properties PLC) development partner in January 2013 Development Cost: TBC Investment Type: Developer, Investor Planning Status: Planning permission has recently been granted for the development Completion: c. 10 years Location: Nine Elms, central London

Key Facts • £2bn plus investment value • 20 acre site • Up to 3,000 new homes • 10,000 sq m commercial space

Site: The UK’s largest fresh produce market already hosts over 200 tenant businesses employing over 2,500 people on its existing 57 acre landholding. Redevelopment will create a modern new market alongside a public facing ‘Garden Heart’ building as a new Food Centre for London in a more efficient layout. Eight hectares (20 acres) of prime development land will be released from the existing market which will be redeveloped for new homes, shops and open spaces from 2017.

Opportunity: The scale of the £2bn development opportunity over a 10 year period offer VSM a variety of options to introduce either a joint venture development partner or to consider a sale in whole or in part.

Investment Return: This will become a new, predominantly residential quarter in the heart of Nine Elms on the South Bank (NESB), with commercial space, shops, community facilities, new homes and open, communal space.

Alexandra Palace, Haringey (3) Key Facts • Alexandra Palace is a multi-million £ investment opportunity. • Attracts around 1 million visitors a year. • Alexandra Palace is 35,490 sq m (382,101 sq ft) in size • 10 minutes from Kings Cross, 20 minutes from the City

Site - Alexandra Park and Palace is a unique, iconic Grade II listed London landmark owned by the London Borough of Haringey vested in a Charitable Trust. The building footprint covers approximately 3.04 hectares (7.5 acres) and is surrounded by a 79.32 hectare (196 acre) Grade II listed park.

The eastern end of the site has successfully secured initial funding from the Heritage Lottery Fund (HLF) to develop plans to restore the historic BBC Studios and Victorian Theatre, both largely derelict.

Opportunity – Approximately 40% of the building is either underused or closed to the public due to its condition. Residential development is not permitted by the Act under which the Palace operates. Detailed master planning has been undertaken on the site, focussing in particular on a potential four storey hotel development behind the Grade II listed south-western façade.

Investment Return – Investment returns can be generated through the sale of property or operational leases and current income producing leisure activities.

Quick Facts Current Owner: Haringey Council / Trustees of Alexandra Palace Development Cost: Multi million £ Investment Type: Developer / Funding partner Planning Status: A detailed Masterplan has been granted planning consent. Decision due from Heritage Lottery Fund and CLG on Listed consent status. Completion: c. 10 years Location: North London

Hallsville Quarter, Canning Town (4) Key Facts • Masterplan includes:

• 50,000 sq m mixed use retail, commercial and leisure accommodation • 1,130 new mixed tenure homes

• £600m investment opportunity delivered over 5 phases • Phase 1 completed Q1 2015 with Phase 2 scheduled for

practical completion in 2017 and all phases by 2024.

Site - Canning Town is in Newham, east London. It is sited around the former London docks on the north side of the River Thames. The area has excellent transport links with the Underground Jubilee line, Docklands Light Railway (DLR) and many local buses. The area is undergoing major regeneration, with many schemes in the pipeline, including the Hallsville Quarter. Situated opposite Canning Town station, the main site will be a new town centre that will include a mix of modern and independent shops, attractive public spaces, new homes and commercial space.

Opportunity – Investors sought for Phase 3 which comprises mixed-use development to include 22,726 sq m retail, cinema, restaurant, and health uses, with 270 mixed tenure residential units.

Investment Return – Investment returns can be realised through sale of development upon completion and income derived from residential lettings and sales.

Quick Facts Project Owner: Bouygues Development (part of Bouygues UK). Development Cost: TBC Investment Type: Investor or developer partner Planning Status: Outline consent for whole, detailed consent required for Phase 3 Completion: Phased - 2024 Location: East London

London Cancer Hub, Sutton (5) Key Facts • Vision to be a world leading life sciences location • 192,000 plus sq m of life sciences space • 9,000 new jobs in the area • Immediate Investment Opportunity: 20,400 sq m state of the art Drug

Discovery Complex Site – This project aims to redefine the Golden Triangle of Life Sciences between Oxford, Cambridge and central London by moving London’s focal point further south to the London Borough of Sutton. The core site is formed of the existing campus of the Institute of Cancer Research and the Royal Marsden Hospital, which is already in the top five global cancer research and treatment facilities. The wider site will be completed by land that is currently under separate ownership.

Opportunity – The ICR and Royal Marsden are recognised as leading institutes for cancer research and this reputation provides an ideal platform to build a new life sciences quarter in London. The planned Drug Discovery Complex has outline planning permission and is seeking immediate investment. Discussions are ongoing to acquire land to the north east of the site. Once achieved this will extend the wider site to deliver a life science cluster specialising in cancer research, diagnosis, treatment, education and biotech commercialisation.

Investment Return – Life sciences is currently the third largest UK growth sector where there is clear demand that is unsatisfied through existing supply. Current returns on this investment opportunity are not clearly defined at this stage but will be forthcoming.

Quick Facts Project Owner: Royal Marsden Hospital & Institute of Cancer Research Development Cost: c.£100m Drug Discovery Complex Investment Type: Developer / Funding partner Planning Status: Outline planning permission Completion: Phased delivery from late 2015 through to 2018. Additional Work: site assembly underway on additional 7.2 hectares

Silvertown, Royal Docks (6) Key Facts • £3.5bn gross development value • 7,000,000 sq ft development • Up to 3,000 residential units • 185,000 sq m of brand pavilions • Excellent transport links including DLR, Jubilee line (Canning

Town/North Greenwich) cable car line, London City Airport and Crossrail (2018).

• Resolution to grant planning permission approved in April 2015 Site - This 25 hectare (62 acres) brownfield freehold site offers a prime dockside position in Royal Victoria Dock, opposite ExCeL. The Silvertown Partnership (TSP) will transform the site into the first purpose built brand destination in the world; and through a series of brand flagships, pavilions and trading houses, organisations will be able to showcase and engage with their consumers through education, entertainment and customisation. In addition up to to 3,000 new homes, restaurants, cafes, galleries and leisure facilities, will be available and served by excellent transport links. TSP will also provide a new landmark bridge which will connect Silvertown with the Crossrail station at Custom House from 2018.

Opportunity – TSP are looking for a funding partner for an investment opportunity of up to £2bn.

Investment Return – Very strong investment returns can be realised through sale of development upon completion and income derived from commercial and residential lettings.

Quick Facts Project Owner: The Silvertown Partnership Development Cost: £2bn Investment Type: Funding partner Planning Status: Masterplan has been finalised, and resolution to grant planning permission achieved Completion: Phased completion - Phase 1 completion by 2018 Location: Royal Docks, East London

Quick Facts Project Owner: Freeholder is Mayor of London with RoDMA holding a lease to dockside and water areas including developable land south of the island. Development Investment Type: Developer partner Planning Status: TBC Completion: TBC Location: East London

Key Facts • 10 hectare site • Situated in the Royal Docks Enterprise Zone • Potential to create a commercial boatyard and light industrial • Proposed centre for marine excellence Site: The site covers 10 hectares and is situated directly to the east of London City Airport. Existing transport connections are good with the site being accessible from Woolwich Manor Road (A117), the A13 and also the Docklands Light Railway via Gallions Reach Station.

Opportunity: Under the direction of the Mayor of London, GLA Land And Property Limited acting as the contracting authority and with the support of the Royal Docks Management Authority (RoDMA) is seeking a partner to enable the delivery of Albert Island. This is one of the last remaining opportunities to develop in the Royal Docks and the development partner should have the necessary expertise, ability and financial strength to comprehensively re-develop the site. This partner is being sought through an OJEU public procurement exercise with the PQQ due to launch in early November 2015.

Investment Return:. The appointed developer will be expected to work closely with the Project Owners and adjoining landowners when bringing forward their proposals. The nature of investment return will be negotiated through the procurement process.

Albert Island, Royal Docks (7)

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