Savills Residential Capital Markets

FOUNDRY COURT AND WATERMANS YARD NORWICHRESIDENTIAL & RETAIL INVESTMENT OPPORTUNITY

Foundry Court

FOUNDRY COURT AND WATERMANS YARD | NORWICH FOUNDRY COURT AND WATERMANS YARD | NORWICH2 3

• Two well situated blocks known as Foundry Court and Watermans Yard, together comprising 48 apartments, 27 garages, 15 off-street surface car parking spaces and three retail units

• All of the apartments are let on assured shorthold tenancies (ASTs), with a gross income of £368,160 per annum

• Foundry Court has three retail units with a gross income of £30,915 per annum

• The portfolio has a total rent passing of £399,075 per annum and an estimated market rental value of £429,500 per annum, reflecting a rental increase of 7.6%

• The residential units have a net sales area (NSA) of 2,849 sq m (30,670 sq ft) and the retail units have a gross internal area (GIA) of 161 sq m (1,734 sq ft)

• The portfolio has been consistently occupied at 100%

• A strong reversionary rental potential, through active management and rental growth prospects

• Both properties are centrally located in Norwich city centre and are within walking distance to all amenities

INVESTMENT SUMMARY

WATERMANS YARD

FOUNDRY COURT

The Cathedral

The ForumCity Hall

Theatre Royal

Castle MallShopping Centre

Riverside Leisure Area

Norwich Market

Chapelfield Shopping Centre

Norwich Train Station

Norwich Castle

FOUNDRY COURT AND WATERMANS YARD | NORWICH5 FOUNDRY COURT AND WATERMANS YARD | NORWICH 4

Over 10 million day tourists and 1.5 million overnight visitors are attracted to Norwich each year

LOCATIONNorwich is the main centre of East Anglia and dominates a large primary catchment area, which encompasses much of eastern Norfolk. It has a resident population of 132,512 (2011 Census) and a primary catchment population of 895,000. The city lies approximately 110 miles to the north east of London via the A11/M11 and about 45 miles to the north of Ipswich via the A140/A14. The mainline station is situated to the east of the city centre and provides links to London and the Midlands with the fastest journey time to London Liverpool Street being c. 1 hour 50 minutes. The city also benefits from an expanding airport with a regular route to Schipol and internationally thereafter.

Norwich is a vibrant city which has seen substantial development over the past fifteen years. This has primarily been in the retail, leisure and residential sectors in and around the city centre. Subsequently, Norwich was ranked 13th in the UK by Javelin Group’s Venuescore 2017 as a leading retail destination. Chapelfield, Castle Mall and Riverside are well established destinations and occupiers provide a good mix of retail and leisure brands; Chapelfield is anchored by House of Fraser. The city centre is a major destination in its own right and benefits from the presence of John Lewis, Debenhams, Marks and Spencer, Jarrolds and an historic covered market.

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Norwich has two universities; UEA, a top 15 university, with c. 15,000 students and the second highest graduate retention rate in the UK and Norwich University of the Arts, which is smaller at c. 2,000 students, with a city centre campus. The city is also a major tourist destination, having two cathedrals, a castle, museums, five theatres and galleries. There is also an extensive array of shops, restaurants and bars. Over 10 million day tourists and 1.5 million overnight visitors are attracted to the city each year, with tourism being worth about £700 million per year to the city and supporting 12,000 jobs.

The local economy is dominated by a number of key long established employers concentrated in the finance and manufacturing sectors. Major employers within the city include Aviva, Marsh, Virgin Money, Moneyfacts, Archant, Kettle Foods, PWC and Anglian Windows. There are also major employers on the outskirts of the city, including Lotus Cars and Broadland Business Park. The city has an established reputation for food research and the Norwich Research Park (NRP) is one of the leading classes for this type of development. A £26 million Government grant has enabled the second phase of development at NRP.

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NORWICHBUS STATION

WATERMANS YARD

FOUNDRY COURT

FOUNDRY COURT AND WATERMANS YARD | NORWICH FOUNDRY COURT AND WATERMANS YARD | NORWICH6 7

PORTFOLIO SUMMARY

The portfolio comprises 48 apartments, 24 garages, 15 off-street surface car parking spaces and three retail units across two properties: Foundry Court, Prince of Wales Road, NR1 1NS and Watermans Yard, Westwick Street, NR2 4SZ.

The owner constructed the buildings in 2004 and 2006 respectively and has managed them since completion. The properties have been maintained to a good standard with general maintenance and capital expenditure occurring in between tenancies. White goods and cooking appliances are included within the portfolio.

The majority of tenants are professional / working people, plus a few mature students. There are no DSS tenants.

The portfolio has been consistently 100% occupied. The minimum tenancy length offered is six months and the average tenancy length is c. 18 months. Generally most tenants have stayed for over six months and there are current tenants who have been in occupation over 10 years.

PropertyResidential

UnitsCommercial

UnitsGarages

Parking Spaces

Residential Income PA

Commercial Income PA

Total Income PA

Residential ERV*

Commercial ERV*

Total Market Rental Value

Foundry Court

24 3 12 11 £171,120 £30,915 £202,035 £181,800 £36,500 £218,300

Watermans Yard

24 - 15 4 £197,040 - £197,040 £211,200 - £211,200

Totals 48 3 27 15 £368,160 £30,915 £399,075 £393,000 £36,500 £429,500

*Estimated Rental Value

The portfolio has been consistently occupied at 100%

Foundry Court Watermans Yard

Foundry Court

Watermans Yard

FOUNDRY COURT AND WATERMANS YARD | NORWICH FOUNDRY COURT AND WATERMANS YARD | NORWICH8 9

FOUNDRY COURT, NR1 1ND

Foundry Court completed in 2004 and comprises 24 self-contained apartments (three x one bedroom apartments, 20 x two bedroom apartments and one x three bedroom apartment), three commercial units, 12 garages and 11 surface car parking spaces. The parking facilities service the residential aspect of the property. Six of the apartments are ground and first floor duplexes with direct access.

Since completion the properties have received general capital expenditure and have therefore been maintained to a good standard. However, there is an opportunity to add value through light refurbishment.

Foundry Court is situated on the Prince of Wales Road, which is one of the main links from the city centre to Norwich railway station. The station is located approximately 0.1 miles to the east and provides direct service to London Liverpool Street in as little as one hour 47 minutes, every half an hour. Norwich Cathedral and The Close, which is the largest English cathedral precinct at 44 acres, is situated c. 0.2 miles to the north. All three retail units are in a prominent position fronting the Prince of Wales Road. The local council have just announced a £2.6 million regeneration plan aimed at the Prince of Wales Road, which will improve the flow of pedestrian and vehicle traffic. The prime retail area is situated c. 0.4 miles to the west of the property.

The estimated market rental value of the residential and commercial units is £218,300, reflecting a rental increase of 8.05%.

Foundry Court Residential Tenancy Schedule

Apartment Floor NSA* Sq m. NSA* Sq ft.No. of

BedroomsParking Facility

Let with FlatIncome PCM Income PA

1 First 52 561 2 - £575 £6,900

2 First 48 519 1 Garage £575 £6,900

3 First 55 587 2 Garage £550 £6,600

4 Second 52 561 2 Garage £575 £6,900

5 Second 48 519 1 - £550 £6,600

6 Second 55 587 2 Space £575 £6,900

7 Third 52 561 2 Garage £595 £7,140

8 Third 48 519 1 Space £575 £6,900

9 Third 55 587 2 - £575 £6,900

10 Ground & First 65 698 2 Garage £595 £7,140

11 Ground & First 65 698 2 - £600 £7,200

12 Second 49 525 2 Garage £595 £7,140

13 Second 49 525 2 Garage £575 £6,900

14 Third 49 525 2 Garage £550 £6,600

15 Third 49 525 2 - £575 £6,900

16 Ground & First 65 698 2 Garage £650 £7,800

17 Ground & First 65 698 2 Space £625 £7,500

18 Second 49 525 2 Space £595 £7,140

19 Second 49 525 2 Garage £595 £7,140

20 Third 49 525 2 Garage £595 £7,140

21 Third 49 525 2 Space £595 £7,140

22 Ground & First 65 698 2 Garage £550 £6,600

23 Ground & First 65 698 2 Space £625 £7,500

24 Second 87 936 3 Space £795 £9,540

Totals: 1,331 14,325 £14,260 £171,120

*Net Sales Area

Foundry Court Commercial Tenancy Schedule

All three retail units are demised within Foundry Court.

Tenant Service Area sq ft. Income PA Lease Start Lease End DateUnexpired

Lease TermMarket

Rental Value

Rebel Inc. Tattoo Studio 561 £9,665 2008 July 2018 6 months £10,000

Linkup Estate Agent 587 £12,000 2004 January 2019 12 months £12,000

WMG Car Leasing 586 £9,250 2013 November 2018 11 months £12,500

Total 1,734 £30,915 £36,500

New terms have been agreed with Rebel Inc. based upon a new lease expiring in 2023 at a rent of £10,000 per annum, subject to a break clause exercisable by the tenant after July 2019 with a three month notice period.

FOUNDRY COURT AND WATERMANS YARD | NORWICH FOUNDRY COURT AND WATERMANS YARD | NORWICH10 11

WATERMANS YARD, NR2 4SD

Watermans Yard completed in 2006 and comprises 24 self-contained apartments (23 x two bedroom apartments and one x three bedroom apartment), four surface car parking spaces and 14 garages. All of the apartments benefit from either a balcony or Juliet balcony. Four of the apartments are impressive duplex units and four have direct views over the River Wensum.

Watermans Yard is situated on Westwick Street, which is approximately 1.0 mile to the north west of Norwich railway station and c. 0.5 miles to the north west of the main shopping area of the city centre. The River Wensum runs parallel to Westwick Street to the north of the site. St Benedicts Street, runs parallel to the south, which is a very vibrant part of the city centre with a number of independent bars and restaurant.

The estimated market rental value is £211,200, reflecting a rental increase of 7.19%.

Watermans Yard Tenancy Schedule

Apartment Floor NSA* Sq m. NSA* Sq ft.No. of

BedroomsParking Facility

Let with FlatIncome PCM Income PA

1 Ground 65 703 2 - £625 £7,500

2 First 65 703 2 Garage £650 £7,800

3 Second 65 703 2 Space £675 £8,100

4 Third & Fourth 90 974 3 Garage £795 £9,540

5 First 55 597 2 Garage £650 £7,800

6 Second 55 597 2 - £650 £7,800

7 Third 55 597 2 Space £625 £7,500

8 First 55 597 2 Garage £650 £7,800

9 Second 55 597 2 Garage £650 £7,800

10 Second 64 689 2 Garage £795 £9,540

11 Third 55 597 2 Garage £695 £8,340

12 Ground & First 93 999 2 Garage £875 £10,500

13 Second & Third 77 831 2 Garage £800 £9,600

14 Third 60 646 2 - £625 £7,500

15 Ground 60 646 2 - £650 £7,800

16 Ground 60 646 2 - £575 £6,900

17 First 60 646 2 Garage £675 £8,100

18 First 60 646 2 Space £725 £8,700

19 First 60 646 2 Garage £695 £8,340

20 Second 60 646 2 Garage £695 £8,340

21 Second 60 646 2 - £625 £7,500

22 Second 60 646 2 Garage £675 £8,100

23 Ground & First 63 678 2 Space £650 £7,800

24 First 62 669 2 Garage £695 £8,340

Totals: 1,519 16,345 £16,420 £197,040

*Net Sales Area

FOUNDRY COURT AND WATERMANS YARD | NORWICH FOUNDRY COURT AND WATERMANS YARD | NORWICH12 13

Average Rents & Rental Growth - NR1

Source: Rightmove

The above graph demonstrates the average rent per calendar month (PCM) per unit type from Q4 2015 to Q3 2017, for the postal code location of NR1.

The average rental compound annual growth rate (CAGR) from 2015 to 2017 in NR1 across one, two, and three bedroom flats was 4.3%. The rental CAGR for Foundry Court during the same period was 1.4%.

The average rents PCM per unit type in NR1 in Q3 2017 were: one bedroom: £644, two bedroom: £759 and three bedroom: £810. Currently the average rents PCM in Foundry Court are: one bedroom: £560, two bedroom: £590 and three bedroom: £714.

Average Rents & Rental Growth - NR2

Source: Rightmove

The above graph demonstrates the average rent per calendar month (PCM) per unit type from Q4 2015 to Q3 2017 for the postal code location of NR2.

The average rental CAGR from 2015 to 2017 in NR1 across one, two, and three bedroom flats was 4.9%. The rental CAGR for Watermans Yard for during the same period was 2.1%.

The average rents PCM per unit type in NR1 in Q3 2017 were: one bedroom: £569, two bedroom: £727 and three bedroom: £867. Currently the average rents PCM in Watermans Yard are: two bedroom: £674 and three bedroom: £795 (one unit).

The aforementioned data analysis for both Foundry Court and Watermans Yard supports the fact that the rents have not been pushed over the last three years, in order to maintain a 100% occupancy rate. Therefore, the portfolio has an attractive reversionary rental income, which could be assessed through active management and rental growth.

THE RESIDENTIAL MARKET

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Savills House Price Forecast

Location 2018 2019 2020 2021 20225-year compound

growth

UK 1.0% 2.5% 5.0% 2.5% 2.5% 14.2%

East Midlands 1.0% 3.0% 5.0% 2.5% 2.5% 14.8%

East of England 0.5% 2.5% 4.0% 2.0% 2.0% 11.5%

South East (excluding London) 0.5% 2.5% 4.0% 2.0% 2.0% 11.5%

Savills Rental Growth Forecast

2018 2019 2020 2021 20225-year compound

growth

UK (excluding London) 2.5% 2.5% 3.0% 3.5% 3.5% 15.5%

Source: Land Registry.

Average monthly asking rent, 2 bed properties - Q3 2017

Over £750 £725 - £750

£700 - £725 £675 - £700

£650 - £675 Under £650

Rental Value Heat Maps

Source: Land Registry.

Average monthly asking rent, 1 bed properties - Q3 2017

Over £650 £550 - £600

£500 - £550 £450 - £500

Under £450

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Capital Value Growth – Price Vs Peak

Source: Land Registry

The Price Vs Peak graph shows average capital value growth of residential property in the stated locations from 2008. In Norwich average residential capital values have increased by 22%, which reflects 2% above Norfolk and 3% above England & Wales.

FURTHER INFORMATION

Tenure

Both properties are held freehold.

Method of Sale

The portfolio is offered for sale, by way of private treaty, as one lot. Offers individually for either Foundry Court or Watermans Yard will also be considered. Offers are sought for the freehold interest/s subject to contract.

VAT

Both properties are not elected for VAT.

Data Room

Further Information can be found on the Savills Data Room:

www.savills.com/foundrycourtandwatermansyard

Viewings

Viewings are strictly by appointment via the vendor’s sole selling agent, Savills. Please contact either Arthur Morgan or James Watkins to make an appointment.

Important Notice

Savills, their clients and any joint agents give notice that:

1. They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact.

2. Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Savills have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise.

Designed and Produced by Savills Marketing: 020 7499 8644 | February 2018

Contacts

Piers de Winton MRICS Director - Residential Capital Markets pdewinton@savills.com 020 7016 3816

James Watkins MRICS Surveyor – Residential Capital Markets jwatkins@savills.com 020 7409 8056

Arthur Morgan MRICS Associate – Norwich amorgan@savills.com 01603 229 259