Helical Bar Regulatory News (HLCL)

19 November 2015

Helical Bar plc ("Helical" or the "Company")

Helical takes control of The Bower office development in £250m transaction

· Transaction provides Helical with further London investment and development exposure

· Comprises 150,700 sq ft of office/restaurant space and development of a further 177,300 sq ft

· Takes London investment to c. 55% of portfolio, and reinforces commitment to the 'Tech Belt'

· Builds on successful lettings progress on phase one development of the scheme

Helical Bar plc is pleased to announce it has exchanged contracts on the purchase of 207 Old Street, London EC1 and 211 Old Street, London EC1, collectively known as The Bower development, for a combined price of £248m. The vendor was a joint venture company (the "Joint Venture") owned by Helical and an affiliate of Crosstree Real Estate Partners LLP ("Crosstree"). Simultaneously, Crosstree has agreed to acquire the Joint Venture's retail parade, at 183-213 Old Street, London EC1, for £23m. Last week, the Joint Venture announced the sale of Empire House, the hotel asset that comprised part of the 3.12 acre site, for £20.65m, to Standard Life Investments Long Lease Fund.

In undertaking the transaction, Helical will acquire 207 Old Street Unit Trust and 211 Old Street Unit Trust and dispose of its interest in the Old Street Retail Unit Trust, the asset owning entities, for a combined net £76m payment to Crosstree, plus refinancing the existing external debt of £88m.

Helical will fund the acquisition through existing cash resources of £18m and new bank finance of £200m, £146m of which will be drawn down to complete the purchase with £54m available to fund the redevelopment of 207 Old Street. This second phase will provide 170,000 sq ft of office space and 7,300 sq ft of retail/restaurant space, on completion of the works. Helical's existing cash equity plus share of profits to date, a total of £84m, will remain invested in the scheme.

211 Old Street, comprising The Warehouse and The Studio, is Phase One of The Bower development and has been substantially pre-let with Agreements for Lease signed on 92% of the redeveloped space generating c. £7.2m pa, once rent free periods have expired, at an average rent over both the office and retail space of £51.79 psf. The Tower, at 207 Old Street, is the second phase of The Bower development and works will commence before Christmas. It has a construction budget of circa £70m and is due for completion in Q4 2017.

Gerald Kaye, Helical's Development Director, said:

"We acquired The Bower, in joint venture with Crosstree, at a time when the renaissance of the Old Street quarter was in its early days, and have seen the area transformed over the last three years, supported in part by the achievements we have made at the scheme to date. We have been seeking to increase our investment holdings in London for some time as well as to retain ongoing development exposure. We have recently sold our London office assets at Enterprise House, Clifton Street and Artillery Lane and this acquisition of The Bower restates and reinforces our commitment to London, and in particular the 'Tech Belt' area. The acquisition will increase our London holdings to c. 55% of our investment portfolio. We expect The Bower will be a significant long term holding for Helical and we are confident it will contribute to the continued growth of the Company."

Sean Arnold/Nick Lyle, Founding Partners of Crosstree, added:

"We are proud to have worked with the team at Helical on the significant repositioning of this derelict set of buildings into a vibrant, successful mixed-use project in the heart of London's creative district. We have every confidence in the success of Phase Two of the Bower and look forward to our continued ownership of the standalone retail asset here. We would also like to thank the CRE team at Deutsche Bank for supporting the joint venture's ambitions for the project at a time of limited speculative development finance, as well as the leasing teams at Hatton and JLL for their great work on the scheme to date."

-ENDS-

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Notes to editors:

The Bower, Old Street, London EC1

This 3.12 acre site was acquired in November 2012 for £60.8m in a joint venture between Helical (33.3%) and Crosstree (66.7%). The site is in the heart of an area which has become a "creative halo", a district of London which is a hub for technology, media and telecommunications companies and which is benefitting from substantial investment in infrastructure.

Since acquisition, a planning consent was obtained to increase the floor space by 116,000 sq ft NIA to refurbish existing areas and significantly upgrade the public realm with the creation of a new pedestrian street.

211 Old Street, London EC1

Building work started on Phase One of the redevelopment of The Bower in January 2014, comprising The Warehouse (128,366 sq ft) and The Studio (22,316 sq ft), and is due for completion in November 2015.

The current letting position on Phase One is as follows:-

207 Old Street, London EC1

Phase Two of the redevelopment of The Bower is expected to commence in January 2016. Planning has been obtained for a comprehensive refurbishment of the existing building ("The Tower") of 119,000 sq ft NIA, increasing the building to c. 170,000 sq ft NIA of office space and 7,300 sq ft of retail/restaurant space.

183-213 Old Street, London EC1

The retail parade comprises 55,724 sq ft of space and is fully let to tenants including a Gymbox, Co-op food store, Argos, Peacocks and the Post Office, generating c. £915,000 of rents.