Portfolio Management Whats on the Radar? London l Geneva l Zurich - PowerPoint PPT Presentation

Portfolio Management – What’s on the Radar? London l Geneva l Zurich l Milan l Padua l New Haven l New York Greenwich l San Francisco l Los Angeles l Rancho Santa Fe l San Diego Singapore l Hong Kong l Tokyo l Sydney l British Virgin Islands

1: Group re-organisations & AGAs Landlord & Tenant (Covenants) Act 1995 introduced ‘authorised guarantee agreements’ (AGAs) L Lease T 2 AGA T 1 AGA T 1 T 2 T 3 assignments London l Geneva l Zurich l Milan l Padua l New Haven l New York Greenwich l San Francisco l Los Angeles l Rancho Santa Fe l San Diego Singapore l Hong Kong l Tokyo l Sydney l British Virgin Islands

2: Guarantors & AGAs L Guarantee Lease G ‘SAGA’ T 1 AGA G T 1 T 2 London l Geneva l Zurich l Milan l Padua l New Haven l New York Greenwich l San Francisco l Los Angeles l Rancho Santa Fe l San Diego Singapore l Hong Kong l Tokyo l Sydney l British Virgin Islands

3 G 1 ‘SAGA’ G 1 G 1 ‘GAGA’ T 1 e ven if ‘voluntary’ T 1 T 2 Good Harvest v Centaur (2010) K/S Victoria v House of Fraser (2012) London l Geneva l Zurich l Milan l Padua l New Haven l New York Greenwich l San Francisco l Los Angeles l Rancho Santa Fe l San Diego Singapore l Hong Kong l Tokyo l Sydney l British Virgin Islands

4 G 1 e ven if ‘voluntary’ T 1 G 1 EMI Group v O&H Q1 Ltd (2016) London l Geneva l Zurich l Milan l Padua l New Haven l New York Greenwich l San Francisco l Los Angeles l Rancho Santa Fe l San Diego Singapore l Hong Kong l Tokyo l Sydney l British Virgin Islands

5 G 1 (Parent) G 1 (Parent) T 1 T 2 T 1 (GroupCo B) (GroupCo A) (GroupCo A) House of Fraser case London l Geneva l Zurich l Milan l Padua l New Haven l New York Greenwich l San Francisco l Los Angeles l Rancho Santa Fe l San Diego Singapore l Hong Kong l Tokyo l Sydney l British Virgin Islands

6 Parent Parent Parent A A Parent GroupCo A GroupCo B (GroupCo C) A (strong) (weak) (weak) London l Geneva l Zurich l Milan l Padua l New Haven l New York Greenwich l San Francisco l Los Angeles l Rancho Santa Fe l San Diego Singapore l Hong Kong l Tokyo l Sydney l British Virgin Islands

Stamp Duty Land Tax – New Rates Commercial Freehold Acquisition Purchase pre - 17 March 2016: Purchase Price Percentage Rate SDLT Due £30,000,000 4% £1,200,000 Purchase post - 17 March 2016: Purchase Price Percentage Rate SDLT Due bands Up to £150,000 0% £0 £150,000 to £250,000 2% £2,000 Above £250,000+ 5% £1,487,500 Total SDLT Due £1,489,500 Share acquisition: Purchase Price Percentage Rate SDLT Due £30,000,000 0.5% £150,000 London l Geneva l Zurich l Milan l Padua l New Haven l New York Greenwich l San Francisco l Los Angeles l Rancho Santa Fe l San Diego Singapore l Hong Kong l Tokyo l Sydney l British Virgin Islands

Commercial Leasehold Acquisition Annual Rent: £1.5m Pre-17 March 2016: 10 year retail unit lease with a break clause: Rent Bands Percentage Rate SDLT due Up to £150,000 0% £0 Above £150,000+ 1% £123,249 Total SDLT due £123,249 Post-17 March 2016: 10 year retail unit lease with a break clause: Rent Bands Percentage Rate SDLT due Up to £150,000 0% £0 £150,000 to £5,000,000 1% £48,500 Above £5,000,000+ 2% £149,498 Total SDLT due £197,998 Post-17 March 2016: 5 year retail unit lease with an option to renew after 5 years: Rent Bands Percentage Rate SDLT due Up to £150,000 0% £0 £150,000 to £5,000,000 1% £48,500 Above £5,000,000+ 2% £35,451 Total SDLT due £84,951 London l Geneva l Zurich l Milan l Padua l New Haven l New York Greenwich l San Francisco l Los Angeles l Rancho Santa Fe l San Diego Singapore l Hong Kong l Tokyo l Sydney l British Virgin Islands

Minimum Energy Efficiency Standards (MEES) 1. What does MEES mean for you: • From 1 April 2018 it will be illegal for a landlord to grant a new letting of a commercial property that has an Energy Performance Certificate with an F or G rating . • From 1 April 2023 this will apply to all lettings including renewals The recent ‘Green to Gold’ Summer 2016 Report by Bilfinger GVA has 2. revealed some interesting statistics: • 57% of respondents have assessed their portfolio’s risk profile in regards to these regulations • 98% of respondents think that MEES will lead to increased capital expenditure • 93% of respondents think that MEES will have an impact on pricing London l Geneva l Zurich l Milan l Padua l New Haven l New York Greenwich l San Francisco l Los Angeles l Rancho Santa Fe l San Diego Singapore l Hong Kong l Tokyo l Sydney l British Virgin Islands

Minimum Energy Efficiency Standards (MEES) 3. What should you be looking out for: From a Landlord perspective: • Carry out a review of your portfolio to determine how much of your portfolio is at risk • Sell those poor performing assets or invest to improve their performance • Consider the extent to which these obligations can be passed on to your tenants either in existing leases and/or in new leases From a Tenant’s perspective: • What does your current lease provide? • Is this an opportunity? • Should you consider exercising a break/not renewing and move to a more efficient building London l Geneva l Zurich l Milan l Padua l New Haven l New York Greenwich l San Francisco l Los Angeles l Rancho Santa Fe l San Diego Singapore l Hong Kong l Tokyo l Sydney l British Virgin Islands

Contact details Paul Brecknell James Martell Partner Partner Tel: +44(0) 207 597 6037 Tel: +44(0) 207 597 6664 paul.brecknell@withersworldwide.com james.martell@withersworldwide.com London l Geneva l Zurich l Milan l Padua l New Haven l New York Greenwich l San Francisco l Los Angeles l Rancho Santa Fe l San Diego Singapore l Hong Kong l Tokyo l Sydney l British Virgin Islands