Warrington Project Overview by The High Street Group

JOHN STREET WARRINGTON PROJECT OVERVIEW REPORT MAY 2017

CONTENTS

THE HIGH STREET GROUP

ASSET AND LIABILITY STATEMENT

BIOGRAPHIES

COMPANY STRUCTURE

THE PRIVATE RENTAL SECTOR

THE PROJECT

SITE CONTEXT & ANALYSIS

FUNDING REQUIREMENTS

THE DEVELOPMENT APPRAISAL (BTL)

THE DEVELOPMENT APPRAISAL (PRS)

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THE HIGH STREET GROUP INTRODUCTION The High Street Group of Companies is a leading financial and property group and one of the North East’s most recognised and respected brands. Conceived in 2006 by Gary Forrest The High Street Group has gone on to grow successful businesses in a variety of sectors; it is now focussing on the growth of its large scale building and development portfolio. The High Street Group has expanded rapidly and now employs more than 50 people at its head office in Newcastle upon Tyne. As a result, the company has adapted its core principles: being open and honest, approachable and flexible. The company’s adopted mission statement is ‘Diversification through Innovation’. All Saints Living is the The High High Street Street Group’s Group’s property property development company which works primarily in the residential sector throughout England, Wales and

residential sector throughout Scotland. Since its launch in 2013,England, All SaintsWales Living and has Scotland. Since its launch in 2013, All Saints Living has grown rapidly and substantially, having undertaken grown and ofsubstantially, undertaken projectsrapidly in excess £50 million.having All Saints Living’s projects in excess of £50 million. All Saints Living’s landmark development is Larbert House & Country landmark development is Larbert House & includes Country Estate in Falkirk, Stirlingshire. The development Estate in Falkirk, Stirlingshire. The development includes full restoration and sensitive conversion of the derelict full restoration and stable sensitive conversion of apartments. the derelict Larbert House and block into luxury Larbert House and stable block into luxury apartments. It also includes four new build sections comprising of a It also block includes four new sections of a mews to mirror the build existing stable;comprising eight luxurious mews block to mirror the existing stable; eight luxurious detached homes nestled within the walled garden; eight detached homes nestled within theofwalled garden; eight properties to the west the walled garden; detached properties to the west of the walled garden; and a group of three large distinctive detached properties and a group of mature three large distinctive detached settled within trees on the east site. properties settled within mature trees on the east site. This development has won the award for Best Renovation This development won thecontinues award forto Best Project of Scotlandhas 2015 and beRenovation nominated Project of Scotland 2015awards. and continues to be nominated for prestigious property for prestigious property awards.

To view further details of Larbert House & Country Estate, please visit the links below; http://www.larberthouseestate.com/ https://www.youtube.com/user/thehighstreetgroup

LARBERT HOUSE & COUNTRY ESTATE TO COMPLETE SUMMER 2018 J O H N S T R E E T street P R O J E C Tproject O VE R V I Eoverview W rutherford

THE HIGH STREET GROUP INTRODUCTION In 2016 The High Street Group acquired The Walled Gardens development in Gosforth, within the grounds of Newcastle Racecourse. The ÂŁ11 million project is being delivered by sister company All Saints Living and will create 14 four and five bedroomed, contemporary, executive homes in this unique setting. This development is situated across two walled gardens; the northern walled garden contains eight, four bedroom semi-detached properties that have been designed to a contemporary finish, incorporating large south facing windows maximising capture of natural light. The southern walled garden contains a further six, five bedroom semi-detached properties. These properties will be finished in a more traditional style in order to complement the surrounding dwellings.

Further developments have been completed in Durham City Centre (26 units), Whitehaven, Cumbria (14 units), Rennington, Northumberland (5 units), Harrogate, North Yorkshire (5 units), Richmond, North Yorkshire (4 units) and Hexham, Northumberland (7 units). The development in Hexham, known as Burn Brae House was a beautiful old building in a state of disrepair; in converting it back to a residential building All Saints Living gave the building a new life. It has been renovated and restored, rejuvenating the front of the building and enhancing the main road into Hexham. Burn Brae House has been short-listed for 2 categories at the North East Property Awards 2017; Refit & Refurbishment of the Year and Residential Development of the Year.

To view further details of All Saints Living development projects, visit www.allsaintsliving.com

THE WALLED GARDENS, GOSFORTH

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THE HIGH STREET GROUP INTRODUCTION All Saints Living is undertaking further residential development projects in Helensburgh, Durham City, Whitley Bay and a further 13 units at Rennington, Northumberland. The High Street Group have identified Private Rental Scheme (PRS) projects to be a significant opportunity in coming years and, as such, have entered into the sector coming years and, as such, have entered into the sector with the development of 139 units in Milton Keynes. The with the development of 139 units in Milton Keynes. The previous developers had failed in their attempt to obtain previous developers had failed in their attempt to obtain planning for the project. The High Street Group planning planning for the project. The High Street Group planning team re-designed the scheme and successfully obtained team re-designed the scheme and successfully obtained planning on 3rd March 2017; this project has been sold to planning on 3rd March 2017; this project has been sold to Grainger Trust PLC for £30,150,000. Grainger Trust PLC for £30,150,000. Having purchased and started the development of a 139 unit project in the Milton Keynes, company has Having purchased and started thethe development of agone 139 unit the Milton Keynes, has gone on toproject secureinprojects in the norththe eastcompany and north west of England which will provide around 550 residential units.

Thetocompany have exchanged and secured on secure projects in the northcontracts east and north west of an option on awill further twoaround projects Newcastle and England which provide 550inresidential units. Warrington. The Newcastle project is a 26 storey PRS development 162 units. Theand Warrington The company containing have exchanged contracts secured projects of a large of an optionconsists on a further two residential projects indevelopment Newcastle and 284 apartments a 7 storey building. Warrington. Thewithin Newcastle project is a 26 storey PRS development containing 162 units. The Warrington The Highconsists Street ofGroup a pipeline of potential projects a largehas residential development of development will take projects under 284 apartmentsschemes within awhich 7 storey building. management in excess of £200,000,000 in 2018. The High Street Group has a pipeline of potential The High Street Groupwhich and will All take Saintsprojects Living under apply development schemes the same high to everything management in standards excess of £200,000,000 in they 2018.do, from product delivery. The High Street Group and All Saints Living apply the same high standards to everything they do, from acquisition and design through to construction and final product delivery.

For more information about The High Street Group visit www.thehighstreetgroup.com

STAMFORD LEA,RENNINGTON, RENNINGTON, NORTHUMBERLAND STAMFORD LEA, NORTHUMBERLAND J O H N S T R E E T street P R O J E C Tproject O VE R V I Eoverview W rutherford

ASSET AND LIABILITY STATEMENT GARY FORREST PERSONAL ASSETS ASSETS

VALUE

MORTGAGE

£700,000

£412,000

Audi Q7

£70,000

Audi A5

£40,000

Land Rover Defender

£25,000

Caravan

£25,000

Cash at Bank

£325,000

Total

£1,185,000

£412,000

HIGH STREET GROUP LTD ASSETS Company Name

Burr Living One Ltd 09245685

Hubertus Developments Ltd 09073795

Ownership Asset

100%

45 St Georges Road Harrogate X4 Apartments utilised as Execulets Hotel x 32 Rooms 3 x Leases to South American Style restaurant, Verdina and Parade Pub/Nightclub

Value £1,035,000

£2,000,000

Mortgage

Annual Income

£581,000 Together

£93,600

£490,000 Together

£220,000

100%

Land with Planning to build 14 Houses

£3,500,000

£1,200,000 Heritable

N/A

Cuthbert Developments Ltd 08815893

100%

5 Frenchgate House Frenchgate Richmond X2 Apartments utilised as Execulets

£520,000

£311,476 Together

£32,700

Engelbert Developments Ltd 08920673

100%

X 4 New build units rented out

£520,000

£344,791 Together

£24,000

£260,000

£168,937 Together

£14,400

£880,000

£431,400 Together

£43,000

£8,000,000

£937,000 Lowry N/A Capital

All Saints Property Investments Ltd 09759805

100%

Drogo Developments Ltd 08920717

90%

X2 Units at Seaham X 11 Units Rented out Larbert House - 56 Homes

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Company Name Lindus Developments Limited 10265183 Frideswide Developments Ltd 09073799 BrighStone Developments Ltd 09912548 High Street Corporate Finance 09396359

Ownership Asset

Value

Mortgage

100%

2 X Refurd terraced cottages 1 x New build Detached 3 bed property

£320,000

£186,000 Lowry Capital

100%

26 x Properties (5 Apartments, 21 x Houses, Belmont)

£4,265,000

£1,500,000 Heritable

100%

£750,000

£402,000 BLG Clearwell Capital

100%

Land to build 10 x Bungalows £500,000

Total Reclaim 07075294

12 x Apartments

Annual Income

£25,000 Goldentree

PPI Company

Profit forecast 2017 £1,000,000

All Saints Construction 09659115 100%

Construction Company

Profit from Jan 2016 to October 2016 £241,621

All Saints Commercial Plc 09571862

100%

Property Group holding Company

N/A

100%

Property Group Holding Company

N/A

100%

Property Group Holding Company

N/A

All Saints Asset Management PLC 09571877 All Saints Developments (NE) Limited High Street Commercial Finance Ltd 07841268 Nilus Developments Ltd 10265273

65%

Specialist Lender

100%

Milton Keynes

£7,100,000

Rutherford Street Newcastle

£250,000

Warrington

£50,000

Olympius Developments Limited 100% 10594675 Palmus Developments Limited 10694418

Balance Sheet as of Dec 2016 £250,000

100%

Total

£32,121,521

£10m

N/A

£4,340,000

£11,297,604

£527,700

NET ASSETS £20,823,917 J O H N S T R E E T street P R O J E C Tproject O VE R V I Eoverview W rutherford

BIOGRAPHIES INTRODUCTION

GARY FORREST

GAVIN FRASER

services and instruments, initially on the mortgage side and subsequently in investments. Gary successfully grew his lending business from a £100m lender to a £1bn lender in 5 years, and sold his company, High Street Home Loans in 2003 to GMAC-RFC. The High Street Group of Companies was conceived in 2011, it has recently focused on alternative investment construction and development sector in 2014. In this short space of time, Gary has successfully steered the company to become one of the largest in the North East, with upcoming projects valuing in excess of £120m and winning various awards such as Best Medium Sized Builder - UK and Best Renovation Project - Scotland. Gary is now focused on large PRS schemes across the UK, and the opportunity this presents to both the company and investors.

Gavin Fraser is a specialist consultant working with The High Street Group, helping identify and bring forward investment opportunities in the UK residential market. investment case, identify land opportunities, and bring forward designs tailored to the investment case. Gavin has worked in the construction and development director positions at Ballast Nedam, Rok Plc and Balfour Beatty. Gavin was a National Housing Director for Rok Plc, helping grow the business from £250m to £1bn turnover in 10 years, including £300m per annum of residential sectors. More latterly, Gavin has performed various roles as a non-executive adviser to Directors at Kier, Macquarie, United Living and Forrest, helping to grow their businesses thorough the creation of investment grade products in residential and energy.

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COMPANY STRUCTURE

HIGH STREET GRP LTD GF

High Street Commercial Finance

All Saints Developments (NE) Ltd

All Saints Commercial plc Cyprus

All Saints Asset Management plc Gibraltar

Drogo Larbert

All Saints Construction Ltd

Genevieve Hexham

Olympius Developments Ltd Rutherford

Cuthbert Richmond Major Works

Englebert Seaham Burr Living Harrogate

Minor Works

Lindus Developments Ltd Sunderland Bridge

(Maintenance)

Brighstone Morar House Management Companies

Maxima Developments Hotel 52

Frideswide Belmont ASPI Rental Properties Whitehaven Seaham

Hubertus Walled Garden Stansfield House (Stanley) Ltd Stanley

45 St Georges Road Man Co

Palmus Developments Warrington

Burn Brae House Man Co

High Street Claims Total Reclaim Bramhall Hospitality Ltd Loca / Verdina Bramhall Exports Ltd (Exporting)

Frenchgate House Man Co

Raskelf High Street Corporate Finance Rennington x2 Nilus Development Milton Keynes

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THE PRIVATE RENTAL SECTOR OVERVIEW According to the English Housing Survey, Private Rented Sector Report 2014-15, the private rental sector has undergone rapid growth in the last 10 years and overtook the social rented sector as the second largest sector in 2012-13. Since then, the sector has continued to grow.

KEY FACTS • In 2014-15, 19% of all households were private renters, this equates to 4.3 million households. • The private rental sector is also the fastest growing sector, between 2005 – 2015 it has grown from 11% to 19%. • The private rented sector has a higher proportion of younger people than other tenure types. In 2014-15, 70% of private renters were aged between 24 – 44. The rise of ‘Generation Rent’ will continue. • It is predicted by 2025 7.2 million households will rent privately (based on cumulative increase of 2.3 million in 2001, 5.4 million in 2014).

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THE HOUSING SECTORS TRENDS IN TENURE, 1980 TO 2013-14

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THE PRIVATE RENTAL SECTOR OUR APPROACH The High Street Group employs a number of key factors when researching Private Rental Schemes.

KEY FACTS • Strong local demand, using specialist data analysis, ensuring demand is sustainable and deep • Mature local regeneration, city or fringe city • • Commuter belt, no more than 15 minutes from public transport links • Within 15 minutes’ walk of city centre amenities • Growth of inner city culture enhanced by senior student population

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THE PRIVATE RENTAL SECTOR OUR APPROACH Once identified, The High Street Group ensures all PRS projects fit a strict set of criteria. These include: size of project, advantageous gross yields and flexible exit strategies.

KEY FACTS • Scale must be between 100 - 300 units • Investment value £10 million - £50 million • Gross yields • Regions 6.5 - 7.5% • Discount to GDV delivered at 10%+ • Design to fleible exit strategies • Vacant possession breakdown • Buy to Let markets • Institutional exit (with yield compression) • Location is key - commuter friendly city location with access to amenities

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THE PROJECT SITE LOCATION The site is located immediately adjacent Warrington Central Station, and within the wholly regenerated town centre. The station has direct trains to Manchester and Liverpool: • Manchester Oxford Road & Picadilly, every 15 mins, prices starting from £3.10 each way. This route also connects the vast employment area of Birchwood to Warrington town centre • Liverpool Lime Street, every 10 mins, prices starting from £2 each way The town centre of Warrington (shaded in yellow below) will be wholly regenerated by the end of 2020. The last element to complete is our residential scheme (bordered in blue).

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THE PROJECT THE CONSENTED SCHEME The site was the second phase of the Cheshire Lines development and benefits from an extant planning permission. The permission for the second phase is for 284 apartments in a 6-storey complex. The ground floor comprises of undercroft parking for 256 cars, retail space (fronting onto Winwick Street) and a small number of residential units (facing onto John Street). The upper 5 floors contain the majority of the residential units facing on to Winwick Street, John Street, internal courtyards and the station square. The valuation of the design as it currently stands is: Vacant Possession Values

Totals

Rents

Number of Properties

Property Type

Value per Property (£)

Total Value (£)

Per units PCM (£)

Total per annum (£)

236

18 APARTMENTS

115,000

27,140,000

625

1,770,000

140

28 APARTMENTS

143,000

20,020,000

700

1,176,000

376

FREEHOLD

3,880,800

752

£51,040,800

£2,946,000

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THE PROJECT THE REVISED SCHEME We have reviewed the consented scheme and will be submitting an amendment to the planning permission.

configured around more attractive central entrances and access cores.

Our planning amendments will sit within the same external envelop (bulk and massing) but will modernise the schemeâ&#x20AC;&#x2122;s appearance both internally and externally. The units will be open plan, modern PRS style units and

The foyer will focus on a new station square and provide a sense of place-making with a better balance of public and private open space. The square is being developed as part of the wider regeneration by Warrington and Co.

EXAMPLE OF PRS COMMUNAL SPACE

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SITE CONTEXT & ANALYSIS WHY WARRINGTON? INTRODUCTION TO WARRINGTON Warrington is a Unitary Authority, formed in 1998, with a population of circa 200,000 people. Warrington is currently experiencing the third largest growth in the UK, behind London and Aberdeen, and has the 9th highest employment rate in the UK and the highest employment rate in the North, according to The Centre for Cities. This how it compares to the other high employment areas in the North: •

Warrington – 78.5%

•

York – 76.7%

•

Leeds – 73.3%

•

Manchester – 69.7%

•

Sheffield – 68.6%

•

Liverpool - 63.9%

Warrington is located between Manchester and Liverpool, with good road and rail links to both Cities. The average salary in Warrington is £26,800 (Centre for Cities report), higher than most cities in the North, Including Manchester and Liverpool. Size and growth is illustrated by the following weekly wages data from Centre For Cities:

CITY

2014

2015

2016

Leeds

£491.8

£516.1

£526.1

Warrington

£488.1

£485.9

£513.8

Liverpool

£494.7

£482.9

£503.8

Manchester

£476.7

£483.5

£500.0

Sheffield

£445.4

£453.2

£465.8

Centre for Cities identify Warrington as the sixth most successful location for both its level of employment and private sector job creation. Warrington is one of fourteen UK locations (and one of only three in the North) already achieving a ‘high wage, low welfare’ economy. Further evidence of its powerhouse status was the increase of almost nine percent, during 2015, in the town’s business stock – now 7,340 businesses. According to StartUp Britain, the daily tracker that counts new business registrations, Warrington moved up from 28th to 22nd in terms of UK locations’ performance – the third highest ranked northern location. And nationally, in terms of startups per 1,000 population, Warrington ranked tenth. With a rate of 24.4 start-ups per 1,000 population, Warrington outperformed all other northern locations. JLL’s ‘The New Geography for Office Demand – Where Next in the UK’ report, published during 2015, highlights Warrington as one of the ten future potential growth centres. The report predicts Warrington will see the second-highest employment growth in the UK, in the office sector, over the next five years, largely due to the strength of, and further investment in, its nuclear industry cluster. The report declares Warrington to be fifth highest in the 37 listed UK locations, in terms of economic growth, with its credence as a northern powerhouse underscored by it being the only northern location placed in the top 20. The report also identifies Warrington as being expected to have a stronger than average economic performance over the next five years, and singles out the town as the top ‘Potential Performer’ in the North of England office market. Warrington’s close proximity to Manchester and Liverpool and the area’s robust employment growth and growth of occupiers – in particular within the nuclear and technology sector – contribute to this strong economic future.

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SITE CONTEXT & ANALYSIS REGENERATION OVERVIEW Since gaining its independence as a Unitary Authority there has been a masterplan to regenerate the town centre. Since the financial crisis of the late 2000’s the regeneration has regained momentum and since 2013 Warrington Council have announced £800m of regeneration, of which £450m is either built or underway. The town centre regeneration is wrapped around the pedestrian zone and the central station, and is focused on three active zones in the following chronological order: • Yellow area. This comprised the refurbishment and extension of the existing Golden Square Shopping Centre, owned by Intu. This was complete before 2010. • Blue Area. The is the demolition and new build of a large portion of the old town centre known as Time Square

or Bridge Street Quarter. This is fully contracted and the phased building work is underway. • Green Area. This is the cultural quarter which has been undergoing a granular regeneration over the last 5 years and is almost complete. Land-ownership is piecemeal so wholescale regeneration has not been possible. Several small scale intiatives including the Cabinet Works, Garven Place, Wilson Patten Place and other residential schemes have combined to create a mature regeneration. • Purple Area. This is regarded as the Stadium Quarter and comprises the central station, the rugby stadium and the proposed residential, secondary education and commercial developments. This regeneration has begun over the last 2 years. Our site is lined in Blue.

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SITE CONTEXT & ANALYSIS A CITY OF CULTURE Warrington delivers a wide and varied cultural programme from grass roots community organisations, village and town festivals through to award winning venues and a strong contemporary arts offer. The Town Centre has a wealth of culture – from its Museum and the Pyramid and Parr Hall to its outdoor park venues and sports stadia. Its community based culture is strong and its talent is growing. Warrington sporting prowess is part of the town’s make-up. The whole of the Town Centre’s paving and street works and its ‘Guardians’ were designed and delivered as a single art installation. Warrington’s flood defences were also designed as public art. Warrington’s events and festivals are second to none. The cultural partnership grows from strength to strength and Warrington’s culture and distinctiveness will form an integral part of the development of the City Centre.

CITY CENTRE PUBLIC REALM FRAMEWORK The key streets in the Town Centre have already been successfully pedestrianised and enhanced to a high quality. The council has extended environmental improvements to some of the adjoining streets – Lower Bridge Street and the Cultural Quarter. It is proposed to extend the enhancement of the public realm still further in parallel with the regeneration and development of the Town Centre. The Council published a Public Realm Framework for the Town Centre in 2009. This outlined a strategy for the improvement and maintenance of public spaces and streets. It also outlined street design principles, surfacing materials, street furniture and lighting. This framework will be used to guide enhancement of Town Centre enhancement schemes.

ANIMATING THE STREETS AND SPACES The Council and its development and investor partners are committed to creating new public spaces and improving existing ones in the Town Centre. The Warrington Town Centre Management Partnership will lead on their animation. The focus will be: • Alfresco eating and dining in the key streets and spaces - Time Square and the Old Market Square will lead here with outdoor space for the market cafes and the proposed family. Restrictions and requirements will be streamlined and reduced to enable this to happen more easily and quickly. • Street entertainment – this can create more colour and activity but it can also provide an easy venue for up and coming talent. • Street Markets - street markets are already a feature of the Town Centre with farmers markets and Christmas markets. It is proposed to make Warrington a city of markets - with regular

outdoor markets with vibrant stalls and pavilions throughout the year – food, vintage, books, flowers, etc. • Events and festivals - Warrington already has excellent festivals and some attractive outdoor venues - Queens Gardens and Bank Park. Time Square and Riverside Plaza will create two new wonderful venues. The Council will ensure that there is a partnership programme of events and festivals throughout the year to use these venues to the full, to enhance the vibrancy of the town centre and to provide more for visitors and residents to do and see throughout the day and throughout the year.

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SITE CONTEXT & ANALYSIS REGENERATION TIMELINES The programme of regeneration has been published by Warrington & Co (Warrington Councilâ&#x20AC;&#x2122;s Regeneration Company), and is set out below. The areas boxed in relate to the town centre regeneration.

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SITE CONTEXT & ANALYSIS INTU SHOPPING CENTRE EXTENSION, GOLDEN SQUARE This ÂŁ65m extension to the Golden Square Shopping Centre in Warrington has been completed as a major regeneration of Warrington town centre in both retail and leisure uses. The 300,000 sq ft extension offers units suitably sized for modern retailers as well as introducing a 100,000 sq ft department store into the town. As well as the major retail element the scheme provides two new public squares surrounded with leisure uses and linking in with the town centre pedestrianisation scheme.

Car parking above and below the new extension and a new state of the art transport interchange, adjacent to the central railway station, has also improved accessibility to the many new attractions that are available. The bus station and its entrance to the Intu Centre is adjacent to the station and less than a 2 minute walk from the station frontage of our site.

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SITE CONTEXT & ANALYSIS BRIDGE STREET QUARTER REGENERATION The regeneration of the Bridge Street area is being renamed as Time Square. The construction of the Â£107m redevelopment has begun and is expected to be completed by 2018. It comprises 42,000 sq ft of retail, 92,000 sq ft of leisure, 42,000 sq ft new market hall, a multistorey car park with 1,200 spaces, 100,000 sq ft of council offices and a new public square.

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SITE CONTEXT & ANALYSIS STADIUM QUARTER REGENERATION

The Stadium Quarter regeneration has multiple aspects to it. The separate aspects are as follows: • Blue Area – comprises the residential blocks known as Cheshire Lines. This is a mixed PRS and homeownership community. Like our site, it is accessed from Central Way, which is the station approach road. It is fully occupied even though the regeneration has yet to wrap around it, although the stalled regeneration has blighted pricing in the area.

Central Way. The station square is to be regenerated into a pedestrian plaza with access to our site and a multistorey car park. •

Red Area – is our site, which will be the last site in the quarter to complete its regeneration, in 2020. • Purple Area – is a mixed-use site being developed over the next two years by the Council.

• Yellow Area – comprises the central station, which has direct trains to both Manchester and Liverpool, in 15-20mins. The station has undergone a recent refurbishment, refocusing the station and its access onto

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SITE CONTEXT & ANALYSIS BRIDGE STREET QUARTER REGENERATION

Buildings A and B are complete, along with the infrastructure and railway arch redevelopment. The area to the South West is currently being transformed into a paved plaza that links through the underpass to Golden Square Shopping Centre.

The remainder of the site is being vacated and redeveloped into offices and other commercial uses. Redevelopment is expected to be completed by the end of 2019.

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SITE CONTEXT & ANALYSIS THE RESIDENTIAL MARKET RENTS - 1 BED (PCM)

• Kingsbridge Court. 3rd floor apartment in an ‘office to residential’ conversion located in the mature regeneration of the Cultural Quarter (£600pcm plus £800 deposit)

• Arundel House. 1st floor apartment in an office to residential conversion. A poor asset in a good location of the Cultural Quarter (£600pcm)

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SITE CONTEXT & ANALYSIS THE RESIDENTIAL MARKET

• Gladstone Street. Terraced apartment in the Stadium Quarter. Out of the regeneration areas but good quality home. (£550pcm) • Barton Court. Located within the Cheshire Lines Development, which is currently blighted by the derelict nature of our site and the Council commercial site. First floor apartment. (£550 pcm) • Bryers Court. Within the Cheshire Lines Development, above. (£520pcm)

There are limited good quality developments within the town centre. The above comparables are representative of 1 Bed units (excluding poor quality stock and studio apartments) and provide a fairly consistent view of the second-hand market place. It is probable that, once regeneration occurs in the stadium quarter, then the rents for 1 Bed units in the second-hand market will stablise at circa £600 pcm. With the above in mind, we have taken the view that a new, six storey, purpose-built and professionally managed PRS block, with excellent links to Manchester, Birchwood and Liverpool, will start at £625 pcm.

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SITE CONTEXT & ANALYSIS THE RESIDENTIAL MARKET RENTS - 2 BED (PCM)

• Pyramid Court. 3rd floor apartment in modern block located in the mature regeneration of the Cultural Quarter (£650pcm)

• Church Street. 3rd floor apartment in a new build block slightly outside of the city centre (£700pcm)

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SITE CONTEXT & ANALYSIS THE RESIDENTIAL MARKET

• Dial Street. Terraced apartment in the Stadium Quarter. Out of the regeneration areas but reasonably modern home. (£575pcm) • Barton Court. Located within the Cheshire Lines Development, which is currently blighted by the derelict nature of our site and the Council commercial site. Second floor apartment. (£650 pcm) • Bryers Court. Within the Cheshire Lines Development, above. (£650pcm) • Bovey Court. Located within the Cultural District. Ground floor apartment (£625 pcm).

Much like the 1 Bed apartments, there are limited good quality developments within the town centre. The above comparables are representative of 2 Bed units (excluding poor quality stock) and provide a fairly consistent view of the second-hand market place. It is probable that, once regeneration occurs in the stadium quarter, then the rents for 2 Bed units (2 Double bedroom and 2 Bathroom) in the second-hand market will stablise at circa £675 pcm. With the above in mind, we have taken the view that a new apartment in a six storey, purpose-built and professionally managed PRS block, with excellent links to Manchester, Birchwood and Liverpool, will start at £700 pcm.

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SITE CONTEXT & ANALYSIS THE RESIDENTIAL MARKET SALE - 1 BED

• Kingsbridge Court. 2nd floor apartment in an ‘office to residential’ conversion located in the mature regeneration of the Cultural Quarter (£135k) • Gladstone Street. Terraced apartment in the Stadium Quarter. Out of the regeneration areas but modern home (very small). (£85k) Much like the rental apartments, there are limited good quality developments within the town centre. The above comparables are representative of 1 Bed units (excluding

poor quality stock and studios) and provide a fairly consistent view of the second hand market place. It is probable that, once regeneration occurs in the stadium quarter, then the prices for 1 Bed units in the second-hand market will stablise at circa £110k. With the above in mind, we have taken the view that a new apartment in a six storey, purpose-built and professionally managed PRS block, with excellent links to Manchester, Birchwood and Liverpool, will start at £115k.

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SITE CONTEXT & ANALYSIS THE RESIDENTIAL MARKET SALE - 2 BED

• Kingsbridge Court. 3rd floor apartment in an ‘office to residential’ conversion located in the mature regeneration of the Cultural Quarter (£230k) • Barton Court. Located within the Cheshire Lines Development, which is currently blighted by the derelict nature of our site and the Council commercial site. Ground floor apartment. (£110k)

• Scott Court. Located withn the Cheshire Lines Development, again blighted by the derelict nature of our site and the Council site. Ground floor small apartment (£105k). • Bailey Court. Within the Cheshire Lines Development, above. Floor plans suggest the apartments are really small (circa 54m2) (£100k for a prelet apartment at £650pcm)

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SITE CONTEXT & ANALYSIS THE RESIDENTIAL MARKET The market for 2 bed units is dominated by very small units out of the town centre. In fact most of the units located North West of the town are in 1990’s Persimmon developments and the unit sizes range from 45m2 to 55m2. As a result these units are selling at prices often below the 1 Bed units as they rarely profer up a decent master bedroom let alone a decent second bedroom. There are no instances of a second bathroom and the units are not of the ‘dumbbell’ design.

The only other reference points within the town centre (in an area where regeneration is complete) is within the Cultural Quarter. However, capital values range up to £230k (3rd storey ‘penthouse’).

The closest reference points that we have are contained within the blighted Cheshire lines site immediately adjacent our site. The site is blighted because it forms part of an abandoned development and previously failed regeneration, along with our site (in red below) and the Council’s commercial site, which is currently a temporary car park, in purple below). Both of those sites are to be completed in the coming two years, and both sites (along with the station square which also be regenerated) landlock Cheshire Lines.

With the above in mind, we have taken the view that a new apartment in a six storey, purpose-built and professionally managed PRS block, with excellent links to Manchester, Birchwood and Liverpool, and using larger dumbbell units, will start at £135k and lift by floor to £150k.

It is probable that, once regeneration occurs in the stadium quarter, then the prices for 2 Bed units in the second-hand market will stablise at circa £120k, albeit in very small units.

Again these units are small, so rent for little more than a 1 Bed unit at £650pcm, meaning that their capitalised value is little more than £105k (ground floor).

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FUNDING REQUIREMENTS PURCHASE PRICE

£3,100,000

COMPLETION FEES

£170,000

£3,270,000

BUILD COST

£32,859,677

INTRODUCER FEE

£155,000

£33,014,677

TOTAL COSTS

£36,284,677

DEVELOPMENT FINANCE (65% OF COSTS) MEZZANINE FINANCE 20% /CLIENT DEPOSITS

£23,585,000 £7,256,935

30,841,935

HIGH STREET GROUP EQUITY FREEHOLD REVERSION HIGH STREET GROUP

£3,880,800 £1,561,942

£5,442,742

TOTAL £36,284,677 32

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THE DEVELOPMENT APPRAISAL (BTL)

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THE DEVELOPMENT APPRAISAL (PRS)

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