23rd November 2009

VALUATION 23rd November 2009

Offices to the Rear, Hodgsons Belprin Road, Beverley HU17 0LN

CONTENTS:

SITUATION.....................................................................................5 DESCRIPTION................................................................................6 ACCOMMODATION......................................................................7 SERVICES.......................................................................................8 TENURE..........................................................................................9 LOCAL AUTHORITY.....................................................................9 TOWN PLANNING.......................................................................10 RATEABLE VALUE.....................................................................10 ENVIRONMENTAL CONSIDERATIONS..................................10 INSURANCE.................................................................................13 GENERAL COMMENTS..............................................................13 VALUATION.................................................................................16 APPENDIX A Site Plan..........................................................................................18 APPENDIX B Location Plan..................................................................................20 APPENDIX C Instructions.....................................................................................22

Our ref:

CG/SE/BelprinRd.FiND (5979)

Your ref: 2nd December 2009

Date:

FAO C. Hodgson Esq. Find Hurn Lodge 13 New Walk Beverley HU17 7AE

Dear Sirs,

Re:

Property: Customer:

Offices to the Rear, Hodgsons Belprin Road, Beverley HU17 0LN FiND

Further to instructions confirmed in our letter dated 18th November 2009 for us to advise on the market value of the above mentioned property and following our inspection on 23rd November 2009, we are pleased to submit our formal report.

We confirm that the valuation has been carried out to determine the market value for advice on market rental value and in accordance with the RICS Valuation Standards (The Red Book). The valuation, unless otherwise stated, is provided subject to the Standard Limitations and Assumptions set out below:

This report is to be regarded as confidential to FiND and their professional advisers. Consequently, and in accordance with current practice, no responsibility is accepted to any third party in respect of the whole or part of its contents.

Should the

circumstances under which the report was commissioned alter we reserve the right to withdraw or alter our advice.

This report and valuation may be subject to monitoring under the Institution’s conduct and disciplinary regulations.

We have not carried out a structural survey of the property nor have we inspected woodwork, steelwork or other parts which are covered, unexposed or inaccessible and have assumed these parts to be in good repair and condition. We cannot express an opinion about or provide advice upon the condition of parts not inspected and this should not be taken as making any implied representation or statement.

We have not carried out any soil stability tests to confirm that the land has any significant load bearing problems which would necessitate unusual or expensive foundations for the current, or any proposed buildings. Neither have we been advised that the property concerned has, or requires any abnormal foundation work. In the event that adverse conditions are subsequently encountered, then this may affect our valuation.

The property was inspected on 23rd November 2009 at which time the weather was dry. The property was viewed from ground level.

We confirm that we have relied on information provided by C. Hodgson Esq., Hodgson Sealants Limited, local agents and information available within the public domain.

We confirm that the valuation has been carried out by Colin Garvin M. Sc. MRICS, a Chartered Surveyor since 1983.

Our report is set out in numbered paragraph format as follows:

SITUATION The property is situated on Belprin Road. It is shown edged green on the extract plan in Appendix A and its location is further illustrated by the map in Appendix B. Any plans provided are for identification purposes only, and verification of boundaries should be with the title deeds only.

Beverley is the county town for the East Riding of Yorkshire and is a busy commercial and tourist centre. It has an immediate population of around 30,000 (2001 census) and has experienced rapid growth during the last ten years with large housing developments to both the north and south of the town.

There have been recent discussions in the local newspapers and other news media concerning the long term redevelopment of the Council owned depot and other buildings fronting Grovehill Road and Beck View Road. The proposals include an eleven acre retail park, something which would have a long term effect on the area. The details are not finalized at the present time and there has been no formal application made. Further details can be found on the Local Planning Authority website and also the

website

of

the

preferred

developer,

Castlemore

(www.castlemore.co.uk).

There are also proposals for another major development closer to the town centre, focused on the former Clariant chemical works and Army Transport Museum bounded by Flemingate, Armstrong Way, Grovehill Road and St Nicholas Road. The proposals are also not finalized, but consist of a mix of: shopping, office, light industrial, leisure, residential and educational uses. The scheme has generally been welcomed by the local population.

The recent consent given to the Southern Relief Road is another development that will benefit the town. This will link Victoria Road (A164) and Hull Road (A1174) via Long Lane where there will be a park and ride facility. This will have the effect of routing through traffic around the east side of the town in particular, Swinemoor Lane and increase traffic flows on that side to the benefit of the town centre.

Belprin Road runs off Swinemoor Lane on the east side of the town. The majority of the land to the east of Swinemoor Lane is given to industrial uses and Belprin Road provides access to the subject property as well as Bush Tyres, ABI Plc Engineering Works and the rear of Chem-Dry’s offices, YMC Limited, The Plumb Centre, The Yorkshire Bed Company.

DESCRIPTION The property is a typical 1980’s single storey office block which was originally built as part of the Hodgson Sealants industrial complex off Belprin Road.

It is a framed construction with (we are informed) a shallow pitch asbestos sheet covered roof. The roof is not visible from ground level due to the profile metal sheet cladding which forms the eaves/facia to the building on all sides. The walls are of cavity brick. To the front of the property there is an extended porch similarly clad in profile metal sheeting.

Internally the property is currently arranged as a combination of open plan and cellular offices with a mixture of solid and stud partitions. We have assumed that due to the frame nature of the construction none of these internal walls are load bearing.

The internal finishes largely reflect the age of the building and include majority suspended ceilings with recessed fluorescent lighting, emulsion and plaster walls and carpets on solid concrete floors.

Fittings include

electrical outlets and telephone sockets, mostly arranged within perimeter walls but not on a scale that reflects the facilities provided by modern perimeter or floor based trunking.

Externally there is a large parking area in front of the property accessed via a shared section of yard which opens directly onto Belprin Road. The shared yard section serves other buildings within the Hodgson Sealants industrial complex and the shared access, office building and other buildings are enclosed by way of galvanized metal palisade fencing and double swing gates.

ACCOMMODATION We do not propose to elaborate in detail on the accommodation, but briefly it comprises the following:

sq ft

sq m

Offices

1,742

161.84

Kitchen

171

15.89

Total:

1,913

External: We estimate the site extends to approximately 824 m2 (8,864 ft2, 0.20 acres and 0.08 hectares). The footprint of the buildings (Gross External Area at ground floor only) occupies about 26% of the site, with the ratio to Gross Internal Area (including all levels) being 24%.

The measurement of the property has been carried out in accordance with the RICS Code of Measuring Practice, 6th Edition.

SERVICES We believe mains services of water, electricity, drainage and gas are connected or available. We recommend that if confirmation of connected services is required, appropriate verification can be carried out by legal adviser by local search or request to the supply companies.

The property benefits from a perimeter radiator central heating system fired from a gas combination boiler located in the kitchen.

Services have not been tested. As regulations governing the installation of services change from time to time, where no adverse comments have been made this should not be taken as an indication of compliance with the latest regulations.

It is essential that any gas appliances in the building have a safety certificate issued by a registered member of the Council for Registered Gas Installers in accordance with The Regulatory Reform (Fire Safety) (England and Wales) Order 2005.

It is also important that gas

appliances are maintained on an annual contract so as to ensure their continuing safety.

We would also recommend regular safety checks of the electrical system and appliances in accordance with IEE Regulations and the Health and Safety Guidelines to BS 7671.

TENURE We are advised that FiND intend to lease the property on the basis of a 5 year term with a 3 year break on the tenant's part and on full repairing and insuring terms.

We have been informed that the freehold to the property is held by Hodgsons Sealants Limited.

No official search has been made on the title and we have prepared our report based upon the assumption that it has good title.

We are unaware of any rights of way, easements or restrictive covenants which may adversely affect the property.

Our valuation reflects this

assumption, but we would recommend legal advisers make further investigations.

Tenancies: there appear to be no current tenancies on the building and we have therefore assumed that the current freeholder enjoys vacant possession of the building and is entitled to grant the lease referred to above.

LOCAL AUTHORITY The property falls within the East Riding of Yorkshire Council administrative area.

TOWN PLANNING We have investigated the information made available by the Local Planning Authority through Public Access via the internet.

The information

available suggests that an application has been made for a change of use from Offices to that of Day Centre which we assume is to in order to accommodate the new tenant's activities.

We have not been made aware of any adverse planning or highways proposals which might affect our valuation but this should be verified by local search.

RATEABLE VALUE The Valuation Office Agency website shows a single entry for Hodgson Sealants Limited, Belprin Road, Beverley and therefore we assume that there is no individual assessment for this building. We believe that now it is being intended to be used as a separate entity from the main factory complex a new rating assessment should be made.

ENVIRONMENTAL CONSIDERATIONS We are not aware of the content of any environmental audit or other environmental investigation or soil survey which may have been carried out on the property and which may draw attention to any contamination or the possibility of any such contamination. In undertaking our report we have assumed that no contaminative or potentially contaminative uses have ever been carried out on the premises.

We have not carried out any investigation into past or present uses either of the property or any neighbouring land to establish whether there is any potential for contamination from these uses or sites adjacent to the property, and have therefore assumed that none exist.

Local Authorities are now charging for the disclosure of environmental information that they hold. If required, we can obtain such information, or a site specific environmental assessment, at an additional cost.

Our inspection did not disclose any activity which we would consider to have a harmful affect but we must stress that this information has been obtained through observation and has not been checked with local authority records.

Should it be established however that contamination, seepage or pollution exists at the property or any neighbouring land, or that the premises have been or are being put to a contaminative use this might reduce the value now reported.

Hazardous Materials: we have not arranged for any investigation to be carried out to determine whether or not any deleterious material or hazardous material has been used in the construction of the property or has since been incorporated, and we are therefore unable to report that it is free from risk in this respect. For the purpose of this valuation we have assumed that such investigation would not disclose the presence of any such material in any significant event.

We would also draw attention to the Control of Asbestos Regulations 2006 which came into force on 13 November 2006 and which brings together the three previous sets of Regulations covering the prohibition of asbestos, the control of asbestos at work and asbestos licensing.

We have not attempted to identify the presence of asbestos within the building other than any specifically mentioned. However it may be considered prudent to have an asbestos audit carried out in order to comply with current Regulations.

Given the age of the property, lead piping in the water or heating systems is a possibility. This is not recommended for a number of reasons: it is unreliable and can fail without warning, where it joins other metals it can cause galvanic action resulting in corrosion and finally it has certain health implications if it is in the drinking water supply. The pipes may turn out to be disused, but if this is not the case we recommend replacement at an appropriate time.

Paint with a high lead content may have been used in the past in these premises. Even low levels of lead in paint can be damaging to health, particularly to children. Great care should be taken to prevent inhalation when sanding or burning off old paintwork.

Whilst no indication of root action damage was noted and the referral to a tree specialist is not considered necessary, no assurance can be given such damage will not occur as our inspection was of a limited visual nature. The presence of trees can have a considerable influence particularly in clay soils. We recommend that buildings insurance covering subsidence is in place and regular monitoring is carried out - if damage is noted the Local Authority should be notified immediately.

INSURANCE The reinstatement value for insurance purposes should be a figure in the region of £320,000 (Three Hundred and Twenty Thousand Pounds) subject to the property being rebuilt using modern methods of construction and materials and to include for professional fees, Local Authority fees, demolition and site clearance. VAT has not been taken into account.

Any reinstatement figure given is for guidance only and a full detailed value should be obtained from a Quantity Surveyor.

In assessing the reinstatement value we have not taken into account any requirement for decontamination of land which might be imposed by the Environmental Agency or other statutory body should total rebuilding be necessary, following an incident generating a claim.

GENERAL COMMENTS We have considered the rental value of the property on the basis of being occupied as offices.

The property comprises a standard purpose built office facility constructed and presented in accordance with its previous function as ancillary offices to a large industrial complex.

The property appears to be about 25 years old and has severed as an ancillary office to the main complex throughout that time.

During this period of time the demand for power and communication outlets within offices has changed substantially and we would anticipate that were a modern office user to lease the premises and upgrade of these services would be required.

Use of the premises as a day care centre does not fall into a category of property use that is openly traded on the market and therefore values are usually based on the most viable alternative commercial use which would be that of offices and the figures shown in the following section reporting market rental value, reflect this situation.

FiND intends to take a 5 year lease of the property on full repairing and insuring terms. We would advise that certain parts of the structure and certain current needed repairs are excluded from the tenants liability and these would include:

A number of the double glazed windows are showing signs of edge seal failure and have misted up between the panes. The defective units should either be replaced or removed from the tenant's liability to repair. There are a number of cracks to the internal walls at the north end of the block together with a section of hollow floor within the kitchen area. We are not certain what has caused these cracks, but they do not appear to be new and are at the maximum only a few millimetres wide. There is no sign of corresponding cracking to the outside leaf of brickwork.

We are obviously unable to see the construction of the property below ground level but it is possible that the frame and the inner leaf of the external walls together with internal partition walls have settled at different rates. Again we would recommend that all liability to the tenant for the existing defects and any progression of similar defects is removed from their liability under the lease. We understand that the roof, which is not visible from ground level, is of asbestos cement sheets. Given the age of the building we believe it is unlikely that this material is in a dangerous state but without access we are unable to confirm this. Although it is unlikely that the material will be in a significantly worse state at the end of the proposed lease than it is now it might also be advisable for the tenant to exclude liability for carrying out substantial repair or replacement of the roof. There are visible areas of damp within the reception area, the men’s WC and the offices on the south east corner of the property. Without further invasive investigations we do not believe it is possible to categorically state why this is happening but we did note that the ground levels in these areas are high in relation to the position of the damp proof course on the external walls. In the case of the damp within the men’s WC and reception area, the raised area immediately outside, forming part of the covered entrance area appears to be bridging the damp proof course and this may be a reason for the damp in these areas. Furthermore on the south east corner of the property the downpipe from the concealed rainwater gutter discharges directly on to (raised) ground adjacent to the wall. It appears that in the original design of the property this water would have been discharged across the adjoining tarmac pathway and soak into the ground to the other side of that pathway. Again the tenant should ensure the defects as specifically removed from their repairing liability.

Finally we noted that the decoration of the window frames, particularly on the east and south facing elevations is particularly poor. We recommend that as a condition of taking the lease FiND should require the landlord to redecorate or agree to remove the repairing liability. As a building which incorporates industrial style cladding (to the eaves sections) we must draw attention to insurance problems which have been highlighted in the past. When applying for insurance we recommend that this form of construction is brought to the attention of the insurers in order to confirm that no problems exist.

VALUATION Having regard to all factors, we are of the opinion that the market rental value is £16,250 (Sixteen Thousand Two Hundred and Fifty Pounds) per annum subject to the property being let on a 5 year lease with a 3 year break in favour of the tenant and on full repairing and insuring terms but assuming that the major defects highlighted above are not the responsibility of the ingoing tenant.

We do not believe that there are any assumptions, special assumptions, reservations, any special instructions or departures from a normal valuation for this purpose.

Taxation and Mortgages: no allowance has been made for taxation which may arise, whether actual or notional on any future disposal of the property. Neither is any allowance made on any basis for the existence of a mortgage or similar financial encumbrance on or over the property.

The Building Regulations control the construction of new buildings or the extension of existing ones and are liable to amendment from time to time. In this report we have not attempted to draw attention to all instances where the manner of construction is different to that insisted upon by the latest Regulations.

This report does not take into account any requirements for Health and Safety Law, Disability Discrimination Act 1995, or in connection with The Regulatory Reform (Fire Safety) (England & Wales) Order 2005. We would therefore recommend these issues are considered and if necessary discussions should take place with the appropriate Regulatory Bodies.

Neither the whole nor any part of this valuation report nor any reference thereto may be included in any published document, circular or statement or published in anyway without the valuers’ written approval of the form and context in which it may appear.

Neither the valuer nor the practice has a conflict of interest in carrying out this valuation which does not take into account any fixtures or fittings that would normally pass with the property. We confirm that the valuer is an independent valuer as defined in the “Red Book”. The valuer has not had any previous material involvement with the property.

Yours faithfully,

C Garvin M. Sc. MRICS

APPENDIX A Site Plan

November 2009

Not to scale

Offices to the Rear, Hodgsons, Belprin Road, Beverley, HU17 0LN

Reproduction from the Ordnance Survey with the sanction of the Controller of HM Stationary Office, Crown Copyright reserved

FOR IDENTIFICATION PURPOSES ONLY

APPENDIX B Location Plan

APPENDIX C Instructions