Industrial Unit - Pinders

1 Industrial unit Petersfield Park Bletchley milton keynes Buckinghamshire MK9 1PP Client: Independent Bank Ltd Branch: milton keynes Proposed Borrower: Mr J Brown Date of Valuation: 30 January 2013 Reference: 911922 Freehold Valuation Report 911922 Page 2 of 23 Purpose and Limitations of Report This report is provided to assist the instructing Client in consideration of the subject property in relation to the purpose stated opposite. Pinders accepts liability only to the Client and no other party, however involved. The report comprises a Property Valuation and expressly does not, in any way, constitute a building (structural) survey or a due diligence assessment. It remains the responsibility of the Client and, where appropriate, the borrower(s), to confirm the accuracy and validity of the information provided. Pinders accepts no liability to the Client, or any other party, should information relied upon in arriving at our opinions of value prove to be misrepresented, either fraudulently or otherwise.

2 Whilst reference may be made within the report to aspects of tenure, title, planning and other statutory obligations, all such aspects should be verified by solicitors acting on behalf of the Client and/or the proposed borrower(s). The report is not intended as a substitute for the searches which would be expected in relation to any property acquisition or investment. We can confirm that neither the valuer nor Pinders has any known conflict of interest in accepting your instructions, nor any previous knowledge of the property or the potential borrower other than as specifically stated within the report. Unless specified elsewhere, this report has been prepared in accordance with our Standard Conditions of Engagement, as appended to this report, and in accordance with The Royal Institution of Chartered Surveyors, Valuation - Professional Standards, for the sole purpose of assisting the Client and Proposed Borrower indicated above, in consideration of the subject property.

3 Whilst the valuations contained within this report are expressed in a way which is suitable for lending purposes, any party, other than the Client shown above, wishing to rely upon the contents of the report for such purposes, will need to instruct Pinders to prepare and provide a further report, which addresses the party s specific requirements. We can confirm that Pinders has in place appropriate Professional Indemnity Insurance in respect of this valuation. A copy certificate to this effect can be provided to the Client upon request. 911922 Page 3 of 23 Terms of Reference Client: Independent Bank plc, milton keynes Purpose of Report: Loan security purposes in relation to a proposed acquisition Property Owner(s): Mr A Smith Person(s) Interviewed: Mr A Smith Previous Visits: We have not previously visited the subject premises Date of Inspection: 21 January 2013 Date of Valuation: 30 January 2013 Undertaken by: Jennifer Nicol MRICS (1274265) Registered Valuer Approved for Issue by: Mark Ellis FRICS (0060171) Chairman We appreciate that there may be many parties involved in consideration of this proposal and this report (inclusive of photographs, maps and site plans) will be provided by electronic mail in pdf file format (requires Acrobat Reader software) to facilitate easy transfer of information.

4 However, we recommend that our lending clients rely only upon an authenticated hard copy of the report, which has the Pinders security seal attached below. If you wish to discuss any aspect of this report, please contact our Operations team at:- Pinder House Central milton keynes MK9 1DS Telephone: 01908 350500 Email: 911922 Page 4 of 23 Synopsis Property Summary Industrial unit Freehold Located within Petersfield Park, an established Industrial area of Bletchley End of terrace modern steel portal frame Industrial unit built c1990 Total GIA of 978 m (10,527 ft ), comprising ground floor warehouse and offices of 856 m (9,214 ft ), first floor offices of 122 m (1,313 ft ), and mezzanine level of 67 m (725 ft ) Building reasonably presented, with no significant obvious wants of repair noted Valuations Summary Existing Proposed Market Value 675,000 n/a PLEASE SEE FULL DEFINITIONS OF VALUATION AND SPECIFIED ASSUMPTIONS APPENDED TO THIS REPORT 911922 Page 5 of 23 Executive Summary The subject property comprises a modern Industrial unit with a total GIA of 978 m (1,0527 ft )

5 , plus a small mezzanine level, over ground and first floor, providing warehousing and ancillary office and associated accommodation. Mr Smith has owned and operated his manufacturing business from the premises since 2005. We understand that property has been marketed for sale through local agents for an asking price of 700,000 some six months with reasonable interest received, and that a sale price of 675,000 has now been agreed between the parties. Our report is required to assist with the proposed purchase. The subject property has a Gross Internal Area (GIA) 978 m (10,527 ft ). In arriving at our opinion of Market Value, we have considered both the comparable method, by reference to sales on a capital value per square meter, and investment method of valuation, by assessing a rent and yield for the premises Taking into consideration the comparable evidence obtained and the quality and facilities of the accommodation, we have adopted a rate of 70 per m ( per ft), which suggests a Market Rental Value of 70,000 per annum.

6 Evidence in respect of yields achieved is more limited; however, based on the comparables gathered and our knowledge of the general wider property market, we have adopted a net initial yield of circa 9%, in addition to making a six month allowance for a void period and six month rent free Tenants incentive. After making appropriate allowances for purchaser s costs, this suggests a Market Value of 675,000. We refer to the Methodology and Comparable Evidence section towards the end of the report for further commentary. 911922 Page 6 of 23 Location Map 911922 Page 7 of 23 Local Environment Location milton keynes has a comprehensive central area comprising retail and leisure facilities at its heart. It lies 15 miles south of Northampton, 12 miles west of Bedford, 15 miles north of Luton and Oxford and Cambridge are both around 40 miles distant.

7 Bletchley is part of the Borough of milton keynes unitary authority, and it lies just to the south-west of the remainder of milton keynes , but still retains a distinctive identity. Bletchley is split between the civil parishes of Bletchley, Fenny Stratford and West Bletchley. The centre of Bletchley has a part pedestrianised shopping area, which includes a number of retail multiples, banks and building societies. Bletchley also benefits from a main line railway station based on the west coast line between London and Scotland, and the station is located less than two miles from the subject property. The area is served by a number of main roads, with the busy A5 passing to the west and the M1 motorway passing to the east. The property forms an end of terrace unit with off road parking for approximately six vehicles available to the front of the unit .

8 Additional parking is provided to the side of the unit , although the majority of spaces appeared to be reserved for neighbouring units. Other occupiers in Petersfield Industrial Park include Henry Designs occupying the unit directly opposite, EEG unit 12, Peter Piper UK unit 13 and MK Lazer unit 8, next door. Larger operators in the wider estate include a very large distribution unit occupied by Tesco and Volvo. Environmental Matters From our limited inspection of the property and information available in the public domain, we note the property appears to lie just outside a flood risk area, although we were verbally advised that neighbouring units in Harriers Park have been subject to flooding - there is a watercourse to the rear of the unit and it has a moderate risk of subsidence and high historical land use. In addition, the subject property is located on an Industrial estate, which, it will be appreciated, has some inherent risks associated with the type of businesses in occupation.

9 From our informal enquiries, there is no indication that the property or its immediate locality: is located within a mining area; is located within an area that is at risk of flooding; is affected by naturally occurring gases; has been used for the manufacture, storage or sale of hazardous/toxic materials such as chemicals, petroleum products, pesticides, fertilisers, acids, asbestos, explosives, paint or radioactive materials; is the site of below-ground storage tanks; is close to incinerators or chimneys giving off heavy emissions. We have detected no evidence to suggest that deleterious or hazardous materials or techniques have been used in the construction or subsequent modification of the building. We refer you to the paragraph headed Environmental Matters within the appended Conditions of Engagement. 911922 Page 8 of 23 Site Plan 911922 Page 9 of 23 Site & Aspects of Title Site Plan The plan shown opposite is taken from the most current Ordnance Survey digital mapping data and shows the subject property within its local environs.

10 We advise that the area outlined in red corresponds with the property inspected and would appear to be in accordance with the lease plan. We understand that the area hatched green comprises four parking spaces named on the lease plan. This should be confirmed in due course. It should be noted that this plan and the markings thereon indicate the approximate extent of the site inspected and no guarantee can be given as to whether this corresponds to that over which title is held. It remains the responsibility of the Client to investigate and confirm the legal boundaries and title applying to the property. Restrictive Covenants, Rights of Way and Easements We were advised that there are no easements or restrictive covenants affecting the property. We have assumed that there are full rights of way in favour of the property in respect of the rear and the entrance road.