FCC Proudreed Properties 2005 HSBC SG CORPORATE ...

KEY CHARACTERISTICS OF THE PROPERTY PORTFOLIOS
Overview
Proudreed France Borrowers
The Property Portfolio of the Proudreed France Borrowers comprises 35 properties located in France.
The Property Portfolio of the Proudreed France Borrowers has a net internal area of approximately
293,945 sq. meters, of which 31,697 sq. meters are currently vacant.
The properties making up the Property Portfolio of the Proudreed France Borrowers have been valued
at u149,330,000 by Savills as at 31 May 2005 (34 properties) and Atis Real as at 30 June 2005 (one
property). The Market Value, together with a description of the methodologies used to derive the values,
is set out in the Valuation Reports contained in the section entitled ‘‘Valuation Report’’ below.
For further details as to the risks associated with valuations, please see the section entitled ‘‘Risk Factors
– reliance on valuation’’ below.
There are approximately 122 individual Occupational Leases within the Property Portfolio of the
Proudreed France Borrowers, and the total rent per annum, as at 31 August 2005 was u13,703,301. The
top five tenants in terms of rental income as at 31 August 2005 accounted for approximately 30.7% of the
total rental income of the Property Portfolio of the Proudreed France Borrowers.
Paris Properties Borrowers
The Property Portfolio of the Paris Properties Borrowers comprises 99 properties located in France. The
Property Portfolio of the Paris Properties Borrowers has a net internal area of approximately 833,519 sq.
meters, of which 65,400 sq. meters are currently vacant.
The properties making up the Property Portfolio of the Paris Properties Borrowers have been valued at
u418,395,000 by Savills as at 31 May 2005 (98 properties) and August 2005 (one property). The Market
Value, together with a description of the methodologies used to derive the values, is set out in the
Valuation Reports contained in the section entitled ‘‘Valuation Report’’ below.
For further details as to the risks associated with valuations, please see the section entitled ‘‘Risk Factors
– reliance on valuation’’ below.
There are approximately 300 individual Occupational Leases within the Property Portfolio of the Paris
Properties Borrowers, and the total rent per annum, as at 31 August 2005 was u40,000,701. The top five
tenants in terms of rental income as at 31 August 2005 accounted for approximately 37.3% of the total
rental income of the Property Portfolio of the Paris Properties Borrowers.
Main features of Occupational Leases
According to the report produced by Orrick, Herrington & Sutcliffe (the ‘‘Orrick Report’’) which was
based on a sample of 77 Leases representing approximately 66 per cent of total gross income on the
properties comprised within the combined Property Portfolio of the Proudreed France Borrowers and the
Paris Properties Borrowers, 97% of the Occupational Leases are commercial leases subject to the
provisions of Article L 145-1 and seq. of the French commercial Code. Most Occupational Leases provide
for rents (plus VAT) to be paid by the tenants quarterly in advance and subject to yearly indexation
pursuant to the variation of the INSEE Construction Cost Index (Indice INSEE du coût de la
construction). Some Occupational Leases provide for the tenant to be responsible for minor repair, for
works due to wear and tear, and to contribute to major repair, insurance property tax and management
of the relevant property through service charges. When any such Occupational Lease expires it could be
extended for an undetermined period unless the landlord issues a notice to vacate the premises either (i)
with an offer to renew the Occupational Lease, which, once accepted by the tenant, could result in the
Occupational Lease being renewed or (ii) without an offer to renew in which case, the landlord may have
to pay the tenant an eviction indemnity (indemnité d’éviction). See the section entitled ‘‘Risk Factors –
Release from performance and statutory rights of Occupational Tenants’’.
Property Portfolio Valuation
The Market Value, together with a description of the methodologies used to derive the values, is set out
in the Valuation Report contained in the section entitled ‘‘Valuation Report’’ below.
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