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IMPORTANT: You must read the following disclaimer before continuing. This electronic transmission applies to the attached document and you are therefore advised to read this disclaimer carefully before reading, accessing or making any other use of the attached document (the “Disclosure Document”) relating to Secure Income REIT Plc (the “Company”) dated 14 March 2016 accessed from this page or otherwise received as a result of such access. By accessing the Disclosure Document, you agree to be bound by the following terms and conditions, including any modifications to them from time to time, each time you receive any information from us as a result of such access. You acknowledge that this electronic transmission and the delivery of the Disclosure Document is confidential and intended for you only and you agree that you will not forward, reproduce or publish this electronic transmission or the Disclosure Document whether electronically or otherwise to any other person. The Disclosure Document has been prepared solely in connection with the proposed placing of existing ordinary shares (“Ordinary Shares”) in the capital of the Company (the “Placing”) by certain shareholders of the Company (the “Selling Shareholders”). The Disclosure Document has been published and is available from the Company’s registered office at Cavendish House, 18 Cavendish Square, London W1G 0PJ and on the Company’s website at http://secureincomereit.co.uk.

THIS ELECTRONIC TRANSMISSION AND THE DISCLOSURE DOCUMENT MAY ONLY BE DISTRIBUTED IN “OFFSHORE TRANSACTIONS” AS DEFINED IN, AND IN RELIANCE ON, REGULATION S UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITHIN THE UNITED STATES TO QUALIFIED INSTITUTIONAL BUYERS (“QIBs”) AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) OR ANOTHER EXEMPTION FROM, OR TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE US SECURITIES ACT. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THE DISCLOSURE DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS NOTICE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS. NOTHING IN THIS ELECTRONIC TRANSMISSION AND THE DISCLOSURE DOCUMENT CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DO SO.

THE ORDINARY SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTION AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVES IS A QIB AS DEFINED IN, OR IN RELIANCE ON, RULE 144A, OR ANOTHER EXEMPTION FROM, OR TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, OR (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

This electronic transmission and the Disclosure Document and the Placing when made are only addressed to and directed at persons in member states of the European Economic Area (each a “Member State”) who are “qualified investors”. Qualified Investors means persons or entities that are described in points (1) to (4) of Section I of Annex II of Directive 2004/39/EC (“MiFID”), and persons or entities who are, on request, treated as professional clients in accordance with Annex II of MiFID, or recognised as eligible counterparties in accordance with Article 24 of MiFID, unless they have requested that they be treated as non- professional clients (“Qualified Investors”). This electronic transmission and the Disclosure Document is being distributed or made available, into or from the Netherlands only to qualified investors (gekwalificeerde beleggers) within the meaning of section 1:1 of the Financial Supervision Act (Wet op het financieel toezicht), as amended from time to time (“Netherlands Qualified Investors”).

This electronic transmission and the Disclosure Document is being distributed in, into or from Switzerland only to regulated qualified investors as defined in Article 10(3)(a) and (b) of the Swiss Collective Investment Schemes Act of June 23, 2006 (“Regulated Qualified Investors”).

This document may only be distributed into Canada to persons who are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (such persons, hereinafter referred to as “Permitted Canadian Investors”).

This electronic transmission and the Disclosure Document must not be acted on or relied on: (i) in any Member State by persons who are not Qualified Investors; (ii) in the Netherlands, by persons who are not Netherlands Qualified Investors, (iii) in Switzerland, by persons who are not Regulated Qualified Investors; (iv) in the United States, by persons who are not QIBs; and (v) in Canada, by persons who are not Permitted Canadian Investors.

Confirmation of Your Representation: This electronic transmission and the Disclosure Document is delivered to you on the basis that you are deemed to have represented to the Company, the Selling Shareholders, Goldman Sachs and Stifel (Goldman Sachs and Stifel together, the “Joint Bookrunners”) that (i) you are (a) a QIB acquiring such securities for its own account or for the account of another QIB or (b) acquiring such securities in “offshore transactions”, as defined in, and in reliance on, Regulation S under the Securities Act; (ii) if you are in any Member State you are a Qualified Investor; (iii) if you are in the Netherlands, you are a Netherlands Qualified Investor; (iv) if you are in Switzerland, you are a Regulated Qualified Investor; (v) if you are in Canada, you are a Permitted Canadian Investor; or (vi) you are an institutional investor that is otherwise eligible to receive the Disclosure Document and you consent to delivery by electronic transmission.

You are reminded that you have received this electronic transmission and the Disclosure Document on the basis that you are a person into whose possession the Disclosure Document may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located and you may not, nor are you authorised to, deliver the Disclosure Document, electronically or otherwise, to any other person. The Disclosure Document has been made available to you in an electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently neither the Company, the Joint Bookrunners nor any of their respective affiliates accepts any liability or responsibility whatsoever in respect of any difference between the document distributed to you in electronic format and the hard copy version. By accessing the Disclosure Document, you consent to receiving it in electronic form. Neither of the Joint Bookrunners nor any of their respective affiliates accepts any responsibility whatsoever for the contents of the Disclosure Document or for any statement made or purported to be made by it, or on its behalf, in connection with the Company or the Ordinary Shares. The Joint Bookrunners and each of their respective affiliates each accordingly disclaims all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of such document or any such statement. No representation or warranty, express or implied, is made by either of the Joint Bookrunners or any of their respective affiliates as to the accuracy, completeness or sufficiency of the information set out in the Disclosure Document.

The Joint Bookrunners are acting exclusively for the Company and the Selling Shareholders and no one else in connection with the Placing. They will not regard any other person (whether or not a recipient of the Disclosure Document) as their client in relation to the Placing and will not be responsible to anyone other than the Company and the Selling Shareholders for providing the protections afforded to their respective clients nor for giving advice in relation to the Placing or any transaction or arrangement referred to in the Disclosure Document.

A hard copy of the Disclosure Document will be made available upon request.

Restriction: Nothing in this electronic transmission constitutes, and may not be used in connection with, an offer of securities for sale to persons other than the specified categories of institutional buyers described above and to whom it is directed and access has been limited so that it shall not constitute a general solicitation. If you have gained access to this transmission contrary to the foregoing restrictions, you will be unable to purchase any of the securities described herein.

You are responsible for protecting against viruses and other destructive items. Your receipt of the Disclosure Document via electronic transmission is at your own risk and it is your responsibility to take precautions to ensure that it is free from viruses and other items of a destructive nature.

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document or the action that you should take, you should immediately consult a person authorised under FSMA who specialises in advising on the acquisition of shares and other securities. If you are not in the United Kingdom you should immediately consult another appropriately authorised independent financial adviser. This document does not constitute a prospectus for the purposes of the Prospectus Rules and it has not been, and will not be, approved by or filed with the FCA under the Prospectus Rules. This document contains no offer of transferable securities to the public within the meaning of section 102B of the FSMA and the Companies Act 2006 of England and Wales or otherwise. The Company, whose registered office address appears on page 24 of this document, accepts responsibility for the information contained in this document, and confirms, having taken all reasonable care to ensure that such is the case, that to the best of its knowledge and belief, the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. Prospective investors should read the entire document and, in particular, the section headed “Risk Factors” when considering the acquisition of Ordinary Shares in the Company.

SECURE INCOME REIT PLC (Incorporated and registered in England and Wales with registered number 06064259) Secondary Placing of up to 110,735,013 Ordinary Shares at a Placing Price expected to be between 250 pence and 260 pence per Ordinary Share GOLDMAN SACHS INTERNATIONAL STIFEL NICOLAUS EUROPE LIMITED Joint Global Coordinator and Joint Bookrunner Joint Global Coordinator, Joint Bookrunner and Nominated Adviser

Goldman Sachs, which is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the FCA and the PRA, is acting as Joint Global Coordinator and Joint Bookrunner in connection with the Placing, and will not be responsible to anyone other than the Company and the Selling Shareholders for providing the protections afforded to its clients, nor for providing advice in relation to the Placing, the contents of this document or any transaction or arrangement referred to herein. Stifel, which is authorised and regulated in the United Kingdom by the FCA, is acting as Joint Global Coordinator, Joint Bookrunner and Nominated Adviser in connection with the Placing. Its responsibilities as the Company’s nominated adviser under the AIM Rules are owed solely to London Stock Exchange plc and are not owed to the Company or to any Director or to any other person. Stifel will not be responsible to anyone other than the Company and the Selling Shareholders for providing the protections afforded to its clients, nor for providing advice in relation to the Placing, the contents of this document or any transaction or arrangement referred to herein. Apart from the responsibilities and liabilities, if any, which may be imposed on Goldman Sachs or Stifel by the FSMA or the regulatory regime established thereunder, neither Goldman Sachs nor Stifel accepts any responsibility whatsoever, and makes no representation or warranty, express or implied, in relation to the contents of this document, including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on behalf of it, the Company, the Directors or any other person in connection with the Company, the Ordinary Shares or the Placing, and nothing in this document is or shall be relied upon as a promise or representation in this respect, whether as to the past or future. Each of Goldman Sachs and Stifel accordingly disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this document or any such statement. The distribution of this document and the sale of Ordinary Shares in certain jurisdictions may be restricted by law. Accordingly, neither this document nor any advertisement or any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons outside of the UK into whose possession this document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities law of any such jurisdictions. The Placing and the distribution of this document are subject to the restrictions set out in paragraph 9 of Part 10: Details of the Placing.

Prospective investors should rely only on the information in this document. No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representations must not be relied on as having been authorised by the Company, Goldman Sachs or Stifel. Neither the delivery of this document nor any purchase of Ordinary Shares made pursuant to this document shall, under any circumstances, imply that there has been no change in the affairs of the Group since, or that the information contained herein is correct at any time subsequent to, the date of this document.

The contents of this document are not to be construed as legal, financial, business, investment or tax advice. Each prospective investor should consult his, her or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice. Investors must inform themselves as to: (a) the legal requirements within their own countries for the purchase, holding, transfer, redemption or other disposal of Ordinary Shares; (b) any foreign exchange restrictions applicable to the purchase, holding, transfer, redemption or other disposal of Ordinary Shares which they might encounter; and (c) the income and other tax consequences which may apply in their own countries as a result of the purchase, holding, transfer, redemption or other disposal of Ordinary Shares. Prospective investors must rely on their own representatives, including their own legal advisers and accountants, as to legal, tax, investment, or any other related matters concerning the Company and an investment therein.

RESTRICTIONS ON SALES This document does not constitute, and may not be used for the purposes of, an offer or any invitation to purchase any Ordinary Shares by any person in any jurisdiction: (a) in which such offer or invitation is not authorised; or (b) in which the person making such offer or invitation is not qualified to do so; or (c) to any person to whom it is unlawful to make such offer or invitation. The distribution of this document and the Placing may be restricted in certain jurisdictions. Accordingly, persons outside the UK into whose possession this document comes are required by the Company, Goldman Sachs and Stifel to inform themselves about and to observe any restrictions as to the Placing and the distribution of this document under the laws and regulations of any territory in connection with the acquisition of Ordinary Shares, including obtaining any requisite governmental or other consent and observing any other formality prescribed in such territory.

NOTICE TO PROSPECTIVE INVESTORS IN AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA AND JAPAN This document does not constitute an offer to sell, or the solicitation of an offer to purchase, Ordinary Shares to any person in any jurisdiction in which such offer or solicitation is unlawful and is not for distribution in or into Australia, the Republic of South Africa or Japan. In particular, the Ordinary Shares offered by this document have not been and will not be registered under the applicable securities laws of Australia, the Republic of South Africa or Japan and, subject to certain exceptions, may not be offered or sold directly, or indirectly, in or into Australia, the Republic of South Africa or Japan, or to or for the account or benefit of any person resident in Australia, the Republic of South Africa or Japan.

NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED KINGDOM This document is only being distributed to and is only directed at persons in the UK who are Qualified Investors (as defined below) who are: (a) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (b) high net worth companies, unincorporated associations and other bodies falling within Article 49(2)(a) to (d) of the Order; and (c) other persons to whom it may lawfully be communicated (all such persons together being referred to as “relevant persons”). The Ordinary Shares are only available to and any invitation, offer or agreement to purchase or otherwise acquire such shares will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. NOTICE TO PROSPECTIVE INVESTORS IN THE EUROPEAN ECONOMIC AREA (OTHER THAN THE UNITED KINGDOM) In any EEA Member State (other than the United Kingdom) that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any member state, the “Prospectus Directive”), this communication is only addressed to and is only directed at: (a) qualified investors in that member state within the meaning of the Prospectus Directive (“Qualified Investors”); and (b) other persons who are permitted to purchase the Ordinary Shares pursuant to an exemption from the Prospectus Directive and other applicable regulations. This document has been prepared on the basis that all offers of Ordinary Shares will be made pursuant to an exemption under the Prospectus Directive, as implemented in member states of the EEA, from the requirement to produce a prospectus for offers of Ordinary Shares. Accordingly, any person making or intending to make any offer within the EEA of the Ordinary Shares which are the subject of the Placing should only do so in circumstances in which no obligation arises for the Company, Goldman Sachs or Stifel to produce a prospectus for such offer.

NOTICE TO PROSPECTIVE INVESTORS IN THE NETHERLANDS The Ordinary Shares shall not be offered, sold, transferred or delivered, directly or indirectly, in the Netherlands, except to qualified investors (gekwalificeerde beleggers) within the meaning of section 1:1 of the Financial Supervision Act (Wet op het financieel toezicht), as amended from time to time. No approved prospectus is required pursuant to the Prospectus Directive.

NOTICE TO PROSPECTIVE INVESTORS IN SWITZERLAND The Company has not been approved by the Swiss Financial Market Supervisory Authority (“FINMA”) as a foreign collective investment scheme pursuant to Article 120 of the Swiss Collective Investment Schemes Act of June 23, 2006 (“CISA”). The Ordinary Shares will be distributed in, into or from Switzerland (i) exclusively to regulated qualified investors as defined in Article 10(3)(a) and (b) of the CISA (“Regulated Qualified Investors”), and/or otherwise in a manner which does not constitute distribution within the meaning of the CISA, its implementing ordinance and guidelines, and (ii) not in a manner which constitutes a public offering within the meaning of Article 652a or 1156 of the Swiss Code of Obligations (“CO”). The Ordinary Shares will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document and any other offering or marketing material have been prepared without regard to the disclosure standards for prospectuses under the CISA, Article 652a or 1156 CO or the listing rules of SIX or any other exchange or regulated trading facility in Switzerland and therefore do not constitute a prospectus within the meaning of the CISA, Article 652a or 1156 CO or the listing rules of SIX or any other exchange or regulated trading facility in Switzerland. The document and any other offering or marketing material relating to Secure Income REIT Plc or the Ordinary Shares may be distributed or made available in, into or from Switzerland (i) only to Regulated Qualified Investors and/or otherwise in a manner which does not constitute distribution within the meaning of the CISA, its implementing ordinance and guidelines, and (ii) not in a manner which constitutes a public offering within the meaning of Article 652a or 1156 CO. Neither this document nor any other offering or marketing material relating to the Company or the Ordinary Shares have been or will be filed with, or approved by, any Swiss regulatory authority. The investor protection afforded to investors of interests in collective investment schemes under the CISA does not extend to acquirers of the Ordinary Shares.

NOTICE TO PROSPECTIVE INVESTORS IN CANADA The Ordinary Shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Ordinary Shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this document (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor. Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (“NI 33-105”), Goldman Sachs and Stifel, as agents for the Selling Shareholders, are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with the Placing.

NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED STATES The Ordinary Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the “Securities Act”), or qualified for sale under the laws of any state or other jurisdiction of the United States and may not be offered, sold, pledged or otherwise transferred except (i) in the United States only to a person that the seller and any person acting on its behalf reasonably believes is a qualified institutional buyer (“QIB”) as defined in and in accordance with Rule 144A under the Securities Act (“Rule 144A”) or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act; or (ii) in an offshore transaction within the meaning of and in accordance with Regulation S under the Securities Act (“Regulation S”), in each case in accordance with any applicable securities laws of any state of the United States. There will be no public offer of the Ordinary Shares in the United States. Investors are hereby notified that sellers of the Ordinary Shares may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A.

The Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Ordinary Shares or the accuracy or adequacy of this document. Any representation to the contrary is a criminal offence in the United States. Prospective investors should be aware that they may be required to bear the financial risks of an investment in the Ordinary Shares for an indefinite period of time. Please see the section of this document headed “Risk Factors” for further information.

AVAILABLE INFORMATION FOR INVESTORS IN THE UNITED STATES For so long as any Ordinary Shares are “restricted securities” within the meaning of Rule 144(a)(3) of the Securities Act, the Company will, during any period in which it is neither subject to Section 13 or 15(d) of the Exchange Act nor exempt from reporting pursuant to Rule 12g3-2(b) of the Exchange Act, provide, upon written request, to holders of Ordinary Shares, any owner of any beneficial interest in Ordinary Shares or to any prospective purchaser designated by such a holder or owner, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. This document is being provided on a confidential basis to persons in the United States. Any reproduction or distribution of this document, in whole or in part, in the United States, and any disclosure of its contents or use of any information herein in the United States for any purpose, other than for considering an investment by the recipient in the Ordinary Shares offered hereby, is prohibited. Each potential investor in the Ordinary Shares, by accepting delivery of this document, agrees to the foregoing.

ENFORCEMENT OF JUDGEMENTS The Company is a public company incorporated under the laws of England and Wales. All of the assets of the Company are located outside of the United States. None of the Directors are citizens or residents of the United States. As a result, it may not be possible for investors to effect service of process within the United States upon the Company or such persons, or to enforce outside of the United States judgments obtained against the Company or such persons in US courts, including, without limitation, judgments based upon the civil liability provisions of the US federal securities laws, or the laws of any state or territory within the United States. In addition, awards of punitive damages in actions brought in the United States or elsewhere may be unenforceable in the English courts. Investors may also have difficulties enforcing, in original actions brought in courts in jurisdictions outside the United States, liabilities under US securities laws.

ERISA Employee benefit plans and other persons or entities that are subject to the US Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and/or Section 4975 of the US Internal Revenue Code of 1986, as amended (the “Code”) (collectively, “Plan Investors”), may not participate in the Placing or hold Ordinary Shares without the permission of the Company. Unless the Company otherwise consents, prospective Shareholders of Ordinary Shares will be deemed to have represented that none of the assets they use to purchase Ordinary Shares constitute “plan assets” for the purpose of ERISA (as described in Part 9: Certain ERISA Considerations of this document). CONTENTS

Page Summary 1 Risk Factors 8 Important Information 20 Placing Statistics 23 Expected Timetable of Principal Events 23 Directors, Company Secretary, Registered Office and Advisers 24 Part 1 : Business 25 Part 2 : Prestbury and the Investment Advisory Agreement 53 Part 3 : Directors and Corporate Governance 61 Part 4 : Operating and Financial Review 65 Part 5 : Capitalisation and Indebtedness 82 Part 6 : Historical Financial Information 83 Part 7 : Property Valuation Report 119 Part 8 : The REIT Regime and Taxation 137 Part 9 : Certain ERISA Considerations 152 Part 10 : Details of the Placing 153 Part 11 : Additional Information 161 Part 12 : Definitions 219 Part 13 : Glossary 227 SUMMARY

The following is a summary of certain information appearing in more detail elsewhere in this document. This summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this document. It is not complete and does not contain all the information that is important to investors or that prospective investors should consider before acquiring Ordinary Shares. Prospective investors should read the whole of this document, paying particular attention to the section headed “Risk Factors”, and not rely solely on the following summarised information.

1 INFORMATION ON THE GROUP Secure Income REIT Plc is a UK REIT that specialises in investing in long term, secure income derived from real estate investments and offering inflation protection. The Directors believe that the Company’s investment strategy, which is designed to satisfy investors’ growing demand for high quality, safe, inflation protected income returns, combined with the Company’s tax efficient REIT status and carefully managed capital structure will allow it to produce attractive, growing and sustainable total returns to Shareholders.

The Board announced its annual results for the year ended 31 December 2015 on 3 March 2016, which included the confirmation of its intention to initiate quarterly cash distributions to Shareholders in August 2016 at an annualised rate of 11.75 pence per Ordinary Share, reflecting a 4.2 per cent yield on the 31 December 2015 EPRA NAV. The Board expects the annual upwards only rental uplifts, in combination with its predictable administrative expenses and fixed cost of debt, will enable the Company to increase distributions annually in line with geared net earnings.

The EPRA NAV of the Company as at 31 December 2015 was £510.1 million (282.8 pence per Ordinary Share), representing a 9.4 per cent increase since 31 December 2014.

The Group owns a freehold portfolio of 26 key operating real estate assets with a weighted average unexpired lease term of over 23 years, independently valued at £1.35 billion as at 31 December 2015, reflecting a net initial valuation yield of 5.3 per cent. The Group’s annual passing rental income is £76.3 million as at 31 December 2015. The Directors expect that following completion of the 2016 rent review cycle in July 2016, and assuming an RPI uplift on the index linked rent of 1.7 per cent, consistent with the RPI swap curve as at 23 February 2016, the net initial yield will increase to 5.5 per cent.

All properties owned by the Group are fully let and 100 per cent of the Group’s rental income is guaranteed by substantial international businesses that the Board considers to be financially strong. The guarantors are: • Ramsay Health Care Limited, the global hospital group that is ranked in the top five private healthcare operators in the world by revenue, which has a market capitalisation as at 11 March 2016 of £6.7 billion and guarantees 58 per cent of annual passing rent as at 31 December 2015; • Merlin Entertainments plc, Europe’s largest and the world’s second largest visitor attractions business by visitor numbers, which has a market capitalisation as at 11 March 2016 of £4.6 billion and guarantees 39 per cent of annual passing rent as at 31 December 2015; and • Orpea SA, a European leader in integrated long term care and post-acute care, which has a market capitalisation as at 11 March 2016 of £3.5 billion and guarantees 2 per cent of annual passing rent as at 31 December 2015.

The Portfolio includes Alton Towers and Thorpe Park, which are two of the three most visited theme parks in the UK, 19 private hospitals in England and central London’s only private psychiatric hospital.

1 The table below provides the breakdown of the annual passing rent as at 31 December 2015. All rental income is subject to fixed or RPI linked annual upwards only rent reviews. Passing rent as at 31 December 2015 Guarantor Next review Rent review basis Private hospitals £44.4m Ramsay Health May 2016 Fixed increase throughout the Care Limited term of 2.75% p.a. with five-yearly open market reviews from May 2017 if higher UK leisure £25.1m Merlin June 2016 Upwards only uncapped RPI Entertainments plc German leisure £ 4.9m(1) Merlin July 2016 Fixed at 3.34% p.a. Entertainments plc London psychiatric hospital £ 1.9m Orpea SA May 2016 Fixed at 3.0% p.a. Total Portfolio £76.3m Expected 2016 uplift in rent assuming RPI is consistent with RPI swap curve at 23 February 2016(1) ...... 2.5% Minimum 2016 uplift in rent if RPI is zero or lower ...... 1.9%

(1) Rent denominated in euros and translated into pounds sterling at the 31 December 2015 rate of €1:£0.7350

An analysis of IPD monthly data for the 29 years to December 2015 demonstrates that income returns make up 78 per cent of total returns from investment in the UK commercial real estate market over that period. Commercial property rents in the UK market have struggled to keep pace with inflation (as measured by CPI) since the early 1990s and UK commercial real estate lease lengths have declined. According to IPD monthly data, the lease length of only seven per cent of new UK commercial real estate leases entered into in 2015 exceeded 15 years. Against this background of a scarcity of both long leases and leases offering inflation protection, the Company has: • the longest weighted average lease length of any UK REIT having a market capitalisation of over £200 million, with over 23 years weighted average term, no contractual lease break options and over 21 years to the first expiry; • a considerable degree of inflation protection through the annual fixed uplifts and upwards only RPI linked reviews in its leases; • tenant and guarantor groups that the Directors believe represent strong credit quality with the rental income being underpinned by operations at key operating assets; and • no vacant space to re-let. During 2015, the Group transformed its capital structure by way of two significant asset sales and a complete replacement of the credit facilities that were in place at the IPO Date. Together these actions have: • reduced the Group’s weighted average interest cost by 23.5 per cent. from 6.8 per cent per annum to 5.2 per cent per annum; • extended the weighted average term to debt expiry from less than two years to over eight years on significantly improved terms with the first debt expiry date extended from May 2017 to October 2022; • reduced Net LTV from 80 per cent at the IPO Date to 61 per cent as at 31 December 2015; • demonstrated market demand and pricing for an asset in each of the Healthcare and Leisure Portfolios by way of disposals on the open market; and • facilitated the initiation of cash distributions. The Board believes that the Company has created a structure that is now more appealing to the wider institutional investor market and has therefore been discussing with certain of the Company’s six largest Shareholders how to best widen the Company’s investor base. All of those Shareholders were founding investors in the fund established with a ten year limited life in 2006 that acquired the Group’s portfolio in 2007.

2 The Board has concluded that a substantial placing of the Company’s Ordinary Shares to a wider shareholder base would create more liquidity in share trading, better place the Company for expansion when new opportunities for value accretive acquisitions are identified and position the Group to continue to comply with the UK REIT rules. Consequently, those Shareholders and Prestbury are making available for sale up to 110,735,013 Ordinary Shares, amounting to 61.4 per cent of the Issued Share Capital of the Company, in a co-ordinated Placing.

Subject to completion of the Placing, PIHL Property LLP has committed to renewing the lock-in arrangements that it entered into on the IPO Date, restricting the sale of any of its remaining Ordinary Shares (22,439,491 Ordinary Shares assuming that all available Ordinary Shares are placed) for at least 12 months from completion of the Placing and with phased releases through to the second anniversary of completion of the Placing (subject to customary exceptions).

Prestbury Incentives funded a cash tax charge of £5.1 million on receipt of 11.9 million Ordinary Shares in payment of incentive fees relating to the period ended 31 December 2014. The Ordinary Shares to be sold in the Placing include a sufficient number of Ordinary Shares to meet Prestbury Incentives’ tax liability. Prestbury’s remaining shares remain subject to lock-in arrangements pursuant to the terms of the Investment Advisory Agreement. Neither Prestbury Incentives nor PIHL Property LLP has any current intention to sell any other Ordinary Shares that it holds.

The Selling Shareholders’ remaining Ordinary Shares, apart from those held by PIHL Property LLP and Prestbury Incentives, will be subject to restrictions on sale for 180 days following completion of the Placing (subject to customary exceptions).

The Company has an experienced non-executive Board chaired by Martin Moore, with three further Independent Directors: Leslie Ferrar, Jonathan Lane and Ian Marcus. The Board also includes three directors from the Prestbury Team: Nick Leslau, Mike Brown and Sandy Gumm. The Company is advised and managed by Prestbury, which is overseen by the Independent Directors. The advisory and management services provided by Prestbury are delivered by an experienced and professional team led by Nick Leslau, Mike Brown, Tim Evans, Ben Walford and Sandy Gumm. Members of the Prestbury Team have been responsible for a series of highly successful publicly listed property investment businesses over more than 30 years, including, most recently, Max Property Group Plc. The Directors believe that Prestbury’s interests are strongly aligned with those of all other Shareholders through the substantial value of its investment in the Company which, following the Placing, will be at least 18 per cent of the Issued Share Capital, or (assuming that all available Ordinary Shares are placed and the Placing Price is set at the mid-point of the Placing Price Range) 33 million Ordinary Shares worth £84.1 million at the Placing Price.

In the second half of 2015, the Company drew down three new secured debt facilities, totalling £905.6 million (including £53 million of euro denominated debt translated at the 31 December 2015 rate of €1:£0.7350) at fixed interest rates, with a weighted average interest cost of 5.2 per cent per annum and for a weighted average term to expiry from 31 December 2015 of over eight years. The secured debt relating to the Leisure Portfolio (£370 million) bears interest at a weighted average rate of 5.72 per cent per annum and matures in October 2022 and the debt facilities relating to the Healthcare Portfolio (£220 million and £315.6 million) bear interest at 4.29 per cent per annum and 5.30 per cent per annum, respectively, and mature in September and October 2025, respectively. The Directors believe that these fixed interest costs in conjunction with predictable administrative costs and an annually increasing rental income stream, should result in net income growth that the Directors consider to be both secure and predictable, and therefore generate growth in distributions for a minimum of the next six and a half years through to the first debt maturity date in October 2022.

The Company aims to build on its £1.35 billion portfolio, and further diversify its risk profile by investing across a wider range of property sectors, assets and tenant credits. The Directors intend to exercise strong capital discipline and use debt and equity issues prudently to enhance returns for Shareholders. The Board aims to deliver attractive, risk-adjusted total returns to Shareholders and create a substantial risk-diversified, long term income specialised REIT with a stable and growing distribution profile.

At an appropriate stage in the Group’s development, the Board intends to move the Company’s listing from AIM to the Main Market of the London Stock Exchange, subject to meeting the relevant eligibility criteria.

3 The Company expects to be considered for inclusion in the FTSE EPRA/NAREIT Global Real Estate Index Series (“EPRA Index”) in the future, subject to meeting the EPRA Index’s eligibility requirements, which include passing certain thresholds in regards to market capitalisation, liquidity and free float, some of which would not be expected to be met prior to completion of the Placing. Certain of the conditions are currently tested on an annual basis and, therefore, the earliest that the Company can expect to be considered for inclusion will be in 2017.

The Board is cognisant of the importance of the EPRA Index and of the greater liquidity offered to investors by a Main Market listing and will continue to monitor the Company’s ability to be included in the EPRA Index and its eligibility to move to the Main Market.

Further information on the Group is set out in Part 1: Business.

2 PRESTBURY The Company is advised by Prestbury, which is controlled by Nick Leslau and Mike Brown. The Prestbury Team comprises Nick Leslau, Mike Brown, Tim Evans, Ben Walford (all of whom are Chartered Surveyors) and Sandy Gumm (a Chartered Accountant), a team of property and finance professionals who between them have extensive experience in the UK real estate market built over more than 30 years in the cases of the Chairman, Nick Leslau, and the CEO, Mike Brown, and have a track record of having successfully created value for shareholders through previous economic cycles, including significant out-performance of the UK commercial real estate market during the recessions of the early 1990s and late 2000s.

The Prestbury Group is significantly invested in the Company, providing strong alignment with all other Shareholders’ interests. Following completion of the Placing it will hold at least 18 per cent of the Company’s shares worth £84.1 million (assuming the Placing Price is set at the mid-point of the Placing Price Range), which is among the largest management holdings in the quoted UK real estate sector.

The Independent Directors have structured fee and incentive arrangements for Prestbury which they believe are appropriate, in order to cover the overhead costs of the business (which are largely incurred by the Prestbury Group) through the Advisory Fee and to provide an incentive to drive growth in Total Shareholder Return through incentive fees that are only paid after all Shareholders have benefited from the achievement of certain EPRA NAV per share thresholds. Incentive fees are in all but very limited circumstances payable in Ordinary Shares and all such incentive shares received are subject to lock-in arrangements over a period from 18 to 42 months.

PIHL Property LLP has committed to renewing the lock-in arrangements that it entered into on the IPO Date upon completion of the Placing, restricting the sale of its Ordinary Shares (subject to customary exceptions) for 12 months from completion of the Placing, with phased releases through to the second anniversary of completion of the Placing. Prestbury Incentives will also continue to be bound by the lock-in restrictions set out within the Investment Advisory Agreement. PIHL Property LLP and Prestbury Incentives have indicated to the Company that they are committed to retaining long term investments in the Company.

Further information on Prestbury is set out in Part 2: Prestbury and the Investment Advisory Agreement.

3 SUMMARY OF INVESTMENT POLICY The Company invests in long term, secure income streams from real estate investments. A long term income stream is considered to be one with (or a portfolio with) a weighted average term to maturity in excess of 15 years at the time of acquisition. Security of income is assessed with reference to a range of factors, principally the extent of rent cover in the case of conventional leases and from underlying earnings, and asset cover in the case of alternative structures such as commercial ground rents.

The Portfolio is considered by the Board to offer attractive geared returns from high quality real estate, with financially strong tenants in industry sectors with strong defensive characteristics. The Board proposes to build on this strong foundation by seeking to: (a) diversify sources of income and enhance prospects for attractive Total Shareholder Returns through acquisitions; and

4 (b) manage the Company’s capital structure in order to enhance income returns for investors whilst maintaining discipline over net debt levels.

The Company will not materially change the investment policy set out in paragraph 2 of Part 1: Business without seeking the prior consent of its Shareholders at a general meeting.

4 INVESTMENT STRATEGY A striking feature of the UK commercial real estate market over the past 20 years has been the significant reduction in income security caused by a marked decline in the average term to the first lease break or expiry. There are currently no other significant UK REITs specialising in long leases across a range of property sectors. Against this backdrop, the Directors believe that there is a growing demand amongst investors for long term, safe and growing income flows. The Board aims to fill this gap and further build a substantial diversified long term income portfolio generating a strong and growing source of cash distributions for investors and an attractive Total Shareholder Return.

As investment market volatility increases, those operating businesses wishing to extract value from their real estate portfolios are facing increasing challenges and the Board believes that it will be able to pursue acquisition opportunities from a range of sources including operating businesses and non- REITs with latent capital gains fettering sale prospects.

5 BUSINESS STRENGTHS The Board believes that it has the experience, skills and resources required to implement its investment policy and deliver its investment strategy. The Company’s key business strengths are identified as: • long term income streams secured on high quality real estate, including the current Portfolio income, which the Directors believe is derived from large, financially secure, international, mature businesses; • gearing that the Board believes is appropriate to the underlying assets and the stage of the economic cycle; • the tax efficiency of a UK REIT; • a strategy overseen by a strong Board with extensive relevant experience and a majority of Directors who are independent of the Investment Adviser; • exclusive access to all investment opportunities that fit the Company’s investment strategy that Prestbury or its affiliates source during the term of Prestbury’s appointment as Investment Adviser; and • day-to-day management undertaken by the experienced Prestbury Team, one of the most successful management teams in the quoted UK real estate sector over the last 30 years, which has a close alignment to all other Shareholders’ interests through the Prestbury Group’s own shareholding in the Company which is expected to amount to at least £84.1 million (assuming the Placing Price is set at the mid-point of the Placing Price Range), representing 18 per cent of the Issued Share Capital.

6 DISTRIBUTION POLICY The UK REIT rules require the Company to distribute at least 90 per cent of the Group’s qualifying profits from its tax exempt property business within 12 months of each financial year end, or otherwise suffer a tax charge. The Directors’ intention is to distribute at least 90 per cent of qualifying profits, and to maintain dividend cover of at least one times adjusted EPS. The Board intends to initiate quarterly cash distributions to Shareholders in August 2016 at an annualised rate of 11.75 pence per Ordinary Share, reflecting a 4.2 per cent yield at 31 December 2015 EPRA NAV. The Board expects the annual upwards only rental uplifts, in combination with the predictable administrative expenses and fixed cost of debt, to enable the Company to increase distributions annually in line with geared net earnings.

7 LOCK-IN ARRANGEMENTS Pursuant to the New PIHL Lock-In Deed, PIHL Property LLP has agreed that, subject to certain customary exceptions and completion of the Placing, it will not, and will procure that its connected persons will not, without the prior written consent of the Company and the Joint Bookrunners: (i) dispose of any of the Ordinary Shares held by it immediately after completion of the Placing before

5 the First Lock-In Release Date; (ii) dispose of more than 50 per cent of the Ordinary Shares held by it immediately after completion of the Placing before the Second Lock-In Release Date; or (iii) dispose of more than 75 per cent of the Ordinary Shares held by it immediately after completion of the Placing before the Final Lock-In Release Date. In relation to PIHL Property LLP, this replaces the Existing Investor Lock-In Deed it entered into on the IPO Date. Should the Placing not proceed, PIHL Property LLP will continue to be bound by the terms of its Existing Investor Lock-In Deed, further details of these lock-in arrangements are set out in paragraph 12.6 of Part 11: Additional Information

Subject to certain customary exceptions, for the period beginning on the First Lock-In Release Date and ending on the earlier of (i) the date that is 36 months after the Settlement Date or (ii) the date on which the Company ceases to be a close company for the purposes of Part 12 of the CTA 2010, provided that such restrictions will apply for a minimum period of twelve months, PIHL Property LLP has agreed that it will, and will procure that its connected persons will, effect any disposal of Ordinary Shares in such a manner as the Joint Bookrunners may in their discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares.

Pursuant to the Secondary Placing Agreement, each of the Selling Shareholders, other than PIHL Property LLP and Prestbury Incentives, has agreed that, subject to certain customary exceptions, from the date of the Secondary Placing Agreement until the date falling 180 days after the Settlement Date, they will not, without the prior written consent of the Joint Bookrunners, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce an offer of, any Ordinary Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as the foregoing.

Prestbury and Prestbury Incentives are subject to lock-in arrangements under the Investment Advisory Agreement in respect of Ordinary Shares issued pursuant to the incentive arrangements in that agreement. The restrictions do not apply where a disposal of Ordinary Shares is effected to discharge any tax liability arising in connection with the receipt of incentive fees. Prestbury Incentives will therefore sell enough Ordinary Shares pursuant to the Placing to realise £5.1 million of net proceeds (after tax) for this purpose.

Under the terms of the New Prestbury Director Lock-In Deeds, each of Mike Brown, Nick Leslau and Sandy Gumm has agreed that, subject to certain customary exceptions, they will not, and will procure that their connected persons will not, without the prior written consent of the Company and the Joint Bookrunners: (i) dispose of any of the Ordinary Shares held by them immediately after completion of the Placing before the First Lock-In Release Date; (ii) dispose of more than 50 per cent of the Ordinary Shares held by them immediately after completion of the Placing before the Second Lock-In Release Date; or (iii) dispose of more than 75 per cent of the Ordinary Shares held by them immediately after completion of the Placing before the Final Lock-In Release Date.

Subject to certain customary exceptions, for a period of 24 months from the First Lock-In Release Date, each of Mike Brown, Nick Leslau and Sandy Gumm have agreed that he or she will, and will procure that his or her connected persons will, effect any disposal of Ordinary Shares in such a manner as the Joint Bookrunners may in their discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares.

Under the terms of the New Independent Director Lock-In Deeds, each of the Independent Directors has agreed that subject to certain customary exceptions: (i) they will not, and will procure that their connected persons will not, without the prior written consent of the Company and the Joint Bookrunners, dispose of any of the Ordinary Shares held by them immediately after completion of the Placing before the First Lock-In Release Date; and (ii) up to the Final Lock-In Release Date that they will effect any disposal of Ordinary Shares in such a manner as the Joint Bookrunners may in their discretion determine to be appropriate with a view to maintaining an orderly market.

Should the Placing not proceed, the Directors will continue to be bound by the terms of the Existing Prestbury Director Lock-In Deeds and the Existing Independent Directors Lock-In Deeds. Further details of these lock-in arrangements are set out in paragraphs 12.4 and 12.5 of Part 11: Additional Information.

6 Pursuant to the Transaction Agreement, the Company has agreed that, subject to certain customary exceptions, from the date of the Transaction Agreement until the date falling 90 days after the Settlement Date, it will not, without the prior written consent of the Joint Bookrunners , issue, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce an offer of, any Ordinary Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as any of the foregoing other than an issue of Ordinary Shares pursuant to the terms of the Commitment Agreement.

Dominic Silvester will continue to be bound by the terms of the orderly market deed entered into on the IPO Date, pursuant to which, he agreed, subject to certain customary exceptions, that until the earlier of (i) 5 June 2017; and (ii) the date on which the Company ceases to be a close company for the purposes of Part 12 of CTA 2010, he will, and will procure that his connected persons will, effect any disposal of Ordinary Shares in such a manner as Stifel may in their discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares.

Further details of the arrangements described above are set out in paragraphs 12.7, 12.8, 12.9 and 12.10 of Part 11: Additional Information.

8 PLACING The Placing comprises the proposed placing by the Joint Bookrunners, as agents for the Selling Shareholders, of up to 110,735,013 Ordinary Shares at the Placing Price. Pursuant to the Placing, Ordinary Shares will be placed to certain institutional and professional investors in the United Kingdom and elsewhere outside the United States in reliance on Regulation S and in accordance with other applicable laws, and in the United States only to QIBs in reliance on Rule 144A or another exemption from the registration requirements of the Securities Act.

No new Ordinary Shares will be issued by the Company pursuant to the Placing.

Certain restrictions that apply to the circulation of this document and Ordinary Shares in jurisdictions outside the United Kingdom are described in paragraph 9 of Part 10: Details of the Placing.

9 RISK FACTORS Prospective investors should carefully consider the risk factors described in the section headed “Risk Factors”, together with all of the other information set out in this document and their own circumstances, before deciding whether or not to invest in the Ordinary Shares.

7 RISK FACTORS

Prospective investors should carefully consider the risk factors described below, together with all other information set out in this document and their own circumstances, before deciding whether or not to invest in Ordinary Shares. Should any of the following events or circumstances occur, the Group’s results of operations, financial condition and business prospects could be materially adversely affected. In such circumstances, the net asset value of the Company and/or the market price of the Ordinary Shares could decline and investors could lose all or part of the value of their investment and/or any distributions relating to the Ordinary Shares could be reduced, interrupted or could cease. The risks and uncertainties described below are not the only ones faced by the Group. Additional risks and uncertainties not presently known or which are currently deemed immaterial may also have a material adverse effect on the Group’s results of operations, financial condition or business prospects.

1 RISKS RELATING TO TAXATION 1.1 Risks relating to the REIT status of the Group The basis of taxation of any Shareholder’s holding in the Company and of the Group will change fundamentally if the Group ceases to maintain its UK REIT status. If the Group fails to remain qualified as a UK REIT, its rental income and gains will become subject to UK taxation with effect from the date that UK REIT status is treated as lost which, depending on the circumstances, could be retrospectively applied.

The Group cannot guarantee continued compliance with any or all of the UK REIT conditions so there is a risk that the UK REIT Regime may cease to apply in some circumstances. Whether the Group is required to exit the UK REIT Regime as a result of a breach of condition will depend on which condition is breached and potentially also on how extensive the breach is and whether that condition or other conditions have already been breached.

A breach of certain conditions of the regime will result in an automatic loss of REIT status. These are the conditions relating to the share capital of the Company, the prohibition on entering into loans with abnormal returns, the requirement that group companies are UK tax resident, and not dual tax resident and that the Company is not an open ended investment company. All of these conditions are within the control of the Company to manage.

HMRC may require the Group to exit the UK REIT regime if: (a) it regards a breach of condition or failure to satisfy conditions relating to the UK REIT Regime as sufficiently serious, which are the conditions requiring the REIT to have at least three rental properties, for no one property to exceed 40 per cent of the value of the portfolio, to distribute 90 per cent of rental profits, and for 75 per cent of assets and profits to derive from investment property; (b) the Group has committed at least four minor breaches of any of various conditions in a ten year period which, under the rules of the regime, did not require immediate loss of REIT status; or (c) HMRC has given the Company or members of the Group at least two notices in relation to the avoidance of tax within a ten year period (or where a single attempt to obtain a tax advantage is sufficiently serious to merit leaving the REIT Regime).

The Group could lose its status as a UK REIT as a result of actions by third parties, for example, in the event of a successful takeover of it by a company that is not a UK REIT or an Institutional Investor. UK REIT status could also be lost if the Company is unable to satisfy the close company condition before 5 June 2017 or if the Company becomes a close company again after that date. Additionally, any REIT may voluntarily opt out of UK REIT status.

In many circumstances, a breach of a condition that results in a loss of UK REIT status will result in a loss of status with effect from the end of the accounting period prior to the breach.

If the Group fails to remain qualified as a UK REIT, members of the Group may be subject to UK corporation or income tax on some or all of their property rental income and chargeable gains on the sale of properties which would reduce the amounts available to distribute to Shareholders. The

8 Company would still be required to make distributions arising from profits that were afforded tax exemption under the UK REIT Regime under deduction of withholding tax even following exit from the regime.

If the Group were to be required to, or voluntarily elects to, leave the UK REIT Regime within ten years of joining (that is, before 5 June 2024), HMRC has wide powers under the early exit provisions to direct how it is to be taxed both before and after it leaves the UK REIT Regime, including in relation to the date on which the Group would be treated as exiting the UK REIT Regime, which could have a material impact on the financial condition of the Group and, as a result, Shareholder returns. In addition, incurring a tax liability might require the Group to liquidate some of its assets or take other steps that could negatively affect its operating results. Further detail is included in Part 8: The REIT Regime and UK Taxation.

1.2 Risks relating to the distribution condition and financing condition The Company has an obligation to distribute at least 90 per cent of the qualifying profits as calculated for tax purposes arising from the Group’s Qualifying Property Rental Business each year (either in cash or by way of stock dividend) to Shareholders in order to continue to enjoy the full exemption from tax on rental income afforded by the UK REIT Regime. To comply, it must distribute annually, within twelve months of the end of each accounting period, an amount sufficient to meet the 90 per cent distribution requirement by way of Property Income Distribution, or PID. The Company would be required to pay corporation tax at regular corporate rates on any shortfall to the extent that it distributes as a PID less than the amount required to meet the 90 per cent distribution test each year.

In addition, differences in timing between the receipt of cash and the recognition of income for the purposes of the UK REIT Regime and the effect of cash outflows not deductible for tax such as debt amortisation payments could in certain circumstances require the Company to raise finance to meet the distribution requirements that are necessary to achieve the full tax benefits associated with qualifying as a UK REIT, even if the then prevailing market conditions are not favourable for any such fundraising.

The constraints of maintaining UK REIT status could limit the Company’s flexibility to make investments. The Company may be forced to rely on the availability of debt or equity capital to fund future growth. There is no certainty that such funding will be available to the Company either at all or on acceptable terms.

As a result of these factors, the constraints of maintaining UK REIT status could limit the Company’s prospects for growth by acquisition and, as a consequence, or in the event that a tax charge (for failure to meet the 90 per cent requirement) arises, could reduce returns to Shareholders.

The UK REIT Regime imposes an interest cover test whereby profits of the Tax Exempt Business of the Group must be at least 1.25 times the costs of financing that business. If this condition is not met then the Company is required to pay UK corporation tax on an amount of income equivalent to the excess financing costs or 20 per cent of the Tax Exempt Business profits, if lower. Should income fall or finance costs rise materially, then the tax charge could increase without a corresponding increase in cash flow from which to pay the tax.

1.3 Risks relating to the UK’s implementation of the OECD Base Erosion and Profit Shifting proposals The Organisation for Economic Co-operation and Development (“OECD”) published its final recommendations from the Base Erosion and Profit Shifting (“BEPS”) project in October 2015. The BEPS project aims to counter tax planning strategies that exploit gaps and mismatches in national tax rules to artificially shift profits to low or no-tax locations where a business has little or no economic activity.

Of particular relevance to the property industry is the OECD’s initiative to combat tax planning strategies and deal with the artificial shifting of profits between tax jurisdictions. While conceptually this is not a particular issue for the property industry, the proposals have a disproportionate impact on capital intensive businesses such as real estate companies and as currently proposed could conflict with the REIT rules. The OECD has suggested within the part of the proposals known as BEPS Action 4 that interest deductions for tax purposes should be capped in the range of 10 per cent to 30 per cent

9 of EBITDA; this could be supplemented by a fall-back group ratio test, such that a group’s aggregate interest deductions should broadly not exceed its third party interest expense. There is also a suggestion that interest deductions could potentially be restricted in full where they relate to the financing of tax exempt activities. These proposals could, if implemented by the UK Government in substantially the form recommended by the OECD, limit the deductibility for tax purposes of interest payments and consequently could have the effect of increasing the required distributions from the Tax Exempt Business (known as PIDs). The OECD’s recommendations are now being considered by the respective governments of member states, including the UK Government, to formulate specific legislation to implement the proposals. A HM Treasury consultation on the BEPS Action 4 proposals closed for responses on 14 January 2016. It is not yet clear how the UK Government will implement the recommendations, but any new legislation is not expected to take effect before April 2017.

If the interest deduction limit were to be set within the 10 per cent to 30 per cent of EBITDA range without the group interest proviso and without a carve-out for the financing of tax exempt activities, the consequences for the Company are estimated at approximately £5 million to £8 million per annum of additional mandatory REIT distribution. However, the Group’s cash flows would not have changed so this could result in the Company breaching the distribution requirement under the REIT Regime and incurring a tax penalty if those rules are not also changed.

1.4 Risks relating to a change in tax law Any future change in the Company’s tax status or in tax legislation may affect the Group’s UK REIT status and, as a result, Shareholder returns. An increase in the rates of Stamp Duty Land Tax could have an impact on the price at which interests in UK land may be acquired (and the same may apply to assets in other jurisdictions) and therefore on asset values.

Statements in this document are based on current UK tax law and practice that is subject to change, possibly with retrospective effect. The taxation of an investment in the Company depends on the individual circumstances of investors. Any change (including a change in interpretation) in the legislative provisions relating to UK REITs or in tax legislation more generally, either in the United Kingdom or in any other country in which the Company operates including Germany, could have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

1.5 Risks relating to passive foreign investment company (“PFIC”) status for US federal income tax purposes The Company expects to be a PFIC for US federal income tax purposes. If US investors do not make certain elections with respect to their investment, they generally will be subject to special deferred tax and interest charges with respect to certain distributions on the Ordinary Shares, any gain realised on a disposition of the Ordinary Shares and certain other events. The effect of these deferred tax and interest charges could be materially adverse to US investors. Alternatively, if US investors make one of such elections, they will not be subject to those charges, but could recognise taxable income in a taxable year with respect to the Ordinary Shares in excess of any distributions that the Company makes to such investors in that year, thus giving rise to a potential tax liability without receipt of corresponding cash.

The Company’s expected PFIC status could adversely affect the value of the Ordinary Shares. If the Company is a PFIC, distributions made to a US Person that is not a corporation will not be eligible for taxation at reduced US federal income tax rates generally applicable to dividends paid by certain US corporations and “qualified foreign corporations”. The more favourable US federal income tax rates applicable to dividends paid by such other corporations could cause non-corporate investors to perceive investment in the Ordinary Shares to be relatively less attractive than investment in the shares of other corporations.

1.6 Risks relating to distributions made to holders of excessive rights A UK REIT may become subject to an additional tax charge if it pays a dividend to, or in respect of, a Substantial Shareholder. This additional tax charge will not be incurred if the UK REIT has taken reasonable steps to avoid paying dividends to a Substantial Shareholder. Therefore, the Articles contain provisions designed to avoid the situation where dividends may become payable to a Substantial Shareholder. These provisions provide the Directors with powers to identify Substantial

10 Shareholders and to prohibit the payment of dividends on Shares that form part of a Substantial Shareholding, unless certain conditions are met. The Articles also allow the Board to require the disposal of Ordinary Shares forming part of a Substantial Shareholding in certain circumstances where the Substantial Shareholder has failed to comply with these provisions. These provisions are summarised in further detail at paragraph 6.10.2 of Part 11: Additional Information.

The Company could be liable to this additional charge were HMRC to take the view that the requirements of the Articles no longer amount to taking of reasonable steps, although there is no reason to believe that their current practice will change.

1.7 Risks relating to property disposals If a Group Company disposes of a property in the course of a trade, any gain will be subject to corporation tax at regular corporate rates. For example, acquiring a property with a view to sale followed by a disposal of the asset would indicate a trading activity, whereas disposal of a property as part of a normal property investment and asset management activity of a property rental portfolio would not indicate a trading activity. Whilst the Group does not intend to dispose of property in the course of a trade, there can be no assurance that HMRC will not successfully argue a disposal to have been in the course of a trade with the consequence that corporation tax will be payable in respect of any profits from the disposal of such property.

2 RISKS RELATING TO BORROWING 2.1 Level of borrowing As at 31 December 2015, the Group had £904.9 million of outstanding bank loans, secured against the Portfolio which has been valued at £1.35 billion at that date. Group companies have granted security to lenders in respect of these bank loans in the form of mortgages over investment property and fixed and floating charges over other assets in three separate non-recourse debt structures. Whilst the use of borrowings typically enhances growth in the net asset value where the value of property assets is rising, it would have the opposite effect where property asset values are falling.

The Group’s current loan agreements contain a number of financial covenants, such as loan to value ratios and interest cover tests, which may, if breached, restrict the operational flexibility of the Group and which could prevent the Company from taking advantage of business opportunities.

Should any fall in asset values or rental income result in a Group company breaching covenants within the Group’s credit agreements, Group companies may be required to substitute cash into the borrower sub-structures or to make early repayment of such borrowings, in whole or in part, together with any attendant costs, including the costs of early prepayment penalties. In such circumstances, the Company’s ability to make distributions may be restricted, the financial condition of the Group could be adversely impacted and the Group may be required to sell sufficient assets to repay such amount of the borrowings or meet the costs of early prepayment penalties.

In circumstances where the Group is required to sell assets, it is possible that the Group may be required to do so at a time and in circumstances where the realisation proceeds are reduced due to a downturn in commercial property values generally, as a forced seller or because there is limited time to market the property.

2.2 Risks associated with access to financing The Board’s ability to implement the Company’s investment policy and achieve the Company’s investment objectives may be dependent upon the Company’s ability to raise further funds, either by way of equity or debt, in the future.

The Group’s debt facilities are due for repayment in 2022 and 2025. At or prior to the repayment dates, or in the event that the Group is raising finance for acquisitions, the Group will be dependent upon access to financing from debt or equity markets or through asset sales to meet its repayment obligations. Access to such financing will depend on market conditions at the time and if conditions in credit and/or equity markets are unfavourable, the Group may not be able to obtain replacement financing or may only be able to obtain such financing at a higher cost or on more restrictive terms than the existing facilities, if at all. In such circumstances, the Company may have to raise finance by other

11 means such as equity issues or asset sales on terms which might have an impact on Total Shareholder Returns. Furthermore, the terms of any refinancing might limit investment activity, Total Shareholder Returns and/or the level of distributions the Company is able to make. There can be no guarantee that the Company will be able to raise additional funds on acceptable terms, or at all, when it is needed.

3 RISKS RELATING TO PROPERTY INVESTMENT 3.1 Tenant risk The Group currently derives its rental income from three tenant groups, two of which, Ramsay (which guarantees 58 per cent of annual passing rent as at 31 December 2015) and Merlin (which guarantees 39 per cent of annual passing rent as at 31 December 2015), account between them for 97 per cent of annual passing rent as at 31 December 2015. There can be no assurance that Ramsay and Merlin and their respective subsidiaries will have sufficient assets, income and access to financing to enable them to satisfy their obligations, including payment obligations, under the lease agreements. If a tenant and its guarantor fail to comply with their respective obligations at any stage throughout the term of the relevant leases, such failure could result in a significantly adverse impact on the value of the Group’s property assets, a significant reduction in the Group’s contracted rental income streams, shortfalls in rent collections, or all of these.

Both the rental income receivable and the market value of the properties owned by the Group may be affected by the operational performance of the tenants’ businesses. This is the case with respect to both the business being carried out at a specific property and the general financial performance of the tenant and guarantor within their wider operations. The operational performance of the tenants and guarantors will be affected in turn by both local conditions and the wider economy. In the case of Ramsay’s UK business, Ramsay’s operational performance may also be affected by political risk given that the majority of its UK income is currently derived from the NHS.

In the event of material default of lease obligations by a tenant and guarantor, the Company may suffer a rental shortfall and/or incur additional expenses and/or interest costs until the property is re-let. The specialised use of the properties may make re-letting difficult. Such an event would be likely to result in the Company having to pay legal and surveyor’s costs, maintenance costs, insurance premiums, property taxes and marketing costs and may have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

3.2 Property valuation risk The Company is a long term investor in property and accordingly is exposed to movements in property valuations. Property values will vary as a result of a variety of factors, many of which are outside the control of the Company. In the event of downward movements in property values, the net asset value of the Group could be adversely affected.

The valuation of the Group’s properties is inherently subjective, in part because property valuations are made on the basis of assumptions which may not prove to be accurate and, in part, because of the individual nature of each property. This is particularly so where there has been more limited transactional activity in the market against which the Group’s property valuations can be benchmarked by the Group’s external valuer. As such, there is no assurance that the valuations of the Group’s investments will reflect actual sale prices or rental levels even where any such sales or entry into leases occur shortly after the relevant valuation date.

3.3 Risks associated with the liquidity of real estate assets Real estate constitutes almost all of the Group’s total assets. In response to changing economic and financial conditions, the Group may desire or need to liquidate such assets. Disposal of these assets may be affected by many factors, such as the availability of bank financing to potential buyers, interest rates and the supply and demand for property, which are beyond the Group’s control. In difficult economic conditions, the Group may not be able to transfer or sell properties for an acceptable price or on acceptable terms in a timely manner, or at all. The Group also cannot predict the length of time needed to find purchasers and to complete such transfers or sales. There can be no assurance that the net price obtained for any sale, in particular any accelerated or forced sales, would cover the book

12 value of the property sold. Any such shortfall could have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

3.4 Risks relating to acquisitions Prior to entering into an agreement to acquire property, the Investment Adviser, on behalf of the Group, is required to perform due diligence on the proposed investment, including an assessment of the financial strength of material tenants, for the Board’s consideration. In so doing, it would typically rely where relevant on third parties to conduct specialist aspects of this due diligence, including, for example, legal reports on title and external property valuations. To the extent that the Company, the Investment Adviser or other third parties underestimate or fail to identify risks and liabilities associated with the investment in question, the Group may incur unexpected liabilities, for example, defects in title, an inability to obtain permits, or environmental, structural or operational defects requiring remediation. If there is a failure of due diligence, there may be a risk that properties are, or have been, acquired which are not consistent with the Company’s investment strategy or that properties are, or have been, acquired that fail to perform in line with expectations or where there are, or will be, liabilities not currently disclosed in the Group’s results.

3.5 Material loss may arise in excess of any insurance proceeds or from uninsured events The Group’s properties could suffer physical damage resulting in losses (including loss of rent) which may not be fully compensated for by insurance, or at all. In addition, there are certain types of losses, generally of a catastrophic nature such as earthquakes, flooding or acts of war or terrorism, which may be uninsurable or are not able to be insured at a reasonable cost. Inflation, changes in building codes and ordinances, environmental considerations, and other factors, might also result in insurance proceeds being insufficient to repair or replace a property. Should an uninsured loss or a loss in excess of insured limits occur that is not met by tenants or their guarantors where they have the obligation to maintain insurance, the Group could lose capital invested in the affected property as well as anticipated future revenue from that property. In addition, the Group could be liable to repair damage caused by uninsured risks in the event that a tenant or guarantor fails to do so. The Group might also remain liable for any debt or other financial obligation related to that property or may in certain circumstances be required to remit insurance proceeds to lenders. Material uninsured losses could have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

3.6 Risk relating to changes in economic, regulatory and governmental conditions The Group’s Portfolio consists of real estate assets predominantly in the UK and the Group intends to continue to invest in long term, secure income streams from real estate investments. Accordingly, the Group’s performance may be significantly affected by events beyond its control, such as the state of the economy in the UK and other territories in which it invests (including interest rates and inflation rate fluctuations and the availability of credit), the financial condition of tenants and their guarantors and the markets in which they operate, changes in regulatory requirements and applicable laws and political, economic or other developments. Such events could reduce rental and/or capital values and may also affect the liquidity of the investment market for the Group’s properties, the state of the financing markets and/or the cost of finance and, consequently, could have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

3.7 Risk associated with general real estate market conditions Both the condition of the real estate market and the overall UK economy will impact the returns of the Company, and may have a negative effect on the Investment Adviser’s and the Board’s prospects for identifying and executing future investments in suitable assets that generate acceptable returns. Market conditions may also negatively impact the price at which the Group is able to dispose of assets. A material fall in value may result in the Group selling assets to repay its loan commitments. These outcomes may, in turn, have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

13 3.8 Risks associated with competition for assets Real estate assets with long leases and secure income streams appeal to a broad spread of potential real estate investors including other listed property specialists and funds. These competitors may have greater financial resources than the Company, greater access to transactions or greater ability to borrow or leverage funds to acquire properties. There is a limited supply of real estate assets with long leases and secure income streams and accordingly there is no assurance that the Company will be able to secure suitable assets in the future, which could have a material adverse effect on the Group’s business or prospects.

3.9 Risks relating to property disposals On a disposal of a property, Group companies may be required to give warranties to a purchaser and accordingly may be exposed to liabilities in relation to future warranty claims or contingent liabilities in respect of disposals. The Group may be required to pay damages (including but not limited to litigation costs) to a purchaser to the extent that any representations or warranties given to a purchaser prove to be inaccurate or to the extent that it has breached any of its covenants or obligations contained in contracts for sale or related documents. The purchaser may in rare circumstances also have the ability to rescind a completed contract for sale. Further, the Group companies may become involved in disputes or litigation in connection with such disposed investments. Certain obligations and liabilities associated with the ownership of investments (such as certain environmental liabilities) can also continue to exist notwithstanding any disposal. Any claims, litigation or continuing obligations in connection with the disposal of any assets may subject the Company to unanticipated costs and may require the Board or the Investment Adviser to devote considerable time to dealing with them. As a result, any such claims, litigation or obligations may have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

3.10 Environmental risks As the owner of property, the Group is subject to environmental regulations that can impose liability for cleaning up contaminated land, watercourses, groundwater or air on the person causing or knowingly permitting the contamination. The cost to the Group of investigation, removal, or remediation required to comply with environmental regulations, or in connection with a change in use or redevelopment, may be substantial. In addition, such environmental liabilities could adversely affect the Group’s ability to sell, lease or redevelop the real estate, or to borrow using the real estate as security. If a Group company owns contaminated land, it could also be liable to third parties for harm caused to them or their property as a result of the contamination. If a Group company is found to be in violation of environmental regulations, it could face reputational damage, regulatory compliance penalties, reduced letting income and/or reduced asset valuation, any of which could have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

4 RISKS RELATING TO IMPLEMENTING INVESTMENT POLICY 4.1 Risks associated with the performance of the Investment Adviser The Company’s performance is dependent upon the judgment and ability of the Investment Adviser to support the Board and implement the Company’s strategy. A failure to source investment opportunities, poor sourcing of investment opportunities or poor skills, judgment or transaction execution or management of investments by the Investment Adviser, could have a material adverse effect on the Group’s business, results of operations, financial condition or prospects including by way of incurring abortive costs on transactions that do not complete.

4.2 Risks associated with the continuing involvement of the Investment Adviser The Independent Directors have a right to propose to the Investment Adviser amended incentive fee terms to better reflect the structure of the business in or around June 2017. In the event that, acting reasonably, the Independent Directors and Prestbury are not able to reach agreement on the revised proposals after a period of negotiation, and failing such agreement they are also unable to accept the continuation of the existing incentive fee arrangements, then the Investment Advisory Agreement can be terminated by the Investment Adviser with notice and new arrangements would need to be made for the management of the Group. If the Investment Advisory Agreement is terminated following such

14 negotiations or otherwise, the Company may be unable to find a suitable replacement in terms of quality or of cost (particularly given Prestbury’s involvement since 2007 in, and knowledge of, the Group’s property portfolio), either immediately or over time, which would limit, in whole or in part, the Company’s ability to make investments or realise its portfolio and have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

4.3 Risks associated with the loss of key personnel As the Company has no executive directors and no employees, the Board is reliant on the advice and services it receives from Prestbury or any replacement management team and its personnel (or the personnel of its subcontractors). The ability of the Group to maintain its operational activity and quality of service is significantly dependent on the expertise of the Prestbury Team and the continued involvement of certain members of the Prestbury Team. The Directors cannot give assurance that those members of the Prestbury Team will remain with Prestbury. If Prestbury fails to staff its operations appropriately, or loses one or more of its key personnel, including the Chairman, Nick Leslau, and the CEO, Mike Brown, and fails to replace them in a satisfactory and timely manner, this may have an adverse impact on the Group’s business, results of operations, financial condition and business prospects.

4.4 No assurance that the Investment Adviser will be successful No assurance can be given that the implementation by the Investment Adviser of the Company’s investment strategy will be successful under current or future market conditions. The approach employed by the Investment Adviser may be altered from time to time, so it is possible that the approach adopted by the Investment Adviser to achieve the Company’s investment strategy in the future may be different from that presently used and disclosed in this document. The Company and Investment Adviser operate in a competitive market and might not be successful in sourcing acquisitions or new lettings in the face of competition. If the investment strategy is not implemented or is not implemented effectively, Shareholders may not receive an expected level of return, or Shareholders could lose part or all of the value of their investment in the Company.

4.5 Past and current performance is not a guarantee of future performance The past and current performance of entities and assets managed by the Prestbury Team, including the Portfolio, should not be construed as an indication of the future performance of the Group or of any investments recommended by Prestbury to the Company. Differences between the circumstances of the Company and the circumstances under which the track record information in this document was generated include (but are not limited to) actual acquisitions and investments made, investment objectives, fee arrangements, structure (including for tax purposes), terms, leverage, geography, performance targets, market conditions and investment horizons. All of these factors can affect returns and impact the usefulness of performance comparisons and, as a result, none of the track record information in this document is directly comparable to the Company’s business or the returns which the Company may generate.

4.6 Risks associated with fraud and misconduct Fraud or other misconduct could occur and the precautions that the Group or the Investment Adviser takes to prevent this may not be effective in all cases. Misconduct by employees of Prestbury or its agents or subcontractors could cause significant financial harm or reputational damage to the Group and any liability or loss may not be fully covered by insurance. Such fraud or misconduct, were it to occur, may have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

5 RISKS RELATING TO LAWS AND REGULATION 5.1 Risks relating to compliance with laws and regulation The Company and the Investment Adviser are both subject to laws and regulations enacted by national, regional and local government institutions. In particular, Group companies will be required to comply with certain statutory requirements under English law applicable to an English company. Compliance with and the monitoring of applicable regulations may be difficult, time consuming and/or

15 costly. Any changes to such regulation could affect the market value of the Company’s portfolio and/or the rental income of the portfolio.

Neither the Company nor the Investment Adviser has obtained and neither currently intends to obtain political risk insurance. As such, government action could have a significant impact on the investments of the Company. Changes to the existing legislation or policy or additional legislation or policies may be burdensome for the Company to implement and may as a result have a negative impact on the returns of the Company.

Government authorities are actively involved in the application and enforcement of laws and regulations relating to taxation, land use and zoning and planning restrictions, environmental protection, safety and other matters. The institution and enforcement of those laws and regulations could have the effect of increasing the expense and lowering the income or rate of return from, as well as adversely affecting, the value of the Company’s assets.

5.2 Risks relating to the potential for change in laws, regulation and/or government policy The Company must comply with laws and governmental regulations (whether domestic or international (including in the EU)) which relate to, among other things, property, land use, development, zoning, health and safety requirements and environmental compliance. These laws and regulations often provide broad discretion to the administering authorities. Additionally, all of these laws and regulations are subject to change, which may be retrospective, and changes in regulations could adversely affect existing planning consents, costs of property ownership, the capital value of the Company’s assets and the income arising from the Portfolio. Such changes may also adversely affect the Company’s ability to use a property as intended and could cause the Company to incur increased capital expenditure or running costs to ensure compliance with the new applicable laws or regulations which may not be recoverable from tenants. Similarly, changes in laws and governmental regulations governing leases could restrict the Company’s ability to increase the rent payable by the tenants, terminate the leases or determine the terms on which the leases may be renewed. The occurrence of any of these events may have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

Specifically, the Group faces potential risks associated with the planned referendum on UK membership in the EU. The possible UK exit from the EU could have an adverse impact on the legal, regulatory and tax regime to which the Group’s operations are currently subject. In addition, the referendum, regardless of its result, could contribute to prolonged uncertainty around certain aspects of the UK economy including consumers’ and investors’ confidence and on the business of the Group’s tenants and therefore have a material adverse effect on the Group’s business, results of operations, financial condition or prospects and adversely impact on the Company’s ability to access further capital.

5.3 Risks relating to ERISA Plan Investors may not purchase Ordinary Shares pursuant to the Placing without the permission of the Company. Unless the Company otherwise consents, purchasers of Ordinary Shares in the Placing will be deemed to have represented that none of the assets they use to purchase Ordinary Shares constitute “plan assets” for purposes of ERISA (as described in Part 9: Certain ERISA Considerations of this document).

If Plan Investors were to hold Ordinary Shares but the Company fails to satisfy the requirements for an exemption from the ERISA Plan Asset Rules, certain adverse consequences could result for the Company, Prestbury, the Board and/or the fiduciaries of employee benefit plans whose assets are used to acquire Ordinary Shares. These adverse consequences are described in Part 9: Certain ERISA Considerations of this document. Investors to which these issues are of concern are advised to review Part 9: Certain ERISA Considerations of this document and to consult their own legal counsel as to the potential applicability of ERISA to the Company and to determine for themselves whether they are permitted to hold Ordinary Shares.

6 RISKS RELATING TO THE AIFMD The AIFMD imposes a regime for EU managers of AIFs and in respect of marketing of AIFs in the EU. The AIFMD has been implemented in the UK by the UK AIFMD Rules.

16 The AIFMD requires that EU AIFMs of AIFs are authorised and regulated. The Company is an internally managed AIF within the scope of AIFMD and the UK AIFMD Rules and is authorised by the FCA in such capacity.

There is a risk that the FCA or a court may determine that the Company is not an internally managed AIF and that the Company’s Investment Adviser is acting as an external AIFM. If so, the Investment Adviser would need to obtain authorisation as an AIFM and the Company may not be able to raise further capital or manage and/or add to the Portfolio until such authorisation is obtained or the Investment Adviser is replaced.

The AIFMD came into force in July 2013 and is relatively untested by the regulators and the courts. Changes to the AIFMD regime or new recommendations and guidance as to its implementation may impose new operating requirements that would require a change in the operating procedures of the Company and may impose restrictions on the investment activities that the Company may engage in and increase the costs borne by the Company.

7 RISKS RELATING TO THE ORDINARY SHARES 7.1 Illustrative returns may not be achieved Certain forward looking scenarios presented in this document including illustrative distributions, illustrative loan to value ratios, and illustrative Total Shareholder Return are illustrations only and are based on estimates of and assumptions about a variety of factors including, without limitation, portfolio composition, asset values, volatility, investment liquidity, continued compliance with loan covenants, market conditions, government regulations or other policies, the economic environment and changes in law and taxation, all of which may affect the illustrations. The Assumptions are the principal relevant assumptions used in preparing these illustrations, and they include assumptions regarding RPI linked rent reviews, valuation yields and the expectation that the incentive fee arrangements of the Investment Adviser will not be amended. There can be no assurance that the Assumptions, or any other relevant assumptions will prove to be complete or correct, or that the Company will achieve the illustrated outcomes, and accordingly, the actual results achieved may be materially different to those presented.

7.2 Distributions are not guaranteed Distributions on the Ordinary Shares will be made at the discretion of the Board. The decision to make any such distribution will depend upon a number of factors, including the Company’s operating results, financial condition, current and anticipated cash needs, legal and regulatory restrictions and requirements including the UK REIT rules, the availability of distributable reserves and such other factors as the Board may deem relevant from time to time. The Company’s ability to make distributions will largely depend on the Group’s ability to generate realised profits and cash flow and the ability of Group companies to pass such profits and cash flows to the Company on a timely basis is not guaranteed.

7.3 The market price of the Ordinary Shares may fluctuate The market price of the Ordinary Shares may not reflect the value of the Company and may be subject to fluctuations in response to various factors, including, amongst other things, variations in the Company’s operating results, the valuations of its assets and liabilities, additional issues of the Company’s shares or other securities exchangeable for or convertible into its shares, the addition or departure of Board members or of changes to the identity of the Investment Adviser or changes to the members of its team, divergence in financial results of the Group or other companies from stock market or analysts’ expectations, changes in analysts’ recommendations regarding the real estate sector as a whole, the Company or any of its assets, a perception that other market sectors may have higher growth prospects, general economic conditions, legislative changes in the real estate sector or the sectors in which the Company’s principal tenants operate and other events and factors within or outside the Company’s control.

7.4 Dilutive effect of future issues of Ordinary Shares The Group may in future require or desire additional equity financing. While the Act contains pre- emption rights for Shareholders in relation to issues of shares in consideration for cash, such rights can be disapplied by special resolution of the Shareholders and do not apply where there is non-cash

17 consideration. Therefore, any additional equity financing may be dilutive to the Company’s existing Shareholders at that time.

The Directors are currently authorised to allot equity securities for cash on a non pre-emptive basis: (a) in connection with an offer of such securities by way of a rights issue; (b) pursuant to the terms of the Commitment Agreement; and (c) otherwise, up to an aggregate nominal amount of £5,615,320.90, which is equal to approximately one third of the Issued Share Capital. Further details of the authorities granted to Directors are set out in paragraph 5.3 of Part 11: Additional Information.

7.5 Risks associated with AIM and the London Stock Exchange Investment in shares traded on AIM is perceived to involve a higher degree of risk and can provide less liquidity than investment in companies whose shares are listed on the Official List. AIM has been in existence since June 1995 but the future success and liquidity in the market for the Company’s securities cannot be guaranteed.

Further, the London Stock Exchange has the right to suspend or limit trading in a company’s securities in certain circumstances. A suspension or significant limit on liquidity of the Company’s Ordinary Shares could result in Shareholders realising less on a disposal than their initial investment.

7.6 Substantial sales of Ordinary Shares may affect the market price Sales of Ordinary Shares or interests in Ordinary Shares by the Investment Adviser, its members, other members of the Prestbury Group or by the Board could depress the market price of the Ordinary Shares.

In addition, a substantial amount of Ordinary Shares being sold by any party, or the perception that sales of this type could occur, could also depress the market price of the Ordinary Shares. These scenarios, occurring either individually or collectively, may make it more difficult for investors to sell the Ordinary Shares at a time and price that they deem acceptable.

7.7 An active and liquid trading market in the Ordinary Shares may not develop To date, there have not been significant trading volumes in the Ordinary Shares. The Company cannot predict the extent to which investor interest will lead to the development of an active and liquid trading market for the Ordinary Shares or, if such a market develops, whether it will be maintained.

The Company does not have a fixed winding up date and therefore, unless Shareholders vote to wind up the Company, Shareholders will only be able to realise their investment through the market. As a result of the New PIHL Lock-in Deed, the New Prestbury Director Lock-in Deeds, the New Independent Director Lock-in Deeds, the Investment Advisory Agreement and the Secondary Placing Agreement, following completion of the Placing and assuming that all available Ordinary Shares are placed pursuant to the Placing, 28.4 per cent of the Issued Share Capital of the Company will be subject to lock-in arrangements. Further details of the lock-in arrangements are set out in paragraphs 12.8, 12.9 and 12.10 of Part 11: Additional Information.

7.8 The interests of significant Shareholders may conflict with those of other Shareholders Following completion of the Placing, the Prestbury Group will hold in aggregate at least 18 per cent of the Issued Share Capital of the Company, and it is possible that, in future, other investors may have significant holdings of Ordinary Shares. Accordingly, certain Shareholders may in future possess sufficient voting power to have significant influence on matters requiring Shareholder approval including the ability to prevent any special resolutions put to Shareholders from being passed. The interests of such significant Shareholders may conflict with those of other holders of Ordinary Shares.

7.9 Shareholders in the United States and other jurisdictions other than the United Kingdom may not be able to participate in future equity offerings The Act contains pre-emption rights for Shareholders in relation to issues of shares in consideration for cash, other than to the extent that Shareholders have voted to disapply such pre-emption rights. However, securities laws of certain jurisdictions may restrict the Company’s ability to allow participation

18 by non-UK Shareholders in future offerings. In particular, Shareholders in the United States may not be entitled to exercise these rights, unless either the Ordinary Shares and any other securities that are offered or sold are registered under the Securities Act, or the Ordinary Shares and any such other securities are offered pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Company cannot assure prospective investors that any exemption from such overseas securities law requirements would be available to enable US or other non-UK Shareholders to exercise their pre-emption rights or, if available, that the Company will utilise any such exemption.

7.10 The ability of Overseas Shareholders to bring actions or enforce judgements against the Company or the Directors may be limited The ability of an Overseas Shareholder to bring an action against the Company may be limited by law. The Company is a public limited company incorporated in England. The rights of holders of Ordinary Shares are governed by English law and by the Company’s Articles of Association. These rights differ from the rights of shareholders in typical US corporations and some other non-UK corporations. In particular, English law significantly limits the circumstances under which shareholders of companies may bring derivative actions. Under such law generally, only a company can be the proper pursuer or claimant in proceedings in respect of wrongful acts committed against it. In addition, it may be difficult for an Overseas Shareholder to prevail in a claim against the Company under, or to enforce liabilities predicated upon, non-UK securities laws.

An Overseas Shareholder may not be able to enforce a judgment against some or all of the Directors. All of the Directors are residents of the United Kingdom. Consequently, it may not be possible for an Overseas Shareholder to effect service of process upon the Directors and within the Overseas Shareholder’s country of residence or to enforce against the Directors any judgments of courts of the Overseas Shareholder’s country of residence based on civil liabilities under that country’s securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce any judgments in civil and commercial matters or any judgments under the securities laws of countries other than the UK against the Directors who are residents of the UK or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Directors in any original action based solely on the foreign securities laws brought against the Company or the Directors in a court of competent jurisdiction in England or other countries.

19 IMPORTANT INFORMATION

GENERAL The information in this section is for general guidance only and it is the responsibility of any person or persons in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction.

FORWARD LOOKING STATEMENTS This document includes statements that are, or may be deemed to be, forward looking statements. These forward looking statements can be identified by the use of forward looking terminology, including the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will “ or “should” or, in each case, their negative or other variations or comparable terminology. These forward looking statements relate to matters that are not historical facts. They appear in a number of places throughout this document and include statements regarding the intentions, beliefs or current expectations of the Company and/or the Directors concerning, amongst other things, the investment strategy, financing strategies, investment performance, results of operations, financial condition, liquidity, prospects and distribution policy of the Company and the markets in which it will operate. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward looking statements are not guarantees of future performance. The Company’s actual performance, results of operations, financial condition, liquidity, distribution policy and the development of its strategies may differ materially from the impression created by the forward looking statements contained in this document. In addition, even if the performance, results of operations, financial condition, liquidity and distribution policy of the Company and the development of its strategies are consistent with the forward looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that may cause these differences include, but are not limited to, changes in general market conditions and in the UK or German real estate market specifically or the economy generally, legislative or regulatory changes, changes in taxation regimes, the Company’s ability to manage its real estate assets by identifying and retaining appropriate tenants on satisfactory terms, the availability and cost of capital for future investments, the availability of suitable financing, the continued provision of services by the Investment Adviser and the Investment Adviser’s ability to retain key personnel.

Potential investors are advised to read this document in its entirety, and, in particular, the section entitled “Risk Factors” for a further description of the factors that could affect the Company’s performance. In light of these risks, uncertainties and assumptions, the events described in the forward looking statements in this document may not occur.

These forward looking statements speak only as at the date of this document. Subject to its legal and regulatory obligations (including under the AIM Rules), the Company expressly disclaims any obligations to update or revise any forward looking statement contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

Certain illustrative information relating to, amongst other matters, rental growth, loan to value ratios, distributions and Total Shareholder Return is included in this document. This information is for illustrative purposes only and is not a profit forecast. This illustrative information is based on the Assumptions. There is no certainty that these illustrative returns will be achieved and this information should not be relied upon in deciding whether to invest in the Company.

NON-GAAP FINANCIAL MEASURES There are certain non-GAAP financial measures included in this document, including EPRA earnings per share, adjusted EPRA earnings per share, adjusted basic NAV, EPRA NAV, EPRA NAV per share, EPRA earnings and adjusted EPRA earnings. These measures are defined in Part 13: Glossary.

The Directors have included these measures as they are, and have historically been used to measure business performance. These measures have not been audited and should not be considered as an alternative to measures based on IFRS and may not be computed in the same manner as similarly titled measures presented by other companies.

20 PRESENTATION OF FINANCIAL INFORMATION All financial information in this document has been prepared in accordance with IFRS, unless otherwise stated. In making an investment decision, investors must rely on their own examination of the Company and the Group from time to time, the terms of the Placing and the financial information in this document.

The financial information contained in this document, including that financial information presented in a number of tables has been rounded to the nearest whole number or the nearest decimal place. Therefore, the actual arithmetic total of the numbers in a column or row in a certain table may not conform exactly to the total figure given for that column or row. In addition, certain percentages presented in the tables in this document reflect calculations based upon the underlying information prior to rounding, and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.

INDUSTRY, MARKET AND OTHER DATA Information regarding markets, market size, market share, market position, growth rates and other industry data pertaining to the Group’s business and the business of the Group’s tenants and the track record of the Prestbury Team contained in this document consists of estimates based on data and reports compiled by professional organisations and analysts, information made public by investment vehicles previously managed by the Prestbury Team, on data from other external sources and on the Board and the Prestbury Team’s knowledge of the UK real estate and other markets. Information regarding the economic environment in the UK has been compiled from publicly available sources. In many cases, there is no readily available external information (whether from trade associations, government bodies or other organisations) to validate market-related analyses and estimates, requiring the Company to rely on internally developed estimates. The Company takes responsibility for compiling, extracting and reproducing market or other industry data from external sources, including third parties or industry or general publications, which data has been accurately reproduced and, so far as the Company is aware and able to ascertain from information published from such sources, no facts have been omitted which would render the reproduced information inaccurate or misleading. Neither the Company nor the Joint Bookrunners has independently verified that data or gives any assurance as to the accuracy and completeness of, and takes no further responsibility for, such data. Similarly, while the Board believes its and the Prestbury Team’s internal estimates to be reasonable, they have not been verified by any independent sources and neither the Company nor the Joint Bookrunners can give any assurance as to their accuracy.

SOURCES OF INFORMATION Where information has been sourced from a third party as specifically noted in the document, including, but not limited to, publicly available information from Merlin, Orpea and Ramsay, the Company confirms that this information has been accurately reproduced, and that as far as the Company is aware and able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. Such information published by a third party has not been verified by the Company or any other adviser (including the Joint Bookrunners).

EXTERNAL VALUATIONS Where information has been sourced from an external valuation or attributed to the opinion of an external valuer this is a reference to an external valuation or external valuer as defined by the RICS Valuation – Professional Standards (2014) and for the avoidance of doubt does not represent an external valuation for the purposes of AIFMD.

CURRENCY PRESENTATION Unless otherwise indicated, all references in this document to “pounds sterling”, “£”, “pence”or“p” are to the lawful currency of the UK, references to “euros”, or “€” are to the lawful currency of the member states of the European Union that have adopted a single currency in accordance with the Treaty establishing European Communities, as amended by the Treaty on the European Union, references to “A$” are to the lawful currency of Australia and references to “£m” are to millions of pounds sterling.

21 DEFINITIONS AND GLOSSARY A list of defined terms used in this document is set out at pages 219 to 226. A glossary of terms used in this document is set out on pages 227 and 228.

NO INCORPORATION OF WEBSITE INFORMATION The contents of the Company’s website and any other websites directly or indirectly linked to the Company’s website do not form part of this document.

22 PLACING STATISTICS

Placing Price Range (per Ordinary Share)(1) 250 pence to 260 pence Number of Ordinary Shares in issue at the date of this document 180,344,228 Number of Ordinary Shares to be sold by the Selling Shareholders pursuant to the Placing up to 110,735,013 Market capitalisation at the Placing Price(2) £459.9 million Placing Shares as a percentage of the Issued Share Capital Up to 61.4 per cent Minimum number of Ordinary Shares to be held by the Prestbury Group and Prestbury Directors immediately following the Placing(2) 32,982,577 Minimum number of Ordinary Shares to be held by the Prestbury Group and Prestbury Directors immediately following the Placing as a percentage of the Issued Share Capital(2) 18.3 per cent ISIN GB00BLMQ9L68

Notes: (1) It is currently expected that the Placing Price will be within the Placing Price Range. It is expected that the Pricing Statement containing the Placing Price will be published on or about 22 March 2016 and will be available on the Company’s website. (2) Assuming the Placing Price is set at the mid-point of the Placing Price Range.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Each of the times and dates below is subject to change without further notice. References to a time of day are to London time.

Publication of this document 14 March 2016 Latest date for receipt of indications of interest under the Placing 18:00 on 21 March 2016 Pricing and allocation 22 March 2016 Settlement 24 March 2016

23 DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS

Directors Martin Moore, Independent non-executive Chairman Mike Brown, Non-executive Director Leslie Ferrar, Independent Non-executive Director Sandy Gumm, Non-executive Director Jonathan Lane, Independent Non-executive Director Nick Leslau, Non-executive Director Ian Marcus, Senior independent Non-executive Director

Company Secretary Sandy Gumm

Registered Office Cavendish House, 18 Cavendish Square, London W1G 0PJ

Investment Adviser Prestbury Investments LLP, Cavendish House, 18 Cavendish Square, London W1G 0PJ

Nominated Adviser, Joint Global Stifel Nicolaus Europe Limited, 150 Cheapside, London, Coordinator and Joint Bookrunner EC2V 6ET

Joint Global Coordinator and Joint Goldman Sachs International, Peterborough Court, 133 Fleet Bookrunner Street, London EC4A 2BB

Corporate Legal Advisers to the Berwin Leighton Paisner LLP, Adelaide House, London Company Bridge, London EC4R 9HA

Real Estate Legal Advisers to the Taylor Wessing LLP, 5 New Street Square, London EC4A Company 3TX

Legal Advisers to the Joint Clifford Chance LLP, 10 Upper Bank Street, Canary Wharf, Bookrunners London E14 5JJ

Reporting Accountants BDO LLP, 55 Baker Street, London W1U 7EU

Auditors to the Company BDO LLP, 2 City Place, Beehive Ring Road, Gatwick RH6 OPA

Property Valuer CBRE Limited, Henrietta House, Henrietta Place, London W1G 0NB

Financial PR Advisers FTI Consulting LLP, 200 Aldersgate, Aldersgate St, London EC1A 4HD

Registrars Capita Registrars Limited, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU

Website www.SecureIncomeREIT.co.uk

Email [email protected]

24 Part 1: Business

The following information should be read in conjunction with the more detailed information appearing elsewhere in this document, including the historical financial information in Part 6: Historical Financial Information and the property valuation report in Part 7: Property Valuation Report.

1 INTRODUCTION Secure Income REIT Plc is a UK REIT that specialises in investing in long term, secure income derived from real estate investments and offering inflation protection. The Directors believe that the Company’s investment strategy, which is designed to satisfy investors’ growing demand for high quality, safe, inflation protected income returns, combined with the Company’s tax efficient REIT status and carefully managed capital structure will allow it to produce attractive, growing and sustainable total returns to Shareholders.

The Board announced its annual results for the year ended 31 December 2015 on 3 March 2016, which included the confirmation of its intention to initiate quarterly cash distributions to Shareholders in August 2016 at an annualised rate of 11.75 pence per Ordinary Share, reflecting a 4.2 per cent yield on the 31 December 2015 EPRA NAV. The Board expects the distributions to grow progressively in line with the Company’s geared net earnings. The Board also intends to seek growth opportunities for the Company, including further expanding to a multi-sector portfolio of long term income streams with a view to moving the Company’s listing to the Main Market of the London Stock Exchange in due course.

The EPRA Net Asset Value of the Company as at 31 December 2015 is £510.1 million or 282.8 pence per Ordinary Share.

The Group owns a high quality portfolio of 26 freehold investment properties externally valued as at 31 December 2015 at £1.35 billion. All lease liabilities are guaranteed by substantial global businesses with multi billion pound market capitalisations and which have delivered strong earnings growth even through the recent financial crisis and subsequent recession.

The Group’s passing rent at 31 December 2015 is £76.3 million. The businesses guaranteeing this rental income are: • Ramsay Health Care Limited, the global hospital group that is ranked in the top five private healthcare operators in the world by revenue, which has a market capitalisation as at 11 March 2016 of £6.7 billion, and guarantees 58 per cent of annual passing rent as at 31 December 2015; • Merlin Entertainments plc, Europe’s largest and the world’s second largest visitor attractions business by visitor numbers, which has a market capitalisation as at 11 March 2016 of £4.6 billion and guarantees 39 per cent of annual passing rent as at 31 December 2015; and • Orpea SA, a European leader in integrated long term care and post-acute care, which has a market capitalisation as at 11 March 2016 of £3.5 billion and guarantees 2 per cent of annual passing rent as at 31 December 2015.

The Company has an experienced non-executive Board comprising four Independent Directors and three directors from the Prestbury Team. The Board is chaired by Martin Moore and the three other Independent Directors are Leslie Ferrar, Jonathan Lane and Ian Marcus. The Directors representing the Investment Adviser, Prestbury, are Nick Leslau, Mike Brown and Sandy Gumm. The quorum for a Board meeting requires a majority of Independent Directors and all material decisions are reserved for the Board. The Directors have a wealth of experience in real estate transactions obtained over many years, and in particular have an in-depth knowledge of acquiring and structuring assets with long leases, together with experience in corporate finance, tax and capital markets. Further information about the Board, including the expertise and experience of the Independent Directors is included in Part 3: Directors and Corporate Governance.

The Company is advised by Prestbury, which is required under the terms of the Investment Advisory Agreement to offer the Company exclusive access to all investment opportunities that it or its affiliates source during the term of its appointment as Investment Adviser which fit the Company’s investment

25 strategy. Prestbury provides all deal execution, property management, financial and administrative services to the Group under the supervision of the Board. The Investment Advisory Agreement expires on 5 June 2022 at which point there are no automatic renewal rights and no penalties for termination.

Prestbury is led by Nick Leslau and Mike Brown, two of the UK’s most successful real estate entrepreneurs. They each have a strong track record over more than 30 years of producing above market returns for investors in the UK commercial real estate market, including major leadership roles at Max Property Group Plc, Prestbury Group Plc, Helical Bar Plc and Burford Holdings Plc. Their respective track records have been built through a number of property cycles and through a spectrum of conditions in the wider UK economy. Prestbury’s interests are strongly aligned with those of all other Shareholders through the Prestbury Group’s substantial investment in the Company, which was initially made in 2007. Following the Placing, the Prestbury Group’s investment in the Company is expected to amount to £84.1 million at the Placing Price (assuming that the Placing Price is set at the mid-point of the Placing Price Range) and representing 18 per cent of the Issued Share Capital, which will continue to be one of the largest management holdings, both by absolute value and as a percentage of issued share capital, in the quoted UK real estate sector. Further information about Prestbury is included in Part 2: Prestbury and the Investment Advisory Agreement.

1.1 Background to and reasons for the Placing The Selling Shareholders have had an interest in the Portfolio for over eight years, having acquired their interests in 2007 through an investment fund established in 2006 with a ten year life. At the time those investments were made, conversion to REIT status or exit via a sale to a REIT were identified as preferred outcomes. At that time REIT conversion required payment of a conversion charge of 2 per cent of gross asset value, and there was a requirement for shares to be widely held from the date of conversion such that the REIT parent company was not a close company. The costs of conversion and the significant dilution in the value of the Selling Shareholders’ interests required to qualify as a REIT at that time, together with exceptionally turbulent market conditions in the years following the financial crisis of 2008, delayed the possibility of such an exit. In 2013 the REIT rules changed, eliminating the conversion charge and allowing closely held companies a three year grace period within which to become widely held. Following those changes, in June 2014, the Company listed on AIM, issuing a minimal amount of new equity amounting to approximately five per cent of the Company’s Issued Share Capital and the Group elected into the REIT Regime.

At the time of listing, the Group’s secured debt had approximately three years’ term to maturity and the significant majority of the Company’s shares continued to be held by the six original investors. The Board’s view was that the best option for the Company was to materially extend the Group’s debt maturity before widening the shareholder base to support its growth aspirations. In order to facilitate that process, during the course of 2015, two of the Group’s investment properties were sold for aggregate gross proceeds of £382.1 million, reducing gearing, and the Group’s debt facilities were refinanced, significantly reducing interest costs, improving debt terms and extending weighted average debt maturity to a term of over eight years. The first debt expiry was extended from May 2017 to October 2022 as a result of the new financing. The improved cash flows and earnings following sales and refinancing have created conditions allowing the Board to initiate dividend payments.

The Board believes that, following the execution of its strategy to extend debt maturity and commence cash distributions, the Company has created a structure that is more appealing to the wider institutional investor market. The Board has therefore been discussing with certain of the Company’s largest Shareholders how to best widen the Company’s shareholder base in order to create liquidity for the Selling Shareholders as envisaged by their original investment arrangements made in 2006 and to implement the growth phase of its strategy. The Board has concluded that a substantial placing of the Company’s shares at this time would: • create more liquidity in share trading; • better place the Company for expansion when new opportunities for value accretive acquisitions are identified; and • position the Group to continue to comply with the UK REIT rules.

Consequently, the Selling Shareholders are making available for sale up to 110,735,013 Ordinary Shares amounting to 61.4 per cent of the Issued Share Capital in a co-ordinated Placing. The

26 Prestbury Team is committed to a long term holding in the Company and, following the Placing, its interest in the Company will be at least 18 per cent, valued at the Placing Price (assuming that the Placing Price is set at the mid point of the Placing Price Range) at £84.1 million, making it one of the largest management holdings in the quoted UK real estate sector. None of the Independent Directors is selling Ordinary Shares and each will renew the lock-in arrangements that were put in place at the IPO Date with effect from completion of the Placing.

1.2 The importance of long term secure income The Group owns a freehold portfolio of 26 high quality assets generating secure income from long leases offering inflation protection, let to businesses considered by the Board to be financially strong and in defensive sectors. The weighted average unexpired lease term of the portfolio is over 23 years and the earliest lease expiry is in over 21 years’ time. There are no contractual lease break options. The portfolio is externally valued at 31 December 2015 at £1.35 billion, reflecting a Portfolio net initial valuation yield of 5.3 per cent after full purchaser’s costs. Approximately one third of rental income is subject to upwards only uncapped RPI linked uplifts and two thirds to fixed annual uplifts of between 2.75 per cent and 3.34 per cent, averaging 2.8 per cent. At the core of the Company’s strategy are three important elements driving property returns: • the stability of income returns and their importance to overall returns over the long term; • the longevity of rental income; and • the security of the rental income flows whether by way of the financial strength of tenants and/ or guarantors responsible for paying the rents or by way of asset cover. An analysis of IPD monthly data for the 29 years to December 2015, shown in the chart below, demonstrates that income returns make up 78 per cent of total returns from investment in the UK commercial real estate market over that period. Income has been the core component of UK real estate market rolling five year total returns

Source: IPD UK Monthly Index December 2015

The Directors believe that commercial property rents in the UK market, and in particular office and industrial rents, have struggled to keep pace with inflation (as measured by CPI) since the early 1990s, as demonstrated by the analysis of rental values over the 38 years from 1977 to 2015 below. Over this period only retail rents show a modest degree of inflation protection but they also demonstrate a sharp negative trend since 2007 reflecting, in the opinion of the Directors, the impact of the recession and the growth in online retail resulting in downward pressure on retail rents. UK rental values have struggled to keep up with inflation

Source: Datastream, IPD

27 In addition, UK commercial real estate lease lengths have continued to decline. According to IPD monthly data, the lease length of only seven per cent of new UK commercial real estate leases entered into in 2015 exceed 15 years as set out in the chart below.

Length of UK Commercial Property Leases Granted in 2015

42% 36%

16%

4% 3%

1-4 Years 5-9 Years 10-14 Years 15-19 Years 20+ Years % of Leases Granted in 2015

Notes: Full lease term on all leases; tenancies equally weighted. Source: IPD

Against the background of a scarcity of both long leases and leases offering inflation protection, the Company has: • the longest weighted average lease length of any UK REIT with a market capitalisation of over £200 million, with over 23 years’ weighted average term, no contractual lease break options and over 21 years to the first expiry; • a considerable degree of inflation protection through the annual fixed uplifts and upwards only RPI linked reviews in its leases; • tenant and guarantor groups that the Directors believe represent strong credit quality with rental income being underpinned by profitable operations at key operating assets; and • no vacant space to re-let.

Secure Income REIT Plc: analysis of passing rent at 31 December 2015

3.34% annual fixed uplifts 6%

Annual RPI upward only uncapped uplifts 33% 2.75% annual fixed uplifts with open market review 58% every 5 years from 2017

3.0% annual fixed uplifts 2%

UK REITs Weighted Average Unexpired Lease Length

Source: Company Disclosures Notes: Most recent disclosure by UK REITs with market capitalisation above £200 million and weighted average unexpired lease terms in excess of four years. Period is to first break where disclosed. Peer group excludes Hansteen Holdings PLC, A. & J. Mucklow Group plc and Workspace Group PLC due to the unavailability of the relevant data.

Given the importance of contracted income growth and the scarcity of high quality assets with both long leases and contractual, upwards only rental growth profiles, the Directors believe that the Portfolio represents a rare opportunity to invest in a portfolio of assets with these characteristics in a tax efficient REIT structure.

28 1.3 Portfolio highlights The Portfolio comprises: • 19 private hospitals in England with the majority in the south of England; • UK leisure attractions including Alton Towers and Thorpe Park, which are two of the three most visited theme parks in the UK, Alton Towers Hotel, and the historic Warwick Castle; • Heide Park theme park, one of the largest in Germany, and Heide Park hotel, both in Saxony, Germany; and • central London’s only private psychiatric hospital.

The Board considers the assets currently owned to be key operating assets, being assets that are an important part of a tenant group’s business and financial performance, as distinct from, for example, administrative offices where the location of the business has only marginal impact on its profitability. Further details of the tenants and guarantors are given in paragraph 5 of this Part 1: Business.

The Portfolio is fully let for a weighted average unexpired lease term of over 23 years with no contractual break clauses on institutional fully repairing and insuring leases, where all property liabilities are the responsibility of the tenants. The earliest lease expiry is in over 21 years in May 2037.

The Portfolio has been externally valued as at 31 December 2015 by CBRE at £1.35 billion, reflecting a net initial valuation yield of 5.3 per cent. At a constant exchange rate of €1:£0.735 (the 31 December 2015 exchange rate) the Group’s annual passing rental income currently amounts to £76.3 million and by July 2016 is expected to increase to a minimum of £77.8 million, following the fixed rental uplifts on the Healthcare Portfolio and German Leisure Portfolio, with further expected increases to £78.2 million by July 2016 if RPI linked uplifts on the UK Leisure Portfolio are consistent with the RPI swap curve as at 23 February 2016.

As a function of the fixed and RPI linked annual rental uplifts, annual increases in the illustrative Portfolio yield (defined as the passing rental income divided by the Portfolio value, net of purchasers’ costs) could be illustrated as follows on the basis of the assumptions set out below the following chart:

Principal Assumptions (see “Assumptions” as defined in Part 12: Definitions for further assumptions that apply to certain illustrative information in this document): 1. Yield calculated as passing rent after completion of all annual rent reviews, as a percentage of valuation net of purchasers’ costs; 2. RPI swap curve at 23 February 2016, averaging 3.1 per cent per annum over twenty years, as an approximation of potential future RPI uplifts; 3. Constant valuation at 31 December 2015 external valuation, irrespective of increasing rents; 4. No open market rental uplifts (only fixed uplifts) on Ramsay leases; 5. No purchases or sales of properties or lease variations; and 6. Constant Euro exchange rate €1:£0.735

Further details of the investment property portfolio are given in paragraph 5 of this Part 1: Business.

29 1.4 Capital structure The Group’s audited EPRA Net Asset Value as at 31 December 2015 is set out in Part 6: Historical Financial Information of this document, and may be summarised as:

As at 31 December 2015 (audited) £m Investment properties 1,349.5 Secured debt (904.9) Cash 81.6 Other net liabilities (16.1) EPRA Net Asset Value 510.1 EPRA Net Asset Value Per Share 282.8p

In the preliminary results announcement released on 3 March 2016, the Directors confirmed the intention to initiate quarterly cash distributions to Shareholders in August 2016 at an annualised rate of 11.75 pence per Ordinary Share, reflecting a 4.2 per cent yield on 31 December 2015 EPRA NAV. The Board expects the Company’s annual upwards only rental uplifts, in combination with its predictable administrative expenses and fixed cost of debt, to enable the Company to increase distributions annually in line with its geared net earnings.

1.5 Growth aspirations The Board believes that there are many opportunities to deliver growth through transactions that create increased Total Shareholder Return and intends to expand the Company’s portfolio through selecting and executing attractive and appropriate transactions, the availability of which has tended in the past to improve in volatile markets.

The Board and the Prestbury Team have a broad range of sector experience and skills and consequently the growth strategy is not sector specific. The Board’s focus is on delivery of Total Shareholder Returns derived from long term income streams, without sector bias in asset selection.

The Board believes that there are many opportunities to grow the business from sources such as: • extracting value from the current Portfolio including by way of lease variation or funding tenant capital developments on site; • structuring long lease transactions with operating businesses seeking efficient funding through property disposals; • transacting with private equity owners of businesses seeking structured exits; • creating ground rents with asset rich businesses seeking operational flexibility providing the Group with access to long leases with income security through strong asset cover; and • creating opportunities where the Company’s listed status can be used to structure transactions using the Company’s shares as consideration or to access effective refinancing strategies for portfolios acquired together with associated debt.

The Board intends to finance acquisitions through a combination of well structured and secure debt finance together with issues of equity, subject to the support of Shareholders on a deal specific basis. The Board intends for the initial loan to value ratio of debt facilities used to finance acquisitions to be no more than 50 per cent.

The Group’s listed REIT status creates a competitive advantage for the Company to pursue its growth strategy, as compared with non-REITs, in competitively pricing acquisitions where the seller needs to manage capital gains tax liabilities on exit. The Directors believe that non-REIT purchasers are likely to be unwilling or unable to take on inherent capital gains tax liabilities whereas in most scenarios the Company would be indifferent to inherent tax liabilities.

The experience of the Board and Prestbury is predominantly in the UK market which, together with the fact that the tax advantages of the UK REIT structure generally do not extend to other jurisdictions, means that UK assets are more likely to be the focus of acquisitions. However, opportunities in other jurisdictions may offer attractive post tax risk and currency risk adjusted returns and, if so, they will also be considered.

30 The Board believes that in growing the Company’s portfolio and improving liquidity in the Company’s Ordinary Shares in this way, and by financing acquisitions at a lower rate than the Group’s current leverage rate, it will be likely that the Company’s overall cost of capital will decline.

At an appropriate stage in the Group’s development, the Board intends to move the Company’s listing from AIM to the Main Market of the London Stock Exchange and expects to be considered for inclusion in the FTSE EPRA/NAREIT Global Real Estate Index Series, subject to meeting the relevant eligibility criteria.

2 INVESTMENT POLICY The Company invests in long term, secure income streams from real estate investments. A long term income stream is considered to be one with (or a portfolio with) a weighted average term to maturity in excess of 15 years at the time of acquisition. Security of income is assessed with reference to a range of factors, principally the extent of rent cover in the case of conventional assets and from underlying earnings and asset cover in the case of alternative structures such as commercial ground rents.

The Portfolio is considered by the Board to offer attractive geared returns from high quality real estate, with financially strong tenants in industry sectors with strong defensive characteristics. The Board proposes to build on this strong foundation by seeking to: (a) diversify sources of income and enhance prospects for attractive Total Shareholder Returns through acquisitions; and (b) manage the Company’s capital structure in order to enhance returns for investors whilst maintaining discipline over net debt levels.

The investment policy at the time of listing included intentions to extend the maturity profile of the Group’s debt and ultimately to reduce leverage. In the period between March and October 2015 the Group executed these elements of the policy with two asset sales and new secured credit facilities that materially reduced the Group’s loan to value ratio, replaced the entire secured debt in place at the time of listing and extended the weighted average unexpired debt term from approximately two years to over eight years at the time of completion of the refinancing. Consequently the Board considers that these aspects of the Group’s original investment policy have been delivered and they have been removed from the investment policy and replaced with paragraph (b) above. The Directors do not consider these to be material changes to the investment policy of the Company.

The Company will not materially change the investment policy set out in this document without seeking the prior consent of its Shareholders at a general meeting.

3 INVESTMENT STRATEGY The Company is the only significant UK REIT specialising in long leases across a range of property sectors.

Long term income streams such as those derived from the Group’s Portfolio mean that the Group’s revenues are expected by the Directors to be predictable and, through prudent tenant and guarantor selection, reliable.

The Board believes that the Group’s financing structure should support a medium to long term outlook for financing costs that is both stable and secure. Having drawn three new secured financing facilities and completed two asset sales in 2015 the Group now has debt with a weighted average term to expiry of over eight years, a weighted average interest rate of 5.2 per cent per annum and terms considered by the Board to provide appropriate flexibility and protection from risk of default.

Through the combination of secure and predictable long term rental income, fixed debt costs and predictable running costs, the Board intends to deliver returns to Shareholders by way of quarterly distributions and capital growth that the Board believes are appropriate on a risk-adjusted basis.

The experience of the Board and Prestbury is predominantly in the UK market which, together with the fact that the tax advantages of the UK REIT structure generally do not extend to other jurisdictions, means that UK assets are more likely to be the focus of acquisitions. However, opportunities in other jurisdictions may offer attractive post tax risk and currency risk adjusted returns and, if so, they will also be considered.

31 4 BUSINESS STRENGTHS The Board believes that it has the experience, skills and resources required to implement its investment policy and deliver its investment strategy. The Company’s key business strengths are identified as: • long term income streams secured on high quality real estate, including the current Portfolio income which the Directors believe is derived from large, financially secure, international mature businesses; • gearing that the Board believes is appropriate to the underlying assets and the stage of the economic cycle; • the tax efficiency of a UK REIT; • a strategy overseen by a strong Board with extensive relevant experience and a majority of Directors who are independent of the Investment Adviser; • exclusive access to all investment opportunities that fit the Company’s investment strategy that Prestbury or its affiliates source during the term of Prestbury’s appointment as Investment Adviser; and • day-to-day management undertaken by the experienced Prestbury Team, one of the most successful management teams in the quoted UK real estate sector over the last 30 years, which has a close alignment to all Shareholders’ interests largely through the Prestbury Group’s own shareholding in the Company which is expected to amount to more than £84.1 million at the Placing Price (assuming that the Placing Price is set at the mid-point of the Placing Price Range) and at least 18 per cent of the Issued Share Capital.

4.1 High quality real estate with financially strong tenants over a range of sectors The Board believes that the current Portfolio offers investors access to attractive geared returns from assets that generate secure, long term income. The rental income is derived from international businesses that have performed well over many years, including through the recession of the late 2000s, demonstrating their strong defensive qualities.

The current passing rental income comprises: • £44.4 million per annum let to Ramsay Healthcare UK Operations Limited, the principal UK operating company in the Ramsay Group, with lease obligations guaranteed by Ramsay Health Care Limited, subject to minimum fixed uplifts of 2.75 per cent in May of each year with potential open market rental uplifts at the landlord’s option every five years commencing in May 2017; • £25.1 million per annum let to Merlin Attractions Operations Limited, the principal UK operating company in the Merlin Group, and guaranteed by Merlin Entertainments plc, subject to annual upwards only uncapped RPI linked rent reviews in June of each year; • £4.9 million per annum (at the 31 December 2015 exchange rate of €1:£0.735) let to Merlin’s two principal German subsidiaries and guaranteed by Merlin Entertainments plc, subject to fixed annual uplifts of 3.34 per cent per annum in July of each year; and • £1.9 million per annum let to Florence Nightingale Hospitals Limited and guaranteed by Orpea SA, subject to annual fixed uplifts of 3.0 per cent per annum in May of each year.

The Board considers each of the businesses guaranteeing the lease liabilities to be particularly attractive given their resilient trading through the most recent recession, the broad geographic and operational spread of their sources of income and profitability and the barriers to entry in their respective markets.

The Board believes the Portfolio has attractive growth prospects offered by the annually increasing rental income profile and leverage through long term fixed rate debt financing, as well as the following defensive characteristics: (a) long leases and contractual uplifts in rent, which are increasingly sought after against a background of shortening lease lengths in the UK commercial real estate market generally; (b) properties that are key operating assets representing significant and profitable parts of each tenant’s business;

32 (c) for the Healthcare Portfolio specifically: (i) an ageing UK population with increasingly complex acute care needs is challenging to the NHS infrastructure resources; (ii) UK public healthcare infrastructure is not well placed to cope with seasonal demands; (iii) patient choice and therefore private sector involvement appears to be embedded in the NHS ethos and government policy; (iv) Ramsay is at the forefront of public/private co-operation, with approximately 75 per cent of its UK admissions from the NHS as reported in its interim results to 31 December 2015; (v) the substantial costs of building and equipping an acute hospital, together with the need to be recognised by the private medical insurers, the need to locate sites close to NHS facilities, planning restrictions and other regulations create barriers to entry; (vi) the international spread of Ramsay’s business provides a degree of protection against fluctuations in any one geographic segment; and (vii) the majority of Ramsay’s property assets are owned, not leased; (d) for the Leisure Portfolio specifically: (i) it includes two of the UK’s top three most visited theme parks; (ii) market trends show growing leisure spending and expansion of leisure time; (iii) planning restrictions, substantial initial capital investment required to create a new attraction and long lead times to do so create barriers to entry; (iv) the majority of Merlin’s property assets are owned, not leased; and (v) Merlin’s international spread and attractions aimed at various age ranges provides a degree of protection against fluctuations in trading in any one geographic or demographic segment.

Information on the principal tenant and guarantor groups, Merlin and Ramsay, is set out in paragraph 5 of this Part 1: Business.

33 4.2 Access to geared returns on a substantial portfolio The Board believes that the Group’s long leases with fixed annual uplifts are suited to underpinning appropriately structured leverage to enhance Total Shareholder Returns.

The Group’s Net LTV ratio as at 31 December 2015 is 61 per cent. Given the long and predictable rental income streams generated by the Portfolio, it is possible to illustrate future scenarios for the Group’s Net Loan to Value profile over time. Based on the assumptions described below, an illustrative gross property valuation and Net Loan to Value profile is as follows:

Portfolio Valuation and Net LTV at Constant Valuation Yield

Principal Assumptions (see “Assumptions” as defined in Part 12: Definitions for further assumptions that apply to certain illustrative information in this document): 1. RPI swap curve at 23 February 2016, averaging 2.4 per cent per annum over six years, as an approximation of potential future RPI uplifts; 2. Constant valuation yield at 31 December 2015 external valuation: 5.3 per cent blended Net Initial Yield and full purchaser’s costs; 3 No open market rental uplifts (only fixed uplifts) on Ramsay leases; 4. No purchases or sales of properties or lease variations; and 5. Constant euro exchange rate €1:£0.735.

On the basis of these Assumptions, the Net LTV ratio would be expected to fall to approximately 50 per cent by the end of 2021.

Visibility of both rental income and debt costs creates a structure where capital growth and distributions should be predictable and, based on the Assumptions, growing.

A summary of the Group’s secured debt facilities are set out in paragraphs 12.17 to 12.19 of Part 11: Additional Information.

4.3 Tax efficiency of the REIT structure The Group’s REIT status presents a tax efficient structure for investors, predominantly due to the tax free nature of qualifying UK property rental incomes and gains on sales of qualifying UK property within a REIT. Furthermore, REITs have a competitive advantage vis-à-vis non-REITs, in pricing certain acquisition opportunities, as REIT status results in the elimination of latent capital gains within a corporate acquisition target.

The tax characteristics of UK REITs are summarised in Part 8: The REIT Regime and UK Taxation.

4.4 Strength of the Board The Board comprises four experienced independent non-executive directors and three non-executive directors representing Prestbury.

34 The Board as a whole has extensive experience in the governance of both quoted and unquoted businesses and has a balance of real estate, financing, tax and general corporate expertise. In particular, the majority of the Independent Directors have extensive experience over more than ten years in the field of long lease acquisition structuring and financing.

The Directors’ biographies appear in Part 3: Directors and Corporate Governance. Information about the Directors is set out in Part 3: Directors and Corporate Governance and Part 2: Prestbury and the Investment Advisory Agreement.

4.5 Strong alignment of interests between Prestbury and Shareholders The Prestbury Team comprises Nick Leslau, Mike Brown, Tim Evans and Ben Walford (all Chartered Surveyors) and Sandy Gumm (a Chartered Accountant). They are all partners in Prestbury who have worked together for between seven and twenty years.

The Prestbury Group is significantly invested in the Company, providing strong alignment with all other Shareholders’ interests. Following completion of the Placing, the Prestbury Group’s interests in the Ordinary Shares of the Company is expected to be at least 18 per cent of the Issued Share Capital, worth £84.1 million at the mid-point of the Placing Price Range. An investment of this size represents a substantial personal investment for the Prestbury Team members. The members of the Prestbury Team have a track record of long term investment in businesses owned and managed by them.

The shares held by the Prestbury Group are subject to lock-in restrictions, details of which are set out in paragraph 8 of Part 10: Details of the Placing. The Prestbury Group has stated that it is committed to a long term participation in the Company and has no current intention to sell further Ordinary Shares once the lock-in periods expire.

In addition to the existing holdings, and in circumstances where Total Shareholder Return exceeds certain thresholds, Prestbury stands to share in the surplus over those threshold returns. In circumstances where thresholds are exceeded, further shares may be awarded under the incentive fee arrangements set out in the Investment Advisory Agreement and which are summarised in paragraph 12.11.3 of Part 11: Additional Information.

The incentive fee is calculated in accordance with the Investment Advisory Agreement, the wording of which was clarified on 2 March 2016 to confirm that the incentive fee is calculated on an annual basis by reference to growth in EPRA NAV per share on the following basis. If growth in EPRA NAV per share exceeds a hurdle rate of 10 per cent per annum, an incentive fee equal to 20 per cent of the excess is payable to Prestbury. Dividends or other distributions paid in any period are treated as payments on account against achievement of the hurdle rate of return. In the event of an incentive fee being payable at the end of an accounting period, as it was for the period ended 31 December 2014, a “high water mark” is established, representing the closing EPRA NAV per share after the impact of the incentive fee, which is then the starting point for the cumulative hurdle calculations for future periods. The hurdle will therefore be set at the higher of the EPRA NAV at the start of the year plus 10 per cent or the high water mark EPRA NAV plus 10 per cent per annum.

Assuming no changes in capital structure, the benchmark to be exceeded in the financial year ending 31 December 2016 stands at EPRA Net Asset Value including distributions of £564.1 million or 312.8 pence per share otherwise no incentive will be earned for that financial year.

If the incentive hurdle is exceeded and an incentive fee is payable in any given year, the fee will be satisfied by the issue of Ordinary Shares, save for exceptions where settlement in Ordinary Shares would be prohibited by applicable law or by the AIM Rules or would result in a member of the Concert Party incurring an obligation to make an offer under Rule 9 of the City Code, or if the Company fails to obtain a valuation of non-cash consideration where it is required to do so, in which unusual circumstances, the incentive fee will be settled in cash.

Any incentive shares issued will be settled by the allotment to a wholly owned subsidiary of Prestbury of such number of new Ordinary Shares credited as fully paid as is equal to the incentive fee (net of VAT) divided by the average closing share price over the financial year for which the fee has been earned. One third of those shares is then locked in for 18 months after the end of the accounting

35 period to which the award of such Ordinary Shares relates, a further one third for 30 months and the remaining one third for 42 months. Further details in relation to the incentive fee are set out in paragraph 12.11.3 of Part 11: Additional Information.

The incentive fee arrangements were put in place at the IPO Date and were at the time benchmarked by the Independent Directors and subject to discussion with the Company’s brokers and major shareholders. Recognising that the implementation of the Company’s investment policy would likely result in a material change in the capital structure of the Group within the first three years after listing, the Independent Directors have a right to propose amended incentive fee terms to better reflect the structure of the business in or around June 2017. The Company’s Remuneration Committee engages specialist advisers to monitor the appropriateness of the incentive fee arrangements and may take specialist advice as appropriate when the arrangements are reviewed. In the event that, acting reasonably, the Independent Directors and Prestbury are not able to reach agreement on the revised proposals after a period of negotiation in good faith, and failing such agreement they are also unable to accept the continuation of the existing incentive fee arrangements, then the Investment Advisory Agreement can be terminated by Prestbury with notice.

Given the balance between the substantial personal investments in the Company by the members of the Prestbury Team, together with the incentive arrangements, the Directors believe that the Prestbury Team is motivated to achieve attractive Total Shareholder Return levels on the basis of appropriate risk adjusted return criteria, with their interests strongly aligned with those of other Shareholders as a whole.

Further information about the Prestbury Team, its track record and the terms of its appointment is included in Part 2: Prestbury and the Investment Advisory Agreement.

4.6 Exclusive access to deal flow from Prestbury Prestbury has agreed in the Investment Advisory Agreement to offer the Company exclusive access to all investment opportunities that fit the Company’s investment strategy that it or its affiliates source during the term of its appointment as Investment Adviser. The Prestbury Team is strongly motivated to source suitable transactions for the Board’s consideration in order to deliver on the investment strategy. The Board believes that the simplicity of the qualifying criteria and Prestbury’s strong alignment of interests and substantial personal investment by Prestbury Team members provides material protection to avoid circumstances in which the Investment Adviser may have a conflict of interest with the Company.

5 INFORMATION ON THE PORTFOLIO The Group owns a high quality portfolio of 26 freehold investment properties, externally valued at £1.35 billion as at 31 December 2015.

The real estate assets comprise the Ramsay Healthcare Portfolio and the Nightingale Psychiatric Hospital in central London, which together make up the Healthcare Portfolio; and the Leisure Portfolio. The Portfolio valuation is analysed between the portfolios as follows:

Healthcare Leisure Total Valuation Valuation Valuation as at 31 as at 31 as at 31 Net Yield at December Net Yield at December Net Yield at December Initial Equivalent July 2015 Initial Equivalent July 2015 Initial Equivalent July 2015 Yield Yield 2016 £m Yield Yield 2016 £m Yield Yield 2016 £m England 5.2% 6.4% 5.4% 834.4 5.4% 6.4% 5.5% 441.6 5.3% 6.4% 5.4% 1,276.0 Germany — — — — 6.3% 7.9% 6.5% 73.5 6.3% 7.9% 6.5% 73.5 Total 5.2% 6.4% 5.4% 834.4 5.5% 6.6% 5.6% 515.1 5.3% 6.4% 5.5% 1,349.5

The July 2016 yields in the table above are calculated on the basis of the rents following the completion of the 2016 rental uplift cycle. Rent increases are contractually fixed at 2.75 per cent for the Ramsay Healthcare Portfolio income (£44.4 million per annum at 31 December 2015) and 3.0 per cent on the Nightingale Hospital rent (£1.9 million per annum at 31 December 2015), with the increased rent commencing on 3 May 2016 in both cases, and 3.34 per cent for German leisure assets rent

36 (£4.9 million per annum at 31 December 2015 exchange rate of €1:£0.735), with the uplifted rent commencing on 30 July 2016. The UK Leisure Portfolio rent reviews occur on 25 June 2016 and are contractually linked to RPI uplifts from April 2015 to April 2016, which CBRE have assumed for the purposes of their valuation report included in Part 7: Property Valuation Report to be 2 per cent, using Oxford Economics as their source for this estimate of RPI.

5.1 Healthcare Portfolio 5.1.1 Ramsay Healthcare Portfolio The Ramsay Healthcare Portfolio comprises 19 private hospitals let to the principal UK operating subsidiary of Ramsay Health Care Limited, the listed Australian private healthcare group and ASX50 constituent.

These private hospitals account for 58 per cent of total Portfolio passing rent and 59 per cent of the valuation of the Portfolio as at 31 December 2015. The Directors believe that they are key operating assets for Ramsay, representing 61 per cent by number of Ramsay’s UK medical facilities.

The Ramsay Healthcare assets currently produce £44.4 million per annum of passing rent, increasing by a minimum of 2.75 per cent per annum throughout the lease term, every May. Every five years commencing in May 2017, the landlord has the option to revise the rent to the higher of the then passing rent increased by 2.75 per cent per annum calculated on a compounded basis (the “indexed rent”) and the open market rental value, with a special assumption at the first open market review in May 2017 that the rental level is the higher of the indexed rent or the amount calculated by the formula 0.885 x 0.65 x ‘EBITDARH’, where EBITDARH is calculated as earnings from each individual property before interest, tax, depreciation, amortisation, rent and head office costs. In subsequent five yearly reviews the rent is set to indexed rent or open market rental value at the landlord’s option. The unexpired lease term of the Ramsay leases is 21 years and there are no lease break options.

37 There are separate leases for each asset on identical terms, save for property specific aspects. All leases are fully repairing and insuring institutional leases such that the tenant is obliged to keep the premises in good and substantial repair and condition including where necessary to rebuild, reinstate, renew or replace the premises.

The tenant may assign the whole of the premises with the landlord’s prior written consent, such consent not to be unreasonably withheld or delayed. However the landlord is entitled to withhold consent if the proposed assignee’s financial strength is not at least equivalent to the financial strength of the tenant or if the assignment would detrimentally affect the value of the landlord’s interest, or if the assignee is not a company that is recognised as a leading hospital operator.

The leases are all guaranteed by Ramsay Health Care Limited, which has an unbroken record of double digit earnings per share growth each year over more than ten years, including through the recession of the late 2000s. Ramsay has operations in Australia, France, the UK and Malaysia. The Board considers Ramsay’s track record to be a testament to the quality of Ramsay management and the resilience of its operations in a defensive sector.

For the six months to 31 December 2015, Ramsay announced revenues increased by 24.9 per cent to A$4.2 billion (£2.1 billion), core net profit after tax from continuing operations increased by 16.2 per cent at A$237.4 million (£117.3 million) and core earnings per share from continuing operations increased by 16.9 per cent, in each case compared to the comparable prior period. Core net profit after tax and earnings per share is defined by Ramsay to mean before non-core items and from continuing operations. Core earnings per share is calculated by Ramsay based on core net profit after tax from continuing operations adjusted for preference dividends, using the weighted average number of ordinary shares adjusted for the effect of dilution.

According to its results announcement for the six months ended 31 December 2015, Ramsay’s earnings before interest and tax in the group’s UK business rose by 9.3 per cent compared to the comparable prior period, growth that is higher than the rate of rental increase on the Ramsay Healthcare Portfolio. NHS admissions, which made up 75 per cent of Ramsay’s UK admissions for the six months ended 31 December 2015, increased by 8 per cent following a successful strategy of targeting NHS income by Ramsay’s management.

Ramsay’s revenue spread was reported in its annual report for the year ended 30 June 2015 with its revenue spread between Australia (52 per cent), France (39 per cent) and the UK (9 per cent).

5.1.2 Nightingale Hospital The Nightingale Hospital in Lisson Grove is central London’s only private psychiatric hospital. It is let to a UK subsidiary of Groupe Sinoué and the obligations under the lease are guaranteed by Orpea SA, which is the Euronext Paris listed French parent company of a group operating retirement homes, outpatient and rehabilitation clinics and psychiatric care facilities with a market capitalisation as at 11 March 2016 of £3.5 billion.

The Nightingale Hospital passing rental income amounts to £1.9 million per annum and increases by 3.0 per cent per annum every May. The unexpired lease term is 28 years and there are no break options.

The lease is a fully repairing and insuring institutional lease such that the tenant is obliged to keep the premises in good and substantial repair and condition including where necessary to rebuild, reinstate, renew or replace the premises.

The tenant may assign the whole of the premises with the landlord’s prior written consent, such consent not to be unreasonably withheld or delayed. However, the landlord is entitled to withhold consent if the proposed assignee’s financial strength is not at least equivalent to the financial strength of the tenant or guarantor if the assignment would detrimentally affect the value of the landlord’s interest, or if the assignee is not a company that is recognised as a leading hospital operator.

38 In July 2014, a lease variation was negotiated whereby the lease on the Nightingale Hospital was extended for a further seven years and the fixed annual rental uplifts increased from 2.75 per cent per annum to 3 per cent per annum in return for the removal of the open market rent reviews, the release of a former guarantor and acceptance of Orpea SA as replacement guarantor.

5.2 Leisure Portfolio The Leisure Portfolio is made up of four well known visitor attractions and two hotels, including: • Alton Towers and Thorpe Park, two of the three most visited theme parks in the UK; • Heide Park, Northern Germany’s largest theme park; • Warwick Castle; and • hotels operating on the Alton Towers and Heide Park sites.

The Properties are let to principal operating subsidiaries of Merlin Entertainments plc and guaranteed by Merlin Entertainments plc.

The UK Leisure Portfolio represents 84 per cent of the Leisure Portfolio passing rent and 86 per cent of Leisure Portfolio value as at 31 December 2015. The visitor attractions account for 83 per cent and the hotels account for 17 per cent of Leisure Portfolio passing rents.

39 The leisure assets are externally valued at £515.1 million as at 31 December 2015 and currently produce £30.0 million per annum of passing rent (including £4.9 million of euro denominated rents translated at €1:£0.735) estimated by the external valuers to increase to £30.7 million by July 2016 as follows. The UK Leisure Portfolio rents are estimated to increase to £25.6 million per annum in June 2016 assuming an RPI uplift as applied by the external valuers at 2.0 per cent. The rents on the German assets will increase by 3.34 per cent in July 2016 to £5.1 million (translated from euros at the 31 December 2015 exchange rate of €1:£0.735).

The average unexpired lease term of the Leisure Portfolio is 26 years and there are no contractual lease break options. The tenant has two rights to renew the leases for 35 years each at the end of each term.

The leases are fully repairing and insuring institutional leases such that the tenant is obliged to keep the premises in good and substantial repair and condition including where necessary to rebuild, reinstate, renew or replace the premises. However, the tenant is not obliged to rebuild, reinstate, renew or replace any rides (although the obligation to otherwise repair still applies).

The tenant may assign the whole of the premises with prior written consent, such consent not to be unreasonably withheld or delayed. However, the landlord is entitled to withhold consent if the proposed assignee’s financial strength is not at least equivalent to the financial strength of the tenant or guarantor, or if the assignment would detrimentally affect the value of the landlord’s interest, or if the assignee is not a company that is recognised as a leading leisure entertainment facility or hotel operator.

The leases are guaranteed by Merlin Entertainments plc, the London Stock Exchange listed FTSE 100 leisure group with a market capitalisation at 11 March 2016 of approximately £4.6 billion. Merlin is Europe’s leading and the world’s second largest visitor attraction operator by visitor numbers with 62.9 million visitors in 2015. Despite conditions referred to by Merlin’s management as “specific challenges in 2015”, Merlin’s revenue grew by 3.9 per cent on a constant currency basis, which the Board believes reflects the strength in Merlin’s underlying brands and strategic growth drivers.

Merlin is an international business and in its 2015 preliminary results announcement reported revenues derived from the UK (37 per cent), Continental Europe (23 per cent), North America (26 per cent) and the Asia-Pacific region (14 per cent).

The Merlin business is diversified across three divisions: Midway Attractions (44 per cent of 2015 revenues), LEGOLAND Parks (34 per cent of 2015 revenues) and Resort Theme Parks (22 per cent of 2015 revenues), encompassing a variety of target age ranges and a spread between indoor and outdoor attractions around the world.

With revenue of £1.3 billion in the 52 week period ended 26 December 2015, the Merlin group produced underlying EBITDA of £402 million, an underlying operating profit of £291 million and underlying profit before tax of £250 million (in each case excluding exceptional items). Merlin’s net assets at 26 December 2015 were £1.1 billion.

Merlin reported that it incurred £215 million of capital expenditure in the 52 week period ended 26 December 2015, of which £125 million was on its existing estate. Net cash flow from operating activities was reported as £325 million for the same period.

Merlin has reported that through its strong brands, its technical and creative expertise and the scarcity value of its current portfolio and the large scale capital requirements for any competitor, it believes that it has a clear competitive advantage. Merlin has also reported that on average a new theme park requires approximately £200 million in capital investment and further funding to deal with the long lead times in developing new attractions. It has estimated that three to four years would be required for planning and regulatory approvals to be obtained with overall lead times in the region of four to six years.

40 5.3 Portfolio history and background Between 2007 and June 2014, the Portfolio was held in separate sub-groups under common ownership by Prestbury 1 LP, a private investment business established in July 2006 with a ten year partnership term. It was managed by its general partner, which is a wholly owned subsidiary of Prestbury. The Prestbury Group had a 26.7 per cent ownership interest in Prestbury 1 LP prior to the transfer of ownership of the Portfolios to the Company and the listing of the Company.

The Portfolio was acquired in 2007 as part of Prestbury’s defensive real estate strategy at that time, focussed on secure, long term rental income streams arising from key operating assets. This strategy was formulated in the context of the Prestbury Team’s perception that the property investment market was overheating and the view held then and still held now that long term income streams represent a defensive investment that is particularly attractive when markets are volatile and provide an excellent source of long term value creation. Since that time, and in the face of the sharp decline in real estate values commencing in 2008, the asset values have ultimately proved resilient, with the ungeared asset returns significantly outperforming the UK commercial real estate market.

Even through a period of significant market turmoil, the UK portfolio and the German assets delivered ungeared total returns of 9.4 per cent per annum and 8.5 per cent per annum, respectively, in the period from acquisition to 31 December 2015. The portfolios were valued at acquisition at Net Initial Yields of 5.3 to 5.4 per cent for the UK Portfolios and 6.0 per cent for German assets, averaging 5.3 per cent for the entire Portfolio. Approximately two thirds of the total returns from acquisition to 31 December 2015 are represented by income returns and one third by capital returns.

Performance of Portfolio Mid-2007 to December 2015

9.5% 9.2% 9.4% 8.5%

5.9% 6.1% 6.3% 6.4%

Ungeared Total Return % p.a 3.6% 2.9% 3.3% 2.1%

UK Hospitals UK Leisure UK Portfolio German Leisure

Capital return Income return

Source: Company data

All Group companies complied with all financial and other covenants within the debt facilities secured on the Portfolio throughout the period of ownership including the 2008-2010 period of very significant valuation falls in the market as a whole, demonstrating the security of the income, the quality of the assets and well structured financing arrangements.

In 2014 the assets were transferred to the Company’s ownership by way of a group reorganisation and remained under the management of the Prestbury Team operating under the supervision of the Board.

41 5.4 Portfolio valuation The fair value of the Portfolio as at 31 December 2015 was £1,349.5 million. The report of the external valuer shown in Part 7: Property Valuation Report is dated 24 February 2016 at which date the valuation of the Portfolio was £1,355.2 million. The difference between the two valuation figures is wholly attributable to the movement in the exchange rate applied to the translation of the euro denominated German assets which has changed from €1:£0.735 at 31 December 2015 to €1:£0.7913 at 24 February 2016. The euro denominated valuation of the German assets is unchanged between the two dates.

The property descriptions and the bandings into which both their 31 December 2015 and 24 February 2016 valuations fall are set out below.

Property Portfolio Region Address Valued between £100-£200 million Alton Towers theme park Leisure Rest of UK Alton, Staffs ST10 4DB Rivers hospital Healthcare Rest of UK High Wych Road, Sawbridgeworth, Herts CM21 0HH Thorpe Park theme park Leisure Rest of UK Staines Road, Chertsey, Surrey KT16 8PN Valued between £50-£100 million Alton Towers hotel Leisure Rest of UK Alton, Staffs ST10 4DB Ashtead hospital Healthcare Rest of UK The Warren, Ashtead, Surrey KT21 2SB Heide Park theme park Leisure Germany Heide Park 1, 29614 Soltau, Lower Saxony, Germany Springfield hospital Healthcare Rest of UK Lawn Lane, Springfield, Chelmsford, Essex CM1 7GU Yorkshire clinic Healthcare Rest of UK Bradford Road, Bingley, West Yorks BD16 1TW Valued between £25-£50 million Duchy hospital Healthcare Rest of UK Peventinnie Lane, Treliske, Truro, Cornwall TR1 3UP Fitzwilliam hospital Healthcare Rest of UK Milton Way, South Bretton, Peterborough PE3 9AQ Fulwood hospital Healthcare Rest of UK Midgery Lane, Fulwood, Preston, Lancs PR2 9SZ Nightingale hospital Healthcare London 11-19 Lisson Grove, Marylebone, London NW1 6SH Oaks hospital Healthcare Rest of UK 120 Mile End Road, Colchester, Essex CO4 5XR Pinehill hospital Healthcare Rest of UK Benslow Lane, Hitchin, Herts SG4 9QZ Reading hospital Healthcare Rest of UK Wensley Road, Coley Park, Reading, Berks RG1 6UZ Warwick Castle Leisure Rest of UK Warwick, Warwicks CV34 4QU Winfield hospital Healthcare Rest of UK Tewkesbury Road, Longford, Gloucester GL2 9WH Woodlands hospital Healthcare Rest of UK Rothwell Road, Kettering, Northants NN16 8XF Valued below £25 million Euxton Hall hospital Healthcare Rest of UK Wigan Road, Euxton, Chorley, Lancs PR7 6DY Heide Park hotel Leisure Germany Heide Park 1, 29614 Soltau, Lower Saxony, Germany Mount Stuart hospital Healthcare Rest of UK St Vincent’s Road, Torquay, Devon TQ1 4UP North Downs hospital Healthcare Rest of UK 46 Tupwood Lane, Caterham, Surrey CR3 6DP Oaklands hospital Healthcare Rest of UK 19 Lancaster Road, Salford, Manchester M6 8AQ Renacres hospital Healthcare Rest of UK Renacres Lane, Halsall, Ormskirk, Lancs L39 8SE Rowley hospital Healthcare Rest of UK Rowley Park, Stafford, Staffs ST17 9AQ West Midlands hospital Healthcare Rest of UK Coleman Hill, Halesowen, West Midlands B63 2AH

6 THE UK REAL ESTATE MARKET: TRENDS AND COMPETITION The Directors believe that the characteristics of secure long term income and the inflation protection in leases with upwards only RPI linked or fixed rental uplifts are strongly sought after by investors in light of market trends moving toward shorter, more flexible, tenant friendly leases. While over three quarters of new leases granted in the UK commercial property market in 2015 had a term of less than ten years, there remain industries and asset classes particularly suited to longer leases, principally those where such a lease is required to justify tenants’ capital outlays. These tend to be key operational assets where the underlying assets generate an important part of a tenant group’s operations and results.

The Board believes that there is investor demand for shares in real estate companies offering stable and growing distributions over the medium to long term, underpinned by high quality real estate. There is currently no other UK REIT specialising in long term lease income with contractually committed rental growth with a mandate to invest across a range of sectors. While there are other investors, principally institutions, with an appetite to invest in long leases across a range of sectors, none has the buying advantage of UK REIT status.

42 The introduction of IFRS16: Property, Plant & Equipment, will require long term leases to be brought on balance sheet by tenants with effect from accounting periods commencing on or after 1 January 2019. It is the opinion of the Board that while the impact of the new reporting standard might influence tenants to favour shorter leases where seeking to enter into property leases in the ordinary course of their business, long lease transactions of the type that the Board will be seeking are considered to be less likely to be affected. The motivation of the tenant entering into a long term lease arrangement reflects the nature of the lease as a financing transaction for a period which suits the long term requirements of their business with large capital investments to write off over a substantial period of time. Additionally in the case where a tenant is seeking to lease a key operating asset that is also difficult to replace, it usually wishes to take a long lease to ensure security of tenure. As such, the accounting treatment, while relevant to many occupiers, is not expected to be a significant obstacle to creating long lease interests.

The Directors believe that the Board and the Prestbury Team’s specialist knowledge and experience of long lease structuring and the ability to invest across a range of real estate sectors provides a competitive advantage in deal sourcing and the ability to effectively execute the often complex structuring required to effectively deliver large long lease transactions. The Company plans to adopt a two-pronged approach to sourcing new acquisitions whilst always maintaining a high degree of income security. Where tenant credit is strong it will seek to structure conventional sale and leaseback transactions in line with its existing portfolio. Where the tenant credit is weaker but the property provides strong fundamentals, the Company will look to create a ground rent interest so that the rent passing is a fraction of the property’s rental value. The Directors believe that ground rents can provide an exceptional degree of income security as a tenant default is not only extremely rare but would usually trigger the windfall of a rise in the value of the ground rent interest as the property would become available to re-let at a much higher rental than previously passing.

7 FINANCIAL PERFORMANCE From the IPO Date to 31 December 2015, the Group has reported growth in EPRA Net Asset Value per share of 64 per cent. The growth in EPRA Net Asset Value per share reflects a series of major transactions undertaken to prepare the Group for its growth phase including: (a) new long term fixed rate debt has been drawn which has: (i) reduced weighted average interest costs by 23.5 per cent from 6.8 per cent per annum to 5.2 per cent per annum; and (ii) extended the weighted average term to debt expiry from less than two years to over eight years on significantly improved terms, with the first debt expiry date extended from May 2017 to October 2022; and (b) asset sales generating £382.1 million of gross proceeds made in 2015 at 8 per cent above their 31 December 2014 carrying values. Including the effect of these major transactions and in part as a result of the annual rental uplifts, over the period from the IPO Date to 31 December 2015: • the Net LTV ratio has reduced from 80 per cent at the IPO Date to 61 per cent at 31 December 2015; • the total value of the Portfolio, excluding sold properties, and at a constant exchange rate of €1:£0.735, increased by 20.5 per cent from £1.12 billion as at 30 April 2014 to £1.35 billion at 31 December 2015; and • the Portfolio passing rent increased on a like for like basis, excluding sold properties and at a constant exchange rate of €1:£0.735, by 3.2 per cent from £73.9 million as at the IPO Date to £76.3 million at 31 December 2015.

These major initiatives and improvements in financial position have facilitated the Group’s ability to commence quarterly cash distributions in August 2016 and prepared it for the proposed Placing with a view to enabling the Company to assemble a group of shareholders who are in the main able to support the Company’s growth aspirations.

43 Audited Group financial information for the year ended 31 December 2015, the nine months ended 31 December 2014, the year ended 31 March 2014 and the year ended 31 March 2013 is included in Part 6: Historical Financial Information on the Group. For the period prior to the June 2014 listing of the Company, Group companies were held under common control but were not part of a single legal group so for the purposes of presenting the historical financial information, aggregated information has been presented on the basis set out in Part 6: Historical Financial Information.

The performance of the Group over the last three reporting periods is analysed in Part 4: Operating and Financial Review.

8 DISTRIBUTION POLICY The UK REIT rules require the Company to distribute at least 90 per cent of the Group’s qualifying profits from its tax exempt property business within 12 months of each financial year end, or otherwise suffer a tax charge. The Group has not generated a net profit from the Tax Exempt Business for any of its historic accounting periods up to and including 31 December 2015. Following the completion of the new financing arrangements and asset sales which concluded in October 2015, the Directors expect tax exempt profits to be generated beginning in the 2016 financial year.

Consequently, the Board intends to initiate quarterly cash distributions to shareholders in August 2016 at an annualised rate of 11.75 pence per Ordinary Share, reflecting a 4.2 per cent yield at 31 December 2015 EPRA NAV. The Directors expect the annual upwards only rental uplifts, in combination with the predictable administrative expenses and the fixed cost of debt, to enable the Company to increase distributions annually in line with geared net earnings. An illustrative indication of distribution growth per share is included in paragraph 9 of this Part 1: Business.

The Board’s intention is to make sufficient distributions to meet the REIT requirement that at least 90 per cent of qualifying profits be distributed and intends to maintain dividend cover of at least one times adjusted EPS. For these purposes, the Board considers the adjustment required under IFRS to spread the impact of fixed rental uplifts over the term of the leases to create, in the early years of the leases, an inflated measure of earnings which is not representative of underlying cash flow and therefore proposes to exclude this non cash adjustment when considering dividend cover.

The payment of distributions in accordance with this policy cannot be guaranteed and is subject to the Company’s performance, its available cash and to the Directors being satisfied that the Company will have sufficient distributable reserves, in accordance with the provisions of the Act, at the relevant time.

9 OUTLOOK The Directors believe that the Group’s stable long term income streams, predictable administrative expenses and fixed cost of debt should result in a relatively predictable outlook for the cash flows generated by the business, before the impact of any acquisitions, disposals, asset management initiatives or financing activity.

44 Two thirds of the Portfolio rental income is subject to fixed annual uplifts and one third to annual upwards only uncapped RPI uplifts. Even in the absence of inflation or in the event of deflation such that there are no RPI uplifts in future periods, the Group’s rental income on the current Portfolio would grow by an average 1.9 per cent per annum over the six years to 31 December 2021. Based on the Assumptions, the impact of certain inflation scenarios on the rental income attributable to the current Portfolio is illustrated below.

Principal Assumptions (see “Assumptions” as defined in Part 12: Definitions for further assumptions that apply to certain illustrative information in this document): 1. Employs RPI swap curve at 23 February 2016, averaging 2.4 per cent per annum over six years, as an approximation of potential future RPI uplifts; 2. No open market rental uplifts (only fixed uplifts) on Ramsay leases; 3. No purchases or sales of properties or lease variations; and 4. Constant euro exchange rate €1:£0.735

The Group’s management costs tend to vary in line with portfolio values as the majority of administrative expenses are represented by the Advisory Fee which is linked to EPRA Net Asset Value. The cost of the Group’s debt is fixed. As a UK REIT, the net income from the UK property business is not taxable. Tax is payable on the German rental surpluses but as a consequence of the predictable income on the German assets, which have fixed annual rental uplifts, and the fixed cost of the borrowings secured on the German debt, the German tax liability is also predictable.

45 On the assumption that the Portfolio is valued at the same 5.3 per cent net initial yield as at the 31 December 2015 external valuation, the UK Leisure Portfolio rents grow in line with the RPI swap curve as at 23 February 2016 and certain other assumptions as set out below, an illustrative profile of distribution per share growth is as follows:

Source: Company data Principal Assumptions (see “Assumptions” as defined in Part 12: Definitions for further assumptions that apply to certain illustrative information in this document): 1. RPI swap curve at 23 February 2016, averaging 2.4 per cent per annum over six years, as an approximation of potential future RPI uplifts; 2. Constant valuation yield at 31 December 2015 external valuation: 5.3 per cent blended Net Initial Yield and full purchaser’s costs; 3. No open market rental uplifts (only fixed uplifts) on Ramsay leases; 4. No purchase or sales of properties or lease variations; 5. Incentive fee arrangements currently in place are not amended at the Independent Directors’ 2017 review; 6. Constant euro exchange rate €1:£0.735; and 7. Earnings cover based on adjusted earnings to exclude increase in rental income from rent smoothing IFRS adjustment.

The illustrative distributions shown above reflect a base case growth rate (assuming RPI linked rents grow in line with the RPI swap curve as at 23 February 2016) of 7.4 per cent per annum compound annual growth over four years from 31 December 2017 to 31 December 2021. Total Shareholder Return measures the distributions together with capital growth. On the basis of the same assumptions as used to illustrate the potential distributions and assuming investment on 31 December 2015 at the December 2015 EPRA Net Asset Value of 282.8 pence per share, the base case Total Shareholder Return for the Company represents a six year internal rate of return of 10.3 per cent per annum. Shown below is an analysis of the impact of certain sensitivities in the RPI and property valuation assumptions with the basis of these illustrations more fully described in the notes to the table below.

(1) Internal rate of return of illustrative EPRA NAV growth and distributions from 31 December 2015 EPRA NAV to 31 December 2021 for 6 year TSR

46 Principal Assumptions (see “Assumptions” as defined in Part 12: Definitions for further assumptions that apply to certain illustrative information in this document): 1. RPI swap curve at 23 February 2016, averaging 2.4 per cent per annum over six years; 2. Valuation yield shift occurs on last day of six year period; 3. No open market rental uplifts (only fixed uplifts) on Ramsay leases; 4. No purchases or sales of properties or lease variations; 5. Incentive fee arrangements currently in place are not amended at the Independent Directors’ 2017 review; 6. Constant euro exchange rate €1:£0.735; and 7. Earnings cover based on adjusted earnings to exclude increase in rental income from rent smoothing IFRS adjustment.

10 FURTHER ISSUES OF SHARES The Act contains pre-emption rights for Shareholders in relation to issues of shares in consideration for cash, other than to the extent that Shareholders have voted to disapply such pre-emption rights.

The Directors are authorised to allot equity securities for cash on a non pre-emptive basis: (a) in connection with an offer of such securities by way of a fully pre-emptive rights issue; (b) pursuant to the terms of the Commitment Agreement; and (c) otherwise, up to an aggregate nominal amount of £5,615,320.90. Further details of the authorities granted to Directors are set out in paragraph 5.3 of Part 11: Additional Information.

Pursuant to the Transaction Agreement, the Company has agreed that, subject to certain customary exceptions, from the date of the Transaction Agreement until the date falling 90 days after the Settlement Date, it will not, without the prior written consent of the Joint Bookrunners, issue, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce an offer of, any Ordinary Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as any of the foregoing other than an issue of Ordinary Shares pursuant to the terms of the Commitment Agreement.

11 MANAGEMENT OF SHARE PRICE DISCOUNTS TO NET ASSET VALUE The Directors believe that the most effective means of minimising any discount in the Company’s share price relative to its Net Asset Value is to deliver strong, consistent, long term performance in both absolute and relative terms. However, the Board recognises that wider market conditions and other considerations will affect the performance of the Ordinary Shares from time to time. One of the means by which the Company could seek to limit the level and volatility of any discount to Net Asset Value at which the Ordinary Shares may trade might include the Company repurchasing Ordinary Shares subject to applicable law, Panel requirements (if any) and it having sufficient cash to do so.

The Company has been granted authority with effect from the date of the 2015 AGM, being 3 June 2015 to make market purchases of up to 14.99 per cent of the Ordinary Shares in issue immediately following the 2015 AGM. The Directors will exercise this authority only when to do so would be in the best interests of the Company and could be expected to result in an increase in Shareholder value.

The Company proposes to seek authority with effect from the date of the 2016 AGM, being 7 June 2016, to make market purchases of up to 14.99 per cent of Ordinary Shares in issue immediately following the 2016 AGM.

12 OPERATIONAL POLICIES 12.1 Shareholder communication and reporting Clear, balanced and regular reporting to Shareholders is important to the Directors.

The Company’s annual report is prepared up to 31 December each year and copies are sent to Shareholders and published on the Company’s website within six months of each financial year end. Shareholders receive an unaudited interim report covering the six months to 30 June each year, which is despatched and published on the Company’s website within four months of each interim reporting date.

12.2 Accounting and valuation policy The Group’s financial statements are prepared in accordance with IFRS and reported in pounds sterling.

47 Property valuations are undertaken every six months by external valuers in accordance with the appropriate sections of both the then current Practice Statements and United Kingdom Practice Statements contained within the RICS Valuation – Professional Standards in force from time to time, known as the Red Book. This is an internationally accepted basis of valuation. A summary of the valuation and the Group’s Net Asset Value both in absolute terms and on a per Share basis is disclosed to Shareholders with the announcement of the Group’s annual results and interim report. Consistent with other listed European real estate investment companies, the Directors follow the guidance published by EPRA and disclose adjusted measures of Net Asset Value and Earnings per Share which are designed by EPRA to better reflect the core long term operations of the business.

A summary of the valuation and Net Asset Value per Ordinary Share is notified via a regulatory information service half yearly as at 30 June and 31 December each year as soon as practicable after calculation. The Net Asset Value per Ordinary Share as at 31 December 2015, being the most recent NAV calculation, announced on 3 March 2016 was 279.7 pence per share. The Net Asset Value at 31 December is taken from the Group’s financial statements, which are approved by the Board and subject to audit.

A summary of the principal accounting policies adopted by the Group is set out in Part 6: Historical Financial Information.

12.3 Treasury policy, custody of assets and cash flow management The Company holds any cash on interest bearing deposit with financial institutions generally rated AA- or better or which have substantial UK government ownership. Such financial institutions will be selected and reviewed by the Directors and may be adjusted having regard to prevailing market conditions. Group companies may hold cash with a broader range of institutions if required in connection with the borrowing arrangements relating to such investments, subject to the cash in question being held within a ring-fenced financing structure.

The Directors have mandated that surplus cash is managed with regard to: (i) ensuring that the Group has sufficient resources to finance its cash needs on the basis of reasonably conservative assumptions; (ii) delivering appropriate returns on cash balances having regard to the Group’s policy not to expose cash balances to significant risk; and (iii) limiting exposures through counterparty selection and diversification.

The Group prepares its financial statements in pounds sterling. Some of the Group’s assets are located in Germany and as a result the Group is subject to foreign currency exchange risk due to exchange rate movements between pounds sterling and euros, though this risk is partially hedged because both assets and liabilities are held in euros, and both revenue and expenditure arise in Euros. An unhedged currency risk therefore exists on the value of the Group’s net investment in, and returns from, its German operations. At 31 December 2015 the net balance sheet exposure amounts to approximately 4 per cent of the Group’s EPRA Net Asset Value.

The Company’s property investments are held in special purpose subsidiary vehicles and this is expected to continue to be the case. Documents of title relating to properties are either held by the Company’s lawyers or by or on behalf of parties with a secured interest.

Pursuant to the Depositary Agreement, Gallium is responsible for ensuring the Company’s cash flows are properly monitored, the safe-keeping of financial instruments and other assets capable of being held in custody, the verification of ownership of other assets, and the oversight and supervision of the Company (as an internally managed AIF). Further details of the Depositary Agreement are set out in paragraph 12.16 of Part 11: Additional Information.

12.4 Insurance policy The Portfolio is insured in accordance with customary estate management practice, including insurance for loss of rent, property damage and property owners’ liability. Directors’ & Officers’ liability insurance is in place with a limitation of liability of £15 million.

The Directors maintain insurance that they believe is appropriate in accordance with customary estate management and good corporate practices or as required by law.

48 13 TAX STRUCTURE As a REIT, the Group has certain tax efficient features with the consequences for Shareholders resident in the UK described in Part 8: The REIT Regime and UK Taxation.

As a REIT: (a) the Group does not pay UK corporation tax on profits and gains from its Qualifying Property Rental Business; and (b) the Company is required to distribute to Shareholders at least 90 per cent of the profits arising from the Tax Exempt Business as calculated for tax purposes by the filing date of the Company’s corporation tax return, which is 12 months after each financial year end.

UK REIT rules require that within three years of entry into the REIT Regime, a company is not considered a close company as defined in Part 12 of the CTA 2010. The Company is currently a close company. By 5 June 2017 the Company’s shareholder base needs to be widened such that the Company is no longer controlled by five or fewer investors. One of the advantages to the Company of the proposed Placing is to make progress in ensuring that the Company’s shares are widely enough held to meet the REIT requirement that the Company is not close. Assuming successful completion of the Placing, the Board expects that the relevant test will be met and that the Company will no longer be considered close for tax purposes. If the close company condition is not met within the required time period, the Company could be served with a notice by HMRC under which it would lose its REIT status and HMRC would have wide powers to direct how it would be taxed, including in relation to the date on which the Company is treated as exiting the REIT Regime.

The UK REIT Regime imposes an interest cover test whereby profits of the Tax Exempt Business of the Group must be at least 1.25 times the costs of financing that business, tested over financial accounting periods which in the case of the Group are years ending 31 December. If this condition is not met then the Company is required to pay corporation tax at regular corporate rates on an amount of income equivalent to the excess financing costs or 20 per cent of the Tax Exempt Business profits if that is less. The Group has not met the required interest test from IPO Date until the Group’s financing arrangements were changed in the latter half of 2015 and therefore additional tax has been payable for the two post IPO accounting periods ended 31 December 2014 and 31 December 2015. From 1 January 2016 onwards the Directors expect that this test will be met.

For further information, please see Part 8: The REIT Regime and UK Taxation.

14 REGULATORY POSITION OF THE COMPANY The Company is an internally managed AIF under the European rules on the regulation of Alternative Investment Funds, and is authorised and regulated by the FCA in that capacity.

The Investment Adviser is not authorised or regulated by the FCA and is not required to be so authorised or regulated to provide its services to the Company.

The Company has appointed Gallium as its Depositary. The Depositary is authorised and regulated by the FCA. Further details of the Depositary agreement are set out in paragraph 12.16 of Part 11: Additional Information.

15 CONCERT PARTY Two of the Shareholders, PIHL Property LLP and Dominic Silvester, together with Shareholders connected to them including Prestbury Incentives, Mike Brown, Sandy Gumm, the trustees of the Saper Trust and Richard Grosse, are considered to be acting in concert in relation to the Company for the purposes of the City Code. This arises as a result of these persons’ co-investment in Prestbury 1 LP and other historic relationships between them. Prestbury 1 LP is the legal entity that owned the Group in the period prior to the IPO Date. As of the date of this document, members of the Concert Party hold, in aggregate, 66,036,868 Ordinary Shares (which are held as set out below), representing approximately 36.6 per cent of the Issued Share Capital. Immediately following completion of the

49 Placing, and assuming that all available Ordinary Shares are placed, members of the Concert Party will hold, in aggregate, 43,809,868 Ordinary Shares, representing 24.3 per cent of the Issued Share Capital. In addition: (a) PIHL Property LLP and Dominic Silvester each committed to subscribe for nine Ordinary Shares each (in aggregate 18 Ordinary Shares) pursuant to the Commitment Agreement in the approximately two year period following the IPO Date. As at the date of this document, 14 of these Ordinary Shares have been issued pursuant to the Commitment Agreement. Further details of the Commitment Agreement and the related subscription obligations are set out in paragraph 12.12 of Part 11: Additional Information; and (b) Prestbury Incentives, a wholly owned subsidiary of the Investment Adviser, may be allotted new Ordinary Shares in satisfaction of incentive fees earned by the Investment Adviser pursuant to the Investment Advisory Agreement (“Incentive Shares”) provided that as a result of the receipt of such Incentive Shares the aggregate interests of the Concert Party in the ordinary share capital of the Company do not exceed 40 per cent of the issued ordinary share capital of the Company. Further details relating to such arrangements and the circumstances in which Prestbury Incentives may receive Incentive Shares are set out in paragraph 12.11 of Part 11: Additional Information of this document.

Within the Concert Party, PIHL Property LLP, Prestbury Incentives, Mike Brown, Sandy Gumm, the trustees of the Saper Trust and Richard Grosse are considered to constitute a sub-concert party (the “Prestbury Concert Party”) by virtue of their longstanding business relationships, family relationship (in the case of the Saper Trust and Richard Grosse) and positions held within the Prestbury Group. As at the date of this document, the Prestbury Concert Party holds, in aggregate, 55,381,990 Ordinary Shares (which are held as set out below), representing approximately 30.7 per cent of the Issued Share Capital. Immediately following completion of the Placing, and assuming that all available Ordinary Shares are placed and that the Placing Price is set at the mid-point of the Placing Price Range, members of the Prestbury Concert Party will hold, in aggregate, 33,154,990 Ordinary Shares, representing 18.4 per cent of the Issued Share Capital. In addition, and as referred to and described above, PIHL Property LLP has agreed to subscribe for nine Ordinary Shares (of which seven Ordinary Shares have already been issued) pursuant to the Commitment Agreement in the approximately two year period following the IPO Date and Prestbury Incentives may receive further Incentive Shares pursuant to the Investment Advisory Agreement.

Details of the Concert Party whose members comprise PIHL Property LLP, Prestbury Incentives, Dominic Silvester, Sandy Gumm, Mike Brown, the trustees of the Saper Trust and Richard Grosse and the Prestbury Concert Party, whose members comprise the members of the Concert Party other than Dominic Silvester, are set out below: (a) PIHL Property LLP is a group entity of PIHL which is the parent company of a privately owned group specialising in owning and managing real estate investments. Its principal investments are in funds, associates and joint ventures, which include the Company. Nick Leslau is Chairman and Chief Executive of PIHL, with Sandy Gumm as Chief Operating Officer. Nigel Wray is a non- executive director of PIHL. PIHL is ultimately controlled by Nick Leslau and Nigel Wray. As at the date of this document, PIHL Property LLP holds 42,619,491 Ordinary Shares representing approximately 23.6 per cent of the Issued Share Capital. Immediately following completion of the Placing, and assuming that all available Ordinary Shares are placed, PIHL Property LLP will hold 22,509,206 Ordinary Shares representing 12.5 per cent of the Issued Share Capital. (b) Prestbury Incentives is a wholly owned subsidiary of the Investment Adviser and, as at the date of this document, holds 11,900,432 Ordinary Shares representing approximately 6.6 per cent of the Issued Share Capital. Immediately following completion of the Placing, and assuming that all available Ordinary Shares are placed and that the Placing Price is set at the mid-point of the Placing Price Range, Prestbury Incentives will hold 9,783,717 Ordinary Shares representing 5.4 per cent of the Issued Share Capital. (c) Dominic Silvester is a private investor who has historically invested with Nigel Wray. He is also on the board of Saracens Rugby Club with Nigel Wray and Nick Leslau. As at the date of this document, he holds 10,654,878 Ordinary Shares representing approximately 5.9 per cent of the Issued Share Capital.

50 (d) Sandy Gumm – details relating to Sandy Gumm are set out in paragraph 1 of Part 2: Prestbury and the Investment Advisory Agreement of this document. As at the date of this document, she holds 114,942 Ordinary Shares representing approximately 0.06 per cent of the Issued Share Capital. (e) Mike Brown – details relating to Mike Brown are set out in paragraph 1 of Part 2: Prestbury and the Investment Advisory Agreement of this document. As at the date of this document, he holds 574,712 Ordinary Shares representing approximately 0.32 per cent of the Issued Share Capital. (f) The Saper Trust is a trust whose trustees are Anita Leslau and Richard Grosse and the beneficiaries of which are Anita Leslau’s children (including Nick Leslau). As at the date of this document, the trustees of the Saper Trust hold 57,471 Ordinary Shares representing approximately 0.03 per cent of the Issued Share Capital. (g) Richard Grosse is a partner at the law firm Taylor Wessing LLP and, as noted above, a trustee of the Saper Trust. As at the date of this document, in addition to the Ordinary Shares he will hold as trustee of the Saper Trust, he holds 114,942 Ordinary Shares representing approximately 0.06 per cent of the Issued Share Capital.

16 THE CITY CODE ON TAKEOVERS AND MERGERS AND THE CONCERT PARTY Brief details of the Panel, the City Code and the protections they afford are given below.

The Company is a public company incorporated in England and Wales and its Ordinary Shares are admitted to trading on AIM. Accordingly, the City Code applies to all takeover and merger transactions in relation to the Company and operates principally to ensure that the Shareholders of the Company are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment. The City Code also provides an orderly framework within which takeovers are conducted and the Panel has now been placed on a statutory footing.

The City Code governs, inter alia, transactions which may result in a change of control of a company to which the City Code applies. Under Rule 9 of the City Code any person who acquires, whether by a series of transactions over a period of time or not, an interest (as defined in the City Code) in shares which, taken together with shares in which he is already interested or in which persons acting in concert with him are interested, carry 30 per cent or more of the voting rights of a company which is subject to the City Code, that person is normally required to make a general offer to all the remaining shareholders to acquire their shares.

Similarly, Rule 9 of the City Code also provides that when any person, together with persons acting in concert with him, is interested in shares which, in aggregate, carry more than 30 per cent of the voting rights of such company, but does not hold shares carrying 50 per cent or more of such voting rights, a general offer will normally be required if any further interest in shares is acquired by any such person.

Rule 9 of the City Code further provides, among other things, that where any person who, together with persons acting in concert with him, holds over 50 per cent of the voting rights of a company, they will not generally be required to make a general offer to the other shareholders to acquire the balance of their shares.

An offer under Rule 9 must be in cash and must be at the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in shares of the company in question during the 12 months prior to the announcement of the offer.

Persons acting in concert include persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate to obtain or consolidate control of that company.

As at the date of this document, the Concert Party is interested in, in aggregate, 66,036,868 Ordinary Shares (which are held as detailed in paragraph 15 above), representing approximately 36.6 per cent of the Issued Share Capital. Immediately following completion of the Placing, and assuming that all available Ordinary Shares are placed and that the Placing Price is set at the mid-point of the Placing Price Range, members of the Concert Party will hold, in aggregate, 43,809,868 Ordinary Shares,

51 representing 24.3 per cent of the Issued Share Capital. As described in paragraph 15 above, members of the Concert Party have an obligation pursuant to the Commitment Agreement to each subscribe for 9 new Ordinary Shares (in aggregate 18 new Ordinary Shares). 14 Ordinary Shares of these 18 Ordinary Shares have already been subscribed for by members of the Concert Party pursuant to the Commitment Agreement. In addition Prestbury Incentives may be allotted Incentive Shares in satisfaction of incentive fees earned by the Investment Adviser pursuant to the Investment Advisory Agreement, provided that such Incentive Shares when taken together with other shareholdings of the Concert Party do not in aggregate exceed 40 per cent of the Issued Share Capital of the Company. Prestbury Incentives has to date been issued 11,900,432 Ordinary Shares pursuant to the Investment Advisory Agreement. Notwithstanding Rule 9.1 of the City Code, the Panel has previously confirmed to the Company that it would not require the Concert Party to make a mandatory offer on the grounds that the Concert Party’s interest in Ordinary Shares increased only as a result of its subscription for up to 18 new Ordinary Shares in aggregate pursuant to the Commitment Agreement or the allotment of Incentive Shares pursuant to the Investment Advisory Agreement up to the maximum level set out above. This confirmation was given by the Panel on the basis that the consequences of such increases were fully disclosed to prospective investors in the Admission Document.

However, should any member of the Concert Party acquire any interest in Ordinary Shares apart from pursuant to the arrangements described above (or should any individual member of the Concert Party acquire any interest in Ordinary Shares such that they are interested in 30 per cent or more of the voting rights of the Company), the Panel may regard this as giving rise to an obligation upon that member of the Concert Party to make an offer for the entire Issued Share Capital of the Company at a price no less than the highest price paid by the individual member of the Concert Party or any other member of the Concert Party in the previous 12 months.

As at the date of this document, the Prestbury Concert Party holds, in aggregate, 55,381,990 Ordinary Shares representing approximately 30.7 per cent of the Issued Share Capital. Immediately following completion of the Placing, and assuming that all available Ordinary Shares are placed, members of the Prestbury Concert Party will hold, in aggregate, 33,154,990 Ordinary Shares, representing 18.4 per cent of the Issued Share Capital. As at the date of this document, the members of the Prestbury Concert Party together own or control more than 30 per cent of the Issued Share Capital. However, as described above, the Panel has confirmed that the Prestbury Concert Party may hold in excess of 30 per cent of the Issued Share Capital without incurring an obligation to make an offer under Rule 9 of the City Code where this increased holding is as a result of subscriptions pursuant to the Commitment Agreement or the allotment of the Incentive Shares, provided that as a result of the issue of Incentive Shares the aggregate interests of the Concert Party in the Ordinary Share capital of the Company does not exceed 40 per cent.

52 Part 2: Prestbury and the Investment Advisory Agreement

The past and current performance of entities and assets managed by the Prestbury Team, including the Portfolio, should not be construed as an indication of the future performance of the Group or of any investments recommended by Prestbury to the Company. The following information should be read in conjunction with the information appearing elsewhere in this document, including the risk factors described in the section headed “Risk Factors”.

1 PRESTBURY 1.1 Overview The Investment Adviser to the Company is Prestbury, which is controlled by Nick Leslau and Mike Brown. The Prestbury Team comprises Nick Leslau, Mike Brown, Sandy Gumm, Ben Walford and Tim Evans, a team of property and finance professionals who between them have extensive experience in the UK real estate market over more than 30 years in the cases of the Chairman, Nick Leslau, and the CEO, Mike Brown, and with a track record of having successfully created value for shareholders through previous economic cycles, including significant out-performance of the quoted UK commercial real estate market during the recessions of the early 1990s and late 2000s.

The Prestbury Team does not manage investments in which it does not have a material ownership interest.

Through their ownership of Ordinary Shares, which is expected to amount to at least 18 per cent of the Issued Share Capital, or £84.1 million at the Placing Price (assuming that the Placing Price is set at the mid-point of the Placing Price Range), the Prestbury Team has a strong alignment of interests with other Shareholders. The Prestbury Team’s shareholding following the Placing will be among the largest management holdings in the quoted UK real estate sector. The interests of the Prestbury Group are subject to formal lock-in arrangements and the Prestbury Team and Prestbury Group have confirmed their long term commitment to retain this substantial investment in the Company.

The Prestbury Team has a contractual arrangement with another member of the Prestbury Group, Prestbury Investment Holdings Limited, which provides the full team of finance, property and administrative staff, together with offices and other resources.

1.2 The Prestbury Team Nick Leslau Nick Leslau, 56, BSc (Hons) Est Man, FRICS, is the Chairman of Prestbury Investments LLP and a Non-executive Director of the Company. He is a Chartered Surveyor who has been Chairman and Chief Executive of Prestbury Investment Holdings Limited since it commenced business in October 2000 and Chairman of Prestbury Investments LLP since its establishment in 2006. He was Chief Executive Officer of Burford Holdings Plc for approximately ten years, during which period the company delivered 34 per cent per annum compound NAV per share growth. After his resignation from the board of Burford in 1997, he became Group Chairman and Chief Executive of Prestbury Group Plc on 1 January 1998. He has been a director on many quoted and unquoted UK company boards including, most recently, Max Property Group Plc, and is a Member of the Bank of England Property Forum. For more information, see paragraph 7 of Part 11: Additional Information.

Mike Brown Mike Brown, 55, BSc (Land Man) MRICS, is Chief Executive Officer of Prestbury Investments LLP and a Non-executive Director of the Company. A Chartered Surveyor with over 30 years’ experience, he joined Prestbury in 2009 having previously been deputy Chief Executive of Helical Bar Plc and a board member of the Investment Property Forum. Helical Bar Plc was one of the best performing companies in terms of total shareholder return in the UK quoted real estate sector from 1998 to 2009 and Mike was responsible for all of Helical Bar’s investment and trading activities during this time. From 1992 to 1997 he was a director of Threadneedle Property Fund Managers, running its then largest fund. For more information, see paragraph 7 of Part 11: Additional Information.

Sandy Gumm Sandy Gumm, 49, BEc, CA (ANZ) is Prestbury’s Chief Operating Officer and a Non-executive Director of the Company. She is an Australian-qualified Chartered Accountant of over 25 years’ standing. She

53 trained at KPMG in Sydney and worked for nine years at KPMG in Sydney and London, leaving KPMG London to become Group Financial Controller of Burford Holdings Plc in December 1995. She was appointed Finance Director of Prestbury Group Plc on 2 December 1997. She was Finance Director of Prestbury Investment Holdings Limited when it commenced business in October 2000 until 5 July 2007 when she was appointed Chief Operating Officer. For more information, see paragraph 7 of Part 11: Additional Information.

Tim Evans Tim Evans, 46, MA Hons (Cantab), MRICS is Prestbury’s Property Director and is a Chartered Surveyor of over 23 years’ experience. Tim joined Prestbury Investment Holdings Limited as Senior Asset Manager in June 2002 and became Prestbury’s Property Director in June 2005. Prior to joining Prestbury Investment Holdings Limited, Tim’s previous experience was with Jones Lang LaSalle, Hill Samuel Asset Management and MEPC Plc.

Ben Walford Ben Walford, 36, BSc (Hons) Est Man, MRICS, is a Chartered Surveyor of nine years’ experience. Ben joined Prestbury Investment Holdings Limited as a Trainee Surveyor in May 2002 and has risen to become a partner in 2011. Ben has extensive experience in property investment, refurbishment and design.

1.3 Approach to asset management The Prestbury Team has extensive experience across a spectrum of property investment sectors encompassing various investment types, and has an understanding of the particular challenges of asset selection, financing and management of long term secure income streams. The team is also experienced in the more management intensive opportunistic portfolios. Members of the team have been investors in and managed long lease transactions since 2004 and have transacted over four billion pounds’ worth of acquisitions and disposals in this specialist area.

Historically, Prestbury has implemented a balance between an active approach to asset management and defensive investment strategies according to prevailing market conditions and the investment mandate of the relevant business.

The Prestbury Team takes a stringent approach to downside protection and income profiles; for example modelling as a scenario in its investment appraisals that there is no rental uplift at open market rent reviews, tenants exercise break options at the first opportunity and vacant space is never re-let, with downside assumptions in mind. In its active management activities the Prestbury Team then seeks to improve the income profile by striving to understand tenants’ needs and improving the condition of properties under management and their relative attractiveness to tenants.

The Prestbury Team has been able to enhance value and returns on properties that it acquired from various sources, including operating businesses, other property investors, private equity investors and institutions. Through periods of varying market conditions, the Prestbury Team has delivered value to shareholders through its improvement of portfolio income and timing of acquisitions and disposals so as to deliver above market returns for investors.

1.4 Track record The track record of the Prestbury Team is concentrated principally within three listed real estate companies prior to Secure Income REIT Plc, namely Burford Holdings Plc, Prestbury Group Plc and Max Property Group Plc, one unlisted fund (Prestbury 1 LP) and several private joint ventures over the last 30 years.

Max Property Group Plc (May 2009 to September 2014) In May 2009, at a time of market turbulence and distress in the wake of the financial crisis beginning in 2008, the Prestbury Team launched an opportunistic property investment company, Max Property Group Plc. Max listed on AIM, raising £211 million net of expenses, with a strategy to invest at a time of market dysfunction and to realise returns over a finite life of some seven and a half years, by which time the intention was to have realised investments to return capital and profits to investors.

54 Having established a strategy to invest over a period ending in May 2014 following which value would be returned to its shareholders, the Max business was sold to a company controlled by Blackstone Real Estate Partners Europe IV and its affiliates in August 2014 in a transaction that valued the equity of the Group, before exit costs, at £447.7 million, equivalent to an enterprise value of more than £650 million.

Delivering an exit at this level represented an uplift of 112 per cent in net asset value before incentive provisions over the five and a quarter year period since Max’s listing. Net cash returned to Max shareholders net of all costs represented an annual compound growth rate on net funds invested at the time of listing of 13.2 per cent per annum over the period from May 2009 to July 2014.

Max’s average annual NAV total return per share for the period from listing (27 May 2009) to its last reported results as at 30 September 2014 was 17.1 per cent. In terms of growth in reported net asset value per share over time, Max’s performance against the ‘cash shell’ property companies listed on the London Stock Exchange that it considers its most relevant peer group from May 2009 (or if later the relevant company’s admission) to September 2014, is as follows:

17.1% 15.6%

9.2% 8.2% 6.6% 6.1% 5.1% Average Annual NAV Total return per Share Max London Metric London & Stamford LXB Metric Retail NewRiver Retail Conygar (Jan-13 - Sep-14) (May-09 to Sep-12) (Mar-10 to Sep-12)

Sources: Data compiled from company announcements and annual reports over the following periods: Max Property Group Plc (May 2009 to September 2014); London & Stamford Property Plc (May 2009 to September 2012); Metric Property Investments Plc (March 2010 to September 2012); LXB Retail Properties Plc (October 2009 to September 2014); LondonMetric Property Plc (January 2013 to September 2014); New River Retail Ltd (September 2009 to September 2014); and Conygar Investment Company Plc (May 2009 — September 2014). LondonMetric Property Plc was not listed as a cash shell but created through the merger of London & Stamford Property Plc and Metric Property Investments Plc which were listed in 2007 and 2010 respectively.

The Healthcare and Leisure Portfolios (2007 to present) The Prestbury Team has had an investment representing a material ownership interest (initially 26.7 per cent and a minimum 18 per cent following the Placing) and has managed the Healthcare and Leisure Portfolios since their acquisition by Prestbury 1 Limited Partnership in 2007.

The Healthcare Portfolio has produced ungeared average returns over the period from mid 2007 to December 2015 of 9.2 per cent per annum, the UK Leisure Portfolio 9.3 per cent per annum and the German Leisure Portfolio 8.5 per cent per annum resulting in a blended return of 9.6 per cent per annum. The period of ownership of these assets includes a period of material falls in capital value in the property market generally following the collapse of Lehman Brothers and market turmoil in 2008 and 2009.

Prestbury Investment Holdings Limited (2000 to present) Having delisted their previous business, Prestbury Group Plc, in October 2000, Nick Leslau and Sandy Gumm continued to run the business as a private concern through PIHL, the group’s new parent company. Tim Evans and Ben Walford joined PIHL in May 2002. The investment strategy of PIHL was to deliver above average growth in Net Asset Value per share for all shareholders. PIHL operates as the provider of administrative services to Prestbury Investments LLP and certain other small investment interests.

Without any further equity raising by PIHL, its Net Asset Value (before dividends paid) has grown from £40 million in October 2000 to approximately £180 million as at 31 December 2015 (based on 31 December 2015 unaudited management accounts for PIHL).

The Prestbury Team invested PIHL’s equity not only in directly held, 100 per cent owned real estate, but also created relationships with a small number of partners, establishing a series of joint ventures for its real estate activities. These include a series of joint ventures managed by a wholly owned subsidiary of PIHL and also an investment in Prestbury 1 LP, an investment partnership where the Prestbury team had a discretionary mandate to invest £475 million of committed capital.

55 The earlier joint ventures established from 2001 to 2003 were consistent with the types of investment made by Prestbury Group Plc, in the main being opportunistic investments in portfolios with opportunities for real estate management and the use of leverage to enhance returns.

Towards the end of 2003, the Prestbury Team believed that the weight of money coming into the market for conventional real estate investments meant that there was insufficient upside potential in this type of investment and instead started to focus on investments with better downside protection in addition to good growth prospects, specifically long leases to strong tenants on leases with fixed or inflation linked annual uplifts. Thus, from 2004 to 2007 the focus of investment activity was in investments with long term income streams.

All of the earlier and more management intensive real estate investments were realised by November 2006. These investments were made with £53 million of equity initially invested in eight portfolios with a gross asset value (at cost at the time of acquisition) in excess of £1 billion. These realisations in aggregate delivered a weighted average equity return post all costs and tax of more than three times initial equity invested over the period 2000 to 2006.

Approximately £83 million of equity was invested within joint ventures managed by a subsidiary of PIHL in two asset backed long term income portfolios with a gross asset value (at initial cost) in excess of £1 billion. Approximately £90 million of cash was returned to shareholders in these portfolios by way of refinancing and the portfolios have since been sold and the joint venture groups liquidated.

Prestbury Group Plc (1997 to 2000) Prestbury Group Plc, an AIM listed property investment company, was established by Nick Leslau and Sandy Gumm in late 1997. Its business strategy was to generate above average growth in Net Asset Value per share through opportunistic investment in and active management of real estate. During the first half of 2000, the equity investment market’s perception of the quoted UK real estate sector deteriorated, with the estimated average share price discount to NAV of listed UK property companies at that time approaching 40 per cent. After Prestbury Group Plc’s shares had been trading at a material discount to Net Asset Value for a period of time, the board of Prestbury Group Plc concluded that such a discount was unsatisfactory for its shareholders and that even sustained performance at above market average levels was unlikely to be reflected in share price performance in the foreseeable future. As a consequence, the board concluded that the best course of action was to unlock the share price discount by returning undiscounted Net Asset Value to shareholders and de-listing the company.

Subsequent to de-listing, Prestbury Group Plc realised and returned to shareholders 75.6 pence per share of value, exceeding the NAV per share at the time of de-listing of 69.0 pence per share. Returns of value were made in stages as assets were realised and liabilities settled.

From December 1997 to December 2003, Prestbury Group Plc achieved average annual total cash returns of over 25 per cent. The Prestbury Group’s portfolio had been substantially realised by the end of 2003.

56 Prestbury Group Plc: Average annual NAV growth plus distributions(2) (1997 – 2003)

(1) Substantially all property assets had been liquidated by 2003. (2) NAV growth + dividends (recorded in year of payment). NAV per share sourced from annual reports from 1997 – 2003 and adjusted where appropriate for the 1 for 20 share consolidation in October 1999. (3) Sourced from Datastream. The FTSE 350 Real Estate Index represents the growth in value of the constituent shareholdings assuming that dividends are reinvested to purchase additional stock. (4) In April 1998, the company raised £50 million through a placing and open offer at a premium to NAV to fund part of the acquisition of a £103 million portfolio of 30 properties and to provide funds for future growth.

Burford Holdings Plc (1987 to 1997) Having de-geared Burford to position it with net cash in 1988 in anticipation of a property crash that subsequently materialised in the early 1990s, Burford, under Nick Leslau’s leadership, was able to take advantage of the opportunities presented by a market in turmoil, delivering substantial returns for shareholders.

Nick Leslau was Burford’s Chief Executive for approximately ten years from 1987 until 1997. Burford’s business strategy was to focus on growth in Net Asset Value per share, and the company generated average annual total returns of 34 per cent from its listing in March 1987 until Nick Leslau’s resignation from the board in December 1997 to set up Prestbury Group Plc.

Burford Holdings Plc: Comparison of NAV progression compared to its peers (1987 – 1997)

(1) NAV Growth + cumulative dividend for the period, both restated for bonus element in case of Burford’s 1996 rights issue. (2) Weighted average by NAV for the following companies: British Land, Land Securities, Hammerson, Slough Estates, Frogmore and MEPC.

2 PRESTBURY REMUNERATION AND INCENTIVES At the time of listing, the Independent Directors, having consulted with the Company’s brokers and major Shareholders, designed a package of fees and incentives for Prestbury that they believe to be appropriately balanced, comprising the following elements: (a) Prestbury and any of its affiliates granting the Company exclusive access to opportunities fitting the Company’s investment strategy for the term of its appointment;

57 (b) an advisory fee to cover the majority of Group overheads; (c) an incentive fee, payable in Ordinary Shares subject to lock-in restrictions; and (d) a contractual term of eight years from June 2014 to provide appropriate management and deal flow in the initial and early growth phases of the business.

The Prestbury Team and the Prestbury Group will following the Placing own at least 18 per cent of the Issued Share Capital, providing in the opinion of the Directors, important alignment with other Shareholders’ interests.

2.1 Advisory fee Under the Investment Advisory Agreement, the Company pays an advisory fee to Prestbury in cash quarterly in arrears. The fee in respect of each quarter is calculated by reference to the following scale: (a) 1.25 per cent per annum of EPRA Net Asset Value up to £500 million; plus (b) 1.00 per cent per annum of EPRA Net Asset Value of more than £500 million up to £1 billion; plus (c) 0.75 per cent per annum of EPRA Net Asset Value in excess of £1 billion. in each case plus applicable VAT.

2.2 Incentive fee In order to provide incentives to the Prestbury Team to deliver attractive Total Shareholder Returns, Prestbury is entitled to receive an incentive fee, subject to certain performance benchmarks being met under arrangements made between the Independent Directors and Prestbury at the time of the Company’s listing.

The incentive fee is calculated in accordance with the Investment Advisory Agreement, the wording of which was clarified on 2 March 2016 to confirm that the incentive fee is calculated on an annual basis by reference to growth in EPRA NAV per share as follows. If this growth exceeds a hurdle rate of 10 per cent per annum, an incentive fee equal to 20 per cent of the excess is payable to Prestbury. Dividends or other distributions paid in any period are treated as payments on account against achievement of the hurdle rate of return. In the event of an incentive fee being payable at the end of an accounting period, as it was for the period ended 31 December 2014, a “high water mark” is established, representing the closing EPRA NAV per share after the impact of the incentive fee, which is then the starting point for the cumulative hurdle calculations for future periods. The hurdle will therefore be set at the higher of the EPRA NAV at the start of the year plus 10 per cent, or the high water mark EPRA NAV plus 10 per cent per annum.

Assuming no changes in the Company’s share capital, the benchmark to be achieved in the financial year ending 31 December 2016 stands at EPRA Net Asset Value including distributions of £564.1 million or 312.8 pence per share, otherwise no incentive will be earned for that financial year.

Any incentive fee is satisfied by the issue of Ordinary Shares, subject to certain exceptions where settlement in Ordinary Shares would be prohibited by applicable law or by the AIM Rules or would result in a member of the Concert Party incurring an obligation to make an offer under Rule 9 of the City Code, or if the Company fails to obtain a valuation of non-cash consideration where it is required to do so, in which case, the incentive fee will be settled in cash. Assuming no such requirement, the incentive fee is settled by the allotment to Prestbury Incentives, a wholly owned subsidiary of Prestbury Investments LLP established to, in part, enable the sharing of incentive fees amongst a wider group of the Prestbury Team, of such number of new Ordinary Shares credited as fully paid as is equal to the incentive fee (net of VAT) divided by the average closing share price for the financial year to which the fee relates (rounded down to the nearest whole Share). The incentive fees attract VAT and the VAT applicable is payable in cash by the Company.

One third of all shares issued in settlement of the Incentive Fee is then locked in for 18 months after the end of the accounting period to which the award of such Ordinary Shares relates, a further one third for 30 months and the remaining one third for 42 months.

It was recognised at the time of the IPO, when the Investment Advisory Agreement was put in place, that the capital structure of the Company was likely to change over the first three years following the

58 IPO Date. Consequently the Independent Directors have a right to propose amended incentive fee terms to better reflect the structure of the business in June 2017. In the event that, acting reasonably, the Independent Directors and Prestbury are not able to reach agreement on the revised proposals after a period of negotiation in good faith, and failing such agreement they are also unable to accept the continuation of the existing incentive fee arrangements, then the Investment Advisory Agreement can be terminated by Prestbury with notice.

The Independent Directors, through the Remuneration Committee, periodically use external consultants to benchmark Prestbury and the fee arrangements, including the incentive fee arrangements. The most recent such review of incentive and fee arrangements was conducted by independent advisers in January 2016. In their report, the independent consultants concluded that the current arrangements are within the range of current market practices.

The incentive fee arrangements under the terms of the Investment Advisory Agreement summarised above are described in more detail in paragraph 12.11.3 of Part 11: Additional Information.

2.3 Term and Termination Unless terminated earlier, the Investment Advisory Agreement continues in force until the earlier of 4 June 2022 and the date of the winding up of the Company.

The Company may terminate the agreement where: (a) Prestbury is in material breach of the agreement and insofar as that breach is capable of remedy, fails to remedy such breach within 30 Business Days of being requested to do so; (b) Prestbury is prohibited by law or regulation from performing its duties under the Investment Advisory Agreement, subject to Prestbury having 60 days following any relevant change in law or regulation which would otherwise enable the Company to terminate the Investment Advisory Agreement to become compliant with such changed relevant law or regulation (to the reasonable satisfaction of the Company); (c) either or both of Nick Leslau or Mike Brown ceases to be a member of Prestbury, ceases to be significantly involved with the services described above, dies, becomes mentally ill or becomes permanently incapacitated and a suitable replacement has not been proposed by Prestbury within six months or has not been appointed within nine months; (d) Prestbury becomes insolvent; (e) a change of control of the Company occurs; or (f) Nick Leslau and Mike Brown cease to hold between them (directly or indirectly) at least 40 per cent of the membership interests in Prestbury (or in any permitted assignee), except where this is as a result of the relevant individual having died, become permanently incapacitated or being mentally ill.

Prestbury may terminate the agreement where: (a) the Company becomes insolvent; (b) the Company or any subsidiary is in material breach of the agreement and insofar as that breach is capable of remedy, it fails to remedy such breach within 30 Business Days of being requested to do so; or (c) a change of control of the Company occurs.

The Placing will not constitute a change of control for the purpose of the Investment Advisory Agreement.

For more information on the Investment Advisory Agreement including the structure of the fees payable to Prestbury and the consequences of termination of the Investment Advisory Agreement, see paragraph 12.11 of Part 11: Additional Information.

3 PRESTBURY GROUP INVESTMENT IN THE COMPANY Prior to the Placing, the Prestbury Group’s 55.2 million Ordinary Shares represents approximately 30 per cent of the Issued Share Capital of the Company. This holding comprises three elements:

59 (a) 42.6 million shares that were issued to a Prestbury Group entity in exchange for its existing 26.67 per cent interest in the Portfolios at the time of the Company’s listing in June 2014. Prestbury’s original cash investment in the Portfolio was made in 2007 with no disposal of any interest in the Portfolio from that time until listing in June 2014. (b) 11.9 million shares were issued to Prestbury in an award of incentive shares following the 2014 audited results of the Company in which the Group reported a 50 per cent increase in EPRA Net Asset Value per share in the seven months since listing — performance that significantly exceeded the benchmark return established by the Independent Directors at the time of listing. (c) Mike Brown subscribed £1.0 million in cash at the placing price for 0.6 million shares and Sandy Gumm subscribed £0.2 million in cash at the placing price for 0.1 million shares in the placing conducted at IPO.

Having been invested in the Portfolios for over eight years and recognising the benefits to the Company of creating liquidity in the Company’s shares, allowing it better access to equity capital to finance growth at the appropriate time and widening the shareholder base to assist with continued compliance with UK REIT rules, PIHL and Prestbury Incentives together intend to sell up to 22,227,000 Ordinary Shares. Prestbury Incentives is permitted to sell only so many Ordinary Shares as will generate sufficient net proceeds to reimburse the Prestbury partners for £5.1 million of tax paid on the receipt of incentive fee income in April 2015. Following the Placing and assuming that all available Ordinary Shares are placed and the Placing Price is set at the mid-point of the Placing Price Range, the Prestbury Group will hold 33 million Ordinary Shares, representing 18 per cent of the Issued Share Capital and valued at £84.1 million. The Directors believe that this continues to provide strong alignment, with the Prestbury Group’s investment placing its interest in the Group among the largest management holdings in the quoted UK real estate sector.

60 Part 3: Directors and Corporate Governance

1 DIRECTORS The Company’s Directors are:

Age Title Date of appointment Martin Moore 59 Independent Non-executive Chairman 27 May 2014 Mike Brown 55 Non-executive director 27 May 2014 Leslie Ferrar 60 Independent Non-executive director 27 May 2014 Sandy Gumm 49 Non-executive director 31 January 2007 Jonathan Lane 57 Independent Non-executive director 27 May 2014 Nick Leslau 56 Non-executive director 31 January 2007 Ian Marcus 57 Independent Non-executive director 27 May 2014

Brief biographical details of Nick Leslau, Mike Brown and Sandy Gumm are set out in paragraph 1.2 of Part 2: Prestbury and the Investment Advisory Agreement.

Brief biographical details of the Independent Directors are as follows.

Martin Moore (Independent Non-Executive Chairman) Martin Moore, 59, MRICS, is a Chartered Surveyor who served as CEO of M&G Real Estate Limited (previously Prudential Property Investment Managers Limited) from 1996 to 2012. During that time, he was responsible for setting strategy and ran the team that grew the business in the UK and led to the establishment of platforms in North America, Continental Europe and Asia. He retired as Chairman of M&G Real Estate in 2013. He is an honorary life member of the British Property Federation, a past President and board member of the British Property Federation, a past Chairman of the Investment Property Forum and was a Commissioner of The Crown Estate for eight years to 2011. He is a senior adviser to KKR, independent non-executive director of M&G Asia Property Fund and SEGRO plc and senior and independent non-executive director of F&C Commercial Property Trust Ltd. He is also a Commissioner of Historic England (formerly English Heritage) and a Trustee of the Guildhall School Trust.

Leslie Ferrar (Independent Non-Executive Director, Audit Committee Chair) Leslie Ferrar, 60, CVO, FCA, BSc is non-executive Chairman of The Risk Advisory Group, a non- executive director of Penna Consulting Plc and is a non-executive member of the HMRC Risk and Audit Committee and a member of the Audit Committee for the Sovereign Grant. She served as Treasurer to TRH the Prince of Wales and Duchess of Cornwall from January 2005 until July 2012. She is a qualified Chartered Accountant and trained at KPMG where she was appointed partner in 1988, a position she held for 17 years. During that time she led the firm’s international expatriate practice and was a member of the international board that ran the global tax practice.

Jonathan Lane (Independent Non-executive Director, Chairman of the Nominations Committee) Jonathan Lane, 57, MA, is a Senior Adviser to Morgan Stanley and Chairman of EMEA Real Estate Investment Banking (REIB). He joined Morgan Stanley in 1999 where he served as Managing Director and co-head of REIB. Jonathan has been a non-executive director of Grosvenor Liverpool Limited since 2009 and on the Advisory Board of Resolution Property IM LLP since 2010. He is a member of the Policy Committee of the British Property Federation and a member of the Bank of England’s Commercial Property Forum. He was formerly a member of the UK Government’s Property Unit Advisory Panel and formerly a non-executive director of Songbird Estates PLC. He holds a masters degree in Biochemistry from the University of Oxford and is a member of the Advisory Board of the University’s Oxford Programme for the Future of Cities.

Ian Marcus (Independent Non-executive Director, Senior Independent Director, Chairman of the Remuneration Committee) Ian Marcus, 57, MA, FRICS, is Chairman of the Bank of England’s Commercial Property Forum. He joined Credit Suisse in 1999 to establish the Real Estate Group and became Managing Director and Chairman of their European Real Estate Investment Banking division. He was responsible for leading

61 the bank’s property related activities across its asset management, private banking and investment banking businesses. Ian is also a member of the Real Estate Advisory Board of the Department of Land Economy at the University of Cambridge, a Senior Adviser to Eastdil Secured and Wells Fargo Securities, Chairman of The Prince’s Regeneration Trust a non-executive director of Town Centre Securities PLC and a member of Redevco’s Advisory Board. He is past president of the British Property Federation, a past Chairman of the Investment Property Forum and has been a Non- Executive Director of The Crown Estate since January 2012.

The business address of each of the Directors is Cavendish House, 18 Cavendish Square, London W1G 0PJ.

There are no family relationships between any of the Directors.

2 LOCK-IN ARRANGEMENTS The Directors are interested in the following numbers of Ordinary Shares:

Ordinary Shares Nick Leslau(1) 42,676,962 Mike Brown 574,712 Sandy Gumm 114,942 Jonathan Lane 57,471 Martin Moore 57,471 Ian Marcus 28,735 Leslie Ferrar 14,367 Prestbury Incentives(2) 11,900,432

(1) 42,619,491 Ordinary Shares are held by PIHL Property LLP and 57,471 Ordinary Shares are held by the Saper Trust. Lesray LLP, a partnership in which Nick Leslau has a 42.6 per cent legal interest and 50 per cent of the voting rights, beneficially owns 81.7 per cent of PIHL Property LLP. The Saper Trust is a trust whose beneficiaries include Nick Leslau. (2) Prestbury Incentives is a wholly owned subsidiary of the Investment Adviser. These shares were issued in settlement of incentive fees payable for the year ended 31 December 2014, as described in Part 2. Nick Leslau, Mike Brown and Sandy Gumm are members of the Investment Adviser whose respective interests in the Investment Adviser for these purposes are: Nick Leslau — 59 per cent; Mike Brown — 15.5 per cent and Sandy Gumm — 7 per cent.

Under the terms of the New Prestbury Director Lock-In Deeds, each of Mike Brown, Nick Leslau and Sandy Gumm has agreed that, subject to certain customary exceptions, they will not, and will procure that their connected persons will not, without the prior written consent of the Company and the Joint Bookrunners: (i) dispose of any of the Ordinary Shares held by them immediately after completion of the Placing before the First Lock-in Release Date; (ii) dispose of more than 50 per cent of the Ordinary Shares held by them immediately after completion of the Placing before the Second Lock-in Release Date; or (iii) dispose of more than 75 per cent of the Ordinary Shares held by them immediately after completion of the Placing before the Final Lock-in Release Date.

Subject to certain customary exceptions, for a period of 24 months from the First Lock-In Release Date, each of Mike Brown, Nick Leslau and Sandy Gumm have agreed that he or she will, and will procure that his or her connected persons will, effect any disposal of Ordinary Shares in such a manner as the Joint Bookrunners may in their discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares.

Under the terms of the New Independent Director Lock-In Deeds, each of the Independent Directors has agreed that subject to certain customary exceptions: (i) they will not, and will procure that their connected persons will not, without the prior written consent of the Company and the Joint Bookrunners, dispose of any of the Ordinary Shares held by them immediately after completion of the Placing before the First Lock-in Release Date; and (ii) up to the Final Lock-in Release Date that they will effect any disposal of Ordinary Shares in such a manner as the Joint Bookrunners may in their discretion determine with a view to maintaining an orderly market.

Should the Placing not proceed, the Directors will continue to be bound by the terms of the Existing Prestbury Director Lock-In Deeds and the Existing Independent Directors Lock-In Deeds, further details of these lock-in arrangements are set out in paragraphs 12.4 and 12.5 of Part 11: Additional Information.

62 Under the terms of the Investment Advisory Agreement, Prestbury agrees not to, and Prestbury agrees to procure that Prestbury Incentives will not, dispose of any Shares delivered to it in settlement of the incentive fee and will not be distributed, loaned or otherwise made available until: (a) as to one third of the relevant Ordinary Shares, 30 September 2017; (b) as to a further one third of the relevant Ordinary Shares, 30 September 2018; and (c) as to the remaining one third of the relevant Ordinary Shares, 30 September 2019, provided that these restrictions will not apply to a disposal of Ordinary Shares (or release of cash) (i) to pay tax arising in connection with receipt of the incentive fee, (ii) pursuant to a takeover or sale of the Company recommended by the Board or where Prestbury is required by law to dispose of such Ordinary Shares, (iii) on completion of a takeover or a sale which results in a change of control of the Company; or (iv) following the termination of the agreement other than following a material breach by Prestbury.

3 REMUNERATION ARRANGEMENTS As Chairman, Martin Moore receives a fee of £75,000 per annum. Leslie Ferrar, as non-executive director and chairman of the audit committee, receives a fee of £40,000 per annum. Jonathan Lane and Ian Marcus each receive a fee of £35,000 per annum.

Nick Leslau, Mike Brown and Sandy Gumm, the Directors associated with Prestbury, receive no remuneration as Directors.

4 CORPORATE GOVERNANCE The Company is AIM listed, therefore it is not required to comply with the UK Corporate Governance Code (“Code”). Nonetheless, the Directors have had reference to the Code in determining appropriate policies and procedures where the Directors consider it appropriate for the size and nature of the Group.

The Code provides that the board of directors of a UK public company should include an appropriate combination of executive and non-executive directors. Except in the case of larger companies, at least two members of the board, including the Chairman (being not less than one third of the Board) should be independent non-executive directors. The board should determine whether a director is independent in character and judgment and whether there are relationships or circumstances which are likely to affect, or could appear to affect, the director’s judgment taking into account the criteria of independence defined in the Code and the guidance in the PLSA AIM Policy.

The Directors support high standards of corporate governance. The Company’s Board currently comprises seven non-executive directors. The Board has carefully considered the Directors’ independence and has determined that the Directors discharge their duties in an independent manner. Leslie Ferrar, Jonathan Lane and Ian Marcus are considered by the Directors to be independent. Martin Moore, as Chairman of the Company, was deemed to be independent on appointment but, by virtue of his role as Chairman of the Company, is not deemed to be independent subsequently in terms of the Code.

Nick Leslau, Sandy Gumm and Mike Brown are not considered to be independent within the meaning of the Code as they are connected to the Investment Adviser.

Accordingly, the Company complies with the provisions of the Code applicable to smaller companies that at least two members (being not less than one third of the Board) should be independent non- executive directors.

The Directors have adopted terms of reference for and have formed an audit committee, a nominations committee and a remuneration committee. In accordance with the NAPF AIM Policy, a majority of the members of the audit committee and remuneration committee are independent non-executive directors. It also requires that the audit committee and the remuneration committee comprise at least three (or in the case of small companies, two) independent non-executive directors. The Company fully complies with the foregoing requirements. The Company does not comply with the requirement of the Code that a majority of the members of the nominations committee should be independent non- executive directors.

63 The Code recommends that the Board should appoint one of its independent non-executive directors to be the senior independent director (“SID”) to provide a sounding board for the Chairman and to serve as an intermediary for the other directors when necessary. The SID should be available to Shareholders if they have concerns that contact through the normal channels of chairman, chief executive or other executive directors has failed to resolve or for which such contact is inappropriate. The Company’s SID is Ian Marcus.

Audit Committee The audit committee meets at least two times a year at appropriate intervals in the financial reporting and audit cycle and otherwise as required. The committee consists of three members, being Leslie Ferrar, Jonathan Lane and Ian Marcus, all of whom are independent non-executive directors. In compliance with the Code, Leslie Ferrar as Chairman of the Audit Committee has relevant financial experience. The audit committee has responsibility for, amongst other things, monitoring the integrity of the financial statements of the Group, including the Group’s annual report and accounts and half-yearly reports and the involvement of the Group’s auditors in that process. The committee focuses in particular on compliance with legal requirements, accounting standards and on ensuring that an effective system of internal financial control is maintained. The ultimate responsibility for reviewing and approving annual report and accounts and half-yearly reports remains with the Board.

The terms of reference of the audit committee cover such issues as membership and the frequency of meetings, as mentioned above, together with the role of the secretary and the requirements of notice and the right to attend and quorum for meetings. The duties of the audit committee covered in the terms of reference are: financial reporting, internal controls and risk management systems, whistleblowing, internal audit, external audit and reporting responsibilities. The terms of reference also set out the authority of the committee to exercise its duties.

Nominations Committee The nominations committee meets at least once a year and otherwise as required. The committee consists of three members. The chairman of the nominations committee must either be an independent director or the chairman of the Board (save when discussing his succession). Accordingly, Jonathan Lane has been appointed as chairman of the nominations committee, the other members being Mike Brown and Nick Leslau. The nominations committee considers the composition of the Board, retirements and appointments of additional and replacement directors and makes appropriate recommendations to the Board.

Remuneration Committee The remuneration committee meets at least once a year and otherwise as required. The committee consists of three members, being Ian Marcus (chairman of the remuneration committee), Leslie Ferrar and Martin Moore, all of whom are independent non-executive directors. The remuneration committee has responsibility for making recommendations to the Board on the Group’s policy on the remuneration of the Investment Adviser, having regard to the terms of the Investment Advisory Agreement.

The terms of reference of the remuneration committee cover such issues as membership and frequency of meetings together with the role of the secretary and the requirements of notice of and quorum for and the right to attend meetings. The duties of the remuneration committee covered in the terms of reference relate to the following: determining and agreeing with the Board a broad policy for any changes to the Investment Advisory Agreement, determining and monitoring policy on and setting level of remuneration, policies for authorising claims for expenses, reporting and disclosure, and the appointment of any remuneration consultants. The terms of reference also set out the reporting responsibilities and the authority of the committee to exercise its duties.

64 Part 4: Operating and Financial Review

Investors should read the following discussion and analysis of the Group’s financial condition and results of operations in conjunction with the historical financial information for the twelve months ended 31 December 2015, the nine months ended 31 December 2014, the twelve months ended 31 March 2014 and the twelve months ended 31 March 2013 (together, the “Group Financial Information”) set out in Part 6: Historical Financial Information. The Group Financial Information has been prepared in accordance with IFRS. The Group’s significant accounting policies are explained in paragraph 6 below and note 2 to the Group Financial Information. Investors should read the Group Financial Information in its entirety and not merely rely on the information contained in this section. Some of the information in the following discussion and analysis includes forward looking statements that involve risks and uncertainties.

1 OVERVIEW The Group is a UK REIT specialising in long term income streams from real estate, offering inflation protection. For an overview of the business and the investment strategy of the Group, see Part 1: Business.

2 KEY FACTORS AFFECTING THE GROUP’S RESULTS OF OPERATIONS AND FINANCIAL CONDITION 2.1 Rents receivable The Group’s sole source of revenue is rents receivable on its investment properties. Rents receivable comprise contracted rents paid by tenants under operating leases, recognised on an accruals basis and, where relevant adjusted pursuant to IFRS to smooth the effect of fixed or minimum uplifts throughout the lease term. Principal factors that have the potential to affect the level of rents receivable from the Portfolio or which have historically done so include:

In the case of the UK Leisure Portfolio, the rate of inflation measured by RPI The UK Leisure Portfolio rents are subject to annual upwards only uncapped RPI-linked rent reviews every June throughout the lease term on the basis of the annual RPI index to April in each year. Should RPI over a relevant period be zero or less, the rental income would remain the same as the passing rent immediately prior to the review. For all periods where RPI movement is an increase, rents will rise in proportion with the RPI increase.

In the case of the Ramsay healthcare assets, rents are subject to fixed annual uplifts with a landlord’s option to review to open market rent every five years, with the first open market review option in May 2017 Every five years commencing in May 2017, the landlord has the option to review the rent to the higher of the then passing rent increased by 2.75 per cent per annum calculated on a compounded basis (the “indexed rent”) and open market rental value, with a special assumption at the first open market review in May 2017 that the rental level is the higher of the indexed rent or the amount calculated by the formula 0.885 x 0.65 x ‘EBITDARH’, where EBITDARH is the earnings from each individual property before interest, tax, depreciation, amortisation, rent and head office costs. In subsequent five yearly reviews the rent is set to the indexed rent or open market rental value at the landlord’s option.

The tenants’ and their respective guarantors’ ability to pay. The rents receivable are all payable by operating companies that are principal trading companies within their respective groups, with all lease liabilities guaranteed by substantial, successful listed businesses with multi billion pound market capitalisations. For additional information on the tenants’ businesses and the related guarantees, see paragraph 5 of Part 1: Business.

In the event that both a tenant and its respective guarantor were unable to meet their respective rental obligations in whole or in part there would be a shortfall in rental income until such time as the property is let or leases renegotiated and there is no guarantee that the rental income at that time would be at

65 the same level as under the existing leases. Although such variations in rent could be a factor affecting the Group’s results of operations, this has never been the case in the period of over eight years while the assets have been under the ownership of the Company or the Prestbury Group.

Smoothing treatment of fixed rental uplifts. In accordance with IFRS, the impact of the fixed uplifts of rental income is spread evenly over the term of each relevant lease — in this case, the Ramsay healthcare leases, the London psychiatric hospital lease and the German leisure leases, which together account for 67 per cent of passing rent as at 31 December 2015.

The current impact of this accounting treatment is to reflect a receivable, included in the book value of investment property, for the amount by which rent recognised in the income statement exceeds actual receipts. Any movement in the rent smoothing adjustment receivable is offset against property revaluation movement and as a result the treatment has no impact on the Group’s Net Asset Value The adjustment does increase the Group’s reported earnings per share and EPRA earnings per share as explained in paragraph 3.1 below.

RPI rental uplifts and any uplifts from open market rent reviews are not subject to the smoothing treatment, so any such uplifts will give rise to year on year variations in rental income reported in the income statement.

2.2 Interest payable Since October 2015 all of the Group’s credit facilities have been fixed rate facilities with a weighted average interest rate of 5.2 per cent per annum and a weighted average unexpired term to maturity of over eight years from 31 December 2015. Unless any facility is in default, the relevant fixed rate should not change during the term of the relevant facility. In the event of a default, interest rates could rise by two percentage points on the relevant facility.

Prior to the completion of the Group’s new financing arrangements, the Group’s secured debt comprised floating rate facilities where interest costs were effectively fixed by way of interest rate swaps. The interest rate swaps were initially recognised at fair value on the date on which the derivative contract was entered into and subsequently measured at fair value. The interest rate swaps were classified as derivatives in effective hedges. The gain or loss on the revaluation of the portion of an instrument that qualified as an effective hedge of cash flow interest rate risk was recognised directly in other comprehensive income through the cash flow hedging reserve. Amounts accumulated in equity were reclassified to the income statement in the period when hedged items affected the income statement and were included in finance costs.

The Group’s former secured debt was prepaid ahead of scheduled maturity to facilitate entry into lower cost, longer term financing arrangements. As a result of this accelerated repayment, swap break costs and certain other financing costs amounting to £74.3 million were incurred. These are included in finance costs in note 5 to the Historical Financial Information for the year ended 31 December 2015.

The Group’s finance costs also include the amortisation of financing fees. These reflect the costs of arranging debt facilities and are principally composed of lender’s arrangement fees and borrowers’ and lenders’ legal, valuation and other professional fees. These fees are capitalised and disclosed within the Group’s current and non-current secured debt, and charged to the income statement evenly over the term of each loan. In the event of early repayment of a loan, any unamortised balance of capitalised prepaid finance fees is written off to the income statement. During 2015, the Group incurred £14.4 million of fees relating to the new financing arrangements. The annual charge to the income statement in amortisation of these costs will be £1.7 million per annum until October 2022. The accelerated repayment of the previous loan facilities resulted in a charge to the income statement in 2015 of £5.3 million representing unamortised finance fees at the time of loan prepayment; this amount was included in the £74.3 million of early debt repayment costs in the year.

66 2.3 Change in the valuation of investment property The Group’s investment property portfolio is externally valued on a fair value basis as at 30 June and 31 December each year by professionally qualified, external valuers who conduct their valuations in accordance with RICS Valuation Professional Standards January 2014.

In accordance with IFRS accounting rules, changes in property valuations are disclosed in the Group’s consolidated income statement under the heading Investment Property Revaluation. This movement can be a significant element of the Group’s operating result and also tends to be a significant element of the movement in the Group’s NAV and EPRA NAV in each reporting period.

As described below in paragraph 3.1 in accordance with the guidance issued by the EPRA Reporting and Accounting Committee, fair valuation movements in respect of the Group’s investment property portfolio are excluded from the calculation of EPRA EPS in order to better represent the Group’s underlying performance.

2.4 Taxation As a UK REIT, the Group does not pay UK corporation tax on its UK and German property rental business and is required to distribute at least 90 per cent of the tax exempt profits arising in that business in any year. The German property rental business is subject to German corporation tax. Any change in UK or German tax law or changes in REIT rules could impact on the Group’s results. See Part 8: The REIT Regime and UK Taxation for further details about the UK tax position of the Group.

3 FINANCIAL INFORMATION 3.1 IFRS and adjusted financial information The Group Financial Information is prepared on an IFRS basis. Financial information is also prepared in accordance with the recommendations of the EPRA Reporting and Accounting Committee, which are designed to present the underlying performance from core operating activities and exclude the impact of fair valuation movements in derivative instruments, such as interest rate swaps where relevant, and the impact of any adjustments reflected in the Group’s NAV for tax on capital gains in investment properties.

The Company also presents adjusted EPRA performance measures, which the Directors believe facilitate a clearer comparison of underlying results or growth in EPRA NAV.

EPRA NAV, EPRA NAV per share, EPRA earnings, EPRA earnings per share, adjusted EPRA earnings and adjusted EPRA earnings per share are not measures of performance under IFRS, should not be considered as alternatives to them and may not necessarily be computed in the same manner as similarly titled measures presented by other companies.

The Group’s adjusted performance measures use IFRS reported values which are then subject to clearly identified adjustments as disclosed in the Group’s financial statements.

The Group’s NAV and EPRA NAV per share as at the end of the three most recent reporting periods is as follows:

As at 31 March As at 31 As at 31 2014 December 2014 December 2015 Basic NAV £ (71.3)m £344.3m £504.4m Capitalisation of shareholder loans(1) £113.3m — — Deferred tax on shareholder loans £ 9.3m — — Adjusted basic NAV £ 51.3m £344.3m £504.4m EPRA adjustments: Deferred tax on investment property revaluations £120.6m £ 4.9m £ 5.7m Fair value of interest rate derivatives £138.7m £117.6m — Deferred tax on interest rate derivatives £ (27.5)m £ (0.6)m — EPRA NAV £283.1m £466.2m £510.1m EPRA NAV per share 177.1p 258.5p 282.2p

(1) Shareholder loans were capitalised prior to the listing of the Company.

67 The adjustments made to earnings per share to derive EPRA earnings per share and adjusted EPRA earnings per share in the last three reporting periods are set out below:

Nine months Year ended 31 ended 31 Year ended 31 March 2014 December 2014 December 2015 Basic earnings attributable to shareholders £ 39.3m £ 249.1m £ 36.8m EPRA adjustments Investment property revaluation (£4.7)m £ (160.6)m £ (70.4)m Profit on sale of investment properties — — £ (24.0)m Costs of early termination of interest rate swaps — — £ 60.6m Other early debt repayment costs — — £ 13.7m UK deferred tax released on REIT conversion — £ (117.3)m — Other deferred tax on property revaluations £ (12.8)m £ 1.8m £ 1.0m EPRA earnings £ 21.8m £ (27.0)m £ 17.7m Other adjustments Rent smoothing £ (16.5)m £ (11.3)m £ (13.0)m Incentive fee — £ 35.2m — Costs of the reorganisation and listing — £ 2.9m — Adjusted EPRA earnings £ 5.3m £ (0.2)m £ 4.7m EPRA EPS 13.6p (16.2)p 9.8p Diluted EPRA EPS 13.6p (15.1)p 9.8p Adjusted EPRA EPS 3.3p — 2.6p Diluted adjusted EPRA EPS: 3.3p — 2.6p Number of Shares: Basic 159,823,056 166,406,143 180,344,213 Number of Shares: Diluted 159,823,056 178,306,575 180,344,213

In addition the Company presents passing rent, being the rent receivable at a particular date expressed as an annual amount. Passing rent is not a measure under IFRS, should not be considered as an alternative to IFRS measures and may not necessarily be computed in the same manner as similarly titled measures presented by other companies.

3.2 Key performance indicators The principal key performance indicators monitored by the Board are: (a) EPRA NAV per share (b) Adjusted EPRA earnings per share (c) Net LTV ratio (d) Uncommitted cash (e) Headroom on debt covenants

68 EPRA NAV per share The calculation of EPRA NAV per share for the last two reporting periods is set out in the first table in paragraph 3.1. The EPRA NAV per share movements over the last two reporting periods are set out in the following table:

Nine months ended Year ended Notes 31 December 2014 31 December 2015 Pence per Pence per £m share £m share EPRA NAV at start of period 283.1 177.1 466.2 258.5 Proceeds of share issue, net of costs of share issue, listing and reorganisation (a) 11.9 — — — Dilution of existing shareholders from share issue (a) — (2.0) — — Fair value adjustment on capitalisation of shareholder loans prior to listing (b) 1.6 1.0 — — EPRA NAV at start of period adjusted for current capital structure 296.6 176.1 466.2 258.5 Investment property revaluation* (c) 171.9 102.0 83.4 46.3 Incentive fee (d) (3.1) (20.1) — — Profit on sale of investment properties (e) — — 24.0 13.3 Early debt repayment costs (f) — — (74.3) (41.2) Rental income less administration expenses and finance costs* (g) 2.8 1.8 13.3 7.3 Tax (h) (1.4) (0.9) (1.3) (0.7) Currency translation movements (i) (0.6) (0.4) (1.2) (0.7) EPRA NAV at end of period 466.2 258.5 510.1 282.8

* Adjusted by £13.0 million (7.2 pence per share) in the year ended 31 December 2015 and £11.3 million (6.7 pence per share) in the nine months ended 31 December 2014 to remove the effect of smoothing fixed rental uplifts over the term of the lease. The adjustment currently reduces rental income and increases revaluation movement in equal measures.

The movements in EPRA NAV for each of the financial periods reflects some material movements relating to the listing in 2014 and in 2015, two significant asset sales in the period and the prepayment of secured debt in order to revise the capital structure of the Group to facilitate the payment of distributions commencing in 2016. (a) On listing the Company raised £11.9 million of net proceeds by way of the issue of 8,620,689 shares at 174 pence per share (£15.0 million in gross proceeds). The issue resulted in two pence per share dilution of existing Shareholders. (b) As part of a reorganisation prior to listing, a fair value adjustment to shareholder loans amounting to £1.6 million or one penny per share was made. (c) Investment properties are externally valued at 30 June and 31 December each year. The property valuation yields and portfolio characteristics are described in Part 1: Business of this document. The most significant movement in EPRA NAV in the nine months ended 31 December 2014 was the property revaluation of 102.0 pence per share. The uplift in the Healthcare Portfolio property valuation amounted to 50.8 pence per share and was attributable to a yield improvement from a blended net initial yield of 6.2 per cent to 5.6 per cent at 31 December 2014. The Leisure Portfolio property valuation uplift in the nine months ended 31 December 2014 amounted to 51.2 pence per share which arose from a combination of a 2.6 per cent increase in rental income and a net initial yield improvement from 5.8 per cent to 5.3 per cent. The property valuation uplift in the twelve months ended 31 December 2015 (on a like for like basis) amounted to 46.3 pence per share; 37.4 pence is attributable to the Healthcare Portfolio and 8.9 pence to the Leisure Portfolio at constant currency on the euro denominated German assets. Healthcare net initial yields have improved from 5.5 per cent at 31 December 2014 to 5.2 per cent at 31 December 2015. UK Leisure Portfolio net initial yields have improved from 5.5 per cent to 5.4 per cent and German net initial yields from 6.5 per cent to 6.3 per cent over the same period.

69 (d) Under the arrangements set out in the Investment Advisory Agreement, the Investment Advisor was awarded incentive fees in respect of the period ended 31 December 2014, satisfied by the issue of 11.9 million Ordinary Shares in 2015. The impact on Net Asset Value comprises the cost to the Group of the irrecoverable VAT on the fees which amounted to £3.1 million. The issue of shares diluted EPRA NAV per share by 18.4 pence per share and the charge for VAT by a further 1.7 pence per share. No incentive fee was earned in 2015. (e) Two investment properties were sold in 2015 generating gross proceeds of £382.1 million, £24.0 million in excess of the 31 December 2014 book value of the properties. (f) At the time of the IPO, the Board stated its intention to extend the term to maturity of the Group’s debt. Its assessment during the early part of 2015 was that debt markets were open for large financing transactions and that it was advisable to explore options while market conditions were favourable. Having done so, the Board assessed that appropriately structured and priced facilities could be obtained and evaluated the cost of doing so against the benefits to shareholders of changing the capital structure of the Group, through a combination of asset sales and refinancing, to reduce leverage and free up cash flow to initiate distributions. The impact on EPRA NAV of the early debt repayment was £74.3 million or 41.2 pence per share. (g) The Group’s rental income less administrative expenses and finance costs are commented on in paragraph 4 of this part 4. (h) As a UK REIT, the Group’s UK and German property business is exempt from UK corporation tax save to the extent that its finance costs exceed a threshold amount relative to its profits. It also bears German corporation tax on surpluses earned from the German property business. The Group has incurred an excess interest charge in 2014 and 2015 but following the reduction in the cost of finance as a result of the refinancing of Group debt in 2015, does not expect to incur further excess interest tax charges. (i) The Group is exposed to currency fluctuations on its euro denominated net assets, which amounted to approximately 4 per cent of Group Net Asset Value at 31 December 2014 and 2015.

Adjusted EPRA earnings per share In order to monitor the Group’s recurring profitability, the Board uses the Group’s EPRA EPS, adjusted to exclude items the Board considers to be non-recurring or non-operating items. According to the EPRA guidelines, EPRA EPS excludes investment property revaluations, fair value movements on derivative instruments, early termination costs relating to interest rate derivatives and any related deferred tax. The Group’s adjusted EPRA EPS excludes any incentive fees, as they are largely derived from property revaluations which are excluded from the EPRA measure, and also excluded the non- recurring costs of the reorganisation and listing in 2014 and the impact of the rent smoothing adjustment which is not fully dealt with in the EPRA guidance.

70 The adjustments made to the IFRS earnings to calculate EPRA earnings and adjusted EPRA earnings are shown in paragraph 3.1 above. The table below sets out a summary presentation of the key income statement components on an EPRA basis for the three most recent reporting periods:

Audited twelve Audited nine Audited twelve months to months to months to 31 March 2014 31 December 2014 31 December 2015 Pence Pence Pence per per per £m share £m share £m share Rental income net of property outgoings 107.3 67.1 80.9 48.7 99.4 55.1 Net finance costs (95.0) (59.5) (66.3) (39.9) (72.3) (40.0) Incentive fee — — (35.2) (21.1) — — Administrative expenses and corporate costs (0.3) (0.2) (6.6) (4.0) (8.1) (4.5) Tax 2.4 1.5 (1.2) (0.7) (1.3) (0.8) Unwinding discount on shareholder loans net of deferred tax 7.4 4.7 1.4 0.8 — — EPRA earnings 21.8 13.6 (27.0) (16.2) 17.7 9.8 Incentive fee — — 35.2 21.1 — — Rent smoothing adjustment (16.5) (10.3) (11.3) (6.3) (13.0) (7.2) One-off costs of reorganisation and listing — — 2.9 1.8 — — Adjusted EPRA earnings 5.3 3.3 (0.2) (1.4) 4.7 2.6 EPRA EPS 13.6 (16.2) 9.8 Diluted EPRA EPS 13.6 (15.1) 9.8 Adjusted EPRA EPS 3.3 — 2.6 Diluted Adjusted EPRA EPS 3.3 — 2.6

The Group’s adjusted EPRA EPS changed over the most recent three reporting periods as a result of the significant changes in the Company’s capital structure over that period. Those changes principally comprise: • the capitalisation of shareholder loans prior to the IPO and the listing of the Company on AIM in 2014, which both eliminated the income statement impact of the discount unwinding (reducing earnings) and increased the number of shares in issue (further reducing the earnings per share measure); • listing the Company on AIM, which increased the Group’s running costs; • placing £15.0 million of share capital at the time of the IPO, increasing the number of shares in issue and so reducing the per share measure; • an increase in the cost of debt from the time of IPO in the amount of £2.3 million in 2014 and £9.5 million in 2015 as a result of covenant release fees incurred as part of the debt restructuring prior to the listing; • RPI rental uplifts in June 2014 of an annualised £0.5 million or 2.5 per cent; • the sale of two assets (Madame Tussauds, London and the New Hall Hospital) in March and May 2015 respectively with a combined rent roll at the time of sale of £18.3 million; • RPI rental uplifts on a like for like basis (excluding sold properties) in June 2015 of an annualised £0.2 million or 0.9 per cent; • increased EPRA NAV of £220.4 million since the IPO Date which has resulted in an increase in the Group’s running costs as a result of the increase in the Advisory Fee which is calculated as a percentage of EPRA NAV; and • in the second half of 2015, the repayment of all of the Group’s secured debt which had a weighted average cost of 6.8 per cent and replacing it with new facilities with a weighted average cost of 5.2 per cent and the reduction in the gross debt outstanding from £1.2 billion to £0.9 billion from 30 June 2015 to 31 December 2015.

These factors, together with the shorter, nine month reporting period ended 31 December 2014, mean that the three reporting periods are not comparable. Consequently none of the historic periods should

71 be taken as a reliable guide to future performance. The key components of the Group’s net income currently are: (i) Rental income: passing rent at 31 December is £76.3 million per annum including £4.9 million of euro denominated rent translated at €1:£0.7350. The terms of contracted rental uplifts are described in Part 1: Business. (ii) Finance costs: secured debt at 31 December 2015 amounts to £904.9 million including £52.8 million of euro denominated debt translated at €1:£0.7350. Interest payable is fixed at 5.2 per cent per annum until 29 October 2022. Debt is scheduled to be repaid in line with an amortisation profile described in paragraphs 12.17, 12.18 and 12.19 of Part 11: Additional Information. Finance costs will also include a non-cash charge of approximately £1.7 million per annum until 29 October 2022 represented by £14.4 million of loan financing fees charged to the income statement over the term of the loans. (iii) The terms of the Investment Advisory Agreement provide that Prestbury is paid a fee calculated as 1.25 per cent of EPRA NAV up to £500 million; plus 1.0 per cent of EPRA NAV of more than £500 million but less than £1 billion; plus 0.75 per cent of any EPRA NAV in excess of £1 billion. (iv) In 2016, the costs relating to the Placing are expected to amount to approximately £2 million. (v) The Directors expect that other costs charged to the income statement, apart from the Advisory Fee, should remain broadly consistent with those incurred in 2015 save that running costs would be expected to increase broadly in line with inflation.

Net LTV ratio The Board monitors the Group’s Net LTV ratio with a view to managing the capital structure of the business throughout varying market conditions.

Over the last three reporting periods, the Net LTV calculated as total debt, less cash, as a proportion of gross property value, has reduced from 78.0 per cent at 31 March 2014 to 70 per cent at 31 December 2014 and further to 61 per cent at 31 December 2015.

The Net LTV reduction in the twelve months ended 31 December 2015 compared to the nine months ended 31 December 2014 was due to a combination of unrealised property valuation surpluses and reduced debt levels following asset sales. The Net LTV reduction in the nine months ended 31 December 2014 compared to the twelve months ended 31 March 2014 was principally a result of unrealised property valuation surpluses.

Uncommitted cash The Board considers that the ability to manage potential debt covenant breaches is at least as important as the level of Net LTV. Consequently, along with managing the execution risk inherent in arranging and documenting credit facilities to ensure that the documentation provides sufficient grace periods and cure rights, the Board regularly monitors the Group’s levels of uncommitted cash in order to ensure that it has resources available to exercise cure rights if appropriate. Uncommitted cash is measured as cash balances outside of ring fenced structures secured to lenders net of any creditors or other cash commitments and net of any cash required to be retained under the regulatory capital rules under the AIFMD regime.

The Group’s uncommitted cash balance increased materially following the new loan financing arrangements and asset sales that were executed during 2015. Uncommitted cash at the end of the last three reporting periods was: £52.7 million as at 31 December 2015; £12.2 million as at 31 December 2014 and £nil at 31 March 2014.

Headroom on debt covenants The Board also considers not only the level of debt but its riskiness, monitoring the extent to which there is headroom on any financial covenants. See paragraphs 12.17, 12.18 and 12.19 of Part 11: Additional Information for an explanation of the principal debt covenants and the current level of headroom on each facility.

72 4 CONSOLIDATED RESULTS OF OPERATIONS FOR THE TWELVE MONTHS ENDED 31 DECEMBER 2015, THE NINE MONTHS ENDED 31 DECEMBER 2014 AND THE TWELVE MONTHS ENDED 31 MARCH 2014 4.1 Gross rental income A key feature of the Group’s rental income is that it is highly predictable as a result of the fixed (67 per cent of current passing rent) and upwards only RPI linked (33 per cent of current passing rent) annual rent reviews.

All rent reviews are contracted to occur between May and July each year and in 2015 the aggregate uplift in contracted rental income amounted to an annualised £1.6 million (a 2.2 per cent increase compared to rental income prior to the 2015 rent reviews) compared to an annualised £2.4 million (a 2.7 per cent increase) in 2014.

In 2015, two properties were sold with an aggregate passing rent at the time of sale of £18.5 million.

As noted in paragraph 3.1 of this Part 4: Operating and Financial Review, the Group accounts for leases in accordance with IFRS and as such the impact of the fixed rental uplifts is ‘smoothed’ throughout the term of each lease.

The impact of the rent smoothing adjustment in each of the three most recent reporting periods is an increase of reported rent over cash rents receivable of £16.5 million in the twelve months to 31 March 2014, £11.3 million in the nine months to 31 December 2014 and £13.0 million in the twelve months to 31 December 2015.

The rent smoothing adjustment is an increase in the rent receivable in cash for the first half of the term of each lease and a reduction to the rent receivable for the second half of each lease. The table below sets out the Group’s scheduled rent smoothing adjustments over the next ten years (assuming no acquisition or disposal activity and no changes to the existing fixed uplifts):

£m 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Rent Smoothing UK 9.6 8.3 7.0 5.6 4.2 2.7 1.3 (0.3) (1.9) (3.5) (5.1) Rent Smoothing Germany(1) 2.0 1.8 1.7 1.5 1.3 1.1 0.9 0.7 0.5 0.3 0.1 Total Rent Smoothing 11.6 10.1 8.7 7.1 5.5 3.8 2.2 0.4 (1.4) (3.2) (5.0)

(1) Translated at 31 December 2015 rate of €1:£0.735

The Group’s gross rental income reported in the income statement for the twelve months ended 31 December 2015 increased to £99.5 million from £80.9 million for the nine months ended 31 December 2014. This increase was primarily due to the longer accounting period which applied in respect of the 2015 fiscal year as well as the uplift from the annual RPI increases on the UK Leisure Portfolio rents net of the impact of the asset sales during 2015.

The Group’s gross rental income reported in the income statement for the nine months ended 31 December 2014 decreased to £80.9 million from the Group’s gross rental income for the audited year ended 31 March 2014 of £107.3 million. This decrease was primarily due to the shorter accounting period which applied in respect of the 2014 fiscal year which was partially offset by the uplift from the annual RPI increases on the UK Leisure Portfolio.

4.2 Property outgoings Property outgoings have for the last three reporting periods amounted to some 0.02 per cent of gross rental income. Because the Group’s properties are all fully let and all leases are institutional fully repairing and insuring leases, there are no material landlord’s costs.

4.3 Administrative expenses The Group’s administrative expenses are relatively predictable with the majority being incurred by the Investment Advisor and covered by way of the Advisory Fee. The Advisory Fee is calculated on a

73 sliding scale relative to the Group’s EPRA NAV in accordance with the Investment Advisory Agreement. See paragraph 2 of Part 2: Prestbury and Investment Advisory Agreement.

The principal elements of the Group’s administrative expenses in the three most recent reporting periods are set out in the table below:

Audited twelve Audited nine Audited twelve months to months to months to 31 March 2014 31 December 2014 31 December 2015 £m £m £m Advisory Fee — 2.7 7.0 Incentive fees (inc £3.1 million of irrecoverable VAT) — 35.2 — Other administrative expenses 0.3 0.7 0.7 Total administrative expenses 0.3 38.6 7.7 Other administrative expenses as a percentage of rental income 0.3% 0.9% 0.7%

Incentive fees are only payable in certain circumstances where Total Shareholder Return thresholds are first met. See paragraph 2 of Part 2: Prestbury and Investment Advisory Agreement. Having exceeded those targets significantly in 2014, an incentive fee liability was recognised in 2014.

The Group’s other administrative expenses for the twelve months ended 31 December 2015 remained consistent with those for the nine months ended 31 December 2014 at £0.7 million in both periods. Taking account of the shorter reporting period in 2014 which included only seven months of operation as a listed Group, the costs have marginally decreased in 2015.

The Group’s other administrative expenses for the nine months ended 31 December 2014 increased to £0.7 million from £0.3 million for the twelve months ended 31 March 2014. The reason for this increase despite the shorter accounting period in 2014 was as a result of the higher costs of running the business as a listed entity for seven of the nine months ended 31 December 2014.

4.4 Corporate costs Corporate costs are classified as those costs which are necessarily incurred as a consequence of the Company being listed. The principal costs are the fees payable to the Independent Directors which amount to £0.2 million for the twelve months ended 31 December 2015. Other costs of being listed include the fees of the Group’s Nominated Adviser and Broker, and the fees of registrars and the Stock Exchange. The Group’s corporate costs for the twelve months ended 31 December 2015 were £0.5 million as compared to £0.3 million for the nine months ended 31 December 2014 with the majority of the increase attributable to the longer reporting period in 2015. As the Company did not operate as a listed company during the twelve months ended 31 March 2014, there were no corporate costs incurred for that financial year.

4.5 Costs of the reorganisation and listing In the nine months ended 31 December 2014, in connection with the establishment of the company and the initial listing on AIM, the Group incurred costs of £2.9 million. These are one-off costs of the listing which were written off to the income statement and which are principally composed of professional fees and brokers’ commissions incurred in connection with the reorganisation, placing and listing. This is a non-recurring cost and as such is not included within adjusted EPRA earnings.

4.6 Investment property revaluation Prior to the Company’s listing on AIM, the Group’s investment properties were valued every 31 March and 30 September. Since the IPO and following the change in the Company’s accounting reference date, the Group’s investment properties have been externally valued every 30 June and 31 December. Prior to that, the investment properties were held at a director’s valuation.

74 Valuation movements arise as a result of changes in the external valuer’s assessment of the open market value of the assets. Historically, such changes have tended to arise from: (a) changes in the Group’s rental income which, in the case of the Group’s assets, is an annual uplift; and (b) changes in the valuer’s assumptions as to the relevant valuation yield to apply to the expected rental cash flows.

The valuer’s assessment was that the Group’s Property values increased by 1.4 per cent from 1 April 2013 to 31 March 2014 and by 11.5 per cent in the nine months ended 31 December 2014. The Portfolio valuation at 31 December 2015 (which does not include properties sold during 2015 for gross proceeds of £382.1 million) was £1.35 billion. On a like for like basis, excluding properties sold during 2015, the value of the Portfolio owned at 31 December 2015 increased by 6.3 per cent compared to the value of the same assets at 31 December 2014.

4.7 Profit on sale of investment properties During the 2015 financial year, the Group sold two investment properties.

The assets sold were: (a) New Hall hospital, which was sold in March 2015 for gross proceeds of £49.8 million; and (b) Madame Tussauds, London, which was sold in May 2015 for gross proceeds of £332.4 million.

The income statement reflects the £24.0 million surplus of net sale proceeds over the 31 December 2014 book value of these properties. The surplus over the 31 December 2014 book value amounted to 8 per cent.

4.8 Operating profit The Group’s operating profit was £185.7 million for the twelve months ended 31 December 2015 as compared to £199.8 million for the nine months ended 31 December 2014 and £111.7 million for the twelve months ended 31 March 2014. The reasons for the movements are as described above.

4.9 Finance costs The Group’s finance costs have changed materially as a result of three transactions: (a) Prior to the Company’s IPO, the Group’s capital structure included loan financing provided by its shareholders. These were interest only loans and were therefore recorded in accordance with IFRS at a discount, with the discount unwinding through the income statement over the expected term to repayment. The amount of discount charged to the income statement amounted to £11.5 million in the year ended 31 March 2014 and £1.7 million in the nine months ended 31 December 2014 with the lower amount charged in 2014 being attributable to the fact that the loans were capitalised immediately prior to the IPO of the Company. There therefore has been no further unwinding of shareholder loan discounts since the IPO. (b) For the whole of the twelve months ended 31 March 2014 and the nine months ended 31 December 2014 the Group’s secured financing, other than the shareholder loans, comprised two secured debt facilities which amounted in aggregate to £1,166.7 million as at 31 March 2014 and £1,157.6 million as at 31 December 2014. The weighted average rate of interest payable on these loans was approximately 6.8 per cent per annum. (c) Following the sale of assets and the new financing arrangements drawn during the course of 2015, the Group’s secured debt obligations decreased from £1,157.3 million at 31 December 2014 to £904.9 million at 31 December 2015. Furthermore, the weighted average interest rate payable on the Group’s debt has reduced from 6.8 per cent per annum to 5.2 per cent per annum. This has resulted in a reduction in interest payable in the year ended 31 December 2015 and will result in a materially lower level of interest payable in future periods as the new financing has a minimum term to expiry of 6.75 years and a weighted average term to expiry of 8.5 years as at 31 December 2015. However, as a result of the accelerated repayment of the Group’s existing

75 debt facilities, £74.3 million of early debt repayment costs have been incurred and these costs are included within the Group’s finance costs in 2015.

The following table sets out the components of the Group’s finance costs for the periods indicated:

Twelve months to Nine months to Twelve months to 31 March 2014 31 December 2014 31 December 2015 £m £m £m Shareholder loans: unwinding of discount to date of capitalisation (non-cash) 11.5 1.7 — Finance costs on old facilities 83.5 64.7 59.4 Interest payable on new facilities since drawdown — — 12.5 Loan cost amortisation relating to new facilities since drawdown (non-cash) — — 0.5 Prepayment costs: Hedging break costs at refinancing net lender’s credit against early debt repayment costs — — 60.6 Exit and covenant release fees payable at refinancing — — 8.4 Loan costs written off at refinancing (non-cash) — — 5.3 Finance costs 95.0 66.4 146.7

4.10 Profit before tax The Group’s profit before tax for the twelve months ended 31 December 2015 was £39.2 million compared to £133.5 million for the nine months ended 31 December 2014 and £16.7 million for the twelve months ended 31 March 2014. The reasons for the movements are as described above.

4.11 Tax The Group’s tax charge reflects four principal components:

Audited twelve Audited nine Audited twelve months to months to months to 31 March 2014 31 December 2014 31 December 2015 £m £m £m German corporation tax charge/(credit) 0.3 (0.1) — UK REIT excess interest charge — 0.7 1.3 Adjustments in respect of prior periods — — 0.1 Deferred tax charge/(credit) (15.4) (114.8) 1.0 Tax (credit)/charge in the period (15.1) (114.3) 2.4

The German corporation tax treatment of the earnings arising on the German assets is unchanged throughout the period. The results reflect a tax credit in the nine months ended 31 December 2014 as a result of a credit adjustment amounting to £0.3 million following the conclusion of a tax audit by the German revenue authorities relating to the years 2007 to 2012. The underlying charge in 2015 was £0.2 million, offset by a further credit relating to prior years of £0.2 million.

Following its election to join the UK REIT Regime which became effective on 5 June 2014, the Group became subject to a general requirement that certain finance costs, to the extent not covered at least 1.25 times by the Group’s exempt net property income, are subject to a tax charge at the prevailing corporation tax rate (subject to a cap of currently 20 per cent of the exempt profits). The Group has historically exceeded the finance costs limit and has therefore reflected in the income statement a tax charge of £0.7 million in the nine months ended 31 December 2014 and £1.4 million in the year ended 31 December 2015. With effect from the 2016 financial year, the Group anticipates that it will meet, and continue to meet, the UK REIT Regime’s interest cover test and expects such tax should no longer be payable.

76 Consistent with the treatment of German corporation tax arising on the German assets, the Group accounts for deferred tax on the investment property surpluses and interest rate derivatives attributable to the German properties. Prior to the Group’s conversion to UK REIT status, the Group also recorded deferred tax on all of the Group’s UK property surpluses and on its UK interest rate derivatives. Only the deferred tax on the German assets and German interest rate derivatives were applicable as at 31 December 2014. All interest rate derivatives were terminated upon repayment of the Group’s former credit arrangements during the course of 2015 therefore there is no longer a deferred tax asset relating to the interest rate derivatives on the German debt.

4.12 Profit for the period The Group’s profit for the twelve months ended 31 December 2015 was £36.8 million compared to £247.7 million for the nine months ended 31 December 2014, as compared to £31.8 million for the twelve months ended 31 March 2014. The reasons for the movements are as described above.

5 LIQUIDITY AND CAPITAL RESOURCES 5.1 Overview The Group’s operations are financed by a combination of cash resources and non-recourse secured debt finance, where the assets at risk in the event of a loan default are limited to those within a specific ring-fenced structure. In all reporting periods up to and including 31 December 2014, the Group’s healthcare assets and the leisure assets each secured a separate non-recourse facility. Following the replacement of the Group’s financing arrangements in the second half of 2015, the Healthcare Portfolio was divided into one portfolio of eleven assets and one of nine assets and the Leisure Portfolio and the two healthcare portfolios each secure separate debt facilities.

5.2 Cash flow Group cash flows in the last three reporting periods are summarised as follows:

Audited twelve Audited nine Audited twelve months to months to months to 31 March 2014 31 December 2014 31 December 2015 £m £m £m Cash flows from operating activities before changes in working capital 90.4 60.3 78.3 Changes in working capital 0.8 6.5 (8.2) Tax paid (0.4) (0.7) (0.3) Cash flows from operating activities 90.8 66.1 69.8 Cash flows from investing activities — — 379.4 Cash flows from financing activities (90.0) (52.9) (406.3) Increase in cash and cash equivalents 0.8 13.2 42.9

5.2.1 Cash flow from operating activities Cash inflows from operating activities comprise cash rents received net of property, administrative and corporate costs, less net interest paid and corporation tax payments in respect of operating activities.

The Group’s rental income receivable increases annually while its cost of debt during the periods under review has been fixed (either directly or through the use of interest rate swaps). In the periods under review, the cash generated from the Group’s business operations has historically increased at a greater rate than the growth in the Group’s rents receivable largely as a result of the fixed cost of finance.

The Group’s cash flow from operating activities for the twelve months ended 31 December 2015 was £69.8 million compared to £66.1 million for the nine months ended 31 December 2014. Taking into account the shorter reporting period to 31 December 2014 this largely reflects the impact of significant working capital movements between the periods.

The Group’s cash flow from operating activities for the nine months ended 31 December 2014 was £66.1 million compared to £90.8 million for the twelve months ended 31 March 2014. The decrease was primarily due to the nine months ended 31 December 2014 being a shorter accounting period.

77 5.2.2 Cash flow from investing activities All of the Group’s leases are on institutional full repairing and insuring terms and there have been no acquisitions in the periods under review. Consequently, the Group’s cash flow from investing activities is represented by interest received on its cash balances.

The Group’s cash flow from investing activities for the twelve months ended 31 December 2015 was £379.4 million compared to £0.04 million for the nine months ended 31 December 2014. The reason for this increase was due to the £379.3 million of net proceeds received in 2015 on property sales.

The Group’s cash flow from investing activities for the nine months ended 31 December 2014 was £0.04 million compared to £0.03 million for the twelve months ended 31 March 2014. The primary reason for this increase was the increase in cash and cash equivalents and the effects of exchange rate changes.

5.2.3 Cash flow from financing activities Cash inflows from financing activities comprised inflows of funds from drawings on new credit facilities and the net proceeds of the issue of Ordinary Shares in the nine months ended 31 December 2014. Cash outflows from financing activities comprised scheduled debt amortisation and early debt repayments including the costs of terminating interest rate derivatives, together with the costs of arranging new debt facilities.

The Group’s cash outflow from financing activities for the twelve months ended 31 December 2015 was £406.3 million compared to £52.9 million for the nine months ended 31 December 2014. This increase in the cash outflow was due to the net impact of the very significant cash flows on refinancing:

Nine months to Twelve months to 31 December 2014 31 December 2015 £m £m Existing facilities repaid — (1,149.5) Cost of early termination of interest rate swaps — (60.3) Other early debt repayment costs — (8.3) New facilities drawn — 905.2 Loan costs paid — (14.4) Refinancing cash flows — (327.3) Debt service cash flows: Interest and finance costs (60.9) (78.6) Scheduled amortisation (6.2) (5.4) (67.1) (84.0) Net proceeds of share issues On listing 11.9 — Issued under Commitment Agreement 2.2 5.0 14.1 5.0 Cash flows from financing activities (52.9) (406.3)

The Group’s cash outflow from financing activities for the nine months ended 31 December 2014 was £52.9 million compared to an outflow of £90.0 million for the twelve months ended 31 March 2014. This decrease was mainly due to the nine months ended 31 December 2014 being a shorter accounting period.

5.3 Cash and cash equivalents The Group’s cash and cash equivalents comprised cash in hand and on demand bank deposits. The movements in the Group’s cash and cash equivalents for the reporting periods represent the net cash flow from operating, investing and financing activities, and the reasons for the movements are described in paragraph 5 above.

78 5.4 The Group’s debt The Group’s debt facilities are summarised in paragraphs 12.17, 12.18 and 12.19 of Part 11: Additional Information. All of the Group’s financing in place at 31 December 2015 and currently was drawn between 6 August and 2 October 2015.

5.5 Covenants and gearing Each of the Group’s debt facilities are self-contained, with no cross default provisions between them. The key terms are disclosed in paragraphs 12.17, 12.18 and 12.19 of Part 11: Additional Information.

Each facility has been designed so that if the breach of any financial covenant could result in a default or cash trap, there are currently levels of headroom over those covenants that the Directors believe are appropriate. Cure rights, including the injection of cash or acceptable unsecured property assets into the borrowing structure, also exist to allow remedial action to be taken if possible.

The loans are subject to minimum interest or debt service cover levels, further details of which are set out in paragraphs 12.17, 12.18 and 12.19 of Part 11: Additional Information.

As of 31 December 2015, the Group has no committed but undrawn credit arrangements and no short term or unsecured borrowings.

5.6 Off balance sheet arrangements As of 31 December 2014 and 31 December 2015, the Group has no off balance sheet arrangements.

5.7 Quantitative and qualitative disclosures about market risk Market risk is defined as the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Group’s market risk arises from open positions in interest bearing assets and liabilities and foreign currencies, to the extent that these are exposed to general and specific market movements.

5.8 Interest rate risk The Group’s interest bearing assets comprise only cash and cash equivalents which bear interest at relatively low rates. Changes in market interest rates therefore have a limited impact on the Group’s finance income. The Group’s borrowings since 2 October 2015 are all at fixed rates. Prior to that date, the Group was exposed to cash flow interest rate risk as its borrowings were at variable rates. The Group’s policy was to fix the interest rate on that debt by entering into interest rate derivatives in order to mitigate this risk. As a result, for both the year ended 31 December 2015 and the period ended 31 December 2014, after taking into account the effect of interest rate swaps, all of the Group’s borrowings were at a fixed rate of interest.

Trade and other payables are interest free and have payment terms of less than one year, so it is assumed that there is no interest rate risk associated with these financial liabilities.

5.9 Currency risk The Group prepares its financial information in pounds sterling. Some of the Group’s assets are located in Germany and as a result the Group is subject to foreign currency exchange risk due to exchange rate movements between pounds sterling and the euro, though this risk is partially hedged because both assets and liabilities are held in euros, and both revenue and expenditure arise in euros. An unhedged currency risk therefore remains on the value of the Group’s net investment in, and returns from, its German operations.

79 The Group’s sensitivity to changes in foreign currency exchange rates, calculated on the basis of a 10 per cent increase or decrease in average and closing pounds sterling rates against the euro, was as follows:

Year to 31 December 2015 £000 Effect on profit 204 Effect on other comprehensive income and equity 1,862

5.10 Credit risk Credit risk is the risk of financial loss to the Group if a counterparty fails to meet its contractual obligations. The principal counterparties are the Group’s tenants (in respect of trade receivables arising under operating leases) and banks (as holders of the Group’s cash deposits).

The credit risk of trade receivables is considered low because the counterparties to the operating leases are considered by the Board to be high quality tenants with lease guarantors of appropriate financial strength, and rent over at least the period since acquisition in 2007 has historically always been paid on or before its due date. Recovery details and statistics are benchmarked in Board reports to identify any problems at any early stage, and if necessary rigorous credit control procedures will be applied to facilitate the recovery of trade receivables. The Group does not hold any financial assets which are either past due or impaired. The credit risk on cash deposits is limited because the counterparties are banks with credit ratings which are acceptable to the Board and are kept under review each quarter or more often if required.

5.11 Liquidity risk Liquidity risk arises from the Group’s management of working capital and the finance costs and principal repayments on its secured debt. It is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group seeks to manage its liquidity risk by ensuring that sufficient cash is available to meet its foreseeable needs. These liquidity needs are relatively modest and are managed principally through the deduction of operating costs from rental receipts, before any surplus is applied in payment of interest and loan amortisation as required by the credit agreements relating to the Group’s secured debt.

Before entering into any debt instrument, the Board assesses the resources that are expected to be available to the Group to meet liabilities when they fall due. These assessments are made on the basis of both conservative and downside scenarios. The Group prepares budgets and working capital forecasts which are reviewed by the Board at least quarterly to assess ongoing cash requirements and compliance with loan covenants. The Board also keeps under review the maturity profile of the Group’s cash deposits in order to have reasonable assurance that cash will be available for the settlement of liabilities when they fall due.

6 CRITICAL ACCOUNTING POLICIES The Group Financial Information is prepared in accordance with IFRS with certain adjusted measures reported as explained in note 2 to the Group Financial Information.

The preparation of financial information requires the Directors to make judgements, estimates and assumptions that may affect the application of accounting policies and reported amounts of assets and liabilities at each balance sheet date and the reported amounts of revenue and expenses during the year. Any estimates and assumptions are based on experience and any other factors that are believed to be relevant under the circumstances and which the Board considers reasonable. Actual outcomes may differ from these estimates.

Accounting policies which have a significant bearing on the reported financial condition and results of the Group may require subjective or complex judgements. The Group’s principal ongoing area of judgement is the investment property valuation, where the opinion of external valuers has been obtained at each reporting date using recognised valuation techniques and the principles of IFRS 13 “Fair Value Measurement”.

80 The Group’s accounting policies and valuation approach for this matter are set out below:

(i) Investment properties Investment properties comprise properties owned by the Group which are held for capital appreciation, rental income or both. They are initially recorded at cost and subsequently valued at each balance sheet date at fair value as determined by professionally qualified external valuers.

Valuations are calculated, in accordance with RICS Valuation — Professional Standards January 2014, by applying capitalisation yields to current and future rental cash flows, with reference to data from comparable market transactions, together with an assessment of the security of income. Gains or losses arising from changes in the fair value of investment properties are recognised in the income statement in the period in which they arise. Depreciation is not provided in respect of investment properties.

Acquisitions and disposals of investment properties are recognised on unconditional exchange of contracts where it is reasonable to assume at the balance sheet date that completion of the acquisition or disposal will occur. Gains or losses on disposal are determined as the difference between the net disposal proceeds and the carrying value of the asset in the previous balance sheet adjusted for any subsequent capital expenditure or capital receipts.

(ii) Occupational leases The Directors exercise judgement in considering the potential transfer of the risks and rewards of ownership in accordance with IAS 17 “Leases” for all properties leased to tenants and determines whether such leases are operating leases. A lease is classified as a finance lease if substantially all of the risks and rewards of ownership transfer to the lessee. If the Group substantially retains those risks, a lease is classified as an operating lease. All leases reflected in the Historical Financial Information (set out in Part 6: Historical Financial Information) are classified as operating leases.

81 Part 5: Capitalisation and Indebtedness

The following table shows the consolidated gross indebtedness of the Group and the consolidated capitalisation of the Group as at 31 December 2015. The figures for capitalisation and indebtedness have been extracted without material adjustment from the Historical Financial Information on the Group included in Part 6: Historical Financial Information for the year ended 31 December 2015.

As at 31 December 2015 £’000 Total current debt Secured debt(1) 4,387 Total current debt 4,387 Total non-current debt (excluding current portion of long term debt) Secured debt(1) 900,521 Total non-current debt 900,521 Total gross indebtedness 904,908 Capitalisation Share capital 18,034 Legal reserve(2) 52,377 Total Capitalisation(3) 70,411

(1) Assets secured comprise the Group’s investment properties, which are subject to a fixed charge, and the lenders have the benefit of floating charges over the assets of the sub-groups forming their specific security pools. Secured debt is presented gross of unamortised finance costs. (2) Comprises the share premium reserve. (3) Capitalisation does not include retained earnings, the cash flow hedging reserve, or the cumulative exchange gains and losses on the translation of the Group’s net investment in its German operations.

The following table shows the consolidated net financial indebtedness of the Group as at 31 December 2015, extracted without material adjustment from the historical financial information on the Group for the year ended 31 December 2015 included in Part 6: Historical Financial Information.

As at 31 December 2015 £’000 Free cash 55,638 Liquidity 55,638 Current financial receivables(1) 25,973 Secured Debt(2) (4,387) Current financial debt (4,387) Net current financial indebtedness 77,224 Secured Debt(2) (900,521) Non-current financial indebtedness (900,521) Net financial indebtedness (823,297)

(1) Comprises secured cash and regulatory capital. (2) Secured debt is presented gross of unamortised finance costs.

There is no material indirect or contingent indebtedness.

82 Part 6: Historical Financial Information

Section 1 — Accountant’s report on the historical financial information

BDO LLP 55 Baker Street London W1U 7EU

The Directors 14 March 2016 Secure Income REIT Plc Cavendish House 18 Cavendish Square London W1G 0PJ

Dear Sirs

Secure Income REIT Plc (the “Company”) and its subsidiary undertakings (together, the “Group”)

Introduction We report on the financial information set out in Section 2 of Part 6. This financial information has been prepared for inclusion in the disclosure document dated 14 March 2016 of the Company (the “Disclosure Document”) on the basis of the accounting policies set out in note 2 to the financial information. This report is prepared as if item 20.1 of annex I of the Commission Regulation (EC) No. 809/2004 (the “PD Regulation”) applied and is given for that purpose and for no other purpose.

Responsibilities The directors of the Company are responsible for preparing the financial information in accordance with International Financial Reporting Standards as adopted by the European Union.

It is our responsibility to form an opinion on the financial information and to report our opinion to you.

Save for any responsibility arising under Prospectus Rule 5.5.3R (2) (f) to any person as and to the extent there provided, to the fullest extent permitted by the law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement consenting to its inclusion in the Disclosure Document.

Basis of opinion We conducted our work in accordance with Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the financial information. It also included an assessment of significant estimates and judgements made by those responsible for the preparation of the financial information and whether the accounting policies are appropriate to the entity’s circumstances, consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial information is free from material misstatement whether caused by fraud or other irregularity or error.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in the United States of America or other jurisdictions outside the United Kingdom and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

83 Opinion In our opinion, the financial information gives, for the purposes of the Disclosure Document, a true and fair view of the state of affairs of the Group as at 31 March 2013, 31 March 2014, 31 December 2014 and 31 December 2015 and of its results, cash flows and changes in equity for the periods then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

Yours faithfully

BDO LLP Chartered Accountants

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)

84 Section 2 — Historical financial information

Group Income Statements

Nine months to Year to Year to Year to 31 31 December 31 December Notes 31 March 2013 March 2014 2014 2015 £000 £000 £000 £000 Revenue 4 105,915 107,331 80,946 99,479 Property outgoings (23) (23) (19) (33) Gross profit 105,892 107,308 80,927 99,446 Administrative expenses (367) (339) (38,568) (7,656) Corporate costs — — (294) (482) Costs of reorganisation and listing — — (2,888) — Total administrative expenses (367) (339) (41,750) (8,138) Investment property revaluation 10 (3,548) 4,706 160,608 70,435 Profit on sale of investment properties 7 — — — 23,962 Operating profit 5 101,977 111,675 199,785 185,705 Finance income 6 26 25 36 61 Finance costs 6 (94,270) (95,044) (66,366) (146,613) Profit before tax 7,733 16,656 133,455 39,153 Tax credit / (charge) 8 5,298 15,145 114,291 (2,382) Profit for the period 13,031 31,801 247,746 36,771

All amounts relate to continuing activities

Pence per Pence per Pence per Pence per Earnings per share share share share share Basic 9 12.7 24.6 149.7 20.4 Diluted 9 12.7 24.6 139.7 20.4

85 Group Statements of Other Comprehensive Income

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Profit for the period 13,031 31,801 247,746 36,771 Items that may subsequently be reclassified to profit or loss: Fair value adjustment of interest rate derivatives in effective hedges 4,491 79,153 21,837 31,703 Reclassification of interest rate derivative fair value adjustment to the income statement — — — 88,125 Tax effect of interest rate derivative fair value adjustment (3,286) (23,244) (26,918) (147) Deferred tax written off following early termination of interest rate derivatives — — — (480) Currency translation differences 309 (159) (370) (899) Total comprehensive income for the period, net of tax 14,545 87,551 242,295 155,073

86 Group Balance Sheets

At At At At 31 March 31 March 31 December 31 December Notes 2013 2014 2014 2015 £000 £000 £000 £000 Non-current assets Investment properties 10 1,437,489 1,457,374 1,625,435 1,349,547 Deferred tax asset 14 53,133 28,506 627 — 1,490,622 1,485,880 1,626,062 1,349,547 Current assets Trade and other receivables 12 43 69 103 114 Current tax recoverable — 39 401 — Cash and cash equivalents 13 24,581 25,367 38,771 81,611 24,624 25,475 39,275 81,725 Total assets 1,515,246 1,511,355 1,665,337 1,431,272 Current liabilities Trade and other payables 15 (36,499) (37,097) (41,035) (29,293) Secured debt 16 (10,176) (11,103) (4,908) (2,707) Current tax payable (43) — (166) (862) (46,718) (48,200) (46,109) (32,862) Non-current liabilities Secured debt 16 (1,161,858) (1,152,540) (1,152,407) (888,312) Shareholders’ loans 16 (101,729) (113,238) — — Interest rate derivatives 16 (216,920) (138,706) (117,578) — Deferred tax liability 14 (146,854) (129,953) (4,938) (5,687) (1,627,361) (1,534,437) (1,274,923) (893,999) Total liabilities (1,674,079) (1,582,637) (1,321,032) (926,861) Net (liabilities) / assets (158,833) (71,282) 344,305 504,411 Equity Share capital 17 — — 16,844 18,034 Share premium reserve 18 — — 16,156 52,377 Retained earnings 18 (21,754) 17,387 396,577 433,348 Cash flow hedging reserve 18 (170,029) (114,120) (119,201) — Other reserves 18 2,080 1,921 33,929 652 Capital contribution reserve 18 30,870 23,530 — — Total equity (158,833) (71,282) 344,305 504,411

Pence per Pence per Pence per Pence per share share share share Basic NAV per share 20 (27.4) 32.1 204.4 279.7 Diluted NAV per share 20 (27.4) 32.1 190.9 279.7 EPRA NAV per share 20 160.2 177.1 258.5 282.8

87 Group Statements of Changes in Equity

Share Capital Cash flow Share premium Merger contribution Other hedging Retained capital reserve reserve reserve reserves reserve earnings Total £000 £000 £000 £000 £000 £000 £000 £000 Year to 31 March 2013 At 1 April 2012 — — — 38,210 1,771 (171,234) (42,125) (173,378) Profit for the year — — — — — — 13,031 13,031 Other comprehensive income — — — — 309 1,205 — 1,514 Total comprehensive income, net of tax — — — — 309 1,205 13,031 14,545 Reclassification of realised amount — — — (7,340) — — 7,340 — At 31 March 2013 — — — 30,870 2,080 (170,029) (21,754) (158,833)

Year to 31 March 2014 At 1 April 2013 — — — 30,870 2,080 (170,029) (21,754) (158,833) Profit for the year — — — — — — 31,801 31,801 Other comprehensive income — — — — (159) 55,909 — 55,750 Total comprehensive income, net of tax — — — — (159) 55,909 31,801 87,551 Reclassification of realised amount — — — (7,340) — — 7,340 — At 31 March 2014 — — — 23,530 1,921 (114,120) 17,387 (71,282) Nine months to 31 December 2014 At 1 April 2014 — — — 23,530 1,921 (114,120) 17,387 (71,282) Profit for the period — — — — — — 247,746 247,746 Other comprehensive income — — — — (370) (5,081) — (5,451) Total comprehensive income, net of tax — — — — (370) (5,081) 247,746 242,295 Issue of shares on capitalisation of shareholder loans 7,791 70,123 — (17,492) — — — 60,422 Issue of shares on acquisition of the healthcare group 8,191 — 73,718 (18,435) — — — 63,474 Capital reduction and cancellation — (70,123) (73,718) — — — 143,841 — Reclassification on capitalisation of shareholder loans — — — 12,397 — — (12,397) — Proceeds from share issues net of capitalised expenses 862 16,156 — — — — — 17,018 Shares to be issued — — — — 32,378 — — 32,378 At 31 December 2014 16,844 16,156 — — 33,929 (119,201) 396,577 344,305 Year to 31 December 2015 At 1 January 2015 16,844 16,156 — — 33,929 (119,201) 396,577 344,305 Profit for the year — — — — — — 36,771 36,771 Other comprehensive income — — — — (899) 119,201 — 118,302 Total comprehensive income, net of tax — — — — (899) 119,201 36,771 155,073 Issue of shares 1,190 36,221 — — (32,378) — — 5,033 At 31 December 2015 18,034 52,377 — — 652 — 433,348 504,411

88 Group Cash Flow Statements

Nine months to Year to Year to Year to 31 December 31 December Notes 31 March 2013 31 March 2014 2014 2015 £000 £000 £000 £000 Operating activities Profit before tax 7,733 16,656 133,455 39,153 Adjustments for non-cash items: Investment property revaluation 10 3,548 (4,706) (160,608) (70,435) Profit on sale of investment properties 7 — — — (23,962) Movement in rent smoothing adjustment 10 (17,836) (16,524) (11,287) (13,011) Administrative expenses settled in shares — — 32,378 — Finance income 6 (26) (25) (36) (61) Finance costs 6 94,270 95,044 66,366 146,613 Cash flows from operating activities before changes in working capital 87,689 90,445 60,268 78,297 Changes in working capital: Trade and other receivables — (52) (194) (11) Trade and other payables 990 753 6,770 (8,155) Cash generated from operations 88,679 91,146 66,844 70,131 Tax paid (410) (386) (743) (316) Cash flows from operating activities 88,269 90,760 66,101 69,815 Investing activities Proceeds from sale of investment properties 7 — — — 379,316 Interest received 6 26 25 36 61 Cash flows from investing activities 26 25 36 379,377 Financing activities Drawdown of secured debt — — — 905,158 Repayment of secured debt (7,531) (10,056) (6,166) (1,154,923) Interest and finance costs paid (80,283) (79,913) (60,882) (86,804) Costs of early termination of interest rate derivatives — — — (60,289) Loan costs paid on new facilities — — — (14,437) Net proceeds of share issues — — 14,131 5,033 Movement in shareholders’ loans 245 — — — Cash flows from financing activities (87,569) (89,969) (52,917) (406,262) Increase in cash and cash equivalents 726 816 13,220 42,930 Cash and cash equivalents at the beginning of the period 23,842 24,581 25,367 38,771 Effect of exchange rate changes 13 (30) 184 (90) Cash and cash equivalents at the end of the period 24,581 25,367 38,771 81,611

89 NOTES TO THE CONSOLIDATED HISTORICAL FINANCIAL INFORMATION 1 GENERAL INFORMATION ABOUT THE GROUP The consolidated financial information set out in this report includes the results and net assets of Secure Income REIT Plc (‘the Company’) and its subsidiaries, together referred to as the Group. The Company is incorporated in the United Kingdom. The address of the registered office and principal place of business is Cavendish House, 18 Cavendish Square, London, W1G 0PJ. The Company has been listed on AIM since June 2014. Further information about the Group can be found on its website, www.SecureIncomeREIT.co.uk. The principal activity of the Group is that of property investment.

2 BASIS OF PREPARATION AND ACCOUNTING POLICIES a) Statement of compliance Prior to 21 May 2014, the Company and SIR Hospital Holdings Limited (the holding company of the subgroup that owns the Group’s healthcare assets) were entities under common control but did not form a single legal group. On 21 May 2014, by way of a reorganisation, the groups headed by these two companies became a legal group headed by the Company. This reorganisation is deemed to be a “combination under common control” and as a result is outside the scope of IFRS 3 “Business Combinations”. As such it is considered appropriate that the principles of merger accounting are used to account for the reorganisation and these entities are treated as if they had always been part of a single group. No fair value adjustments are required. Accordingly, although these entities did not form a legal group for the whole of the periods reported herein, the consolidated financial information comprises the net assets of all entities as if the subsequently formed legal group had been in existence throughout the nine months to 31 December 2014 and throughout the years to 31 March 2014 and 31 March 2013. In particular, earnings per share figures (including diluted, EPRA and adjusted EPRA EPS) have been calculated on the assumption that the capitalisation of shareholder loans which occurred in May 2014 had been in place throughout the nine month period from 1 April 2014 (and throughout the years to 31 March 2014 and 31 March 2013) with a corresponding effect on earnings and number of shares used in the EPS calculations (see note 9). Except for the calculation of the number of shares in issue for EPS purposes, the consolidated financial information has been prepared in accordance with the International Financial Reporting Standards adopted for use in the European Union (“IFRS”). The NAV per share figures (basic, diluted and EPRA NAV per share) at 31 March 2014 and at 31 March 2013 have also been calculated on the assumption that the capitalisation of shareholder loans had been in place at both those dates with a corresponding effect on the number of ordinary shares used in the NAV per share calculations (see note 20). b) Basis of preparation The consolidated financial information is presented in pounds sterling as this is the currency of the primary economic environment in which the Group operates. Amounts are rounded to the nearest thousand, unless otherwise stated. Euro denominated results for the German assets have been converted to pounds sterling at an average exchange rate for the year to 31 December 2015 of €1:£0.7256 (nine months to 31 December 2014: €1:£0.79916; year to 31 March 2014: €1:£0.84337; year to 31 March 2013: €1:£0.81511), which is not materially different from the actual rates at the time of the transactions. Year end balances have been converted to pounds sterling at the 31 December 2015 exchange rate of €1:£0.7350 (31 December 2014: €1:£0.77877; 31 March 2014: €1:£0.82629; 31 March 2013: €1:£0.84288). The consolidated financial information has been prepared on a going concern basis. In considering the appropriateness of this assumption, the Directors have considered the Group’s projections for the twelve months from the date of this Disclosure Document, including cash flow forecasts. The Directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future and therefore adopt the going concern basis of accounting in preparing the consolidated financial information.

90 The consolidated financial information has been prepared on the historical cost basis except that investment properties and interest rate derivatives are stated at fair value. The accounting policies, to the extent applicable to each period, have been applied consistently in all material respects throughout each reporting period covered by the consolidated financial information.

The preparation of the consolidated financial information requires the Directors to make judgements, estimates and assumptions that may affect the application of accounting policies and reported amounts of assets and liabilities as at each balance sheet date and the reported amounts of revenue and expenses during each reporting period. Any estimates and assumptions are based on experience and any other factors that are believed to be relevant under the circumstances and which the Board considers reasonable. Actual outcomes may differ from these estimates.

Accounting policies which have a significant bearing on the reported financial condition and results of the Group may require subjective or complex judgements. The principal ongoing area of judgement is the investment property valuation where, as described in note 10, the opinion of either external valuers or (in respect of the years to 31 March 2014 and 31 March 2013) an appropriately qualified Director, has been obtained at each reporting date using recognised valuation techniques. The principles of IFRS 13 “Fair Value Measurement” have also been applied in respect of the reporting periods to 31 December 2015, 31 December 2014 and 31 March 2014, with that standard first becoming effective in respect of the reporting period to 31 March 2014.

In respect of the reporting periods for the nine months to 31 December 2014, year to 31 March 2014 and year to 31 March 2013 another principal area of judgement was in respect of the valuation of interest rate derivatives used to hedge interest rate exposures, shown in note 16, where the valuations were externally assessed by expert valuers on the basis of market rates and credit risk at each of those reporting dates. Following the cancellation of the majority of the Group’s interest rate derivatives during the year to 31 December 2015 this was no longer a principal area of judgement at 31 December 2015.

In addition, during the period covering the nine months to 31 December 2014 the following specific matters also required judgement: • whether the services to the Group that generated a performance fee of £35.2 million were provided by employees or non-employees; • the allocation of £3.1 million of listing expenses between the income statement and the share premium account; and • whether the amendment that resulted in an £11.9 million covenant release fee on one of the Group’s loan facilities represented a “substantial modification” of the loan.

In addition, during the year to 31 March 2013 another principal area of judgement was in respect of the carrying value of the shareholder loans, where the initial fair value was assessed on the basis of the terms of the loans using a discount rate considered by the Directors to be a reasonable approximation of the market rate at inception.

The Group’s accounting policies for these matters, together with other policies material to the Group, are set out in paragraphs (c) to (j) below.

(i) Adoption of new and revised standards No new or amended standards or interpretations issued by the International Accounting Standards Board (“IASB”) or the IFRS Interpretations Committee (“IFRIC”) have led to any material changes in the Group’s accounting policies or disclosures during each reporting period presented other than as explained below.

In the nine months to 31 December 2014 the Group adopted IFRS 10 “Consolidated financial statements”, IFRS 11 “Joint arrangements” and IFRS 12 “Disclosure of interests in other entities”, along with the related amendments to IAS 27 (revised) “Separate financial statements” and IAS 28 (revised) “Investments in associates and joint ventures”. The requirements of IFRS 10 did not change the scope of the Group’s consolidation and the Group has no associates or joint ventures, so the only impact of these new and revised standards on the consolidated financial information for that reporting period onwards results from the adoption of IFRS 12, which expanded the disclosures on subsidiary undertakings, as set out in note 11.

91 In the year to 31 March 2014 the Group adopted the amendments to IAS 1 “Presentation of items of other comprehensive income” and IFRS 13 “Fair value measurement” which were first effective for that reporting period.

The amendments to IAS 1 required items of comprehensive income to be grouped by those items that will be reclassified subsequently to profit or loss and those that will never be reclassified, as well as their associated income tax, if any.

IFRS 13 impacted on the disclosure and measurement of certain balances held at fair value, as set out in relation to investment properties in note 10 and financial instruments in note 16, but its adoption did not have any material impact on the carrying value of balances contained within the consolidated financial information. As IFRS 13 was not relevant in respect of the reporting period to 31 March 2013 the relevant disclosures have been excluded for that period in note 10 and note 16.

(ii) Standards and interpretations in issue not yet adopted As at 31 December 2015 the IASB had issued the following standards that are mandatory for later accounting years, subject to endorsement by the EU, and which are relevant to the Group but have not been adopted early:

Effective date

IFRS 9 “Financial instruments” 1 January 2018 IFRS 15 “Revenue from contracts with customers” 1 January 2018 IFRS 16 “Leases” 1 January 2019

IFRS 9 deals with the classification and measurement of financial instruments and the Directors do not anticipate that its adoption will have a material impact on the Group’s financial information assuming that the existing capital structure and financing arrangements remain in place at that time. The Group’s revenue is derived entirely from leases, which are outside the scope of IFRS 15 but within the scope of IFRS 16. IFRS 15 is not therefore expected to have an impact on the Group. Since IFRS 16 will not result in significant changes of accounting policies for lessors, the Directors do not expect that the adoption of this standard will have a material impact on the Group’s financial information in future periods.

As at 31 December 2015 the IASB and IFRIC have also issued or revised IFRS 11, IAS 16, IAS 38 and IAS 41 but these are not expected to have a material effect on the operations of the Group. c) Basis of consolidation Subsidiaries are those entities controlled by the Group. The Group has control within the meaning of this policy when it has power over an entity, is exposed to or has rights to variable returns from its involvement with the entity, and has the ability to use its power over the entity to affect those returns.

Prior to the adoption of IFRS 10 in the nine month period to 31 December 2014, the definition of control was wider, however the change in definition had no impact on how the Group accounted for any of its investee entities.

The consolidated financial information includes the financial information of the Group’s subsidiaries prepared to each reporting period end under the same accounting policies as the Group as a whole, using the acquisition method. All intra-group balances and transactions are eliminated on consolidation. d) Property portfolio (i) Investment properties Investment properties comprise properties owned by the Group which are held for capital appreciation, rental income or both. They are initially recorded at cost and subsequently valued at each balance sheet date at fair value as determined by professionally qualified valuers.

Valuations are calculated, in accordance with RICS Valuation – Professional Standards (the most recent version being January 2014), by applying capitalisation yields to current and future rental cash

92 flows, with reference to data from comparable market transactions, together with an assessment of the security of income. Gains or losses arising from changes in the fair value of investment properties are recognised in the income statement in the period in which they arise. Depreciation is not provided in respect of investment properties.

Acquisitions and disposals of investment properties are recognised on unconditional exchange of contracts where it is reasonable to assume at the balance sheet date that completion of the acquisition or disposal will occur. Gains or losses on disposal are determined as the difference between the net disposal proceeds and the carrying value of the asset in the previous balance sheet adjusted for any subsequent capital expenditure or capital receipts.

(ii) Occupational leases The Directors exercise judgement in considering the potential transfer of the risks and rewards of ownership in accordance with IAS 17 “Leases” for all properties leased to tenants and determine whether such leases are operating leases. A lease is classified as a finance lease if substantially all of the risks and rewards of ownership transfer to the lessee. If the Group substantially retains those risks, a lease is classified as an operating lease. All leases reflected in the consolidated financial information are classified as operating leases.

(iii) Rental income Revenue comprises rental income exclusive of VAT. Rental income is recognised in the income statement on an accruals basis. Contingent income, arising from RPI-linked rent reviews, is recorded in the income statement in the period in which it is earned. Rental income from leases with fixed rent uplifts is recognised on a straight line basis over the term of the lease. Where income is recognised in advance of the related cash flows, an adjustment is made to ensure that the carrying value of the relevant investment property including accrued rent does not exceed the valuation. e) Financial assets and liabilities Financial assets and liabilities are recognised when the relevant Group entity becomes a party to the unconditional contractual terms of the instrument. Unless otherwise indicated, the carrying amounts of financial assets and liabilities are considered by the Directors to be a reasonable estimate of their fair values at each balance sheet date.

(i) Financial assets Financial assets are recognised initially at their fair value. All financial assets currently constitute “loans and receivables”, which are measured at amortised cost using the effective interest method, less any impairment.

(ii) Trade and other payables Trade and other payables are recognised initially at their fair value and subsequently at amortised cost.

(iii) Cash and cash equivalents Cash and cash equivalents comprise cash in hand and deposits held at call with banks and financial institutions, with original maturities of three months or less.

(iv) Borrowings and finance charges Secured debt is initially recognised at its fair value, net of any transaction costs directly attributable to its issue. Subsequently, secured debt is carried at amortised cost. Transaction costs are amortised over the life of the loan and charged to the income statement as part of the Group’s financing costs. Where there is a change in the terms of an existing loan that is not considered to be a substantial modification of that loan, any associated transaction costs are also amortised over the remaining life of the loan.

Non-interest bearing loans from shareholders were measured at a value using an imputed interest rate. On inception of these loans, the difference between their fair values and amounts received were treated as capital contributions. The amounts initially recorded as capital contributions were originally to be released to retained earnings over the Directors’ assessment of the minimum terms of the loans.

93 These loans were however capitalised at the time of the reorganisation referred to in note 2a and the remaining amount within the capital contribution reserve was released to retained earnings at that time.

(v) Interest rate derivatives The Group has used interest rate derivatives to hedge its exposure to cash flow interest rate risks. Derivatives are initially recognised at fair value on the date on which the derivative contract is entered into and subsequently measured at fair value.

Derivatives are classified either as derivatives in effective hedges or derivatives held for trading. It is anticipated that any hedging arrangements that the Group enters into will generally be “highly effective” within the meaning of IAS 39 “Financial Instruments: Recognition and Measurement” and that the criteria necessary for applying hedge accounting will therefore be met. All derivatives held by the Group in each reporting period covered by the consolidated financial information met these criteria.

Hedges are assessed on an ongoing basis to ensure they continue to be effective. The gain or loss on the revaluation of the portion of an instrument that qualifies as an effective hedge of cash flow interest rate risk is recognised directly in other comprehensive income through the cash flow hedging reserve. Amounts accumulated in equity are reclassified to the income statement in the period when the hedged items affect the income statement. The gain or loss on the revaluation of any derivative financial instrument classified as held for trading because it is not an effective hedge is recognised directly in the income statement.

There has been no hedge ineffectiveness to recognise in the income statement in any reporting period covered by the consolidated financial information, so all movements in the fair value of these instruments, have been reflected in other comprehensive income.

The Group ceases to use hedge accounting if the forecast transaction being hedged against is no longer expected to occur. In such circumstances, the cumulative amounts in other comprehensive income are then reclassified from equity to profit or loss.

(vi) De-recognition of financial liabilities The Group derecognises financial liabilities when its obligations are discharged, cancelled or they expire. The difference between the carrying amount of those financial liabilities and the consideration paid, including any non-cash assets transferred and any new liabilities assumed is recognised in profit or loss. f) Tax Tax is included in the income statement except to the extent that it relates to income or expense items recognised through reserves, in which case the related tax is recognised either in other comprehensive income or directly in equity.

Current tax is the expected tax payable on taxable income for a reporting period, using tax rates enacted or substantively enacted at the balance sheet date, together with any adjustment in respect of previous periods. Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes.

The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. g) Foreign currency translation The results of subsidiary undertakings with a functional currency other than pounds sterling are translated into pounds sterling at the actual exchange rates prevailing at the time of the transaction, unless the average rate for the reporting period is not materially different from the actual rate, in which case that average rate is used.

94 The gains or losses arising on the end of period translation of the net assets of such subsidiary undertakings at closing rates and the difference between translating the results at average rates compared to the closing rates are taken to ‘other reserves’.

Monetary assets and liabilities denominated in foreign currencies are translated into pounds sterling at the rates of exchange ruling at the balance sheet date with any gains or losses arising on translation recognised in the income statement. h) Equity instruments Equity instruments issued by the Company are recorded at the proceeds received, net of directly attributable issue costs. Costs not directly attributable to the issue are disclosed within administrative expenses in the income statement. i) Share based payments The fair value of payments that are to be settled by the issue of shares is determined on the basis of an estimate of the value of the services provided by non-employees over the relevant accounting period. The estimated number of shares to be issued in satisfaction of the services provided is calculated using the average daily closing share price of the Company for that period. j) Fair value measurements Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market. It uses the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. A fair value measurement of a non-financial asset takes into account the highest and best use for that asset.

3 OPERATING SEGMENTS IFRS 8 “Operating Segments” requires operating segments to be identified on the basis of internal reports about components of the Group that are reviewed by the chief operating decision maker to make decisions about resources to be allocated between segments and assess their performance. The Group’s chief operating decision maker is considered to be the Board.

The Group owns two property portfolios. The Board receives quarterly management accounts prepared on a basis which aggregates the performance of the portfolios and focuses on total shareholder returns. The Board have therefore concluded that the Group has operated in and was managed as one business segment, being property investment, throughout the reporting periods covered by the consolidated financial information.

The geographical split of revenue and applicable non-current assets required by IFRS 8 was as follows:

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Revenue UK 98,172 99,319 75,251 92,587 Germany 7,743 8,012 5,695 6,892 105,915 107,331 80,946 99,479

Investment properties UK 1,369,154 1,390,697 1,553,364 1,276,003 Germany 68,335 66,677 72,071 73,544 1,437,489 1,457,374 1,625,435 1,349,547

95 Revenue, which reflects the impact of rent smoothing adjustments, includes £55.3 million (nine months to 31 December 2014: £42.9 million; year to 31 March 2014: £57.8 million; year to 31 March 2013: £57.8 million) relating to the Group’s largest tenant, and £41.8 million (nine months to 31 December 2014: £35.8 million; year to 31 March 2014: £47.2 million; year to 31 March 2013: £45.8 million) relating to the Group’s second largest tenant. No other single tenant or guarantor contributed more than 10% of the Group’s revenue in any of the reporting periods covered by the consolidated financial information.

4. REVENUE Revenue comprises:

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Rental income 88,079 90,807 69,659 86,468 Rent smoothing adjustment 17,836 16,524 11,287 13,011 105,915 107,331 80,946 99,479

The rent smoothing adjustment arises through the Group’s accounting policy in respect of leases, which requires the recognition of rental income on a straight line basis over the lease term in certain circumstances, including for the 67 per cent (as at 31 December 2014: 57 per cent; as at 31 March 2014: 57 per cent; as at 31 March 2013: 57 per cent) of passing rent as at 31 December 2015 which increases by a fixed percentage each year. During each of the reporting periods covered by the consolidated financial information, this has resulted in an increase in revenue and an offsetting entry being recognised in the income statement as a reduction in the gains or increase in the losses on investment property revaluation.

5. OPERATING PROFIT Operating profit is stated after charging fees for:

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Audit of the Company’s consolidated and individual financial statements 20 20 75 67 Audit of subsidiaries, pursuant to legislation 62 40 90 99 Non-audit services in connection with the listing — — 273 —

The Group had no employees in any of the reporting periods covered by the consolidated financial information.

The Directors, who are the key management personnel of the Company, are appointed under letters of appointment for services. Directors’ remuneration, all of which represents fees for services provided since the Company’s listing in June 2014, was as follows:

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Martin Moore — — 44 75 Leslie Ferrar — — 23 40 Jonathan Lane — — 21 35 Ian Marcus — — 21 35 Total charged to the income statement — — 109 185

Mike Brown, Sandy Gumm and Nick Leslau received no Directors’ fees from the Group in any of the reporting periods covered by the consolidated financial information.

96 6. FINANCE INCOME AND COSTS

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Recognised in the income statement: Finance income Interest on cash deposits 26 25 36 61 Finance costs Interest on secured debt (83,949) (83,535) (59,387) (66,781) Amortisation of loan costs (non-cash) — — (2,168) (7,561) Exit and other fees — — (3,135) (11,646) Reclassification of fair value adjustment of interest rate derivatives from the cash flow hedging reserve net of lender’s share of early termination costs — — — (60,625) Shareholder loans: unwinding of discount to date of capitalisation (non-cash) (10,321) (11,509) (1,676) — Total finance costs (94,270) (95,044) (66,366) (146,613) Net finance costs recognised in the income statement (94,244) (95,019) (66,630) (146,552)

Included within interest on secured debt is an amount of £35.0 million (nine months to 31 December 2014: £40.7 million; year to 31 March 2014: £55.1 million; year to 31 March 2013: £52.6 million) which has been reclassified from other comprehensive income in respect of the Group’s interest rate derivatives in effective hedges.

On issue in 2007, interest free shareholder loans were measured at fair value using imputed interest rates of between 11.2% and 11.7%. The difference between the fair value of the loans on inception and their face values at that date was being unwound over the minimum term of the loans prior to their capitalisation in May 2014.

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Recognised in other comprehensive income: Fair value adjustment of interest rate derivatives in effective hedges 4,491 79,153 21,837 31,703 Reclassification of fair value adjustments to the income statement — — — 88,125 Total finance income recognised in other comprehensive income 4,491 79,153 21,837 119,828

Net finance costs analysed by the categories of financial asset and liability shown in note 16 are as follows:

Year to Year to Nine months to Year to 31 31 March 31 March 31 December December 2013 2014 2014 2015 £000 £000 £000 £000 Loans and receivables 26 25 36 61 Financial liabilities at amortised cost (41,656) (39,944) (25,651) (50,982) Derivatives in effective hedges (52,614) (55,100) (40,715) (95,631) Net finance costs recognised in the income statement (94,244) (95,019) (66,330) (146,552)

97 The Group’s sensitivity to changes in interest rates, calculated on the basis of a 10 basis point increase or decrease in LIBOR, was as follows:

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Effect on profit for the period — — — 82 Effect on other comprehensive income and equity 4,001 3,749 3,993 —

The Group receives interest on its bank balances so an increase in interest rates would increase finance income.

In respect of future periods there would be no impact on finance costs from a change in interest rates because all of the secured debt in place since 2 October 2015 is at fixed rates. Prior to that date there would have been no significant impact on finance costs in the income statement because the floating rate secured debt was effectively hedged with interest rate swaps.

At each of the balance sheet dates prior to 31 December 2015, interest on secured debt was fixed through interest rate swaps and as a result, changes in interest rates had an impact on the valuation of those interest rate swaps through other comprehensive income and equity, such that an increase in interest rates would result in a credit to other comprehensive income. Since those interest rate swaps were terminated during the year to 31 December 2015 there were therefore no longer any changes in interest rates that would directly affect other comprehensive income and equity.

7. PROFIT ON SALE The profit on sale of investment properties arose as follows:

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Sale proceeds — — — 382,136 Sale costs — — — (2,820) Book value of sold properties — — — (355,354) — — — 23,962

8. TAX

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December Analysis of tax (credit) / charge for the period 2013 2014 2014 2015 £000 £000 £000 £000 Current tax — UK UK REIT excess interest charge — — 665 1,293 Adjustments in respect of prior periods — — — 50 Current tax — Germany Corporation tax charge / (credit) 365 304 (130) 242 Adjustments in respect of prior periods 1,334 — — (226) Deferred tax Deferred tax (credit)/charge (see note 14) (6,997) (15,449) (114,826) 1,023 (5,298) (15,145) (114,291) 2,382

98 The tax assessed for each reporting period varies from the standard rate of corporation tax in the UK applied to the profit before tax. The differences are explained below: Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Profit before tax 7,733 16,656 133,455 39,153 Profit before tax multiplied by the standard rate of corporation tax in the UK of 20.25 per cent (nine months to 31 December 2014: 21 per cent; year to 31 March 2014: 23 per cent; year to 31 March 2013: 24 per cent) 1,856 3,831 28,026 7,928 Effects of: Investment property revaluation not taxable — — (34,275) (15,875) Movement in previously unrecognised tax losses 83 144 3,231 15,512 Profit on sale of investment properties not taxable — — — (4,852) Qualifying property rental business not taxable — — 4,908 (3,633) Expenses and finance costs not deductible 1 — — 1,943 UK REIT excess interest charge — — 665 1,293 German current tax charge / (credit) for the period 365 304 (130) 242 Adjustments in respect of prior periods 1,334 — — (176) UK deferred tax released on conversion to REIT status — — (117,276) — Costs of the reorganisation and listing not deductible for tax — 606 — Double tax relief (301) (338) (58) — Other items (27) (19) 12 — German deferred tax charge for the period — 3,429 — — Changes in indexation on investment property revaluations (2,274) (3,687) — — Reduction in UK corporation tax rate (6,335) (18,809) — — Tax (credit) / charge for the period (5,298) (15,145) (114,291) 2,382

The Group elected into the UK REIT Regime with effect from 5 June 2014. Subject to continuing compliance with certain rules, the UK REIT rules exempt the profits of the Group’s UK and German property rental business from UK corporation tax. Gains on the Group’s UK and German properties are also generally exempt from UK corporation tax, provided they are not held for trading or in certain circumstances sold in the three years after completion of development. To remain a UK REIT, there are a number of conditions to be met in respect of the Company, the Group’s qualifying activity and the Group’s balance of business. Since entering the UK REIT Regime the Group has continued to meet these conditions. The condition requiring that the Company must not be a close company includes a grace period of three years from entry into the UK REIT Regime. The Company was a close company when it entered the UK REIT Regime and continues to be so, but has until 4 June 2017 to comply. The Board is seeking to widen its shareholder base with a view to meeting this requirement within the three year grace period. One of the ongoing REIT tests is an interest cover test that requires the profits of the tax exempt property business of the Group (calculated on a tax basis, but before deducting financing costs and capital allowances) to be at least 1.25 times its cost of financing. If this condition is not met, the Company remains within the UK REIT Regime but is required to pay UK corporation tax on an amount equivalent to the excess interest costs or 20 per cent of the Tax Exempt Business profits (calculated on a tax basis, but before deducting financing costs and capital allowances) if that is less. The Group has not met this test since entering the UK REIT Regime on 5 June 2014 and so in respect of the year to 31 December 2015 tax of £1.3 million was payable (nine months to 31 December 2014: £0.7 million of

99 tax was payable as a result of not meeting the test from 5 June 2014 to 31 December 2014; year to 31 March 2014: not applicable; year to 31 March 2013: not applicable). Following the debt refinancing during the year to 31 December 2015, the interest cover test is being met and therefore, assuming no material changes to the Group’s capital structure, no such tax is expected to be payable in future financial years.

The Group has been subject to German corporation tax on its German property rental business at a rate of 21 per cent throughout the reporting periods covered by the consolidated financial information. During the year to 31 December 2015, the German tax charge of £0.2 million has been offset by a credit of £0.2 million arising from a tax audit relating to the years between 2007 and 2012 which has now been finalised, and further repayments relating to 2013 and 2014. This is expected to result in a net repayment of tax to the Group of £0.8 million, of which £0.7 million had been received by 31 December 2015.

In addition, at 31 December 2015, a deferred tax liability of £5.7 million (31 December 2014: £4.9 million; 31 March 2014: £3.4 million; 31 March 2013: £3.3 million) was recognised for the German capital gains tax that would potentially be payable on the sale of the relevant investment properties (see note 14).

At 31 December 2014 a deferred tax asset of £0.6 million (31 March 2014: £0.8 million; 31 March 2013: £1.0 million) was recognised against the interest rate derivatives hedging the loan facility secured on those German properties (see note 14).

9. EARNINGS PER SHARE Earnings per share (“EPS”) is calculated as profit attributable to ordinary shareholders of the Company for each period divided by the weighted average number of ordinary shares in issue throughout the relevant period. Diluted EPS reflects shares to be issued, including any to be issued in settlement of incentive fees that were earned in the relevant period (see note 21 for further information). Where shares are issued in one reporting period relating to the results of the prior period, the shares are treated, for the purposes of calculating the weighted average of shares in issue, as having been issued at the end of that prior period regardless of the actual date of issue.

Adjustment to number of shares in issue prior to 21 May 2014 As explained in note 2a, on 21 May 2014, the Company and SIR Hospital Holdings Limited (the “Combined Companies”) became a legal group. During each of the reporting periods prior to the year to 31 December 2015 that are covered by the consolidated financial information and until 21 May 2014, the Combined Companies were entities under common control. It is considered that the use of the actual number of shares of the Combined Companies in issue prior to 21 May 2014 as a denominator in the EPS calculation would not provide meaningful information. Instead, the weighted average number of shares in issue has been determined based on the number of shares that would have been in issue in the relevant period had the shareholder loans to the Combined Companies been capitalised on the basis of one share for each £1 of shareholder loans at the time they were advanced. The profit attributable to the shareholders of the Combined Companies prior to 21 May 2014 has also been adjusted to remove the impact of the amount included in finance costs in respect of the shareholder loans together with the related deferred tax.

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Profit for the period 13,031 31,801 247,746 36,771 Unwinding of discount on shareholder loans net of tax 7,263 7,464 1,341 — Adjusted profit for EPS 20,294 39,265 249,087 36,771

Weighted average number of shares in issue Number Number Number Number Basic EPS 159,686,505 159,823,056 166,406,143 180,344,213 Diluted EPS 159,686,505 159,823,056 178,306,575 180,344,213

100 Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 Pence per Pence per Pence per Pence per share share share share Basic EPS 12.7 24.6 149.7 20.4 Diluted EPS 12.7 24.6 139.7 20.4

The European Public Real Estate Association (“EPRA”) publishes guidelines for calculating adjusted earnings designed to represent core operational activities. As well as the standard EPRA earnings figure, an adjusted EPRA earnings calculation is presented, excluding the incentive fee, largely derived from investment property revaluations, and the non-recurring costs of the reorganisation and listing. EPRA EPS has also been adjusted in the year to 31 December 2015 (and the EPRA EPS in the prior reporting periods covered by the consolidated financial information have similarly been restated) to exclude the effect of smoothing fixed rental uplifts in order not to artificially flatter dividend cover calculations now that distributions are to be initiated.

Year to Year to Nine months to 31 March 31 March 31 December Year to 2013 2014 2014 31 December (restated) (restated) (restated) 2015 £000 £000 £000 £000 Basic earnings attributable to shareholders 20,294 39,265 249,087 36,771 EPRA adjustments: Investment property revaluation 3,548 (4,706) (160,608) (70,435) Profit on sale of investment properties — — — (23,962) Cost of early termination of interest rate swaps — — — 60,625 Other early debt repayment costs — — — 13,666 UK deferred tax released on UK REIT conversion — — (117,276) — Other deferred tax on investment property revaluations (4,599) (12,787) 1,823 1,023 EPRA earnings 19,243 21,772 (26,974) 17,688 Other adjustments: Rent smoothing (17,836) (16,524) (11,287) (13,011) Incentive fee — — 35,186 — Costs of the reorganisation and listing — — 2,888 — Adjusted EPRA earnings 1,407 5,248 (187) 4,677

Pence per Pence per Pence per Pence per share share share share EPRA EPS 12.1 13.6 (16.2) 9.8 Diluted EPRA EPS 12.1 13.6 (15.1) 9.8 Pence per Pence per Pence per share share share Pence per (restated) (restated) (restated) share Adjusted EPRA EPS 0.9 3.3 — 2.6 Diluted adjusted EPRA EPS 0.9 3.3 — 2.6

10. INVESTMENT PROPERTIES

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Freehold investment properties At the start of the period 1,422,339 1,437,489 1,457,374 1,625,435 Disposals — — — (355,354) Revaluation movement 14,288 21,230 171,895 83,446 Currency translation movement 862 (1,345) (3,834) (3,980) At the end of the period 1,437,489 1,457,374 1,625,435 1,349,547

101 As at 31 December 2015 the properties were externally valued at £1,349.5 million (31 December 2014: £1,625.4 million) by CBRE Limited, Commercial Real Estate Advisers, in their capacity as external valuers. The valuations were prepared on a fixed fee basis, independent of the portfolio value, and were undertaken in accordance with RICS Valuation — Professional Standards January 2014 on the basis of fair value, supported by reference to market evidence of transaction prices for similar properties.

The properties were valued at £1,457.4 million as at 31 March 2014 and at £1,437.5 million as at 31 March 2013 by Nick Leslau BSc (Hons) FRICS, a Chartered Surveyor and Director of the Company, on the basis of fair value.

The historical cost of the Group’s investment properties as at 31 December 2015 was £1,063.6 million (31 December 2014: £1,315.1 million; 31 March 2014: £1,315.1 million; 31 March 2013: £1,315.1 million). The Group did not have any contractual investment property obligations at any balance sheet date. The responsibility for property liabilities including repairs and maintenance resides with the tenants.

All of the investment properties are held as security under fixed charges in respect of secured debt.

Included within the carrying value of investment properties at 31 December 2015 is £156.6 million (31 December 2014: £154.4 million; 31 March 2014: £142.7 million; 31 March 2013: £125.7 million) in respect of the smoothing of fixed contractual rental uplifts as described in note 4. The difference between rents on a straight line basis and rents actually receivable is included within, but does not increase, the carrying value of investment properties. The effect of this adjustment on the revaluation movement is as follows:

Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Revaluation movement 14,288 21,230 171,895 83,446 Rent smoothing adjustment (17,836) (16,524) (11,287) (13,011) Revaluation movement in the income statement (3,548) 4,706 160,608 70,435

The Board determines the Group’s valuation policies and procedures, and is responsible for overseeing the valuations. Valuations are based on information provided from the Group’s financial and property reporting systems, such as current rents and the terms and conditions of lease agreements, together with assumptions used by the valuer (based on market observation and their professional judgement) in the valuation model.

At each reporting date, certain partners and employees of the Investment Adviser, who have recognised professional qualifications and are experienced in valuing the types of property owned by the Group, initially analyse the valuer’s assessment of movements in the property valuations from the prior reporting date. Fair value changes (positive or negative) over a certain threshold are considered. Changes in fair value are also compared to external sources (such as the Investment Property Databank or other relevant benchmarks) for reasonableness. Once the Investment Adviser has considered the valuations, the results are discussed with the Group’s valuers, focusing on properties with unexpected fair value changes and, if applicable, properties undergoing significant refurbishment. Following the Company’s listing, the Audit Committee also now considers the valuation process as part of its overall responsibilities, and reports on its assessment of the procedures to the Board.

The fair value of the investment property portfolio has been determined using an income capitalisation technique, whereby contracted and market rental values are capitalised with a market capitalisation rate. This technique is consistent with the principles in IFRS 13 and uses significant unobservable inputs, such that the fair value measurement of each property within the portfolio has been classified as level 3 in the fair value hierarchy as defined in IFRS 13. There have been no transfers to or from other levels of the fair value hierarchy during the year to 31 December 2015 (nine months to 31 December 2014: none; year to 31 March 2014: none; year to 31 March 2013: IFRS 13 was not applicable).

102 The key inputs for the level 3 valuations at 31 December 2015, 31 December 2014 and 31 March 2014 were as follows:

Inputs Fair value Weighted Portfolio £000 Key unobservable input Range average At 31 December 2015: Healthcare 834,437 Net initial yield 4.5% - 5.8% 5.2% Reversionary yield 4.6% - 5.9% 5.4% Leisure — UK 441,560 Net initial yield 5.2% - 6.1% 5.4% Reversionary yield 5.3% - 6.2% 5.5% Future RPI assumption per annum 2.0% 2.0% Leisure — Germany 73,550 Net initial yield 6.3% 6.3% Reversionary yield 6.5% 6.5%

At 31 December 2014: Healthcare 812,981 Net initial yield 4.4% - 5.8% 5.6% Reversionary yield 4.5% - 6.0% 5.7% Leisure — UK 740,383 Net initial yield 4.8% - 6.5% 5.2% Reversionary yield 4.9% - 6.6% 5.3%

Future RPI assumption per 2.2% for 2.2% for annum 2015, 2015, 3.5% 3.5% thereafter thereafter Leisure — Germany 72,071 Net initial yield 6.5% 6.5% Reversionary yield 6.8% 6.8%

At 31 March 2014: Healthcare 727,458 Net initial yield 5.2% - 6.5% 6.2% Reversionary yield 5.3% - 6.5% 6.3% Leisure — UK 663,239 Net initial yield 5.0% - 7.0% 5.6% Reversionary yield 5.1% - 7.2% 5.8% 2.6% for 2.6% for Future RPI assumption 2014, 2014, 3.0% for 3.0% for 2015, 2015, 3.5% 3.5% thereafter thereafter Leisure — Germany 66,677 Net initial yield 7.3% 7.3% Reversionary yield 7.5% 7.5%

The principal sensitivity of measurement to variations in the significant unobservable outputs is that decreases in net initial yield, decreases in reversionary yield and increases in RPI will increase the fair value (and vice versa).

All of the Group’s revenue as reflected in the income statement is derived from rental income on investment properties. Property outgoings arising on investment properties, all of which generated rental income in each period, were £33,000 for the year to 31 December 2015 (nine months to 31 December 2014: £19,000; year to 31 March 2014: £23,000; year to 31 March 2013: £23,000).

11. SUBSIDIARIES The companies listed below were the subsidiary undertakings of the Company at 31 December 2015, all of which are wholly owned and incorporated in England unless otherwise indicated.

SIR Umbrella Limited, SIR Healthcare 1 Limited and SIR Healthcare 2 Limited were all incorporated in those names in the year to 31 December 2015. All the other companies listed below have been in existence throughout the reporting periods covered by the consolidated financial information, albeit

103 those with the prefix ‘SIR’ formerly had a prefix ‘P1’ prior to the Company’s listing. Prior to the reorganisation that took place in May 2014 (see note 2a), the companies whose names are in italics in the list below were subsidiary undertakings of SIR Hospital Holdings Limited.

Company name Nature of business SIR Theme Park Subholdco Limited* Intermediate parent company and borrower under mezzanine secured debt facility Charcoal Midco 2 Limited Intermediate parent company SIR Theme Parks Limited Intermediate parent company and borrower under senior secured debt facility SIR ATH Limited Property investment — leisure SIR ATP Limited Property investment — leisure SIR HP Limited** Property investment — leisure and borrower under senior secured debt facility (registered in England, operating in Germany) SIR TP Limited Property investment — leisure SIR WC Limited Property investment — leisure SIR Hospital Holdings Limited* Intermediate parent company SIR Umbrella Limited Intermediate parent company SIR Hospitals Propco Limited Intermediate parent company and borrower under secured debt facility SIR Downs Limited Property investment — healthcare SIR Duchy Limited Property investment — healthcare SIR Euxton Limited Property investment — healthcare SIR Midlands Limited Property investment — healthcare SIR Mt Stuart Limited Property investment — healthcare SIR Oaklands Limited Property investment — healthcare SIR Renacres Limited Property investment — healthcare SIR Rivers Limited Property investment — healthcare SIR Springfield Limited Property investment — healthcare Thomas Rivers Limited Property investment — healthcare SIR Healthcare 1 Limited Intermediate parent company SIR Healthcare 2 Limited Intermediate parent company and borrower under secured debt facility SIR Ashtead Limited Property investment — healthcare SIR Fitzwilliam Limited Property investment — healthcare SIR Fulwood Limited Property investment — healthcare SIR Lisson Limited Property investment — healthcare SIR Oaks Limited Property investment — healthcare SIR Pinehill Limited Property investment — healthcare SIR Reading Limited Property investment — healthcare SIR Rowley Limited Property investment — healthcare SIR Winfield Limited Property investment — healthcare SIR Woodland Limited Property investment — healthcare SIR Yorkshire Limited Property investment — healthcare UK Healthcare Partners (General Partner) Limited Dormant (In voluntary liquidation) (Registered in Guernsey) SIR New Hall Limited* Dormant (Property investment prior to disposal of investment property in the year to 31 December 2015) SIR MTL Limited* Dormant (Property investment prior to the disposal of investment property in the year to 31 December 2015) Charcoal Bidco Limited* Dormant

* Directly owned by the Company at 31 December 2015 (all other entities are indirectly owned at that date by the Company) ** Operating in Germany; all other companies operate in England

The terms of the secured debt facilities may, in the event of a covenant default, restrict the ability of certain subsidiaries to transfer funds to the Company, which is outside the relevant security groups.

104 12. TRADE AND OTHER RECEIVABLES

At At At 31 At 31 31 March 31 March December December 2013 2014 2014 2015 £000 £000 £000 £000 Prepayments and accrued income 43 69 103 114

13. CASH AND CASH EQUIVALENTS

At At At 31 At 31 31 March 31 March December December 2013 2014 2014 2015 £000 £000 £000 £000 Secured cash 24,272 24,937 25,335 25,598 Regulatory capital — — 450 375 Free cash 309 430 12,986 55,638 24,581 25,367 38,771 81,611

Secured cash is held in accounts over which the providers of secured debt have fixed security. As the Company is considered to be an internally managed Alternative Investment Fund, it has been required by the Financial Conduct Authority, since 5 June 2014, to hold a balance of regulatory capital in liquid funds, which is maintained in cash.

14. DEFERRED TAX

The movements in deferred tax balances in each reporting period covered by the consolidated financial information, analysed by the asset or liability giving rise to the balance, were as follows:

Unrealised Tax gains on losses Interest rate investment carried Shareholder derivatives properties forward loans at fair value Total £000 £000 £000 £000 £000 Balance at 1 April 2012 (138,091) 3,005 (16,420) 54,074 (97,432) Credit / (charge) to the income statement (note 8) 4,599 (660) 3,058 — 6,997 Movement in other comprehensive income — — — (3,286) (3,286) Balance at 31 March 2013 (133,492) 2,345 (13,362) 50,788 (93,721) Balance at 1 April 2013 (133,492) 2,345 (13,362) 50,788 (93,721) Credit / (charge) to the income statement (note 8) 12,787 (1,383) 4,045 — 15,449 Movement in other comprehensive income 69 — — (23,244) (23,175) Balance at 31 March 2014 (120,636) 962 (9,317) 27,544 (101,447) Balance at 1 April 2014 (120,636) 962 (9,317) 27,544 (101,447) Credit / (charge) to the income statement (note 8) 115,453 (962) 335 — 114,826 Movement in other comprehensive income 245 — — (26,917) (26,672) Deferred tax released on capitalisation of shareholder loans credited direct to equity — — 8,982 — 8,982 Balance at 31 December 2014 (4,938) — — 627 (4,311) Balance at 1 January 2015 (4,938) — — 627 (4,311) Charge to the income statement (note 8) (1,023) — — — (1,023) Movement in other comprehensive income 274 — — (627) (353) Balance at 31 December 2015 (5,687) — — — (5,687)

105 The deferred tax balances are classified for financial reporting purposes as follows:

At At At At 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Deferred tax assets 53,133 28,506 627 — Deferred tax liabilities (146,854) (129,953) (4,938) (5,687) (93,721) (101,447) (4,311) (5,687)

Prior to its entry into the UK REIT Regime in June 2014, the Group did not recognise a deferred tax asset in respect of certain non-trade financial losses. The relevant losses available for carry forward were £3.7 million at 31 March 2014 and £3.7 million at 31 March 2013.

15. TRADE AND OTHER PAYABLES

At At At At 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Trade payables — — — 251 Tax and social security 2,155 2,219 5,163 1,347 Accruals and deferred income 34,344 34,878 35,872 27,695 36,499 37,097 41,035 29,293

16. FINANCIAL ASSETS AND LIABILITIES Borrowings

At At At At 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Amounts falling due within one year Secured debt — current portion of long term facilities 12,125 13,052 6,853 4,387 Unamortised finance costs (1,949) (1,949) (1,945) (1,680) 10,176 11,103 4,908 2,707 Amounts falling due within more than one year Secured debt — gross 1,165,750 1,153,628 1,150,712 900,521 Exit fee 2,308 3,158 3,978 — Unamortised finance costs (6,200) (4,246) (2,283) (12,209) Secured debt — total 1,161,858 1,152,540 1,152,407 888,312 Shareholders’ loans 101,729 113,238 — — 1,263,587 1,265,778 1,152,407 888,312

Secured debt — general As at 31 December 2015, the fair value of the Group’s secured debt was £912.2 million (31 December 2014: £1,157.6 million; 31 March 2014: £1,166.7 million; 31 March 2013: £1,177.9 million). The Group had no undrawn, committed borrowing facilities at any of the above balance sheet dates.

The debt is secured by charges over the Group’s investment properties and by fixed and floating charges over the other assets of certain Group companies, not including the Company itself save for a limited share charge over the parent company of one of the ring-fenced subgroups. There have been no defaults or breaches of any loan covenants during any of the reporting periods covered by the consolidated financial information.

106 At 31 December 2014, 31 March 2014 and 31 March 2013 the secured debt due within one year included an estimate of amortisation out of surplus net rental income (rental income less certain finance costs and administrative expenses) for the ensuing 12 months. At 31 December 2015, the amortisation amounts are fixed.

Secured debt at 31 December 2015 — fixed rate loans All of the Group’s secured debt at 31 December 2015 comprises fixed rate loans.

Secured debt at 31 December 2014 and 31 March 2014 — variable rate loans The following additional disclosures in relation to the Group’s bank borrowings were included in the Company’s 31 December 2014 consolidated financial statements:

The Group’s secured debt arrangements as at 31 December 2014 were as follows:

Healthcare Leisure Lender Bank of Scotland Plc Bank of Scotland Plc Recourse beyond ring-fenced group holding the portfolio None None Secured debt outstanding £608.9m £548.7m Other secured liabilities £14.0m — Fair value of secured properties £813.0m £812.4m Gross LTV ratio 76.6% 67.5% Net LTV ratio 75.0% 65.8% Current repayment terms Interest only Capital/interest Final repayment date May 2017 July 2017

With effect from 5 June 2014, there were no scheduled capital repayments, only quarterly repayments from the surplus net income on the leisure assets. Any balances not settled by quarterly repayments were payable in full at the end of the terms of these loans in 2017.

Interest was hedged by way of interest rate swaps which fixed the rate payable (inclusive of lenders’ margin) at between 6.6 per cent and 6.9 per cent, equivalent to a blended 6.8 per cent, until the loan maturity dates.

The terms of one of the secured loans were altered with effect from 5 June 2014 such that a covenant release fee of £11.9 million became payable to the lender. The fee, which was to be paid in quarterly instalments, was being charged to the income statement over the remaining term of the loan. £9.5 million of this fee remained outstanding as at 31 December 2014.

At 31 December 2014, the leisure facilities comprised a pounds sterling facility of £497.2 million (31 March 2014: £500.6 million) and a euro facility of £51.5 million (31 March 2014: £55.6 million), with security cross-collateralised between the UK and German leisure assets.

Secured debt at 31 March 2013 — variable rate loans The following additional disclosures in relation to the Group’s bank borrowings were included in the Company’s AIM Admission Document:

There were no scheduled capital repayments, only quarterly repayments from the surplus net rental income. Any balances not settled by quarterly repayments were payable in full at the end of the terms of these loans in 2017.

Floating rates of interest were payable. The average interest rate range on all bank loans in the year to 31 March 2013 was between 1.8 per cent and 3.6 per cent. Interest had been fixed by way of purchases of interest rate hedging products which fixed the interest rate payable (inclusive of lenders’ margin) at rates between 6.7 per cent and 6.9 per cent until the loan maturity dates.

107 A fee was payable on the final repayment of one of the secured bank loans, which was being accrued for over the term of the loan and was included in the total secured bank loan balance. At 31 March 2013 the fee amounted to £2.3 million.

Shareholder loans Shareholder loans amounting to £159.8 million that were originally issued in 2007 were capitalised on 20 and 21 May 2014 (see note 17). Prior to their capitalisation, the shareholder loans were unsecured, interest free, subordinated to the secured debt and had no fixed repayment date. The earliest date that the shareholder loans could be repaid was following the repayment of the secured debt. At 31 March 2014 and at 31 March 2013 there was no material difference between the fair value of the shareholder loans and their carrying value.

Borrowings by currency The analysis of borrowings by currency is as follows: At At At At 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Pounds sterling: Secured debt — gross 1,119,983 1,111,004 1,106,109 852,150 Exit fee 2,308 3,158 3,978 — Unamortised finance costs (7,748) (5,893) (4,008) (13,093) 1,114,543 1,108,269 1,106,079 839,057 Shareholders’ loans 101,729 113,238 — — 1,216,272 1,221,507 1,106,079 839,057 Euro: Secured debt — gross 57,892 55,676 51,456 52,758 Unamortised finance costs (401) (302) (220) (796) 57,491 55,374 51,236 51,962

The exchange rates used at each balance sheet date are disclosed in note 2b.

Interest rate derivatives The fair values of the Group’s interest rate derivatives at each balance sheet date were as follows: Notional amount Fair value 31 December 31 December 31 December 31 December 2015 2014 2015 2014 £000 £000 £000 £000 5.1% swap — 608,920 — (56,849) 5.4% amortising swap — 304,008 — (32,955) 5.4% swaps — 196,622 — (21,804) 4.4% amortising swap* — 33,091 — (3,579) 4.4% swaps* — 21,529 — (2,391) — 1,164,170 — (117,578)

* denominated in euros, converted at the relevant period end rate. Notional amount Fair value 31 March 31 March 31 March 31 March 2014 2013 2014 2013 £000 £000 £000 £000 5.1% amortising swap 612,800 618,600 (67,507) (107,573) 5.4% amortising swap 306,818 309,618 (38,463) (60,306) 5.4% swaps 196,622 196,622 (25,227) (39,347) 4.4% amortising swap* 35,600 36,752 (4,518) (5,856) 4.4% swaps* 22,843 23,301 (2,991) (3,838) 1,174,683 1,184,893 (138,706) (216,920)

* denominated in euros, converted at the relevant period end rate.

108 Further information in relation to the utilisation of interest rate derivatives prior to their cancellation in the year to December 2015:

Prior to the refinancing of all of the Group’s bank loans that took place in the year to 31 December 2015, all of the above interest rate derivative instruments were due to expire between April and July 2017, on dates coterminous with the relevant underlying original bank loans.

Prior to their cancellation in the year to 31 December 2015, the Group used all of its interest rate derivatives in risk management as cash flow hedges to protect against exposures to variability in future interest cash flows on bank loans which bore interest at variable rates. The amounts and timing of future cash flows from these interest rate derivatives were projected on the basis of their contractual terms.

Categories of financial instruments

At At At At 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Financial assets Loans and receivables: Cash and cash equivalents (note 13) 24,581 25,367 38,771 81,611 24,581 25,367 38,771 81,611 Financial liabilities Financial liabilities at amortised cost: Accrued interest (13,390) (13,264) (13,530) (9,592) Secured debt — gross (1,177,875) (1,166,680) (1,157,565) (904,908) Shareholder loans (101,729) (113,238) — — Derivatives in effective hedges: Interest rate derivatives (216,920) (138,706) (117,578) — (1,509,914) (1,431,888) (1,288,673) (914,500)

At each balance sheet date, all financial assets and liabilities (excluding shareholder loans which were carried in the balance sheet at a value using an imputed interest rate at 31 March 2014 and at 31 March 2013) were measured at amortised cost except for interest rate derivatives which were measured at fair value. Secured debt, which comprises fixed rate loans as at 31 December 2015 and comprises variable rate loans as at the three previous balance sheet dates, is measured at amortised cost but its fair value is also disclosed as required by IFRS 7.

The derivatives and secured debt were valued in accordance with IFRS 13 by reference to interbank bid market rates as at the close of business on the last working day prior to each balance sheet date by JC Rathbone Associates Limited as at 31 December 2015, 31 December 2014 and 31 March 2014. A similar approach was taken at 31 March 2013 when IFRS 13 did not apply. All interest rate derivatives and secured debt were classified as “level 2” as defined in IFRS 13 as at 31 December 2015, 31 December 2014 and 31 March 2014. Their fair values at each balance sheet date were calculated using the present values of future cash flows, based on market forecasts of interest rates and adjusted for the credit risk of the counterparties. There were no transfers to or from other levels of the fair value hierarchy during any reporting period covered by the consolidated financial information.

Financial risk management Through the Group’s operations and use of debt financing it is exposed to certain risks. The Group’s financial risk management objectives are to minimise the effect of these risks by using fixed rate debt or derivative financial instruments to manage exposure to fluctuations in interest rates. Any such derivative financial instruments are not employed for speculative purposes. Any use of any derivatives is approved by the Board, which monitors acceptable levels of interest rate risk, credit risk and liquidity risk.

The exposure to each financial risk considered potentially material to the Group, how it arises and the policy for managing it is summarised below.

109 Market risk Market risk is defined as the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Group’s market risk arises from open positions in interest bearing assets and liabilities and foreign currencies, to the extent that these are exposed to general and specific market movements.

(a) Market risk — interest rate risk The Group’s interest bearing assets comprise only cash and cash equivalents. Changes in market interest rates therefore affect the Group’s finance income. All of the Group’s borrowings since 2 October 2015 are at fixed rates. Prior to that date, the Group was exposed to cash flow interest rate risk as its secured bank borrowings were at variable rates. The Group’s policy was to fix the interest rate on that debt by entering into interest rate derivatives in order to mitigate this risk. As a result, for each of the reporting periods covered by the consolidated financial information, after taking into account the effect of interest rate swaps, all of the Group’s secured bank borrowings were at a fixed rate of interest. The Group’s sensitivity to changes in interest rates is disclosed in note 6. Trade and other payables are interest free and have payment terms of less than one year, so it is assumed that there is no interest rate risk associated with these financial liabilities.

(b) Market risk — currency risk The Group prepares its financial statements in pounds sterling. Some of the Group’s assets are located in Germany and as a result the Group is subject to foreign currency exchange risk due to exchange rate movements between pounds sterling and the euro, though this risk is partially hedged because both assets and liabilities are held in euros, and both revenue and expenditure arise in euros. An unhedged currency risk therefore remains on the value of the Group’s net investment in, and returns from, its German operations. The Group’s sensitivity to changes in foreign currency exchange rates, calculated on the basis of a 10% increase or decrease in average and closing pounds sterling rates against the euro, was as follows: Year to Year to Nine months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Effect on profit 89 113 204 204 Effect on other comprehensive income and equity 565 483 1,046 1,862

Credit risk Credit risk is the risk of financial loss to the Group if a counterparty fails to meet its contractual obligations. The principal counterparties are the Group’s tenants (in respect of trade receivables arising under operating leases) and banks (as holders of the Group’s cash deposits). The credit risk of trade receivables is considered low because the counterparties to the operating leases are considered by the Board to be high quality tenants with lease guarantors of appropriate financial strength, and rent over at least the last nine years having historically always been paid on or before its due date. Recovery details and statistics are benchmarked in Board reports to identify any problems at an early stage, and if necessary rigorous credit control procedures will be applied to facilitate the recovery of trade receivables. The Group does not hold any financial assets which are either past due or impaired. The credit risk on cash deposits is limited because the counterparties are banks with credit ratings which are acceptable to the Board and are kept under review each quarter or more often if required.

Liquidity risk Liquidity risk arises from the Group’s management of working capital and the finance costs and principal repayments on its secured debt. It is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group seeks to manage its liquidity risk by ensuring that sufficient cash is available to meet its foreseeable needs. These liquidity needs are relatively modest and are managed principally through

110 the deduction of operating costs from rental receipts, before any surplus is applied in payment of interest and loan amortisation as required by the credit agreements relating to the Group’s secured debt.

Before entering into any debt instrument, the Board assesses the resources that are expected to be available to the Group to meet the liabilities when they fall due. These assessments are made on the basis of both conservative and downside scenarios. The Group prepares budgets and working capital forecasts which are reviewed by the Board at least quarterly to assess ongoing cash requirements and compliance with loan covenants. The Board also keeps under review the maturity profile of the Group’s cash deposits in order to have reasonable assurance that cash will be available for the settlement of liabilities when they fall due.

The following tables show the maturity analysis for financial assets and liabilities at the end of each of the reporting periods covered by the consolidated financial information. The tables have been drawn up based on the undiscounted cash flows of financial liabilities, including future interest payments, based on the earliest date on which the Group can be required to pay.

Effective Less than One to two Two to five More than interest rate one year years years five years Total £000 £000 £000 £000 £000 31 December 2015 Financial assets: Cash and cash equivalents 0.3% 81,611 — — — 81,611 Financial liabilities: Accrued interest (9,592) — — — (9,592) Secured debt 5.2% (52,833) (51,093) (152,941) (1,043,396) (1,300,263) (62,425) (51,093) (152,941) (1,043,396) (1,309,855)

Effective Less than One to two Two to five More than interest rate one year years years five years Total £000 £000 £000 £000 £000 31 December 2014 Financial assets: Cash and cash equivalents 0.3% 38,771 — — — 38,771 Financial liabilities: Accrued interest (13,530) — — — (13,530) Secured debt 2.5% (22,420) (42,057) (1,172,006) — (1,236,483) Interest rate derivatives 4.3% (42,978) (48,054) (26,546) — (117,578) (78,928) (90,111) (1,198,552) — (1,367,591)

Effective Less than One to two Two to five More than interest rate one year years years five years Total £000 £000 £000 £000 £000 31 March 2014 Financial assets: Cash and cash equivalents 0.3% 25,367 — — — 25,367 Financial liabilities: Accrued interest (13,264) — — — (13,264) Secured debt 2.5% (25,434) (48,392) (1,200,135) — (1,273,961) Shareholder loans — — — (159,823) — (159,823) Interest rate derivatives 4.3% (44,917) (46,372) (47,417) — (138,706) (83,615) (94,764) (1,407,375) — (1,585,754)

111 Effective Less than One to two Two to five More than interest rate one year years years five years Total £000 £000 £000 £000 £000 31 March 2013 Financial assets: Cash and cash equivalents 0.3% 24,581 — — — 24,581 Financial liabilities: Accrued interest (13,390) — — — (13,390) Secured debt 2.5% (28,692) (28,692) (1,238,000) — (1,295,384) Shareholder loans — — — (159,823) — (159,823) Interest rate derivatives 4.3% (52,400) (52,400) (113,534) — (218,334) (94,482) (81,092) (1,511,357) — (1,686,931)

Capital risk management in respect of the reporting periods covered by the consolidated financial information The Board’s primary objective when monitoring capital is to safeguard the Group’s ability to continue as a going concern, while ensuring it remains within its debt covenants so as to safeguard secured assets and avoid financial penalties. Borrowings are secured on the property portfolio by way of fixed charges over property assets and over the shares in the parent company of each ring-fenced borrower subgroup, and also by floating charges on the assets of the relevant subsidiary companies.

Since the Company’s listing, the Group is subject to the externally imposed capital requirements under the AIFMD regime as disclosed in note 13. There have been no breaches of those capital requirements, which have been complied with at all times since they became applicable to the Group’s operations. Prior to the Company’s listing the Group was not subject to any externally imposed capital requirements.

At 31 December 2015 and at 31 December 2014 the capital structure of the Group consisted of debt (note 16), cash and cash equivalents (note 13), and equity attributable to the shareholders of the Company (comprising share capital, retained earnings and the other reserves referred to in note 18).

At 31 March 2014 and at 31 March 2013 the capital structure of the Group consisted of debt, including shareholder loans (note 16), cash and cash equivalents (note 13) and equity attributable to the shareholders of the Company (comprising share capital, retained earnings and the other reserves referred to in note 18).

As part of the Group’s management of its capital structure, consideration is given to the cost of capital. In order to maintain or adjust the capital structure, the Group keeps under review the amount of any dividends or other returns to shareholders, and monitors the extent to which the issue of new shares or the realisation of assets may be required.

Details of the significant accounting policies adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in the accounting policies in note 2.

17. SHARE CAPITAL Share capital represents the aggregate nominal value of shares issued. At 31 December 2015, the Company had an issued and fully paid share capital of 180,344,228 (31 December 2014: 168,443,772) ordinary shares of £0.10 each. At 31 March 2014 and 31 March 2013 the Company had an issued and fully paid share capital of 1 ordinary share of £1.

112 The movement in the number of the Company’s shares in issue over the reporting periods covered by the consolidated financial information have been as follows:

Nine Year to Year to months to Year to 31 March 31 March 31 December 31 December 2013 2014 2014 2015 Number Number Number Number At the start of the period 1 1 1 168,443,772 Subdivision of ordinary share — — 9 — Capitalisation of shareholder loans — — 77,914,338 — Issue of ordinary shares prior to listing — — 81,908,717 — Issue of ordinary shares on listing — — 8,620,689 — Issue of ordinary shares under the Commitment Agreement — — 18 24 Issue of ordinary shares in settlement of incentive fee — — — 11,900,432 At the end of the period 1 1 168,443,772 180,344,228

The transactions that have given rise to these movements in the Company’s issued share capital during the year to 31 December 2015 and the nine months to 31 December 2014 are explained below.

Movements in issued share capital in the year to 31 December 2015 Under the terms of the Commitment Agreement described in note 21, the Company’s shareholders prior to listing agreed to subscribe in cash for one ordinary share per quarter until 10 July 2016 to cover the fees payable to the Investment Adviser from the time of listing.

During the year to 31 December 2015, 24 ordinary shares of £0.10 each were issued under this arrangement for total proceeds of £5.0 million. The excess over nominal value was credited to the share premium reserve.

Under the terms of the Investment Advisory Agreement described in note 21, during the year to 31 December 2015 the Company issued 11,900,432 ordinary shares of £0.10 each in settlement of incentive fees payable to the Investment Adviser in respect of services provided during the nine months to 31 December 2014.

Movements in issued share capital in the year to 31 December 2014 On 16 April 2014, the Company’s one ordinary share in issue of £1 was subdivided into ten ordinary shares of £0.10 each, such shares having the same rights and being subject to the same restrictions as the existing ordinary share of £1.

Non-interest bearing shareholder loans of £77.9 million were capitalised on 20 May 2014 in exchange for the issue of 77,914,338 ordinary shares of £0.10 each at a value of £1 each. The excess over nominal value was credited to the share premium reserve. The Directors of the Company at the time of the reorganisation considered that the market value of the loans as at the date of capitalisation was equal to their face value.

On 21 May 2014, the Company entered into a sale and purchase agreement pursuant to which it issued 81,908,717 ordinary shares of £0.10 each at a value of £1 each to Prestbury 1 Limited Partnership in consideration for the transfer of the entire issued share capital of SIR Hospital Holdings Limited to the Company. The merger relief principles of the Companies Act 2006 were applied in connection with this acquisition such that the excess consideration over nominal value was not credited to the share premium reserve. The investment in SIR Hospital Holdings Limited was transferred at fair value and accordingly the credit was taken to the merger reserve.

On 23 May 2014, the Company, by written resolution, approved a reduction in the £70.1 million standing to the credit of the share premium reserve at that date and the cancellation of the £73.7 million standing to the credit of the merger reserve. The amounts were transferred to retained earnings and are treated as realised profits.

113 The Company was re-registered as a public company limited by shares on 27 May 2014 and was admitted to trading on AIM on 5 June 2014, raising £15.0 million before expenses through a placing of 8,620,689 new ordinary shares of £0.10 each at a price of 174 pence per share. The excess over nominal value was credited to the share premium reserve. Transaction costs of £3.1 million were incurred on this transaction.

Under the terms of the Commitment Agreement described in note 21, the Company’s shareholders prior to listing agreed to subscribe in cash for one ordinary share per quarter until 10 July 2016 to cover the fees payable to the Investment Adviser from the time of listing. During the nine months to 31 December 2014, 18 ordinary shares of £0.10 each were issued under this arrangement for total proceeds of £2.2 million). The excess over nominal value was credited to the share premium reserve.

18. RESERVES The nature and purpose of each of the reserves included within equity that had a balance at any of the balance sheet dates covered by the consolidated financial information is as follows: • Share premium reserve: represents the surplus of the gross proceeds of share issues over the nominal value of the shares, net of the direct costs of equity issues. • Other reserves: represents the cumulative exchange gains and losses on the translation of the Group’s net investment in its German operations, as well as the impact on equity of any shares to be issued after any balance sheet date, as described in note 21, under the terms of both the Commitment Agreement and the incentive fee arrangements. • Cash flow hedging reserve: represents cumulative gains or losses, net of tax, on effective cash flow hedging instruments. Following the termination of the interest rate swaps during the year to 31 December 2015, all amounts on this reserve were reclassified to retained earnings and the balance has therefore reduced to £nil as at that date. • Retained earnings: represent the cumulative profits and losses recognised in the income statement, together with any amounts transferred or reclassified from the other reserves of the Group. • Capital contribution reserve: This reserve arose in connection with the advance to the Group of the shareholders’ loans. After applying a market rate of interest as required by accounting standards in order to determine their fair values at inception, the differences between face value and fair value, net of tax, were recognised as capital contributions within equity. These amounts were to be reclassified to retained earnings over the term of these loans but at the time of their capitalisation in May 2014 the balance remaining in the capital contribution reserve was transferred to retained earnings.

19. OPERATING LEASES The Group’s principal assets are investment properties which are leased to third parties under non- cancellable operating leases. The average remaining lease term is 23.5 years (31 December 2014: 25.1 years; 31 March 2014: 25.6 years; 31 March 2013: 26.6 years) and the leases contain either fixed or RPI-linked uplifts, with no break options. Contingent rental income arises as a result of the RPI- linked uplifts and amounted to £0.6 million recognised in the income statement in the year (nine months to 31 December 2014: £0.8 million; year to 31 March 2014: £1.2 million; year to 31 March 2013: £1.4 million). The future minimum lease payments receivable under the Group’s leases, translated at the relevant period end exchange rates, are as follows:

At At At At 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 Within one year 89,956 92,398 94,190 77,371 Between one year and five years 374,738 384,907 392,413 324,167 More than five years 2,457,088 2,399,896 2,355,051 1,845,457 2,921,782 2,877,201 2,841,654 2,246,995

114 20. NET ASSET VALUE PER SHARE Net asset value per share — basic The net asset value per share of 279.7 pence as at 31 December 2015 (31 December 2014: 204.4 pence; 31 March 2014: 32.1 pence (adjusted, see below); 31 March 2013: (27.4) pence (adjusted, see below) is calculated as the net assets of the Group attributable to shareholders at the balance sheet date divided by the number of shares in issue at that date of 180,344,228 (31 December 2014: 168,443,772; 31 March 2014: 159,823,056 — adjusted, see below; 31 March 2013: 159,686,505 — adjusted, see below).

Adjustment to number of shares in issue at 31 March 2014 and 31 March 2013 On 21 May 2014, by virtue of the reorganisation explained in note 2a, the Company and SIR Hospital Holdings Limited (the “Combined Companies”) became a legal group. At 31 March 2014 and at 31 March 2013 the Combined Companies were entities under common control. It is considered that the use of the actual number of shares of the Combined Companies in issue at 31 March 2014 and at 31 March 2014 as a denominator in the NAV per share calculations above would not provide meaningful information. Instead, the number of shares in issue at that date has been determined based on the number of shares that would have been in issue had the shareholder loans been capitalised into shares on the basis of one share for each £1 of shareholder loans. The basic NAV has also been adjusted to reflect what it would have been had these loans been capitalised at that date.

Net asset value per share — diluted The calculation of diluted NAV per share adjusts the number of shares in issue at the relevant balance sheet date for any shares that are to be issued after the end of a reporting period in respect of services performed in that period, including any in settlement of incentive fees payable (see note 21). Since no incentive fee was payable at 31 December 2015, the number of shares for that calculation was 180,344,228 (31 December 2014: 180,344,204 — taking into account the shares issued in the year to 31 December 2015 in settlement of incentive fees payable as set out in note 17) and diluted NAV per share at that date was the same as the basic NAV per share at 279.7 pence (31 December 2014: 190.9 pence — reflective of the shares issued in settlement of incentive fees payable in the year to 31 December 2015 as referred to above).

There were no adjustments to be made for dilutive or potentially dilutive equity arrangements in respect of the reporting periods to 31 March 2014 and 31 March 2013.

EPRA net asset value per share The European Public Real Estate Association (“EPRA”) has issued guidelines aimed at providing a measure of net asset value on the basis of long term fair values. The EPRA measure excludes items that are considered to have no impact in the long term, such as the fair value of interest rate derivatives and deferred tax balances. The Group’s EPRA NAV is calculated as follows:

At At At At 31 March 31 March 31 December 31 December 2013 2014 2014 2015 £000 £000 £000 £000 NAV per the balance sheet (158,833) (71,282) 344,305 504,411 Capitalisation of shareholder loans 101,729 113,238 — — Deferred tax on shareholder loans 13,362 9,317 — — Adjusted NAV for basic NAV per share purposes (43,742) 51,273 344,305 504,411 EPRA adjustments: Deferred tax on investment property revaluations 133,492 120,636 4,938 5,687 Fair value of interest rate derivatives 216,920 138,706 117,578 — Deferred tax on interest rate derivatives (50,788) (27,544) (627) — Dilution from shares issued for incentive fee — — — — EPRA NAV 255,882 283,071 466,194 510,098

115 At At At At 31 March 31 March 31 December 31 December 2013 2014 2014 2015 Pence per Pence per Pence per Pence per share share share share Basic NAV per share (27.4) 32.1 204.4 279.7 EPRA adjustments: Deferred tax on investment property revaluations 83.6 75.5 2.7 3.1 Fair value of interest rate derivatives 135.8 86.7 65.2 — Deferred tax on interest rate derivatives (31.8) (17.2) (0.3) — Dilution from shares issued for incentive fee — — (13.5) — EPRA NAV per share 160.2 177.1 258.5 282.8

21. RELATED PARTY TRANSACTIONS AND BALANCES The only related party transactions in the reporting periods to 31 March 2014 and 31 March 2013 related to those associated with the shareholders’ loans. The balances at the relevant balance sheet date are disclosed in note 16. Details of the unwinding of the discount that arose on inception are disclosed in note 6 in respect of each reporting period to which this unwinding relates.

Related party transactions and balances since the Company’s listing Advisory fees payable Nick Leslau, Mike Brown and Sandy Gumm are Directors of the Company and also hold partnership interests in, and are Chairman, Chief Executive and Chief Operating Officer respectively of, Prestbury Investments LLP (“Prestbury”), which is Investment Adviser to the Group under the terms of an agreement that became effective on listing in June 2014 (the “Investment Advisory Agreement”). Under the terms of the Investment Advisory Agreement, Advisory Fees of £6.5 million (nine months to 31 December 2014: £2.7 million) were payable in cash to Prestbury in respect of the year to 31 December 2015, £0.2 million (31 December 2014: £0.2 million) of which was outstanding as at the balance sheet date and is included in trade and other payables (note 15).

Commitment Agreement In May 2014, in connection with its listing, the Company entered into a Commitment Agreement with its existing investors at that time in order to fund (in whole or in part) the Company’s payment of its contracted Advisory Fee to Prestbury during the period from listing on 5 June 2014 to 10 July 2016 (the “Commitment Agreement Period”).

Under the terms of the Commitment Agreement, the cash funding of the Advisory Fees is required to be satisfied by way of subscription for ordinary shares. Each existing investor has agreed to subscribe for one share per quarter over the Commitment Agreement Period amounting to an aggregate of 24 (nine months to 31 December 2014: 18) new shares in the Company during the year to 31 December 2015. The total subscription price payable by the existing investors for the shares to be issued to them in any quarter is equal to the Advisory Fee payable by Group companies to Prestbury in respect of that quarter (subject to a maximum aggregate subscription price of £1.3 million per quarter). Since Advisory Fees have begun to exceed that maximum in the year to 31 December 2015, those investors have contributed £5.0 million towards the fees in that year and the remaining £1.5 million has been borne by the Group.

Incentive fee Year ended 31 December 2015 Under the terms of the Investment Advisory Agreement, Prestbury (or a wholly owned subsidiary of Prestbury) may become entitled to an incentive fee which rewards growth and is intended to strongly align Prestbury’s interests with those of shareholders. The fee entitlement is calculated annually on the basis of the Group’s audited financial statements, with any fee payable settled in shares in the

116 Company (subject to certain limited exceptions). Sales of any shares are restricted, with the restriction lifted on a phased basis over a period from 18 to 42 months from the date of listing, subject to a release in the event that Prestbury needs to sell shares to settle any tax liability on the fee income it recognises.

The incentive fee is calculated in accordance with the Investment Advisory Agreement, the wording of which was clarified on 2 March 2016 to confirm that the incentive fee is calculated annually by reference to growth in EPRA NAV per share on the basis set out below.

If this growth exceeds a hurdle rate of 10 per cent per annum, an incentive fee equal to 20 per cent of this excess is payable to Prestbury. Dividends or other distributions paid in any period are treated as payments on account against achievement of the hurdle rate of return. In the event of an incentive fee being payable at the end of an accounting period, as it was for the nine month period to 31 December 2014, a “high water mark” is established, represented by the closing EPRA NAV per share after the impact of the incentive fee, which is then the starting point for the cumulative hurdle calculations for future periods. The hurdle will therefore be set at the higher of the EPRA NAV at the start of the year plus 10 per cent or the high water mark EPRA NAV plus 10 per cent per annum.

Irrecoverable VAT arises on any element of the fee that relates to the healthcare portfolio. Since new ordinary shares are issued in satisfaction of an incentive fee, the cost of that fee in the consolidated financial information only impacts the net asset value of the Group to the extent of that irrecoverable VAT. However, the shares to be issued do reduce the Group’s net asset value per share.

As at 31 December 2015, EPRA NAV per share did not exceed 284.35 pence per share, at which point the 10 per cent hurdle for that year would have been reached. No incentive fee was therefore payable for the year to 31 December 2015. Assuming no changes in capital structure, EPRA NAV growth per share, including any distributions, will have to exceed 30.0 pence per share for a fee to be earned for the year ending 31 December 2016; that is, EPRA NAV including distributions for that year will have to exceed 312.8 pence per share (£564.1 million) at 31 December 2016 before any incentive fee becomes payable.

Year ended 31 December 2014 For a performance fee to arise in the nine months to 31 December 2014, the EPRA NAV per share of the Group had to exceed 182 pence per share at 31 December 2014. Since that was achieved, 20 per cent of shareholder returns in excess of that level were attributable to Prestbury, payable by the issue of shares.

The performance fee which was charged in the income statement for the period from the Company’s listing to 31 December 2014 amounted to £35.2 million (which represented a fee of £32.1 million plus irrecoverable VAT of £3.1 million). The fee was largely offset in the Group’s net asset value as at 31 December 2014 by an increase in reserves representing the shares to be issued in satisfaction of the fee, with only the irrecoverable VAT settled in cash. In order to satisfy the £32.1 million fee, 11,900,432 shares (approximately 7.1 per cent of the Company’s issued share capital at 31 December 2014) were issued in April 2015 at the average mid-market closing share price of the Company for the period from listing to 31 December 2014 of 270 pence per share. Recognising the cost of the performance fee only impacted the net asset value of the Group at 31 December 2014 to the extent of the irrecoverable VAT but, by reflecting the shares to be issued, it further reduced the Group’s net asset value per share and earnings per share as at 31 December 2014.

Share purchase agreement As described in note 17 on 21 May 2014 the Company entered into a sale and purchase agreement with Prestbury 1 Nominee Limited (as nominee) and Prestbury 1 Limited Partnership (as beneficial owner), pursuant to which the Company issued 81,908,717 ordinary shares of £0.10 each (at a value of £1 each) to Prestbury 1 Nominee Limited as nominee for Prestbury 1 Limited Partnership in consideration for the transfer of the entire issued share capital of SIR Hospital Holdings Limited (formerly P1 Hospital Holdings Limited) to the Company. All of the members of Prestbury 1 Limited Partnership at the time of the sale and purchase agreement thereby became shareholders in the Company and still held these shares, amounting to 87 per cent of the issued share capital of the Company at 31 December 2015 (31 December 2014: 95 per cent).

117 22. CONTROLLING PARTY INFORMATION The Company listed on AIM in June 2014.

Prior to the Company’s listing on AIM in June 2014, the issued share capital of both the Company and SIR Hospital Holdings Limited was legally owned by Prestbury 1 Nominee Limited and beneficially owned by Prestbury 1 Limited Partnership whose general partner is Prestbury General Partner Limited Partnership. The ultimate parent entity of Prestbury General Partner Limited Partnership is Prestbury Investments LLP.

Nick Leslau was the controlling party of Prestbury Investments LLP in respect of the business relating to the Group during and at the end of the reporting periods to 31 March 2014 and 31 March 2013.

Prestbury 1 Limited Partnership prepared consolidated financial statements to 31 March 2014 and to 31 March 2013 and these are available from the company secretary of its general partner, Cavendish House, 18 Cavendish Square, London W1G 0PJ.

118 Part 7: Property Valuation Report

CBRE Limited Henrietta House Henrietta Place London W1G 0NB Switchboard +44 20 7182 2000 Fax +44 20 7182 2273

Report Date 14 March 2016

Addressees Secure Income REIT Plc (the “Company”) Cavendish House 18 Cavendish Square London W1G 0PJ Goldman Sachs International (“GS”) Peterborough court 133 Fleet Street London EC4A 2BB In their capacity as Joint Global Coordinator and Joint Bookrunner Stifel Nicolaus Europe Limited (“Stifel”) 150 Cheapside London EC2V 6ET In their capacity as Joint Global Coordinator and Joint Bookrunner

The Properties The properties held by the Company, as listed in the Property Details set out below.

Purpose of Ownership Investment

Instruction and Purpose of We have been appointed to undertake a valuation of the properties listed Valuation in the attached Schedule. This report represents a condensed Valuation Report. In addition we have, as at today’s date, published a further more detailed Valuation Report to the Addressees in respect of the same properties. The Aggregate Market Value is the same in each report. In accordance with your instructions, we report our opinion of the Market Value of the freehold and/or leasehold interests (as appropriate) of the properties listed in the Schedule. The Valuation Report has been prepared for a Regulated Purpose as defined in the RICS Valuation – Professional Standards (January 2014) (the “Red Book”). It is understood that our Valuation Report is required for inclusion in a disclosure document (the “Disclosure Document “), which is to be published by the Company pursuant to a proposed placing of shares which are admitted to trading on the AIM market of on the London Stock Exchange.

www.cbre.co.uk Registered in England No 3536032 Registered Office St Martin’s Court 10 Paternoster Row London EC4M 7HP CBRE Ltd is regulated by RICS 119 CBRE | SPECIALIST MARKETS VALUATION REPORT

The Valuation Date The effective date of the valuation is 24 February 2016.

Brief Summary of the The Properties form a portfolio of properties described in the Schedule (the Portfolio “Portfolio”), which amounts to twenty six (26) properties in total. For the purposes of this Report, Alton Towers together with the Alton Towers Hotel, and Heide Park together with the Heide Park Hotel, are each treated as a single property for descriptive purposes. Values are however reported separately as they comprise separate legal interests 24 of the properties are situated in the U.K., with 2 properties (Heide Park and Heide Park Hotel) located in Germany. 25 are held freehold and 1 (Alton Towers Hotel), is held on a 999 year long leasehold basis (commonly referred to as a virtual freehold). 20 of the assets are hospital properties, 6 are Visitor Attractions and all are held as investments.

Compliance with Valuation We confirm that the valuations have been prepared in accordance with Standards the appropriate sections of the RICS Valuation — Professional Standards January 2014 (the “Red Book”). The Valuation Report complies with the International Valuation Standards and paragraphs 128-130 of the ESMA update of CESR’S recommendations for the consistent implementation of the European Commission Regulation (EC) No. 809/2004 implementing the Prospectus Directive.

Valuer Status We confirm that we have undertaken the valuations acting as External Valuer as defined in the Red Book. We confirm we have sufficient current local and national knowledge of the particular property market involved and have the skills and understanding to undertake the valuations competently. Where the knowledge and skill requirements of the Red Book have been met in aggregate by more than one valuer within CBRE Ltd, we confirm that a list of those valuers has been retained within the working papers, together with confirmation that each named valuer complies with the requirements of the Red Book.

Assumptions The Schedule to this Valuation Report comprises a summary of the Properties valued. We have made various assumptions as to tenure, letting, taxation, town planning and the condition and repair to buildings and sites — including ground and groundwater contamination — as detailed under Valuation Assumptions below and mentioned elsewhere in our Valuation Report (the “Assumptions”). The Company has confirmed and we confirm that our Assumptions are correct so far as the Company and we, respectively, are aware. If any of the information or assumptions on which the valuations are based are subsequently found to be incorrect, the valuation figures may also be incorrect and should be reconsidered.

120 CBRE | SPECIALIST MARKETS VALUATION REPORT

For the avoidance of doubt, the Assumptions made do not affect compliance with the approach to Market Value under the Red Book.

Variation from Standard None. Assumptions

Aggregate Market Value Subject to the contents of this Valuation Report, we are of the opinion that the aggregate of the Market Values, as defined by RICS VPS 4, of the freehold and leasehold interests subject to the occupational leases at 24 February 2016 is: £1,355,187,000 (One Billion Three Hundred and Fifty Five Million One Hundred and Eighty Seven Thousand Pounds). The aggregate Market Value incorporates the valuation of Heide Park, Germany expressed in £ sterling as agreed with the Company. The conversion rate from Euros has been calculated at 24th February 2016 at an exchange rate of 0.7913 (Bank of England). Any reference to rents in this report is also expressed incorporating Heide Park in £ sterling. We have valued the Properties individually and no account has been taken of any discount or premium that may be negotiated in the market if all or parts of the Portfolio was to be marketed simultaneously, either in lots or as a whole. Our opinion of Market Value is based upon the Scope of Work and Valuation Assumptions attached, and has been primarily derived using comparable recent market transactions on arm’s length terms. There are no negative values to report. The blended Net Initial Yield, based on the aggregate of the individual market values as stated herein, equates to 5.35%. As noted above we have valued the properties individually and this net initial yield is provided for information purposes only. This yield has been calculated after conversion to £ sterling of the Heide park valuation. We are required to show the split between freehold and long leasehold properties: Freehold* Long Leasehold Total £1,355,187,000 £0.00 £1,355,187,000 *Part of Alton Towers is held on a 999 year leasehold interest and as an integral part of the asset is incorporated here. The Company has expressly instructed us not to disclose certain information which is considered to be commercially sensitive, namely the individual rents and individual values of the properties.

121 CBRE | SPECIALIST MARKETS VALUATION REPORT

There are 5 properties of the 26 which, individually, have a value of more than 5% of the aggregate of the individual market values. The aggregate value of these properties represents 45.6% of the aggregate of the market values across the portfolio. These are as follows:

Address Total £ Rivers Hospital, High Wych Road, Sawbridgeworth, Hertfordshire, CM21 0HH 139,751,000 Springfield Hospital, Lawn Lane, Chelmsford, Essex, CM1 7GU 80,770,000 Alton Towers, Alton, Staffordshire, ST10 4DB 186,760,000 Alton Towers Hotels, Alton, Staffordshire, ST10 4DB 70,000,000 Thorpe Park, Staines Road, Chertsey, Surrey, KT16 8PN 141,060,000 Total 618,341,000

We have not become aware (after having made enquiry of the Company) of any material change since 24th February 2016 of any matter relating to any property covered by this Valuation Report which in our opinion would have a material effect on the value of the properties.

Independence The total fees, including the fee for this assignment, earned by CBRE Ltd (or other companies forming part of the same group of companies within the UK) from the Addressees (or other companies forming part of the same group of companies) is less than 5.0% of CBRE Ltd’s total UK revenues. It is not anticipated that this will change in the financial year to 31 December 2016. We confirm that CBRE Ltd does not have any material interest in the Company or any of the Properties.

Disclosures CBRE Ltd has valued the four Properties let to Merlin and a number of the hospitals for secured lending purposes in 2015 to third parties and previously valued all the properties in 2014 for an Initial Placing on the AIM market of the London Stock Exchange. CBRE Ltd has also provided twice yearly valuations of the properties since 2014 for Company Accounting Purposes On behalf of the Company (or other companies forming part of the same group of companies): Ⅲ The principal signatory of this report has been the signatory of specific one-off valuation-related instructions from time-to-time since 2005; Ⅲ CBRE Ltd has carried out valuations and provided other property advice since 2005; and Ⅲ CBRE Ltd has carried out Valuation and Agency services for between 10 and 14 years

122 CBRE | SPECIALIST MARKETS VALUATION REPORT

We do not consider that any conflict of interest arises for us in preparing the advice requested by the Company and the Company has confirmed this to us.

Responsibility We are responsible for our Valuation Report and accept responsibility for the information contained in our Valuation Report and confirm that to the best of our knowledge (having taken all reasonable care to ensure that such is the case), the information contained in our Valuation Report is in accordance with the facts and contains no omissions likely to affect its import. No reliance may be placed upon this responsibility statement or the contents of this Valuation Report by any party for any purpose other than in connection with the Purpose of Valuation and, to the fullest extent permitted by law, we accept no liability for any losses arising as a result of such reliance.

Reliance This report is for the specific purpose set out herein and no responsibility is accepted to any third party for the whole or any part of its contents, save as set out in “Responsibility” above.

Publication Neither the whole of the Valuation Report, nor any part, nor reference thereto, may be published in any other document, statement or circular, nor in any communication with third parties, without our prior written approval of the form and context in which it will appear. Before this Valuation report, or any part thereof, is disclosed orally or otherwise to a third party, CBRE’s written approval of the form and context of such publication or disclosure must first be obtained. Such publication or disclosure will not be permitted unless where relevant it incorporates the Assumptions referred to herein. For the avoidance of doubt, such approval is required whether or not CBRE is referred to by name and whether or not the contents of our Valuation report are combined with others.

123 CBRE | SPECIALIST MARKETS SCOPE OF WORK & SOURCES OF INFORMATION

Sources of We have carried out our work based upon information supplied to us by the Information Company and its real estate lawyers, Taylor Wessing LLP, primarily comprising title certificates and tenancy information, which we have assumed to be correct and comprehensive.

Inspections We internally inspected all Properties between May 2015 and February 2016. The Company has advised us of changes that have occurred to the Properties in the intervening period.

Areas We have not measured the Properties, as floor areas are not the primary driver to the valuation methodology applied.

Environmental Matters We have not undertaken, nor are we aware of the content of, any environmental audit or other environmental investigation or soil survey which may have been carried out on the Properties and which may draw attention to any contamination or the possibility of any such contamination. We have not carried out any investigations into the past or present uses of the Properties, nor of any neighbouring land, in order to establish whether there is any potential for contamination and have therefore assumed that none exists.

Repair and Condition We have not carried out building surveys, tested services, made independent site investigations, inspected woodwork, exposed parts of the structure which were covered, unexposed or inaccessible, nor arranged for any investigations to be carried out to determine whether or not any deleterious or hazardous materials or techniques have been used, or are present, in any part of the Properties. We are unable, therefore, to give any assurance that the Properties are free from defect.

Town Planning and We have not made oral or written planning enquiries, although where Statutory practicable we have reviewed local planning policies in relation to the Requirements Properties on the websites of the relevant local planning authority. We have assumed that, save as disclosed to us by the Company, all buildings have been erected in accordance with planning permissions and the Properties have the benefit of permanent planning consents or existing use rights for their current use and that no adverse planning conditions or restrictions apply. We have assumed that the Properties are not adversely affected by any town planning or road proposals and that all buildings comply with all statutory and local authority requirements including building, fire, and health and safety regulation and are not subject to any outstanding statutory notices as to their construction, use or occupation.

Titles, Tenures and Details of title/tenure under which the Properties are held and of lettings to Lettings which they are subject are as supplied to us by the Company and its lawyers. We have not generally examined nor had access to all the deeds, leases or other documents relating thereto. Where information from deeds, leases or other documents is recorded in this report, it represents our understanding of the relevant documents. We should emphasise, however, that the interpretation of the documents of title (including relevant deeds, leases and planning consents) is the responsibility of your legal adviser. A brief summary of the tenancy information relied upon is noted in the Schedule.

124 CBRE | SPECIALIST MARKETS SCOPE OF WORK & SOURCES OF INFORMATION

We have not conducted credit enquiries on the financial status of any tenants. We have, however, obtained published financial information and D&B compact/business reports and reflected in our valuations our opinion of the investment market’s perception of the financial status of the guarantors as publicly listed vehicles.

125 CBRE | SPECIALIST MARKETS VALUATION ASSUMPTIONS

Assumptions An Assumption is defined in the Red Book Glossary and Appendix 3 to be a “supposition taken to be true” (an “Assumption”). Assumptions are facts, conditions or situations affecting the subject of, or approach to, a valuation that it has been agreed need not be verified by the valuer as part of the valuation process. Assumptions are made when it is reasonable for the valuer to accept that something is true without the need for specific investigation. The Company has confirmed and we confirm that our Assumptions are correct as far as the Company and we, respectively, are aware. In the event that any of these Assumptions prove to be incorrect then our valuations should be reviewed. The principal Assumptions which we have made are stated in this Valuation Report. For the avoidance of doubt, the Assumptions made do not affect compliance with the approach to Market Value under the Red Book.

Basis of Value Each valuation has been prepared on the basis of Market Value , which is defined as: “The estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.” The valuation represents the figure that would appear in a hypothetical contract of sale at the valuation date. No adjustment has been made to this figure for any expenses of acquisition or realisation—nor for taxation which might arise in the event of a disposal. No account has been taken of any inter-company leases or arrangements, nor of any mortgages, debentures or other charge. No account has been taken of the availability or otherwise of capital based Government or European Community grants.

Taxation, Costs and As stated above, no allowances have been made for any expenses of Realisation Costs realisation nor for taxation which might arise in the event of a disposal. Our valuations reflect purchasers’ statutory and other normal acquisition costs.

VAT We have been advised the theme parks are elected for VAT however, under the terms of the leases the hospitals cannot be registered for VAT. All rents and capital values stated in this report are exclusive of VAT.

Rental Values Rental values indicated in our report are those which have been adopted by us as appropriate in assessing the capital value and are not necessarily appropriate for other purposes, nor do they necessarily accord with the definition of Market Rent.

The Properties Landlord’s fixtures such as lifts, escalators, central heating and other normal service installations have been treated as an integral part of the building and are included within our valuations.

126 CBRE | SPECIALIST MARKETS VALUATION ASSUMPTIONS

In respect of the hospital Properties, we understand and have assumed that the leases provide that Properties include, without limitation, all such plant and machinery referred to above and also specialist items integral to the building such as gas delivery systems, air conditioning systems including specialist theatre airflow systems, specialist lighting and nurse call systems and any replacements thereof. Process plant and machinery, tenants’ fixtures and specialist trade fittings have been excluded from our valuations. All measurements, areas and ages quoted in our report are approximate.

Environmental Matters In the absence of any information to the contrary, we have assumed that: (a) the Properties are not contaminated and are not adversely affected by any existing or proposed environmental law; (b) any processes which are carried out on the Properties which are regulated by environmental legislation are properly licensed by the appropriate authorities. (c) the properties possess current Energy Performance Certificates (EPCs) as required under the Government’s Energy Performance of Buildings Directive, and that they have an energy efficient standard of ‘E’, or better. We would draw your attention to the fact that the Energy Act 2011 is due to come into force in England and Wales no later than 1 April 2018 (although it may be earlier), and in Scotland, no earlier than April 2015. From such date, it will be unlawful for landlords to rent out a residential or business premise unless they have reached a minimum energy efficient standard – most likely, ‘E’ – or carried out the maximum package of measures funded under the ‘Green Deal’ or the Energy Company Obligation (ECO). (d) the properties are either not subject to flooding risk or, if they are, that sufficient flood defences are in place and that appropriate building insurance could be obtained at a cost that would not materially affect the capital value. High voltage electrical supply equipment may exist within, or in close proximity of, the Properties. The National Radiological Protection Board (NRPB) has advised that there may be a risk, in specified circumstances, to the health of certain categories of people. Public perception may, therefore, affect marketability and future value of the property. Our valuation reflects our current understanding of the market and we have not made a discount to reflect the presence of this equipment.

Repair and Condition In the absence of any information to the contrary, we have assumed that: (a) there are no abnormal ground conditions, nor archaeological remains, present which might adversely affect the current or future occupation, development or value of the Properties; (b) the Properties are free from rot, infestation, structural or latent defect;

127 CBRE | SPECIALIST MARKETS VALUATION ASSUMPTIONS

(c) no currently known deleterious or hazardous materials or suspect techniques have been used in the construction of, or subsequent alterations or additions to, the Properties; and (d) the services, and any associated controls or software, are in working order and free from defect. We have otherwise had regard to the age and apparent general condition of the Properties. Comments made in the property details do not purport to express an opinion about, or advise upon, the condition of uninspected parts and should not be taken as making an implied representation or statement about such parts.

Title, Tenure, Lettings, Unless stated otherwise within this report, and in the absence of any Planning, Taxation and information to the contrary, we have assumed that: Statutory & Local Authority (a) the Properties possess a good and marketable title free from any requirements onerous or hampering restrictions or conditions; (b) all buildings have been erected either prior to planning control, or in accordance with planning permissions, and have the benefit of permanent planning consents or existing use rights for their current use; (c) the Properties are not adversely affected by town planning or road proposals; (d) all buildings comply with all statutory and local authority requirements including building, fire and health and safety regulations; (e) only minor or inconsequential costs will be incurred if any modifications or alterations are necessary in order for occupiers of each Property to comply with the provisions of the Disability Discrimination Act 1995; (f) all rent reviews are upward only and are to be assessed by reference to full current market rents; (g) there are no tenant’s improvements that will materially affect our opinion of the rent that would be obtained on review or renewal; (h) tenants will meet their obligations under their leases, and are responsible for insurance, payment of business rates, and all repairs, whether directly or by means of a service charge; (i) there are no user restrictions or other restrictive covenants in leases which would adversely affect value; (j) where appropriate, permission to assign the interest being valued herein would not be withheld by the landlord where required; and (k) vacant possession can be given of all accommodation which is unlet or is let on a service occupancy. (l) Stamp Duty Land Tax (SDLT) will apply at the rate currently applicable in the UK Real Estate transfer Tax will apply for properties outside the U.K.

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PROPERTY DETAILS

Property Location and Description Tenure and Tenancies

ASHTEAD HOSPITAL Ashtead is a residential suburb located on the Freehold. The Warren north side of the M25 Motorway approximately Entire let to Ramsay Health Care Ashtead 15 miles south west of Central London. The UK Operations Limited Surrey KT21 2SB Property is situated in an upmarket residential area guaranteed by Ramsay Health just off the A24 Leatherhead Road one mile from Care Limited on a full repairing the M25. and insuring lease for a term of Purpose-built 55 bed inpatient hospital erected in 30 years from 3 May 2007. 1984 and extended in 1995, 2000 and 2013, Minimum rent is set out for each and has approximately 120 car parking spaces. year of the term equivalent to Main medical facilities comprise 53 single en-suite annual fixed increase of 2.75%. patient bedrooms, twin bedded HDU, 3 major Upward only rent review in year operating theatres (all with laminar airflow), TSSU, 10 to higher of the pre-determined radiology (2 no. x-ray), fixed base MRI and CT fixed increase or formula being scanners, 15 consulting rooms and physiotherapy 88.5% x 65% of EBITDARH. In unit. years 15, 20, 25 the rent is reviewed upwards only to the higher of the pre-determined fixed increase or Open Market Rent.

DUCHY HOSPITAL Truro is located close to the south western end of Freehold. Penventinnie Lane mainland Britain approximately 45 miles west of Tenancies – as Ashtead Hospital. Treliske, Truro Plymouth. The Property is located in Treliske on the Cornwall TR1 3UP outskirts of Truro adjacent to the Royal Cornwall NHS Hospital. Purpose-built 28 beds inpatient hospital constructed in 1981 and extended in the 1990s and 2012, with approximately 130 car parking spaces and an undeveloped area of land adjacent. Main medical facilities comprise 24 single and one double en-suite patient bedrooms, twin bedded HDU, 3 major operating theatres (each with laminar airflow), 9-bed ambulatory unit, radiology dept. (1 no. x-ray), 11 consulting rooms and a physiotherapy unit.

EUXTON HALL HOSPITAL Chorley is approximately 22 miles north west of Freehold. Wigan Road Manchester and 10 miles south of Preston. The Tenancies – as Ashtead Hospital. Euxton, Chorley Property is situated in the suburban area of Euxton Lancashire PR7 6DY approximately 2 miles north west of Chorley. Euxton Park is under-let to Chorley Euxton Park, which comprises part of the Borough Council for a term of Property’s site, lies to the south of the hospital site. 999 years from 1 June 1989 at a Inpatient hospital comprising a former 18th century peppercorn rent. There is a further mansion with purpose-built extensions, a detached under-let to Chorley Parish block of ten Close Care apartments, car parking Council. We understand that the and large landscaped grounds. Main medical use is restricted to public open facilities comprise 26 beds (23 single en-suite space only. patient bedrooms and 3-bed en-suite patient bedrooms) with 2 major operating theatres (each with laminar airflow), endoscopy unit, radiology (including x-ray), 5 consulting rooms and a physiotherapy unit.

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FITZWILLIAM HOSPITAL Peterborough is located approximately 40 miles Freehold. Milton Way, east of Leicester and 35 miles to the north west of Tenancies – as Ashtead Hospital. South Bretton Cambridge. The Property is situated on Milton Peterborough Way approximately 3 miles west of the city centre. Cambridgeshire Purpose built hospital constructed in 1983 and PE3 9AQ extended in 1992 and 2012-13, with an overnight capacity (including HDU) of 46 beds. Main medical facilities include 4 theatres (3 with laminar airflow), 8 bays recovery area, endoscopy suite, 2 x-ray rooms, fixed base MRI scanner 14 outpatient consulting rooms and a physiotherapy unit with gymnasium and 6 treatment rooms.

FULWOOD HOSPITAL Preston is located approximately 35 miles north Freehold. Midgery Lane west of Manchester and 45 miles north east of Tenancies – as Ashtead Hospital. Fulwood, Liverpool. The Property is situated in the suburb of Preston Fulwood approximately 2 miles north east of Lancashire PR2 9SZ Preston town centre. Purpose built property erected in 1986 and substantially extended in1989 and 2012. The Property has been subject to further refurbishment and a major works programme between 2007 and 2012. It comprises 26 inpatient beds (20 single and three double en-suite overnight patient bedrooms, 2- bed HDU and a10-bay ambulatory unit. The hospital has undergone a major refurbishment programme since 2007. The main medical and surgical facilities include 3 operating theatres (with laminar airflow), 12-bay day care unit, DSI x-ray machine, OPG and ultra sound facilities, a physiotherapy unit with gym, 4 treatment rooms and 6 consulting rooms.

MOUNT STUART The three adjacent seaside towns of Torquay, Freehold. HOSPITAL Paignton and Brixham collectively are called Tenancies – as Ashtead Hospital. St Vincent’s Road Torbay Torquay is located approximately 22 miles Torquay south of Exeter and 30 miles east of Plymouth. The Devon TQ1 4UP Property is situated 1.5 miles north of Torquay town centre. Purpose-built 31-bed hospital constructed during 1984. Main medical and surgical facilities include 2 patient bedrooms equipped for HDU purposes and 2 major operating theatres (with laminar airflow). The hospital also provides endoscopy, DSI X-ray, ultrasound, mammography and OPG facilities, 7 consulting rooms, a cosmetic surgery suite, a physiotherapy unit, 7 treatment rooms and an on-site pharmacy. A major development project commenced in May 2015 and is now nearing completion. The works include a third operating theatre and new 12-bed second stage ambulatory recovery section, as well as back of house reconfiguration works.

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NORTH DOWNS Caterham is located about 20 miles due south from Freehold. HOSPITAL Central London just within the M25 Motorway. The Tenancies – as Ashtead Hospital. 46 Tupwood Lane, Property is located on Tupwood Lane Caterham approximately one mile south east of Caterham. Surrey CR3 6DP The Property comprises a large detached 19th century house converted to an 18 bedroom private hospital, with a modern extension construction and separate detached 1996 building. The main medical and surgical facilities include 2 operating theatres (with laminar airflow), 4 consulting rooms (with specialist ophthalmic and ENT facilities), a physiotherapy room, 2 treatment rooms, endoscopy room and DSI x-ray unit.

OAKLANDS HOSPITAL Manchester is a major financial and commercial Freehold. 19 Lancaster Road centre in the north west of England approximately Tenancies – as Ashtead Hospital. Salford 35 miles east of Liverpool and 53 miles south west Manchester M6 8AQ of Leeds. The Property is situated approximately 4 miles west of Manchester City Centre with good access to the M60 Manchester orbital. Purpose built, private acute hospital built in1990 with extensions added in 1996, 2001 and 2015. The current accommodation includes 20 overnight beds including a 2-bed HDU and a second stage ambulatory recovery area (8-beds). The main medical and surgical facilities include 3 major operating theatres (with a laminar airflow), a recovery bay, endoscopy and X-ray unit, and DEXA machine, ultrasound, mammography and OPG facilities, with a physiotherapy unit and 8 consulting rooms.

OAKS HOSPITAL Colchester is located approximately 62 miles north Freehold. 120 Mile End Road east of Central London, with Ipswich 15 miles to Tenancies – as Ashtead Hospital. Colchester the north east and Chelmsford 25 miles to the south Essex CO4 5XR west. The property is located 1 mile north of Colchester town centre. Purpose built hospital building which opened in 1994 and was extended in 2012, and has 48 beds overnight beds, including 42 single en suite patient rooms, 3 double en suites and 3 HDU. The main medical and surgical facilities comprise 4 operating theatres (with laminar air-flow) and 2 minor operation rooms, with an endoscopy unit, a 7- bay recovery area, paediatric facility. The hospital also provides X-ray screening (DSI), ultrasound, 8 treatment rooms and a physiotherapy room with exercise gym and 14 consulting rooms.

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PINEHILL HOSPITAL Hitchin is located approximately 37 miles north of Freehold. Benslow Lane Central London, and 10 miles north east of Luton. Tenancies – as Ashtead Hospital. Hitchin Hertfordshire The town benefits from good connections, being 4 SG4 9QZ miles west of the A1 (M). The Property comprises a 40 bed hospital within a converted manor house, constructed in 1908, including 33 overnight beds and 7-day case pods. The hospital was opened in 1982 with a substantial 2-storey extension added in 1997 and further first floor extension added in 2011 to house a new theatre. The main medical and surgical facilities comprise 9 consulting rooms, X-ray room with separate ultrasound and mammography facilities, 3 principal theatres (each incorporating laminar airflow enclosure), 1 minor ops suite, a physiotherapy facility and an on-site pharmacy. MRI and CT scanning and Dexa services are provided by a mobile service to the site.

READING HOSPITAL Reading is located on the north side of the M4, Freehold. Wensley Road approximately 40 miles west of Central London Tenancies – as Ashtead Hospital. Coley Park, Reading and 25 miles south east of Oxford. Berkshire RG1 6UZ Purpose built 47 bed purpose built acute hospital developed in 1992 and a former nursing home (Coley Park Mansion) converted in 1997 for outpatient purposes. The main medical and surgical facilities include 3 operating theatre with 5-bay recovery area, TSSU and physiotherapy unit, exercise gym, and an orthopaedic unit, and a 2 bed HDU. The Grade ll listed Coley Park Mansion has 24 consulting rooms, radiology department with 2 x- ray rooms and MRI facilities, gynecological, cardiology, paediatrics and urology facilities.

RENACRES HOSPITAL Ormskirk is a small market town in West Freehold. Renacres Lane Lancashire, 13 miles north of Liverpool City Centre Halsall, Nr. Ormskirk and 18 miles south of Preston. Lancashire L39 8SE Renacres Hospital comprises a 24 bed hospital opened in 1987 and extended in 1998/1999. Main medical and surgical facilities include 2 major operating theatres, DSI x-ray, ultrasound and mammography facilities, a physiotherapy suite and exercise gym with two treatment rooms, and a further 7 consulting rooms. Other facilities include an audiology and endoscopy suite, with MRI services delivered via a visiting unit.

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RIVERS HOSPITAL Sawbridgeworth is a village located in East Freehold. High Wych Road Hertfordshire about 2 miles north of Harlow, which Tenancies – as Ashtead Hospital. Sawbridgeworth is about 20 miles north east of London via the Hertfordshire CM21 0HH M11. The Property comprises a major healthcare complex, which includes the Rivers private acute hospital, the Gardens and Jacobs Centre neurological units and Orchard Lea “close care” residential village, with 315 car parking spaces. Rivers Hospital was purpose built in 1992 and extended in 2010 and comprises a 62-bed acute hospital building, including 2 HDU. Main medical facilities include 4 major operating theatres (each with laminar airflow), ambulatory unit with 9-bays and 2 ops rooms, radiology (2 no. x-ray), fixed base MRI and CT scanners, 13 consulting rooms and physiotherapy unit. The Gardens was built in 1992 and has 56 beds. Jacobs Centre was built in 2004 and has 60 long term care beds including 9 designated for high dependency. Both buildings have an array of lounge/dining and therapy areas and assisted bathrooms. Orchard Leas comprises a cluster of 22 residential units and gardens sold to the occupiers on long leases and a supporting “Core” facility including a restaurant serviced from Rivers Hospital.

ROWLEY HOSPITAL Stafford is located approximately 27 miles north of Freehold. Rowley Park Birmingham and benefits from good road Tenancies – as Ashtead Hospital. Stafford communications with the M6 situated 3 miles south Staffordshire ST17 9AQ of the town centre. The Property comprises a 15 bed converted period building, with a surgical theatre extension completed in 2011 and infill extension added in 2015. A comprehensive programme of internal refurbishment and cosmetic improvements have been carried out between then, in the main building and the detached annexe. The main medical and surgical facilities include 2 major operating theatres, X-ray and ultrasound facilities, with 9 consulting rooms, treatment rooms and a Physiotherapy unit with multi-gym.

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SPRINGFIELD HOSPITAL Chelmsford is located approximately 30 miles Freehold. Lawn Lane Springfield north east of Central London, with junction 28 of Chelmsford the M25 motorway about 12 miles south west. Tenancies – as Ashtead Hospital. Essex CM1 7GU Basildon and Southend-on-Sea are located approximately 12 miles to the south.

The Property is a purpose-built 64 bed inpatient hospital constructed in 1987 and extended in 2000 and 2013. In addition to 3 HDU, the main medical facilities include 5 major operating theatres (4 with laminar airflow), a Radiology unit with 2 X-ray, ultrasound, mammography, OPG and Lithotripter equipment. There are 21 outpatient consulting rooms and 2 rooms used for private GP consulting, 4 minor treatment rooms and audiology. Other facilities include an onsite pharmacy and large conference room. A Cancer Care Centre is under development and the building will contain a linear accelerator that Ramsay will operate in partnership with Genesis Care of Australia. Completion is scheduled for March 2016.

WEST MIDLANDS Halesowen is located in the West Midlands Freehold. HOSPITAL approximately 9 miles south west of central Coleman Hill Birmingham and 6 miles south of Dudley. Tenancies – as Ashtead Hospital. Halesowen West Midlands B63 2AH The property comprises a former residence, extended in two phases in the late 1980’s. The main medical and surgical facilities include 29 ensuite bedrooms, including one HDU, a radiology department with digital facilities digital X-ray and mammography and ultrasound facilities, 2 principal operating theatres (with laminar airflow), 6 general consulting rooms and a physiotherapy suite.

WINFIELD HOSPITAL Gloucester is located approximately 35 miles north Freehold. Tewkesbury Road of Bristol and 53 miles south of Birmingham, and Longford, Gloucester is situated to the west of the M5 motorway. Tenancies – as Ashtead Hospital. Gloucestershire GL2 9WH Purpose built, two storey hospital constructed in 1993 with two semi-detached villas and the Dean Neurological Centre, completed in 2009. The Winfield Hospital’s main medical and surgical facilities include 42 beds including 2 HDU, 3 operating theatres (each with laminar air enclosures) and digital X-ray, ultrasound and mammography and OPG facilities. A physiotherapy department includes an exercise gym with 5 treatment rooms, also with 11 consulting rooms.

The Dean Neuro Centre facility includes 60 ensuite bedrooms (16 HDU) and ancillary lounge and office space.

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WOODLAND HOSPITAL Kettering is located approximately 15 miles north Freehold. Rothwell Road east of Northampton and 24 miles south east of Tenancies – as Ashtead Hospital. Kettering Leicester. Coventry is circa 30 miles to the west via Northamptonshire the A14. NN16 8XF The property comprises a 30 bed purpose built hospital, including 2 HDU, completed in 1990 and extended in 2012 to include additional consulting, operating theatre and plant space. A new two- storey building providing additional operational space opened in 2006. The main medical and surgical facilities include 3 operating theatres, endoscopy suite, X-ray and OPG services and 10 consulting rooms, also with a physiotherapy unit.

YORKSHIRE CLINIC Bingley is located approximately 6 miles north west Freehold. Bradford Road of Bradford and 15 miles to the west of Leeds. The Tenancies – as Ashtead Hospital. Bingley Property is situated in the village of Cottingley 1 West Yorkshire mile west of Shipley BD16 1TW Purpose-built 55 beds inpatient hospital with 4 HDU, constructed in 1982, extended in the 1990s and a first floor fifth theatre extension completed in 2010/11, together approximately 140 car parking spaces. The main medical and surgical facilities include 5 major operating theatres, TSSU, radiology and cardiac unit with X-ray, mammography, ultrasound and OPG facilities. The hospital also has a fixed base MRI and CT scanner unit, with13 consulting rooms and a physiotherapy suite.

THE NIGHTINGALE Lisson Grove is located in Marylebone in the City Freehold. HOSPITAL of Westminster. The Property is located at the Entire let to Florence Nightingale 11-19 Lisson Grove southern end of Lisson Grove within a block Hospitals Limited and pursuant to Marylebone situated between Marylebone Road and Bell Street a Deed of Variation and London NW1 6SH to north. Guarantee dated 21 July 2014, The Property comprises a number of buildings Orpea is the surety. converted to a psychiatric care facility. The main The Existing Lease expires on 2 building at 11-19 Lisson Grove is a 65-bed acute May 2037 and there is a inpatient psychiatric hospital with supporting Reversionary Lease from 3 May services including consulting and therapy rooms. 2035 to 20 July 2044 inclusive). 7 Lisson Grove (Edward House) is a mid-terraced Pursuant to the Deed of Variation, period building providing 10 consulting rooms and the fixed rent increases from year offices. 9 onwards are at 3% per annum with no other reviews. The fixed 98,100 and 102 Bell Street is a terrace of period rent increases under the residential buildings with the basement level Reversionary Lease are 3% per incorporated as part of the main psychiatric annum with no other reviews and hospital and with the ground and upper floors of the same rent is payable for the 100 & 102 in outpatient therapy uses (21 first two years of the Reversionary consulting rooms) and in 98 there are residential Lease as payable under the last sub-lettings. two years of the Existing Lease. 2, 3 and 4 Bendall Mews is a 3 storey modern building built as an annexe to the main hospital. The Tenant has refurbished the building as a Young Persons Unit with 9 single ensuite bedrooms and it is due to open end February 2016.

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ALTON TOWERS Alton Towers lies approximately 1 mile north of the Freehold and part 999 year long Alton village of Alton in Staffordshire. The small village/ leasehold from 2007. Staffordshire, ST10 4DB hamlet of Farley is immediately to the North West. Entire let to Merlin Attractions It is 15 miles east of Stoke-on-Trent and 22 miles Operations Limited (tenant) with west of Derby. Merlin Entertainments plc acting The theme park is built around the 19th Century as Surety. Held on a full repairing Gothic Towers, divided up in to 11 differently and insuring lease for a term of named amusement areas with rides and supporting 35 years from 5 July 2007 with food and beverage and retail sales areas. In options to renew for two further addition there are two hotels, a water park, terms at expiry. Rent is reviewed adventure mini golf, conference centre and new annually upwards only by enchanted village of 125 lodges. The hotels have reference to R.P.I. There is a 176 rooms and 216 rooms respectively. separate lease of the hotel to the same tenant on similar terms.

THORPE PARK The park is located a mile south of Staines and Freehold Chertsey north of Chertsey in close proximity of the M25 Surreys KT16 8PN and M3 intersection. London is approximately 25 miles east. Thorpe Park is a thrill seekers theme park and has the capacity for 4,500 cars. The main theme park is situated on an Island with the themed rides then arranged in various sectors around the park. In addition there are various ancillary food and beverage, retail sales units and a 90 bed accommodation block.

WARWICK CASTLE Warwick Castle is located within Warwick’s town Freehold Warwick centre, approximately 3 miles to the north of the Tenancy – As Alton Towers Warwickshire, M40 motorway between junctions 13 and 15. CV34 4QU Access from junction 13 is via the A425 and the A429 from junction 15. Warwick Castle is a medieval castle attraction. The original wooden motte and bailey castle was rebuilt in the 12th century and before being bought by the Tussauds Group in 1978 had been used as a country house. It now provides arrange of family attractions with supporting food, beverage and retail.

HEIDE PARK Soltau is located in the North West German state Freehold Soltau, Germany of Lower Saxony. The state capital, Hanover, is Entire let to Heide Park Soltau located approximately 90km south of Soltau. GmbH (tenant) with Surety from Heide Park is situated in a rural setting, between Merlin Entertainments Plc and the A7 turnoff and Soltau town centre. Merlin Entertainments Group The property comprises a comprehensive large Luxembourg 3 S.à.r.l. Held on a scale theme park which provides a combination of full repairing and insuring lease rides and attractions, supporting food and for a term of 35 years expiring 29 beverage facilities. The theme park has four main July 2042 with options to renew attraction areas including feature rollercoasters, for two further terms at expiry. The children’s rides and play areas, show areas and rent is reviewed annually by way food and beverage offerings. of a fixed increase of 3.34%. There is a separate lease of the There is also a 166 room hotel constructed in hotel on similar terms with the 2007 and a holiday camp with 80 units. exception of the tenant which is Tussauds Heide- Metropole GmbH.

136 Part 8: The REIT Regime and Taxation

Section A and B of this Part 8 are intended as a general guide only, are not an exhaustive summary of all applicable legislation in relation to the matters outlined therein and are based on the Company’s understanding of current UK tax law and HMRC practice, each of which is subject to change, possibly with retrospective effect. They do not constitute advice.

SECTION A: OVERVIEW OF THE REIT REGIME 1 THE REIT REGIME The REIT Regime applicable in the UK (the “REIT Regime”) was introduced by the UK Finance Act 2006 and subsequently re-written into Part 12 of CTA 2010.

Investing in property through a UK taxable corporate investment vehicle has the disadvantage that, in comparison to a direct investment in property assets, some categories of shareholder may effectively bear tax twice on the same income: first, indirectly, when the corporate investment vehicle pays direct tax on its profits, and secondly, directly (subject to any available exemption or with the benefit of a tax credit) when the shareholder receives a dividend. UK non-tax paying entities, such as UK pension funds, bear tax indirectly when investing through a taxable closed-ended corporate vehicle that is not a REIT which they would not suffer if they were to invest directly in the property assets.

As part of a REIT Group, UK resident REIT Group members do not pay UK direct taxes on income and capital gains from their Qualifying Property Rental Businesses in the UK and elsewhere and non-UK resident REIT Group members with a UK Qualifying Property Rental Business do not pay UK direct taxes on income from their UK Qualifying Property Rental Businesses, provided that certain conditions are satisfied. Instead, distributions in respect of the tax-exempt Qualifying Property Rental Businesses are treated for UK tax purposes as UK property income in the hands of shareholders. Section B of this Part 8 contains further detail on the UK tax treatment of shareholders in a REIT.

Gains arising in UK resident REIT Group members on the disposal of shares (including shares in property owning companies) may, however, be subject to UK corporation tax. In addition, REIT Group members will remain subject to overseas direct taxes in respect of any property rental business carried on outside the UK, and UK and overseas direct taxes are still payable in respect of any income and gains from the REIT Group’s businesses (generally including any property trading business) not included in the Qualifying Property Rental Business (the “Residual Business”).

Whilst within the REIT Regime, the Qualifying Property Rental Business will be treated as a separate business for corporation tax purposes from the Residual Business and a loss incurred by the Qualifying Property Rental Business cannot be set off against profits of the Residual Business (and vice versa).

A dividend paid by the Company relating to profits or gains of the Qualifying Property Rental Business of the members of the Group (other than gains arising to non-UK resident members of the Group) is referred to as a “Property Income Distribution”ora“PID”. Other dividends paid by the Company (including dividends relating to the Residual Business) are referred to as “Non-PID Dividends”. Under the REIT Regime, both PIDs and Non-PID Dividends may be satisfied by stock dividends. Section B of this Part 8 contains further detail on the UK tax treatment of shareholders in a REIT.

In this document, references to a company’s accounting period are to its accounting period for UK corporation tax purposes. This period can differ from a company’s accounting period for other purposes.

2 QUALIFICATION AS A REIT A group becomes a REIT Group by the principal company (which, for the purposes of this Part is the Company) serving notice on HMRC before the beginning of the first accounting period for which it wishes the group members to become a REIT. In order to qualify as a REIT, the REIT Group must satisfy certain conditions set out in CTA 2010. A non-exhaustive summary of the material conditions is set out below. Broadly, the principal company must satisfy the conditions set out in paragraphs 2.1 to 2.4 and 2.6 below and the REIT Group as a whole must satisfy the conditions set out in paragraph 2.5.

137 2.1 Company conditions The principal company must be solely UK resident for tax purposes, admitted to trading on a recognised stock exchange and it must not be an open-ended investment company. In addition to being admitted to trading on a recognised stock exchange, the principal company’s shares must either be listed on such an exchange throughout each accounting period or traded on such an exchange in each accounting period. The listed/traded requirement is relaxed in the REIT Group’s first three accounting periods but trading must occur before the end of the third accounting period and thereafter shares in the Company must be traded or listed as described above.

The principal company must also not (apart from in circumstances where it is only a close company because it has as a participator an Institutional Investor) be a “close company” (as defined in section 439 of CTA 2010 as amended by section 528(5) of CTA 2010) (the “close company condition”). In summary, the close company condition amounts to a requirement that the company cannot be under the control of five or fewer participators, or of participators who are directors (and participators for these purposes is defined in section 454 of CTA 2010), subject to certain exceptions. The close company condition is relaxed for the REIT Group’s first three years.

2.2 Share capital restrictions The principal company must have only one class of ordinary share in issue. The only other shares it may issue are non-voting restricted preference shares, including shares which would be restricted preference shares but for the fact that they carry a right of conversion into shares or securities in the company.

2.3 Borrowing restrictions The principal company must not be party to any loan in respect of which the lender is entitled to interest which exceeds a reasonable commercial return on the consideration lent or where the interest depends to any extent on the results of any of its business or on the value of any of its assets (subject to exceptions). In addition, the amount repayable must either not exceed the amount lent or must be reasonably comparable with the amount generally repayable (in respect of an equal amount lent) under the terms of issue of securities listed on a recognised stock exchange.

2.4 REIT financial statements The principal company must prepare financial statements (the “Financial Statements”) in accordance with statutory requirements set out in Sections 532 and 533 of CTA 2010 and submit these to HMRC. In particular, the Financial Statements must contain the information about the Qualifying Property Rental Business and the Residual Business separately.

2.5 Qualifying Property Rental Business Conditions (including the Balance of Business conditions) The REIT Group must satisfy, amongst other things, the following conditions in respect of each accounting period during which it is to be treated as a REIT Group: (a) the Qualifying Property Rental Business must throughout the accounting period involve at least three properties (and for these purposes, the relevant REIT legislation defines a single property as one that is designed, fitted or equipped for the purposes of being rented, and which is rented or available for rent as a separate commercial or residential unit separate from any other unit); (b) throughout the accounting period no one property (applying the definition of single property above) may represent more than 40 per cent of the total value of the properties involved in the Qualifying Property Rental Business. Assets must be valued in accordance with international accounting standards and at fair value when international accounting standards offers a choice between a cost basis and a fair value basis; (c) the income profits arising from the Qualifying Property Rental Business must represent at least 75 per cent of the REIT Group’s total income profits for the accounting period (the “75 per cent profits condition”). Profits for this purpose means profits calculated in accordance with International Accounting Standards, before deduction of tax and excluding, broadly, gains and

138 losses on the disposal of property and gains and losses on the revaluation of properties, changes in fair values of hedging derivatives, and certain exceptional items; and (d) at the beginning of the accounting period the value of the assets in the Qualifying Property Rental Business must represent at least 75 per cent of the total value of assets held by the REIT Group (the “75 per cent assets condition”). Cash held on deposit and gilts or relevant UK REIT shares are included in the value of the assets relating to the Qualifying Property Rental Business for the purpose of meeting this condition.

In addition, the Qualifying Property Rental Business does not include any property which is classified as owner-occupied in accordance with generally accepted accounting practice (subject to certain exceptions).

2.6 Distribution condition The principal company will be required (to the extent permitted by law) to distribute to shareholders by way of cash or stock dividend, on or before the filing date for the principal company’s tax return for the accounting period in question, at least 90 per cent of the Group’s property rental business profits as calculated for tax purposes (broadly, calculated using normal UK corporation tax rules) of the UK resident members of the REIT Group in respect of their Qualifying Property Rental Business and of the non-UK resident members of the REIT Group insofar as they are derived from their UK Qualifying Property Rental Business arising in each accounting period (the “90 per cent distribution condition”). Failure to meet this requirement will result in a tax charge calculated by reference to the extent of the failure, although in certain circumstances where the profits of the period are increased from the amount originally shown in the Financial Statements delivered to HMRC, this charge can be mitigated if an additional dividend is paid within a specified period which brings the amount of profits distributed up to the required level. For the purpose of satisfying the distribution condition, any dividend withheld in order to comply with the 10 per cent rule (as described below) will be treated as having been paid.

3 INVESTMENTS IN OTHER REITS Finance Act 2013 enacted changes to Part 12 of CTA 2010 in order to facilitate investments by REITs in other REITs. The legislation exempts a distribution of profits or gains of the Qualifying Property Rental Business of one REIT to another REIT. The investing REIT is required to distribute 100 per cent of the distributions received from the investment to its shareholders. The investment by one REIT in another REIT will effectively be treated as a Qualifying Property Rental Business asset for the purposes of the 75 per cent assets condition.

4 EFFECT OF BECOMING A REIT 4.1 Tax exemption As a REIT, the REIT Group will not pay UK corporation tax on profits and gains from the Qualifying Property Rental Business. Corporation tax will still apply in the normal way in respect of the Residual Business.

Corporation tax could also be payable were the shares in a member of the REIT Group to be sold (as opposed to property involved in the Qualifying Property Rental Business). The REIT Group will also continue to pay all other applicable taxes including VAT, stamp duty land tax, stamp duty, PAYE, rates and national insurance contributions in the normal way.

4.2 Dividends When the principal company of a REIT pays a dividend, that dividend will be a PID to the extent necessary to satisfy the 90 per cent distribution condition (and where it relates to profits or gains of the Qualifying Property Rental Business of the members of the Group, other than gains arising to non-UK resident members of the Group). If the dividend exceeds the amount required to satisfy that test, the REIT may determine that all or part of the balance is a Non-PID Dividend to the extent there are any profits of the current or previous years which derive from activities of a kind in respect of which corporation tax is chargeable in relation to income (e.g. profits of the Residual Business) and reserves representing accounting profits in excess of taxable profits, for example, where capital allowances

139 exceed depreciation in an accounting period. Any remaining balance of the dividend (or other distribution) will generally be deemed to be a PID, firstly in respect of the remaining income profits of the Qualifying Property Rental Business for the current year or previous years and secondly, in respect of capital gains which are exempt from tax by virtue of the REIT Regime (in either case distributed as a PID). Any remaining balance will be attributed to other Non-PID Dividends.

Subject to certain exceptions, PIDs will be subject to withholding tax at the basic rate of income tax (currently 20 per cent). Further details of the United Kingdom tax treatment of certain categories of shareholder while the Group is in the REIT Regime are contained in Section B of this Part 8.

If the REIT Group ceases to be a REIT, dividends paid by the principal company may nevertheless be PIDs to the extent they are paid in respect of profits and gains of the Qualifying Property Rental Business that arose whilst the REIT Group was within the REIT Regime.

4.3 Interest cover ratio A tax charge will arise if, in respect of any accounting period, the REIT Group’s ratio of property rental business profits in respect of its Qualifying Property Rental Business as calculated for tax purposes but before capital allowances and financing costs (its “Property Profits”) to financing costs in respect of its Qualifying Property Rental Business (its “Property Financing Costs”) is less than 1.25:1. The amount (if any) by which the Property Financing Costs exceeds the amount of those costs which would cause that ratio to equal 1.25 is chargeable to corporation tax (subject to a cap of 20 per cent of the REIT Group’s Property Profits).

4.4 The “10 per cent rule” The principal company of a REIT may become subject to an additional tax charge if it pays a dividend to, or in respect of, a person beneficially entitled, directly or indirectly, to 10 per cent or more of the principal company’s dividends or share capital or that controls, directly or indirectly, 10 per cent or more of the voting rights in the principal company. Shareholders should note that this tax charge only applies where a dividend is paid to persons that are companies or are treated as bodies corporate in accordance with the law of an overseas jurisdiction with which the UK has a double taxation agreement, or in accordance with such a double taxation agreement. It does not apply where a nominee has such a 10 per cent or greater holding unless the persons on whose behalf the nominee holds the shares meets the test in their own right.

This tax charge will not be incurred if the principal company has taken reasonable steps to avoid paying dividends to such a person. HMRC guidance describes certain actions that might be taken to show it has taken such “reasonable steps”. One of these actions is to include restrictive provisions in the principal company’s articles of association to address this requirement.

4.5 Property development and property trading by a REIT A property development undertaken by a member of the REIT Group can be within the Qualifying Property Rental Business provided certain conditions are met. However, if the costs of the development exceed 30 per cent of the fair value of the asset at the later of: (a) the date on which the relevant company becomes a member of a REIT, and (b) the date of the acquisition of the development property, and the REIT sells the development property within the three years beginning with the completion of the development, the property will be treated as never having been part of the Qualifying Property Rental Business for the purposes of calculating any gain arising on disposal of the property (and any tax exempt market value deemed disposal of the property on entry to the REIT Regime will be ignored). Any gain will be chargeable to corporation tax.

If a member of the REIT Group disposes of a property (whether or not a development property) in the course of a trade, the property will be treated as never having been within the Qualifying Property Rental Business for the purposes of calculating any profit arising on disposal of the property (and any tax exempt market value deemed disposal of the property on entry to the REIT Regime will be ignored). Any profit will be chargeable to corporation tax.

140 4.6 Movement of assets in and out of the Qualifying Property Rental Business In general, where an asset owned by a UK resident member of the REIT Group and used for the Qualifying Property Rental Business begins to be used for the Residual Business, there will be a tax exempt market value disposal of the asset. Where an asset owned by a UK resident member of the REIT Group and used for the Residual Business begins to be used for the Qualifying Property Rental Business, this will generally constitute a taxable market value disposal of the asset for UK corporation tax purposes, except for capital allowances purposes.

4.7 Joint ventures The REIT Regime also makes certain provisions for corporate joint ventures. If one or more members of the REIT Group are beneficially entitled, in aggregate, to at least 40 per cent of the profits available for distribution to equity holders in a joint venture company and at least 40 per cent of the assets of the joint venture company available to equity holders in the event of a winding up, that joint venture company (or its subsidiaries) is carrying on a Qualifying Property Rental Business which satisfies the 75 per cent profits condition and the 75 per cent assets condition (the “JV company”) and certain other conditions are satisfied, the principal company may, by giving notice to HMRC, elect for the assets and income of the JV company to be included in the Qualifying Property Rental Business for tax purposes (on a proportionate basis). In such circumstances, the income of the JV company will count towards the 90 per cent distribution condition and the 75 per cent profits condition, and its assets will count towards the 75 per cent assets condition (on a proportionate basis).

The REIT Group’s share of the underlying income and gains arising from any interest in a tax transparent vehicle carrying on a Qualifying Property Rental Business, including offshore unit trusts or partnerships, should automatically fall within the REIT tax exemption, and will also count towards the 75 per cent profits and assets conditions, provided the REIT Group is entitled to more than 20 per cent of the profits and assets of the relevant tax transparent vehicle. The REIT Group’s share of the Qualifying Property Rental Business profits arising will also count towards the 90 per cent distribution condition.

4.8 Acquisitions and takeovers If a REIT is taken over by another REIT, the acquired REIT does not necessarily cease to be a REIT and will, provided the conditions are met, continue to enjoy tax exemptions in respect of the profits of its Qualifying Property Rental Business and capital gains on disposal of properties in the Qualifying Property Rental Business.

The position is different where a REIT is taken over by an acquirer which is not a REIT. In these circumstances, the acquired REIT is likely in most cases to fail to meet the requirements for being a REIT (unless the acquirer qualifies as an Institutional Investor and the REIT’s shares continue to be admitted to trading on a recognised stock exchange and are either listed or traded) and will therefore be treated as leaving the REIT Regime at the end of its accounting period preceding the takeover and ceasing from the end of that accounting period to benefit from tax exemptions on the profits of its Qualifying Property Rental Business and capital gains on disposal of property forming part of its Qualifying Property Rental Business. The properties in the Qualifying Property Rental Business are treated as having been sold and reacquired at market value for the purposes of corporation tax on chargeable gains immediately before the end of the preceding accounting period. These disposals should be tax exempt as they are deemed to have been made at a time when the acquired REIT was still in the REIT Regime and future capital gains on the relevant assets will therefore be calculated by reference to a base cost equivalent to this market value. If the acquired REIT ends its accounting period immediately prior to the takeover becoming unconditional in all respects, dividends paid as PIDs before that date should not be recharacterised retrospectively as normal dividends.

4.9 Certain tax avoidance arrangements If HMRC believes that a member of a REIT Group has been involved in certain tax avoidance arrangements, it may cancel the tax advantage obtained and, in addition, impose a tax charge equal to the amount of the tax advantage. These rules apply to both the Residual Business and the Qualifying Property Rental Business. In addition, if HMRC considers that the circumstances are sufficiently

141 serious or if two or more notices in relation to the obtaining of a tax advantage are issued by HMRC in a ten year period, it may require the REIT Group to exit the REIT Regime.

5 EXIT FROM THE REIT REGIME The principal company of the REIT Group can give notice to HMRC that it wants to leave the REIT Regime at any time. The Board retains the right to decide that the REIT Group should exit the REIT Regime at any time in the future without shareholder consent if it considers this to be in the best interests of the REIT Group.

If the REIT Group (or a member of the REIT Group) voluntarily leaves the REIT Regime within ten years of joining and disposes of any property that was involved in its Qualifying Property Rental Business within two years of leaving, any uplift in the base cost of the property as a result of the deemed disposals on entry into and exit from the REIT Regime (or as a movement from the Qualifying Property Rental Business to the Residual Business) is disregarded in calculating the gain or loss on the disposal.

It is important to note that it cannot be guaranteed that the Company or the REIT Group will comply with all of the REIT conditions and that the REIT Regime may cease to apply in some circumstances. HMRC may require the REIT Group to exit the REIT Regime if: (a) it regards a breach of the conditions relating to the REIT Regime (including in relation to the Qualifying Property Rental Business), or an attempt to obtain a tax advantage, as sufficiently serious; or (b) the REIT Group or the Company have committed a certain number of breaches of the conditions in a specified period; or (c) HMRC has given members of the REIT Group two or more notices in relation to the obtaining of a tax advantage within a ten year period of the first notice having been given.

In addition, if the conditions for REIT status relating to the share capital of the principal company and the prohibition on entering into loans with abnormal returns are breached or the principal company ceases to be UK resident, becomes dual resident or an open-ended company, or (in certain circumstances) ceases to satisfy the close company condition (as described above) or ceases to be listed or traded, it will automatically lose REIT status. Where the REIT Group automatically loses REIT status or is required by HMRC to leave the REIT Regime within ten years of joining, HMRC has wide powers to direct how it is to be taxed, including in relation to the date on which the REIT Group is treated as exiting the REIT Regime.

Shareholders should note that it is possible that the REIT Group could lose its status as a REIT as a result of actions by third parties (for example, in the event of a successful takeover by a company that is not a REIT, unless the acquirer qualifies as an Institutional Investor and the REIT’s shares continue to be admitted to trading on a recognised stock exchange and are either listed or traded) or other circumstances outside the REIT Group’s control.

142 SECTION B: UK TAXATION OF SHAREHOLDERS AFTER ENTRY INTO THE REIT REGIME

1 INTRODUCTION Under the REIT Regime, corporate entities with a UK Qualifying Property Rental Business do not pay UK direct taxes on income and capital gains from their Qualifying Property Rental Businesses in the UK and elsewhere (the “Tax Exempt Business”) provided that certain conditions are satisfied. Instead, distributions relating to the Tax Exempt Business (as determined by the legislation), and in particular distributions required to meet the minimum distributions requirement under the UK REIT rules, are treated for UK tax purposes as UK property income in the hands of Shareholders. However, corporation tax is still payable in the normal way in respect of income and gains from the Company’s business (generally including any property trading business) not included in the Tax Exempt Business. Dividends relating to this business (as determined by the legislation) are treated for UK tax purposes as normal dividends. A dividend paid by the Company relating to profits or gains of the Tax Exempt Business of the members of the Group is referred to in this section as a Property Income Distribution (“PID”). Any normal dividend paid by the Company out of the profits of the Non Tax exempt Business is referred to as a “Non-PID Dividend”.

The Company and members of the Group do not expect to pay UK direct taxes on income and chargeable gains from their Qualifying Property Rental Businesses in the UK and elsewhere.

A Group Company owns property in Germany and is subject to tax in Germany in respect of this property. For UK tax purposes any income and capital gains from the German property is exempt from UK tax under the REIT Regime. However, the Group does still have a liability to German tax in respect of these assets.

The following paragraphs relate only to certain limited aspects of the United Kingdom taxation treatment of PIDs and Non-PID Dividends paid by the Company, and to disposals of Ordinary Shares in the Company. The statements are not applicable to all categories of Shareholders, and in particular are not addressed to (i) Shareholders who do not hold their Ordinary Shares as capital assets or investments or who are not the absolute beneficial owners of those shares or dividends in respect of those shares, (ii) some Shareholders who own (or are deemed to own) ten per cent or more of the share capital or of the voting power of the Company or are entitled to ten per cent or more of the Company’s distributions, (iii) special classes of Shareholders such as dealers in securities, broker- dealers, insurance companies, trustees of certain trusts and investment companies, (iv) Shareholders who hold Ordinary Shares as part of hedging or commercial transactions, (v) Shareholders who hold Ordinary Shares in connection with a trade, profession or vocation carried on in the UK (whether through a branch or agency or otherwise), (vi) Shareholders who hold Ordinary Shares acquired by reason of their employment, (vii) Shareholders who hold Ordinary Shares in a personal equity plan or an individual savings account; or (viii) Shareholders who are subject to UK taxation on a remittance basis, or (ix) Shareholders who are not resident in the UK for tax purposes (save where express reference is made to non-UK resident Shareholders).

Prospective investors who are in any doubt about their tax position, or who are subject to tax in a jurisdiction other than the United Kingdom, should consult their own appropriate independent professional adviser without delay, particularly concerning their tax liabilities on PIDs, whether they are entitled to claim any repayment of withholding tax, and, if so, the procedure for doing so.

2 UK TAXATION OF PIDS 2.1 UK taxation of Shareholders who are individuals Subject to certain exceptions, a PID will generally be treated in the hands of Shareholders who are individuals as the profit of a single UK property business (as defined in section 264 Part 3 of the Income Tax (Trading and Other Income) Act 2005). A PID is, together with any property income distribution from any other company to which Part 12 of CTA 2010 applies, treated as a separate UK property business. Income from any other UK property business (a “different UK property business”) carried on by the relevant Shareholder must be accounted for separately. This means that any surplus expenses from a Shareholder’s different UK property business cannot be offset against a PID as part of a single calculation of the profits of the Shareholder’s UK property business. A Shareholder who is subject to income tax at the basic rate will be liable to pay income tax at 20 per cent on the PID. Higher

143 rate taxpayers will be subject to tax at 40 per cent and additional rate taxpayers at 45 per cent No dividend tax credit will be available in respect of PIDs. However, a tax credit will be available in respect of the basic rate tax withheld by the Company (where required) on the PID.

Please see also section 3 (Withholding tax and PIDs) below.

2.2 UK taxation of UK tax resident corporate Shareholders Subject to certain exceptions, a PID will generally be treated in the hands of Shareholders who are within the charge to corporation tax as profit of a property business (as defined in Part 4 of CTA 2009) (“Part 4 property business”). A PID is, together with any property income distribution from any other company to which Part 12 of CTA 2010 applies, treated as a separate Part 4 property business. Income from any other Part 4 property business (a ‘‘different Part 4 property business’’) carried on by the relevant Shareholder must be accounted for separately. This means that any surplus expenses from a Shareholder’s different Part 4 property business cannot be offset against a PID as part of a single calculation of the Shareholder’s property business profits.

The main rate of UK corporation tax on such profit is currently 20 per cent (due to reduce to 19 per cent from 1 April 2017 and 18 per cent from 1 April 2020).

Please see also paragraph 3 (Withholding tax and PIDs) below.

2.3 UK taxation of Shareholders who are not resident for tax purposes in the UK Where a Shareholder who is not resident for tax purposes in the UK receives a PID, the PID will generally be chargeable to UK income tax as profit of a UK property business and this tax will generally be collected by way of a withholding tax under SI 2006/2867. Under Section 548(7) of CTA 2010, this income is expressly not non-resident landlord income for the purposes of regulations under section 971 of the Income Tax Act 2007.

Prospective non-UK tax resident Shareholders should consult their own professional advisers on the implications in the relevant jurisdictions of any non-UK implications of receiving PIDs.

Please see also paragraph 3 (Withholding tax and PIDs) below.

3 WITHHOLDING TAX AND PIDS 3.1 General Subject to certain exceptions summarised at paragraph 3.4 below, the Company is required to withhold income tax at source at the basic rate (currently 20 per cent) from its PIDs (whether paid in cash or in the form of a stock dividend). The Company will provide Shareholders with a certificate setting out the gross amount of the PID, the amount of tax withheld, and the net amount of the PID.

3.2 Shareholders solely resident in the UK Where tax has been withheld at source, Shareholders who are individuals may, depending on their particular circumstances, be liable to further tax on their PID at their applicable marginal rate, incur no further liability on their PID, or be entitled to claim repayment of some or all of the tax withheld on their PID. Shareholders who are corporate entities will generally be liable to pay corporation tax on their PID (see paragraph 2.2 above) and if (exceptionally) income tax is withheld at source, the tax withheld can be set against their liability to corporation tax, or income tax which they are required to withhold, in the accounting period in which the PID is received.

3.3 Shareholders who are not resident for tax purposes in the UK It is not possible for a Shareholder to make a claim under a double taxation convention for a PID to be paid by the Company gross or at a reduced rate. The right of a Shareholder to claim repayment of any part of the tax withheld from a PID will depend on the existence and terms of any double taxation convention between the UK and the country in which the Shareholder is resident. Shareholders who are not resident for tax purposes in the UK should obtain their own tax advice concerning tax liabilities on PIDs received from the Company.

144 3.4 Exceptions to requirement to withhold income tax In certain circumstances the Company is not required to withhold income tax at source from a PID. These include where the Company reasonably believes that the person beneficially entitled to the PID is a company resident for tax purposes in the UK, or a charity or a company resident for tax purposes outside the UK with a permanent establishment in the UK which is required to bring the PID into account in computing its chargeable profits. They also include where the Company reasonably believes that the PID is paid to the scheme administrator of a registered pension scheme, the sub- scheme administrator of certain pension sub-schemes, the account manager of an Individual Savings Account (ISA), the plan manager of a Personal Equity Plan (PEP), or the account provider for a Child Trust Fund, in each case, provided the Company reasonably believes that the PID will be applied for the purposes of the relevant fund, scheme, account or plan. In order to pay a PID without withholding tax, the Company will need to be satisfied that the Shareholder concerned is entitled to that treatment. For that purpose the Company will require such Shareholders to submit a valid claim form (copies of which may be obtained on request from the Company’s Registrars or the registered office of the Company). Shareholders should note that the Company may seek recovery from Shareholders if the statements made in their claim form are incorrect and the Company suffers tax as a result. The Company will, in some circumstances, suffer tax if its reasonable belief as to the status of the Shareholder turns out to have been mistaken.

4 UK TAXATION OF NON-PID DIVIDENDS 4.1 General Non-PID Dividends are treated in exactly the same way as dividends paid by a Company which has not elected for REIT status, whether in the hands of individual or corporate Shareholders and regardless of whether the Shareholder is resident for tax purposes in the UK. The Company is not required to withhold tax when paying a Non-PID Dividend (whether in cash or in the form of a stock dividend).

4.2 UK taxation of Shareholders who are individuals Currently, an individual Shareholder who is resident in the UK (for tax purposes) and who receives a Non-PID Dividend from the Company will generally be entitled to a tax credit which such Shareholder may set off against his total income tax liability on the dividend. The tax credit will be equal to ten per cent of the aggregate of the Non-PID Dividend (the “Cash Dividend”) and the tax credit (the “Gross Dividend”), which is also equal to one-ninth of the Cash Dividend received. A UK resident individual Shareholder who is liable to income tax at the basic rate will be subject to tax on the dividend at the rate of ten per cent of the Gross Dividend, so that the tax credit will satisfy in full such Shareholder’s liability to income tax on the Cash Dividend.

A UK resident individual Shareholder who is liable to income tax at the higher rate will be liable to tax on the Gross Dividend at the current rate of 32.5 per cent. A UK resident individual Shareholder who is liable to tax at the “additional” rate will be liable to tax on the Gross Dividend at the rate of 37.5 per cent. The Gross Dividend will generally be regarded as the top slice of the Shareholder’s income. After taking into account the 10 per cent tax credit, a higher rate tax payer will have to account for additional tax equal to 22.5 per cent of the Gross Dividend (which is also equal to 25 per cent of the Cash Dividend received). An individual paying “additional” rate income tax will have to account, after taking into account the 10 per cent tax credit, for additional tax equal to 27.5 per cent of the Gross Dividend (which is also equal to approximately 30.56 per cent of the Cash Dividend received). It will not be possible for UK resident Shareholders to claim repayment of the tax credit in respect of Non-PID Dividends.

Provisions announced in the UK Summer Budget 2015 and contained in the draft clauses of Finance Bill 2016 published by the Government on 9 December 2015 will, if passed by Parliament, change the tax treatment of Non-PID Dividends paid from 6 April 2016 to individual shareholders. The 10 per cent dividend tax credit will be abolished and individuals will be given a £5,000 dividend tax allowance (the “Allowance”). Dividend income received in excess of the Allowance will be taxed at 7.5 per cent for basic rate tax payers, 32.5 per cent for higher rate tax payers and 38.1 per cent for “additional” rate tax payers. In determining the relevant tax band for Non-PID Dividends, the total Non-PID Dividends for the tax year (including the part within the Allowance) will be treated as the highest part of the individual’s total income for income tax purposes.

145 4.3 UK taxation of UK resident corporate Shareholders Shareholders who are within the charge to UK corporation tax will be subject to corporation tax on Non-PID Dividends paid by the Company, unless the Non-PID Dividends fall within an exempt class and certain other conditions are met. Whether an exempt class applies and whether the other conditions are met will depend on the circumstances of the particular Shareholder, although it is expected that the Non-PID Dividends paid by the Company would normally be exempt. Shareholders within the charge to UK corporation tax will not be able to claim repayment of tax credits attaching to Non-PID Dividends.

4.4 UK taxation of other UK tax resident Shareholders Other UK resident Shareholders who are not liable to UK tax on Non-PID Dividends, including pension funds and charities, are not entitled to claim repayment of the tax credit.

4.5 Taxation of Shareholders who are not resident in the UK for tax purposes Shareholders who are resident outside the UK for tax purposes will not generally be able to claim repayment from HMRC of any part of the tax credit attaching to Non-PID Dividends received from the Company, although this will depend on the existence and terms of any double taxation convention between the UK and the country in which such Shareholder is resident. A Shareholder resident outside the UK may also be subject to foreign taxation on dividend income under local law. Shareholders who are not solely resident for tax purposes in the UK should obtain their own tax advice concerning their tax position on Non-PID Dividends received from the Company.

5 UK TAXATION OF CHARGEABLE GAINS IN RESPECT OF ORDINARY SHARES IN THE COMPANY 5.1 General For the purpose of UK tax on chargeable gains, the amount paid by a Shareholder for Ordinary Shares will constitute the base cost of his holding. If a Shareholder disposes of all or some of his Ordinary Shares, subject to the availability of any exemptions, reliefs and/or allowable losses, a liability to tax on chargeable gains may arise. This will depend on the base cost and incidental costs of acquisition and disposal which can be allocated against the proceeds, and also the Shareholder’s circumstances and any reliefs to which they are entitled. In the case of corporate Shareholders, indexation allowance will apply to the amount paid for the Ordinary Shares.

5.2 UK taxation of Shareholders who are UK tax resident individuals Subject to the availability of any exemptions, reliefs and/or allowable losses, a gain on disposal of Ordinary Shares by individuals, trustees and personal representatives will generally be subject to capital gains tax at the rate of up to 28 per cent.

5.3 UK taxation of UK tax resident corporate Shareholders Subject to the availability of any exemptions, reliefs and/or allowable losses, a gain on disposal of Ordinary Shares by a Shareholder within the charge to UK corporation tax will generally be subject to corporation tax at the current rate of 20 per cent (due to reduce to 19 per cent from 1 April 2017 and to 18 per cent from 1 April 2020).

5.4 UK taxation of Shareholders who are not resident in the UK for tax purposes Shareholders who are not resident in the UK for tax purposes may not, depending on their personal circumstances, be liable to UK taxation on chargeable gains arising from the sale or other disposal of their Ordinary Shares (unless they carry on a trade, profession or vocation in the UK through a branch or agency with which their Ordinary Shares are connected or, in the case of a corporate Shareholder, through a permanent establishment in connection with which the Ordinary Shares are held).

Individual Shareholders who are temporarily not UK resident and who dispose of all or part of their Ordinary Shares during that period may be liable to UK capital gains tax on chargeable gains realised on their return to the UK, subject to any available exemptions or reliefs.

146 Shareholders who are resident for tax purposes outside the UK may be subject to foreign taxation on capital gains depending on their circumstances.

6 UK STAMP DUTY AND UK STAMP DUTY RESERVE TAX (“SDRT”) The statements in this section are intended as a general guide to the current UK stamp duty and SDRT position for shares admitted to trading on AIM and not listed on any other market.

There is no UK stamp duty or SDRT on the issue or transfer of shares admitted to trading on a recognised growth market, providing they are not listed on any other market. HMRC has confirmed that AIM is a recognised growth market for the purposes of this exemption. Therefore as long as AIM remains a recognised growth market and the shares in the Company are not listed on any other market, there should be no UK stamp duty or stamp duty reserve tax (‘SDRT’) on the issue or transfer of shares in the Company.

7 ISAS AND SIPPS It is expected that the Ordinary Shares will be eligible for inclusion in ISAs (subject to applicable subscription limits) provided they have been acquired by purchase in the market and that they will be permissible assets for SIPPs.

Prospective purchasers of Ordinary Shares should consult their own tax advisers with respect to the tax consequences to them of acquiring, holding and disposing of Ordinary Shares.

147 SECTION C: CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a discussion of certain US federal income tax considerations applicable to the purchase, ownership and disposition of Ordinary Shares by US Holders (defined below) that purchase Ordinary Shares in this offering and hold such shares as capital assets. This discussion does not cover all aspects of US federal income taxation that may be relevant to the purchase, ownership or disposition of the Ordinary Shares by prospective investors in light of their particular circumstances. In particular, this discussion does not address all of the tax considerations that may be relevant to certain types of investors subject to special treatment under US federal income tax laws such as banks and other financial institutions, tax-exempt organisations, tax-deferred accounts, dealers in securities or currencies, traders in securities that elect to use a mark-to-market method of accounting, persons that own (or are deemed to own) 10 per cent or more (by voting power) shares in the Company, regulated investment companies, real estate investment trusts, cooperatives, persons holding Ordinary Shares as part of a hedging, integrated, conversion or constructive sale transaction or a straddle, persons liable for alternative minimum tax and US Holders (as defined below) whose functional currency is not the US dollar.

As used herein, the term “US Holder” means a beneficial owner of Ordinary Shares that is for US federal income tax purposes, (i) a citizen or individual resident of the United States, (ii) a corporation, or other entity treated as a corporation, created or organised in or under the laws of the United States or any state thereof, (iii) an estate the income of which is subject to US federal income tax without regard to its source, or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or that is otherwise treated as a United States person.

This summary does not address holders of equity interests in a US Holder. If a partnership (or any other entity treated as fiscally transparent for US federal income tax purposes) holds Ordinary Shares, the tax treatment of a partner in such partnership generally will depend upon the status of the partner and the activities of the partnership. Any such partner or partnership should consult their tax advisors as to the US federal income tax consequences to them of the acquisition, ownership and disposition of Ordinary Shares.

This summary is based on the tax laws of the United States including the Internal Revenue Code of 1986, its legislative history, existing and proposed regulations promulgated thereunder, published rulings and court decisions, all as currently in effect and all of which are subject to change at any time, possibly with retroactive effect. This discussion does not address any state, local or non-US tax considerations, or any US federal tax considerations other than income tax considerations (such as estate or gift tax considerations or the Medicare contribution tax on certain investment income).

Shareholders considering the purchase of Ordinary Shares are urged to consult their own tax advisors concerning the particular US federal income tax and other consequences of the purchase, ownership and disposition of the Ordinary Shares, as well as any consequences arising under state, local and non-US tax laws.

1 Passive Foreign Investment Company Status and Related Tax Consequences The Company expects to be a PFIC for US federal income tax purposes. A non-US corporation is classified as a PFIC for US federal income tax purposes for each taxable year in which (a) 75 per cent or more of its gross income is passive income (as specially defined for this purpose) or (b) on average for such taxable year, 50 per cent or more (by value) of its gross assets either produce or are held for the production of passive income. For purposes of the PFIC provisions, passive income generally includes rents and gains from the sale of property held for investment. The Company’s subsidiaries will not be considered PFICs due to electing non-corporate status for US federal tax purposes.

A US Holder of Ordinary Shares is generally subject to a special tax computation and interest charge if such holder receives “excess distributions” from the Company or recognises gain on the sale of Ordinary Shares. An excess distribution is any distribution received on Ordinary Shares in a taxable year in excess of 125 per cent of the average annual distributions received in the three preceding taxable years (or, if shorter, the US Holder’s holding period for the Ordinary Shares). Any gain realised

148 on the sale, exchange or other disposition of Ordinary Shares generally is subject to the special rules applicable to excess distributions. Under these special rules: 1. the excess distribution or gain would be allocated rateably over the aggregate holding period for the Ordinary Shares; 2. the amount allocated to the current taxable year would be taxed as ordinary income and would not be “qualified dividend income”; and 3. the amount allocated to each earlier taxable year would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and would be increased by an additional tax equal to interest on the resulting tax deemed deferred with respect to each such other taxable year.

Pursuant to the specific provisions of the PFIC rules, a taxpayer may realise gain on the disposition of Ordinary Shares if the securities are disposed of by a holder whose securities are attributed to the US Holder, if the securities are pledged as security for a loan, transferred by gift or death, or are subject to certain corporate distributions.

Special rules apply with respect to the amount of the foreign tax credit that a US Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a US Holder should consult with its own tax advisor regarding the availability of the foreign tax credit with respect to distributions by a PFIC.

The tax regime described above does not apply if a US Holder is eligible to, and so elects, either the qualified electing fund “QEF”or“mark-to-market” elections.

The QEF election would require an electing US Holder, in lieu of the excess distribution regime described above, (i) to include in income each year the holder’s proportionate share of the Company’s earnings and profits for such year regardless of whether these earnings and profits are actually distributed to that US Holder and (ii) to comply with specified information reporting requirements. Any gain subsequently recognised upon the sale by that US Holder of the Ordinary Shares generally would be taxed as capital gain and the denial of the basis step-up at death that generally applies to PFIC shares would not apply.

The QEF election is only available to a US Holder if the Company provides information concerning its earnings (as determined under US tax principles) to investors on an annual basis. The Company does not anticipate that it will make that information available to US Holders, and consequently US Holders will not be able to make a QEF election.

A US Holder may make a mark-to-market election if the Ordinary Shares constitute “marketable stock” for PFIC purposes. The Ordinary Shares will be considered marketable if they are regularly traded on an established securities market. Qualifying securities markets for this purpose include any exchange or other market the IRS determines has trading, listing, financial disclosure and other rules adequate to carry out the purposes of the mark-to-market election. The IRS has not determined whether AIM qualifies as such an exchange. AIM may qualify as such an exchange, but no assurances can be given in this regard. Further, the Ordinary Shares must be regularly traded in order to retain their status as “marketable stock”. Please consult your tax advisor as to whether the Ordinary Shares are eligible for the mark-to-market election.

If the Ordinary Shares are marketable under the rules described above and a US Holder makes the mark-to-market election, the US Holder generally: (i) includes as income for each taxable year the excess, if any, of the fair market value of the Ordinary Shares held at the end of the taxable year over the adjusted tax basis of such Ordinary Shares; and (ii) deducts as a loss the excess, if any, of the adjusted tax basis of such Ordinary Shares over the fair market value of such Ordinary Shares held at the end of the taxable year, but only to the extent of the amount previously included in income as a result of the mark-to-market election. The US Holder’s adjusted tax basis in the Ordinary Shares is adjusted to reflect any income or loss resulting from the mark-to-market election.

149 US Holders may be subject to reporting requirements (including a requirement to file IRS Form 8621 on an annual basis) in relation to their acquisition, ownership and/or disposition of Ordinary Shares due to the Company’s status as a PFIC. If a US Holder fails to timely file a Form 8621 for a taxable year, the statute of limitations on the assessment and collection of the holder’s US federal income taxes for such year may not close before the date which is three years after the date such form is filed. US Holders should consult their own tax advisers regarding any filing or reporting obligations they may have as a result of their purchase, ownership or disposition of Ordinary Shares. Failure to comply with certain filing or reporting obligations could result in the imposition of substantial penalties.

SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE PFIC RULES TO THEIR PARTICULAR SITUATION, INCLUDING WITH REGARD TO SPECIAL TAX RETURN FILING REQUIREMENTS.

2 Dividends Subject to the PFIC rules discussed above, distributions of cash or property in respect of the Ordinary Shares will constitute dividends for US federal income tax purposes to the extent paid out of the Company’s current or accumulated earnings and profits (as determined for US federal income tax purposes) and will be includible in each US Holder’s gross income upon receipt. Distributions in excess of earnings and profits will be treated first as a return of capital (with a corresponding reduction in each US Holder’s tax basis in the Ordinary Shares) to the extent of each US Holder’s tax basis in the Ordinary Shares on which the distribution was made (determined separately for each share), and then as gain from the sale or exchange of such Ordinary Shares. Because the Company expects to be a PFIC, unless the mark-to-market election described above is made, any distributions (including distributions in excess of earnings and profits) that constitute “excess distributions” are subject to the “excess distribution” regime discussed above.

Distributions on Ordinary Shares will not be eligible for the dividends-received deduction for corporate US Holders and will not qualify for treatment as “qualified dividend income” (which is taxable at the rates generally applicable to long-term capital gains) for non-corporate US Holders.

3 Sale, Exchange or Other Taxable Disposition of Ordinary Shares Subject to the PFIC rules discussed above, upon the sale, exchange or other taxable disposition of Ordinary Shares, a US Holder will recognise gain or loss equal to the difference between the amount realised on such sale, exchange or taxable disposition and such US Holder’s tax basis in the Ordinary Shares sold. Gains will be ordinary and, subject to the PFIC rules discussed above, losses may be capital. The deductibility of capital losses is subject to limitations.

4 Foreign Tax Credit As described under Section B of this Part 8: The REIT Regime and Taxation, the Company must withhold United Kingdom tax on distributions relating to profits or gains of the Company’s Qualifying Property Rental Business. A US Holder generally will be entitled, at the election of such US Holder, to receive either a deduction or a credit for such United Kingdom income tax paid. This election is made on a year by year basis and applies to all foreign taxes paid (whether directly or through withholding) by a US Holder during a year.

Dividends paid by the Company on its Ordinary Shares should generally constitute foreign source income for US foreign tax credit purposes. Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a US Holder’s US federal income tax liability that such US Holder’s “foreign source” taxable income bears to such US Holder’s worldwide taxable income for the same tax year. In applying this limitation, a US Holder’s various items of income and deduction must be classified, under complex rules, as either “foreign source” or “US source”. In addition, as discussed above, special rules apply with respect to the amount of the foreign tax credit that a US Holder may claim on a distribution from a PFIC. Each US Holder is urged to consult its own tax advisor regarding the application of the foreign tax credit rules to such withholding tax and whether such withholding tax may be reduced under the United Kingdom’s double tax treaty with the United States.

150 5 Information Reporting and Backup Withholding US Holders generally will be subject to information reporting requirements with respect to dividends on Ordinary Shares and on the proceeds from the sale, exchange or disposition of Ordinary Shares that are paid within the United States or through US-related financial intermediaries, unless the US Holder is an “exempt recipient.” In addition, a US Holder may be subject to backup withholding on such payments, unless the holder provides a taxpayer identification number and a duly executed IRS Form W-9 or otherwise establishes an exemption.

Backup withholding is not an additional tax, and the amount of any backup withholding will be allowed as a credit against a US Holder’s US federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.

151 Part 9: Certain ERISA Considerations

Investors to whom these issues might apply are advised to consult their own legal counsel as to the potential applicability of ERISA to the Company and to determine for themselves whether they are permitted to participate in the Placing or to hold Ordinary Shares.

Plan Investors may not acquire Ordinary Shares pursuant to the Placing without the permission of the Company. Unless the Company otherwise consents in writing, purchasers of Ordinary Shares pursuant to the Placing will be deemed to have represented that none of the assets they use to purchase Ordinary Shares constitute “plan assets” for purposes of ERISA.

If Plan Investors were permitted to hold Ordinary Shares, the fiduciary and prohibited transaction provisions of ERISA and the prohibited transaction provisions of the Code would affect the operation of the Company and the conduct of the Company’s business and affairs unless the Company satisfied the requirements for an exemption under ERISA and the US Department of Labor regulation contained at 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA (the ‘‘Plan Asset Rules’’).

The Plan Asset Rules generally provide that when a pension, profit-sharing or other employee benefit plan subject to ERISA, a US tax-qualified retirement plan described in Section 401(a) of the Code, a US tax-qualified annuity plan described in Section 403 of the Code, or an individual retirement account or individual retirement annuity described in Section 408 of the Code (collectively hereinafter, the “Plan”or“Plans”) acquires an equity interest in an entity that is not a ‘‘publicly-offered security”ora security issued by an investment company registered under the United States Investment Company Act of 1940, as amended (the “Investment Company Act”), the Plan’s assets include not only the equity interest, but also an undivided interest in each of the underlying assets of the entity, unless an exception applies, in each case as defined in the Plan Asset Rules. These rules may apply to a non- US Company, without regard to whether it operates or conducts business in the United States.

If the assets of the Company were to be deemed to be ‘‘plan assets’’ under ERISA, this would result, among other things, in: (a) the application of the prudence and other fiduciary responsibility standards of ERISA (which impose liabilities on fiduciaries) to investments made by the Company; (b) potential liability of persons having investment discretion over the assets of Plans investing (either directly or through other Plan Investors) in the Company, should investments made by the Company not conform to ERISA’s prudence and fiduciary standards under Part 4 of Subtitle B of Title I of ERISA; (c) the possibility that certain transactions in which the Company might enter into in the ordinary course of its business and operation would constitute ‘‘prohibited transactions’’ under ERISA and the Code; (d) the assets of the Company would be subject to certain reporting and disclosure requirements under ERISA; (e) a fiduciary causing a Plan Investor to make an investment in the Company’s Ordinary Shares could be deemed to have delegated its responsibility to manage the assets of the Plan Investor; (f) various providers of fiduciary or other services to the Company, and any other parties with authority or control with respect to the Company, could be deemed to be fiduciaries of Plans investing (either directly or through other Plan Investors) in the Company; and (g) the Company, Prestbury and/or the Board becoming an ERISA fiduciary.

Because the determination of whether the Company’s assets will be deemed to be “plan assets” under ERISA is inherently factual, the Company can give no assurance that it will not be subject to ERISA or that its underlying assets will not be treated as “plan assets” under ERISA. In connection with the Placing, Plan Investors will not be able to acquire any Ordinary Shares without the written permission of the Company.

152 Part 10: Details of the Placing

1 THE PLACING This section should be read in conjunction with the Placing Statistics and Expected Timetable of Principal Events sections.

The Placing comprises the placing by Goldman Sachs and Stifel, as agents for the Selling Shareholders, of up to 110,735,013 Ordinary Shares at the Placing Price. Pursuant to the Placing, Ordinary Shares will be placed to certain institutional and professional investors in the United Kingdom and elsewhere outside the United States in reliance on Regulation S and in accordance with other applicable laws, and in the United States only to QIBs in reliance on Rule 144A or another exemption from the registration requirements of the Securities Act.

An announcement of the completion of the Placing is expected to be released by RIS announcement on or around 24 March 2016.

No new Ordinary Shares will be issued by the Company pursuant to the Placing.

The Company will not receive any of the proceeds of the sale of Ordinary Shares in the Placing, all of which will be paid to the Selling Shareholders.

Certain restrictions that apply to the circulation of this document and Ordinary Shares in jurisdictions outside the United Kingdom are described in paragraph 9 of this Part 10: Details of the Placing.

2 REASONS FOR THE PLACING On 29 September 2015, the Company announced its interim results for the six months ended 30 June 2015. The announcement included a statement that “The Board is now actively engaged with the Company’s six major shareholders to discuss how best to widen the investor base”. The Company’s rationale for seeking to widen its shareholder base through the Placing is that this will create more liquidity in the Ordinary Shares, ensure that the Company is better placed for expansion when the time is right and enable it to continue to meet its obligations under the UK REIT rules. The Company is currently considered to be a close company as defined in Part 12 of the UK Corporation Tax Act 2010. In order for the Company to retain the benefit of being a REIT, the Company’s shareholder base needs to be widened by 5 June 2017 so that it is no longer considered close.

3 COSTS OF THE PLACING Any commissions payable in respect of the Placing will be paid by the Selling Shareholders. The Company will incur certain costs in relation to the Placing, which are expected to amount to approximately £2 million.

4 SETTLEMENT ARRANGEMENTS The Placing is subject to the satisfaction of certain conditions which are typical for a transaction of this nature and which are contained in the Transaction Agreement and the Secondary Placing Agreement. Further details of the Transaction Agreement and the Secondary Placing Agreement are set out in paragraphs 6 and 7 of this Part 10: Details of the Placing.

Each new investor will be required to pay the aggregate Placing Price for the Ordinary Shares sold to the investor in the Placing (calculated as the Placing Price multiplied by the number of Placing Shares acquired), in such manner as shall be directed by the Joint Bookrunners.

It is expected that Ordinary Shares sold to investors in the Placing will be delivered in uncertificated form and that settlement will take place through CREST on or around 24 March 2016. No temporary documents of title will be issued. Dealings in advance of the crediting of the relevant CREST stock account shall be at the risk of the person concerned.

153 5 CREST CREST is a paperless settlement procedure operated by Euroclear enabling securities to be evidenced otherwise than by a certificate and transferred otherwise than by written instrument. The Articles permit the holding of Ordinary Shares under the CREST system. The Company’s Ordinary Shares have been admitted to CREST and, accordingly, settlement of transactions in Ordinary Shares, such as the Placing, may take place within the CREST system if any Shareholder so wishes.

6 TRANSACTION AGREEMENT On 14 March 2016, the Company, the Directors, the Investment Adviser and the Joint Bookrunners entered into the Transaction Agreement in connection with the Placing.

The Transaction Agreement contains certain conditions which include, inter alia, the Secondary Placing Agreement having been entered into and not having been terminated, no material adverse change in or affecting the condition (financial, operational, legal or otherwise), earnings, management, business affairs or prospects of the Company or the Group taken as a whole having occurred and the absence of any breach of representation or warranty contained in the Transaction Agreement. The Joint Bookrunners are entitled to terminate the Transaction Agreement if any of the conditions have not been satisfied or waived by the applicable date.

The Company has agreed to reimburse the Joint Bookrunners in respect of all reasonably and properly incurred expenses in connection with the Placing (including any applicable VAT which the Joint Bookrunners cannot recover), including legal fees and out-of-pocket expenses.

The Company, the Investment Adviser and each of the Directors has given certain customary representations, warranties and undertakings to the Joint Bookrunners. The Company has also given an indemnity to the Joint Bookrunners.

7 SECONDARY PLACING AGREEMENT On 14 March 2016, Goldman Sachs, Stifel and each of the Selling Shareholders entered into the Secondary Placing Agreement. Pursuant to the Secondary Placing Agreement, the Selling Shareholders have agreed, subject to certain conditions, to sell up to 110,735,013 Ordinary Shares in the Placing at the Placing Price.

The Joint Bookrunners have severally (and not jointly or jointly and severally) agreed, on an agency basis, subject to certain conditions, to use their reasonable endeavours to procure purchasers for the Ordinary Shares to be sold in the Placing at the Placing Price. The conditions include, inter alia, the Transaction Agreement having been entered into and not having been terminated and the absence of any breach of representation or warranty contained in the Secondary Placing Agreement. The Joint Bookrunners are entitled to terminate the Secondary Placing Agreement if any of the conditions have not been satisfied or waived by the applicable date.

Each Selling Shareholder has agreed to pay to the Joint Bookrunners a commission of two per cent. of the number of Ordinary Shares to be sold by such Selling Shareholder in the Placing multiplied by the Placing Price.

Each of the Selling Shareholders has given certain customary representations, warranties and undertakings to the Joint Bookrunners, and has also given an indemnity to the Joint Bookrunners.

Each Selling Shareholder has agreed to certain lock-in restrictions following the Placing, further details of which are set out in paragraph 8 of this Part 10: Details of the Placing.

8 LOCK-IN ARRANGEMENTS Pursuant to the New PIHL Lock-In Deed, PIHL Property LLP has agreed that, subject to certain customary exceptions, it will not, and will procure that its connected persons will not, without the prior written consent of the Company and the Joint Bookrunners: (i) dispose of any of the Ordinary Shares held by it immediately after completion of the Placing before the First Lock-In Release Date; (ii) dispose of more than 50 per cent of the Ordinary Shares held by it immediately after completion of the

154 Placing before the Second Lock-In Release Date; and (iii) dispose of more than 75 per cent of the Ordinary Shares held by it immediately after completion of the Placing before the Final Lock-In Release Date. In relation to PIHL Property LLP, this replaces the Existing Investor Lock-In Deed it entered into on the IPO Date. Should the Placing not proceed, PIHL Property LLP will continue to be bound by the terms of its Existing Investor Lock-In Deed, further details of these lock-in arrangements are set out in paragraph 12.6 of Part 11: Additional Information.

Subject to certain customary exceptions, for the period beginning on the First Lock-In Release Date and ending on the earlier of (i) the date that is 36 months after the Settlement Date or (ii) the date on which the Company ceases to be a close company for the purposes of Part 12 of the CTA 2010, provided that such restrictions will apply for a minimum period of twelve months, PIHL has agreed that it will, and will procure that its connected persons will, effect any disposal of Ordinary Shares in such a manner as the Joint Bookrunners may in their discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares.

Prestbury and Prestbury Incentives are subject to lock-in arrangements under the Investment Advisory Agreement in respect of Ordinary Shares issued pursuant to the incentive arrangements in that agreement. The restrictions do not apply where a disposal of Ordinary Shares is effected to discharge any tax liability arising in connection with the receipt of incentive fees. Sufficient Ordinary Shares are being sold in the Placing by Prestbury Incentives to raise a net £5.1 million for this purpose.

Pursuant to the Secondary Placing Agreement, each of the Selling Shareholders, other than PIHL and Prestbury Incentives, has agreed that, subject to certain customary exceptions, from the date of the Secondary Placing Agreement until the date falling 180 days after the Settlement Date, they will not, without the prior written consent of the Company and the Joint Bookrunners, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce an offer of, any Ordinary Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as the foregoing.

Under the terms of the New Prestbury Director Lock-In Deeds, each of Mike Brown, Nick Leslau and Sandy Gumm has agreed that, subject to certain customary exceptions, they will not, and will procure that their connected persons will not, without the prior written consent of the Company and the Joint Bookrunners: (i) dispose of any of the Ordinary Shares held by them immediately after completion of the Placing before the First Lock-In Release Date; (ii) dispose of more than 50 per cent of the Ordinary Shares held by them immediately after completion of the Placing before the Second Lock-In Release Date; or (iii) dispose of more than 75 per cent of the Ordinary Shares held by them immediately after completion of the Placing before the Final Lock-In Release Date.

Subject to certain customary exceptions, for a period of 24 months from the First Lock-In Release Date, each of Mike Brown, Nick Leslau and Sandy Gumm have agreed that he or she will, and will procure that his or her connected persons will, effect any disposal of Ordinary Shares in such a manner as the Joint Bookrunners may in their discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares.

Under the terms of the New Independent Director Lock-In Deeds, each of the Independent Directors has agreed that subject to certain customary exceptions: (i) they will not, and will procure that their connected persons will not, without the prior written consent of the Company and the Joint Bookrunners, dispose of any of the Ordinary Shares held by them immediately after completion of the Placing before the First Lock-In Release Date; and (ii) up to the Final Lock-In Release Date that they will effect any disposal of Ordinary Shares in such a manner as the Joint Bookrunners may in their discretion determine to be appropriate with a view to maintaining an orderly market.

Pursuant to the Transaction Agreement, the Company has agreed that, subject to certain exceptions, from the date of the Transaction Agreement until the date falling 90 days after the Settlement Date, it will not, without the prior written consent of the Joint Bookrunners, issue (other than those required to be issued under the Commitment Agreement), offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce an offer of, any Ordinary Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as any of the foregoing.

155 Further details of the arrangements described above are set out in paragraphs 12.8, 12.9 and 12.10 of Part 11: Additional Information.

9 SELLING AND TRANSFER RESTRICTIONS The distribution of this document does not constitute an offer of, or the solicitation of an offer to subscribe for or purchase, any Ordinary Shares to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful, and therefore persons into whose possession this document comes should inform themselves about and observe any such restrictions. In particular, this document is not for distribution in or into, Australia, Japan or the Republic of South Africa (collectively, with the United States, the “Excluded Territories”) and, subject to certain exemptions, may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered directly or indirectly, within the Excluded Territories or in any other country where such offer, sale or other activity may lead to a breach under any law or regulatory requirements.

No action has been or will be taken by the Company, Goldman Sachs or Stifel to permit a public offering of the Ordinary Shares under the applicable securities laws of any jurisdiction. Other than in the United Kingdom, no action has been taken or will be taken to permit the possession or distribution of this document (or any other offering or publicity materials relating to the Ordinary Shares) in any jurisdiction where action for that purpose may be required or where doing so is restricted by law. Accordingly, neither this document, nor any advertisement, nor any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this document comes should inform themselves about and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction.

European Economic Area In relation to each Relevant Member State, no Ordinary Shares have been offered or will be offered pursuant to the Placing to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Ordinary Shares which has been approved by the competent authority in that Relevant Member State, or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that offers of Ordinary Shares to the public may be made at any time under the following exemptions under the Prospectus Directive, if they are implemented in that Relevant Member State: (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; (b) to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) in such Relevant Member State subject to the consent of the Joint Bookrunners having been obtained; or (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Ordinary Shares shall result in a requirement for the publication of a prospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing the Prospectus Directive in a Relevant Member State and each person who initially subscribes for any Ordinary Shares or to whom any offer is made under the Placing will be deemed to have represented, acknowledged and agreed that it is a “qualified investor” within the meaning of Article 2(1)(e) of the Prospectus Directive.

For the purposes of this provision, the expression “offer to the public” in relation to any offer of Ordinary Shares in any Relevant Member State means a communication in any form and by any means presenting sufficient information on the terms of the offer and any Ordinary Shares to be offered so as to enable an investor to decide to subscribe for or purchase the Ordinary Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC as amended, to the extent implemented in the Relevant Member State and includes any relevant implementing measure in each Relevant Member State.

In the case of a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, any Ordinary Shares acquired by it in the Placing must not be acquired on a non-discretionary basis on

156 behalf of, nor be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the EEA which has implemented the Prospectus Directive to qualified investors.

United Kingdom In the United Kingdom this document is being distributed to, and is directed only at, “qualified investors” (as defined in the Prospectus Directive) who are also (i) persons having professional experience in matters relating to investments falling within the definition “investment professionals”in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”); or (ii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order, and other persons to whom it may lawfully be communicated. Any investment or investment activity to which this communication relates is only available to and will only be engaged in with such persons and persons within the United Kingdom who receive this document (other than persons falling within (i) and (ii) above) should not rely on or act upon this document.

United States The Ordinary Shares have not been and will not be registered under the Securities Act, or qualified for sale under the laws of any state or other jurisdiction of the United States, and may not be offered, sold, pledged or otherwise transferred except (i) in the United States only to a person that the seller and any person acting on its behalf reasonably believes is a QIB as defined in and in accordance with Rule 144A or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act; or (ii) in an offshore transaction within the meaning of and in accordance with Regulation S, in each case in accordance with any applicable securities laws of any state of the United States.

In addition, until 40 days after the commencement of the Placing, an offer or sale of Placing Shares in the United States by any dealer (whether or not participating in the Placing) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A.

Due to the following restrictions, purchasers of Shares in the United States are advised to consult legal counsel prior to making any offer for, resale, pledge or other transfer of the Shares.

Regulation S Each purchaser of the Shares outside the United States will be deemed by its acceptance of the Shares to have represented and agreed, on its own behalf and on behalf of any investor accounts for which it is subscribing for or purchasing the Shares, that neither the Company or any of the Company’s affiliates nor any of the Joint Bookrunners, nor any person representing the Company, any of its affiliates or any of the Joint Bookrunners, has made any representation to it with respect to the offering or sale of any Shares, other than the information contained in this document, which document has been delivered to it and upon which it is solely relying in making its investment decision with respect to the Shares, it has had access to such financial and other information concerning the Company and the Shares as it has deemed necessary in connection with its decision to purchase any of the Shares, and that (terms defined in Regulation S shall have the same meanings when used in this section); (a) the purchaser understands and acknowledges that the Shares have not been and will not be registered under the Securities Act, or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act and any other applicable securities law; (b) the purchaser, and the person, if any, for whose account or benefit the purchaser is acquiring the Shares, is acquiring the Shares in an “offshore transaction” meeting the requirements of Regulation S and was located outside the United States at the time the buy order for the Shares was originated; (c) the purchaser is aware of the restrictions on the offer and sale of the Shares pursuant to Regulation S described in this document;

157 (d) the Shares have not been offered to it by means of any “directed selling efforts” as defined in Regulation S; and (e) the Company shall not recognise any offer, sale, pledge or other transfer of the Shares made other than in compliance with the above-stated restrictions.

Each purchaser acknowledges that the Company and the Joint Bookrunners will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements, and agrees that if any of the acknowledgements, representations or warranties deemed to have been made by such purchaser by its purchase of Shares are no longer accurate, it shall promptly notify the Company and the Joint Bookrunners; if they are acquiring Shares as a fiduciary or agent for one or more investor accounts, each purchaser represents that they have sole investment discretion with respect to each such account and full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account.

Rule 144A Each purchaser of the Shares within the United States will be deemed by its acceptance of the Shares to have represented and agreed on its behalf and on behalf of any investor accounts for which it is subscribing for or purchasing the Shares, that neither the Company or any of the Company’s affiliates nor any of the Joint Bookrunners, nor any person representing the Company, any of its affiliates or any of the Joint Bookrunners, has made any representation to it with respect to the offering or sale of any Shares, other than the information contained in this document, which document has been delivered to it and upon which it is solely relying in making its investment decision with respect to the Shares, it has had access to such financial and other information concerning the Company and the Shares as it has deemed necessary in connection with its decision to purchase any of the Shares, and that (terms defined in Rule 144A shall have the same meanings when used in this section): (a) the purchaser acknowledges that the Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and are subject to restrictions on transfer; (b) the purchaser (i) is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) (“QIB”), (ii) is aware that the sale to it is being made in reliance on Rule 144A under the Securities Act or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and (iii) is acquiring such Shares for its own account or for the account of a “QIB”, in each case for investment and not with a view to, or for offer or sale in connection with, any resale or distribution of the Shares in violation of the Securities Act or any state securities laws; (c) the purchaser is aware that the Shares are being offered in the United States in a transaction not involving any public offering in the United States within the meaning of the Securities Act; (d) if the purchaser decides to offer, resell, pledge or otherwise transfer such Shares, such Shares may be offered, sold, pledged or otherwise transferred only (A) (i) to a person whom the beneficial owner and/or any person acting on its behalf reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A under the Securities Act, (ii) in accordance with Regulation S under the Securities Act, (iii) in accordance with Rule 144 under the Securities Act thereunder (if available), or (iv) in accordance with an effective registration statement under the Securities Act, and (B) in accordance with all applicable securities laws of the states of the United States and any other jurisdiction and agrees to give any subsequent purchaser of such Shares notice of any restrictions on the transfer thereof; (e) the Shares have not been offered to it by means of any general solicitation or general advertising; (f) the Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act and no representation is made as to the availability of the exemption provided by Rule 144 under the Securities Act for resales of any Shares; (g) the purchaser will not deposit or cause to be deposited such Shares into any depositary receipt facility established or maintained by a depositary bank other than a Rule 144A restricted depositary receipt facility, so long as such Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act; (h) the Shares (to the extent they are in certificated form), unless otherwise determined by the Company in accordance with applicable law, will bear a legend to the following effect:

158 THE SECURITY EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4) IN ACCORDANCE WITH AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND ANY OTHER JURISDICTION. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THIS SECURITY EACH INVESTOR IN THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER AND EACH INVESTOR WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY INVESTOR IN THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE. EACH HOLDER, BY ITS ACCEPTANCE OF THIS SECURITY, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS. (i) the Company shall not recognise any offer, sale, pledge or other transfer of the Shares made other than in compliance with the above-stated restrictions, and (j) each purchaser agrees that it will give to each person to whom it transfers Shares notice of any restrictions on transfer of such Shares.

Each purchaser acknowledges that the Company and the Joint Bookrunners will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements, and agrees that if any of the acknowledgements, representations or warranties deemed to have been made by such purchaser by its purchase of Shares are no longer accurate, it shall promptly notify the Company and the Joint Bookrunners; if they are acquiring Shares as a fiduciary or agent for one or more investor accounts, each purchaser represents that they have sole investment discretion with respect to each such account and full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account.

Terms defined in Rule 144A or Regulation S shall have the same meanings when used in this paragraph.

Each purchaser of the Shares will be deemed by its acceptance of the Shares to have represented and agreed that it is purchasing the Shares for its own account, or for one or more investor accounts for which it is acting as a fiduciary or agent, in each case for investment, and not with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or any state securities laws, subject to any requirement of law that the disposition of its property or the property of such investor account or accounts be at all times within its or their control.

Each purchaser represents and warrants that (a) unless it has received the written consent of the Company, it is not and will not be, and is not acquiring the Ordinary Shares with the assets of, or for or on behalf of, any (i) “employee benefit plan” (as described in Section 3(3) of the US Employee Retirement Income Security Act of 1974, as amended) that is subject to the provisions of Title I of ERISA, (ii) a “plan” to which Section 4975 of the US Tax Code applies, (iii) an entity whose underlying assets are deemed to include the assets of an employee benefit plan or plan described in (i) or (ii) above, (b) if it is a non-US plan, governmental plan, as defined in Section 3(32) of ERISA, or a church plan, the purchase and holding of the Ordinary Shares or any interest therein does not violate any laws or regulations that are substantially similar to ERISA or Section 4975 of the Code, or any statute, regulation, administrative decision, policy or other legal authority applicable to such non-US,

159 governmental or church plan and the purchase and holding of Ordinary Shares or any interest therein will not result in the assets of the Company being deemed to include the assets of such non-US, governmental or church plan and (c) it will not sell or otherwise transfer any Ordinary Shares or interest to any person without first obtaining the same foregoing representations, warranties and covenants from that person.

BY ITS PURCHASE AND HOLDING OF THIS SECURITY OR ANY INTEREST THEREIN, THE PURCHASER AND/OR HOLDER THEREOF AND EACH TRANSFEREE WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED AT THE TIME OF ITS PURCHASE AND THROUGHOUT THE PERIOD THAT IT HOLDS THE SECURITY EVIDENCED HEREBY OR INTEREST THEREIN, THAT (1) UNLESS IT HAS RECEIVED THE WRITTEN CONSENT OF THE COMPANY, IT IS NOT AND WILL NOT BE AND IS NOT ACQUIRING THE SECURITIES EVIDENCED HEREBY WITH THE ASSETS OF OR ON BEHALF OF (A) AN EMPLOYEE BENEFIT PLAN AS DESCRIBED IN SECTION 3(3) OF ERISA THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (B) A PLAN TO WHICH SECTION 4975 OF THE US TAX CODE APPLIES OR (C) AN ENTITY WHOSE UNDERLYING ASSETS ARE DEEMED TO INCLUDE THE ASSETS OF AN EMPLOYEE BENEFIT PLAN OR PLAN DESCRIBED IN (A) OR (B) ABOVE, (2) IF IT IS A NON-US, PLAN, GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA OR A CHURCH PLAN, THE PURCHASE AND HOLDING OF THE SECURITIES EVIDENCED HEREBY OR ANY INTEREST THEREIN DOES NOT VIOLATE ANY LAW OR REGULATION THAT IS SUBSTANTIALLY SIMILAR TO ERISA OR SECTION 4975 OF THE US TAX CODE OR ANY STATUTE, REGULATION, ADMINISTRATIVE DECISION, POLICY OR OTHER LEGAL AUTHORITY APPLICABLE TO SUCH NON-US, GOVERNMENTAL OR CHURCH PLAN AND THE PURCHASE AND HOLDING OF THE SECURITIES EVIDENCED HEREBY OR ANY INTEREST HEREIN WILL NOT RESULT IN THE ASSETS OF THE COMPANY BEING DEEMED TO INCLUDE THE ASSETS OF SUCH NON-US, GOVERNMENTAL OR CHURCH PLAN AND (3) IT WILL NOT SELL OR OTHERWISE TRANSFER ANY SUCH SECURITIES OR INTEREST TO ANY PERSON WITHOUT FIRST OBTAINING THE SAME FOREGOING REPRESENTATIONS, WARRANTIES AND COVENANTS FROM THAT PERSON.

10 DILUTION The Company will not be issuing any new Ordinary Shares and there will therefore be no dilution of the existing Shareholders as a consequence of the Placing.

160 Part 11: Additional Information 1 RESPONSIBILITY The Company accepts responsibility for the information contained in this document. To the best of the knowledge and belief of the Company, the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

2 INCORPORATION AND STATUS OF THE COMPANY 2.1 The Company was incorporated and registered in England and Wales on 24 January 2007 under the Act with registered number 06064259 as a private company limited by shares with the name Newincco 653 Limited. It changed its name to Prestbury 1 Nine Limited on 13 February 2007 and to P1 Theme Park Holdings Limited on 31 August 2007. The Company was re-registered as a public company limited by shares with the name Secure Income REIT Plc on 27 May 2014. The Company’s legal and commercial name is Secure Income REIT Plc. 2.2 The principal legislation under which the Company operates is the Act. 2.3 The registered and head office of the Company is at Cavendish House, 18 Cavendish Square, London W1G 0PJ. The telephone number of the Company’s registered office is +44 (0) 20 7647 7647. 2.4 The address of the Company’s website which discloses the information required by Rule 26 of the AIM Rules for Companies is www.SecureIncomeREIT.co.uk. 2.5 The Company is an internally managed AIF under the European rules on the regulation of Alternative Investment Funds, and authorised and regulated by the FCA in that capacity under firm reference number 624782. 2.6 The Company’s accounting period ends on 31 December of each year. 2.7 BDO LLP has been the only auditor of the Company since its incorporation. BDO LLP is a member of the Institute of Chartered Accountants in England and Wales. The annual report and financial statements of the Company are prepared in accordance with the Act and IFRS. 2.8 The Company has no employees and most of its day to day activities are carried out by third parties under contractual arrangements summarised in paragraph 12 of this Part 11.

3 PRESTBURY 3.1 Prestbury was established and registered in England and Wales on 28 June 2006 with registered number OC320632 under the Limited Liability Partnerships Act 2000 (the “LLP Act”) as a limited liability partnership named Prestbury Manager LLP and, on 7 May 2009, changed its name to Prestbury Investments LLP. The principal legislation under which Prestbury operates is the LLP Act. Prestbury’s registered office and principal place of business is Cavendish House, 18 Cavendish Square, London W1G 0PJ. The telephone number of Prestbury’s registered office is +44 (0) 20 7647 7647. 3.2 Aside from its relationship with the Company, Prestbury’s sole other business activity since incorporation has been only its operation as property adviser to Prestbury 1 LP and Max Property Group Plc. The general partner of Prestbury 1 LP is controlled by Prestbury. Max Property Group Plc sold its business in August 2014 and was liquidated in November 2014. Prestbury 1 LP now owns only one portfolio and is not able to make additional investments.

4 GALLIUM 4.1 Gallium has been appointed as depositary of the Company pursuant to the Depositary Agreement. Gallium was established and registered as a company in England and Wales on 11 April 2011 with registered number 07599626. The principal legislation under which Gallium operates is the Act. Gallium is authorised and regulated by the FCA with firm reference number 612479. Gallium’s registered office and principal place of business is Gallium House, Unit 2, Station Court, Borough Green, Sevenoaks, Kent TN15 8AD. The telephone number of Gallium’s registered office is +44 (0) 17 3288 2642. 4.2 Gallium is responsible for ensuring the Company’s cash flows are properly monitored, the safe-keeping of financial instruments and other assets held on behalf of the Company and the oversight and supervision of the Company (as an internally managed AIFM). Please refer to the summary of the Depositary Agreement at paragraph 12.16 of this Part 11: Additional Information for further information.

161 5 SHARE CAPITAL OF THE COMPANY 5.1 As at 11 March 2016 the Issued Share Capital of the Company is:

Nominal Issued and Class of shares value fully paid (£) Number Ordinary Shares ...... £0.10 18,034,422.80 180,344,228 5.2 Since incorporation there have been the following changes to the Company’s share capital: Total number of Ordinary Shares in issue

24 January 2007 As at incorporation 1 ordinary share of £1 16 April 2014 1 ordinary share of £1 subdivided into 10 10 Ordinary Shares Ordinary Shares 20 May 2014 77,914,338 Ordinary Shares issued at a value of 77,914,348 £1 each pursuant to the capitalisation of a loan Ordinary Shares owing from Prestbury 1 LP to the Company 21 May 2014 81,908,717 Ordinary Shares issued in 159,823,065 consideration for the acquisition of the entire Ordinary Shares issued share capital of Hospital Holdings 23 May 2014 81,908,717 B Shares issued pursuant to the 159,823,065 capitalisation of the Company’s merger reserve Ordinary Shares arising as a result of its acquisition of Hospital and 81,908,717 Holdings B shares 23 May 2014 Cancellation of the B shares and the amount 159,823,065 standing to the credit of the share premium Ordinary Shares account of the Company 5 June 2014 8,620,689 Ordinary Shares issued pursuant to a 168,443,754 placing Ordinary Shares 1 July 2014 6 Ordinary Shares issued pursuant to the 168,443,760 Commitment Agreement Ordinary Shares 1 October 2014 6 Ordinary Shares issued pursuant to the 168,443,766 Commitment Agreement Ordinary Shares 23 December 2014 6 Ordinary Shares issued pursuant to the 168,443,772 Commitment Agreement Ordinary Shares 31 March 2015 6 Ordinary Shares issued pursuant to the 168,443,778 Commitment Agreement Ordinary Shares 15 April 2015 11,900,432 Ordinary Shares issued pursuant to 180,344,210 the Investment Advisory Agreement Ordinary Shares 26 June 2015 6 Ordinary Shares issued pursuant to the 180,344,216 Commitment Agreement Ordinary Shares 30 September 2015 6 Ordinary Shares issued pursuant to the 180,344,222 Commitment Agreement Ordinary Shares 23 December 2015 6 Ordinary Shares issued pursuant to the 180,344,228 Commitment Agreement Ordinary Shares 5.3 By a resolution passed on 27 May 2014 it was resolved, amongst other things: (a) that in addition to all existing authorities under section 551 of the Act the directors be generally and unconditionally authorised in accordance with section 551 of the Act to allot: (i) equity securities of the Company (within the meaning of section 560 of the Act) up to a maximum aggregate nominal amount of £16,844,375.40, such

162 authority to expire on 27 May 2019, but so that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities pursuant to such an offer or agreement as if this authority had not expired; and in addition (ii) equity securities of the Company (within the meaning of section 560 of the Act) in connection with an offer of such securities by way of a rights issue (as defined in the paragraph below) up to an aggregate nominal amount of £16,844,375.40, such authority to expire on 27 May 2019, but so that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities pursuant to such an offer or agreement as if this authority had not expired; (b) that the directors be empowered, pursuant to section 570 of the Act, to allot equity securities (within the meaning of section 560) of the Act) for cash pursuant to the authority conferred by paragraph 5.3(a) as if section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities: (i) pursuant to the terms of the Commitment Agreement; (ii) in connection with an offer of such securities by way of a Rights Issue; and (iii) otherwise than pursuant to paragraphs 5.3(i) to 5.3(ii) above up to an aggregate nominal amount of £5,615,320.90, and shall expire on 27 May 2019, save that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of any such offer or agreement as if this power had not expired. “Rights Issue” means an offer of equity securities to holders of ordinary shares in the capital of the Company on the register on a record date fixed by the directors in proportion as nearly as may be to the respective numbers of Ordinary Shares held by them, but subject to such exclusions or other arrangements as the directors may deem necessary or expedient to deal with any treasury shares, fractional entitlements or legal or practical issues arising under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory or any other matter. 5.4 By a resolution passed on 3 June 2015 it was resolved, amongst other things: (a) that the Company be authorised to make market purchases of up to 27,033,596 Ordinary Shares, provided that: (i) the minimum price, exclusive of any expenses, which may be paid for an Ordinary Share is £0.10; (ii) the maximum price, exclusive of any expenses, which may be paid for each Ordinary Share is an amount equal to the higher of (a) 105 per cent of the average middle market quotations for an Ordinary Share, as derived from the London Stock Exchange Daily Official List, for the five Business Days immediately preceding the day on which the ordinary share is purchased; and (b) the amount stipulated by Article 5(1) of the Buy-back and Stabilisation Regulation 2003; and (iii) the authority expires at the conclusion of the next annual general meeting of the Company (except in relation to the purchase of Ordinary Shares the contract for which was concluded before the expiry of this authority and which will or may be executed wholly or partly after such expiry). 5.5 The Company has no present intention to issue any new shares in the share capital of the Company, save in relation to its obligations under the Investment Advisory Agreement to issue shares in satisfaction of incentive fees, should the conditions for their issue be met

163 (please refer to paragraph 12.11 of this Part 11 for further details), and under the terms of the Commitment Agreement by which a total of 54 Ordinary Shares were to be issued, of which 42 have been issued (please refer to paragraph 12.12 of this Part 11 for further details). 5.6 The Company does not have in issue any securities not representing share capital. 5.7 No shares of the Company are currently in issue with a fixed date on which entitlement to a distribution arises and there are no arrangements in force whereby future distributions are waived or agreed to be waived. 5.8 The Company does not hold any Ordinary Shares in treasury and no Ordinary Shares are held by or on behalf of the Company itself. 5.9 Save as disclosed in this paragraph 5, there has been no issue of share or loan capital of the Company or any other Group Company (other than intra-group issues by wholly owned subsidiaries and pursuant to the 2014 Placing, the Commitment Agreement and in satisfaction of the incentive fee payable to Prestbury under the Investment Advisory Agreement) in the three years immediately preceding the date of this document and (other than pursuant to the Commitment Agreement or in satisfaction of the incentive fee payable to Prestbury under the Investment Advisory Agreement) no such issues are proposed. 5.10 No commissions, discounts, brokerages or other special terms have been granted by the Company or any other Group Company in connection with the issue or sale of any share or loan capital of the Company or any other Group Company in the three years immediately preceding the date of this document other than the commission paid to Oriel Securities in respect of the IPO. 5.11 No share or loan capital of the Company is under option nor has any agreement either conditionally or unconditionally been entered into to put such share or loan capital of the Company under option. 5.12 No convertible securities, exchangeable securities or securities with warrants have been issued by the Company and remain outstanding. 5.13 The Ordinary Shares are in registered form.

6 ARTICLES OF ASSOCIATION The Articles contain provisions, inter alia, to the following effect:

6.1 Voting rights Subject to the rights or restrictions referred to in paragraph 6.2 and subject to any special rights or restrictions as to voting for the time being attached to any shares, on a show of hands (i) every member who (being an individual) is present in person or (being a corporation) is present by a duly authorised representative shall have one vote; and (ii) every proxy appointed by a member shall have one vote save that every proxy appointed by one or more members to vote for the resolution and by one or more other members to vote against the resolution, has one vote for and one vote against.

6.2 Restrictions on voting 6.2.1 A member of the Company is not entitled, either in person or by proxy, in respect of any share held by him, to be present at any general meeting of the Company or at any separate general meeting of the holders of any class of shares unless all call and other amounts payable by him in respect of that share have been paid. 6.2.2 A member of the Company shall not, if the directors determine, be entitled to attend general meetings and vote or to exercise rights of membership if he or another person appearing to be interested in the relevant shares has failed to comply with a notice given under section 793 of the Act within 14 days. The restrictions will continue for the period specified by the Board provided that such period shall end not later than seven days after the earliest of (i) due compliance to the satisfaction of the Board with the section 793 notice; or (ii) receipt by the Company of notice that the shareholding has been sold to a third party pursuant to an arm’s length transfer.

164 6.2.3 A member in respect of whom an order has been made by any competent court or official on the ground that he is or may be suffering from mental disorder or is otherwise incapable of managing his affairs may vote at any general meeting of the Company and may exercise any other right conferred by membership in relation to general meetings by or through any person authorised in such circumstances to do so on his behalf (and that person may vote by proxy), provided that evidence to the satisfaction of the Board of the authority of the person claiming to exercise the right to vote or such other right has been received by the Company not later than the last time at which appointments of proxy must be deposited in order to be valid for use at the meeting or adjourned meeting or on the holding of the poll.

6.3 Dividends 6.3.1 The Company may, by ordinary resolution, declare a dividend to be paid to the members, according to their respective rights and interests in the profit. The directors may pay such interim dividends as appear to the Board to be justified by the financial position of the Company but no dividend shall exceed the amount recommended by the Board. No dividends payable in respect of an Ordinary Share shall bear interest. The directors may, if authorised by an ordinary resolution, offer the holders of Ordinary Shares the right to elect to receive further shares, credited as fully paid instead of cash in respect of all or part of a dividend (a “scrip dividend”). The directors may, pursuant to the provisions of the Articles relating to disclosure of interests, withhold dividends or other sums payable in respect of shares which are the subject of a notice under section 793 of the Act and which represent 0.25 per cent or more in nominal value of the issued shares of their class and in respect of which the required information has not been received by the Company within 14 days of that notice and the member holding those shares may not elect, in the case of a scrip dividend, to receive shares instead of that dividend. 6.3.2 The Company or its directors may fix a date as the record date for a dividend provided that the date may be before, on or after the date on which the dividend, distribution, allotment or issue is declared. A dividend unclaimed for a period of 12 years from the date when it became due for payment or was declared shall be forfeited and cease to remain owing by the Company.

6.4 Return of capital If the Company is wound up, the liquidator may, with the sanction of a special resolution and any other sanction required by law, divide among the members in specie the whole or any part of the assets of the Company and may, for that purpose, value any assets and determine how the division shall be carried out as between the members or different classes of members. The liquidator may with the same sanction, vest the whole or any part of the assets in trustees on trusts for the benefit of the members as the liquidator, with the same sanction, thinks fit but no member shall be compelled to accept any assets on which there is any liability.

6.5 Variation of rights Subject to the Statues, all or any of the rights attaching to a class of shares in the Company may be varied with the written consent of the holders of not less than three-fourths in nominal value of the issued shares of the class (excluding any shares of the class held as treasury shares), or with the sanction of a special resolution passed at a separate general meeting of the holders of the relevant class. The quorum for the separate general meeting shall be two persons entitled to vote and holding, or represented by proxy, not less than one-third in nominal value of the issued shares of the relevant class (excluding any shares of the class held as treasury shares).

6.6 Transfer of shares 6.6.1 Subject to the restriction set out in this paragraph, paragraph 6.6.2 and paragraph 6.6.3, any member may transfer all or any of his shares in any manner which is permitted by the Companies Acts (as defined in section 2 of the Companies Act 2006) and every other statute, statutory instrument, regulation or order for the time being in force concerning companies registered under the Companies Acts (the “Statutes”) or in any other manner

165 approved by the Board. A transfer of a certificated share shall be in writing in the usual common form or in any other form permitted by the Statutes or approved by the Board. The transferor is deemed to remain the holder of the shares concerned until the name of the transferee is entered in the register of members in respect of those shares. All transfers of uncertificated shares shall be made by means of the relevant system or in any other manner which is permitted by the Statutes and is from time to time approved by the Board. 6.6.2 The directors have discretion to refuse to register a transfer of a certificated share which is not fully paid (provided that this does not prevent dealings in the shares from taking place on an open and proper basis). The directors may also decline to register a transfer of shares in certificated form unless (i) the instrument of transfer is duly stamped or duly certified or otherwise shown to the satisfaction of the Board to be exempt from stamp duty and is deposited at the office of the Company or such other place as the Board may appoint, accompanied by the certificate for the shares to which it relates if it has been issued and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; and (ii) the instrument of transfer is in respect of only one class of share and in favour of no more than four transferees. The directors may, pursuant to the provisions of the Articles relating to disclosure of interests, decline to register a transfer in respect of shares which are the subject of a notice under section 793 of the Act and which represent at least 0.25 per cent of the issued shares of their class, and in respect of which the required information has not been received by the Company within 14 days after service of the notice. 6.6.3 The directors have discretion to reserve to register any transfer of an uncertificated share where permitted by the Uncertificated Securities Regulations 2001 (SI 2001 No.3755) including any modifications or re-enactment of them for the time being in force. 6.6.4 Save as aforesaid, the Articles contain no restrictions as to the free transferability of fully paid shares.

6.7 Alteration of capital and purchase of own shares The Company may alter its share capital in accordance with the provisions in any manner permitted by the Statutes.

6.8 General meetings 6.8.1 Annual general meetings The Board shall convene and the Company shall hold annual general meetings in accordance with the requirements of the Statutes.

6.8.2 Convening of general meetings All meetings other than annual general meetings shall be called general meetings. The Board may convene a general meeting whenever it thinks fit. A general meeting shall also be convened by the Board on the requisition of members pursuant to the provisions of the Statutes or, in default, may be convened by such requisitions, as provided by the Statutes. The Board shall comply with the provisions of the Statutes regarding the giving and the circulation, on the requisition of members, of notices of resolutions and of statements with respect to matters relating to any resolution to be proposed or business to be dealt with at any general meeting of the Company.

6.8.3 Orderly conduct of meetings The Board may both prior to and during any general meeting make any arrangements and impose any restrictions which it considers appropriate to ensure the security and/or the orderly conduct of any such general meeting, including, without limitation, arranging for any person attending any such meeting to be searched, for items of personal property which may be taken into any such meeting to be restricted and for any person (whether or not a member of the Company) who refuses to comply with any such arrangements or restrictions to be refused entry to or excluded from any such meeting.

166 6.8.4 Notice of general meetings Subject to the provisions of the Statutes, an annual general meeting and all other general meetings of the Company shall be called by at least such minimum period of notice as is prescribed under the Statutes for the type of meeting concerned.

The notice shall specify the place, day and time of the meeting and the general nature of the business to be transacted.

Notice of every general meeting shall be given to all members other than any who, under the provisions of the Articles or the terms of issue of the shares which they hold, are not entitled to receive such notices from the Company, and also to the auditors (or, if more than one, each of them) and to each director.

Every notice of meeting shall state with reasonable prominence that a member entitled to attend, speak and vote at the meeting may appoint one or more proxies to attend, speak and vote at that meeting instead of him and that a proxy need not be a member of the Company.

6.8.5 Quorum No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business, but the absence of a quorum shall not preclude the choice or appointment of a chairman of the meeting which shall not be treated as part of the business of the meeting.

Except as otherwise provided by the Articles two persons entitled to attend and to vote on the business to be transacted, each being a member present in person or by proxy or a duly authorised representative of a corporation which is a member shall be a quorum. If within five minutes (or such longer time not exceeding one hour as the chairman of the meeting may decide to wait) from the time appointed for the commencement of the general meeting a quorum is not present, or if during the meeting, a quorum ceases to be present, the meeting, if convened by or on the requisition of members, shall be dissolved. In any other case, it shall stand adjourned to such other day, time and place as the chairman may, subject to the Statutes, determine. If at an adjourned meeting a quorum is not present within 15 minutes from the time fixed for holding the meeting or if during the meeting a quorum ceases to be present, the adjourned meeting shall be dissolved.

6.8.6 Chairman At each general meeting, the chairman of the Board or, if he is absent or unwilling, the deputy chairman shall preside as chairman at every general meeting. If there is no chairman or deputy chairman, or if at any meeting neither the chairman nor the deputy chairman is present within five minutes after the time appointed for the commencement of the meeting, or if neither the chairman nor the deputy chairman is willing to act as chairman, the directors present shall choose one of their number to act, or if one director only is present he shall preside as chairman of the meeting if willing to act. If no director is present, or if each of the directors present declines to take the chair, the persons present and entitled to vote shall appoint one of their number to be chairman of the meeting.

6.8.7 Directors entitled to attend and speak Each director shall be entitled to attend and speak at any general meeting of the Company and at any separate general meeting of the holders of any class of shares of the Company.

6.8.8 Adjournment With the consent of any meeting at which a quorum is present the chairman of the meeting may (and if so directed by the meeting shall) adjourn the meeting either without any fixed time or place for resumption or to another time or place.

In addition, the chairman of the meeting may at any time without the consent of the meeting adjourn the meeting (whether or not it has commenced or a quorum is present) either without any fixed time or place for resumption or to another time or place if, in his opinion, it would facilitate the conduct of the

167 business of the meeting to do so, notwithstanding that by reason of such adjournment some members may be unable to be present at the adjourned meeting.

6.8.9 Method of voting and demand for poll At a general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless (before or immediately after the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded by: (a) the chairman of the meeting; or (b) a majority of directors present at the meeting; or (c) not less than five members present in person or by proxy having the right to vote on the resolution; or (d) a member or members present in person or by proxy representing in aggregate not less than 10 per cent of the total voting rights of all the members having the right to vote on the resolution (excluding any voting rights attached to any shares in the Company held as treasury shares); or (e) a member or members present in person or by proxy holding shares conferring the right to vote on the resolution on which an aggregate sum has been paid up equal to not less than 10 per cent of the total sum paid up on all the shares conferring that right (excluding any shares in the Company conferring a right to vote at the meeting which are held as treasury shares), and a demand for a poll by a person as proxy for a member shall be as valid as if the demand were made by the member himself.

6.8.10 Taking a poll If a poll is demanded (and the demand is not withdrawn), it shall be taken at such time (either at the meeting at which the poll is demanded or within 30 days after the meeting), at such place and in such manner as the chairman of the meeting shall direct and he may appoint scrutineers (who need not be members).

6.8.11 Proxies A proxy need not be a member of the Company and a member may appoint more than one proxy in relation to a meeting to attend and to speak and to vote on the same occasion provided that each proxy is appointed to exercise the rights attached to a different share or shares held by a member.

6.8.12 Form of proxy An appointment of a proxy shall be in writing in: (a) hard copy in any usual form or in any other form which the Board may approve, signed by the appointor, or his agent duly authorised in writing, or, if the appointor is a corporation, shall either be executed under its common seal or be signed by some agent or officer authorised to sign it; or (b) electronic form.

6.8.13 Deposit of proxy The appointment of a proxy shall: (a) in the case of an appointment in hard copy form, be delivered personally or by post to the office or such other place within the UK as may be specified by or on behalf of the Company for that purpose in the notice convening the meeting or in any form of proxy sent by or on behalf of the Company in relation to the meeting, not less than 48 hours before the time appointed for holding the meeting or adjourned meeting;

168 (b) in the case of an appointment in electronic form, be received at an address specified (or is deemed by a provision in the Act to have been specified) by or on behalf of the Company for the purpose of receiving documents or information in electronic form in, or by way of note to, the notice convening the meeting or in any form of proxy sent by or on behalf of the Company in relation to the meeting or in any invitation to appoint a proxy issued by or on behalf of the Company in relation to the meeting or on a website that is maintained by or on behalf of the Company and identifies the Company, not less than 48 hours before the time appointed for holding the meeting or adjourned meeting; (c) in the case of a poll which is taken more than 48 hours after it is demanded, be delivered or received as aforesaid not less than 24 hours before the time appointed for the taking of the poll; or (d) in the case of a poll which is not taken at the meeting at which it is demanded but is taken not more than 48 hours after it was demanded, be delivered in hard copy form at the meeting at which the poll was demanded to the chairman or to the secretary or to any director.

The Board may at its discretion determine that in calculating the periods mentioned above, no account shall be taken of any part of a day that is not a working day as defined in the Act. Where proxies are sent by electronic means but because of a technical problem cannot be read, the proxies in question are not invalidated.

In relation to any shares which are held in uncertificated form, the Board may from time to time permit appointments of a proxy to be made by electronic means in the form of an Uncertificated Proxy Instruction.

An appointment of a proxy relating to more than one meeting (including any adjournment thereof) having once been so received for the purposes of any meeting shall not require to be received again for the purposes of any subsequent meeting to which it relates.

6.8.14 Notice of revocation of proxy Notice of the revocation of the appointment of a proxy may be given in any lawful manner which complies with the regulations (if any) made by the directors to govern the revocation of a proxy.

6.9 Directors 6.9.1 Number Unless otherwise determined by ordinary resolution of the Company, the number of directors (other than alternate directors) shall not be less than two and there shall be no maximum number of directors.

6.9.2 Appointment of directors Subject to the provisions of the Articles, any person who is willing to act to be a director, either to fill a vacancy or as an additional director may be appointed by: (a) the Company by ordinary resolution; or (b) the Board, but so that the total number of directors shall not at any time exceed any maximum number fixed by or in accordance with these Articles. Any director so appointed shall retire at the next annual general meeting and shall then be eligible for re-appointment. No person (other than a director retiring in accordance with the Articles) shall be appointed or re-appointed a director at any general meeting unless: (c) he is recommended by the Board; or (d) not less than seven nor more than 42 clear days before the date appointed for the meeting notice in writing by a member qualified to vote at the meeting (other than the person to be proposed) has been given to the Company of the intention to

169 propose that person for appointment or re-appointment together with confirmation in writing by that person of his willingness to be appointed or re-appointed and the particulars which would, if he were so appointed or re-appointed, be required to be included in the Company’s register of directors.

6.9.3 Remuneration The directors (other than any director who for the time being holds an executive office of employment with the Company or a subsidiary of the Company) shall be paid out of the funds of the Company by way of remuneration for their services as determined by the directors. The aggregate of the fees shall not exceed £300,000 per annum (or such larger sum as the Company may, by ordinary resolution determine). Any fee shall be distinct from any remuneration or other amounts payable to a director under other provisions of the Articles and shall accrue from day to day. The directors shall be paid all travelling, hotel and other expenses properly incurred in and about the discharge of their duties as directors including expenses incurred in travelling to and from meetings of the Board, committee meetings, general meetings and separate meetings of the holders of any class of securities of the Company.

6.9.4 Retirement of directors by rotation (a) At every annual general meeting: (i) any director who has been appointed by the Board since the previous annual general meeting; (ii) any director who held office at the time of the two preceding annual general meetings and who did not retire at either of them; or (iii) any Independent Director who has held office with the Company, other than employment or executive office, for a continuous period of nine years or more at the date of the meeting, shall retire from office and may offer himself for re-appointment by the members. (b) The names of the directors to retire by rotation shall be stated in the notice of the annual general meeting or in any document accompanying the notice. The directors to retire on each occasion (both as to number or identity) shall be determined by the composition of the Board on the day which is 14 days prior to the date of the notice convening the annual general meeting and no directors shall be required to retire or be relieved from retiring by reason of any change in the number or identity of the directors after that time but before the close of the meeting.

6.9.5 Position of retiring directors A director who retires at an annual general meeting (whether by rotation or otherwise) may, if willing to continue to act, be re-appointed. If he is re-appointed he is treated as continuing in office throughout. If he is not re-appointed, he shall retain office until the end of the meeting or (if earlier) when a resolution is passed to appoint someone in his place or when a resolution to re-appoint the director is put to the meeting and lost.

6.9.6 Removal of directors The Company may by ordinary resolution, of which special notice has been given in accordance with the Statutes, remove any director before his period of office has expired notwithstanding anything in the Articles or in any agreement between him and the Company.

6.9.7 Vacation of office of director Without prejudice to the provisions of the Articles for retirement or removal, the office of a director shall be vacated: (a) if he ceases to be a director by virtue of any provision of the Statutes or is removed from office pursuant to these Articles;

170 (b) if he is prohibited by law from being a director; (c) if he becomes bankrupt or he makes any arrangement or composition with his creditors generally; (d) if a registered medical practitioner who is treating that person gives a written opinion to the Company stating that that person has become physically or mentally incapable of acting as a director and may remain so for more than three months; (e) if for more than six months he is absent (whether or not an alternate director attends in his place), without special leave of absence from the Board, from meetings of the Board held during that period and the Board resolves that his office be vacated; or (f) if he serves on the Company notice of his wish to resign, in which event he shall vacate office on the service of that notice on the Company or at such later time as is specified in the notice.

6.9.8 Executive directors The Board or any committee authorised by the Board may from time to time appoint one or more directors to hold any employment or executive office with the Company and on such terms as the Board determine.

A director appointed to any executive office or employment shall automatically cease to hold that office if he ceases to be a director.

6.9.9 Power to appoint alternate directors Each director may appoint another director or any other person who is willing to act as his alternate and may remove him from that office. The appointment as an alternate director of any person who is not himself a director shall be subject to the approval of a majority of the directors or a resolution of the Board. An alternate director shall have the same designation as his appointor for the purpose of determining his status as an Independent director or a Non-Independent Director, as the case may be.

An alternate director shall be entitled to receive notice of all meetings of the Board and of all meetings of committees of which the director appointing him is a member, to attend and vote at any such meeting at which the director appointing him is not personally present and at the meeting to exercise and discharge all the functions, powers and duties of his appointor as a director and for the purposes of the proceedings at the meeting the provisions of the Articles shall apply as if he were a director.

Every person acting as an alternate director shall have one vote for each director for whom he acts as alternate, in addition to his own vote if he is also a director, but he shall count as only one for the purpose of determining whether a quorum is present.

6.9.10 Quorum and voting requirements (a) A director shall not vote on (or be counted in the quorum) in relation to any resolution of the Board concerning his own appointment (including fixing or varying its terms), or the termination of his own appointment, as the holder of any office or place of profit with the Company or any other company in which the Company is interested but, where proposals are under consideration concerning the appointment (including fixing or varying its terms), or the termination of the appointment, of two or more directors to offices or places of profit with the Company or any other company in which the Company is interested, those proposals may be divided and a separate resolution may be put in relation to each director and in that case each of the directors concerned (if not otherwise debarred from voting under this Article) shall be entitled to vote (and be counted in the quorum) in respect of each resolution unless it concerns his own appointment or the termination of his own appointment.

171 (b) A director shall not be entitled to vote on a resolution (or attend or count in the quorum at those parts of a meeting regarding such resolution) relating to a transaction or arrangement with the Company in which he is interested, save: (i) where the other directors resolve that the director concerned should be entitled to do so in circumstances where they are satisfied that the director’s interest cannot reasonably be regarded as likely to give rise to a conflict of interest; or (ii) where his interest arises solely by reason of his also having a direct or indirect interest in the shares of the Company; or (iii) in any of the following circumstances: (A) the giving of any guarantee, security or indemnity in respect of money lent or obligations incurred by the director or by any other person at the request of or for the benefit of the Company or any of its subsidiary undertakings; (B) the giving of any guarantee, security or indemnity in respect of a debt or obligation of the Company or any of its subsidiary undertakings for which the director has himself assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security; (C) the giving to him of any other indemnity, where all other directors are also being offered indemnities on substantially the same terms; (D) the funding by the Company of his expenditure on defending proceedings or the doing by the Company of anything to enable him to avoid incurring such expenditure where all other directors are being offered substantially the same arrangements; (E) any contract concerning an offer of shares, debentures or other securities of or by the Company or any of its subsidiary undertakings for subscription or purchase in which offer the director is or may be entitled to participate as a holder of securities or he is or is to be interested as a participant in the underwriting or sub- underwriting thereof; (F) any contract in which the director is interested by virtue of his interest in shares, debentures or other securities of the Company or otherwise in or through the Company; (G) any contract concerning any other company in which the director is interested, directly or indirectly and whether as an officer, shareholder, creditor or otherwise, unless the company is one in which he has a relevant interest; (H) any contract relating to an arrangement for the benefit of the employees of the Company or any of its subsidiary undertakings which does not award him any privilege or benefit not generally awarded to the employees to whom such arrangement relates; (I) any contract concerning the adoption, modification or operation of a pension fund or retirement, death or disability benefits scheme which relates both to directors and employees of the Company and/ or of any of its subsidiary undertakings and does not provide in respect of any director as such any privilege or advantage not accorded to the employees to which the fund or scheme relates; (J) any contract concerning the adoption, modification or operation of a pension fund, superannuation or similar scheme or retirement, death, or disability benefits scheme or employees’ share scheme which relates both to directors and employees of the Company or any of its subsidiary undertakings and does not provide in respect of

172 any director as such any privilege or advantage not accorded to employees to which the fund or scheme relates; and (K) any contract concerning the purchase or maintenance of insurance against any liability, for the benefit of persons including directors. (iv) A company shall be deemed to be one in which a director has a relevant interest in and so long as he (together with persons connected with him within the meaning of sections 252 to 255 of the Act) to his knowledge holds an interest in shares (as determined pursuant to sections 820 to 825 of the Act) representing 1 per cent or more of any class of the equity share capital of that company (calculated exclusive of any shares of that class in that company held as treasury shares) or of the voting rights available to members of that company or if he can cause 1 per cent or more of those voting rights to be exercised at his direction; and (v) Where a company in which a director has a relevant interest is interested in a contract, he shall also be deemed interested in that contract.

6.9.11 Other conflicts of interest (a) If a director is in any way, directly or indirectly, interested in a proposed contract with the Company or a contract that has been entered into by the Company, he must declare the nature and extent of that interest to the directors in accordance with the Statutes. (b) Provided he has declared his interest in accordance with paragraph 6.9.11(a), a director may: (i) be party to, or otherwise interested in, any contract with the Company or in which the Company has a direct or indirect interest; (ii) hold any other office or place of profit with the Company (except that of auditor) in conjunction with his office of director for such period and upon such terms, including as to remuneration, as the Board may decide, either in addition to or in lieu of any remuneration under any other provision of these Articles; (iii) act by himself or through a firm with which he is associated in a professional capacity for the Company or any other company in which the Company may be interested (otherwise than as auditor); (iv) be or become a director or other officer of, or employed by or otherwise be interested in any holding company or subsidiary company of the Company or any other company in which the Company may be interested; and (v) be or become a director of any other company in which the Company does not have an interest and which cannot reasonably be regarded as giving rise to a conflict of interest at the time of his appointment as a director of that other company.

6.9.12 Conflicts of interest requiring Board authorisation (a) A “conflict of interest”, in this paragraph 6.9.12, means, in relation to any person, an interest or duty which that person has which directly or indirectly conflicts or may conflict with the interests of the Company or the duties owed by that person to the Company but excludes a conflict of interest arising in relation to a transaction or arrangement with the Company (to which the provisions of paragraph 6.9.11 apply). (b) The Board may, subject to the quorum and voting requirements set out in this paragraph, authorise any matter which would otherwise involve a director breaching his duty under the Statutes to avoid conflicts of interest (“Conflicts”). (c) A director seeking authorisation in respect of a Conflict (the “relevant director”) shall declare to the Board the nature and extent of his interest in a Conflict as soon as is

173 reasonably practicable. The director shall provide the Board with such details of the relevant matter as are necessary for the Board to decide how to address the Conflict together with such additional information as may be requested by the Board. (d) Any director (including the relevant director) may propose that the relevant director be authorised in relation to any matter the subject of a Conflict. Such proposal and any authority given by the Board shall be effected in the same way that any other matter may be proposed to and resolved upon by the Board under the provisions of these Articles save that: (i) the relevant director and any other director with a similar interest shall not count towards the quorum nor vote on any resolution giving such authority; (ii) the relevant director and any other director with a similar interest may, if the other members of the Board so decide, be excluded from any Board meeting while the Conflict is under consideration; (iii) notwithstanding paragraph 6.9.10, the quorum necessary to authorise a Conflict may be fixed by the Board and, unless so fixed at any other number, shall be any two of the non-interested directors; and (iv) notwithstanding paragraph 6.9.24, a written resolution of the directors authorising a Conflict shall be valid and effective if it is signed by all non- interested directors. (e) Where the Board gives authority in relation to a Conflict, or where any of the situations described in this paragraph applies in relation to a director (a “Relevant Situation”): (i) the Board may (whether at the relevant time or subsequently) (i) require that the relevant director is excluded from the receipt of information, the participation in discussion and/or the making of decisions (whether at meetings of the Board or otherwise) related to the Conflict or Relevant Situation; and (ii) impose upon the relevant director such other terms for the purpose of dealing with the Conflict or Relevant Situation as it may determine; (ii) the relevant director will be obliged to conduct himself in accordance with any terms imposed by the Board in relation to the Conflict or Relevant Situation; (iii) the Board may provide that where the relevant director obtains (otherwise than through his position as a director of the Company) information that is confidential to a third party, the director will not be obliged to disclose that information to the Company, or to use or apply the information in relation to the Company’s affairs, where to do so would amount to a breach of that confidence; (iv) the terms of the authority shall be recorded in writing (but the authority shall be effective whether or not the terms are so recorded); and (v) the Board may revoke or vary such authority at any time but this will not affect anything done by the relevant director prior to such revocation in accordance with the terms of such authority. (f) The directors may authorise a matter which may give rise to a Conflict on the part of a person who is proposed to be appointed as a director to the Board and any authorisation of such matter by the directors shall promptly be communicated to such person and shall apply to him on his appointment as a director. (g) A director shall not be regarded as having a Conflict by reason of his also being a director of or holding any other position with another Group Company and the director shall not be in breach of any duty to the Company by reason of his disclosure of any information to the other Group Company or by anything done by the other Group Company including the exploitation of any property, information or opportunity following any such disclosure to it by the director. The directors may resolve that a specified company shall no longer be treated as a Group Company for the purposes of this Article.

174 (h) Save as otherwise resolved by the directors, a director shall not be regarded as having a Conflict by reason of his also having a direct or indirect interest in the shares of the Company.

6.9.13 Benefits Subject to the provisions of the Statutes a director shall not be disqualified by his office from entering into any contract with the Company, either with regard to his tenure of any office or position in the management, administration or conduct of the business of the Company or as vendor, purchaser or otherwise. Subject to the interest of the director being duly declared, a contract entered into by or on behalf of the Company in which any director is in any way interested shall not be liable to be avoided; nor shall any director so interested be liable to account to the Company for any benefit resulting from the contract by reason of the director holding that office or of the fiduciary relationship established by his holding that office.

6.9.14 Powers of the Board The business of the Company shall be managed by the Board which may exercise all the powers of the Company, subject to the provisions of the Statutes and the Articles. No alteration of the Articles shall invalidate any prior act of the Board which would have been valid if the alteration had not been made.

6.9.15 Borrowing powers Subject to the provisions of the Statutes and the Articles, the Board may exercise all the powers of the Company to borrow money, to mortgage or charge all or any part of the Company’s undertaking, property, assets (present and future) and uncalled capital, to issue debentures and other securities and to give security either outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

6.9.16 Indemnity of officers Subject to the provisions of and so far as may be permitted by and consistent with the Statutes each current or former director or other officer (other than an auditor) of the Company or any company or other body corporate which is/or, where the context admits, was at any relevant time associated with the Company for the purpose of section 256 of the Act (an “Associated Company”) may be indemnified out of the assets of the Company against: (a) any liability incurred by or attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the Company other than in the case of a current or former director: (i) any liability to the Company or any Associated Company; and (ii) any liability of the kind referred to in section 234(3) of the Act; (b) any liability incurred by or attaching to him in connection with the activities of the Company or any Associated Company in its capacity as a trustee of an occupational pension scheme (as defined in section 235(6) of the Act) other than a liability of the kind referred to in section 235(3) of the Act; and (c) any other liability incurred by or attaching to him in the actual or purported execution and/or discharge of his duties and/or the exercise or purported exercise of his powers.

For the purpose of this paragraph, references to “liability” shall include all costs and expenses incurred by the current or former director or other officer (other than an auditor) in relation thereto.

Subject to the provisions of and so far as may be permitted by the Statutes, the Board may exercise all the powers of the Company to: (a) provide any current or former director or other officer (other than an auditor) of the Company with funds to meet expenditure incurred or to be incurred by him in

175 defending any criminal or civil proceedings in connection with any alleged negligence, default, breach of duty or breach of trust by him in relation to the Company or an Associated Company, or in connection with any application for relief under the provisions mentioned in section 205(5) of the Act; and (b) do anything to enable any such person to avoid incurring expenditure, but so that the terms set out in section 205(2) of the Act shall apply to any such provision of funds or other things so done. For the purpose of this paragraph references to “director” in section 205(2) of the Act shall be deemed to include references to a former director or other officer (other than an auditor) of the Company.

The Board may purchase and maintain for or for the benefit of any person who holds or has at any time held a relevant office (as defined in the Articles), insurance against any liability or expense incurred by him in relation to the Company or any Associated Company or any third party in respect of any act or omission in the actual or purported discharge of his duties or otherwise in connection with holding his office.

6.9.17 Delegation to individual directors The Board may entrust to and confer upon any director any of its powers, authorities and discretions (with power to sub-delegate) on such terms and conditions as it thinks fit and may revoke or vary all or any of them, but no person dealing in good faith shall be affected by any revocation or variation. The power to delegate contained in this paragraph shall be effective in relation to the powers, authorities and discretions of the Board generally and shall not be limited by the fact that in certain Articles, but not in others, express reference is made to particular powers, authorities or discretions being exercised by the Board or by a committee authorised by the Board.

6.9.18 Committees The Board may delegate any of its powers, authorities and discretions (with power to sub-delegate) including without prejudice to the generality of the foregoing all powers, authorities and discretions whose exercise involves or may involve the payment of remuneration to, or the conferring of any other benefit on, all or any of the directors to any committee consisting of such person or persons (whether directors or not) as it thinks fit, provided that the majority of the members of the committee are directors and that no meeting of the committee shall be quorate for the purpose of exercising any of its powers, authorities or discretions unless a majority of those present are directors.

6.9.19 Board meetings The Board may meet for the despatch of business, adjourn and otherwise regulate its meetings as it thinks fit.

6.9.20 Notice of Board meetings Notice of a Board meeting shall be given to each director and shall be deemed to be properly given to a director if it is given to him personally or by word of mouth or sent in hard copy form to him at his last known address or any other address given by him to the Company for this purpose or sent in electronic form to him at an address given by him to the Company for this purpose.

6.9.21 Quorum The quorum necessary for the transaction of the business of the Board may be fixed by the Board and, unless so fixed at any other number, shall be two. Save for a situation where the number of directors is less than the minimum fixed as the quorum and the continuing directors or the sole continuing director are holding a Board meeting to fill vacancies or summon general meetings for the purpose of appointing further directors, no meeting of the directors shall be quorate unless a majority of directors are Independent directors. Subject to the provisions of the Articles, any director who ceases to be a director at a Board meeting may continue to be present and to act as a director and be counted in the quorum until the termination of the Board meeting if no other director objects and if otherwise a quorum of directors would not be present.

176 6.9.22 Voting Questions arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes the chairman of the meeting shall have a second or casting vote, unless he is not, in accordance with the Articles, to be counted as participating in the decision-making process for quorum, voting or agreement purposes.

6.9.23 Telephone and video conference meetings A meeting of the Board may consist of a conference between directors some or all of whom are in different places provided that each director who participates is able: (a) to hear each of the other participating directors addressing the meeting; and (b) if he wishes, to address all of the other participating directors simultaneously, whether by conference telephone or by video conference or by any other form of communications equipment (whether in use when the Articles are adopted or developed subsequently) or by a combination of any such methods.

A meeting held in this way is deemed to take place at the place where the largest group of participating directors is assembled or, if no such group is readily identifiable, at the place from where the chairman of the meeting participates.

6.9.24 Resolutions in writing Any director may propose a directors’ written resolution and the secretary must propose a written resolution if a director so requests. A resolution in writing signed by all of the directors for the time being entitled to notice of a meeting of the Board, to attend such meeting and to vote on such resolution shall be as valid and effective as if it had been passed at a meeting of the Board duly called and constituted. The resolution may be contained in one document or in several documents in like form, each signed or approved by one or more of the directors concerned.

6.10 Real estate investment trust For the purposes of this paragraph 6.10 only, the following words and expressions shall bear the following meanings (and statutory references are to any section as modified, supplemented or replaced from time to time):

“Distribution” means any dividend or other distribution on or in respect of the shares of the Company and references to a Distribution being paid includes a distribution not involving a cash payment being made;

“Distribution Transfer” means a disposal or transfer (however effected) by a Person of his rights to a Distribution from the Company such that he is not beneficially entitled (directly or indirectly) to such a Distribution and no Person who is so entitled subsequent to such disposal or transfer (whether the immediate transferee or not) is (whether as a result of the transfer or not) a Substantial Shareholder;

“Distribution Transfer Certificate” means a certificate in such form as the directors may specify from time to time to the effect that the relevant Person has made a Distribution Transfer, which certificate may be required by the directors to satisfy them that a Substantial Shareholder is not beneficially entitled (directly or indirectly) to a Distribution;

“Excess Charge” means, in relation to a Distribution which is paid or payable to a Person, all tax or other amounts which the directors consider may become payable by the Company or any other Group Company under section 551 of the CTA 2010 and any interest, penalties, fines or surcharge attributable to such tax as a result of such Distribution being paid to or in respect of that Person;

“Group” means the Company and the other companies in its group for the purposes of section 606 of the CTA 2010;

“interest in the Company” includes, without limitation, an interest in a Distribution made or to be made by the Company;

177 “Person” means a natural person, corporation, partnership or other entity or organisation of any kind incorporated or unincorporated;

“Relevant Registered Shareholder” means a Shareholder who holds all or some of the shares in the Company that comprise a Substantial Shareholding (whether or not a Substantial Shareholder);

“Reporting Obligation” means any obligation from time to time of the Company to provide information or reports to HMRC as a result of or in connection with the Company’s status as a UK REIT;

“Substantial Shareholding” means the shares in the Company in relation to which or by virtue of which (in whole or in part) a Person is a Substantial Shareholder; and

“Substantial Shareholder” means any Person whose interest in the Company, whether legal or beneficial, direct or indirect, may cause any Group Company to be liable to pay tax under section 551 of the CTA 2010 on or in connection with the making of a Distribution to or in respect of such Person including, at the date of adoption of the Articles, any holder of excessive rights as defined in section 553 of the CTA 2010.

6.10.1 Notification of Substantial Shareholder and other status (a) Each Shareholder and any other relevant Person shall serve notice in writing on the Company at the registered office on: (i) him becoming a Substantial Shareholder or him being a Substantial Shareholder (together with the percentage of voting rights, share capital or dividends he controls or is beneficially entitled to, details of the identity of the Shareholder(s) who hold(s) the relevant Substantial Shareholding and such other information, certificates or declarations as the directors may require from time to time); (ii) him becoming a Relevant Registered Shareholder (together with such details of the relevant Substantial Shareholder and such other information, certificates or declarations as the directors may require from time to time); and (iii) any change to the particulars contained in any such notice, including on the relevant Person ceasing to be a Substantial Shareholder or a Relevant Registered Shareholder. (b) Any such notice shall be delivered by the end of the second Business Day after the day on which the Person becomes a Substantial Shareholder or a Relevant Registered Shareholder of the change in relevant particulars or within such shorter or longer period as the directors may specify from time to time. (c) The directors may at any time give notice in writing to any Person requiring him, within such period as may be specified in the notice (being seven days from the date of service of the notice or such shorter or longer period as the directors may specify in the notice), to deliver to the Company such information, certificates and declarations as the directors may require to establish whether or not he is a Substantial Shareholder or a Relevant Registered Shareholder or to comply with any Reporting Obligation. Each such Person shall deliver such information, certificates and declarations within the period specified in such notice.

6.10.2 Distributions in respect of Substantial Shareholdings (a) In respect of any Distribution, the directors may, if the directors determine that the condition set out in paragraph 6.10.2(b) is satisfied in relation to any shares in the Company, withhold payment of such Distribution on or in respect of such shares. Any Distribution so withheld shall be paid as provided in paragraph 6.10.2(c) and until such payment the Persons who would otherwise be entitled to the Distribution shall have no right to the Distribution or its payment.

178 (b) The condition referred to in paragraph 6.10.2(a) is that, in relation to any shares in the Company and any Distribution to be paid or made on and in respect of such shares: (i) the directors believe that such shares comprise all or part of a Substantial Shareholding of a Substantial Shareholder; and (ii) the directors are not satisfied that such Substantial Shareholder would not be beneficially entitled to the Distribution if it was paid, and, furthermore, if the shares comprise all or part of a Substantial Shareholding in respect of more than one Substantial Shareholder this condition is only satisfied in respect of such of the shares as are referable to any particular Substantial Shareholder. (c) If a Distribution has been withheld on or in respect of any shares in the Company in accordance with paragraph 6.10.2(a), it shall be paid as follows: (i) if it is established to the satisfaction of the directors that the condition in paragraph 6.10.2(b) is not satisfied in relation to such shares, in which case the whole amount of the Distribution withheld shall be paid; and (ii) if the directors are satisfied that sufficient interests in all or some of the shares concerned have been transferred to a third party so that such transferred shares no longer form part of the Substantial Shareholding, in which case the Distribution attributable to such shares shall be paid (provided the directors are satisfied that following such transfer such shares concerned do not form part of a Substantial Shareholding); and (iii) if the directors are satisfied that as a result of a transfer of interests in shares referred to in (ii) above the remaining shares no longer form part of a Substantial Shareholding, in which case the Distribution attributable to such remaining shares shall be paid. In this sub-paragraph, references to the “transfer” of a share include the disposal (by any means) of beneficial ownership of, control of voting rights in respect of and beneficial entitlement to dividends in respect of, that share. (d) A Substantial Shareholder may satisfy the directors that he is not beneficially entitled to a Distribution by providing a Distribution Transfer Certificate. The directors shall be entitled to (but shall not be bound to) accept a Distribution Transfer Certificate as evidence of the matters therein stated and the directors shall be entitled to require such other information, certifications or declarations as they think fit. (e) The directors may withhold payment of a Distribution on or in respect of any shares in the Company if any notice given by the directors pursuant to paragraph 6.10.1(c) in relation to such shares shall not have been complied with to the satisfaction of the directors within the period specified in such notice. Any Distribution so withheld will be paid when the notice is complied with to the satisfaction of the directors unless the directors withhold payment pursuant to paragraph 6.10.2(a) and until such payment the Persons who would otherwise be entitled to the Distribution shall have no right to the Distribution or its payment. (f) If any Distribution shall be paid on a Substantial Shareholding and an Excess Charge becomes payable, the Substantial Shareholder shall pay the amount of such Excess Charge and all costs and expenses incurred by the Company in connection with the recovery of such amount to the Company on demand by the Company. Without prejudice to the right of the Company to claim such amount from the Substantial Shareholder, such recovery may be made out of the proceeds of any disposal pursuant to paragraph 6.10.4(b) or out of any subsequent Distribution in respect of the shares to such Person or to the shareholders of all shares in relation to or by virtue of which the directors believe that Person has an interest in the Company (whether that Person is at that time a Substantial Shareholder or not).

179 6.10.3 Distribution trust (a) If a Distribution is paid on or in respect of a Substantial Shareholding (except where the Distribution is paid in circumstances where the Substantial Shareholder is not beneficially entitled to the Distribution), the Distribution and any income arising from it shall be held by the payee or other recipient to whom the Distribution is transferred by the payee on trust absolutely for the Persons nominated by the relevant Substantial Shareholder under paragraph 6.10.3(b) in such proportions as the relevant Substantial Shareholder shall in the nomination direct or, subject to and in default of such nomination being validly made within 12 years after the date the Distribution is made, for the Company or such Person as may be nominated by the directors from time to time. (b) The Substantial Shareholder of shares of the Company in respect of which a Distribution is paid shall be entitled to nominate in writing any two or more Persons (not being Substantial Shareholders) to be the beneficiaries of the trust on which the Distribution is held under paragraph 6.10.3(a) and the Substantial Shareholder may in any such nomination state the proportions in which the Distribution is to be held on trust for the nominated Persons, failing which the Distribution shall be held on trust for the nominated Persons in equal proportions. No Person may be nominated under this article that is or would, on becoming a beneficiary in accordance with the nomination, become a Substantial Shareholder. If the Substantial Shareholder making the nomination is not by virtue of paragraph 6.10.3(a) the trustee of the trust, the nomination shall not take effect until it is delivered to the Person who is the trustee. (c) Any income arising from a Distribution which is held on trust under paragraph 6.10.3(a) shall until the earlier of (i) the making of a valid nomination under paragraph 6.10.3(b) and (ii) the expiry of the period of 12 years from the date when the Distribution is paid be accumulated as an accretion to the Distribution. Income shall be treated as arising when payable, so that no apportionment shall take place. (d) No Person who by virtue of paragraph 6.10.3(a) holds a Distribution on trust shall be under any obligation to invest the Distribution or to deposit it in an interest-bearing account. (e) No Person who by virtue of paragraph 6.10.3(a) holds a Distribution on trust shall be liable for any breach of trust unless due to his own fraud or wilful wrongdoing or, in the case of an incorporated Person, the fraud or wilful wrongdoing of its directors, officers or employees.

6.10.4 Obligation to dispose (a) If at any time, the directors believe that: (i) in respect of any Distribution declared or announced, the condition set out in paragraph 6.10.1(b) is satisfied in respect of any shares in the Company in relation to that Distribution; (ii) a notice given by the directors pursuant to paragraph 6.10.1(c) in relation to any shares in the Company has not been complied with to the satisfaction of the directors within the period specified in such notice; or (iii) any information, certificate or declaration provided by a Person in relation to any shares in the Company for the purposes of the preceding provisions was materially inaccurate or misleading, the directors may give notice in writing (a “Disposal Notice”) to any Persons they believe are Relevant Registered Shareholders in respect of the relevant shares requiring such Relevant Registered Shareholders within 21 days of the date of service of the notice (or such longer or shorter time as the directors consider to be appropriate in the circumstances) to dispose of such number of shares the directors may in such notice specify or to take such other steps as will cause the condition set out in paragraph 6.10.2(b) no longer to be satisfied. The directors may, if they think fit, withdraw a Disposal Notice.

180 (b) If: (i) the requirements of a Disposal Notice are not complied with to the satisfaction of the directors within the period specified in the relevant notice and the relevant Disposal Notice is not withdrawn; or (ii) a Distribution is paid on a Substantial Shareholding and an Excess Charge becomes payable, the directors may arrange for the Company to sell all or some of the shares to which the Disposal Notice relates or, as the case may be, that form part of the Substantial Shareholding concerned. For this purpose, the directors may make such arrangements as they deem appropriate. In particular, without limitation, they may authorise any officer or employee of the Company to execute any transfer or other document on behalf of the holder or holders of the relevant shares and, in the case of a share in uncertificated form, may make such arrangements as they think fit on behalf of the relevant holder or holders to transfer title to the relevant share through a relevant system. (c) Any sale pursuant to paragraph 6.10.4(b) shall be at the price which the directors consider is the best price reasonably obtainable and the directors shall not be liable to the holder or holders of the relevant share for any alleged deficiency in the amount of the sale proceeds or any other matter relating to the sale. (d) The net proceeds of the sale of any share under paragraph 6.10.4(b) (less any amount to be retained pursuant to paragraph 6.10.2(f) and the expenses of sale) shall be paid over by the Company to the former holder or holders of the relevant shares upon surrender of any certificate or other evidence of title relating to it, without interest. The receipt of the Company shall be a good discharge for the purchase money. (e) The title of any transferee of shares shall not be affected by an irregularity or invalidity of any actions purportedly taken pursuant to this paragraph.

6.10.5 General (a) The directors shall be entitled to presume without enquiry, unless any director has reason to believe otherwise, that a Person is not a Substantial Shareholder or a Relevant Registered Shareholder. (b) The directors shall not be required to give any reasons for any decision or determination (including any decision or determination not to take action in respect of a particular Person) pursuant to the provisions described in this paragraph 6.10 and any such determination or decision shall be final and binding on all Persons unless and until it is revoked or changed by the directors. Any disposal or transfer made or other thing done by or on behalf of the Board or any director pursuant to the provisions described in this paragraph 6.10 shall be binding on all Persons and shall not be open to challenge on any ground whatsoever. (c) Without limiting their liability to the Company, the directors shall be under no liability to any other Person, and the Company shall be under no liability to any Shareholder or any other Person, for identifying or failing to identify any Person as a Substantial Shareholder or a Relevant Registered Shareholder. (d) The directors shall not be obliged to serve any notice required under the provisions described in this paragraph 6.10 upon any Person if they do not know either his identity or his address. The absence of service of such a notice in such circumstances or any accidental error in or failure to give any notice to any Person upon whom notice is required to be served under the provisions described in this paragraph 6.10 shall not prevent the implementation of or invalidate any procedure under the provisions described in this paragraph 6.10. (e) Any notice required or permitted to be given pursuant to this paragraph 6.10 may relate to more than one share and shall specify the share or shares to which it relates.

181 (f) The directors may require from time to time any Person who is or claims to be a Person to whom a Distribution may be paid without deduction of tax under Regulation 7 of the Real Estate Investment Trusts (Assessment and Recovery of Tax) Regulations 2006 (as amended, supplemented or replaced by regulations having similar effect from time to time) to provide such certificates or declarations as they may require from time to time.

7 DIRECTORS’ AND OTHER INTERESTS 7.1 As at the date of this document, the interests of the Directors (including any interest known to that Director or which could with reasonable diligence be ascertained by him) or any person connected with a Director within the meaning of section 252 to 255 of the Act in the Company’s Issued Share Capital are (and immediately following the Placing are expected to be) as follows: Number of Ordinary Shares Number of Ordinary Shares held immediately following held before the Placing the Placing(1) Number of Percentage of Number of Percentage Ordinary Issued Ordinary of Issued Shares Share Capital Shares Share Capital Martin Moore 57,471 0.03% 57,471 0.03% Mike Brown 574,712 0.32% 574,712 0.32% Leslie Ferrar 14,367 0.01% 14,367 0.01% Sandy Gumm 114,942 0.06% 114,942 0.06% Jonathan Lane 57,471 0.03% 57,471 0.03% Nick Leslau(2) 42,676,962 23.66% 22,566,677 12.51% Ian Marcus(3) 28,735 0.02% 48,343 0.03% Prestbury Incentives(4) 11,900,432 6.60% 9,783,717 5.26%

(1) Assuming that all available Ordinary Shares are placed and the Placing Price is set at the mid-point of the Placing Price Range. (2) 42,619,491 Ordinary Shares are held by PIHL Property LLP and 57,471 Ordinary Shares are held by the Saper Trust. Lesray LLP, a partnership in which Nick Leslau has a 42.6 per cent legal interest and 50 per cent of the voting rights, beneficially owns 81.7 per cent of PIHL Property LLP. The Saper Trust is a trust whose beneficiaries include Nick Leslau. (3) Ian Marcus is purchasing shares equal in value to £50,000 as part of the Placing. The Ordinary Share numbers above assume the Placing Price is set at the mid-point of the Placing Price Range. (4) Prestbury Incentives is a wholly owned subsidiary of the Investment Adviser. These shares were issued in settlement of incentive fees payable for the year ended 31 December 2014, as described in Part 2: Prestbury and the Investment Advisory Agreement. Nick Leslau, Mike Brown and Sandy Gumm are members of the Investment Adviser whose respective interests in the Investment Adviser for these purposes are: Nick Leslau — 59 per cent; Mike Brown — 15.5 per cent and Sandy Gumm — 7 per cent.

7.2 The Company is aware of the following Shareholders (other than any Director) who by virtue of the notifications made to it pursuant to the Act and/or the Disclosure and Transparency Rules are either before the Placing or immediately following the Placing will be interested, directly or indirectly, in 3 per cent or more of the Issued Share Capital:

Number of Ordinary Shares Number of Ordinary Shares held immediately following held before the Placing the Placing(1) Number of Percentage Number of Percentage Ordinary of voting Ordinary of voting Shares rights Shares rights PIHL Property LLP 42,619,491 23.6% 22,509,206 12.5% West Coast Capital Prestven Investments Limited 14,206,499 7.9% — — West Coast Capital Investments Limited 14,206,497 7.9% 12,785,847 7.1% West Coast Capital (Retail Parks) Limited 14,206,495 7.9% — — Prestonfield P1 Limited 14,206,497 7.9% — — Prestonfield P2 Limited 14,206,497 7.9% — — Prestonfield P3 Limited 14,206,497 7.9% — — Prestbury Incentives Limited 11,900,432 6.6% 9,738,717 5.4% Bluetouch Investments (Malta) Limited 10,654,878 5.9% — — Brookstone Limited 10,654,878 5.9% 5,254,878 2.9% Dominic Silvester 10,654,878 5.9% 10,654,878 5.9%

(1) Assumes that all available Ordinary Shares are placed and a Placing Price set at the mid-point of the Placing Price Range.

182 7.3 The following table sets out the number of Ordinary Shares the Selling Shareholders are selling in the Placing and the interests of the Selling Shareholders following the Placing:

Maximum Number of Ordinary Shares Number of Ordinary Shares held immediately following to be sold in the Placing(1) the Placing(1) Number of Percentage Number of Percentage Ordinary of voting Ordinary of voting Shares rights Shares rights PIHL Property LLP 20,110,285 11.1% 22,509,206 12.5% West Coast Capital Prestven Investments Limited 14,206,499 7.9% — — West Coast Capital Investments Limited 1,420,650 0.7% 12,785,847 7.1% West Coast Capital (Retail Parks) Limited 14,206,495 7.9% — — Prestonfield P1 Limited 14,206,497 7.9% — — Prestonfield P2 Limited 14,206,497 7.9% — — Prestonfield P3 Limited 14,206,497 7.9% — — Bluetouch Investments (Malta) Limited 10,654,878 5.9% — — Brookstone Limited 5,400,000 3.0% 5,254,878 2.9% Prestbury Incentives Limited 2,116,715 1.2% 9,783,717 5.4% Total 110,735,013 61.4% 50,333,648 27.9%

(1) Assuming that all available Ordinary Shares are placed and the Placing Price is set at the mid-point of the Placing Price Range.

The business address of each of the Selling Shareholders is as follows:

PIHL Property LLP Cavendish House, 18 Cavendish Square, London, W1G 0PJ West Coast Capital Prestven Investments Limited Marathon House, Olympic Business Park, Drybridge Road, Dundonald, Ayrshire, KA2 9AE West Coast Capital Investments Limited c/o Pinsent Masons LLP, 1 Park Row, Leeds LS1 5AB West Coast Capital (Retail Parks) Limited Marathon House, Olympic Business Park, Drybridge Road, Dundonald, Ayrshire, KA2 9AE Prestonfield P1 Limited The Mound, Edinburgh EH1 1YZ Prestonfield P2 Limited The Mound, Edinburgh EH1 1YZ Prestonfield P3 Limited The Mound, Edinburgh EH1 1YZ Bluetouch Investments (Malta) Limited Level 2 West, Mercury Tower, The Exchange Financial & Business Centre, Elia Zammit Street, St Julians, STJ 3155, Malta Brookstone Limited 40 Esplanade, St. Helier, Jersey, JE4 9RJ Prestbury Incentives Limited Cavendish House, 18 Cavendish Square, London, W1G 0PJ 7.4 Save as disclosed in paragraphs 7.1 and 7.2 above, the Company is not aware of any person who directly or indirectly, jointly or severally, exercises or could exercise control over the Company nor is it aware of any arrangements, the operation of which may at a subsequent date result in a change of control of the Company. 7.5 The persons including the Directors, referred to in paragraphs 7.1 and 7.2 above, do not have voting rights that differ from those of other Shareholders. 7.6 The Company and the Directors are not aware of any arrangements, the operation of which may at a subsequent date result in a change of control of the Company.

183 7.7 In addition to their directorships of the Company and subsidiaries of the Company, the Directors currently hold, and have during the five years preceding the date of this document held, the following directorships or partnerships:

Current Previous directorships/partnerships directorships/partnerships Martin Moore Crawley Holdings Limited British Property Federation English Heritage Trading Limited HighSpeed Office Limited F&C Commercial Property Holdings Euro Salas Properties Limited Limited F&C Commercial Property Finance F&C Commercial Property Trust Limited Limited FCPT Holdings Limited Legalfuture Limited Leonard Crawley Limited M&G Limited M&G Asia Property Fund SICAV-FIS M&G Investment Management Limited MRM UK Consulting Services Limited M&G Real Estate Limited Prime 4 Limited MEPC Limited SCP Estate Holdings Limited PruPim Singapore SCP Estates Limited Scottish Amicable Investment Property The Guildhall School Trust Limited Winchester Burma Limited SEH Manager Limited SEGRO Plc SEH Nominee Limited SES Nominee Limited SES Manager Limited St Edward Homes Limited 10 Lancelot Place Limited Ian Marcus The Prince’s Regeneration Trust British Property Federation Ian Marcus Consultants Limited Buckley Properties (Leeds) Limited Town Centre Securities PLC Astra House Limited The Crown Estate Business Living Investments Limited Business Living Limited Citygate Developments No.1 Limited Citygate Developments No.2 Limited Evans (Ashford) Limited Evans Advisory Limited Evans Ashford Investments Limited Evans Homes Limited Evans Homes No.2 Limited Evans Management Limited Evans Of Leeds Limited Evans Property Group Limited Evans Property Holdings Limited Evans Property Limited Evans Regeneration Investments Limited Evans Residential Holdings Limited F R Evans (Leeds) Limited Forth Bridges Business Park Developments Limited Fradley District Centre Limited Fradley Park Developments Limited Marchington Properties Limited Millshaw Investments Limited Millshaw No.3 Limited Quartz Point Limited Roando Investments Limited Rowite Properties No 1 Limited Skelton Investments Limited Springhead Developments No.1 Limited

184 Current Previous directorships/partnerships directorships/partnerships Volbay Investments Limited White Rose (Leeds) Limited White. Rose Property Investments No.2 Limited York Business Park Developments Limited Airebank Developments Limited Templegate Developments Limited Millshaw No.2 Limited Millshaw Property Co. Limited Evans Student Investments Limited United Kingdom Historic Buildings Preservation Trust Leslie Ferrar Penna Consulting Plc A.G. Carrick Limited The Risk Advisory Group (Holdings) Plc Breakthrough Breast Cancer Westminster Roman Catholic Diocese CAFOD Trustee Duchy Originals Limited Windmill Hill Asset Management Limited Duchy Originals Foods Limited HMRC Dumfries Estate (Pennyfadzeoch) Limited Dumfries Estate (Glenside) Limited Dumfries Estate (Orchardton) Limited Dumfries Farming and Land Limited Dumfries House Home Farm Limited Dumfries House Trust Trading Limited Dumfries Social Enterprises Limited Ecolouica Transalvania Golden Jubilee Events Limited In Kind Direct Neerock Farming Limited North Highland Initiative PCF Social Enterprises Limited PCF Sustainable Development Limited The Amiri Collection Limited The Great Steward of Scotland’s Dumfries House Trust The Prince’s Charities Events Limited The Prince of Wales’s Charitable Foundation Traditional Arts Limited Jonathan Lane Grosvenor Liverpool Limited Compagnie La Lucette Resolution Property IM LLP Advisory Songbird Estates PLC Board Songbird Finance (Two) Limited Tenebrae Choir Trading Limited The Tenebrae Choir Nick Leslau Saracen Property Investments LLP Burford Beta Holdings Limited PIHL Equity Limited Liability Partnership Starncourt Limited PIHL Property Limited Liability PSX No 2 Limited Partnership PCV Bracknell Limited Prestbury Two Limited Liability PWC3 Portfolio 2 Limited Partnership Prestbury West Coast Treasury Prestbury Investments LLP Limited Lesray LLP PWCR Finance Limited Prestbury Services (Voluntary Members PWCR Minerva House Limited Liquidation on 30/11/2015) PWCR No 1 Limited Prestbury Group PWCR Bedford Street Limited Prestbury 2009 Limited (Voluntary PWCR Burlington Limited Members Liquidation on 23/09/2014) PWCR Chandlers Ford Limited

185 Current Previous directorships/partnerships directorships/partnerships Prestbury Acquisitions Limited PWCR Kensington Limited (Voluntary Members Liquidation on PWCR Liverpool Street Limited 23/09/2014) PWCR Old Broad Street Limited Prestbury Industrial (Voluntary Members PWCR Stevenage Limited Liquidation on 23/09/2014) PWCR Chandlers Ford 2 Limited Saracens Limited Blaxmill (Forty-Three) Limited Prestbury (Stukeley Road) Ltd Blaxmill (Thirty-Nine) Limited Prestbury Property Holdings Limited 16 Wood Mews Limited (Voluntary Members Liquidation on Prestbury West Coast Five Limited 30/11/2015) P1 Mcstone Limited New Prestbury Limited Prestbury 1 Eleven Limited Prestbury Nominees Limited Prestbury 1 Fifteen Limited Prestbury Properties No. 1 Limited Wave Ventures Limited (Voluntary Members Liquidation on Max Property Group Plc 30/11/2015) Prestbury Hampshire Ltd Prestbury Residual Limited Prestbury (New Garden House) Ltd Prestbury West Coast Four Limited Prestbury Offices Limited Prestbury West Coast Holdings Limited Starnbush Limited — (Voluntary Members Liquidation on Deltaglen Limited 31/08/2010) Prestbury Residential Limited Prestbury Assets Limited (Voluntary Prestbury Sheffield Limited Members Liquidation on 30/11/2015) Prestbury (Church House) Ltd. Prestbury Capital Ventures Limited Prestbury (Clarges House) Ltd. (Voluntary Members Liquidation on Prestbury Brighton Ltd. 23/09/2014) Prestbury Croydon Ltd. PCV HP Limited (Voluntary Members Prestbury Fishergate Ltd. Liquidation on 23/09/2014) Prestbury Taunton Ltd. PCV HP Nominee Limited (Voluntary Prestbury Properties No. 12 Limited Members Liquidation on 23/09/2014) Prestbury Properties No. 2 Limited Prestbury Incentives Limited Prestbury Properties No. 3 Limited Prestbury Investment Holdings Limited Prestbury Properties No. 4 Limited Prestbury West Coast Limited (Voluntary Prestbury Properties No. 5 Limited Members Liquidation on 04/06/2015) Giltauto Limited Prestbury West Coast Two Limited PCV Plymouth No.2 Limited Prestbury West Coast Three Limited PCV Plymouth No.3 Limited PWC3 Portfolio 1 Limited PSX Bondco Limited Prestbury 2014 Limited (Voluntary PSX Equitvco Limited Members Liquidation on 30/11/2015) PSX Midco Limited Prestbury West Coast Rice Limited PSX Noteco Limited (Voluntary Creditors Liquidation on PSX Propco Limited 21/05/2010) PSX Propholdco Limited Talkbake Limited (Voluntary Creditors Max Industrial GP Limited Liquidation on 21/05/2010) Max Industrial Nominee Limited PIHL Wentworth Manager Limited Max Office GP Limited Prestbury Wentworth Limited (Voluntary Max Office Nominee Limited Creditors Liquidation on 30/01/2015) MPG Hospital Holdings Limited Prestbury Wentworth Acquisitions MPG Hospital Properties Limited Limited (Voluntary Creditors Liquidation Max Bars GP Limited on 30/01/2015) Max Bars Nominee Limited Prestbury Wentworth Finance Limited MPG Pubs GP Limited (Voluntary Creditors Liquidation on MPG Pubs Nominee Limited 30/01/2015) MPG Finco Limited Prestbury Wentworth Holdings Limited MPG St Katharine GP Limited (Voluntary Creditors Liquidation on MPG St Katharine Nominee Limited 30/01/2015) MPG St Katharine Nominee Two SL 2011 Limited (Voluntary Creditors Limited Liquidation on 30/01/2015) SKD Marina Limited

186 Current Previous directorships/partnerships directorships/partnerships Prestbury Wentworth Three Limited SKIL Four Limited (Voluntary Creditors Liquidation on SKIL Three Limited 30/01/2015) St. Katharine’s Estate Management Prestbury West Coast Maidenhead Company Limited Limited (Voluntary Members Liquidation MPG Holborn GP Limited on 04/06/2015) MPG Holborn Nominee Limited Prestbury Hotels Assets Limited MPG Artemis GP Limited (Voluntary Creditors Liquidation on MPG Artemis Nominee 1 Limited 30/06/2015) MPG Artemis Nominee 2 Limited Prestbury Hotels Limited (Voluntary MIMI LA Sardine LLP Creditors Liquidation on 30/06/2015) Platbay Limited TLLC CMpropco11 Limited (Voluntary Max Property 1 Limited Creditors Liquidation on 27/04/2015) Max Property 2 Limited TLLC CMpropco8 Limited (Voluntary Max Property Group Limited Creditors Liquidation on 10/12/2014) PSX Holdings Limited TLLC Bridgeco1 Limited (Voluntary Prestbury (AAH House) Ltd. Creditors Liquidation on 09/12/2014) Prestbury New Road Ltd. TLLC Bridgeco2 Limited (Voluntary Prestbury Queen Street Ltd. Creditors Liquidation on 09/12/2014) PIHL LP Limited TLLC Bridgeco5 Limited (Voluntary PREP Management Limited Creditors Liquidation on 10/12/2014) PCV High Street No.2 Limited TLLC Bridgeco6 Limited (Voluntary PCV High Street No.3 Limited Creditors Liquidation on 30/06/2015) PWCR No 2 Limited TLLC Bridgesubco1 Limited (Voluntary Giant Property Consortium Limited Creditors Liquidation on 09/12/2014) PSX Willesden Limited TLLC Bridgesubco2 Limited (Voluntary P1 Old Finance Limited Creditors Liquidation on 09/12/2014) TLLC Bridgesubco5 Limited (Voluntary Creditors Liquidation on 09/12/2014) TLLC Bridgesubco6 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC CMpropco1 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMpropco10 Limited (Voluntary Creditors Liquidation on 11/12/2014) TLLC CMpropco12 Limited (Voluntary Creditors Liquidation on 11/12/2014) TLLC CMpropco2 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMpropco3 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMpropco4 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC CMpropco5 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMpropco9 Limited (Voluntary Creditors Liquidation on 11/12/2014) TLLC CMsubpropco1 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMsubpropco10 Limited (Voluntary Creditors Liquidation on 11/12/2014) TLLC CMsubpropco11 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC CMsubpropco12 Limited (Voluntary Creditors Liquidation on 11/12/2014)

187 Current Previous directorships/partnerships directorships/partnerships TLLC CMsubpropco2 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMsubpropco3 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMsubpropco4 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC CMsubpropco5 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMsubpropco8 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMsubpropco9 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC Levpropc10 Limited (Voluntary Creditors Liquidation on 11/12/2014) TLLC Levsubpropco10 Limited (Voluntary Creditors Liquidation on 11/12/2014) Prestbury Hotels Two Limited (Voluntary Creditors Liquidation on 30/06/2015) Prestbury Equities Limited (Voluntary Members Liquidation on 30/11/2015) Prestbury Hotel Holdings Limited (Voluntary Creditors Liquidation on 30/06/2015) PIHL Services Limited TLLC Levpropco9 Limited (Voluntary Creditors Liquidation on 28/04/2015) TLLC Levsubpropco9 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC Levpropco2 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC Levpropco8 Limited (Voluntary Creditors Liquidation on 28/04/2015) TLLC Levsubpropco2 Limited (Voluntary Creditors Liquidation on 28/04/2015) TLLC Levsubpropco8 Limited (Voluntary Creditors Liquidation on 27/04/2015) Prestbury West Coast Retail Limited PIHL One Limited PIHL Equity Administration Limited PIHL Equity Holdings Limited PIHL Property Administration Limited PIHL Property Holdings Limited Prestbury General Partner Limited P1 Bars Limited P1 Bars Propco Limited Prestbury 1 Feasibility Limited Prestbury 1 Nominee Limited SIR Hospital Holdings Limited PIHL Equity Assessments Limited P1 Bars GP Limited P1 Bars Propco 2 Limited P1 Hedge End Limited P1 Prime Limited P1 Reversions Limited Prestbury Hotels Finance Limited (Voluntary Creditors Liquidation on 30/06/2015)

188 Current Previous directorships/partnerships directorships/partnerships TLLC Bridgeco10 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC Bridgeco4 Limited (Voluntary Creditors Liquidation on 27/04/2015) Pumpkin General Partner Limited Sale & Leaseback Limited P1 Attractions Limited (Voluntary Members Liquidation on 30/11/2015) P1 Intermediate One Limited (Voluntary Members Liquidation on 30/11/2015) P1 Intermediate Three Limited — (Voluntary Members Liquidation on 30/11/2015) P1 Intermediate Two Limited (Voluntary Members Liquidation on 30/11/2015) P1 Old Hotels Limited (Voluntary Members Liquidation on 30/11/2015) P1 Use Hotels Limited P1 Old Opco Limited (Voluntary Members Liquidation on 30/11/2015) P1 Tasmania Group Limited (Voluntary Members Liquidation on 30/11/2015) P1 Tasmania Limited (Voluntary Members Liquidation on 30/11/2015) Holetown Group Limited P1 Cornhill Limited P1 Dover Limited P1 Duke Street Limited P1 Golden Limited P1 Kensington Limited P1 Newman Limited P1 Parkshot Limited P1 St Andrew Limited P1 St Martins Limited PIHL Three Limited (Voluntary Members Liquidation on 30/11/2015) Prestbury Feeder GP Limited (Voluntary Members Liquidation on 30/11/2015) P1 Hedge End Subco Limited MPG Feeder Limited (Voluntary Members Liquidation on 30/11/2015) TLLC Bridgeco3 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC Bridgeco7 Limited (Voluntary Creditors Liquidation on 27/04/2015) Premier Team Holdings Limited Muddy Boots Real Foods Ltd Twenty Three Prince Albert Road (Management) Limited BM Holdco Limited Prestbury Incentives Limited Prestbury SIR 1 Limited Prestbury SIR 2 Limited Prestbury SIR 3 Limited Trancoso Limited Portico UK Holdco Limited

189 Current Previous directorships/partnerships directorships/partnerships Mike Brown Prestbury Brown LLP Max Industrial 1 Limited Prestbury Incentives Limited Max Nominee Limited Prestbury Investments LLP Max Industrial Finance Limited Max Industrial 3 Limited Max Industrial GP Limited Max Industrial Nominee Limited Max Office GP Limited Max Office Nominee Limited Max Bars GP Limited Max Bars Nominee Limited Max Industrial Limited Max Industrial 2 Limited Max Industrial Limited Partner Limited Max Office Finance Limited Max Office Limited Max Office Limited Partner Limited Max Office Properties Limited Max Office Investor Limited Max Property Group Plc Max Investor Limited Max Bars Limited Partner Limited MPG Pubs Finance Limited MPG Pubs Holding Limited MPG Pubs LP Limited MPG St Katharine Limited MPG St Katharine LP Limited MPG St Katharine Finance Limited MPG Hedging Limited MPG Holborn Limited MPG Holborn LP Limited MPG Artemis Limited MPG Artemis LP Limited MPG Pubs GP Limited MPG Pubs Nominee Limited MPG Finco Limited MPG St Katharine GP Limited MPG St Katharine Nominee Limited MPG St Katharine Nominee Two Limited SKD Marina Limited SKIL Four Limited SKIL Three Limited St. Katharine’s Estate Management Company Limited MPG Holborn GP Limited MPG Holborn Nominee Limited MPG Artemis GP Limited MPG Artemis Nominee 1 Limited MPG Artemis Nominee 2 Limited Investment Property Forum Sandy Gumm Prestbury Services (Voluntary Members PSX Holdings Limited Liquidation on 30/11/2015) Starncourt Limited Prestbury Group Prestbury (AAH House) Ltd Prestbury 2009 Limited (Voluntary Prestbury New Road Ltd Members Liquidation on 23/09/2014) Prestbury Queen Street Ltd

190 Current Previous directorships/partnerships directorships/partnerships Prestbury Acquisitions Limited PWCR No 2 Limited (Voluntary Members Liquidation on PSX No 2 Limited 23/09/2014) PCV Bracknell Limited Prestbury Industrial (Voluntary Members Stanhope Communications Plc Liquidation on 23/09/2014) PWC3 Portfolio 2 Limited Prestbury (Stukeley Road) Ltd. Prestbury West Coast Treasury Prestbury Property Holdings Limited Limited (Voluntary Members Liquidation on Manta Yacht Charter Limited 30/11/2015) PWCR Minerva House Limited New Prestbury Limited PWCR Finance Limited Prestbury Nominees Limited PWCR No 1 Limited Prestbury Properties No. 1 Limited PWCR Bedford Street (Voluntary Members Liquidation on PWCR Burlington Limited 30/11/2015) PWCR Chandlers Ford Limited Prestbury Residual Limited PWCR Kensington Limited Prestbury West Coast Four Limited PWCR Liverpool Street Limited Prestbury West Coast Holdings Limited PWCR Old Broad Street Limited (Voluntary Members Liquidation on PWCR Stevenage Limited 31/08/2010) PWCR Chandlers Ford 2 Limited Prestbury Assets Limited (Voluntary Blaxmill (Forty-Three) Limited Members Liquidation on 30/11/2015) Blaxmil (Thirty-Nine) Limited Prestbury Capital Ventures Limited Stablebright Limited (Voluntary Members Liquidation on Stablegreen Limited 23/09/2014) Prestbury West Coast Five Limited PCV HP Limited (Voluntary Members P1 McStone Limited Liquidation on 23/09/2014) Prestbury 1 Eleven Limited PCV HP Nominee Limited (Voluntary Prestbury 1 Fifteen Limited Members Liquidation on 23/09/2014) Max Industrial GP Limited Prestbury Incentives Limited Max Industrial Nominee Limited Prestbury Investment Holdings Limited Max Office GP Limited Prestbury West Coast Kensington Max Office Nominee Limited Limited (Voluntary Members Liquidation MPG Hospital Holdings Limited on 04/06/2015) MPG Hospital Holdings Limited Prestbury West Coast Limited (Voluntary MPG Hospital Properties Limited Members Liquidation on 04/06/2015) Max Bars GP Limited Prestbury West Coast Maidenhead Max Bars Nominee Limited Limited (Voluntary Members Liquidation MPG Pubs GP Limited on 04/06/2015) MPG Pubs Nominee Limited Kensington Nominee No.1 Limited MPG Finco Limited (Voluntary Members Liquidation on MPG St Katharine GP Limited 04/06/2015) MPG St Katharine Nominee Limited Kensington Nominee No.2 Limited MPG St Katharine Nominee Two (Voluntary Members Liquidation on Limited 04/06/2015) SKD Marina Limited Maidenhead Nominee No.1 Limited SKIL Four Limited (Voluntary Members Liquidation on SKIL Three Limited 04/06/2015) St. Katharine’s Estate Management Maidenhead Nominee No.2 Limited Company Limited (Voluntary Members Liquidation on MPG Holborn GP Limited 04/06/2015) MPG Holborn Nominee Limited Prestbury West Coast Caledonian MPG Artemis GP Limited Limited (Voluntary Members Liquidation MPG Artemis. Nominee 1 Limited on 04/06/2015) MPG Artemis Nominee 2 Limited. Prestbury West Coast Two Limited Prestbury Hampshire Ltd Turnpike Land Limited Prestbury (New Garden House) Ltd Turnpike Land No.2 Limited Prestbury Offices Limited Prestbury West Coast Three Limited Starnbush Limited PWC3 Portfolio 1 Limited Deltaglen Limited

191 Current Previous directorships/partnerships directorships/partnerships Prestbury 2014 Limited (Voluntary Prestbury Residential Limited Members Liquidation on 30/11/2015) Prestbury Sheffield Limited Prestbury West Coast Rice Limited Prestbury (Church House) Lid (Voluntary Creditors Liquidation on Prestbury (Clarges House) Ltd 21/05/2010) Prestbury Brighton Ltd Talkbake Limited (Voluntary Creditors Prestbury Croydon Ltd Liquidation on 21/05/2010) Prestbury Fishergate Ltd PIHL Wentworth Manager Limited Prestbury Taunton Ltd Prestbury Wentworth Limited (Voluntary Prestbury Properties No. 12 Limited Creditors Liquidation on 30/01/2015) Prestbury Properties No. 2 Limited Prestbury Wentworth Acquisitions Prestbury Properties No. 3 Limited Limited (Voluntary Creditors Liquidation Prestbury Properties No. 4 Limited on 30/01/2015) Prestbury Properties No. 5 Limited Prestbury Wentworth Holdings Limited Giltauto Limited (Voluntary Creditors Liquidation on PCV Plymouth No2 Limited 30/01/2015) PCV Properties No.3 Limited SL 2011 Limited (Voluntary Creditors PCV High Street No.2 Limited Liquidation on 30/01/2015) PCV High Street No.3 Limited Prestbury Wentworth Finance Limited PSX Midco Limited (Voluntary Creditors Liquidation on PSX Bondco Limited 30/01/2015) PSX Equityco Limited Prestbury Wentworth Intermediate PSX Noteco Limited Limited (Voluntary Creditors Liquidation PSX Propco Limited on 30/01/2015) PSX Propholdco Limited Prestbury Wentworth Portfolio Limited PSX Willesden Limited (Voluntary Creditors Liquidation on Max Property 1 Limited 30/01/2015) Max Property 2 Limited PIHL Wentworth Manager Limited Max Property Group Limited Prestbury Wentworth Three Limited PIHL LP Limited (Voluntary Creditors Liquidation on Prep Management Limited 30/01/2015) Giant Property Consortium Limited Prestbury Hotels Assets Limited P1 Old Finance Limited (Voluntary Creditors Liquidation on Max Property Group Plc 30/06/2015) Max Industrial 1 Limited Prestbury Hotels Limited (Voluntary Max Nominee Limited Creditors Liquidation on 30/06/2015) Max Industrial Finance Limited TLLC CMpropco11 Limited (Voluntary MPG Opco Limited Creditors Liquidation on 27/04/2015) MPG Pubs LP Limited TLLC CMpropco8 Limited (Voluntary Max Property GP Limited Creditors Liquidation on 10/12/2014) Max Property LP Limited TLLC Bridgeco1 Limited (Voluntary Max Industrial Limited Creditors Liquidation on 09/12/2014) Max Industrial 2 Limited TLLC Bridgeco2 Limited (Voluntary Max Industrial 3 Limited Creditors Liquidation on 09/12/2014) Max Industrial Limited Partner TLLC Bridgeco5 Limited (Voluntary Max Office Finance Limited Creditors Liquidation on 10/12/2014) Max Office Limited TLLC Bridgeco6 Limited (Voluntary Max Office Limited Partner Limited Creditors Liquidation on 30/06/2015) Max Office Properties Limited TLLC Bridgesubco1 Limited (Voluntary Max Office Investor Limited Creditors Liquidation on 09/12/2014) Max Investor Limited TLLC Bridgesubco2 Limited (Voluntary MPG Hedging Limited Creditors Liquidation on 09/12/2014) Max Bars Limited Partner Limited TLLC Bridgesubco5 Limited (Voluntary MPG Pubs Finance Limited Creditors Liquidation on 09/12/2014) MPG Pubs Holding Limited TLLC Bridgesubco6 Limited (Voluntary MPG St Katharine Limited Creditors Liquidation on 27/04/2015) MPG St Katharine LP Limited TLLC CMpropco1 Limited (Voluntary MPG St Katharine Finance Limited Creditors Liquidation on 10/12/2014) MPG Holborn Limited

192 Current Previous directorships/partnerships directorships/partnerships TLLC CMpropco10 Limited (Voluntary MPG Holborn LP Limited Creditors Liquidation on 11/12/2014) MPG Artemis Limited TLLC CMpropco12 Limited (Voluntary MPG Artemis LP Limited Creditors Liquidation on 11/12/2014) TLLC CMpropco2 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMpropco3 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMpropco4 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC CMpropco5 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMpropco9 Limited (Voluntary Creditors Liquidation on 11/12/2014) TLLC CMsubpropco1 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMsubpropco10 Limited (Voluntary Creditors Liquidation on 11/12/2014) TLLC CMsubpropco11 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC CMsubpropco12 Limited (Voluntary Creditors Liquidation on 11/12/2014) TLLC CMsubpropco2 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMsubpropco3 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMsubpropco4 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC CMsubpropco5 Limbed (Voluntary Creditors Liquidation on 10/12/2015) TLLC CMsubpropco8 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC CMsubpropco9 Limited (Voluntary Creditors Liquidation on 10/12/2014) TLLC Levpropc10 Limited (Voluntary Creditors Liquidation on 11/12/2014) TLLC Levsubpropco10 Limited (Voluntary Creditors Liquidation on 11/12/2014) Prestbury Hotels Two Limited (Voluntary Creditors Liquidation on 30/06/2015) TLLC Levpropco8 Limited (Voluntary Creditors Liquidation on 28/04/2015) TLLC Levsubpropco8 Limited (Voluntary Creditors Liquidation on 27/04/2015) Prestbury Hotel Holdings Limited — (Voluntary Creditors Liquidation on 30/06/2015) Prestbury Hotels Three Limited — (Voluntary Creditors Liquidation on 28/04/2015) TLLC Levpropco2 Limited (Voluntary Creditors Liquidation on 28/04/2015) TLLC Levsubpropco2 Limited (Voluntary Creditors Liquidation on 27/04/2015)

193 Current Previous directorships/partnerships directorships/partnerships PIHL Services Limited TLLC Levpropco9 Limited (Voluntary Creditors Liquidation on 28/04/2015) TLLC Levsubpropco9 Limited (Voluntary Creditors Liquidation on 27/04/2015) Prestbury West Coast Retail Limited PW London Limited (Voluntary Creditors Liquidation on 30/01/2015) PW No1 Limited (Voluntary Creditors Liquidation on 09/12/2014) PW No2 Limited (Voluntary Creditors Liquidation on 09/12/2014) PW No3 Limited (Voluntary Creditors Liquidation on 09/12/2014) PW No4 Limited (Voluntary Creditors Liquidation on 30/01/2015) PW No5 Limited (Voluntary Creditors Liquidation on 09/12/2014) PW No6 Limited (Voluntary Creditors Liquidation on 09/12/2014) PW No7 Limited (Voluntary Creditors Liquidation on 09/12/2014) PW No8 Limited (Voluntary Creditors Liquidation on 30/01/2015) PW Scotland Limited (Voluntary Creditors Liquidation on 09/12/2014) Prestbury Equities Limited (Voluntary Members Liquidation on 30/11/2015) PIHL One Limited PIHL Equity Administration Limited PIHL Equity Holdings Limited PIHL Property Administration Limited PIHL Property Holdings Limited Prestbury General Partner Limited P1 Bars Limited P1 Bars Propco Limited Prestbury 1 Feasibility Limited Prestbury 1 Nominee Limited PIHL Equity Assessments Limited P1 Bars GP Limited P1 Bars Propco 2 Limited P1 Hedge End Limited P1 Prime Limited P1 Reversions Limited Prestbury Hotels Finance Limited (Voluntary Creditors Liquidation on 30/06/2015) TLLC Bridgeco10 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC Bridgeco4 Limited (Voluntary Creditors Liquidation on 27/04/2015) Sale & Leaseback Limited (Voluntary Members Liquidation on 30/11/2015) P1 Attractions Limited (Voluntary Members Liquidation on 30/11/2015) P1 Intermediate One Limited (Voluntary Members Liquidation on 30/11/2015)

194 Current Previous directorships/partnerships directorships/partnerships P1 Intermediate Three Limited (Voluntary Members Liquidation on 30/11/2015) P1 Intermediate Two Limited (Voluntary Members Liquidation on 30/11/2015) P1 Old Hotels Limited (Voluntary Members Liquidation on 30/11/2015) P1 Old Opco Limited (Voluntary Members Liquidation on 30/11/2015) P1 Tasmania Group Limited (Voluntary Members Liquidation on 30/11/2015) P1 Tasmania Limited (Voluntary Members Liquidation on 30/11/2015) TLLC Bridgeco3 Limited (Voluntary Creditors Liquidation on 27/04/2015) TLLC Bridgeco7 Limited (Voluntary Creditors Liquidation on 27/04/2015) Holetown Group Limited P1 Cornhill Limited P1 Dover Limited P1 Duke Street Limited P1 Golden Limited P1 Kensington Limited P1 Newman Limited P1 Parkshot Limited P1 St Andrew Limited P1 St Martins Limited PIHL Three Limited (Voluntary Members Liquidation on 30/11/2015) Prestbury Feeder GP Limited (Voluntary Members Liquidation on 30/11/2015) P1 Hedge End Subco Limited PIHL Equity Limited Liability Partnership Prestbury Investments LLP Prestbury Incentives Limited Prestbury SIR 1 Limited Prestbury SIR 2 Limited Prestbury SIR 3 Limited Action Breaks Silence Ltd Butlers Wharf Building Limited MPG Feeder Limited (Voluntary Members Liquidation on 30/11/2015) Portico UK Holdco Limited Prestbury (Scotland) Limited Partnership 7.8 None of the Directors has any unspent convictions in relation to indictable offences. 7.9 None of the Directors have been the subject of any public criticism by any statutory or regulatory authority (including a recognised professional body). 7.10 Save as described below, none of the Directors has been a director of a company at the time of, or within the 12 months preceding the date of, that company being the subject of a receivership, compulsory liquidation, creditors’ voluntary liquidation, administration, company voluntary arrangement or any composition or arrangement with its creditors generally or any class of its creditors. 7.11 Jonathan Lane was a director of two of the London Borough of Hackney (“LBH”) charities, Ocean Music Trust and Ocean Music Enterprises which were put into administration in 2004 as a result of a change of their remit by LBH.

195 7.12 Sandy Gumm was a non-executive director of Stanhope Communications Plc for which a liquidator was appointed on 25 February 2005 and which was dissolved by way of a creditors’ voluntary liquidation on 1 February 2013. 7.13 Sandy Gumm is a director of: (a) PW No1 Limited, PW No2 Limited, PW No3 Limited, PW No5 Limited, PW No6 Limited, PW No7 Limited and PW Scotland Limited, for each of which liquidators were appointed on 9 January 2014 and which are being dissolved by way of creditors’ voluntary liquidation; (b) Prestbury Wentworth Intermediate Limited, Prestbury Wentworth Portfolio Limited, PW London Limited, PW No4 Limited and PW No8 Limited, for each of which liquidators were appointed on 30 January 2015 and which are being dissolved by way of creditors’ voluntary liquidation; (c) Prestbury Hotels Three Limited, for which a liquidator was appointed on 28 April 2015 and which is being dissolved by way of creditors’ voluntary liquidation; (d) Prestbury West Coast Kensington Limited, Kensington Nominee No.1 Limited, Kensington Nominee No.2 Limited, Maidenhead Nominee No.1 Limited, Maidenhead Nominee No.2 Limited and Prestbury West Coast Caledonian Limited, for each of which liquidators were appointed on 4 June 2015 and which are being dissolved by way of members’ voluntary liquidation; and (e) Sale & Leaseback Limited, for which a liquidator was appointed on 30 November 2015 and which is being dissolved by way of members’ voluntary liquidation. 7.14 Sandy Gumm and Nick Leslau are or were directors of: (a) Prestbury West Coast Holdings Limited for which a liquidator was appointed on 31 August 2010 and which is being dissolved by way of members’ voluntary liquidation; and (b) Prestbury West Coast Rice Limited and Talkbake Limited for each of which liquidators were appointed on 21 May 2010 and which are being dissolved by way of members’ voluntary liquidation; (c) Prestbury West Coast Treasury Limited and Prestbury West Coast Five Limited, each of which was dissolved by way of voluntary strike-off on 13 September 2011; (d) Prestbury Properties No.2 Limited, Prestbury Properties No.3 Limited, Prestbury Properties No.4 Limited, Prestbury Properties No.12 Limited, Prestbury Properties No.5 Limited, Giltauto Limited, Prestbury Residential Limited, Prestbury Offices Limited, Starncourt Limited, Starnbush Limited, Deltaglen Limited, Prestbury (New Garden House) Limited, Prestbury Hampshire Limited, Prestbury Sheffield Limited, Prestbury Brighton Limited, Prestbury Croydon Limited, Prestbury Fishergate Limited, Prestbury (Clarges House) Limited, Prestbury (Church House) Limited, Prestbury Taunton Limited, PCV High Street No.2 Limited, PCV High Street No.3 Limited, PCV Plymouth No.2 Limited and PCV Plymouth No.3 Limited, each of which was dissolved by way of voluntary strike-off on 14 April 2014; (e) Prestbury 2009 Limited, Prestbury Acquisitions Limited, Prestbury Industrial, Prestbury Capital Ventures Limited, PCV HP Limited and PCV HP Nominee Limited, for each of which liquidators were appointed on 23 September 2014 and which are being dissolved by way of members’ voluntary liquidation; (f) TLLC Bridgeco1 Limited, TLLC Bridgeco2 Limited, TLLC Bridgesubco1 Limited, TLLC Bridgesubco2 Limited and TLLC Bridgesubco5 Limited, for each of which liquidators were appointed on 9 December 2014 and which are being dissolved by way of creditors’ voluntary liquidation; (g) TLLC CMpropco8 Limited, TLLC Bridgeco5 Limited, TLLC CMpropco1 Limited, TLLC CMpropco2 Limited, TLLC CMpropco3 Limited, TLLC CMpropco5 Limited, TLLC CMsubpropco1 Limited, TLLC CMsubpropco2 Limited, TLLC CMsubpropco3 Limited, TLLC CMsubpropco5 Limited, TLLC CMsubpropco8 Limited and TLLC CMsubpropco9 Limited, for each of which liquidators were appointed on

196 10 December 2014 and which are being dissolved by way of creditors’ voluntary liquidation; (h) TLLC CMpropco10 Limited, TLLC CMpropco12 Limited, TLLC CMpropco9 Limited, TLLC CMsubpropco10 Limited, TLLC CMsubpropco12 Limited, TLLC Levpropc10 Limited and TLLC Levsubpropco10 Limited, for each of which liquidators were appointed on 11 December 2014 and which are being dissolved by way of creditors’ voluntary liquidation; (i) Prestbury Wentworth Limited, Prestbury Wentworth Acquisitions Limited, Prestbury Wentworth Finance Limited, Prestbury Wentworth Holdings Limited, SL 2011 Limited and Prestbury Wentworth Three Limited, for each of which liquidators were appointed on 30 January 2015 and which are being dissolved by way of creditors’ voluntary liquidation; (j) TLLC CMpropco11 Limited, TLLC Bridgesubco6 Limited, TLLC CMpropco4 Limited, TLLC CMsubpropco11 Limited, TLLC CMsubpropco4 Limited, TLLC Levsubpropco9 Limited, TLLC Levsubpropco2 Limited, TLLC Levsubpropco8 Limited, TLLC Bridgeco10 Limited, TLLC Bridgeco4 Limited, TLLC Bridgeco3 Limited and TLLC Bridgeco7 Limited, for each of which liquidators were appointed on 27 April 2015 and which are being dissolved by way of creditors’ voluntary liquidation; (k) TLLC Levpropco9 Limited, TLLC Levpropco2 Limited and TLLC Levpropco8 Limited, for each of which liquidators were appointed on 28 April 2015 and which are being dissolved by way of creditors’ voluntary liquidation; (l) Prestbury West Coast Limited and Prestbury West Coast Maidenhead Limited, for each of which liquidators were appointed on 4 June 2015 and which are being dissolved by way of members’ voluntary liquidation; (m) Prestbury Hotels Assets Limited, Prestbury Hotels Limited, TLLC Bridgeco6 Limited, Prestbury Hotels Two Limited Prestbury Hotel Holdings Limited and Prestbury Hotels Finance Limited, for each of which liquidators were appointed on 30 June 2015 and which are being dissolved by way of creditors’ voluntary liquidation; and (n) Prestbury Services, Prestbury Property Holdings Limited, Prestbury Properties No. 1 Limited, Prestbury Assets Limited, Prestbury 2014 Limited, Prestbury Equities Limited, P1 Attractions Limited, P1 Intermediate One Limited, P1 Intermediate Three Limited, P1 Intermediate Two Limited, P1 Old Hotels Limited, P1 Old Opco Limited, P1 Tasmania Group Limited, P1 Tasmania Limited, PIHL Three Limited, Prestbury Feeder GP Limited and MPG Feeder Limited, for each of which liquidators were appointed on 30 November 2015 and which are being dissolved by way of members’ voluntary liquidation. 7.15 Leslie Ferrar was a director of The Amiri Collection Limited, which was dissolved by voluntary strike-off on 3 August 2010. On 20 January 2012, Dumfries Estate (Glenside) Limited and Dumfries Estate (Pennyfadzeoch) Limited of which Leslie Ferrar was a director were dissolved by voluntary strike-off. Further, on 28 February 2012, Traditional Arts Limited of which she was a director was dissolved by voluntary strike-off. In all cases, there were no amounts outstanding to creditors. 7.16 None of the Directors has been a partner of a partnership at the time of, or within 12 months preceding the date of, that partnership being placed into compulsory liquidation or administration or being entered into a partnership voluntary arrangement nor in that time have the assets of any such partnership been the subject of a receivership. 7.17 No asset of any Director has at any time been the subject of a receivership. 7.18 None of the Directors is or has been bankrupt nor been the subject of any form of individual voluntary arrangement. 7.19 None of the Directors is or has ever been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company.

197 8 DIRECTORS’ REMUNERATION AND APPOINTMENT LETTERS 8.1 In the financial year ended 31 December 2015, the aggregate remuneration (including benefits in kind) of the Directors was £185,000. The aggregate remuneration (including benefits in kind) of the Directors in respect of the current financial year (under the arrangements in force at the date of this document) is expected to be £185,000. In the financial year ended 31 December 2015, no Director accrued contingent or deferred consideration payable at a later date. 8.2 The fees payable to the Directors are set by the Board and are set out in the table below: Annual fees Martin Moore £75,000 Leslie Ferrar £40,000 Jonathan Lane £35,000 Ian Marcus £35,000 Nick Leslau nil Mike Brown nil Sandy Gumm nil In addition to the annual fees described above, the Company also reimburses all expenses reasonably incurred by the Directors in the proper performance of their duties and has obtained directors’ and officers’ liability insurance. 8.3 None of the Directors is entitled to any pension, retirement or other benefits, including bonuses. 8.4 All of the Directors are non-executive directors. No Director has a service agreement with the Company, nor are any such arrangements proposed. Each Director entered into a letter of appointment with the Company, effective from 5 June 2014. The letter of appointment for each Director is subject to the provisions of the Articles. The letters of appointment provide that a Director’s appointment is terminable by either party on three months’ written notice.

9 THE COMPANY AND ITS SUBSIDIARIES 9.1 The Company is the holding company of the Group and has the following principal subsidiaries:

Country of registration or incorporation Principal activity Charcoal Midco 2 Limited England Intermediate parent company SIR Healthcare 1 Limited England Intermediate parent company SIR Healthcare 2 Limited England Intermediate parent company and borrower under secured debt facility SIR Hospital Holdings Limited England Intermediate parent company SIR Hospitals Propco Limited England Intermediate parent company and borrower under secured debt facility SIR Theme Park Subholdco England Intermediate parent company and Limited borrower under mezzanine secured debt facility SIR Theme Parks Limited England Intermediate parent company and borrower under senior secured debt facility SIR Umbrella Limited England Intermediate parent company SIR Ashtead Limited England Property investment —healthcare SIR Downs Limited England Property investment — healthcare SIR Duchy Limited England Property investment — healthcare

198 Country of registration or incorporation Principal activity SIR Euxton Limited England Property investment — healthcare SIR Fitzwilliam Limited England Property investment — healthcare SIR Fulwood Limited England Property investment — healthcare SIR Lisson Limited England Property investment — healthcare SIR Midlands Limited England Property investment — healthcare SIR Mt Stuart Limited England Property investment — healthcare SIR Oaklands Limited England Property investment — healthcare SIR Oaks Limited England Property investment — healthcare SIR Pinehill Limited England Property investment — healthcare SIR Reading Limited England Property investment — healthcare SIR Renacres Limited England Property investment — healthcare SIR Rivers Limited England Property investment — healthcare SIR Rowley Limited England Property investment — healthcare SIR Springfield Limited England Property investment — healthcare SIR Winfield Limited England Property investment — healthcare SIR Woodland Limited England Property investment — healthcare SIR Yorkshire Limited England Property investment — healthcare Thomas Rivers Ltd England Property investment — healthcare SIR ATH Limited England Property investments — leisure SIR ATP Limited England Property investments — leisure SIR HP Limited England Property investments — leisure and borrower under secured debt facility SIR TP Limited England Property investments — leisure SIR WC Limited England Property investments — leisure Charcoal Bidco Limited England Dormant SIR MTL Limited England Dormant SIR New Hall Limited England Dormant UK Healthcare Partners (General Guernsey Dormant (in voluntary liquidation) Partner) Limited 9.2 The above companies are all directly or indirectly wholly owned by the Company and have their registered office at Cavendish House, 18 Cavendish Square, London W1G 0PJ.

10 THE CITY CODE 10.1 Mandatory takeover bids 10.1.1 The City Code applies to all takeover and merger transactions in relation to the Company, and operates principally to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment. The City Code provides an orderly framework within which takeovers are conducted and the Panel on Takeovers and Mergers has now been placed on a statutory footing. 10.1.2 The City Code is based upon a number of General Principles which are essentially statements of standards of commercial behaviour. General Principle One states that all

199 holders of securities of an offeree company of the same class must be afforded equivalent treatment and if a person acquires control of a company, the other holders of securities must be protected. This is reinforced by Rule 9 of the City Code which requires a person, together with persons acting in concert with him, who acquires shares carrying voting rights which amount to 30 per cent or more of the voting rights to make a general offer. “Voting rights” for these purposes means all the voting rights attributable to the share capital of a company which are currently exercisable at a general meeting. A general offer will also be required where a person who, together with persons acting in concert with him, holds not less than 30 per cent but not more than 50 per cent of the voting rights, acquires additional shares which increase his percentage of the voting rights. Unless the Panel consents, the offer must be made to all other shareholders, be in cash (or have a cash alternative) and cannot be conditional on anything other than the securing of acceptances which will result in the offeror and persons acting in concert with him holding shares carrying more than 50 per cent of the voting rights. 10.1.3 There are not in existence any current mandatory takeover bids in relation to the Company.

10.2 Squeeze out Section 979 of the Act provides that if, within certain time limits, an offer is made for the share capital of the Company, the offeror is entitled to acquire compulsorily any remaining shares if it has, by virtue of acceptances of the offer, acquired or unconditionally contracted to acquire not less than 90 per cent in value of the shares to which the offer relates and in a case where the shares to which the offer relates are voting shares, not less than 90 per cent of the voting rights carried by those shares. The offeror would effect the compulsory acquisition by sending a notice to outstanding shareholders telling them that it will compulsorily acquire their shares and then, six weeks from the date of the notice, pay the consideration for the shares to the Company to hold on trust for the outstanding shareholders. The consideration offered to shareholders whose shares are compulsorily acquired under the Act must, in general, be the same as the consideration available under the takeover offer.

10.3 Sell out Section 983 of the Act permits a minority shareholder to require an offeror to acquire its shares if the offeror has acquired or contracted to acquire shares in the Company which amount to not less than 90 per cent in value of all the voting shares in the Company and carry not less than 90 per cent of the voting rights. Certain time limits apply to this entitlement. If a shareholder exercises its rights under these provisions, the offeror is bound to acquire those shares on the terms of the offer or on such other terms as may be agreed.

11 NOTIFICATIONS OF SHAREHOLDINGS The provisions of DTR 5 apply to the Company and its Shareholders. DTR 5 sets out the notification requirements for Shareholders and the Company where the voting rights of a Shareholder exceed, reach or fall below the threshold of 3 per cent and each 1 per cent thereafter up to 100 per cent. DTR 5 provides that disclosure by a Shareholder to the Company must be made within two trading days of the event giving rise to the notification requirement and the Company must release details to a regulatory information service as soon as possible following receipt of a notification.

12 MATERIAL CONTRACTS The following are the only contracts (not being contracts entered into in the ordinary course of business) which have been entered into by members of the Group in the two years immediately preceding the date of this document which are, or may be, material or which have been entered into at any time by any Group Company and which contain any provision under which any Group Company has any obligation or entitlement which is, or may be, material to the Group as at the date of this document:

12.1 Transaction Agreement Details of the terms of the Transaction Agreement are set out in paragraph 6 of Part 10: The Placing of this document.

200 12.2 Framework Agreement 12.2.1 The Company and the Selling Shareholders entered into a Framework Agreement on 2 March 2016 in order to set out a coordinated process in relation to the Placing and to agree certain related matters. 12.2.2 Pursuant to the Framework Agreement, it was agreed that the Company would appoint the Joint Bookrunners in connection with the Placing and conduct a roadshow with potential investors. 12.2.3 Each of the Selling Shareholders agreed to sell up to a specified number of Ordinary Shares pursuant to the Placing, subject to certain conditions. Each of the Selling Shareholders agreed to bear all commissions relating to the sale of any Ordinary Shares by it pursuant to the Placing. 12.2.4 Subject to certain exceptions, each of the Selling Shareholders has severally undertaken to the Company that it will not, and that it will procure that its connected persons will not, without the prior written consent of the Company sell, transfer or dispose of any Ordinary Shares (or agree to enter into any similar transaction) before the earlier of (i) 29 April 2016 and (ii) the completion of the Placing. 12.2.5 The Framework Agreement also contains certain other ancillary obligations on the parties in relation to the Placing. 12.2.6 The Framework Agreement is governed by English law and shall terminate automatically on the earlier of (i) 29 April 2016 and (ii) the completion of the Placing.

12.3 Share Purchase Agreement On 21 May 2014, the Company entered into a sale and purchase agreement with Prestbury 1 LP and P1 Nominee, pursuant to which the Company issued 81,908,717 Ordinary Shares (at an issue price of £1 per Ordinary Share) to P1 Nominee (as nominee for Prestbury 1 LP) in consideration for the transfer of the entire issued share capital of Hospital Holdings to the Company. Prestbury 1 LP provided customary representations in connection with rights to sell and transfer the beneficial interest in the entire issued share capital of Hospital Holdings; and P1 Nominee provided customary representations in connection with rights to sell and transfer the legal interest in the entire issued share capital of Hospital Holdings.

12.4 Existing Independent Director Lock-In Deeds 12.4.1 Each of the Independent Directors entered into an Existing Independent Director Lock-In Deed pursuant to which they agreed, subject to certain customary exceptions, that they would not, and would procure that their connected persons would not, subject to certain exemptions, without the prior written consent of the Company and Stifel (as successor to Oriel Securities) during the period from (and including) 5 June 2014 until 5 June 2015 dispose of any of the Ordinary Shares that they were holding at the IPO Date (the Lock-In Period). 12.4.2 Subject to certain customary exceptions, from the end of the Lock-In Period until 5 June 2016, each of the Independent Directors agreed that they would, and would procure that their connected persons would, effect any disposal of Ordinary Shares in such a manner as Stifel (as successor to Oriel Securities) may in its discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares. 12.4.3 Amongst other things, the restrictions on disposals of Ordinary Shares by an Independent Director cease to apply when that Independent Director ceases to be a director of the Company.

12.5 Existing Prestbury Director Lock-In Deeds 12.5.1 Each of Mike Brown, Sandy Gumm and Nick Leslau entered into an Existing Prestbury Director Lock-In Deed pursuant to which he or she agreed, subject to certain customary

201 exceptions, that he or she would not, and would procure that their connected persons would not, without the prior written consent of the Company and Stifel (as successor to Oriel Securities): (i) dispose of any of the Ordinary Shares held by him or her at the IPO Date before 5 June 2015; (ii) dispose of more than 50 per cent of the Ordinary Shares held by him or her at the IPO Date before 5 December 2015; or (iii) dispose of more than 75 per cent of the Ordinary Shares held by him or her at the IPO Date before 5 June 2016 (the Lock-In Period). 12.5.2 Subject to certain customary exceptions, from the end of the Lock-In Period until the earlier of (a) 5 June 2017; and (b) the date on which the Company ceases to be a close company for the purposes of Part 12 of the CTA 2010 (subject to a minimum period of 24 months following the IPO Date, being 5 June 2016), each of Mike Brown and Sandy Gumm has agreed that he or she would, and would procure that his or her connected persons would, effect any disposal of Ordinary Shares in such a manner as Stifel (as successor to Oriel Securities) may in its discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares. 12.5.3 Amongst other things, the restrictions on disposals of Ordinary Shares by a Prestbury Director cease to apply when that Prestbury Director ceases to be a director of the Company, provided that he or she has also ceases to be a member, shareholder, officer, employee of, or consultant or adviser to the Investment Adviser.

12.6 Existing Investor Lock-In Deeds 12.6.1 Each of PIHL Property LLP, West Coast Capital Prestven Investments Limited, Prestonfield Investments Limited, Prestbury Investment Holdings Limited and West Coast Capital Holdings Limited entered into an Existing Investor Lock-In Deed pursuant to which it agreed, subject to certain customary exceptions, that it will not, and will procure that its connected persons will not, without the prior written consent of the Company and Stifel (as successor to Oriel Securities): (i) dispose of any of the Ordinary Shares held by it at the IPO Date before 5 June 2015; (ii) dispose of more than 50 per cent of the Ordinary Shares held by it at the IPO Date before 5 December 2015; and (iii) dispose of more than 75 per cent of the Ordinary Shares held by it at the IPO Date before 5 June 2016 (the Lock-In Period). 12.6.2 Subject to certain customary exceptions, from the end of the Lock-In Period until the earlier of (a) 5 June 2017; and (b) the date on which the Company ceases to be a close company for the purposes of Part 12 of the CTA 2010 (subject to a minimum period of 24 months following the IPO Date, being 5 June 2016), each of the Substantial Pre-IPO Investors agreed that it would, and would procure that its connected persons would, effect any disposal of Ordinary Shares in such a manner as Stifel (as successor to Oriel Securities) may in its discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares. 12.6.3 Each of the Selling Shareholders has entered into a condition release and termination deed whereby, subject to the completion of the Placing, they will no longer be bound to the terms of their respective Existing Investor Lock-In Deeds from the date of the completion of the Placing. For the avoidance of doubt, if for any reason the Placing does not proceed the Existing Investor Lock-In Deeds will continue with full force and effect.

12.7 Orderly Market Deeds Each Other Pre-IPO Investor entered into an Orderly Market Deed pursuant to which it agreed, subject to certain customary exceptions, for the period from the IPO Date until the earlier of (a) 5 June 2017; and (b) the date on which the Company ceases to be a close company for the purposes of Part 12 of CTA 2010 (subject to a minimum period of 12 months following the IPO Date), that it would, and would procure that its connected persons would, effect any disposal of Ordinary Shares in such a manner as Stifel (as successor to Oriel Securities) may in its discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares.

12.8 New Independent Director Lock-In Deeds 12.8.1 Each of the Independent Directors have entered into a New Independent Director Lock-In Deed pursuant to which they have agreed, subject to certain customary exceptions, that they

202 will not, and will procure that their connected persons will not, subject to certain exemptions, without the prior written consent of the Company, Goldman Sachs and Stifel during the period from (and including) completion of the Placing until the First Lock-In Release Date dispose of any of the Ordinary Shares held by them immediately after the completion of the Placing. 12.8.2 Subject to certain customary exceptions, from the First Lock-In Release Date until the Final Lock-In Release Date, each of the Independent Directors have agreed that they will, and will procure that their connected persons would, effect any disposal of Ordinary Shares in such a manner as Goldman Sachs and Stifel may in their discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares. 12.8.3 Amongst other things, the restrictions on disposals of Ordinary Shares by an Independent Director cease to apply when that Independent Director ceases to be a director of the Company. 12.8.4 Should the Placing not proceed, the Independent Directors will continue to be bound by the terms of their Existing Independent Lock-In Deed.

12.9 New Prestbury Director Lock-In Deeds 12.9.1 Each of Mike Brown, Sandy Gumm and Nick Leslau have entered into a New Prestbury Director Lock-In Deed pursuant to which he or she agreed, subject to certain customary exceptions, that he or she will not, and will procure that their connected persons will not, without the prior written consent of the Company, Goldman Sachs and Stifel: (i) dispose of any of the Ordinary Shares held by him or her immediately after completion of the Placing before the First Lock-In Release Date; (ii) dispose of more than 50 per cent of the Ordinary Shares held by him or her immediately after completion of the Placing before the Second Lock-In Release Date; or (iii) dispose of more than 75 per cent of the Ordinary Shares held by him or her immediately after completion of the Placing before the Final Lock-In Release Date. 12.9.2 Subject to certain customary exceptions, for a period of 24 months from the First Release Date, each of Mike Brown, Nick Leslau and Sandy Gumm have agreed that he or she will, and will procure that his or her connected persons will, effect any disposal of Ordinary Shares in such a manner as the Joint Bookrunners may in their discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares. 12.9.3 Amongst other things, the restrictions on disposals of Ordinary Shares by a Prestbury Director cease to apply when that Prestbury Director ceases to be a director of the Company, provided that he or she has also ceases to be a member, shareholder, officer, employee of, or consultant or adviser to the Investment Adviser. 12.9.4 Should the Placing not proceed, the Prestbury Directors will continue to be bound by the terms of their Existing Prestbury Director Lock-In Deed.

12.10 New PIHL Lock-In Deed 12.10.1 PIHL Property LLP has entered into the New PIHL Lock-In Deed pursuant to which it agreed, subject to certain customary exceptions, that it will not, and will procure that its connected persons will not, without the prior written consent of the Company, Goldman Sachs and Stifel: (i) dispose of any of the Ordinary Shares held by it immediately after completion of the Placing before the First Lock-In Release Date; (ii) dispose of more than 50 per cent of the Ordinary Shares held by it immediately after completion of the Placing before the Second Lock-In Release Date; and (iii) dispose of more than 75 per cent of the Ordinary Shares held by it immediately after completion of the Placing before the Final Lock-In Release Date. 12.10.2 Subject to certain customary exceptions, for the period beginning on the First Release Date and ending on the earlier of (i) the date that is 36 months after the Settlement Date or (ii) the date on which the Company ceases to be a close company for the purposes of Part 12 of the CTA 2010, provided that such restrictions will apply for a minimum period of twelve months, PIHL Property LLP has agreed that it will, and will procure that its connected persons will, effect any disposal of Ordinary Shares in such a manner as the Joint Bookrunners may in their discretion determine to be appropriate with a view to maintaining an orderly market in the Ordinary Shares.

203 12.10.3 Should the Placing not proceed, PIHL Property LLP will continue to be bound by the terms of its Existing Investor Lock-In Deed.

12.11 Investment Advisory Agreement The Company and Prestbury are parties to the Investment Advisory Agreement, pursuant to which Prestbury was appointed by the Company to provide or procure the provision of investment advisory and certain other services.

12.11.1 Exclusivity Prestbury has agreed that, for the exclusivity period set out below, it will not and it will procure that: (a) its members; (b) its affiliates; (c) PIHL; (d) Prestbury 1 LP; (e) Prestbury General Partner LP; and (f) any entity controlled by any of the foregoing that either carries on activities similar to Prestbury or is in a business of making investments and has investment objectives similar to the Company’s investment strategy, (the “Excluded Persons”) will not, without the prior written consent of the Company, commence marketing or act as the source of transactions or provide advisory services similar to those provided to the Company for any entity with substantially the same investment strategy as the Company, except in relation to the following: (a) Prestbury may provide advisory and management services to a number of existing investment structures. These entities are: Prestbury 1 LP; Prestbury General Partner LP, in its capacity as the general partner of Prestbury 1 LP; Holetown Group Limited and its subsidiary undertakings, Holetown Partnership, BM Holdco Limited and certain specified undertakings no longer run by Prestbury; and (b) Prestbury may provide advisory and management services to any entity which operates an investment strategy which is different from the investment strategy of the Company.

These exceptions are subject to a requirement that Prestbury offers new investments that fall within the Company’s investment strategy (subject to limited exceptions) to the Company. This is disclosed further below.

The exclusivity period referred to above applies for the term of the Investment Advisory Agreement, details of which are set out below.

In addition to the exclusivity arrangements set out above, Prestbury has also agreed that, during the exclusivity period, it will offer (and will procure that any Excluded Person also offers) to the Company any investment opportunity which is offered to it and which falls within the Company’s investment strategy. The Board is required to notify Prestbury, within five Business Days of receipt of information which is sufficient to enable it to take a decision as to whether to pursue the investment opportunity, if it determines that the Company should pursue such investment opportunity. In the absence of service of such notice, Prestbury may pursue such investment opportunity itself. There are also certain limited exceptions to this arrangement, namely: (a) if the Board notifies Prestbury (by way of a revocable notice) that it has invested all of the funds available to it or that it has insufficient funds to pursue the investment opportunity, then Prestbury (or an Excluded Person) may pursue that opportunity; (b) if the investment opportunity relates to additions to investments currently held by Prestbury 1 LP, Prestbury General Partner LP (in its capacity as the general partner of Prestbury 1 LP) or any of the other investment structures referred to above (such

204 as extensions to assets already within those entities’ existing portfolio or properties adjacent to existing properties within that portfolio), Prestbury is not required to offer the investment opportunity to the Company; or (c) if the investment opportunity has a gross property asset value of less than or equal to £10 million (adjusted annually in line with RPI, but subject always to a minimum of £10 million), Prestbury is not required to offer the investment opportunity to the Company.

12.11.2 Advisory Fee The Investment Advisory Agreement provides for the cash payment by the Company to Prestbury of an Advisory Fee based on a percentage (on a sliding scale) of EPRA NAV (calculated on the last day of each quarter and payable quarterly in arrears) as follows: (a) 1.25 per cent of the Group’s EPRA Net Asset Value up to £500 million; plus (b) 1.00 per cent of the Group’s EPRA Net Asset Value of more than £500 million up to £1 billion; plus (c) 0.75 per cent of the Group’s EPRA Net Asset Value in excess of £1 billion plus VAT as applicable.

12.11.3 Incentive fee The Company shall pay an incentive fee in respect of each Accounting Period in which an incentive fee is earned. If at the end of an Accounting Period, the Closing EPRA NAV is in excess of the Cumulative Hurdle Amount, then the incentive fee for that Accounting Period shall be calculated as follows:

Incentive fee = 20% x (E-H) x S

Where: E = Closing EPRA NAV H = Cumulative Hurdle Amount S = the number of Ordinary Shares in issue at the end of the Accounting Period in respect of which the incentive fee is calculated.

The Investment Advisory Agreement provides in certain circumstances which would render the operation of the provisions of the incentive fee inequitable for the Investment Adviser and the Company to consult with each other and to agree such necessary revisions to the incentive fee calculations as are necessary in order to give effect to the calculations commercial intent. These circumstances include adjustments to take account of corporate actions that entail changes to the Company’s share capital, such as consolidations, sub-divisions or bonus issues or other restructurings or reorganisations affecting its share capital.

The incentive fee is settled as follows: (a) in cash in respect of the VAT element; and (b) as to the balance, by the allotment to Prestbury Incentives Limited of such number of new Ordinary Shares credited as fully paid as is equal to the incentive fee (net of VAT) divided by the Average Closing Price for the financial year to which the fee relates (rounded down to the nearest whole Share).

Where the incentive fee is to be settled by the issue of Ordinary Shares, the Company will obtain a valuation of the non-cash consideration for the allotment of those Ordinary Shares in accordance with s.596 of the Act.

If the settlement of the incentive fee in Ordinary Shares would be prohibited by applicable law or by the AIM Rules or would result in a member of the Concert Party incurring an obligation to make an offer under Rule 9 of the City Code, or if the Company fails to obtain a valuation of the non-cash consideration for the allotment of the relevant Ordinary Shares where it is required to do so, the incentive fee will be settled in cash.

205 The Independent Directors may, within a period of 30 days following the third anniversary of the IPO Date, propose amendments to the incentive fee arrangements having regard to any appropriate market comparatives. The Independent Directors and Prestbury will then consult acting reasonably for up to 30 days to attempt to agree the revised incentive fee arrangements. If no agreement is reached, Prestbury may terminate the agreement.

For the purposes of this paragraph 12.11:

“Accounting Period” means the period commencing on the IPO Date and ending on 31 December 2014 and thereafter each successive period of twelve calendar months each of which starts on the end of the preceding Accounting Period and ends at midnight on 31 December in each year throughout the term and, in the last year of the term, the period which starts on the expiry of the immediately preceding Accounting Period and which ends at midnight on the date of termination of the Investment Advisory Agreement;

“Actual Shareholder Returns” means, in respect of an Accounting Period, all dividends and other distributions made to Shareholders in that Accounting Period divided by the number of Ordinary Shares in issue at the date on which each dividend or other distribution is paid to Shareholders in the Accounting Period;

“Average Closing Price” means the average of the daily closing middle market quotations of an Ordinary Share (as adjusted to exclude any dividend which is included in such quotations if the shares are ex that dividend) on each dealing day for the Accounting Period in respect of which the incentive fee is payable as derived from the London Stock Exchange Daily Official List;

“Closing EPRA NAV” means EPRA Group NAV on a per Ordinary Share basis, which is calculated by taking EPRA Group NAV as disclosed in the Audited Accounts for an Accounting Period, which for the avoidance of doubt is after expensing any disallowable VAT in respect of any Performance Fee payable in respect of the Accounting Period, divided by the actual number of Ordinary Shares in issue at the end of the Accounting Period;

“Cumulative Hurdle Amount” means, at the end of an Accounting Period, on a per Ordinary Share basis: (a) in respect of the first Accounting Period (commencing on Admission) the sum of the Opening NAV and a Hurdle Return thereon, less Actual Shareholder Returns in the Relevant Accounting Period and a Hurdle Return thereon from the date paid; (b) in respect of an Accounting Period immediately following an Accounting Period in which no incentive fee was payable, the Cumulative Hurdle Amount at the end of the previous Accounting Period and a Hurdle Return thereon less Actual Shareholder Returns in the relevant Accounting Period and a Hurdle Amount thereon from the date paid; and (c) in respect of an Accounting Period immediately following an Accounting Period in which a Performance Fee was payable, the High Water Mark and a Hurdle Return thereon less Actual Shareholder Returns in the Relevant Accounting Period and a Hurdle Return thereon from the date paid.

The issue of new Ordinary Shares and the buyback of issued Ordinary Shares by the Company shall be disregarded for the purpose of calculating the Cumulative Hurdle Amount, save for (a) the issue of Ordinary Shares in settlement of an incentive fee and (b) a rights issue.

“High Water Mark” is calculated on a per Ordinary Share basis at the end of the most recent Accounting Period in which an incentive fee was payable pursuant to the Investment Advisory Agreement (if any) by dividing the actual amount of EPRA Group NAV at the end of the relevant Accounting Period by the sum of the actual number of Ordinary Shares in issue and the number of Ordinary Shares to be issued in settlement of the incentive fee for that Accounting Period;

“Hurdle Return” means a return of 10 per cent per annum, which for periods not equal to one year is multiplied by (N/365) where N is the number of days in that period;

206 “Opening NAV” means the Group’s NAV on a per Ordinary Share basis as set out in the pro forma statement of net asset value set out in Part 4 of the IPO Admission Document, being 172p per share, as adjusted for any variation in the amount of the equity issue taking place at the IPO Date and relevant costs to the extent not reflected in the pro forma; and

Prestbury agrees not to, and Prestbury agrees to procure that Prestbury Incentives will not, dispose of any Shares delivered to it in settlement of the incentive fee and it is agreed that any incentive fee paid in cash will not be distributed, loaned or otherwise made available until: (a) as to one-third of the relevant Ordinary Shares or cash, 18 months from the end of the Accounting Period in respect of which the relevant Ordinary Shares were acquired or cash received; (b) as to a further one-third of the relevant Ordinary Shares or cash, the date that is 30 months from the end of the relevant Accounting Period; and (c) as to the remaining one-third of the relevant Ordinary Shares or cash, the date that is 42 months from the end of the relevant Accounting Period,

provided that these restrictions will not apply to a disposal of Ordinary Shares (or release of cash) (i) to pay tax arising in connection with receipt of the incentive fee, (ii) pursuant to a takeover or sale of the Company recommended by the Board or where Prestbury is required by law to dispose of such Ordinary Shares, (iii) on completion of a takeover or a sale which results in a change of control of the Company; or (iv) following the termination of the agreement other than following a material breach by Prestbury.

12.11.4 Expenses The Company (or such other Group Company to which the relevant cost relates) is responsible for any costs and expenses incurred on its behalf by Prestbury. Such expenses include all costs and expenses properly incurred in connection with the establishment of any Group Company. The Company is also responsible for: costs incurred in connection with the administration, operation and business of the Group, including legal, auditors’, valuers’ and external consultants’ fees; bank charges and borrowing costs; costs and expenses (including stamp duties, stamp taxes and professional fees) of holding, financing, monitoring and disposing of investments; costs of abortive transactions; insurance costs; and all travel costs and out of pocket expenses properly incurred by Prestbury in providing services pursuant to the Investment Advisory Agreement.

12.11.5 Appointment of directors During the term of the Investment Advisory Agreement, Prestbury has the right to appoint one director to the Board. In addition, for so long as Prestbury and PIHL and certain related entities and individuals hold more than 21,654,569 Ordinary Shares, Prestbury has the right to appoint a further two directors to the Board. Such appointees are subject to the approval of the Independent Directors, not to be unreasonably withheld. No such director is entitled to receive any fees from the Company in respect of the appointment.

Prestbury is also required, at the request of the Company, to appoint at least two persons to act as directors of the Company’s subsidiaries.

12.11.6 Delegated authority Prestbury has full power and authority to investigate, negotiate or execute, or require any Group Company to execute, certain transactions, being: (a) an asset acquisition by the Group with a value not exceeding a net asset value of £10 million and a gross asset value of £20 million; (b) a disposal of an asset with an impact not exceeding a net asset value of £10 million and a gross asset value of £20 million; and (c) a financing or refinancing opportunity in respect of an investment opportunity or an existing investment in which the Group proposes to invest or has invested with an impact not exceeding a net asset value of £10 million and a gross asset value of £20 million.

207 Unless authorised by the Company, Prestbury may not act on behalf of the Company or any relevant Group Company in relation to: (a) any transaction which involves structural or financial terms which are unusual in the context of transactions of that type and/or are likely to have a material effect on the risk profile of the Group; and (b) any transaction in which the counterparty is an “Excluded Person” (as referred to above).

12.11.7 Advisory services The Company has appointed Prestbury to provide advisory services to the Company including: (a) advising on appropriate amendments to the Company’s investment strategy; (b) identifying suitable investment opportunities for acquisition which are consistent with the Company’s investment strategy; (c) identifying and recommending to the Board as appropriate the recommended timing and terms of any disposals; (d) preparing investment appraisals in relation to each investment opportunity; (e) identifying and introducing potential buyers and sellers for investments; (f) recommending deposits where the Group holds cash; (g) identifying providers of debt funding and hedging arrangements and assisting in negotiating the terms of such arrangements having regard to the Company’s financing policies; (h) advising on the terms of appointment and co-ordinating with third party advisers to conduct due diligence on proposed acquisitions; (i) preparing financial analysis on any potential acquisition and reporting to the Board on its recommendations as to the acceptability as an appropriate investment by the Group in light of the Company’s investment strategy; (j) recommending valuers and hedging specialists to the Company; and (k) negotiating contractual documents with buyers, sellers and providers of finance and liaising with third party advisers in the negotiation thereof.

12.11.8 Other services Prestbury provides further services to the Company including: (a) financial administration; (b) providing quarterly board reports to the Company, including, inter alia, a narrative report on general market conditions, potential purchases or disposals, financial statements and a summary report regarding each property in which the Group is interested; (c) preparing the Company’s statutory accounts and interim reports; (d) co-ordinating and supervising the Company’s auditors in relation to the audit of the statutory accounts; (e) co-ordinating and liaising with the Company’s other advisers; (f) co-ordinating and liaising with Shareholders and the Company’s nominated adviser; (g) overseeing tax and regulatory compliance; (h) ensuring the secretary maintains and keeps up to date the statutory registers of the Company and other members of the Group and makes necessary filings;

208 (i) negotiating appropriate corporate insurances including key man insurance (if required); and (j) compliance with financial arrangements.

In addition, Prestbury also provides services to the Company’s subsidiaries or other entities in which the Company has a direct or indirect interest including: (a) preparing quarterly reports on property management services; (b) liaising with and providing financial information to such entities’ auditors; (c) overseeing tax and regulatory compliance; (d) managing property inspection, tenant liaison and property management transactions; (e) advising and consulting as to the appointment of rent review surveyors and overseeing the execution of rent reviews; (f) advising on any works required to enhance capital values and/or rental growth; (g) advising in connection with the development, refurbishment and construction of properties; and (h) compliance with financial arrangements.

12.11.9 Indemnity The Company has provided a customary indemnity to Prestbury in respect of any liabilities, actions, claims, costs, demands, damages and expenses (including legal fees) incurred or threatened or arising out of in connection with the Investment Advisory Agreement, subject to certain exceptions, and the Company has received an equivalent indemnity from Prestbury in return.

12.11.10 Term and termination Unless earlier terminated, the Investment Advisory Agreement continues in force until the earlier of the date falling eight years following the IPO Date, being 5 June 2022, and the date of the winding up of the Company.

The Company may terminate the agreement (and accordingly the appointment of Prestbury) where: (a) Prestbury is in material breach of the agreement and insofar as that breach is capable of remedy, fails to remedy such breach within 30 Business Days of being requested to do so; (b) Prestbury is prohibited by law or regulation from performing its duties under the Investment Advisory Agreement, subject to Prestbury having 60 days following any relevant change in law or regulation which would otherwise enable the Company to terminate the Investment Advisory Agreement to become compliant with such changed relevant law or regulation (to the reasonable satisfaction of the Company); (c) either or both of Nick Leslau or Mike Brown ceases to be a member of Prestbury, ceases to be significantly involved with the services described above, dies, becomes mentally ill or becomes permanently incapacitated and a suitable replacement has not been proposed by Prestbury within six months or has not been appointed within nine months; (d) Prestbury becomes insolvent; (e) a change of control of the Company occurs; or (f) Nick Leslau and Mike Brown cease to hold between them (directly or indirectly) at least 40 per cent of the membership interests in Prestbury (or in any permitted assignee), except where this is as a result of the relevant individual having died, having become permanently incapacitated or being mentally ill.

209 Prestbury may terminate the agreement where: (a) the Company becomes insolvent; (b) the Company or any subsidiary is in material breach of the agreement and insofar as that breach is capable of remedy, it fails to remedy such breach within 30 Business Days of being requested to do so; or (c) a change of control of the Company occurs.

The Independent Directors have a right to propose amended incentive fee terms to better reflect the structure of the business in or around June 2017. In the event that, acting reasonably, the Independent Directors and Prestbury are not able to reach agreement on the revised proposals after a period of negotiation in good faith, and failing such agreement they are also unable to accept the continuation of the existing incentive fee arrangements, then the Investment Advisory Agreement can be terminated by Prestbury with notice.

Where the term of the Investment Advisory Agreement comes to an end or the Investment Advisory Agreement is terminated, Prestbury is entitled to payment of an aggregate amount equal to the accrued and unpaid Advisory Fee and/or incentive fee payable for the period prior to the termination date.

Where the Investment Advisory Agreement is terminated at the option of the Company because of a change of control of the Company or Prestbury being prohibited by law or regulation from performing its duties then, in addition to any outstanding Advisory Fee due in respect of any period prior to the termination, Prestbury is entitled to a termination payment calculated as a multiple of the Advisory Fee payable for the quarter immediately before the termination.

Where the termination is made at the option of the Company as a result of a change of control of the Company then, where the termination occurs during the first five years following the IPO Date (the “Initial Period”), the termination payment is six times the prior quarter’s Advisory Fee, and where the termination occurs after the Initial Period, the termination payment is four times the prior quarter’s Advisory Fee.

Where the termination is made at the option of the Company as a result of a change of law or regulation preventing the performance of Prestbury’s obligations, then where the termination occurs during the Initial Period, the termination payment is three times the prior quarter’s Advisory Fee, and where the termination occurs after the Initial Period, the termination payment is two times the prior quarter’s Advisory Fee.

12.11.11 Insurance and key man provisions Except in limited circumstances, Prestbury is to maintain at all times during the period of the agreement professional indemnity insurance of not less than £5 million per calendar year in aggregate. Prestbury is also required to maintain a run off policy in relation to that cover following termination of the agreement for six years following such termination, unless the Company is wound up first.

In the event that either Nick Leslau or Mike Brown ceases (for whatever reason) to be a member of Prestbury then the Company shall, at all times following such cessation, maintain a key man insurance policy in respect of whichever of the two remains a member of not less than £1 million. The Company will be the named insured under the policy until a replacement is appointed.

If either or both of Nick Leslau and Mike Brown dies, becomes unable to discharge his duties under the Investment Advisory Agreement because of physical or mental illness or injury, ceases to be significantly involved in the provision of the services described above or ceases to be a member of Prestbury, then Prestbury must use all its reasonable endeavours to find one or more suitable replacements as soon as reasonably practicable, and in any event so that the replacement or replacements are proposed to the Company within six months. The replacement or replacements must be appointed within nine months. The Company has a right of approval (not to be unreasonably withheld or delayed) in respect of any replacement.

210 If the Investment Adviser has not proposed a suitable replacement or replacements within six months or has not appointed a replacement or replacements within nine months, then the Company may, if it wishes, terminate the Investment Advisory Agreement.

12.12 Commitment Agreement 12.12.1 On 29 May 2014, the Company, the Pre-IPO Investors and others entered into the Commitment Agreement in order to subsidise (in whole or in part) the Company’s payment of the Advisory Fee to Prestbury under the terms of the Investment Advisory Agreement during the period from the IPO Date to 10 July 2016. 12.12.2 Pursuant to the Commitment Agreement, each Pre-IPO Investor (or its associate) agreed to subscribe for one Share per quarter for the period between the IPO Date and 10 July 2016 (amounting to an aggregate of 54 Ordinary Shares during the term of the Commitment Agreement). As at the date of this document, the Company has issued 48 Ordinary Shares pursuant to the Commitment Agreement. The total subscription price payable by the Pre-IPO Investors for the Ordinary Shares to be issued to them in a quarter is equal to the Advisory Fee payable by the Company to Prestbury in respect of that quarter (subject to a maximum aggregate subscription price of £1,321,244 per quarter, pro-rated for the period from 1 July 2016 to 10 July 2016).

12.13 Disaggregation Agreement On 29 May 2014, the Company and the Substantial Pre-IPO Investors entered into the Disaggregation Agreement pursuant to which each of the Substantial Pre-IPO Investors agreed, inter alia, to transfer such number of Ordinary Shares that it holds to such of its connected persons on or prior to 30 September 2014 as is necessary to ensure that, with effect from such time, neither it nor its connected persons are a direct shareholder in the Company and a holder of excessive rights for the purposes of Section 553 of the CTA 2010. The transfers contemplated by this Disaggregation Agreement have all been completed.

12.14 IPO Placing Agreement 12.14.1 The Company entered into the IPO Placing Agreement with Oriel Securities, the Directors and Prestbury in connection with the placing of the Initial Placing Shares with investors and the admission of the entire issued and to be issued Ordinary Share capital of the Company to trading on AIM. Pursuant to the IPO Placing Agreement, Oriel Securities agreed, subject to certain conditions, to use its reasonable endeavours to procure subscribers for the Initial Placing Shares. 12.14.2 The IPO Placing Agreement contained customary warranties given by the Company, Prestbury and the Directors to Oriel Securities as to the accuracy of the information contained in the Admission Document and other matters relating to the Company and its business, and also contained indemnities given by the Company to Oriel Securities in a form customary for this type of agreement.

12.15 Nomad and Broker Agreement On 16 May 2014, Oriel Securities entered into a nominated adviser and broker agreement with the Company and the Directors, pursuant to which the Company appointed Oriel Securities to act as nominated adviser and broker to the Company (the “Nomad and Broker Agreement”). The Nomad and Broker Agreement was novated by Oriel Securities to Stifel on 1 March 2015 pursuant to a deed of novation between the Company, Oriel Securities and Stifel. The Nomad and Broker Agreement is terminable by either party upon written notice. Stifel receives a fee of £65,000 (excluding VAT) per annum for the services rendered by it. The Nomad and Broker Agreement contains an indemnity given by the Company to Stifel, and provides, amongst other things, that the Company undertakes to comply with the AIM Rules.

211 12.16 Depositary Agreement 12.16.1 Gallium has been appointed as depositary of the Company pursuant to the Depositary Agreement. Gallium is responsible for ensuring the Company’s cash flows are properly monitored, the safe-keeping of financial instruments and other assets held on behalf of the Company and the oversight and supervision of the Company (as an internally managed AIFM). Gallium is responsible for ensuring the Company’s cash flows are properly monitored, the safe-keeping of financial instruments and other assets capable of being held in custody, the verification of ownership of other assets, and the oversight and supervision of the Company (as an internally managed AIFM). 12.16.2 Gallium is entitled to a fee of £50,000 per annum (exclusive of VAT), together with reimbursement of transaction charges, expenses and costs as agreed with the Company or the Investment Adviser from time to time. 12.16.3 Gallium may, where permitted by law and regulation, and with the prior approval of the Company, delegate all or any of its functions or services under the Depositary Agreement. Gallium will retain responsibility to the Company for the delegation of any services. At the date of this document no such delegation has been made. 12.16.4 Gallium and the Company agree to indemnify each other against certain losses (save where the loss arises due to the indemnified party’s fraud, negligence, bad faith or wilful misconduct), and each provides representations in a form customary for this type of agreement. 12.16.5 The Depositary Agreement may be terminated by Gallium on six months’ prior written notice or on three months’ prior written notice (or such other period as the FCA may require) if for regulatory reasons it is unable to perform its duties under the Depositary Agreement. The Company may terminate the Depositary Agreement without penalty on three months’ prior written notice.

12.17 Leisure Facility Agreements 12.17.1 SIR Theme Parks Limited and SIR HP Limited entered into a senior facility agreement dated 3 August 2015 as borrowers with Rothesay Life Limited as arranger and original lender, with Charcoal Midco 2 Limited, SIR Theme Parks Limited, SIR HP Limited, SIR TP Limited, SIR ATP Limited, SIR ATH Limited and SIR WC Limited (the “Guarantors”) as guarantors. 12.17.2 The senior facility agreement provides for the following facilities, which are fully drawn: (a) a pounds sterling facility of £260,690,000 to SIR Theme Parks Limited (the “Senior Sterling Leisure Facility”); and (b) a euro facility of €59,070,000 to SIR HP Limited (the “Senior Euro Leisure Facility” and together with the Senior Sterling Leisure Facility, the “Senior Leisure Facilities” and each a “Senior Leisure Facility”). 12.17.3 SIR Theme Park Subholdco Limited entered into a mezzanine facility agreement dated 3 August 2015 as borrower with Husky UK Finco, L.L.C. as arranger and original lender, with the Guarantors as guarantors. 12.17.4 The mezzanine facility agreement provides for the following facilities, which are fully drawn: (a) a pounds sterling facility of £56,110,000 to SIR Theme Park Subholdco Limited (the “Mezzanine Sterling Leisure Facility”); and (b) a euro facility of €12,710,000 to SIR Theme Park Subholdco Limited (the “Mezzanine Euro Leisure Facility” and together with the Mezzanine Sterling Leisure Facility, the “Mezzanine Leisure Facilities” and each a “Mezzanine Leisure Facility”). 12.17.5 Following the fifth anniversary of the drawdown date, 0.25 per cent of each Senior Leisure Facility and each Mezzanine Leisure Facility are repayable on each quarterly interest payment date. Each Senior Leisure Facility and each Mezzanine Leisure Facility is repayable in full on 29 October 2022, being the interest payment date following the seventh anniversary of the drawdown date.

212 12.17.6 The interest rates applicable to each facility are as follows: (a) the interest rate on the Senior Sterling Leisure Facility is 4.484 per cent per annum; (b) the interest rate on the Senior Euro Leisure Facility is 3.261 per cent per annum; (c) the interest rate on the Mezzanine Sterling Leisure Facility is 12.384 per cent per annum; and (d) the interest rate on the Mezzanine Euro Leisure Facility is 11.161 per cent per annum. 12.17.7 The rate of any interest payable is increased by 2 percentage points for overdue amounts. 12.17.8 The following fees are or were payable in relation to the Senior Leisure Facilities: arrangement fees, agency fees and common security agency fees (with £1,955,175 and €443,025 payable on the drawdown date in respect of arrangement fees and £4,375 payable quarterly in advance in respect of the agency and common security agency fees). 12.17.9 The following fees are or were payable in relation to the Mezzanine Leisure Facilities: arrangement fees, agency fees, mezzanine security agency fees and common security agency fees (with £420,825 and €95,325 payable on the drawdown date in respect of arrangement fees and £4,625 payable quarterly in advance in respect of the agency, mezzanine security agency and common security agency fees). 12.17.10 As is UK market practice for real estate finance investment facilities, all net rental income received by the subsidiaries of SIR Theme Parks Limited is required to be paid into rent accounts charged to and controlled by the lenders. Amounts standing to the credit of the rent accounts are required to first be used to service any amounts unpaid under the Senior Leisure Facilities and secondly be used to service any amounts unpaid under the Mezzanine Leisure Facilities, with any surplus paid into unblocked general accounts controlled by SIR Theme Parks Limited, SIR HP Limited and SIR Theme Park Subholdco Limited. No funds will be paid into a general account if an event of default is continuing under any Senior Leisure Facility or any Mezzanine Leisure Facility or, following the third anniversary of the drawdown date, the aggregate loan to value for the Senior Leisure Facilities and the Mezzanine Leisure Facilities exceeds 85 per cent In the event that, following the third anniversary of the drawdown date, the aggregate loan to value for the Senior Leisure Facilities and the Mezzanine Leisure Facilities exceeds 80 per cent but is less than 85 per cent, 0.25 per cent of the Senior Leisure Facilities and the Mezzanine Leisure Facilities would be retained in a blocked account and not paid into a general account on each quarterly interest payment date. The senior and mezzanine facility agreements permit the borrowers to cure a breach of the above loan to value test, subject to a limit of six cures during the term of the Senior Leisure Facilities and Mezzanine Leisure Facilities and not more than three cures in any nine month period. The borrowers can cure a breach of the above loan to value test by prepaying a loan in accordance with the voluntary prepayment mechanism detailed below or, with lender consent, by granting security to the lenders over additional assets brought into the leisure group structure. 12.17.11 Regardless of whether an event of default is continuing or a loan to value test is not met, up to £200,000 per annum of third party operating expenses (or any greater amount agreed by the lenders) will continue to be paid into the general accounts to pay for such operating expenses. 12.17.12 The senior and mezzanine facility agreements include mandatory prepayment provisions in relation to illegality and change of control of the borrower sub-groups. They also include a number of mandatory prepayment events where the borrower has received specific funds, for example any lease surrender or amendment premiums, amounts received from an insurer that are not used to reinstate the property or the proceeds of the sale of a property secured in favour of the lenders or the sale of the shares in a Guarantor. The senior and mezzanine facility agreements include a mechanism for voluntary prepayments on 10 Business Days’ notice to the lenders, with any voluntary prepayment being in a minimum amount of £5,000,000 (or the euro equivalent). 12.17.13 Any prepayment (other than prepayments triggered by illegality or on the repayment of a particular lender due to a tax gross-up or increased costs) of a Senior Leisure Facility or a

213 Mezzanine Leisure Facility would give rise to a prepayment fee, being an amount calculated to be the present value of the cash flows comprising interest that would have been due to the lenders in respect of such amount prepaid for the remainder of the term of the loan, but with such cash flows discounted using the mid 6 month GBP LIBOR interest swap rate or the mid 6 month EURIBOR interest swap rate (as applicable) at the date of calculation. Following the fifth anniversary of the drawdown date, the discount rate applied to the present value of the cash flows is increased by 25 basis points in respect of a prepayment of a Senior Leisure Facility and 75 basis points in respect of a prepayment of a Mezzanine Leisure Facility. 12.17.14 The senior and mezzanine facility agreements contain customary events of default, representations, warranties, covenants and undertakings for senior and mezzanine loan agreements of this type. 12.17.15 The Senior Leisure Facilities and the Mezzanine Leisure Facilities are secured by (i) an English law debenture containing first priority legal mortgages over property in England, first priority fixed charges and floating charges, (ii) a German law security purpose agreement relating to land charges over property in Germany, (iii) a German law global assignment agreement and (iv) a German law rental assignment agreement in respect of rent collected from property in Germany. 12.17.16 The Mezzanine Leisure Facilities are further secured by (i) an English law debenture from SIR Theme Park Subholdco Limited containing first priority legal mortgages, first priority fixed charges and floating charges and (ii) a limited recourse English law parent security agreement containing a fixed charge over the shares in SIR Theme Park Subholdco Limited held by the Company and related rights and an assignment of all intercompany debt owed by SIR Theme Park Subholdco Limited to the Company. 12.17.17 The senior and mezzanine facility agreements also contain customary restrictions on the power of the obligors to assign or transfer their rights and obligations under the finance documents and restrictions on change of control of the borrower sub-groups.

12.18 Healthcare 1 Facility Agreement 12.18.1 SIR Hospitals Propco Limited entered into a facility agreement as borrower dated 7 September 2015, with LGIM Commercial Lending Limited as arranger and Legal & General Pensions Limited (and others) as lenders, with the subsidiaries of SIR Hospitals Propco Limited as guarantors. 12.18.2 The facility agreement provides a pounds sterling facility of £220,000,000 (the “Healthcare 1 Facility”), which is fully drawn and of which £219,500,000 is outstanding as at the date of this document. 12.18.3 The Healthcare 1 Facility is repayable in full on the tenth anniversary of the drawdown date, being 7 September 2025. The L&G Healthcare Facility amortises in an aggregate total amount of £10,000,000 divided into equal instalments and with an instalment due on each quarterly interest payment date and the termination date. 12.18.4 The interest rate on the Healthcare 1 Facility is 4.29 per cent per annum. The rate of any interest payable is increased by 2 percentage points per annum for overdue amounts. 12.18.5 The following fees are or were payable in relation to the Healthcare 1 Facility: arrangement fee (£1,650,000 payable on the drawdown date); agency fees (£30,750 per annum (inclusive of VAT), with the first payment being on the drawdown date and subsequent payments on each anniversary thereafter); and monitoring fees (£79,250 with the first payment being on the drawdown date and subsequent payments on the anniversary thereafter). 12.18.6 As is UK market practice for real estate finance investment facilities, all net rental income received by the subsidiaries of SIR Hospitals Propco Limited is required to be paid into a rent account charged to and controlled by the lenders. Amounts standing to the credit of the rent account are required to first be used to service any amounts unpaid under the L&G Healthcare Facility, with any surplus paid into a general account controlled by SIR Hospitals Propco Limited on each quarterly interest payment date. No funds will be paid into the general account if either (i) an event of default is continuing under the Healthcare 1 Facility (or would result from the making of such payment into the general account) or (ii) an obligor is unable to repeat certain representations set out in the facility agreement. If certain interest

214 cover financial tests have not been satisfied, rather than amounts being paid into the general account, amounts will instead be used to settle corporate running costs, overheads and tax liabilities of the obligors with the balance being paid into a blocked cure account. 12.18.7 The facility agreement includes mandatory prepayment provisions in relation to illegality and change of control of the borrower sub-group. It also includes a number of mandatory prepayment events where the borrower has received specific funds, for example any lease surrender or amendment premiums, amounts received from an insurer that are not used to reinstate the property or the proceeds of the sale of a property secured in favour of the lenders or the sale of the shares in a subsidiary of SIR Hospitals Propco Limited. The facility agreement includes a mechanism for voluntary prepayments on 15 Business Days’ notice to the lenders, with any voluntary prepayment being in a minimum amount of £10,000,000. 12.18.8 Any prepayment (other than prepayments triggered by illegality or on the repayment of a particular lender due to a tax gross-up or increased costs) would give rise to a prepayment fee being the higher of (i) the principal amount prepaid; and (ii) an amount calculated in accordance with a ‘spens’ formula set out in the facility agreement which determines the present value of future cash flows in respect of the prepaid amount discounted at a rate of 0.50 per cent plus the applicable ask yield on the applicable pounds sterling swap. 12.18.9 The financial performance of the SIR Hospitals Propco Limited group is tested by the lenders against a number of financial covenants, being: (i) a projected interest cover test where the rent due to be collected over the next 12 months must be at least 150 per cent of the interest and other costs due to the lenders under the Healthcare 1 Facility during the next 12 months; and (ii) a loan to value test, measuring the principal outstanding under the Healthcare 1 Facility against the value of the properties secured to the lenders, which must be no more than 80 per cent after the fourth anniversary of the Healthcare 1 Facility until and including the eighth anniversary of the Healthcare 1 Facility, and after the eighth anniversary of the Healthcare 1 Facility, no more than 75 per cent. These financial covenants shall be tested on 1 August of each year by reference to the most recent compliance certificate and each valuation. 12.18.10 The facility agreement permits the borrower to cure a breach of any of the above financial covenant tests, subject to a limit of five cures during the term of the Healthcare 1 Facility and a prohibition on cures in any more than two consecutive years. The borrower can cure a breach of a financial covenant test by paying an amount into an account charged to and controlled by the lenders, prepaying the loan in accordance with the voluntary prepayment mechanism detailed above or by granting security to the lenders over an additional property brought into the SIR Hospitals Propco Limited group structure. 12.18.11 The facility agreement contains customary events of default, representations, warranties, covenants and undertakings for a loan agreement of this type. 12.18.12 The borrower can ask the lenders for consent to the disposal of a property secured to the lenders and the acquisition of a new property provided that the new property is located in the United Kingdom and the market value and passing rent for the acquired property is at least equal to the market value and passing rent of the property being sold. 12.18.13 The Healthcare 1 Facility is secured by (i) an English law security agreement containing first priority legal mortgages, first priority fixed charges, floating charges and assignments of intercompany debt between SIR Hospitals Propco Limited and its subsidiaries and (ii) a limited recourse English law parent security agreement containing a fixed charge over the shares in SIR Hospitals Propco Limited held by SIR Umbrella Limited and related rights and an assignment of all intercompany debt between SIR Umbrella Limited and other transaction obligors. 12.18.14 The facility agreement also contains customary restrictions on the power of the obligors to assign or transfer their rights and obligations under the finance documents and restrictions on change of control of the borrower sub-group.

12.19 Healthcare 2 Facility Agreement 12.19.1 SIR Healthcare 2 Limited entered into a facility agreement dated 25 September 2015 as borrower with AIG Asset Management (Europe) Limited as arranger and various lenders

215 being The Variable Annuity Life Insurance Company, American General Life Insurance Company, National Union Fire Insurance Company of Pittsburgh, PA. and American Home Assurance Company, with the subsidiaries of SIR Healthcare 2 Limited as guarantors. 12.19.2 The facility agreement provides a pounds sterling facility of £315,600,000 (the “Healthcare 2 Facility”), which is fully drawn and of which £314,579,704 is outstanding as at the date of this document. 12.19.3 The Healthcare 2 Facility is repayable in full on the tenth anniversary of the drawdown date, although SIR Healthcare 2 Limited can request to extend the termination date by a further period of 90 days. 12.19.4 The interest rate on the Healthcare 2 Facility is 5.296 per cent per annum. The rate of any interest payable is increased by 2 percentage points for overdue amounts. 12.19.5 The following fees are or were payable in relation to the (Healthcare 2 Facility: arrangement fee, agency fees and security agency fees (with £3,157,500 payable on the drawdown date in respect of the arrangement fee and £1,875 payable quarterly in arrears in respect of the agency and security agency fees). 12.19.6 As is UK market practice for real estate finance investment facilities, all net rental income received by the subsidiaries of SIR Healthcare 2 Limited is required to be paid into a rent account charged to and controlled by the lenders. Amounts standing to the credit of the rent account are required to first be used to service any amounts unpaid under the Healthcare 2 Facility, with any surplus paid into a general account controlled by SIR Healthcare 2 Limited on each quarterly interest payment date. No funds will be paid into the general account if a default is continuing under the Healthcare 2 Facility or if loan to value and debt service cover financial tests have not been satisfied (although £120,000 would still be paid into the general account each quarter to pay for operating expenses of the obligors if any financial covenant test is not met). 12.19.7 The facility agreement includes mandatory prepayment provisions in relation to illegality and change of control of the borrower sub-group. It also includes a number of mandatory prepayment events where the borrower has received specific funds, for example any lease surrender or amendment premiums, amounts received from an insurer that are not used to reinstate the property or the proceeds of the sale of a property secured in favour of the lenders or the sale of the shares in a subsidiary of SIR Healthcare 2 Limited. The facility agreement includes a mechanism for voluntary prepayments on 15 Business Days’ notice to the lenders, with any voluntary prepayment being in a minimum amount of £10,000,000. 12.19.8 Any prepayment (other than prepayments triggered by illegality or on the repayment of a particular lender due to a tax gross-up or increased costs) would give rise to a prepayment fee, being the greater of (i) 1 per cent of the amount prepaid; and (ii) an amount calculated to be the interest that would have been due to the lenders on such amount prepaid for the remainder of the term of the loan, but with such interest amount discounted using the interpolated GBP swap rate at the date of calculation. 12.19.9 The financial performance of the SIR Healthcare 2 Limited group is tested by the lenders against a number of financial covenants, being: (i) a historic interest cover test where the rent collected during the previous 12 months must be at least 120 per cent of the interest and other costs due to the lenders under the Healthcare 2 Facility during the previous 12 months; (ii) a projected interest cover test where the rent due to be collected over the next 12 months must be at least 120 per cent of the interest and other costs due to the lenders under the Healthcare 2 Facility during the next 12 months and (iii) a loan to value test, measuring the principal outstanding under the Healthcare 2 Facility against the value of the properties secured to the lenders, which must be no more than 85 per cent in the first year of the Healthcare 2 Facility and reducing in steps to 74 per cent in the tenth year of the Healthcare 2 Facility. 12.19.10 The facility agreement permits the borrower to cure a breach of any of the above financial covenant tests, subject to a limit of six cures during the term of the Healthcare 2 Facility and a prohibition on cures in consecutive financial quarters. The borrower can cure a breach of a financial covenant test by paying an amount into an account charged to and controlled by the lenders, prepaying the loan in accordance with the voluntary prepayment mechanism

216 detailed above or by granting security to the lenders over an additional property brought into the SIR Healthcare 2 Limited group structure. 12.19.11 The facility agreement contains customary events of default, representations, warranties, covenants and undertakings for a loan agreement of this type. 12.19.12 The borrower can ask the lenders for consent to the disposal of a property secured to the lenders and the acquisition of a new property provided that the new property is located in the United Kingdom and the market value and passing rent for the acquired property is at least equal to the market value and passing rent of the property being sold. 12.19.13 The Healthcare 2 Facility is secured by (i) an English law security agreement containing first priority legal mortgages, first priority fixed charges and floating charges, (ii) a limited recourse English law parent security agreement containing a fixed charge over the shares in SIR Healthcare 2 Limited held by SIR Healthcare 1 Limited and related rights and an assignment of all intercompany debt owed by SIR Healthcare 2 Limited to SIR Healthcare 1 Limited and (iii) an English law subordinated creditor’s security agreement containing assignments of all intercompany debt between SIR Healthcare 2 Limited and each of its subsidiaries. 12.19.14 The facility agreement also contains customary restrictions on the power of the obligors to assign or transfer their rights and obligations under the finance documents and restrictions on change of control of the borrower sub-group.

13 RELATED PARTY TRANSACTIONS The transactions referred to in note 21 of the historical financial information shown in Part 6: Historical Financial Information are the only related party transactions which, as a single transaction or in their entirety, are or may be material to the Company and have been entered into by the Company or any other Group Company during the period commencing on 1 April 2012 and terminating immediately prior to the date of this document. Each of the transactions was concluded at arm’s length.

14 WORKING CAPITAL The Company is of the opinion that, after taking into account the financing facilities available, the working capital of the Group will be sufficient for its present requirements, that is, for at least the period of 12 months from the date of this document.

15 LITIGATION No Group Company is or has been involved in any governmental, legal or arbitration proceedings which may have, or have had during the 12 months preceding the date of this document, a significant effect on the Group’s financial position or profitability and, so far as the Directors are aware, there are no such proceedings pending or threatened against any Group Company.

16 THIRD PARTY INFORMATION Where third party information has been referenced in this document, the source of that information has been disclosed. The Company and the Directors confirm that such data has been accurately reproduced and, so far as they are aware and are able to ascertain from information published from such sources, no facts have been omitted which would render the reproduced information inaccurate or misleading.

17 GENERAL 17.1 There has been no significant change in the financial or trading position of the Group since 31 December 2015, the date to which the audited financial information of the Group set out in Part 6: Historical Financial Information was prepared. 17.2 The estimated costs and expenses relating to the Placing (including those fees and commissions referred to in paragraph 3 of Part 10: Details of the Placing above) payable by the Company are estimated to amount to approximately £2 million.

217 17.3 BDO LLP of 55 Baker Street, London, W1U 7EU has given and has not withdrawn its written consent to the inclusion in this document of its accountant’s reports in Part 6: Historical Financial Information in the form and context in which it appears. A written consent prepared as if item 20.1 of annex I of the Commission Regulation (EC) No. 809/2004 applied is different from a consent filed under Section 7 of the Securities Act, which is applicable only to transactions involving securities registered under the Securities Act. As the offered securities will not be registered under the Securities Act, BDO LLP has not filed a consent under Section 7 of the Securities Act. The Reporting Accountant has no interest in the Company. 17.4 CBRE of Henrietta House, Henrietta Place, London, W1G0NB has given and has not withdrawn its written consent to the inclusion in this document of its report in Part 5: Property Valuation Report of this document and the references to its report in the form and context in which it appears. CBRE has no interest in the Company. 17.5 Save as otherwise disclosed in this document there are no patents or other intellectual property rights, licences, industrial, commercial or financial contracts or new manufacturing processes which are material to the Group’s business or profitability. 17.6 Conflicts of interest may arise in relation to the Prestbury Directors due to their interests in Prestbury and its group. However, it should be noted that the Prestbury Team is significantly invested in the Company, providing very strong alignment with the other Shareholders’ interests. Moreover, Prestbury has agreed in the Investment Advisory Agreement to offer the Company exclusive access to all investment opportunities that it or its affiliates source during the term of its appointment as Investment Adviser which fit the Company’s investment strategy. Similarly, conflicts of interest may arise as a result of the Independent Directors’ positions outside of the Group noted in paragraph 7 of this Part 11: Additional Information. Arrangements have been put in place to assist in the management of such conflicts and in ensuring there must be a majority of Independent Directors for a Board meeting to be quorate. The Independent Directors, and the Board as a whole, are independent of the Investment Adviser and any substantial shareholders, including the Prestbury Group. 17.7 In accordance with the AIM Rules the Company is required to manage its investments in accordance with its investment policy, which is set out in paragraph 2 of Part 1: Business. In accordance with the AIM Rules, the Company’s investment strategy and policy may only be materially varied by seeking the prior consent of the Shareholders in a general meeting. 17.8 Typical investors in the Company are expected to be institutional and sophisticated investors.

18 DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents will be available for inspection during normal business hours on any day (except Saturdays, Sundays, bank and public holidays) free of charge to the public at the offices of the Company and at the offices of Berwin Leighton Paisner LLP, Adelaide House, London Bridge, London EC4R 9HA from the date of this document to the date one month from the date of this document: (a) the audited consolidated accounts of the Group for the financial year ended 31 March 2013, the financial year ended 31 March 2014 and the nine months ended 31 December 2014 and the preliminary results announcement of the Group for the financial year ended 31 December 2015; (b) the accountant’s report set out in Part 6: Historical Financial Information of this document; (c) the Property Valuation Report set out in Part 7: Property Valuation Report of this document; and (d) the Articles.

218 Part 12: Definitions

The following definitions apply throughout this document unless the context requires otherwise:

Accountant’s Report the report of BDO set out in Section 1 of Part 6: Historical Financial Information on the Group

Act the Companies Act 2006

Admission Document the admission document dated 30 May 2014 in relation to the admission for the Company’s Ordinary Shares to trading on AIM

Advisory Fee the advisory fee payable pursuant to the Investment Advisory Agreement as set out in paragraph 12.11.2 of Part 11: Additional Information

AIF an alternative investment fund within the meaning of AIFMD

AIFM an alternative investment fund manager within the meaning of AIFMD

AIFMD Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers

AIM AIM, a market of the London Stock Exchange

AIM Rules the AIM Rules for Companies and the AIM Rules for Nominated Advisors

AIM Rules for Companies the rules for companies whose securities are traded on AIM published by the London Stock Exchange as amended from time to time

AIM Rules for Nominated the rules for nominated advisors to companies whose securities Advisors are traded on AIM published by the London Stock Exchange as amended from time to time

Articles the articles of association of the Company

Assumptions the assumptions that apply to certain illustrative information in this document being: 1. RPI swap curve at 23 February 2016 as an approximation of potential future RPI uplifts in UK Leisure Portfolio rents; 2. constant valuation yield at 31 December 2015 external valuation: 5.3 per cent blended Net Initial Yield; 3. incentive fee arrangements currently in place are not amended at the Independent Directors’ 2017 review; 4. no open market rental uplifts (only fixed uplifts) on Ramsay Health Care leases; 5. dividends paid quarterly and commencing in August 2016 at an annualised 11.75 pence per share for the first four quarters and thereafter based on higher of minimum REIT distribution requirement and one times adjusted earnings. Adjusted earnings exclude increases in rental income from the rent smoothing IFRS adjustment and one-off placing costs in 2016 of approximately £2 million; 6. administrative expenses (other than the Advisory Fee) (2015 total £1.2 million) assumed to grow at 3 per cent per annum;

219 7. existing debt arrangements are unchanged and no covenants are breached; 8. no change in tax law and the Company is no longer a close company by 5 June 2017; 9. no purchases or sales of properties or lease variations; and 10. constant euro exchange rate €1:£0.735.

Board the board of directors of the Company

Business Day a day (other than a Saturday or Sunday) on which AIM is open for trading

CBRE CBRE Limited certificated or in certificated in relation to a Share, recorded on the Company’s register as form form being held in certificated form (that is not in CREST)

City Code the City Code on Takeovers and Mergers as amended from time to time

Commitment Agreement the commitment agreement dated 29 May 2014 entered into between the Company and the Pre-IPO Investors, as more particularly described in paragraph 12.12 of Part 11: Additional Information

Company Secure Income REIT Plc, a company registered in England and Wales with company number 06064259 and authorised and regulated by the FCA under firm reference number 624782

Concert Party those persons whose details are set out in paragraph 15 of Part 1 of this document

CREST the system for paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear UK & Ireland Limited in accordance with the Regulations

CTA 2010 the UK Corporation Tax Act 2010

Depositary the person appointed to act as depositary to the Company in accordance with the AIFMD, being Gallium P E Depositary Limited

Depositary Agreement the depositary agreement dated 17 July 2014 entered into between the Company and the Depositary, as more particularly described in paragraph 12.16 of Part 11: Additional Information of this document

Directors the directors of the Company whose names are set out on page 61 of this document and “Director” shall mean any of them

Disaggregation Agreement the disaggregation agreement dated 29 May 2014 entered into between the Company and the Substantial Pre-IPO Investors, as more particularly described in paragraph 12.13 of Part 11: Additional Information

EEA European Economic Area

EU the European Union

220 Exchange Act or US Exchange Act the US Exchange Act 1934 as amended

Existing Independent Director the lock-in deeds dated 30 May 2014 amongst each of the Lock-in Deeds Independent Directors and the Company and Oriel Securities, as more particularly described in paragraph 12.4 of Part 11: Additional Information

Existing Investor Lock-in Deeds the lock-in deeds dated 30 May 2014 amongst each of the Substantial Pre-IPO Investors, PIHL, West Coast Capital Holdings Limited, the Company and Oriel Securities, as more particularly described in paragraph 12.6 of Part 11: Additional Information

Existing Prestbury Director the lock-in deeds dated 30 May 2014 entered into between Lock-in Deeds each of Mike Brown, Nick Leslau and Sandy Gumm and the Company and Oriel Securities as more particularly described in paragraph 12.5 of Part 11: Additional Information

FCA the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of FSMA

Financial Statements financial statements prepared in accordance with statutory requirements set out in Sections 532 and 533 of CTA 2010

Final Lock-In Release Date the date six months following the Second Lock-In Release Date

First Lock-In Release Date the date 12 months following the Settlement Date

FSMA the Financial Services and Markets Act 2000 (as amended)

Gallium Gallium P E Depositary Limited, a company registered in England and Wales with registered number 07599626 and authorised and regulated by the FCA with firm reference number 612479

German Leisure Portfolio Heide Park and the hotel operating on the Heide Park site

Goldman Sachs Goldman Sachs International of Peterborough Court, 133 Fleet Street, London EC4A 2BB

Group the Company and its subsidiaries and subsidiary undertakings from time to time (as defined in section 606 of CTA 2010) and “Group Company” means any one of these

Healthcare Portfolio the Ramsay Healthcare Portfolio and the Nightingale Psychiatric Hospital in central London

HMRC Her Majesty’s Revenue & Customs

Hospital Holdings SIR Hospital Holdings Limited, a company registered in England with registered number 05863307

IFRS International Financial Reporting Standards, as adopted by the European Union and therefore complying with Article 4 of the EU IAS regulation

221 Independent Directors those directors that are independent from the Investment Adviser, being at the date of this document, Martin Moore, Leslie Ferrar, Jonathan Lane and Ian Marcus, and their alternates from time to time

Initial Placing Shares 8,620,689 Ordinary Shares issued on 5 June 2014 in connection with the IPO

Institutional Investor a person who qualifies as an institutional investor under section 528(4A) of CTA 2010

Investment Adviser Prestbury, or such other entity as may replace Prestbury as investment adviser of the Company from time to time

Investment Advisory Agreement the investment advisory agreement dated 30 May 2014 and made between the Company, Prestbury and Gallium (as amended and restated on 3 June 2015 and 2 March 2016), as more particularly described in paragraph 12.11 of Part 11: Additional Information

IPO the admission of the Ordinary Shares to trading on AIM

IPO Date the date on which the Ordinary Shares were admitted to trading on AIM, being 5 June 2014

IPO Placing Agreement the conditional placing agreement dated 30 May 2014 entered into between the Company, Oriel Securities, the Investment Adviser and the Directors, as more particularly described in paragraph 12.14 of Part 11: Additional Information of this document

Issued Share Capital the issued share capital of the Company as at the date of this document, being 180,344,228 Ordinary Shares

Joint Bookrunners Goldman Sachs and Stifel

Leisure Portfolio the six leisure real estate assets owned by the Group and let to Merlin, as more particularly described in paragraph 5 of Part 1: Business

London Stock Exchange London Stock Exchange plc

Merlin Merlin Entertainments plc, a company registered in England with registered number 08700412, with its registered office at 3 Market Close, Poole, Dorset BH15 1NQ

New Independent Director Lock- the lock-in deeds dated, on or around the date of this In Deeds document, amongst each of the Independent Directors and the Company, Goldman Sachs and Stifel, as more particularly described in paragraph 12.8 of Part 11: Additional Information

New PIHL Lock-In Deed the lock-in deed dated, on or around the date of this document, between PIHL Property LLP and the Company, Goldman Sachs and Stifel, as more particularly described in paragraph 12.10 of Part 11: Additional Information

New Prestbury Director Lock-In the lock-in deeds dated, on or around the date of this Deeds document, entered into between each of Mike Brown, Nick Leslau and

222 Sandy Gumm and the Company, Goldman Sachs and Stifel, as more particularly described in paragraph 12.9 of Part 11: Additional Information

NHS the UK’s National Health Service

Non-Independent Director any director that, from time to time, is not an Independent Director

Non-PID Dividends a dividend declared by the Company that is not a PID

Official List the Official List of the UK Listing Authority

Orderly Market Deeds the orderly market deeds dated 30 May 2014 entered into between each of the Other Pre-IPO Investors, the Company and Stifel, as more particularly described in paragraph 12.7 of Part 11: Additional Information

Ordinary Shares ordinary shares of 10 pence each in the capital of the Company

Oriel Securities Oriel Securities Limited

Orpea Orpea S.A., a company registered in France, with its registered office at 115 rue de la Santé, 75013 Paris.

Other Pre-IPO Investors Bluetouch Investments (Malta) Limited, Brookstone Limited and Dominic Silvester

Overseas Shareholders persons who are resident in, or who are citizens of, or who have registered addresses in, territories other than the UK

P1 Nominee Prestbury 1 Nominee Limited, a company registered in England with registered number 05863328

Panel the Panel on Takeovers and Mergers

PID or Property Income a distribution referred to in section 548(1) or 548(3) of CTA Distribution 2010, being a dividend or distribution paid by the Company in respect of profits or gains of the Qualifying Property Rental Business of the Group (other than gains arising to non-UK resident Group companies) arising at a time when the Group is a REIT insofar as they derive from the Group’s Qualifying Property Rental Business

PIHL Prestbury Investment Holdings Limited, a company registered in England with registered number 03985560

Placing the proposed placing of Ordinary Shares at the Placing Price pursuant to the Placing, as more particularly described in Part 10: Details of the Placing

Placing Price the price at which each Ordinary Share is to be sold under the Placing

Placing Price Range the range within which the Placing Price is set, expected to be between 250 pence and 260 pence

Placing Shares the number of Ordinary Shares that each Selling Shareholder agrees to sell pursuant to the Secondary Placing Agreement

Portfolio the property portfolio held by the Company as at the date of this document, comprising the Healthcare Portfolio and the Leisure Portfolio

PRA Prudential Regulatory Authority

223 Pre-IPO Investors PIHL Property LLP, West Coast Capital Prestven Investments Limited, Prestonfield Investments Limited, Bluetouch Investments (Malta) Limited, Brookstone Limited and Dominic Silvester

Prestbury Prestbury Investments LLP, a limited liability partnership registered in England with registered number OC321632

Prestbury 1 LP Prestbury 1 Limited Partnership, an entity registered in England with registered number LP011435

Prestbury Concert Party PIHL Property LLP, Prestbury Incentives, Sandy Gumm, Mike Brown, the trustees of the Saper Trust and Richard Grosse

Prestbury Directors those directors that are related to or appointed by the Investment Adviser, being at the date of this document, Mike Brown, Nick Leslau and Sandy Gumm and their alternates from time to time

Prestbury Group a group of entities under the common ownership of Nick Leslau and Nigel Wray and others and any person connected to them (including the Prestbury Team)

Prestbury Incentives Prestbury Incentives Limited, a company registered in England and Wales with registered number 09033962

Prestbury Team Mike Brown, Tim Evans, Sandy Gumm, Nick Leslau and Ben Walford

Property Valuation Report the valuation report prepared by CBRE and shown in Part 7: Property Valuation Report

Prospectus Directive the EU Prospectus Directive 2003/71/EC of FSMA

Prospectus Rules the prospectus rules of the UK Listing Authority made under section 73A of FSMA, as amended

QIB qualified institutional buyer, as defined in Rule 144A

Qualifying Property Rental a business within the meaning of section 205 of CTA 2009 or Business an overseas property business within the meaning of section 206 CTA 2009, but, in each case, excluding certain specified types of business (as per section 519(3) of CTA 2010)

Ramsay Ramsay Health Care Limited, a company registered in Australia, with its registered office at Level 9, 154 Pacific Highway St Leonards NSW 2065

Ramsay Healthcare Portfolio the 19 healthcare real estate assets let to the principal UK operating subsidiary of Ramsay Health Care Limited, as more particularly described in paragraph 5 of Part 1: Business of this document

Registrars or Capita Capita Registrars Limited

Regulation S Regulation S under the Securities Act

Regulations the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)

REIT a group or company which has elected for real estate investment trust status under Part 12 of the CTA 2010

224 REIT Group a group UK REIT within the meaning of Part 12 of the CTA 2010

REIT Regime Part 12 of the CTA 2010

Relevant Member State each member state of the EEA which has implemented the Prospectus Directive

Residual Business the business of the Group that is not Qualifying Rental Property Business

RICS Royal Institution of Chartered Surveyors

Rule 144A Rule 144A of the US Securities Act

SDLT stamp duty land tax

SDRT stamp duty reserve tax

Second Lock-In Release Date the date six months following the First Lock-In Release Date

Secondary Placing Agreement the secondary placing agreement dated 14 March 2016 entered into between the Joint Bookrunners and the Selling Shareholders, as more particularly described in paragraph 7 of Part 10: Details of the Placing

Securities Act the United States Securities Act of 1933 (as amended)

Selling Shareholders PIHL Property LLP, West Coast Capital Prestven Investments Limited, West Coast Capital Investments Limited, West Coast Capital (Retail Parks) Limited, Prestonfield P1 Limited, Prestonfield P2 Limited, Prestonfield P3 Limited, Bluetouch Investments (Malta) Limited, Brookstone Limited and Prestbury Incentives Limited

Settlement Date the date of settlement in relation to the Placing, being 24 March 2016

Shareholder a holder of Ordinary Shares

Stifel Stifel Nicolaus Europe Limited of 150 Cheapside, London, EC2V 6ET

Substantial Pre-IPO Investors PIHL Property LLP, West Coast Capital Prestven Investments Limited and Prestonfield Investments Limited

Substantial Shareholder a substantial shareholder as defined in paragraph 6.10 of Part 11: Additional Information

Substantial Shareholding a substantial shareholding as defined in paragraph 6.10 of Part 11: Additional Information

Tax Exempt Business the Qualifying Property Rental Business of the Group

Transaction Agreement the transaction agreement dated 14 March 2016 entered into between the Company, the Directors, Prestbury and the Joint Bookrunners, as more particularly described in paragraph 12.1 of Part 11: Additional Information

UK AIFMD Rules the laws, rules and regulations implementing AIFMD in the UK, including without limitation the Alternative Investment Fund

225 Managers Regulations 2013 and the Investment Funds sourcebook of the FCA

UK Corporate Governance Code the UK Corporate Governance Code published by the Financial Reporting Council

UK Leisure Portfolio Alton Towers, Thorpe Park, Warwick Castle and the hotels operating on the Alton Towers and Thorpe Park sites

UK Listing Authority a division of the FCA acting as competent authority for the purposes of Part VI of FSMA uncertificated or in in relation to an Ordinary Share, recorded on the Company’s uncertificated form register as being held in uncertificated form in CREST and title to which, by virtue of the Regulations, may be transferred by means of CREST

Uncertificated Proxy Instruction a properly authenticated dematerialised instruction and/or other instruction or notification, which is sent by means of the relevant system (as defined in the Regulations) concerned and received by such participant in that system acting on behalf of the Company as the directors of the Company may prescribe, in such form and subject to such terms and conditions as from time to time be prescribed by the directors (subject anyways to the facilities and requirements of the relevant system concerned)

United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland

United States or US the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia and any other area subject to its jurisdiction

US Person as defined in Regulation S of the Securities Act

In this document, words denoting any gender include all genders (unless the context otherwise requires).

226 Part 13: Glossary

Adjusted EPRA earnings EPRA earnings adjusted to exclude any incentive fees, non- recurring costs and the effects of rent smoothing

Adjusted EPRA EPS or adjusted EPRA earnings for a period divided by the weighted Adjusted EPRA earnings per average number of shares in issue in the period share

Average Annual Total Returns changes in a group’s net asset value after adding back any distributions to shareholders

CPI the Consumer Price Index, being the official measure of inflation of consumer prices of the United Kingdom

EBITDA earnings before interest, tax, depreciation and amortisation

EBITDARH earnings before interest, tax, depreciation, amortisation, rent and head office costs

EPRA the European Public Real Estate Association

EPRA Earnings a measure of earnings designed by EPRA to present underlying earnings from core operating activities

EPRA EPS or EPRA earnings EPRA earnings for a period divided by the weighted average per share number of shares in issue in the period

EPRA NAV a measure of net asset value designed by EPRA to present fair value of a company on a long term basis, by excluding items such as interest rate derivatives that are held for long term benefit, net of deferred tax

EPRA NAV per share EPRA NAV divided by the number of Ordinary Shares in issue at the relevant date

EPS or earnings per share earnings per share, calculated as the earnings for the period after tax attributable to members of the Company divided by the weighted average number of shares in issue in the period

Equivalent yield the constant capitalisation rate which, if applied to all cash flows from an investment property, equates to the fair value of the investment property

ERV estimated rental value, which is the open market rental value expected to be achievable at the date of valuation

Gross LTV and Gross Loan to LTV calculated on the gross loan amount and any other Value secured liabilities

IFRS International Financial Reporting Standards adopted for use in the European Union

Loan to Value or LTV a loan to value ratio expresses the gearing on an asset or within a company or group by dividing the outstanding loan amount by the value of the assets on which the loan is secured (for example a property with a value of £100 million securing a loan of £70 million would be said to have a loan to value ratio of 70 per cent)

227 NAV or Net Asset Value the measure shown in the balance sheet of a company or a group of all assets less all liabilities, equal to the equity attributable to shareholders in any company or group. The net asset value of the Group has been measured consistently with the Group’s accounting policies as included in note 2 of section 2 of Part 6: Historical Financial Information on the Group

Net Initial Yield or NIY annualised net rents on investment properties as a percentage of the investment property valuation, plus notional purchaser’s costs

Net LTV or Net Loan to Value LTV calculated on the gross loan amount and any other secured liabilities, less cash balances

Passing Rent the rent receivable at a particular date expressed as an annual amount

Reversionary Yield the anticipated yield to which the Net Initial Yield will rise once the rent reaches the ERV

RPI the All Items Retail Prices Index as published by the Office for National Statistics or the nearest equivalent successor index

Total Shareholder Return the total of growth in EPRA Net Asset Value per Ordinary Share plus distributions per Ordinary Share over a period of time, usually expressed as a percentage.

Dated 14 March 2016

228 Printed by RR Donnelley, 155762