Secure Income REIT Plc
9 March 2018
www.SecureIncomeREIT.co.uk
2
Secure Income REIT Plc is a specialist UK REIT, selectively investing in key
operating real estate assets in defensive sectors that provide long term rental
income with inflation protection. As at 31 December 2017 it owned a £1.77
billion portfolio of 81 high quality assets let to financially strong businesses.
An investment in the Company offers secure, growing income streams and
strong foundations for sustainable capital growth, while continuing to deliver
attractive risk adjusted returns for shareholders over the long term.
1. Introduction
2. December 2017 financial highlights
3. New acquisitions:
− The Manchester Arena
− The Brewery
− Stonegate Pubs
− Travelodge Hotels
− Financing & Pro Forma Enlarged Group NAV
4. Enlarged Portfolio Analysis
Warwick Castle
4
Secure Income REIT Plc
▪ The current portfolio of 81 properties is valued at £1.77bn
▪ Let to substantial businesses in defensive sectors
▪ Long WAULT of 22.2 years with no breaks
▪ 58% subject to fixed annual uplifts averaging 2.8% p.a. and 42% to uncapped, upwards only RPI reviews
▪ The Company has delivered strong Total Accounting Returns of 26% p.a. since listing in June 2014
▪ The Company has an experienced board, chaired by Martin Moore and with Leslie Ferrar, Jonathan Lane and Ian
Marcus along with Nick Leslau, Mike Brown & Sandy Gumm from the external investment adviser, Prestbury
▪ The Prestbury team has a track record of outperformance over many years and is closely aligned with
shareholders with a c. £137m1
stake – one of the largest management stakes in the sector.
1 £137 million held at 9 March valued at the Placing Price
5
Existing Portfolio
Multi sector portfolio underpinned by strong tenant covenants
Portfolio total passing rent £95.7m at 31 December 2017 from 81
key operating assets with income security from strong operating
businesses underpinning £1.77bn of property value
▪ 49% of rent guaranteed by Ramsay Health Care Limited: £7.2bn
market capitalisation ASX 50 company and one of the top five
private hospital operators in the world
▪ 2% of rent guaranteed by Orpea SA, mental health and aged care
specialists, listed on Euronext with £5.6bn market capitalisation
▪ 34% of rent guaranteed by Merlin Entertainments Plc: FTSE 250
company with £3.8bn market capitalisation: second largest visitor
attractions company in the world and largest in Europe
▪ 15% of rent guaranteed by Travelodge Hotels Ltd: a well-
capitalised business with financial year 2017 revenue growth of
6.6% to £637.1m and an increase in EBITDA to £112.4m; one of
the UK’s top two budget hotel brands
▪ 58% of rent subject to fixed minimum annual uplifts averaging
2.8% p.a. until at least 2037, 42% to uncapped upwards only RPI
uplifts
Portfolio Value December 2017: £1.77bn
Sources: Market data as at 1 March 2018 using AUD/GBP exchange rate of A$1:£0.56423 and EUR/GBP exchange rate of €1:£0.88826
For further information please see Appendix 2, pages 41 to 43
Portfolio Rent December 2017: £95.7m p.a.
TravelodgeHotels15% Merlin
Theme Parks34%
RamsayHospitals
49%
OrpeaHospitals
2%
Ramsay Hospitals
51%
OrpeaHospitals
3%
TravelodgeHotels13%
Merlin UK Theme Parks27%
Merlin German Theme Parks
6%
Hospitals:
Theme Parks:
Budget Hotels:
Overall:
31 December 2017 Financial Highlights
6
▪ Total shareholder return and total accounting return for the year 18.7%
31 December 2017 31 December 2016 % change
• Net Assets £860.6m £737.4m ↑ 16.7%
• EPRA Net Asset Value £870.8m £745.9m ↑ 16.7%
• EPRA Net Asset Value per share 370.4p 323.6p ↑ 14.5%
• EPRA NAV per share growth plus dividends 18.7% 16.5% ↑ 2.2pp
• Net LTV 49.6% 53.5% ↓ 3.9pp
31 December 2017 31 December 2016 % change
• Adjusted EPRA EPS1
13.6p 11.3p ↑ 20.4%
• Dividends per share (commenced Aug 2016) 13.6p 5.8p n/a
• Annualised DPS at year end 14.0p 11.8p ↑ 19.1%
1 Adjusted to exclude rental income in excess of cash rents received as a result of the accounting requirement to spread the impact of fixed rental uplifts
over the lease term and other non recurring items (see slide 47)
EPRA NAV Progression
7
£m Pence
• EPRA NAV at 31 December 2016 745.9 323.6
• Valuation uplifts:
• Healthcare 51.6 22.4
• UK Leisure 33.2 14.4
• German leisure (constant currency) 7.8 3.4
• Travelodge Hotels 32.3 14.0
• Net results 31.4 13.7
• Incentive fee - (7.4)
• Irrecoverable VAT on incentive fee (1.6) (0.6)
• Currency translation movements 1.4 0.5
• Dividends paid (31.2) (13.6)
• EPRA NAV at 31 December 2017 870.8 370.4
up 14.5%
▪ Portfolio valuation up 7.8% since 31 December 2016 to £1.77 billion
▪ Passing rents up 3.3% like-for-like to £95.7m at 31 December 2017
▪ Valuation net initial yield 5.1%: 22bps yield compression on portfolio since December 2016
7.6% uplift
since
December ’16
at constant
currency
£124.9m
For further information please see page 45 for the detailed Dec 2017 property valuation uplift
Adjusted EPRA Earnings
8
2017 2016
£m Pence £m Pence
Net rent:
Like for like portfolio 80.5 34.9 77.9 40.9
Travelodge (from Oct 2016) 13.9 6.0 2.4 1.1
Net finance costs
Like for like portfolio (49.1) (21.2) (49.2) (25.7)
Travelodge (from Oct 2016) (1.9) (0.8) (0.4) (0.2)
Admin & corporate costs (11.9) (5.1) (9.1) (4.8)
Tax (0.3) (0.2) - -
Adjusted EPRA EPS 31.2 13.6 21.6 11.3
+20%
▪ Positive impact of 3.3% rental uplifts resulting in Adjusted EPRA EPS growth and therefore dividend
growth
▪ Fully covered quarterly dividends with in-built uplifts providing inflation protection
£1
2.0
m
£1
5.1
m
£1
6.1
m£7.0m
£14.0m
Dec 2016 June 2017 Dec 2017
184.5p258.5p 275.3p 282.8p 300.2p 323.6p 355.5p 370.4p
-75p
25p
125p
225p
325p
425p
Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17EPRA NAV per share Dividends per share
9
Delivering Strong Total Returns
Total Accounting Return
Dividends and DPS
▪ NAV per share up 113%
▪ Like-for-like portfolio value up 36%
Adjusted EPRA EPS
▪ Net LTV down from 80% to under 50%
▪ Annualised DPS 14p per share (3.8% on Dec ‘17 EPRA
NAV)
Net Loan to Value
5.9p6.6p
1
7.0p
69.7%61.0%
53.5% 49.6%
Dec-14 Dec-15 Dec-16 Dec-17
• CAGR since Mar
2016 secondary
placing 27.4% p.a.
• CAGR since Oct
2016 placing
25.7% p.a.
1 Pro forma figures for the completion of the sale of Madame Tussauds and the refinancing of the Group’s entire debt which occurred subsequent to
the balance sheet date
Performance since listing in June 2014
11.8p
13.1p14.0p
0.0p
2.6p
11.3p13.6p
Dec-14 Dec-15 Dec-16 Dec-17
New Acquisitions
Warwick Castle
▪ Leisure portfolio:
▪ £224m gross cost
▪ Manchester Arena, The Brewery at Chiswell Street, 17 Travelodge Hotels & 18 Stonegate Pubs
− WAULT c.18.0 years1
− NIY 5.9%
− 72% of rents with RPI reviews; 26% with fixed reviews; 2% upwards only open market reviews
− 100% occupational leases on FRI terms
▪ Hotels portfolio:
▪ £212m gross cost
▪ 59 Travelodge Hotels
− WAULT c.23.5 years1
− NIY 6.1%
− 100% of rents with uncapped upwards only five yearly RPI reviews
− 100% occupational leases on FRI terms
▪ £436m gross cost
▪ Placing to raise £315.5m at Pro Forma EPRA NAV of 365.0p per share
▪ £128.7m of new non-recourse debt at 30% loan to cost and expected 3.4% p.a.
▪ Management & board investing £5.25m cash at the placing price bringing the value of their aggregate holding to
over £143m at the placing price
Delivering on our growth strategy: Two simultaneous off-market acquisitions
11
1 WAULT is calculated from 9th March 2018 and excludes any rent-free incentives
Travelodge Hotels57%
Brewery13%
StonegatePubs6%
Manchester Arena24%
Total Acquisitions by Cost
12
Acquisitions: Benefits for the Group
▪ Dividend accretive: post acquisition dividend yielding 4.3% on placing price
▪ Material deleveraging: from 49.6% to 45.8%
▪ Total returns: base case outlook c. 10% p.a. over the next 5 years1
▪ Long term secure income:
− WAULT of 21.7 years2
− Rent subject to upwards only RPI reviews increases from 42% to 51%.
− 48% of rents subject to fixed uplifts with the remaining 1% subject to upwards only open market reviews
− 70% of rent subject to annual uplifts (as opposed to five yearly)
▪ Value-enhancing asset management opportunities
▪ Increases EPRA NAV to c. £1.2bn
1 EPRA Net Asset Value growth plus dividends. See assumptions on page 38
2 WAULT is calculated from 9th March 2018 and excludes any rent-free incentives
Manchester Arena
14
Manchester Arena
▪ Strategic 8 acre long leasehold property1 on top of Manchester Victoria Railway and Metrolink station, close to
prime retail, restaurants, leisure and NOMA regeneration scheme
▪ UK’s largest indoor arena by capacity at 21,000 seats and ranked 2nd in the UK and 4th globally by ticket sales
▪ Arena let to SMG – (the world’s largest venue management company), unexpired term 27 years, passing rent
£3.68m p.a. with annual RPI reviews (collared at 2%-5% p.a.)
− leading global venue manager with 40+ years of experience
− 25 years of uninterrupted EBITDA growth averaging 8% p.a.
− 239 venues globally
− 16m tickets sales annually
− Acquired for $1bn in December 2017 by Onex, VC with over $30bn under management
▪ 160,000 sq. ft of offices & leisure space, 1,000 space multi-storey car park and advertising hoardings
▪ In addition to SMG, let to Serco, Manchester City Council, Unison, JCDecaux and Teamsport, combined passing
rent £2.71m p.a.
▪ Potential additional income generation from asset management
▪ £5.75m net income p.a. contracted to rise to £5.92m p.a. on expiry of lease incentive with a WAULT of c. 18 years2
▪ Next SMG rent review on 15 June 2018 anticipated to take net income over £6m p.a.
1 176 year leasehold with 10% of rents received payable to Network Rail
2 WAULT is calculated from 9th March 2018 and excludes any rent-free incentives
15
Manchester Arena – Aerial View
1 Manchester Arena
2 NOMA Estate
3 Old Boddington Brewery Site
4 National Football Museum
5 Printworks
6 Manchester Arndale Centre7 Selfridges8 Harvey Nichols
The Brewery at Chiswell St, London EC1
17
The Brewery at Chiswell St, London EC1
▪ 66,000 sq ft (GIA) predominantly freehold investment1
▪ Largest catered events venue in the City of London
− 9 function rooms
− 700+ dinner capacity in the main event space, only behind Grosvenor House and Park Lane Hilton
− Well located: Crossrail station within 5 minutes walk (Moorgate entrance to Liverpool Street)
▪ Winner of two London Venue Awards 2016
▪ Let to specialist venue operator until July 2031 at £3.4m p.a. rising five yearly 2.5% p.a. compound
▪ Asset management opportunities
1 The property is predominantly freehold and part 999 year lease from 2006
18
The Brewery at Chiswell St, London EC1
Upper Sugar RoomQueen Charlotte Room
The Porter Tun Room King George III Room
James Watt
Entrance
Travelodge Hotels
Travelodge Bath Central
20
Travelodge Hotels
▪ 76 hotels1 let to Travelodge Hotels Ltd - gross cost £245.5m
− WAULT of 23.1 years2
− Rent of £15m p.a. subject to 5 yearly upward only uncapped RPI reviews
▪ Largest lot sizes in Bath, London Morden, London Park Royal, Heathrow Heston, Reading, Dartford and
Birmingham
▪ 50% by value in 17 locations average lot size c.£7m
▪ 50% by value average lot size c.£2m
▪ 58% freehold/virtual freehold; 28% long leasehold; 14% short leasehold3
▪ Adding to existing hotels portfolio provides opportunity for portfolio rationalisation and asset management
opportunities
1 59 in Hotels portfolio and 17 in Leisure portfolio
2 Calculated from 9th March 2018
3 Analysis by value; short leasehold refers to properties with less than 80 years unexpired
21
Travelodge Portfolio AnalysisAttractive portfolio diversified by location, type and value
Location
Top 50% by purchase cost1 Bath Central
2 London Wimbledon (Morden)
3 Heathrow Heston M4 Westbound
4 Reading Central
5 London Park Royal
6 Dartford
7 Birmingham Central
8 Cambridge Fourwentways
9 York Tadcaster
10Arundel Fontwell
11Southampton Eastleigh
12 Ilminster
13Leeds Central
14Medway M2
15Plymouth Derriford
16Heathrow Heston M4 Eastbound
17Towcester Silverstone
18Brentwood East Horndon
19Great Yarmouth Acle
20Reading M4 Westbound
21Lincoln Thorpe on the Hill
22Frimley
23York
24Chippenham Leigh Delamere M4 Eastbound
25 Inverness
26Reading M4 Eastbound
27Canterbury Whitstable
28Bracknell
29Widnes
30St Clears Carmarthen
31Stoke Talke
32Okehampton Sourton Cross
33Liverpool Docks
34Swansea M4
35Cirencester
36Birmingham Hilton Park M6 Southbound
37Perth
38Birmingham Frankley M5 Southbound
39Milton Keynes Old Stratford
40Warrington
41Bedford Wyboston
42Stratford Alcester
43Alfreton
44Birmingham Sutton Coldfield
45Telford Shawbirch
46Stafford M6
47Stirling M80
48Oswestry
49Bournemouth
50Peterborough Alwalton
51Chester
52Pontefract Ferrybridge A1/M62
53Middlewich
54Dundee
55Leeds
56Nottingham, Wollaton Vale
57Chippenham Leigh Delamere M4 Westbound
58Birmingham
59Birmingham Oldbury
60Cambridge Swavesey
61Coventry
62Basildon, Wickford
63Liverpool, Aigburth
64Stonehouse
65Plymouth Roborough
66Macclesfield Adlington
67Barnsley
68Scotch Corner Skeeby
69Edinburgh Musselburgh
70Cardiff Llanedeyrn
71Stoke on Trent
72Leicester
73Preston Chorley
74Derby
75Carlisle Todhills
76Grantham, South Witham
22
TravelodgeA leading UK Hotel Brand
▪ UK’s second largest hotel brand by number of hotels and rooms
▪ Excellent market position with some 19m customers, 558 hotels and over 42,000 rooms at 31 December 2017
▪ Results for the year ended 31 December 2017:
− Revenue up 6.6% from £597.8m to £637.1m
− EBITDA up 2.1% from £110.1m to £112.4m
− RevPAR1 growth 0.7pts ahead of competitive segment
− Cash £95m and £50m undrawn revolving credit facility
▪ Well invested modernised hotel portfolio
▪ Well balanced approximately even business/leisure customer split
▪ Almost 90% booking direct, with c. 80% through own websites
▪ Low upfront capex leasehold model
1 Revenue per available room
23
Bath Central
Travelodge Hotels
Dartford Cirencester
Cambridge Fourwentways London Wimbledon (Morden) Leeds Central
Stonegate Pubs
The Bedford Arms, Southampton
25
Stonegate Pubs
▪ Freehold portfolio of 18 pubs let to or guaranteed by
Stonegate Pub Co Ltd, the UK’s largest privately
managed pub operator by number of sites - gross cost
£29.7m
▪ WAULT of c. 22 years1 with no breaks
▪ Passing rent of £1.96m p.a. subject to five yearly RPI
uplifts with 1%- 4% p.a. collar
▪ Average lot size of £1.6m
▪ Stonegate has a Moody’s B2 credit rating and is owned by
TDR who have a long experience in the leisure sector
including David Lloyds, Center Parcs and Pizza Express
▪ EBITDA has risen to £98m 2 2017 from £70m in 2015
1 Calculated from 9th March 2018
2 In 52 weeks ending 9th April 2017
Source: ONS, OBR
26
Stonegate Pubs
1 Southsea
2 Southampton
3 Farnham
4 London
5 Gloucester
6 Wolverhampton
7 Nottingham
8 Lincoln
9 Liverpool
10 Bolton
11 Preston
12 Huddersfield
13 Brighouse
14 Middlesborough
15 East Boldon
16 South Shields
17 Cramlington
18 Kirkcaldy
The Abbey, GloucesterFaradays, Nottingham
The Bedford Arms, SouthamptonSlug and Lettuce, Southsea
Slug and Lettuce, FarnhamThe Occasional Half, Palmers Green
27
Financing and Pro Forma Enlarged Group NAV
▪ Specific deal funding:
− transparency for investors
− enhances returns by avoiding cash drag
▪ Issue of 86.4m new shares at pro forma EPRA NAV of 365.0p per share
▪ £128.7m of new secured debt
Dec 2017Hotels portfolio
at cost1
Leisure portfolio
at cost2
Equity Issue (net
of costs)Pro forma EPRA NAV
£m £m £m £m £m
Investment property 1,770.2 210.0 219.0 2,199.2
Acquisition costs 1.7 5.3 7.0
Write off acquisition costs (1.7) (5.3) (7.0)
Debt (967.3) (68.7) (60.0) (1,096.0)
Prepaid finance Fees 12.0 1.1 1.3 14.4
Cash 89.1 (144.1) (165.6) 309.7 89.1
Other net assets (33.2) (33.2)
EPRA NAV 870.8 (1.7) (5.3) 309.7 1,173.5
EPRA NAV (p/share)3
370.4 365.0
Net LTV 49.6% 45.8%
1 £5m non-refundable deposit paid at exchange
2 £6m non-refundable deposit paid at exchange
3 Based on 230,536,874 shares currently in issue and 4,588,479 committed to be issued in March 2018; 321,563,353 shares in issue following Placing
– see assumption 10 slide 38
28
New Debt Facilities
▪ Strong interest from major UK clearing banks & institutions in competitive process
▪ Two new ring-fenced facilities
− Five year terms
− Expected blended marginal cost expected 3.4% on 30% blended LTC
− Significant covenant headroom
− Cure rights as usual for SIR facilities
− Only limited make-whole payments and pre-payment fees
▪ Floating rate facilities, to be hedged to limit interest rate exposure
▪ Maturities designed to facilitate enlarged group access to debt capital markets in due course
Total HotelsLeisure Portfolio
(excl. hotels)Total New Debt
Cost £243.3m £185.7m £429m
Loan principal £68.7m £60m £128.7m
Expected interest cost 3.4% p.a. 3.4% p.a. 3.4% p.a.
Initial LTV 28.2% 32.3% 30.0%
Default LTV 50.0% 50.0%
Initial ICR 650% 550%
Default ICR 250% 150%
Valuation fall to default LTV 44% 35%
Income fall to default ICR 61% 73%
Enlarged Group Debt
29
▪ Reduction in net LTV from 31 December 2017 49.6% to 45.8%
▪ Weighted average term to maturity 6.0 years at April 2018
▪ Weighted average cost c. 4.9% p.a.
▪ Pro forma post acquisition interest cover 2.3x 1
▪ On base case assumptions2 net LTV expected to further reduce to c. 38% at June 2023
1 Interest cover for these purposes is measured as current passing rent divided by current annualised interest cost
2 See assumptions on page 38
Illustrative Portfolio Valuation and Net LTV at Constant Valuation Yield2
There is no certainty that these illustrative projections will be achieved
38.3%
2,570.9
Enlarged Portfolio Analysis
Heide Park
31
Enlarged Portfolio Data: Key Statistics
1 Existing portfolio at 31 December 2017 independent valuation and acquisition at cost
2 WAULT is calculated from 9th March 2018 and excludes any rent-free incentives
WAULT (years)2
• Theme Parks 24.4
• Hotels 24.2
• Pubs 21.9
• Hospitals 19.5
• Arena 17.9
• Brewery 13.3
21.7
• Dec 2017
NIY
July 2018
Running
Yield1
• Hospitals • 4.9% 5.0%
• Theme Parks • 5.1% 5.3%
• Hotels • 5.8% 5.9%
• Arena 5.6%
• Brewery 6.1%
• Pubs 6.6%
• Total Portfolio • 5.1% 5.3%
Valuation by Type1
Healthcare43%
Theme Parks22%
Theme Park Hotels
5% Existing Hotels10%
New Hotels11%
Brewery3%
Stonegate1%
Manchester Arena
5%
12
14
16
18
20
22
Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23
Dis
trib
uti
on
s p
er
sh
are
(p
en
ce
)
RPI Swap Curve + 100 bps
RPI Swap Curve
Zero or lower RPI growth
32
Illustrative Distribution Outlook
▪ Pay-out ratio of 1x Adjusted EPRA EPS
▪ Following completion of placing and acquisition, dividend to increase to annualised 15.7p per share on
base case assumption: first increased payment expected Q3 2018
▪ Following distribution of enhanced net income, dividend yield of c.4.3% on Placing Price of 365.0p
▪ Illustrative 5 year dividend growth CAGR (2018-2023) on base case assumptions of 5.6% p.a.1
1 See assumptions on page 38 - There is no certainty that these illustrative projections will be achieved
5 year CAGR
Jun 18- 23
6.3% p.a.
5.6% p.a.
3.3% p.a.
365.0392.8 406.0
431.7460.1
484.5
15.7 32.2
49.7
68.8
89.3
44.8% 44.0% 43.0% 41.4% 39.7% 38.3%
Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23
0
100
200
300
400
500
600
Net LTV
Pe
nc
e p
er
sh
are
EPRA NAV per share (pence) Accumulated dividends (pence)
Total Return Outlook
33
EPRA NAV plus Dividends on Base Case1
1 See assumptions on page 38 - There is no certainty that these illustrative projections will be achieved
Total Shareholder Return Scenarios
TSR (Jun 2018 – Jun 2023)1
Property Valuation
Yield (net)RPI curve +1%
Base case: RPI
CurveRPI curve -1% Zero or lower RPI
-50 bps 13.8 % 13.2 % 12.6 % 11.3 %
-25 bps 12.4 % 11.7 % 11.0 % 9.6 %
Base case 10.9 % 10.2 % 9.5 % 8.0 %
+25 bps 9.4 % 8.6 % 7.9 % 6.4 %
+50 bps 7.9 % 7.2 % 6.4 % 4.9 %
34
Attractive growth prospects on steady state portfolio basis
Base case
▪ Base case 10.2% TSR from 30 June 2018 to 30 June 2023 assuming investment at Placing Price and final
valuation at EPRA NAV
▪ Assumes a constant valuation yield on the combined portfolio and based on the assumptions on pg.38
1 See assumptions on page 38 - There is no certainty that these illustrative projections will be achieved
35
Summary
▪ Exciting proposed new off-market acquisition would:
✓ offer 4.3% dividend yield on placing price
✓ further diversify the portfolio
✓ provide estate management opportunities
✓ maintain WAULT of enlarged portfolio at c.22 years
✓ increase EPRA NAV by over a third to c. £1.2bn
✓ increase RPI review exposure from 42% to 51%
✓ reduce LTV from 50% to 46%
✓ generate base case TAR c. 10% p.a.
▪ Consistently strong performance over 3.5 years since listing with a doubling of NAV per share,
driving total Accounting Return since June 2014 IPO of 25.9% p.a.
▪ Very resilient portfolio of key operating assets let to strong businesses in defensive sectors with
high barriers to entry
▪ RPI & fixed rental uplifts combined with fixed cost debt drives healthy dividend growth, creating
attractive and predictable returns
▪ Prestbury’s c. £137m1
stake provides strong alignment with shareholders – management and
Board investing a further £5.2m at the placing price
1 £137 million held at 9 March valued at the Placing Price
36
Placing Summary
Issuer
Secure Income REIT Plc
Ticker: SIR
UK REIT, traded on AIM
Placing Price
Placing of up to 86,438,000 ordinary shares to raise gross proceeds of up to £315.5m
Placing Price of 365.0 pence per share equal to pro forma EPRA NAV per share
New shares entitled to May 2018 dividend
Timetable1
Placing opens: 9 March 2018
Placing closes: 11.30am on 26 March 2018
Extraordinary General Meeting to approve increase in share capital: 27 March 2018
Admission and settlement: 29 March 2018
Offer Structure
Non pre-emptive placing to qualified institutional investors
Outside the US in reliance on Regulation S
Following Admission, the Placing Shares will rank pari passu with existing shares
Sole Bookrunner
contact details
Stifel Nicolaus Europe Limited
Mark Young 020 7710 7633 David Arch 020 7710 7616 Peter Lees 020 7710 7490
Tom Yeadon 020 7710 7480 Neil Winward 020 7710 7460 Rob Tabor 020 7710 7669
1 The times and dates above may change. Any such change will be notified by announcement through a Regulatory Information
Service. References to time are to London time. The timetable above assumes that the resolutions are passed at the General Meeting without
adjournment
Appendix 1: Assumptions and Glossary
Travelodge Manchester Central
Assumptions
1. Employs RPI swap curve at 27 February 2018, averaging inflation increases of 3.3% p.a. over the period
2. Constant property valuation yield at 31 December 2017 external valuation yields for existing portfolio and 6.0% yield on acquisition cost for new acquisitions
3. Only fixed uplifts included on Ramsay leases: ignores potential for further uplifts from open market reviews
4. Other than the target portfolios referred to in this presentation, no purchases or sales of properties or lease variations. Target portfolio acquisitions assumed to close on 1 April 2018.
5. 31 December 2017 exchange rate (€1:£0.8873) used throughout illustrative periods (Euro denominated EPRA net assets amount to c.5.1% of the whole at 31 December 2017 and estimated c.3.8% on a pro forma basis after acquisition)
6. Valuation yield shift on sensitised valuation scenarios occurs on last day of calculation period
7. Expected cost of funds (five year swap rate) on new debt 1.38% – will not be fixed by way of hedging until after purchase contracts are unconditional
8. The investment advisory agreement between SIR and Prestbury expires in June 2022 with no renewal rights on either side. The returns illustrations assume that the existing arrangements continue unchanged beyond that date
9. In October 2022 the existing leisure loan facility matures. At that time the loan principal will be £372.5m at 31 December 2017 Euro exchange rate and the base case property valuation as at 31 December 2017 valuation yield and Euro exchange rate is estimated at £702.3m. The illustrative returns assume that the existing loan continues on the same terms
10. Pro forma EPRA NAV per share is calculated as 230.5m shares currently in issue plus 4.5m to be issued in March for the 2017 Incentive Fee plus 86.4m for the placing
11. The Company raises gross proceeds of £315.5 million from the Placing
38
Glossary
39
DPS Dividends per share
DSCR Debt service cover ratio, measured as rental income divided by payments due to lenders (comprising
interest or interest plus amortisation as specified in relevant credit agreement)
EPRA European Public Real Estate Association
EPRA EPS A measure of EPS designed by EPRA to present underlying earnings from core operating activities
EPRA NAV A measure of NAV designed by EPRA to present the fair value of a company on a long term basis by
excluding items such as interest rate derivatives held for long term benefit, net of deferred tax
EPS Earnings per share, calculated as the earnings over a period, after tax, attributable to members of the
parent company divided by the weighted average number of shares in issue over the period
Net Initial Yield Annualised net rents on investment properties expressed as a percentage of the investment property
valuation, less purchasers’ costs
Prestbury Prestbury Investments LLP, the investment adviser to the company
Loan To Value or
LTV
The outstanding amount of a loan expressed as a percentage of property value
NAV Net asset value
Net LTV LTV calculated on the gross loan amount and any other secured liabilities, less cash balances
Running yield The anticipated Net Initial Yield at a future date, taking account of any rent reviews in the intervening
period, Existing Portfolio at 31 December 2017 independent valuation and acquisition at cost
TAR Total Accounting Return: the movement in EPRA NAV over a period plus distributions paid in the period,
expressed as a percentage of EPRA NAV at the start of the period
TSR Total Shareholder Return: the movement in share price over a period plus distributions paid in the period,
expressed as a percentage of the share price at the start of the period
WAULT Weighted average unexpired lease term
Warwick Castle
Appendix 2: Existing Portfolio Details
41
The Healthcare Portfolio
19 private hospitals valued at £896.2m at 31 December 2017
representing 51% of current portfolio value generating £46.9m
of passing rent
Well located throughout England – 51% by value in South East
Let on individual fully repairing and insuring leases with a term to
expiry of 19.4 years at December 2017 without break clauses
Rent increases by at least 2.75% p.a. throughout the lease term
in May each year
Guaranteed by Ramsay Health Care Limited
Ramsay
Healthcare Portfolio Net Initial Yield of 4.8% as at
31 December 2017
Let to a UK subsidiary of Groupe Sinoué on a fully repairing
and insuring lease for 26.6 years
Central London’s only private psychiatric hospital – located in
Lisson Grove, near Marylebone station
Rent increase of 3.0% in May each year
Guaranteed by Orpea SA
Valued at £48.2m at 31 December 2017, representing 3% of
total portfolio value generating £2.0m of passing rent
London Psychiatric Hospital
Ashtead Hospital
Duchy Hospital
Euxton Hall Hospital
Fitzwilliam Hospital
Fulwood Hospital
Mount Stuart Hospital
Nightingale Hospital
North Downs Clinic
2
1
3
4
5
6
7
8
Oaklands Hospital
Oaks Hospital
Pinehill Hospital
Reading Hospital
Renacres Hospital
Rivers Hospital
Rowley Hospital
Springfield Hospital
10
9
11
12
13
14
15
16
West Midlands Hospital
Winfield Hospital
Woodland Hospital
Yorkshire Clinic
18
17
19
20
Ramsay Health Care Portfolio London Psychiatric Hospital
20
2
3
4
5
6
8
9
10
11
12
13
14
15
16
17
18
19
1
7
LiverpoolManchester
Sheffield
London
Leeds
Cambridge
Bristol
United Kingdom
Birmingham
42
The Merlin Leisure Portfolio
4
GermanyHamburg
Berlin
Munich
Hanover
Düsseldorf
Frankfurt
Nuremberg
Alton Towers Theme Park
and Alton Towers Hotel
Thorpe Park
Warwick Castle
1
2
3
Heide Park Theme Park
and Heide Park hotel4
Overview
Valued at £595.2m1
at 31 December 2017 valuation
representing 34% of current portfolio generating £32.7m of
passing rent2.
• UK (82% by value):
− Alton Towers Park and Hotel, Thorpe Park, Warwick
Castle
− Alton Towers and Thorpe Park are 2 of top 3 theme
parks in the UK3
• Germany (18% by value):
− Heide Park attractions and hotel
• Visitor attractions account for 82% of passing rent and
hotels 18%
Individual fully repairing and insuring leases with:
• Average unexpired lease term of 24.5 years
• Upwards only uncapped RPI-linked rent reviews every
June for the UK portfolio
• Fixed annual increases of 3.34% every July for the German
properties
Guaranteed by Merlin Entertainments Plc
1 Includes £107.8m of German assets valued in Euros and translated at €1 : £0.8873
2 Includes £6.3m of rent from German assets denominated in Euros and translated at €1 : £0.8873
3 The Global Attractions Attendance Report 2016
Leisure Portfolio Net Initial Yield of 5.1% as at 31
December 2017
1
2
3
Liverpool ManchesterSheffield
London
Leeds
Bristol
United
Kingdom
Birmingham
Cambridge
The Existing Hotels Portfolio
43
Location (by value)
Property type (by value)
City centre34%
Edge of town17%
City roadside
22%
Roadside27%
Overview
Valued at £230.6m at 31 December 2017 valuation representing 13% of current
portfolio generating £14.1m of passing rent
▪ 55 Hotels with 3,096 rooms
− Key assets in Manchester, Oxford & Edinburgh: average lot size
£21.7m
− Remaining 52 properties: average lot size £3.2m
25.4 year weighted average unexpired lease term
▪ no unexpired lease shorter than 20 years
▪ no break clauses
Five yearly upwards only RPI rent reviews
Purchased in October 2016 for £192.6m contract price off £13.7m income at
completion; yield of 7.0%
Each hotel let to Travelodge Hotels Ltd – one of the UK’s leading hotel brands
with c. 19m customers p.a.. Trading in the UK, Ireland and Spain with 558 hotels
and over 42,000 rooms as at 31 December 2017
Hotel Portfolio Net Initial Yield of 5.8% as at 31 December 2017
South East29%
East2%
East Mids9%
West Mids4%
South West15%North
5%
North West17%
Scotland19%
Florence Nightingale Hospital
Appendix 3: 31 December 2017 Financial Information
December 2017 Property Valuation Uplift
1 Using valuer’s assessments of RPI of 2.5% at next uplift and taking no account of any open market uplift on Ramsay Hospitals
Healthcare Merlin Leisure Travelodge Hotels Total
31 Dec
2017
Change
over year
31 Dec
2017
Change
over year
31 Dec
2017
Change
over year
31 Dec
2017
31 Dec
2016 Change
£m £m £m £m £m
Rent at 31 Dec 48.9 +2.8% 32.7 +4.1% 14.1 +3.2% 95.7 92.6 +3.3%
Values:
England 944.5 +5.8% 487.4 +7.3% 186.8 +16.6% 1,618.7 1,507.3 +7.4%
Scotland - - - - 43.7 +15.4% 43.7 37.9 +15.4%
Germany at
constant FX - - 104.3 +8.1% - - 104.3 96.5 +8.1%
Euro rate movement - - 3.5 - - - 3.5 - -
Fair value at
31 Dec944.5 +5.8% 595.2 +8.1% 230.5 +16.3% 1,770.2 1,641.7 +7.8%
2017 2016 2017 2016 2017 2016 2017 2016
Net Initial Yield 4.9% 5.0% 5.1% 5.3% 5.8% 6.5% 5.1% 5.3%
Running Yield at
July 20181 5.0% 5.3% 5.% 5.2%
WAULT 19.6 20.6 24.5 25.5 25.4 26.3 22.2 23.1
45
▪ £967.3m of secured credit in four ring-fenced facilities
▪ All facilities are non recourse with substantial headroom on financial covenants
▪ All facilities have cash cure rights and SIR has £60m uncommitted cash as at 31 December 2017 that could, if
necessary, be deployed for covenant cure
Financing as at 31 December 2017
46
Healthcare Healthcare Leisure Travelodge
Principal at 31 December 17 £217.8m £309.1m £380.4m1 £60.0m
Assets in security pool 9 11 6 55
Fixed rate 4.29% 5.30% 5.68% 2.71%
Annual cash amortisation £1.0m £3.2m
None yrs 1 – 5
£3.8m Oct 2020-2022 None
Final repayment Sept 2025 Oct 2025 Oct 2022 Oct 2023
LTV cash trap headroom n/a 27% 20% / 25%3 35% / 42%3
LTV default headroom 35% (Sept 19)2 31% n/a 48%
DSCR4 cash trap headroom 30% 18% n/a 65%
DSCR default headroom 41% 30% n/a 71%
1 Includes £64m of Euro denominated loans at 31 December 2017 (EUR/GBP exchange rate of €1:£0.8873)
2 Not tested until Sept 2019
3 First stage partial cash sweep to lender, second stage full cash sweep to lender
4 Debt Service Cover Ratio
47
Unaudited Supplementary Information
EPRA Earnings Per Share and Adjusted
Earnings Per ShareEPRA Earnings Per Share
2017 2016
£000 £000
EPRA Earnings Per Share
Basic earnings attributable to
shareholders 137,240 92,329
EPRA adjustments:
Investment property revaluation (113,428) (72,181)
Other income (171)
German deferred tax on investment
property revaluation 1,437 1,766
EPRA earnings 25,078 21,914
Other adjustments:
Rent smoothing (11,443) (12,783)
Incentive fee 17,575 10,457
Costs of share placing 2,007
Adjusted EPRA earnings 31,210 21,595
2017 2016
Pence per share Pence per share
EPRA EPS 10.9 11.5
Diluted EPRA EPS 10.7 11.3
Adjusted EPRA EPS 13.6 11.3
Diluted adjusted EPRA EPS 13.3 11.1
EPRA NAV Per Share
2017 2017 2016 2016
£000Pence per
share£000
Pence per
share
Basic NAV 860,577 373.3 737,423 324.5
Dilution from shares issued for
incentive fee (7.3) (4.6)
Diluted NAV 860,577 366.0 737,423 318.9
Deferred tax on investment
property revaluations 10,238 4.4 8,496 3.7
EPRA NAV 870,815 370.4 745,919 323.6 EPRA Triple Net Asset Value Per Share
2017 2017 2016 2016
£000
Pence per
share £000
Pence per
share
EPRA NAV 870,815 370.4 745,919 323.6
Adjustment to reflect fair value of
fixed rate debt (38,024) (16.2) (43,211) (18.8)
Deferred tax on German investment
property revaluations (10,238) (4.4) (8,496) (3.7)
EPRA Triple NAV 822,553 349.8 694,212 301.1
48
Unaudited Supplementary Information
EPRA Cost Ratio excluding non-cash items
2017 2016
£000 £000
EPRA gross rental income 105,818 93,154
Rent smoothing adjustments (11,443) (12,783)
EPRA gross rental income excluding non-cash items 94,375 80,371
EPRA costs 29,513 21,622
Incentive fee settled in shares (16,015) (9,359)
EPRA costs excluding non-cash items 13,498 12,263
EPRA Cost Ratio excluding non-cash items 14.3% 15.3%
EPRA Cost Ratio
2017 2016
£000 £000
Revenue 106,930 93,214
Tenant contributions to property outgoings (1,112) (60)
EPRA gross rental income 105,818 93,154
Non-recoverable property expenses 27 32
Administrative expenses 28,984 20,975
Corporate costs 502 615
Direct vacancy costs
EPRA costs 29,513 21,622
EPRA Cost Ratio 27.9% 23.2%
EPRA Net Initial Yield
2017 2016
£000 £000
Annualised rental income based on cash passing 95,682 92,568
Non-recoverable property operating expenses (27) (32)
Annualised net rents 95,655 92,536
Property at external valuation 1,770,164 1,641,701
Allowance for purchaser's costs 119,479 110,818
Grossed up investment property portfolio valuation 1,889,643 1,752,519
EPRA Net Initial Yield and Topped Up Net Initial Yield 5.1% 5.3%
Appendix 4: Additional Data
50
Additional Enlarged Portfolio Data: Key Statistics
The Arena
Martin House – Part BasementOffice space
Manchester Victoria Station Car Park
RPI-linked reviews 51%
Fixed uplifts 48%
Open market reviews 1%
RPI-linked reviews:
Hotels 23%
UK Theme Parks 22%
Arena 4%
Pubs 2%
Fixed reviews:
Hospitals 40%
German Theme Parks 5%
The Brewery 3%
Open market reviews:
Arena 1%
Review Type by Rent
27.2 %
19.2 %
13.6 %
12.3 %
8.2 %
5.0 %
4.8 %
3.5 %
3.4 %
2.5 %
South East
West Mids
Greater London
North West
South West
North
Germany
East Mids
East
Scotland
Value by Region
51
SMG
• SMG is the leading global manager of venues with 40+ years of experience and 25 years of
uninterrupted EBITDA growth averaging 8% p.a.
• 239 venues globally, 15 in Europe providing 20% of gross profit. 83 stadiums & arenas with
1.4m seats, 70 convention centres with 20m sq. ft of space, 66 theatres plus 176 F&B venues.
• 33,000 events p.a. include the world famous Super Bowl, NBA, Rolling Stones, U2, Beyonce
concerts
• 16m tickets sales annually, US$79m adj. EBITDA, 98% renewal rate, av. client tenure 12
years, 74% RFP win rate for new clients
• Onex acquired SMG for US$1 billion in December 2017 with US$425m of cash and rollover
equity. Founded in 1984, Onex is one of the oldest and most established VCs and manages
US$30bn including US$8bn of their own capital. It focuses on partnerships with management
and long term investment horizons and has a strong track record and history of capital
preservation.
Source: Statistica
52
Recent Long Lease Market Evidence
These tables include a sample of illustrative transactions that the Company is aware of. It does not purport to show all
transactions involving the sectors listed.
SECTOR PROPERTY TRANSACTION
DATE
REVIEW BASIS WAULT PRICE NIY
Leisure Odeon, Derby Nov-17Annual uplifts indexed to RPI for 25 years 1% -
5% pa20 £12,600,000 4.89%
Leisure David Lloyd, Monks Lane, Newbury Aug-17 5 yearly reviews to RPI 0% - 4% pa 30 £17,585,000 4.49%
Leisure Virgin Active, Wandsworth Mar-175 yearly rent reviews linked to RPI 1%-3%
compounded annually20 £12,950,000 5.00%
Pubs14 public houses let to Stonegate
Pub CompanyJun-17
Annual CPI reviews 1% - 4% until 2024. Five
yearly index linked reviews thereafter22.5 £23,000,000 5.50%
Pubs 5 pubs let to Spirit or Punch May-17 Fixed increases of 1.25% - 2.5% pa 28 £9,475,000 4.80%
Pubs Marstons (various transactions)Jan-16
to Apr-17
Annual RPI with a floor of 1% and a collar of 4%
with a tenant buy back option for £1 at the end of
the lease
40 £21m - £45m3.8% -
4.1%
Medical Offices Bond House, High Road, Chiswick Dec-17 Annual RPI linked reviews to 2-4% 13.8 £29,000,000 4.00%
Retail Tesco, Bristol Aug-17 Annual RPI linked reviews 13.5 £28,500,000 4.90%
Retail Sainsbury’s, Bybrook, Ashford Aug-17 Annual RPI linked reviews 21 £80,000,000 4.50%
Retail Morrisons, Loughborough Jun-17Yearly RPI linked increases. Completion not due
until March 201824.5 £32,500,000 4.32%
OfficesAbcam Building, Cambridge
Biomedical CampusMar-17
5 yearly RPI linked reviews with a cap and collar
of 2% -4%20 £61,325,000 4.85%
Student
Accommodation
Hughended Student Village, High
WycombeFeb-17
Annual RPI linked reviews and a cap and collar
of 0% -8%30 £38,750,000 4.35%
Holiday Park Park Holidays Portfolio Nov-17 Annual indexed reviews to RPI 1% - 4% 100 £144,700,000 3.01%
Holiday Park Park Dean Portfolio May-17 Annual rent reviews in line with RPI 0% - 5% 170 £150,000,000 3.22%
53
These tables include a sample of illustrative transactions that the Company is aware of. It does not purport to show all
transactions involving the sectors listed.
SECTOR PROPERTY TRANSACTION
DATE
REVIEW BASIS WAULT PRICE NIY
Budget Hotels Travelodge, London Tower Bridge Nov-17 5 yearly uncapped RPI 31 £47,000,000 3.58%
Budget Hotels Travelodge, Chertsey Nov-17 5 yearly uncapped RPI 22 £7,200,000 4.75%
Budget HotelsTravelodge, 12-14 West St
BrightonOct-17 5 yearly uncapped RPI 31 TBC
Sub
4%
Budget Hotels Travelodge, Tewkesbury Sep-17 TBC 27 £4,665,000 5.50%
Budget Hotels Travelodge, Princes St, Swindon Sep-17 5 yearly uncapped RPI 23 £6,300,000 5.50%
Budget Hotels Premier Inn, Camberley Sep-17 5 yearly uncapped RPI; capped at 5% 15 £8,500,000 5.00%
Budget HotelsTravelodge, Liverpool – John
Lennon AirportAug-17 5 yearly uncapped RPI; collar and cap of 1%-4% 25 £7,590,000 5.25%
Budget HotelsPremier Inn, Birmingham Waterloo
StAug-17 5 yearly CPI 20 £26,600,000 4.12%
Budget HotelsTravelodge, Lytham St Annes,
BlackpoolAug-17 5 yearly RPI 20 £6,700,000 5.67%
Budget Hotels Travelodge, Chester Le-Street Aug-17 5 yearly RPI 21 £940,000 5.81%
Budget Hotels Travelodge, London Southwark Jul-17 5 yearly, higher of RPI or Market Rent 31Excess of
£50m3.35%
Recent Long Lease Market Evidence
Appendix 5: Governance
Travelodge Glasgow Central
55
Highly Experienced Board: Independent Directors
Experienced Independent Directors
Governance Structure Strongly Aligned with Shareholder Interests
Board structure
• Chairman highly experienced in long lease sector and independent of managers
• 4 independent non-executive directors (including Chairman)
• 3 management representatives on Board (Nick Leslau, Mike Brown and Sandy Gumm) must be in minority for all decisions
Senior advisor to KKR and
independent Non-Executive Director
at SEGRO Plc and F&C Commercial
Property Trust
Chairman of M&G Real Estate until
2013 and CEO from 1996 to 2012
Commissioner of English Heritage
and a Trustee of the Guildhall
School Trust
Past President and board member of
British Property Federation
Chartered Surveyor
Past Chairman of the Investment
Property Forum and Commissioner
of The Crown Estate
Non-Executive Chairman of The
Risk Advisory Group
Non-Executive member of HMRC
Risk & Audit Committee
Audit Committee member for the
Sovereign Grant
Treasurer to TRH the Prince of
Wales and the Duchess of
Cornwall 2005 to 2012
Former head of international
expatriate tax at KPMG
Chartered Accountant
Trustee of the Diocese of
Westminster
Jonathan Lane
Nominations Committee Chair
Ian MarcusRemuneration Committee Chair and
Senior Independent Director
Leslie Ferrar, CVO
Audit Committee ChairMartin Moore
Chairman
Senior Non-Executive Director of The Crown
Estate and Town Centre Securities
Senior Adviser to Eastdil Secured, Wells
Fargo Securities, Elysian Residences
Limited and Work.Life
Member of Redevco NV’s Advisory Board
and Trustee of The Prince’s Foundation
Chairman of the European Advisory Board of
the Wharton Business School Real Estate
Faculty
Former Chairman of the BoE’s Commercial
Property Forum. MD and Chairman of the
European RE Investment Banking division of
Credit Suisse
Past President of the British Property
Forum and past Chairman of the Investment
Property Forum
Senior Advisor to Morgan Stanley &
Chairman of EMEA Real Estate
Investment Banking (“REIB”)
Chairman of the board of Grosvenor
Europe and member of the advisory
board of Resolution Real Estate
Advisors LLP
Policy Committee member of the
British Property Federation,
member of the BoE Commercial
Property Forum
Former member of the Government’s
Property Unit Advisory Panel and
former Director of Songbird Estates
Advisory board member for the
University of Oxford Programme for
the Future of Cities
56
A Proven Management Team with 130+ Years Combined Experience
Strong Manager Alignment
Management team members have a strong track record of long-term investment in the companies they have managed (Burford,
Prestbury, Helical Bar, Max Property Group Plc)
Over 35 years’ real
estate experience
(Secure Income REIT Plc,
Max Property Group Plc,
Prestbury Group Plc,
Burford Holdings Plc)
Extensive Plc board
experience both as
executive and non-
executive
Over 20 years with
Prestbury
BSc (Hons) Est Man,
FRICS
Over 34 years’ real
estate experience in
funds and listed
companies (Secure
Income REIT Plc, Max
Property Group Plc,
Helical Bar plc,
Threadneedle)
Over 8 years with
Prestbury
BSc (Hons) Land Man,
MRICS
Over 27 years’
experience in finance
with extensive Plc board
experience (Secure
Income REIT Plc,
Prestbury Group Plc,
Burford Holdings Plc)
9 years with KPMG in
Sydney and London
Over 20 years with
Prestbury
BEc, CA (ANZ)
Over 27 years’ real
estate experience
(Secure Income REIT
Plc, Prestbury, Jones
Lang LaSalle, Hill
Samuel Asset
Management, MEPC)
Over 15 years with
Prestbury
MA Hons (Cantab),
MRICS
Over 15 years’
experience in property
investment,
refurbishment and
design
Over 15 years with
Prestbury
BSc (Hons) Est Man,
MRICS
Nick Leslau
Prestbury’s ChairmanMike Brown
Prestbury’s CEO
Sandy Gumm
Prestbury’s COO
Tim Evans
Prestbury’s Property Director
Ben Walford
Prestbury’s Senior Surveyor
Overseeing an experienced team of finance, property and administrative staff
57
Management Team Strongly Aligned with Shareholders
Management Team has among the largest shareholdings in the quoted UK Real Estate sector: c.£137m
at the placing price
Prestbury exclusively offers all qualifying long lease deals to the Company
Contract term to June 2022 – no renewal rights or termination payment at end of term
Incentive to achieve above target returns via incentive share awards of 20% of above target growth after
investor priority returns:
• Target is higher of 10% above year end EPRA NAV and EPRA NAV at time of last incentive share award
(“high watermark”)
• Paid in shares subject to lock-in of 18 – 42 months
• The 2017 results set a new benchmark of 10% total accounting return in 2018 from the 370.4p per share
delivered at 31 December 2017; that is, returns of 37p per share accruing to shareholders during the year
before any incentive fee is earned
• Independent Director review of incentive arrangements completed in March 2017; no changes required;
appropriateness of incentive fee structure to be reviewed again in 2019, three years ahead of expiry of the
management agreement
Management meets overhead costs and receives advisory fee on sliding scale relative to EPRA NAV:
paid in cash quarterly 1.25% p.a. up to £500m, plus 1.0% p.a. between £500m to £1.0bn, plus 0.75% p.a.
thereafter
0
25
50
75
100
Dec-1997 Dec-1998 Dec-1999 Dec-2000 Dec-2001 Dec-2002 Dec-2003
Ind
ices R
eb
ased
to
P
restb
ury
NA
V P
er
Sh
are
58
A Proven Track Record of Delivering Shareholder Returns
Max Property Group Plc – Average Total Return of 17.1% p.a. (May-2009 – Sep-2014) vs. Peer Group1
De-listing and
disposal of majority
of portfolio 25% p.a. returns
Prestbury Group Plc: Average Total Returns of 25% p.a.
(1997 – 2003)Burford Holdings Plc – Total Returns of 34% p.a.
(1987 – 1997)
A
B C
1 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 Prestbury Team has a strong track record including, between them, the management of three listed real estate investment vehicles,
Burford Holdings Plc, Prestbury Group Plc and Max Property Group Plc
Prestbury Team Track Record
0
250
500
750
1,000
1,250
1,500
Dec-1986 Dec-1988 Dec-1990 Dec-1992 Dec-1994 Dec-1996
Reb
ased
to
100
Burford NAV Progression Peers NAV Progression
34% p.a returns
8.2% p.a returns
14.6x
2.0x
NAV per share Distributions Previous Distributions FTSE 350 Real Estate Index
17.1%15.6%
9.2%8.2%
6.6% 6.1% 5.1%
Max London Metric(Jan-13 - Sep-14)
London & Stamford(May-09 to Sep-12)
LXB Metric Retail(Mar-10 to Sep-12)
NewRiver Retail Conygar
Avera
ge
NA
V T
ota
l re
turn
pe
r S
ha
re
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connection therewith (together, the “Presentation”) is confidential. Reliance upon the Presentation for the purpose of engaging in any investment activity may
expose an individual to a significant risk of losing all of the property or other assets invested. If any person is in any doubt as to the contents of the Presentation,
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comes should inform themselves about and observe any such restrictions. In particular, neither the Presentation nor any copy of it should be distributed, directly or
indirectly, by any means (including electronic transmission) to any persons in Australia, Canada, Japan or the Republic of South Africa. This Presentation should
not be distributed in or into the United States of America (or any of its territories or possessions) (together, the “US”) other than to “qualified institutional buyers”
(“QIBs”) as such term is defined in Rule 144A under the United States Securities Act of 1933, as amended (the “Securities Act”).
The Ordinary Shares have not been, and will not be, registered under the Securities Act or under the securities laws of any other jurisdiction, and are not being
offered or sold (i) directly or indirectly, within or into the US, Australia, Canada, Japan or the Republic of South Africa or (ii) to, or for the account or benefit of, any
US persons or any national, citizen or resident of the US, Australia, Canada, Japan or the Republic of South Africa, unless such offer or sale would qualify for an
exemption from registration under the Securities Act and/or any other applicable securities laws.
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Disclaimer
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended
(“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the
“MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the
purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Ordinary Shares have been subject to a product approval
process, which has determined that the Ordinary Shares to be issued pursuant to the Placing are: (i) compatible with an end target market of retail investors and
investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution
channels as are permitted by MiFID II (the “Target Market Assessment”).
Notwithstanding the Target Market Assessment, distributors should note that: the price of the Ordinary Shares may decline and investors could lose all or part of their
investment; the Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the Ordinary Shares is compatible only with investors
who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of
evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market
Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that,
notwithstanding the Target Market Assessment, Stifel will only procure investors who meet the criteria of professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b)
a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Ordinary Shares.
Each distributor is responsible for undertaking its own target market assessment in respect of the Ordinary Shares and determining appropriate distribution channels.
The Company is under no obligation to update or keep current the information contained in this Presentation or to correct any inaccuracies which may become
apparent, and any opinions expressed in it are subject to change without notice. Neither the Company nor any of its directors, officers, employees or advisers accept
any liability whatsoever for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection therewith.
The Presentation contains forward-looking statements. These statements relate to the future prospects, developments and business strategies of the Company.
Forward-looking statements are identified by the use of such terms as "believe", "could", "envisage", "estimate", "potential", "intend", "may", "plan", "will" or variations
or similar expressions, or the negative thereof. The forward-looking statements contained in the Presentation are based on current expectations and are subject to
risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. If one or more of these risks or
uncertainties materialise, or if any underlying assumptions prove incorrect, the Company's actual results may vary materially from those expected, estimated or
projected. Given these risks and uncertainties, certain of which are beyond the Company's control, potential investors should not place any reliance on forward-
looking statements. These forward-looking statements speak only as at the date of the Presentation. Except as required by law, the Company undertakes no
obligation to publicly release any update or revisions to the forward-looking statements contained in the Presentation to reflect any change in events, conditions or
circumstances on which any such statements are based after the time they are made.
Stifel, which is authorised and regulated in the United Kingdom by the FCA, is acting as bookrunner and nominated adviser connection with the matters referred to
herein, and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in relation to the
contents of the Presentation or any transaction or arrangement referred to herein.
Apart from the responsibilities and liabilities, if any, which may be imposed on Stifel by the FSMA or the regulatory regime established thereunder, Stifel accepts no
responsibility whatsoever, and makes no representation or warranty, express or implied, in relation to the contents of the Presentation, 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, the Investment Adviser or
any other person in connection with the Company, the Ordinary Shares or the matters referred to herein, and nothing in the Presentation is or shall be relied upon as
a promise or representation in this respect, whether as to the past or future. Stifel accordingly disclaims all and any liabi lity whether arising in tort, contract or
otherwise (save as referred to above), which it might otherwise have in respect of the Presentation or any such statement.