Prime Long-Income Logistics Investment Opportunity

T E N N E N T CA L E D ON I A N BR EW E R I E S DI ST R I BU T ION WA R E HOUS E

» A rare opportunity to acquire a prime long income distribution

warehouse let to Tennent Caledonian Breweries UK Ltd with a

parent company guarantee from C&C Group plc.

» Located in Cambuslang, which is considered Glasgow and

Scotland’s premier distribution location due to its strategic

position and unrivalled motorway access to the M74, M8, M73,

M80 and M77.

» The Property serves as a principal UK distribution facility for

Tennent’s Lager, Caledonia Best, Magners Cider and the

Matthew Clark wholesale business and is mission-critical to the

tenant’s operation.

» Modern, well-specified standalone distribution warehouse

extending to 135,540 sq ft which will increase to 193,698 sq ft on

completion of a 58,158 sq ft building extension to be delivered at

the cost of the vendor.

» Currently let to Tennent Caledonian Breweries Ltd

with a parent company guarantee from C&C Group plc

on a full repairing and insuring lease expiring 9th May

2027 at a passing rent of £813,000 per annum which

reflects a rent of £6.00 per sq ft.

» Following practical completion of the building

extension, the lease will be varied to provide a 15-year

term over the whole of the extended building at an initial

rent of £1,310,000 per annum, reflecting a sensible rate

of £6.76 per sq ft, subject to 5 yearly rent reviews to

the higher of the passing rent, OMRV or RPI, subject

to a collar and cap of 1% and 3% pa respectively.

» The recently agreed re-gear confirms Tennent’s

long-term commitment to the location.

» Heritable Interest (Scottish equivalent of

English Freehold).

I N V E ST M E N T SU M M A RY

» Our client is seeking a total consideration in

excess of £27,250,000 exclusive of VAT for

their Heritable Interest in the Property, to be

phased over two payments on the basis of an

initial payment for the existing asset followed

by a second balancing payment on practical

completion of the building extension and

commencement of the varied lease.

» Based upon the reversionary rent, a purchase

at this level would reflect a Net Initial Yield of

4.50% and a capital rate of £141 per sq ft after

allowing for standard purchaser’s costs of 6.76%.

02

Glasgow is home to three of Scotland’s largest and most prestigious universities: University of Glasgow, University of Strathclyde, and Glasgow Caledonian University as well as the world-renowned Glasgow School of Art and the Royal Conservatoire of Scotland. The City is firmly established as a ‘knowledge city’ and with more than 185,000 students from 140 countries, its metropolitan region has the second largest student population in the UK and more international students studying in competitive universities than almost any medium-sized city (1-3 million) in the world.

Glasgow has one of the most highly skilled and flexible workforces in Europe. 46% of the current working age population in the City Region is educated to degree level or above and the City is a preferred destination for an ever-increasing number of FTSE 100 and AIM listed companies. It is now widely acknowledged that Glasgow represents a mature global investment proposition for corporate and real estate investment. Major global companies in business and finance, life sciences, digital technology, engineering, manufacturing, creative industries, maritime services and food and drink have opted for Glasgow as their preferred business location. Notably, within the past 5 years Barclays Bank, JP Morgan and Morgan Stanley have established single-occupied new-build HQ buildings within the City.

G L A SGOWGlasgow is the economic, cultural, sporting and academic heart of scotland and is one of Europe’s most vibrant and cosmopolitan cities.

With a population of 622,000 and an extended catchment population of circa 2.3 million people within one hour’s drive, which is more than 40% of Scotland’s entire population, Glasgow is Scotland’s largest city and the third largest urban centre in the UK. The City sits within the Central Belt Region, which is home to 3.5 million people, making it one of the 20 largest urban regions in Europe.

The Glasgow metropolitan population is forecast to grow at a faster rate than in Lisbon, Helsinki and Amsterdam, and as fast as New York, Los Angeles and Paris. Between 2018 and 2035, this equates to a growth of 175,000 residents, around 130% more than the population growth recorded between 2000 and 2018.

Glasgow is Scotland’s largest centre of employment and an economic powerhouse, generating approximately £19bn in Gross Value Added (GVA) each year. In 2018, Glasgow’s metropolitan area generated £42.9bn of GVA, equating to 30% of the Scottish total.

03

Cambuslang is considered Glasgow and Scotland’s premier distribution location, largely due to its strategic position and unrivalled motorway access.

The Property is located approximately 4 miles south east of Glasgow city centre and offers best in class road connectivity across Scotland via four-way interchanges at Junctions 2 and 2A of the M74, which provide direct access to the city’s orbital motorway network, the City Centre, Glasgow International Airport, the central belt motorway network and to England.

T RAV E L T I M E SCity Distance Travel Time

Glasgow 6.1 miles 14 mins

Stirling 27.1 miles 35 mins

Edinburgh 44.7 miles 55 mins

Carlisle 91.6 miles 1 hour 25 mins

Aberdeen 157 miles 2 hours 40 mins

Manchester 211 miles 3 hours 10 mins

Liverpool 214 miles 3 hours 20 mins

Birmingham 285 miles 4 hours 20 mins

London 407 miles 6 hours 10 mins

LO CAT ION

Edinburgh

Glasgow Livingston

Bathgate

Penicuik

Hamilton

Cumbernauld

Motherwell

Falkirk

StirlingDunfermline

M74A71

A89A899 A71

M77

M73

M8

M9

M80

M80

Glasgow

Carlisle

Manchester

Birmingham

London

Liverpool

Stirling

Aberdeen

Edinburgh

M6

M8

M74 A68

A9

M1

A1(M)

M5

M4

M40

M40

M11

04

BOC Gas

Hertz

CCG

Cabot

Batleys

Booksource DHL

A724

Dale Avenue

GlasgowCity Centre

M8 / Edinburgh / The North / The South

CCG

Vetichi Flooring

EnconInsulation

BiffaWasteCleveland

Cable

Parcelforce Worldwide

M&HLogistics

Camas Walk(Dawn Homes)

Muller

DPD

Newsquest

Siemens

B&Q

Regis

Scottish Power

Liberty Steel

SpeedyHire

Royal MallSpicer

M74

J2A

Bogleshole Road

The Property is prominently situated on Dale Avenue and is directly accessed from Cambuslang Road to the north and Bogleshole Road to the south.

S I T UAT IONAs a result of its unrivalled connectivity, Cambuslang attracts a prestigious range of logistics businesses including DHL, DPD, Royal Mail, Parcelforce Worldwide, Kingfisher, Scottish Power, Muller, Spicer and BOC Gas.

J2A

J2

Bogle

shol

e Rd

(A724) Cambuslang Rd

Fulla

rton

Rd

Cly

defo

rd R

d

River Clyde

Dale A

ve

M74

Clydesmill Rd

Cambuslang Rd

05

The Property serves as the primary distribution hub for Tennent’s Lager which is the tenant’s flagship brand. Tennent’s was founded in Glasgow in 1885, is exclusively brewed here at the Wellpark Brewery on Duke Street and is the bestselling lager in Scotland.

In addition to Tennents Lager, the Property is a principal UK distribution facility (serving Scotland and beyond) for all Tennent Caledonian and C&C Group brands including Bulmers, Magners, Menabrea, Caledonia Best, Heverlee, Orchard Pig, Drygate and others.

C&C Group complements its branded business with third-party drinks wholesaling and distribution in its key domestic markets of Ireland and the UK. The group’s principal agency business is the AB InBev beer portfolio which C&C distribute in Ireland and Scotland from the Property together with Menabrea, the premium Italian lager, Pabst Blue Ribbon, the American heritage beer and Tsingtao, the UK’s leading Chinese beer. In addition to the above brands, Tennent’s brew numerous supermarket own-brand beers at Wellpark Brewery which are then distributed from the Property.

In April 2018, C&C Group announced the acquisition of both Matthew Clark and Bibendum, two of the UK’s largest independent drinks wholesalers to the hospitality industry. Combined, both businesses serve over 24,000 outlets from national prestige hotel chains to independent pubs, clubs, and restaurants. C&C Group’s Matthew Clark warehouse and transport operation will be consolidated into the Tennent’s facility in Cambuslang further cementing the ‘mission critical’ nature of the Property.

In addition, the tenant’s recent commitment to a 58,158 sq ft building extension and 15-year lease extension demonstrates the long-term strategic importance of the Property and its location to them.

DA L E AV E N U E , CA M BUS L A NG - T E N N E N T CA L E D ON I A N A N D C&C G ROU P P LC DI ST R I BU T ION WA R E HOUS E

Glasgow City CentreWellpark Brewery

BOC Gas

Camas Walk(Dawn Homes)

LibertySteel

M74

J2

Dale Avenue

Bogleshole Road

06

An Agreement for Lease (AFL) has been contractually agreed with the Tenant whereby they have committed to a 58,158 sq ft building extension.

Upon completion, the warehouse will extend to a total floor area of 193,698 sq ft and the site density will increase to 30%. Full details and specification of the extension can be provided upon request.

The Property has been measured in accordance with The RICS Code of Measuring Practice (6th Edition) on a Gross Internal basis, summarised below:

UseExisting GIA

(sq m)Existing GIA

(sq ft)Extended GIA

(sq m)Extended GIA

(sq ft)

Warehouse 11,724.26 126,200 17,127.28 184,358

Office 867.70 9,340 867.70 9,340

Total 12,591.96 135,540 17,994.98 193,698

The Property comprises a modern, well-specified standalone distribution warehouse of steel portal frame construction arranged over ground level with internal and external office/staff accommodation arranged over two levels. The Property benefits from 20 level access doors, 2 dock levelers, 12 metre eaves height, an extensive concrete yard and approximately 175 car parking spaces. The building extends to a total gross internal floor area of 135,540 sq ft of which 9,340 sq ft comprises office accommodation. The site extends to approximately 15 acres equating to a low site density of 21%. The Property is currently utilised by the tenant as a regional distribution facility for their Tennent’s Lager, Caledonia Best and Magners Cider brands and is mission-critical to their operation.

DE SC R I P T ION WA R E HOUS E E X T E NS ION

ACCOM MODAT ION

S I T E P L A N

B

-

BO

GLE

SH

OLE

RO

AD

PRIE

STLEY WA

Y

DA

LE

AV

EN

UE

Approximate title boundary, existing unit and proposed extension.

07

Current TenancyThe Property is currently let in its entirety on Full Repairing and Insuring terms to Tennent Caledonian Breweries UK Ltd (Registered No SC362352) with a parent company guarantee in place from C&C Group plc (CRO 383466). The current passing rent is £813,000 per annum which equates to £6.00 per sq ft, with lease expiry on 9th May 2027, thus providing an unexpired term certain of 5.6 years. The existing review clause is on a 5-yearly basis to Open Market Rental Value, with one remaining review on 10th May 2022.

Building ExtensionAn Agreement for Lease (AFL) has been contractually agreed with the Tenant whereby they have committed to a 58,158 sq ft building extension. The AFL is subject to full planning consent which is expected to be granted in October/November 2021. The footprint of the extended building will increase the site density to 30%.

Tenancy – Varied Lease on Delivery of Building ExtensionFollowing practical completion of the building extension, the lease will be varied to provide a 15-year term over the whole of the existing building and the building extension. The lease variation will come into effect 10 days following practical completion of the development works (“the Rent Commencement Date”) at which point the rent is to increase to £1,310,000 per annum which equates to £6.76 per sq ft. The tenant will receive a 11-month rent free period as part of this agreement from the Rent Commencement Date. The varied lease will provide for rent reviews at 5 yearly intervals with the initial rent to be revised to the greater of: (i) the passing rent; (ii) open market rental value; or (iii) the rent increased in-line with the All Items RPI Index over the preceding 5 years subject to a collar and cap of 1% and 3% per annum compounded annually.

T E NA NC Y Tenancy Summary

Existing Lease

TenantTennent Caledonian Breweries UK Ltd (Registered No SC362352)

Guarantor C & C Group plc (CRO 383466)

Floor Area 135,540 sq ft

Rent p.a. £813,000

Rent (sq ft) £6.00

Expiry 9th May 2027

Term Certain 5.6 years

Rent Review 10th May 2022 to OMRV

Repairing Obligation FRI

Varied Lease

TenantTennent Caledonian Breweries UK Ltd (Registered No SC362352)

Guarantor C & C Group plc (CRO 383466)

Floor Area 193,698 sq ft

Rent p.a. £1,310,000

Rent (sq ft) £6.76

Expiry15 years from practical completion

Term Certain 15 years

Rent Review

5 yearly upwards only to the higher of OMRV or RPI, subject to a collar and cap of 1% and 3% pa compounded

Repairing Obligation FRI

Heritable Interest (Scottish equivalent of English Freehold).

T E N U R E

08

Company Name (Number)

Current D&B

Rating

Year Ending

Sales Turnover (000’s)

Pre-Tax Profit

(000’s)

TangibleNet Worth

Tennent Caledonian Breweries UK Limited (SC362352)

4A3February

2020£222,399 -£10,625 £29,315,000

Tennent Caledonian is Scotland’s pre-eminent brewer. Based at the historic Wellpark brewery in Glasgow, they brew an industry-leading portfolio of beers led by the iconic Tennent’s Lager and Caledonia Best – for home and export markets across the world, including the USA, Canada and Europe. They employ over 300 people across the production and commercial arms of the business and since 2009 they have been part of C&C Group plc.

Tennent’s performed strongly in FY2021 and through the COVID-19 pandemic, with the underlying brand health reflected in Tennent’s gaining both volume and value share in the off-trade market. Tennent’s off-trade volume and value share of 26.5% and 21.6% respectively as at 21 February 2021 represents growth of 1.1% and 0.7% versus FY2020.

Tennent Caledonian Breweries UK LimitedSet out below is a summary of the key financial indicators for the Tenant, taken from the most up to date Dun & Bradstreet Credit Report:

Company Name (Number)

Current D&B

Rating

Year Ending

Sales Turnover (000’s)

Pre-Tax Profit

(000’s)

Tangible Net Worth

C&C Group Plc (CRO383466)

N2February

2020€1,719,300 €11,600 -€97,500,000

C&C Group plc, a FTSE 250 company, are a leading vertically integrated premium drinks company which manufactures, markets, and distributes branded beer, cider, wine, spirits and soft drinks across the UK and Ireland. They are the largest independent alcohol distributor across the UK and Ireland and their brands include Bulmers the leading Irish cider brand; Tennent’s, the leading Scottish beer brand; Magners the premium international cider brand; a range of super-premium and craft ciders and beers such as: Heverlee, Orchard Pig and Five Lamps; as well as Tipperary Water; and Finches soft drinks.

C&C is also the leading drinks wholesaler to the hospitality industry in the UK and Ireland, where it operates under the Matthew Clark, Bibendum, Tennent’s and C&C Gleeson brands.

C&C Group also has a strategic investment in Admiral Taverns, an award-winning tenanted pub company with circa 850 pubs across Great Britain.

C&C Group PlcSet out below is a summary of the key financial indicators for the Guarantor, taken from the most up to date Dun & Bradstreet Credit Report:

COV E NA N T - T E N N E N T CA L E D ON I A N BR EW E R I E S U K L I M I T E D

COV E NA N T - C&C G ROU P P LC

09

COVID-19 and FY2021 ResultsCOVID-19 and related restrictions have had an unprecedented, albeit short-term, impact on the drinks and hospitality sector.

With approximately 80% of C&C’s pre COVID-19 net revenue derived from the hospitality sector, the pandemic has had an unprecedented impact on the Group. For the year ended February 2021, C&C reported net revenue of €736.9 million, operating loss of €59.6 million and liquidity of €314.6 million.

Notwithstanding, C&C have successfully navigated the crisis and managed these challenges to date, maximising liquidity, reducing costs, and fulfilling off-trade demand from the immediate change in consumption dynamics.

The Group returned to profitability and underlying cash generation once trade restrictions were eased in July, August, and September 2020. Their core brands performed strongly in FY2021, with Bulmers, Magners and Tennent’s each gaining market share in the off-trade channel.

CEO Statement from FY2021 accounts:“We look to FY2022 with optimism and C&C continuing to play an integral role in the UK and Ireland drinks market with our brand and distribution assets appreciated by consumers, customers and brand owners alike. We are confident C&C will emerge from the pandemic stronger, more streamlined, and primed to deliver on our ambition to be the preeminent brand-led, final-mile, drinks distributor across our core markets which will ensure long term value for our shareholders.”

10

OccupationalDue to a favourable supply/demand dynamic, namely exceptional occupier demand coupled with a critical lack of Grade A space, headline rents for prime industrial stock are experiencing significant rental growth.

The supply of well specified 100,000 sq ft + units is critically low and is exacerbated further by a lack of speculative development – there are currently no units over 100,000 sq ft being speculatively developed in Scotland. In-light of the supply/demand imbalance coupled with strong occupier demand, the prime rent is forecast to break through £8.00 per sq ft in the medium term.

For example, quoting rents at Belgrave Logistics Park (a proposed new-build prime scheme in Bellshill) are £8.50 per sq ft for 30,000-50,000 sq ft units and £8.00 per sq ft for a 125,000 sq ft unit.

For pre-let bespoke design and build distribution/last mile units, rents range from £9.35 per sq ft (DHL, Clyde Gateway East) to £11.53 per sq ft (Amazon, Glasgow Business Park) and £12.15 per sq ft (Co-operative Group, Newhouse).

LO G I ST ICS M A R K ETInvestment2020 saw record investment of £450m into Scotland’s industrial market, representing an increase of 43% on the previous year and 45% above the five-year average.

The ongoing imbalance between demand and supply means the industrial sector continues to draw interest from a wide mix of investors. Annual spending on Glasgow industrials stands at record levels (£298 million), while average transaction-based yields have fallen to post-financial crisis lows amid competitive bidding for assets.

Recent notable transactions in Scotland include Blackbrook Capital’s acquisition of a 274,000 sq ft distribution unit in East Kilbride, let to Sainsbury’s, for £31m/4.68%. In addition, BP Pension Fund acquired a 71,000 sq ft distribution unit at Eurocentral, let to Stapletons Tyres, in January 2021 for £8.55m/4.55% and Aberdeen Standard acquired Royal Mail’s RDC in Wishaw in April 2021 for £11.35m/4.42% following

Key investment transactions:

Address Date Size

(sq ft) Tenant

WAULT (years)

Price NIY % Purchaser

Co-op Distribution Unit, Newhouse, M8

On the Market 47,500Co-operative

Group ltd18 £12,500,000 4.50% TBC

Clyde Gateway East, Glasgow Concluded Missive 50,034 DHL 15 £10,000,000 4.38%Aberdeen Standard

Investments

Fountain Drive, Inchinnan Under Offer 67,415 Elis UK Ltd 10.75 £6,448,000 4.00% TBC

Dovecote Road, Eurocentral Aug-21 98,877Clipper Logistics

& DX5 £12,250,000 4.49% Dunedin/Carlyle

Royal Mail Distribution Centre, Excelsior Park, Wishaw*

Apr-21 112,127Royal Mail Group Ltd

5.5 £11,350,000 4.42%Aberdeen Standard

InvestmentsTitan, Dovecote Road, Eurocentral

Q1 2021 122,575 The Scottish

Ministers (NHS)5 £14,320,000 5.01%

Lothian Pension Fund

Condor Glen, Eurocentral

Q1 2021 71,576 Stapletons Tyres 12 £8,550,000 4.55%BP

Pension FundSainsbury’s RDC, East Kilbride

Nov-20 274,069 Sainsbury's

Supermarkets Ltd14.5 £31,000,000 4.68% Blackbrook Capital

UPS, 30 South Gyle Crescent, Edinburgh

Oct-20 30,050 UPS7

(to break)£4,105,000 4.81% Private Investor

Prestonfield Park, Edinburgh Oct-20 99,835 Multi-let3.4

(to breaks)£14,450,000 4.96% Ribston

Amazon Way Dunfermline Sep-20 1,020,000 Amazon 11.4 £63,000,000 4.60% KFIM

Cutlins Road, Hermiston Gait, Edinburgh

Dec-19 215,745 Royal Mail 10.5 £25,400,000 5.20% Hines

Hop Hub, 10 Condor Glen, Eurocentral

Nov-19 129,183 Brewdog 20 £15,250,000 4.95%CBRE Global

Investors

their agreement to purchase a last-mile distribution unit in Clyde Gateway East, let to DHL, for £10m/4.38%.

Meanwhile, South Korean investor KB Securities’ acquisition of Amazon’s 1m sq ft fulfilment centre in Dunfermline for £63m/4.60% was Scotland’s largest ever single tenant logistics transaction.

The Scottish market benefits from an attractive yield arbitrage versus other prime UK regions, with the prime Scottish yield currently standing at 4% and trending keener.

Looking forward, strong occupier fundamentals and positive investor sentiment across the UK Industrial/Logistics markets are expected to drive continued record investment volumes and further yield compression.

*acquired as part of a larger portfolio.

11

Additional detailed information is available from an electronic data room. Access arrangements can be made available to interested parties.

The Property is elected for VAT, however, it is envisaged the transaction will be treated as a T.O.G.C. (Transfer of a Going Concern).

DATA RO OM

The Property has an EPC rating of B. A copy of the Certificate is available upon request.

E PC

VAT

Douglas WoodDirectorInvestment+44 (0)7826 947 231douglas.wood@avisonyoung.com

Ben FarrellAssociate DirectorInvestment+44 (0)7973 315 189ben.farrell@avisonyoung.com

F U RT H E R I N FOR M AT ION

Avison Young hereby gives notice that the information provided (either for itself, for any joint agents or for the vendors lessors of this property whose agent Avison Young is in this brochure is provided on the following conditions: 1. The particulars are set out as a general outline only, for the guidance of intending purchasers and/or lessees and do not constitute an offer or contract, or part of an offer or contract. 2. All descriptions, dimensions and references to this property’s condition and any necessary permission for use and occupation, and any other relevant details, are given in good faith and are believed to be correct. However, any intending purchasers or tenants should not rely on them as statements or representations of fact but satisfy themselves of their correctness by inspection or otherwise. 3. No person in the employment of Avison Young, or any joint agents, has any authority to make or give any representation or warranty whatsoever in relation to the property or properties in this brochure. 4. All prices quoted are exclusive of VAT. 5. Avison Young shall have no liability whatsoever in relation to any documents contained within the brochure or any elements of the brochure which were prepared solely by third parties, and not by Avison Young. September 2021

P ROPOSA LOur client is seeking a total consideration in excess of £27,250,000 exclusive of VAT for their Heritable Interest in the Property, to be phased over two payments on the basis of an initial payment for the existing asset followed by a second balancing payment on practical completion of the building extension and commencement of the varied lease.

Based upon the reversionary rent, a purchase at this level would reflect a Net Initial Yield of 4.50% and a capital rate of £141 per sq ft after allowing for standard purchaser’s costs of 6.76%.

Based upon the below RPI Growth Rate assumptions, a purchase at this level would provide the following running yield profiles following PC of the building extension and commencement of the Varied Lease:

RPI Growth Rate1% p.a 2% p.a. 3% p.a.

NIY 4.50% 4.50% 4.50%RY Year 5 4.73% 4.97% 5.22%RY Year 10 4.97% 5.49% 6.05%