Fundraising and Acquisition of Property Portfolio

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION IN PARTICULAR THE UNITED STATES, CANADA, AUSTRALIA AND JAPAN

This announcement is for information purposes only and shall not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire any ordinary shares of Standard Life Investments Property Income Trust Limited in any jurisdiction in which any such offer or solicitation would be unlawful.

13 November 2015

RECOMMENDED PROPOSALS IN RELATION TO THE ACQUISITION OF THE NEW PORTFOLIO AND THE INITIAL PLACING AND OFFER FOR SUBSCRIPTION

Introduction

The Board announces that the Company has entered into the conditional Acquisition Agreement in relation to the acquisition of a new portfolio of 22 UK commercial real estate assets.  The Acquisition is to be effected by the Company and the Property Subsidiary acquiring all of the units in the JPUT and the entire issued share capital of the General Partner which holds, through the Limited Partnership, the New Portfolio.  The JPUT and the Limited Partnership were established in September 2013 with the principal purpose of investing in and holding the New Portfolio.  The New Portfolio comprises 22 UK commercial properties and is complementary to the Company's Property Portfolio (for a detailed analysis of the existing Property Portfolio, the New Portfolio and the Combined Portfolio, please see Appendix I). In order to complete this Acquisition, the Board is proposing to raise up to £100 million by issuing  New Shares pursuant to an Initial Placing and Offer for Subscription at an Issue Price of 82.0 pence per New Share representing a 2.84 per cent. premium to the NAV per Share as at 30 September 2015 once the accrued dividends for the period ending 30 September 2015 have been deducted.  The Board will also need to utilise the New Bank Facility which will allow the Group to borrow up to approximately £70.6 million (in addition to the existing Bank Facility) and its existing, available cash reserves of approximately £22 million  to complete the Acquisition.

The Acquisition is considered to be a significant transaction under the Listing Rules and, as a consequence, it requires Shareholder approval. The Listing Rules also provide that the Company must seek Shareholder approval prior to issuing its Shares on a non pre-emptive basis.  The Company will shortly publish a Prospectus and Circular which will provide Shareholders with further details of the Acquisition and the Initial Placing and Offer.  The Circular will also provide Shareholders with notice of the General Meeting of the Company at which Shareholders will be asked to consider and, if thought fit, pass the Resolutions to approve the Acquisition and issue of New Shares pursuant to the Initial Placing and Offer on a non pre-emptive basis.

Reasons for and Benefits of the Acquisition and the Initial Placing and Offer for Subscription

The Board believes that the Proposals offer significant benefits for all Shareholders as noted below:

The Board believes that if the Proposals are successful, the Company's existing Shareholders will, in particular, benefit from the reduced ongoing charge, the favourable terms of the New Bank Facility Agreement and the lower costs of investing the Company's existing cash reserves in the New Portfolio through the acquisition of the JPUT as opposed to the direct acquisition of UK commercial real estate assets.  For these reasons and the reasons set out above, the Board is recommending that Shareholders vote in favour of the Proposals at the General Meeting. Standard Life Investments Pooled Pensions Property Fund has indicated that it intends to subscribe for approximately 7.3 million New Shares for an aggregate price of £6 million under the Initial Placing and Offer.

The property portfolios

The Company's existing Property Portfolio

As at 30 September 2015, the Property Portfolio comprised 42 UK commercial properties with an aggregate market value of approximately £308.8 million. The Property Portfolio generates a current net annual rent of approximately £19.2 million (being an Income Return of 5.9 per cent.) and an aggregate estimated net annual rent of approximately £22 million (giving an equivalent yield of 6.7 per cent.).

According to the Dun and Bradsheet failure score 74.8 per cent. of the Company's income is from tenants rated as having a negligible or low risk of failure score. The average unexpired lease term to earliest termination of the occupational leases of these Properties (weighted by current gross annual rent) is approximately 7 years and 1 month and all of the rent review provisions in the occupational leases of the Properties are upwards only or subject to fixed/indexed increases. The Company announced on 9 November 2015 that it had completed the sale of the Maple Cross Property for a consideration of £14.75 million.

The New Portfolio

The Company and its Property Subsidiary have entered into the conditional Acquisition Agreement  to acquire all of the units in the JPUT and the entire issued share capital of the General Partner. The JPUT holds, indirectly through its interest as the sole limited partner in the Limited Partnership, the New Portfolio.  The New Portfolio is diversified by sector, tenant and region and is complementary to the Property Portfolio. The New Portfolio comprises 22 properties UK commercial properties with an aggregate market value of approximately £165 million as at 19 October 2015.  The New Portfolio generates a current net annual rent of approximately £10.8 million (being a net initial yield of 5.96 per cent.).

According to the Dun and Broadsheet failure score 82 per cent. of the New Portfolio's income is from tenants rated as having a negligible or low risk of failure score. The average unexpired lease term of the occupational leases of the New Properties (weighted by current gross annual rent) is approximately 4 years and 2 months and all of the rent review provisions in occupational leases of the New Properties are upwards only or have fixed/indexed increases.

The Combined Portfolio

In the event that the Resolutions are approved by Shareholders and the Acquisition is completed, the Combined Portfolio will comprise 63 properties with an aggregate market value of £460 million (on the basis of the valuations of the Property Portfolio as at 30 September 2015 and the New Portfolio as at 19 October 2015).  The Combined Portfolio would generate a current net annual rent of approximately £29 million (being a net initial yield of 5.97 per cent.).

The average unexpired lease term of the occupational leases of these properties (weighted by current gross annual rent) is approximately 6 years and 2 months, compared to the equivalent figure for an average commercial property portfolio, as represented by the independent IPD IRIS (excluding leases over 35 years), of 7 years and 4 months.

The Directors believe that the Combined Portfolio will be accretive to the level of dividend cover and will provide a number of asset management opportunities which should enhance the income profile and the capital value of the assets.

Details of the terms of the Proposals

The Initial Placing and Offer In order to complete this Acquisition, the Company is proposing to issue up to 121,951,220  New Shares under the Initial Placing and Offer (representing up to approximately 42.3 per cent. of the Company's current issued share capital) to raise up to approximately £100 million.  The Issue Price is 82.0 pence representing a premium of 2.84 per cent. to the NAV per Share as at 30 September 2015 once the accrued dividends for the period ending 30 September 2015 have been deducted.  The net proceeds of the Initial Placing and Offer will be used to fund the Acquisition together with the New Bank Facility and the Company's existing cash resources. If the Initial Placing and Offer does not proceed and Admission does not occur, the Acquisition will not proceed and no funds will be drawn down under the New Bank Facility. The Initial Placing and Offer is  conditional on: (i)            the Placing Agreement becoming wholly unconditional (save as to Admission) and not having been terminated in accordance with its terms prior to Admission; (ii)          the Admission Condition being satisfied prior to 8.00 a.m. on 15 December 2015 (or such later time and/or date, not being later than 8.00 a.m. on 18 December 2015 as the Board may determine); (iii)         Shareholder approval being granted in respect of the issue of New Shares, on a non pre-emptive basis, in relation to the Initial Placing and Offer and the Acquisition at the General Meeting; and (iv)         the gross proceeds of the Initial Placing and Offer being the equivalent of at least £80 million (the "Minimum Issue Proceeds"). The maximum number of New Shares to be issued pursuant to the Initial Placing and Offer will be 121,951,220. In the event that the number of New Shares applied for under the Initial Placing and Offer at the Issue Price results in the Company receiving gross proceeds which are significantly in excess of the size of the Initial Placing and Offer then it would be necessary to scale back such applications. In such event New Shares will be allocated, as far as reasonably possible, so that applications from existing Shareholders are given priority over other applicants, and, where applicable, with a view to ensuring that existing Shareholders are allocated such percentage of New Shares as is as close as possible to their existing percentage holding of Ordinary Shares. The actual number of New Shares issued under the Initial Placing and Offer will be determined by the Company and the Placing Agent, after taking into account demand for the New Shares, prevailing market conditions and the acquisition costs of the New Portfolio. The final results of the Initial Placing and Offer and any scaling back will be announced via a Regulatory Information Service. In the event that Admission does not occur, the Acquisition of the New Portfolio will not complete and any monies raised under the Initial Placing and Offer will be returned to investors.

The Acquisition  The Company and the Property Subsidiary have entered into the conditional Acquisition Agreement with the Vendors dated 12 November 2015.  Under this Acquisition Agreement the Company and the Property Subsidiary have agreed to purchase the New Portfolio by way of acquiring all of the units in the JPUT (the sole limited partner in the Limited Partnership) and the entire issued share capital in the General Partner (the general partner of the Limited Partnership).  The JPUT was established on 11 September 2013 and its principal activity is to invest in the Limited Partnership which holds the New Portfolio. The JPUT has not taken out any debt.  It's income is derived solely through its investment in the New Portfolio, by way of it being the sole limited partner of the Limited Partnership, and its expenditure relates only to administration and advisory expenses and property expenses. Pursuant to the Acquisition Agreement, the aggregate consideration payable for all of the units in the JPUT, shares in the General Partner and the New Portfolio will be approximately £165 million adjusted to take into account any accruals and contingencies of the JPUT and the Limited Partnership on the date of completion of the Acquisition.  The Company will need to use the net proceeds of the Initial Placing and Offer, the New Bank Facility and its existing cash reserves to fund the Acquisition.  The New Properties have been externally valued by Knight Frank with a market value as at 19 October 2015 of approximately £165 million. In addition to the conditions to the Initial Placing and Offer (as set out above) including the condition that the Minimum Issue Proceeds require to be raised under the Initial Placing and Offer, the Acquisition Agreement provides that the Acquisition is conditional on: (i)  at least £80 million (or such lower amount as the Company shall, in its discretion, consider is sufficient to enable it to proceed to completion of the Acquisition) being raised pursuant to the Initial Placing and offer; and (ii) JFSC consent being granted in relation to the change in investment manager of the JPUT on completion.  The Acquisition is also conditional upon Shareholder approval being granted in favour of the resolutions at the General Meeting and the satisfaction of all of the conditions precedent in the New Bank Facility Agreement (which are customary for a facility of this nature and include that sufficient funds must be raised under the Initial Placing and Offer to satisfy the Minimum Issue Proceeds).  Therefore if the Minimum Issue Proceeds are not raised under the Initial Placing and Offer, the Acquisition will not complete and no new funds will be able to be drawn down under the New Bank Facility. The Acquisition Agreement contains warranties, indemnities and representations customary to agreements of this nature.  The liability of the Vendor in relation to these warranties, indemnities and representation has been capped to a nominal value.  Therefore warranty and indemnity insurance has been taken out on behalf of the Company and the Property Subsidiary. Completion of the Acquisition is expected to occur on 15 December 2015 immediately after Admission. The parties are entitled to rescind the Acquisition Agreement in the event that the conditions thereto are not satisfied by 18 December 2015. The current intention of the Group is to undertake a restructuring, immediately post Acquisition, involving the New Properties and the subsequent liquidation of the JPUT.

Gearing and borrowings

The Company has the power under the Articles to borrow an amount up to 65 per cent. of the Group's gross assets. It is the present intention of the Directors that the Company's loan to value ratio (calculated as borrowings less all cash as a proportion of the Property Portfolio valuation) will not exceed 45 per cent. and the Investment Manager is currently instructed to target a LTV between 25 per cent. to 35 per cent.

The Group's current borrowings

The Group currently has a fully drawn down debt facility of £84,432,692 with the Bank which is repayable on 16 December 2018. As at 30 September 2015, the Group's LTV was approximately 22 per cent.

Interest on the Bank Facility is payable at a rate equal to the aggregate of three month LIBOR, and a margin of 1.65 per cent. per annum (below 40 per cent. LTV) or 1.75 per cent. per annum (40 to 60 per cent. LTV inclusive) or 1.95 per cent. (above 60 per cent. LTV). The current applicable margin is 1.65 per cent. per annum.

The Group has two interest rate swap agreements with the Bank for a notional principal amount of £84,432,692 in aggregate which results, based upon current LTV, in the all-in margin in respect of the Group's borrowing being fixed until 16 December 2018 at 3.66 per cent. per annum. If the existing Bank Facility is repaid prior to 16 December 2018 such swaps will require to be broken and the associated termination costs will require to be paid.

The Group's proposed additional borrowings on completion of the Acquisition

The Property Subsidiary and the Company  have entered into the New Bank Facility Agreement with the Bank conditional on, inter alia, the completion of the Acquisition and the satisfaction of the conditions precedent (which are customary for a facility of this nature).  The New Bank Facility is in addition to the existing Bank Facility and consists of the New Term Loan of £40,567,308 and the Revolving Credit Facility of £30,000,000 which amounts to, in aggregate, £70,567,308. The Facility Agreement will therefore be amended, subject to the completion of the Acquisition, pursuant to an amendment and restatement agreement (the New Bank Facility Agreement) in order to effect the new terms of the existing Bank Facility and the New Bank Facility. The New Bank Facility Agreement has a term of 18 months.  Therefore, as a result of these new arrangements the repayment date, in relation to the existing Bank Facility (as well as the New Bank Facility) has been brought forward from 16 December 2018 to 17 June 2017.  Interest will be payable in relation to the existing Bank Facility at the all-in rate of 3.26 per cent. per annum pursuant to the swaps that are already in place (further details on the swaps are set out above) and in relation to the New Bank Facility at a rate equal to the aggregate of the applicable LIBOR rate and a margin of 1.25 per cent. per annum. For illustrative purposes and on the assumption that the maximum amount under the New Bank Facility is required to be drawn down, the Group's maximum level of borrowings (the existing Bank Facility plus the New Bank Facility) will be £155 million, and the maximum LTV, once the New Portfolio has been acquired, would be approximately  32  per cent.  The structure and terms of the New Bank Facility Agreement provide the Company with the flexibility to make repayments prior to the repayment date of 17 June 2017.  Thereby it could reduce the  LTV shortly after the completion of the Acquisition with the proceeds of any disposals of New Properties (or existing Properties). In the event the Revolving Credit Facility is repaid in full with the proceeds of any disposals, the Group's maximum LTV (assuming the maximum amount under the New Term Loan is drawn down) could reduce to approximately 28 per cent.    The Property Subsidiary will only draw down funds under the New Bank Facility once Admission has occurred on the completion of the Acquisition.

The  Property Subsidiary does not currently intend to hedge the New Bank Facility. In the light of the current low interest rate environment it is likely that the Group would look to refinance all of their debt (the existing Bank Facility as well as the New Bank Facility) in the near term. As part of the refinancing the Group would have to break the existing interest rate swaps and it would, at that time, consider entering into the new arrangements to mitigate interest rate risk in respect of any new debt incurred.

Dividends

Dividend policy

It is the Board's policy that in paying dividends it should target aggregate annual dividends which are fully covered by the Group's net income. Dividends on the Ordinary Shares are expected to be paid in equal instalments quarterly in respect of each financial year in March, May, August and November. All dividends are paid as interim dividends.

Payment of dividends

The Company has declared a dividend of 1.161 pence per Share for the quarter ending 30 September 2015 which will be paid on 27 November 2015 to existing Shareholders. The Company expects that its final interim dividend of 1.161 pence per Share in respect of the period to 31 December 2015 will be split into: (i) a fourth interim dividend for the period between 1 October 2015 and 14 December 2015 (the date immediately prior to Admission and the completion of the Acquisition); and (ii) a fifth interim dividend for the period between 15 December 2015 and 31 December 2015. The Company's existing Shareholders will qualify for the fourth and fifth interim dividends in respect of their existing holdings of Ordinary Shares which together equal the equivalent of 1.161 pence for the quarter per Share.  New Shares issued pursuant to the Initial Placing and Offer will only qualify for the fifth interim dividend.

Save as referred to above, New Shares will rank pari passu with the Ordinary Shares in respect of dividends.

In the event that the Acquisition completes, the Board believes that the dividend cover would be enhanced.  Accordingly if the Acquisition completes it is the Board's intention to increase the quarterly dividend by 2.5 per cent. to 1.19 pence per Share commencing with the quarter ending 31 March 2016. If Admission does not occur and the Acquisition does not proceed, the Board does not intend to increase the dividend in the near term but will continue to keep the Company's dividend policy under review.

Costs and expenses of the Proposals

The costs and expenses of the Proposals (including the consideration for the purchase price of the JPUT and the New Portfolio, the commission payable to the Placing Agent and the costs in relation to the publication of the Prospectus and the Circular) are expected to be approximately £171  million.  The New Shares will be issued at a premium of 2.84 per cent. to the NAV per Share as at 30 September 2015 once the accrued dividends for the period ending 30 September 2015 have been deducted.

Indicative timetable

An indicative timetable of principal events is as follows:

Event Indicative Timing Initial Placing and Offer opens 17 November 2015 Publication of Circular and Prospectus 17 November 2015 Latest date for receipt of Application Forms under the Offer 9  December 2015 Latest date for commitments under the Initial Placing 10 December 2015 General Meeting 11 December 2015 Results of the Initial Placing and Offer and General Meeting announced 11  December 2015 Admission and dealings in New Shares commence 15 December 2015

A more detailed timetable will be included in the Prospectus.

General

In deciding whether or not to vote in favour of the Resolutions at the General Meeting to implement the Proposals, Shareholders should rely only on the information contained in, and should follow the procedures described in, the Circular and the Prospectus.

 All enquiries:

Jason Baggaley/Gordon Humphries, Standard Life Investments

Tel: [phone] 245 2735

Graeme Caton, Winterflood Investment Trusts
Tel: [phone]

Douglas Armstrong, Dickson Minto W.S.

Tel:  [phone]

Winterflood Securities Limited, which is authorised and regulated by the Financial Conduct Authority, is acting for the Company and for no-one else in connection with the Proposals and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Winterflood Securities Limited, or for affording advice in relation to the Proposals.

Dickson Minto W.S., which is authorised and regulated by the Financial Conduct Authority, is acting for the Company and for no-one else in connection with the Proposals and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Dickson Minto W.S., or for affording advice in relation to the contents of the Proposals.

APPENDIX I

DETAILS OF THE PROPERTY PORTFOLIO, THE NEW PORTFOLIO AND THE COMBINED PORTFOLIO

A detailed description and comparison of the Company's existing Property Portfolio (based on the Valuer's valuation report as at 30 September 2015), the New Portfolio (based on the Knight Frank valuation report as at 19 October 2015) and the Combined Portfolio is set out below:

Properties*	Sector	Region	Current net annual rent receivable
Properties valued at £15 - £20 million – Property Portfolio
White Bear Yard, Clerkenwell, London	Standard Office	London Mid-Town	£527,334
DSG Blackpool Road, Preston	Retail Warehouse	North West	£1,040,895
Chester House, Farnborough Aerospace Centre, Farnborough GU14 6TQ (Leasehold)	Office Park	South East	£1,257,640
The Symphony Group, Ickles Way, Rotherham	Industrial ROUK	North West	£1,080,000
Properties valued at £15 - £20 million – New Portfolio
Elstree Tower, Borehamwood	Standard Office	South East	£1,320,000
Properties valued at £10 - £15 million – Property Portfolio
Denby 242, Denby, DE5 8NN	Industrial ROUK	Midlands	£0 Rent Free, £1,153,138 per annum from 15 March 2015
Hertford Place Maple Cross Rickmansworth	Standard Office	South East	£1,156,900
St James's House, Cheltenham	Standard Office	Midlands	£862,102
3b-c Michigan Drive Milton Keynes	Industrial ROSE	South East	£712,980
Hollywood Green, Wood Green, London	High Street Retail	London	£787,878
Bourne House, The Causeway, Staines	Standard Office	South East	£0 Rent Free, £696,995 per annum from 15 January 2016
Ocean Trade Centre, Altens Industrial Estate, Aberdeen	Industrial ROUK	Scotland	£442,700
Ground Floor,  New Palace Place, Monck Street, Westminster, London (Leasehold)	Standard Office and Retail	London	£546,103
Howard Town Retail Park, Glossop	Retail Warehouse	North West	£677,430
Properties valued at £10 - £15 million – New Portfolio
Charter Court, Bath Road, Slough	Standard Office	South East	£815,448
82-84 Eden Street, Kingston Upon Thames	Retail	Greater London	£200,264
Properties valued at £5 - £10 million – Property Portfolio
Tetron 141, Swadlingcote	Industrial ROUK	Midlands	£635,216
Explorer 1 & 2,  Mitre Court, Crawley	Standard Office	South East	£701,490
1/1A Marsh Way, Fairview Industrial Park, Rainham, Essex (Leasehold)	Industrial	Eastern England	£450,000
Tetron 93, Swadlingcote	Industrial ROUK	Midlands	£375,448
Dorset Street, Southampton	Standard Office	South East	£459,166
Bathgate Retail Park, Bathgate	Retail Warehouse	Scotland	£478,625
Unit 6 Broadway Business Park, Oldham	Industrial	North West	£854,626
Silbury House, Silbury Boulevard, Milton Keynes	Standard Office	South East	£373,500
Units 1&2 Olympian Way, Leyland, Preston	Retail Warehouse	North West	£380,000
Halfords, Valley Road, Bradford	Retail Warehouse	North West	£515,825
Matalan, Kings Lynne	Retail Warehouse	Eastern England	£378,500
Properties valued at £5 - £10 million – New Portfolio
The Quadrangle Cheltenham	Standard Office	South West	£700,000
Ceva Logistics Earlstrees Rd Corby	Standard Industrial	East Midlands	£597,637
The Kirkgate, Church St Epsom	Standard Office	South East	£550,000
Walton Summit Industrial Estate Preston	Industrial ROUK	North West	£590,000
Budbrooke Industrial Estate Warwick	Standard industrial	West Midlands	£476,623
Swift House, Cosford Lane Rugby	Industrial ROUK	West Midlands	£523,574
Foxholes Business Park Hertford	Standard Industrial	South East	£459,747
P&O, Whitecliffs Business Park, Dover	Industrial ROSE	South East	£479,090
Victoria Shopping Park Hednesford	Retail	West Midlands	£485,000
Causeway House Teddington	Standard Office	South East	£347,703
Symiths Toys, Middle Engine Lane, North Shields	Retail Warehouse	North East	£371,138
The Point Retail Park Rochdale	Retail Warehouse	North West	£370,000
Wincanton, Portbury, Bristol	Industrial ROUK	South West	£379,643
Foundary Lane Horsham	Industrial ROSE	South East	£125,450
Properties valued at £0 - £5 million – Property Portfolio
Endeavour House, Langford Business Park Kiddlington	Office Park	South West	£415,000
Interplex 16 Ash Bridge Rd Bristol	Industrial ROUK	South West	£192,000
Interfleet House, Pride Park, Derby	Office  Park	East Midlands	£390,000
The IT Centre, Innoation Way, York	Office Park	North East	£360,624
Matalan, Mayo Avenue, Bradford	Retail Warehouse	North West	£318,278
Dawson Rd, Mount Farm Milton Keynes	Standard Industrial	South East	£282,758
Units 1&2 Deans Ind Estate, Cullen Sq Livingston	Standard Industrial	Scotland	£405,076
Persimon House, Crossways Business Park, Dartford	Office Park	South East	£306,643
31/32 Queen Sq, Bristol	Standard Office	South West	£160,000
Unit 2 Brunel Way, Segensworth East Fareham	Standard Industrial	South East	£225,000
Farrah Unit, Crittall Rd, Witham	Standard Industrial	South East	£212,380
Turin Crt Bird Hall Lane Cheadle Hume Stockport	Office Park	North West	£340,850
Unit 4 Monkton Business Park Hebburn, Newcastle	Industrial ROUK	North East	£220,000
Unit 4 Easter ParkWingates Bolton	Industrial ROUK	North West	£184,000
21 Gavin Way Nexus Point Birmingham	Industrial ROUK	West Midlands	£200,250
Unit 14 Interlink Park Bardon	Industrial ROUK	East Midlands	£155,415
Travis Perkins Cheltenham	Standard Industrial	South West	£112,000
1b Crown Farm, Mansfield	Standard Industrial	East Midlands	£60,000
Properties valued at £0 - £5 million – New Portfolio
Broadoak Business Park, Trafford Park, Manchester	Standard Industrial	North West	£303,179
Anglia House, Station Road, Bishops Stortford	Standard Office	South East	£426,648
The Range, Southend on Sea	Retail Warehouse	South East	£303,410
Units 1-4 Opus Way, Warrington	Standard Industrial	North West	£268,035
Ceres Court, Kingston Upon Thames (leasehold)	Standard Retail	South East	£198,712

1. Details of the ten largest properties (Combined Portfolio)

Set out below is a brief description of the ten largest Properties in the Combined Portfolio.

White Bear Yard, Clerkenwell, London
Mid Town Office
Tenant	Lease Term	Lease expiry/break option	Rent review
B&W Group Limited	10 years	13 November 2018	N/A
White Bear Yard Management Limited	5 years	23 June 2019	N/A
IDEO LLC	10 years	23 June 2019	N/A
White Bear Yard Management Limited	10 years	23 June 2019	N/A
Current net annual rent                    £527,334 (increasing to £1,057,743 on expiry of rent frees) Market Value                                        £15-20 million

Elstree Tower, Elstree Way, Borehamwood
Office South East
Tenant	Lease Term	Lease expiry/break option	Rent review
Sungard Availability Services (UK) Ltd	10 years	24 March 2025 / 24 March 2020	25 March 2020
Current net annual rent                    £1,320,000 Market Value                                        £15-20 million

Currys and PC World, Preston
Retail Warehouse
Tenant	Lease Term	Lease expiry/break option	Rent review
DSG	25 years	25 December 2030	25 November 2020
Current net annual rent                    £1,040,895 Market Value                                        £15-20 million

Chester House, Farnborough Aerospace Centre, Farnborough
Office Park
Tenant	Lease Term	Lease expiry/break option	Rent review
BAE Systems plc	27 years	31 December 2023	10 April 2017
Current net annual rent                    £1,257,640 Market Value                                        £15-20 million

The Symphony Group, Ickles Way Rotherham
Industrial
Tenant	Lease Term	Lease expiry/break option	Rent review
The Symphony Group plc	20 years	15 September 2034	16 September 2019
Current net annual rent                    £1,080,000 Market Value                                        £15-20 million

Denby 242, Denby Rd, Denby
Industrial
Tenant	Lease Term	Lease expiry/break option	Rent review
Techno Cargo Logistics	15 years	14 March 2025	15 March 2016
Current net annual rent                    £0 (increasing to £1,153,138 at expiry of rent free) Market Value                                        £10-£15 million

Hertford Place, Rickmansworth
Office
Tenant	Lease Term	Lease expiry/break option	Rent review
Trebor Bassett Ltd	20 years	19 December 2022	20 December 2017
Current net annual rent                    £1,156,900 Market Value                                        £10-£15 million

St James's House, Cheltenham
Office
Top five tenants	Lease Term	Lease expiry/break option	Rent review
BPE Solicitors LLP	12 years	21 March 2024	22 March 2019
Barnett Waddingham LLP	11 years	29 October 2022	29 October 2019
Tangible UK Limited	10 years	6 July 2021/ 7 July 2016	7 July 2016
Local World Ltd	10 years	8 August 2025 / 8 August 2020	9 August 2020
Volo Commerce Ltd	10 years	3 March 2024	4 March 2019
Current net annual rent               £862,102 Market Value                                 £10-£15 million

Charter Court, 50 Windsor Road, Slough
Office
Tenant	Lease Term	Lease expiry/break option	Rent review
Webloyalty International Ltd	7 years	22 June 2020	1 March 2015
Airwave Solutions Ltd	13 years	24 December 2021	30 April 2018
Webloyalty International Ltd	7 years	22 June 2020	1 March 2015
Current net annual rent                    £815,448 Market Value                                        £10-£15 million

3 B – C Michigan Drive Milton Keynes
Industrial
Tenant	Lease Term	Lease expiry/break option	Rent review
Bong UK Ltd	12 years	2 January 2026	Annual fixed increases
Current net annual rent                    £712,980 Market Value                                        £10-£15 million

1. Tenant concentration

The tenants that contribute in excess of two per cent. of the current net annual rent of the Property Portfolio and the New Portfolio can be summarised as follows:

Lease Name	Sector	Current net annual rent	% of Current net annual rent of Property Portfolio
Sunguard Availability Services (UK) Ltd	Office	£1,320,000	4.1%
BAE Systems	Office	£1,257,640	3.9%
Trebor Basset	Office	£1,156,900	3.6%
The Symphony Group Plc	Industrial	£1,080,000	3.4%
DSG	Retail Warehouse	£1,040,895	3.3%
Bong UK Ltd	Industrial	£712,980	2.2%
Royal Bank Of Scotland PLC	Office	£700,000	2.2%
Matalan	Retail Warehouse	£696,778	2.2%
Grant Thornton	Office	£680,371	2.1%
Euro Car Parks Ltd	Industrial	£635,216	2.0%

1. Summary of tenure

	As a percentage of aggregate Market Value
Tenure	Property Portfolio	New Portfolio	Combined Portfolio
Freehold/Feuhold	70.6%	86.1%	76.0%
Leasehold	29.4%	13.9%	24.0%

1. Lease length

The Properties in the Property Portfolio have a total of 113 tenants (excluding car parking spaces, wayleaves and substations).  The New Properties in the New Portfolio have a total of 118 tenants.  The length of the leases can be summarised as follows:

	As a percentage of current gross annual rent
Lease Length	Property Portfolio	New Portfolio	Combined Portfolio	IPD Quarterly Universe*
0-5 years	31.6%	66.4%	34.0%	35%
5-10 years	43.6%	30.9%	37.4%	31%
10-15 years	17.8%	2.7%	20.2%	15%
15-20 years	5.4%	0.0%	4.0%	7%
20 + years	-	0.0%	1.0%	12%
% Void (by rent)	2.2%	1.46%	2.0%	6.9%
AWULTC	7.1 years	4.4 years	6.2 years	7.45 years

*Source: IPD Quarterly Universe (excluding leases over 35 years) 30 June 2015

AWULTC means Average Weighted Unexpired Lease Term Certain (to lease end or break option date if sooner).

1. Income profile (Combined Portfolio)

The occurrence of the earlier of lease expiries and break options of the Property Portfolio and the New Portfolio can be summarised as follows:

Year of expiration or break option		Current gross annual rent	% of current gross annual rent	Cumulative % of current gross annual rent
2016		£2,598,142	8.5%	8.5%
2017		£2,290,483	7.5%	16%
2018		£2,906,199	9.5%	25.5%
2019		£2,552,809	8.3%	33.8%
2020		£1,707,521	5.6%	39.4%
2021+		£17,448,366	57.0%	100%

The aggregate current net annual rent of the Property Portfolio is approximately £19.23 million and the aggregated estimated net annual rental value is approximately £22.04 million.

The aggregate current net annual rent of the New Portfolio is approximately £10.81 million and the aggregated estimated net annual rental value is approximately £11.81 million.

1. Covenants

The covenant strength of the tenants of the Properties and the New Properties can be summarised as follows:

	As a percentage of current gross annual rent
Covenant Strength	Property Portfolio	New Portfolio	Combined Portfolio	IPD Quarterly Universe*
Negligible & Government risk	61%	58%	58%	57%
Low risk	15%	24%	18%	21%
Low-medium risk	10%	2%	7%	6%
Medium-high risk	8%	4%	6%	2%
High risk	3%	2%	3%	4%
Maximum risk	2%	1%	1%	6%
Unscored	0%	8%	3%	2%
Administration	0%	1%	0%	0%

* Source:  IPD Quarterly Universe

** Based on D&B Risk of Failure

1. Lease terms

The occupational leases of the Properties and the New Properties are on terms which could reasonably be expected for properties of the type comprised in the Property Portfolio and the New Portfolio. Subject to the above and viewing the Property Portfolio and New Portfolio as a whole, the occupational leases of the Properties in the Property Portfolio and the New Properties in the New Portfolio are in general terms institutionally acceptable.

1. Property condition

Independent building surveys, mechanical and electrical surveys and environmental surveys have been undertaken for each of the Properties and the New Properties. These have been reviewed by the Investment Manager and it is considered that the condition of the Properties and the New Properties is acceptable having regard to the properties' age, use, type and lease terms.

1. Regional weightings

The regional weightings of the Property Portfolio, the New Portfolio and the Combined Portfolio can be summarised as follows:

	As a percentage of current gross annual rent
Region	Property Portfolio	New Portfolio	Combined Portfolio	IPD Quarterly Universe*
London West End	3%	0.0%	2%	15.2%
London City	7%	0.0%	4.3%	4.9%
East Midlands	5.1%	10.5%	14.2%	10.5%
South East	36%	55%	43%	33.6%
South West	8%	9%	8%	6.5%
West Midlands	1%	19%	4%	6.6%
North East	10%	3%	8%	2%
North West	11%	14%	12%	12%
Scotland	7%	0.0%	4%	5.5%

* Source:  IPD Quarterly Universe

1. Sectoral weightings

The sectoral weightings of the Property Portfolio, the New Portfolio and the Combined Portfolio can be summarised as follows:

	As a percentage of current gross annual rent
Sector	Property Portfolio	New Portfolio	Combined Portfolio	IPD Quarterly Universe*
Retail	21%	21%	21%	42.6%
Office	42%	37%	40%	29.8%
Industrial	37%	41%	39%	18.4%
Other	0%	0%	0%	9.2%

* Source:  IPD Quarterly Universe

1. Sub-sector weightings

The sub-sector weightings of the Property Portfolio, the New Portfolio and the Combined Portfolio can be summarised as follows:

	As a percentage of current gross annual rent
Region	Property Portfolio	New Portfolio	Combined Portfolio	IPD Quarterly Universe*
South East Standard Retail	5.4%	8.3%	7.6%	9.7%
Rest of UK Standard Retail	0%	0%	0%	7.1%
Shopping Centres	0%	0%	0%	9.1%
Retail Warehouses	15.4%	13.6%	14.5%	16.7%
Central London Offices	10.0%	0.0%	6.5%	15.2%
South East Offices	22.5%	31%	19.1%	9.5%
Rest of UK Offices	9.3%	6.2%	8.2%	5.1%
South East Industrial	9.8%	13.1%	12.1%	10.8%
Rest of UK Industrial	27.6%	27.8%	31.9%	7.6%
Other	0%	0.0%	0%	9.2%

* Source:  IPD Quarterly Universe

12.          Disposals from the Property Portfolio

Since 30 September 2015, the Company has completed the sale of the Maple Cross Property for a consideration of £14.75 million.  As at 30 September 2015, the market value of the Maple Cross Property was £14 million.  This sale completed on 6 November 2015.

APPENDIX II

DEFINITIONS

The meanings of the following terms shall apply throughout this document unless the context otherwise requires.

Acquisition	the acquisition of all of the units in the JPUT, the two ordinary shares in the General Partner and the New Portfolio by the Group
Acquisition Agreement	the sale and purchase agreement relating to all the units in the JPUT and the entire issued share capital of the General Partner dated 12 November 2015
Admission	the admission of the New Shares to the Official List and to trading on the Main Market pursuant to the Initial Placing and Offer
Admission Condition	(i) the UKLA having acknowledged to the Company or its agent (and such acknowledgement not having been withdrawn) that the application for the admission of the New Shares arising under the Issues, as the case may be, to the Official List with a premium listing has been approved and (after satisfaction of any conditions to which such approval is expressed to be subject ("listing conditions")) will become effective as soon as a dealing notice has been issued by the FCA and any listing conditions having been satisfied and (ii) the London Stock Exchange having acknowledged to the Company or its agent (and such acknowledgement not having been withdrawn) that the New Shares will be admitted to trading
Application Form	the application form which accompanies this document for use in connection with the Offer
Bank	The Royal Bank of Scotland plc, a company incorporated in Scotland with registered number SC090312
Bank Facility	the £84,432,692 term loan facility provided to the Company by the Bank pursuant to the Facility Agreement
Board or Directors	the directors of the Company
Circular	the circular to be published in connection with the Proposals
Combined Portfolio	the Property Portfolio and the New Portfolio
Company	Standard Life Investments Property Income Trust Limited, a company incorporated in Guernsey with registered number 41352
Combined Portfolio	the Property Portfolio and the New Portfolio
Estimated Net Annual Rent	is based on the current rental value of a property: (i)            ignoring any special receipts or deductions arising from the property; (ii)           excluding Value Added Tax and before taxation (including tax on profits and any allowances for interest on capital or loans); (iii)         after making deductions for superior rents (but not for amortisation), and any disbursements including, if appropriate, expenses of managing the property and allowances to maintain it in a condition to command its rent; and (iv)          where a property, or part of it, is let at the date of valuation, the rental value reflects the terms of the lease, and, where a property, or part of it, is vacant at the date of valuation, the rental value reflects the rent the Valuer considers would be obtainable on an open market letting as at the valuation date
Facility Agreement	the facility agreement in relation to the Bank Facility between, among others, the Bank in various capacities  and the Company and the Property Subsidiary, originally dated 22 December 2011, as amended by first and second amendment agreements both dated 19 December 2014
FCA	the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part IV of FSMA, or any successor authority
FSMA	the Financial Services and Markets Act 2000, as amended
General Meeting	the general meeting of the Company to be held at 30 St Mary Axe, London EC3A 8EP at 10 a.m. on 11 December 2015 to approve the issue of New Shares pursuant to the Initial Placing and Offer and the Acquisition
General Partner	Aviva Investors UK Real Estate Recovery II (General Partner) Limited
Group	the Company and the Property Subsidiary and any other direct or indirect subsidiary (as that term is defined in the Law) of the Company from time to time and, subject to Admission and the completion of the Acquisition, the JPUT, the Limited Partnership and the General Partner
Income Return	is the current net annual rent receivable for a property expressed as a percentage of the market value of such property (without making any deduction in respect of any acquisition costs for such property)
Initial Placing	the placing of New Shares by the Placing Agent
Investment Manager	Standard Life Investments (Corporate Funds) Limited, a company incorporated in Scotland with registered number SC111488
IPD	Investment Property Databank Limited
IPD IRIS	the IPD Rental Information Service
Issue Price	82.0 pence per New Share (being a premium of 2.84 per cent. to the  NAV per Share as at 30 September 2015 once the accrued dividend for the period ending 30 September 2015 has been deducted)
JFSC	Jersey Financial Services Commission
JPUT	Aviva Investors UK Real Estate Recovery II Unit Trust, a Jersey property unit trust which ultimately holds the New Portfolio
Knight Frank	Knight Frank LLP, a limited liability partnership with registered number OC305934 acting as the independent valuer of the New Portfolio
Law	the Companies (Guernsey) Law, 2008 as amended from time to time
LIBOR	London Inter-bank Offered Rate
Limited Partnership	Aviva Investors UK Real Estate Recovery II Limited Partnership
Listing Rules	the listing rules made by the FCA under Part VI of FSMA as amended from time to time
London Stock Exchange	London Stock Exchange plc
LTV	Loan to value ratio (calculated as borrowings less all cash as a proportion of the Group's Property Portfolio valuation)
Main Market	the  London  Stock  Exchange's  main  market  for  listed securities being a regulated market for the purposes of Directive 2004/39/EC the "Markets in Financial Instruments Directive"
Maple Cross Property	the property situated at Hertford Place, Maple Cross, Rickmansworth
Minimum Issue Proceeds	the minimum gross proceeds of the Initial Placing and Offer being £80 million
NAV	in relation to a Share, means its net asset value on the relevant date calculated in accordance with the Company's normal accounting policies
New Bank Facility	the new term loan of up to £40,567,308 and the new revolving credit facility of up to £30,000,000 from the Bank
New Bank Facility Agreement	the amended and restated facility agreement between the Bank, the Company and the Property Subsidiary
New Portfolio	the 22 properties indirectly held by the JPUT through its interest in the Limited Partnership
New Properties	the properties comprised in the New Portfolio
New Shares	the new Ordinary Shares to be issued by the Company pursuant to the Initial Placing
New Term Loan	the new term loan agreed with the Bank for up to £40,567,308
Offer for Subscription or Offer	the offer for subscription of New Shares
Official List	the Official List of the UK Listing Authority
Ordinary Shareholders or Shareholders	holders of the Ordinary Shares
Ordinary Shares or Shares	ordinary shares of 1 pence each in the capital of the Company
Placing Agent or Winterflood Securities	Winterflood Securities Limited, acting through its division, Winterflood Investment Trusts
Placing Agreement	the  placing  agreement  between  the  Company,  the Investment Manager and the Placing Agent
Properties	the  properties  comprised  in  the  Property  Portfolio,  or any of them as the context requires (each a "Property")
Property Portfolio	the direct and indirect property assets of the Group
Property Subsidiary	Standard Life Investments Property Holdings Limited, a company incorporated in Guernsey with registered number 41351
Proposals	the Acquisition and the Initial Placing and Offer
Prospectus	prospectus to be published in connection with the Proposals
Resolutions	the ordinary resolution to approve the Acquisition and the special resolution to approve the allotment of New Shares, pursuant to the Initial Placing and Offer, on a non pre-emptive basis to be proposed at the General Meeting
Revolving Credit Facility	the revolving credit facility agreed with the Bank for up to £30,000,000
Shareholder	a holder of Shares
Sponsor	Dickson Minto W.S.
UKLA or UK Listing Authority	the Financial Conduct Authority, acting in its capacity as the competent authority for the purposes of Part VI of FSMA
United States or USA	the United States of America (including the District of Columbia), its territories and possessions, any state of the United States of America and all other areas subject to its jurisdiction or any political sub-division thereof
Valuer	Jones Lang LaSalle Limited, a company incorporated in England and Wales with registered number 01188567
Vendor	the vendors of the New Portfolio as set out in the Acquisition Agreement