Cotton House, 7 Cochrane Street, Glasgow

1 Cotton house , 7 cochrane street , GlasgowCity Centre Government Let Office 230/10/2015 10:01 Cotton house , 7 cochrane street , GlasgowInvestment SummaryAttractive government let office building. Wholly occupied by HMRC as a key operational centre for city centre location, close to major public transport to The Secretary of State for Communities & Local Government until 14 December 2028, with tenant break options on 15 December 2020 and 15 December passing rent of 978,096 per annum ( per sq ft, exclusive of parking), with 5 yearly, upward only, open market rent specified office building extending to a total of 52,346 sq ft (4, sq m) of office accomodation and 41 secure underground car parking spaces, providing an excellent car parking ratio of 1:1,277 sq ft. Absolute Ownership (Scottish equivalent of English Freehold).

2 Offers in excess of 11,510,000 (Eleven Million, Five Hundred and Ten Thousand Pounds Sterling), subject to contract and exclusive of VAT are invited for the Absolute Ownership in the property. A purchase at this level would represent a net initial yield of , after allowing for purchaser s costs based on LBTT and a low capital value of 220 per sq 330/10/2015 10:01 Location The property is situated on the corner of Cochrane Street and Montrose Street, within the Merchant City area of Glasgow city centre. Cochrane Street links the south east corner of George Square with the Merchant City to the east and leads to St Vincent Place and St Vincent Street further to the west, which is Glasgow s traditional prime office Square has historically been Glasgow s civic, cultural and commercial heart. Its popularity as an office location has been reinforced with the redevelopment of the 100% prime, Grade A offices: Connect110ns, Queen Street and G1, George close proximity to both main line railway stations, all other public transport hubs and the numerous retail and leisure facilities make this location extremely popular amongst ChambersQueen Street StationUniversity of StrathclydeNetwork RailBuchanan Galleries Shopping CentreSt Enoch Shopping CentreBuchanan Bus StationGlasgow Caledonian UniversityCity of Glasgow CollegeThe Italian CentreEY, MercerThe Weir GroupDeloitte, Grant ThorntonCandleriggs Quarter Development SiteGeorge SquareMercure HotelClydesdale BankHouse of FraserM&SLloyds Banking GroupArgyle St.

3 StationRoyal Exchange SquareMerchant SquareMerchant City AreaPremier InnInovo BuildingCotton HouseArgyle StreetBuchanan StreetSauchiehall StreetM8 430/10/2015 10:01 Cotton house , 7 cochrane street , GlasgowDescriptionTenancyCotton house was completed in 1998 and is laid out over ground and five upper floors, providing flexible, open plan office accommodation. The building is of reinforced concrete frame construction, with natural blond sandstone subjects are arranged around a central core and provide a flexible L-shaped floor plate that can be easily sub-divided. The property benefits from on-site cycle racks and a secure 41 space car park, giving an excellent city centre car parking ratio of 1 sq m (1:1,277 sq ft). The property is let in its entirety to The Secretary of State for Communities & Local Government on a 15 year lease expiring on 14th December 2028 with 5 yearly open market rent reviews, the next review date being 15th December 2018.

4 The current passing rent is 978,096 pa, which reflects per sq ft assuming car parking is rentalised at 2,500 per space per annum and reception at half rate. The lease is subject to a Minute of Variation which entitles the tenant to terminate the lease on two relevant break dates, namely 15th December 2020 and 15th December 2025, subject to 12 months prior written Minute of Variation allows for a reduction in the initial annual rent over the term of the lease. The reduction is structured as follows: Date of Entry until 14th Dec 2020 = a reduction of 116,440 pa. If the tenant does not exercise the break in 2020 they will receive an additional 8 months rent free, amortised equally over 5 years. If the break is not exercised in 2025, the tenant receives an additional 3 months rent free, amortised equally over the remaining 3 year lease , the building benefits from the following office specification: Large, open plan floor plates of approximately 9,000 sq ft.

5 Suspended ceilings incorporating recessed light fittings. Full raised access floors. Four pipe fan coil air conditioning with delivery in the floor voids. Two 10 person passenger lifts. Male, female and disabled toilet facilities on each floor. Shower and gym facilities located on the 2nd 530/10/2015 10:01 AccommodationThe subjects have been measured on a net internal area (NIA) basis in accordance with the RICS Code of Measuring Practice (6th Edition) and approximate areas are as follows: FloorDescriptionNIA sq mNIA sq ,1 , , , , , ,346 TenureAbsolute Ownership (Scottish equivalent of English Freehold).Typical Upper FloorCOCHRANE STREETMONTROSE STREETVATEPCThe property has been elected for VAT and therefore VAT will be chargeable on the purchase price, however it is anticipated the sale will be dealt with as a Transfer Of a Going Concern (TOGC).

6 The property has an EPC rating of D. A full EPC can be provided on 630/10/2015 10:01 Cotton house , 7 cochrane street , GlasgowTenant InformationThe building is currently let to The Secretary of State for Communities & Local Government, having been occupied by HMRC since practical completion. Cotton house is an important operational centre for HMRC. It has historically been the main tax enquiry centre for the public and businesses in the Glasgow area, and is currently utilised for a number of back office the current indications of UK constitutional reform and potential devolution of tax powers to Scotland, it is likely the tenant s role and importance in Scotland will increase 730/10/2015 10:01 Glasgow is one of the UK s Big Six office markets. It is Scotland s largest city, with a population of nearly 600,000 and a wider regional catchment of approximately million.

7 The city is well regarded for its skilled workforce, with five higher education institutions based in the city and 40% of the working age population educated to degree level or above. Although traditionally boasting a strong manufacturing economy, Glasgow has moved towards becoming a service-based economy over the past 25 years. 84% of jobs now fall into the service sector. This includes professional services such as finance, public administration and business services. Nearly 17,000 companies are now based in Glasgow , and the city contributes approximately 18 billion GVA per annum to the Scottish economy. Glasgow has been recognised for its strategy to attract investment and was named the Best Large City in Europe for its Foreign Direct Investment Strategy in fDi Magazine s European Cities and Regions of the Future 2014/2015 rankings.

8 CommunicationsCotton house benefits from a core city centre location that affords easy access to Glasgow s excellent transport network, which allows connectivity across and out of the city. Glasgow s transport options include the following:Rail: Two main line railway stations, Glasgow Central and Glasgow Queen Street, are within walking distance of Cotton house and provide rail connections to all major UK cities. Network Rail have recently submitted an application to Scottish Ministers for the redevelopment of Glasgow Queen Street : Glasgow Airport, Edinburgh International Airport and Prestwick Airport offer routes to over 130 destinations worldwide, with Glasgow Airport accessible within 15 minutes drive time from the city centre, and Edinburgh International Airport and Prestwick Airport within 45 : The M8 motorway dissects Glasgow city centre and is located within 15 minutes of Cotton house .

9 The motorway provides easy access to Edinburgh and links to the M80 reaching northwards and the M74 reaching : 22 bus operators run services across the city, including frequent services to Glasgow International Airport. Buchanan Bus Station is located nearby offering links to other UK : Three stations are available in the city centre and link to key leisure, business and cultural areas in the west StreetCowcaddens RoadCowcaddensSt GeorgesCross87 Killermont StreetMontrose StreetCathedral StreetSaltmarketNorth Hanover StreetNth Frederick StFrederick StPort Dundas RoadDobbies LoanDobbies LoanKyl e StreetWest Graham StreetBuchananBus StationBuchQuarterCity CollegeCampusSSSB uananStreetchananCityChambersMap keyPrime retailMerchant CityCotton 830/10/2015 10:01 Cotton house , 7 cochrane street , GlasgowGlasgow Office Investment Market AddressDatePurchaserPriceNet Initial YieldCapital Value Per Sq FtComments180 West George Street, GlasgowAugust 2015 Picton 274 Multi-let with AWULT of St Vincent Street, GlasgowJuly 2015 Northwood 232 Multi-let with AWULT of , GlasgowJuly 2015 Amundi 491 Let to ESure with years unexpired house , 20 Haymarket Yards, EdinburghApril 2015 Kames 297 Let to The Secretary of State for Communities and Local Government until December 2028, with a tenant break option in December Rutland Court, EdinburghDec 2014 Private 381 Let to Anderson Strathern until December Renfield Street, GlasgowSep 2014 Kames 257 Let to Newsquest (Herald & Times)

10 Ltd until May 2030 with a tenant break option in May St Vincent Place, GlasgowApr 2014 Patrizia 219 Let to Clydesdale Bank Plc until September 2024. Glasgow is a major UK regional office centre and has attracted long term investors in UK commercial property from UK institutions, overseas funds and high net worth individuals. Recent comparable city centre office investment transactions are highlighted in the table West George Street - GlasgowElgin house - EdinburghBuchanan Street - 930/10/2015 10:01 Glasgow Office Occupational Market Glasgow is Scotland s largest office market, with an existing stock of approximately 27 million sq ft, of which million sq ft is in the city centre. 2014 saw Glasgow exceed its 10 year average take-up figure, and 2015 is set to continue this trend. Take-up has totalled 326,617 sq ft to the end of September 2015, and is being driven by banking/financial institutions, professional, and business service firms.