Placing, Open Offer and Offer for Subscription

RNS Number : 4127C

Urban Logistics REIT PLC

10 February 2020

 

THIS ANNOUNCEMENT, INCLUDING APPENDIX 1 AND THE INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 ("MAR"). 

Urban Logistics REIT plc

("Urban Logistics" or the "Company")

Placing for a target issue of £100 million and Open Offer and Offer for Subscription to raise up to c.£6.7 million

and

Proposed Special Dividend

and

Proposed amendments to Management Incentivisation Arrangements

Further to the pipeline update announcement on 6 January 2020, Urban Logistics, the specialist UK Logistics REIT, announces the proposed Placing to raise a target issue of £100 million and an Open Offer and Offer for Subscription to raise up to c.£6.7 million, each at a price of 137.5 pence per New Ordinary Share (the "Issue" and the "Issue Price").

The Company expects to use the net proceeds of the Issue to acquire an attractive pipeline of high-quality logistics properties that meet the Company's investment policy and objectives identified by Pacific Capital Partners Limited, the Company's investment manager.

Special Dividend

The Company intends to declare, at the time it announces the results of the Placing, a special dividend of 3.85 pence per share in respect of the financial year ending 31 March 2020 (the "Special Dividend"). The Special Dividend will bring the total dividends issued in respect of the 2020 financial year to 7.60 pence per share.

Any investors participating in the Issue will not be eligible to receive the Special Dividend payment in respect of any New Ordinary Shares issued to them as part of the Issue.

The Company intends that the next interim dividend will be declared following the release of its interim results for the half year ending 30 September 2020.

Issue Highlights

• Placing for a target issue of 72,727,273 Placing Shares at the Issue Price with new and existing investors⁽¹⁾

• Shortly following the announcement of the results of the Placing, an Open Offer and Offer for Subscription of up to 4,875,089 New Ordinary Shares at the Issue Price to raise up to a further £6.7 million in aggregate

• The Issue Price is 137.5 pence per New Ordinary Share representing:

• a discount of 7.7% to the closing mid-market price on 7 February 2020

• nil premium/discount to the adjusted EPRA NAV per share of 137.5 pence as at 30 September 2019² (adjusted for dividends of 3.75 pence per share declared and paid since 30 September 2019, the Special Dividend of 3.85 pence per share and 4.19 pence per share relating to the proposed early crystallisation of the LTIP for the period ending 30 September 2020 plus 4.06 pence per share of unaudited accrued EPRA earnings per share for the period from 1 October 2019 to Admission)

• Qualifying Shareholders will be offered the opportunity to participate in the Open Offer of up to 4,875,089 New Ordinary Shares (the "Open Offer Shares") on the basis of 1 New Ordinary Share for every 18 Existing Ordinary Shares

• Any Open Offer Shares not taken up by Qualifying Shareholders subscribing for their Basic Entitlements will be offered to:

• Qualifying Shareholders under the Excess Application Facility

• new and existing investors under the Offer for Subscription

• The net proceeds of the Issue are expected to be used to acquire pipeline assets where the Manager is in advanced negotiations (the "Advanced Portfolio") which comprise three portfolios and 12 single assets, with a weighted average unexpired lease term of approximately 7.8 years and are expected to have a weighted average net initial yield of approximately 6.8%

• The Company believes that the Advanced Portfolio offers opportunities to grow income and through active asset management create value for shareholders

• The Manager is in preliminary stage discussions on further properties with an aggregate consideration of more than £150 million

• The Company expects the net proceeds of the Issue to be substantially invested within three months of Admission

• The Issue is expected to be earnings accretive from the first full year after the Issue

• The Board anticipate that an increase in the size of the Company should improve liquidity and enhance the marketability of the Company's Ordinary Shares, broadening its investor base over the longer term

• The Issue is conditional, inter alia, upon the approval of the Issue by Shareholders at a general meeting of the Company which is expected to be convened for 10.00 a.m. on 9 March 2020.

¹The Directors reserve the right, in conjunction with the Joint Bookrunners and the Manager to increase the size of the Placing to a maximum of 145,454,546 Placing Shares if overall demand exceeds 72,727,273 Placing Shares. The number of New Ordinary Shares available under the Open Offer and Offer for Subscription will not exceed 4,875,089 New Ordinary Shares.

²Unaudited.

Nigel Rich CBE, Independent Non-Executive Chairman, said:

"Since listing in 2016, we have built a portfolio focused on income generation and total returns that exploits the opportunities created by the growing shift towards e-commerce. Our sector-leading performance reflects careful stock selection and proactive asset management. Having proven our model and assembled a high-quality pipeline of new opportunities, we believe the time is right to increase the scale of our portfolio."

Richard Moffitt, Director and CEO, commented

"Mid-box logistics assets at the end of evolving logistics chains are in short supply and offer excellent opportunities for investors seeking exposure to this high-growth sub-sector of the real estate market. We are in advanced negotiations on just under half of our £300 million pipeline, enabling the rapid deployment of funds raised pursuant to the Issue into accretive high-quality income-generating assets. With greater scale, we are confident that we can continue to grow the Company and deliver attractive shareholder returns."

Background to and reasons for the Issue

Background to the Company

The Company was formed in 2016 with the objective of generating attractive dividends and capital returns for its Shareholders by investing in industrial and logistics properties that enable businesses to operate essential modern distribution networks capable of responding to the challenges created by e-commerce and evolving infrastructure demands. Its investment strategy focuses on strategically located smaller single let urban logistics properties servicing high-quality tenants. Investment returns are generated by an experienced management team focusing on quality stock selection and active asset management.

Since its IPO in April 2016, the Company has raised approximately £95 million of equity capital, that together with debt finance and realisation proceeds, has been used to acquire 45 logistics properties with a total cost of £187.6 million at a 7.1% average Net Initial Yield. As at 7 February 2020, the portfolio is well-diversified and consists of 38 high-quality urban logistics properties and 4 development properties with:

• a combined market value of £195.0 million, representing a valuation increase of 3.8% (on a like-for-like basis for the six month period to 30 September 2019) and a 19.9% increase over purchase price;

• contracted rent roll of £12.2 million representing a 6.2% Net Yield as at 30 September 2019; and

• a weighted average unexpired lease term of 6.1 years as at 30 September 2019.

Information on the Pipeline³

The Manager has identified a substantial pipeline of high-quality logistics properties which meet the Company's investment policy and objectives. As at 7 February 2020, the total pipeline is in excess of £300 million and includes units for an aggregate consideration of £146 million where the Manager is in advanced negotiations and further properties with an aggregate consideration of more than £150 million where the Manager is in preliminary stage discussions.

The Advanced Portfolio assets, which comprise three portfolios and 12 single assets have a weighted average unexpired lease term of 7.8 years and a weighted average Net Initial Yield of 6.8%.

The Manager believes that the acquisition of the properties in the pipeline will be accretive to shareholder returns and will further diversify the Company's income, in addition to continuing to strengthen the portfolio's quality, size and prospects for further growth.

The pipeline assets referred to are subject to ongoing negotiation and due diligence by the Manager and no contractually binding obligations have been entered into for their sale and purchase.

³The acquisition of any potential investments by the Company is subject, among other things, to the Company completing satisfactory due diligence, successful negotiation of terms with vendors and the approval of the directors of the Company. There can be no guarantee that the acquisition of any of the potential investments will be completed. All information relating to the potential investments are indicative, subject to detailed due diligence and may subsequently change as a result.

Rationale for the Issue

The Directors believe that the Issue will benefit the Company by:

• enabling the acquisition of the Advanced Portfolio to grow income and create value for shareholders through active asset management;

• enhancing earnings in the first full financial year following the Issue;

• increasing the portfolio's geographic and tenant diversity, thereby improving income diversity;

• diluting operating costs over a larger capital base, reducing ongoing charges ratios; and

• improving liquidity and enhancing the marketability of the Ordinary Shares, resulting in a broader investor base over the longer term.

Market overview, portfolio and trading update and pipeline

Market Overview

Investor activity in the logistics sub-sector of the UK real estate market remains robust. Investment volumes in 2019 stood at £4.99 billion in total, or 25.4 million square feet, which was 20% down on 2018 but still above the 10 year long-term average.

Structural changes, in particular e-commerce and the continuing development of modern technology, are driving demand for logistics warehousing as well as a supply chain requirement to modernise and fulfil orders to urban areas nationally. The Company believes that current supply cannot meet the changing patterns of consumer demand and has therefore constructed a portfolio to benefit from this secular growth.

Regionally, the East Midlands saw the strongest take-up in 2019, accounting for 37.0% of total take-up. Meanwhile take-up in the South East and East Midlands represented 61.7% of total logistics take-up in the UK last year (source: CBRE Q4 2019 Logistics Market Summary). The Company is well represented in these areas.

In terms of occupier interest, the distribution and online sectors together accounted for 44.8% of take-up in the year, which is a trend that has continued for several years now.

Speculative building is continuing across the Midlands, particularly in the 'big box' space of over 400,000 sq. ft.

The Company, however, owns real estate in the urban logistics sub-sector of the UK commercial property market, with each property below 200,000 sq. ft. Supply in the 20,000-200,000 sq. ft. logistics space has fallen by 36.0% since 2012 with land being lost to higher value uses, meaning the Company is well positioned.

The Company's investment proposition is particularly focused on last mile warehousing and parcel depots. These facilities principally operate business-to-business delivery of domestic goods, such as food or pharmaceuticals. The UK continues to be one of the fastest growing adopters of online retail sales and there is a requirement for tenants to develop their e-fulfilment capability accordingly. As such, key geographic regions across the UK are seeing buoyant leasing activity.

The Company also sees a strong market for local delivery driven by 10% expected population growth across major UK conurbations by 2038 (source: Savills). Savills also forecasts that growth of online retail could account for up to 25% of all retail sales by 2022, creating yet more demand for distribution warehousing.

The Company's focus will be to continue acquiring assets and implementing asset management initiatives with a focus on rental growth in light of the current market dynamic of diminishing supply and increasing occupier demand.

Portfolio update

As at 7 February 2020, the average size of the properties in the portfolio was 54,313 sq. ft.

Portfolio as at 7 February 2020

Property	Location	Month of Acquisition	Acquisition Cost (£m)¹	Net book value (£m)²	Rent (£m)³
Interlink Business Park	Bardon	Apr 16	£6.00	£7.50	£0.36
Edison Road	Bedford	Apr 16	£2.68	£4.35	£0.17
Elm Farm Industrial Estate	Bedford	Apr 16	£1.68	£3.75	£0.24
Caxton Road	Bedford	Apr 16	£1.10	£1.99	£0.09
Edison Road	Bedford	Apr 16	£1.25	£2.44	£0.13
Regent House	Bedford	Apr 16	£2.85	£5.93	£0.40
Riverside Way	Northampton	Apr 16	£0.75	£0.93	£0.07
Park Road	Chesterfield	Jan 17	£4.66	£5.60	£0.43
Bruntcliffe Way	Leeds	Mar 17	£6.05	£5.95	£0.60
Haverhill Business Park	Haverhill	Sep 17	£4.09	£5.97	£0.38
Haverhill Business Park	Haverhill	Sep 17	£14.15	£21.58	£0.95
Hope Carr	Leigh	Sep 17	£3.34	£3.57	£0.28
Legbrannock Road	Motherwell	Sep 17	£2.42	£2.92	£0.34
Dodwells Road	Hinckley	Sep 17	£3.28	£3.28	£0.29
Pontfract Road	Normanton	Sep 17	£6.11	£6.10	£0.48
Belcon Industrial Estate	Hoddesdon	Sep 17	£3.95	£5.23	£0.24
Belcon Industrial Estate	Hoddesdon	Sep 17	£1.48	£1.68	£0.07
Radclive Road	Buckingham	Dec 17	£6.29	£9.00	£0.50
Wagonway Road	Hebburn	Dec 17	£3.16	£3.32	£0.23
Hellesdon Park	Norwich	Dec 17	£2.18	£2.25	£0.14
Greenfold Way	Leigh	Dec 17	£7.15	£8.00	£0.51
Astmoor Industrial Estate	Runcorn	Dec 17	£8.08	£8.00	£0.58
Moulton Park	Northampton	Dec 17	£3.03	£3.10	£0.21
Cotes Park Industrial Estate	Alfreton	Jul 18	£8.90	£9.23	£0.59
Meridian Business Park	Leicester	Jul 18	£6.30	£6.35	£0.42
Crow Lane Industrial Estate	Northampton	Jul 18	£4.30	£4.60	£0.24
Don Road	Sheffield	Sep 18	£3.45	£3.52	£0.23
Burryport Road	Northampton	Sep 18	£3.80	£3.90	£0.23
Glaisdale Parkway	Nottingham	Sep 18	£9.25	£9.30	£0.57
Hudson Road	Bedford	Dec 18	£12.00	£16.00	£1.10
Aylesford Way	Thatcham	Apr 19	£3.40	£3.40	£0.21
Bonham Drive	Sittingbourne	Jun 19	£1.90	£1.90	£0.12
Walworth Industrial Estate	Andover	Sep 19	£1.57	£1.58	£0.16
Bermuda Industrial Estate	Nuneaton	Sep 19	£3.09	£3.10	£0.20
Marley Industrial Estate	Leighton Buzzard	Sep 19	£2.16	£2.20	£0.16
Rogerstone	Newport	Sep 19	£1.59	£1.60	£0.12
Inveralmond Estate	Perth	Sep 19	£0.63	£0.78	£0.08
Lee Mill Industrial Estate	Plymouth	Sep 19	£0.83	£0.85	£0.06
Total			£158.87	£190.74	£12.20

¹ Excludes purchaser costs

² Excludes development land of £4.3m. Net book value as at 30 September 2019  

^3.Based on contracted rent as at 30 September 2019

CBRE independently valued the portfolio as at 30 September 2019 in accordance with the RICS Valuation - Professional Standards. The portfolio's market value as at 30 September 2019 was £195.0 million, compared with the assets' combined purchase price of £162.7 million, excluding purchaser costs. This represents an increase of £32.4 million, or 19.9% on the aggregate purchase price.

Trading update

In the current financial year, since 1 April 2019, the Company has acquired logistics properties in the south east of England (Thatcham and Sittingbourne) let to DHL Parcel UK, and acquired a portfolio of properties let to Tuffnells Express Limited on a 20 year leaseback with an annual gross rent of £0.8 million. The acquisition costs (excluding purchaser costs) totalled £15.2 million and had a blended net initial yield of 6.6%.

The Company has also sold three properties in Nuneaton, Bedford and Dunstable for £18.4 million, which represented an average disposal net initial yield of 4.9% and realising an aggregated return of 49.7%.

The Manager has recently settled four rent reviews, representing like-for-like income growth of 38% or £0.35 million per annum. There are also two forthcoming rent reviews, one of which is potentially significant. The other rent review is less material and is expected to complete in this financial year.

The Company otherwise continues its active asset management programme and is currently engaged in capital expenditure across its sites in Bedford, one property is being re-configured and another is about to undergo a complete refurbishment with an extension of 22,000 sq. ft. currently contemplated.

Details of the Issue

The Issue Price represents a discount of approximately 7.7% to the closing mid-market price of 149.0 pence per Ordinary Share on 7 February 2020 (being the last practical date prior to the announcement of the Placing) and represents a nil premium/discount to the adjusted EPRA NAV per share of 137 pence as at 30 September 2019¹ (adjusted for dividends of 3.75 pence per share declared and paid since 30 September 2019, the Special Dividend of 3.85 pence per share and 4.19 pence per share relating to the proposed early crystallisation of the LTIP for the period ending 30 September 2020 plus 4.06 pence per share of unaudited accrued EPRA earnings per share for the period from 1 October 2019 to Admission).

¹Unaudited.

The Issue is conditional, inter alia, upon the approval of the Issue by Shareholders at a general meeting of the Company which is expected to be convened for 10.00 a.m. on 9 March 2020 at 4 More London Riverside, London SE1 2AU and upon Admission of the New Ordinary Shares to trading on AIM. It is expected that Admission of the New Ordinary Shares will occur on or around 11 March 2020.

The New Ordinary Shares issued pursuant to the Issue will, when issued, be credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares including the right to receive all dividends and other distributions declared, made or paid after their date of issue. For the avoidance of doubt, the New Ordinary Shares issued pursuant to the Issue will not be eligible to receive the Special Dividend.

The Placing

The Company is targeting a placing of 72,727,273 New Ordinary Shares with new and existing investors at the Issue Price (the "Placing Shares"). N+1 Singer and Panmure Gordon, as placing agents of the Company, will use their reasonable endeavours to place the Placing Shares with institutional investors at the Issue Price. The Directors reserve the right, in conjunction with the Joint Bookrunners and the Manager to increase the size of the Placing to a maximum of 145,454,546 Placing Shares.

The Placing will be conducted by way of a bookbuilding process which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in Appendix 1 below, and is expected to close at 1.00 p.m. on 14 February 2020. The Joint Bookrunners, in consultation with the Company, reserve the right to close the bookbuilding process earlier or later at their discretion.

Details of the number of Placing Shares and the approximate gross proceeds of the Placing will be announced as soon as practicable after the closing of the Placing. 

The Placing is not being underwritten and the Placing Shares are not subject to clawback under, or conditional upon, the Open Offer or the Offer for Subscription.

The Open Offer

The Directors recognise the importance of pre-emption rights to Shareholders and, consequently, shortly following announcing the results of the Placing, will invite Qualifying Shareholders to participate in the proposed issue of New Ordinary Shares by way of the Open Offer. The Open Offer will provide Qualifying Shareholders with an opportunity to participate in the Issue by subscribing for their Basic Entitlements and Excess Entitlements.

Qualifying Shareholders will be given the opportunity to subscribe for Open Offer Shares under the Open Offer at the Issue Price, payable in full on application and free of all expenses, pro rata to their existing shareholdings on the following basis:

1 Open Offer Share for every 18 Existing Ordinary Shares

held by Qualifying Shareholders and registered in their name at the Record Date.

Open Offer Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to Open Offer Shares will be aggregated and made available under the Excess Application Facility and the Offer for Subscription. Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating their Basic Entitlement.

If Qualifying Shareholders sell or otherwise transfer all of their Existing Ordinary Shares on or after the 'ex-entitlement' date, they will not be entitled to participate in the Open Offer but may still be entitled to participate in the Offer for Subscription.

The Open Offer is not a rights issue. Qualifying CREST Shareholders should note that, although the Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Qualifying Non-CREST Shareholders should note that the Open Offer Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders should be aware that under the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer.

Further details of the Open Offer and the terms and conditions on which the Open Offer is being made, including the procedure for application and payment, will be set out in the Circular which is expected to be published on or around 18 February 2020 following announcement of the result of the Placing.

Qualifying Shareholders will also be given the opportunity, provided that they take up their Basic Entitlements in full, to apply for Excess Entitlements through the Excess Application Facility.

Excess Application Facility

The Excess Application Facility will enable Qualifying Shareholders, provided that they take up their Basic Entitlements in full, to apply for Excess Entitlements. Shareholders who do not qualify for Basic Entitlements cannot participate in the Open Offer under the Excess Application Facility.

The Offer for Subscription

The Company has agreed, in conjunction with the Open Offer, to make an offer of New Ordinary Shares in the United Kingdom pursuant to the Offer for Subscription at the Issue Price, subject to the terms and conditions under the Offer for Subscription.

Further information on the Offer for Subscription and the terms and conditions of the Offer for Subscription, including the procedure for application and payment, will be set out in the Circular.

Basis of allocation under the Issue

The Placing Shares are not subject to clawback and are not part of the Open Offer or the Offer for Subscription. The Open Offer is being made on a pre-emptive basis to Qualifying Shareholders. Any Ordinary Shares available under the Open Offer that are not taken up by subscriptions by Qualifying Shareholders under their Basic Entitlements will be available under the Excess Application Facility and the Offer for Subscription.

Scaling back and allocation

The maximum number of New Ordinary Shares in aggregate available under the Open Offer and Offer for Subscription is 4,875,089. Subject always to satisfying applications by Qualifying Shareholders in full up to their Basic Entitlement, in the event that the Open Offer and Offer for Subscription is oversubscribed it would be necessary to scale back applications under the Excess Application Facility and Offer for Subscription. The Company reserves the right to scale back applications under the Excess Application Facility and the Offer for Subscription on such basis that the Company (in consultation with N+1 Singer and Panmure Gordon) considers appropriate, in its absolute discretion. The Company reserves the right to decline in whole or in part any application for New Ordinary Shares pursuant to the Open Offer and/or Offer for Subscription.

Other information relating to the Issue

The placing of the Placing Shares and the issue of the Open Offer Shares and the Subscription Shares are conditional, inter alia, upon:

• the approval of Resolutions 1 and 2 at the General Meeting of the Company expected to be held at 10.00 a.m. on 9 March 2020;

• the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms; and

• Admission of the Placing Shares, the Open Offer Shares and the Subscription Shares to trading on AIM. It is expected that Admission of the New Ordinary Shares will occur on 11 March 2020.

Participation in the Issue by the Directors

The following Directors intend to subscribe for New Ordinary Shares pursuant to the Issue as outlined below.

Director	No. of New Ordinary Shares being subscribed pursuant to the Issue	Resulting holding of Ordinary Shares	% of Enlarged Share Capital*
Nigel Rich	110,000	335,536	0.20
Bruce Anderson	4,446	50,000	0.03

Pacific Industrial LLP will be issued 1,809,607 Ordinary Shares following the issue of the LTIP Shares and Richard Moffitt, Mark Johnson and Christopher Turner are members of the LLP and will therefore have an interest in such shares.

*Assuming 79,411,969 New Ordinary Shares are issued pursuant to the Issue and the LTIP.

Management Incentivisation Arrangements

The Board believes that the success of the Company depends, in part, on the future performance of the Manager. The Directors also recognise the importance of ensuring that the Pacific Group and the Management Team are incentivised and identify closely with the long-term success of the Company, in alignment with the Shareholders.

As the Company looks to further expand its institutional investor base, the Board has undertaken a review of the Company's management incentive arrangements. As a result of this process, and subject to completion of the Issue, the management arrangements will be amended as follows:

Annual management fee

Under the current management arrangement, the Manager receives a management fee of 0.95% per annum of the Group's EPRA NAV, payable quarterly in arrears.

Subject to completion of the Issue, the Company and the Manager have agreed a new management fee such that the Company will pay to the Manager the following fees, payable quarterly in arrears:

• 0.95% per annum of the Group's EPRA NAV up to, and including, £250 million;

• 0.90% per annum of the Group's EPRA NAV in excess of £250 million and up to and including £500 million; and

• 0.85% per annum of the Group's EPRA NAV in excess of £500 million.

Existing LTIP

The existing LTIP, the terms of which were announced on 14 July 2017, has an EPRA NAV element and a share price element and would have been assessed on: (i) 30 September 2020 (the "First Calculation Date") and (ii) 30 September 2023 (the "Second Calculation Date"). The EPRA NAV element is 10.0% of the excess of the EPRA NAV per Ordinary Share return, over an annualised 9.0% hurdle (adjusted for all distributions per share including inter alia dividends), multiplied by the number of Ordinary Shares in issue at the relevant calculation date. The share price element is 10.0% of the excess of the share price return, over an annualised 9.0% hurdle (adjusted for all distributions per share including inter alia dividends), multiplied by the number of Ordinary Shares in issue at the relevant calculation date.

Following consultation with the Joint Bookrunners and subject to completion of the Issue, the Company and Manager have agreed to the early crystallisation of the existing LTIP which would have become due as at First Calculation Date in order to support the Issue. The parties have agreed to bring forward the First Calculation Date to 7 February 2020 (the last practicable date prior to the publication of this announcement) (the "Revised First Calculation Date"), resulting in the payment of c.£3.68 million by the Company to the Manager, equivalent to 4.19 pence per existing Ordinary Share. The payment of the LTIP will be satisfied by the issue of 1,809,607 new Ordinary Shares ("LTIP Shares") (which will be subject to a 12 month lock-up) and c.£1.1 million in cash paid to Pacific Industrial LLP (an affiliate of the Manager).

Subject to completion of the Issue, application will be made for admission of the LTIP Shares to trading on AIM which is expected to occur on 11 March 2020.

Amendment to the LTIP

Subject to completion of the Issue, the Company and the Manager have agreed to amend how the LTIP is assessed for the period from the Revised First Calculation Date to the Second Calculation Date. The principal changes are as follows:

• an increase in the EPRA NAV hurdle and the share price hurdle from 9% to 10%;

• the excess return on both elements of the LTIP payable to the Manager shall be reduced from 10% to 5%;

• in order to allow the LTIP to better deal with additional capital raises (should they arise) the LTIP will been amended so that it shall be calculated by reference to the total value created as follows:

• the excess EPRA NAV return payable to the Manager shall be calculated by reference to the increase in the Company's EPRA NAV (adjusted for any new issue of shares) from the Revised First Calculation Date to the Second Calculation Date rather than by reference to an increase in the EPRA NAV per Ordinary Share; and

• the excess share price return payable to the Manager shall be calculated by reference to the increase in the market capitalisation of the Company (adjusted for any new issue of shares) from the Revised First Calculation Date to the Second Calculation Date rather than by reference to an increase in the market price of an Ordinary Share; and

• the LTIP payment shall be capped at three times the average annual management fees paid from 7 February 2020 to the Second Calculation Date.

As a result of the above changes:

• the EPRA NAV element would be 5.0% of the amount by which the Company's EPRA NAV at the Second Calculation Date exceeds the Company's EPRA NAV as at the Revised First Calculation Date and an annualised 10.0% hurdle thereon (adjusted for any new issue of shares, all distributions including inter alia dividends and any returns of capital), and

• the share price element would be 5.0% of the amount by which the market capitalisation of the Company at the Second Calculation Date exceeds the market capitalisation of the Company as at the Revised First Calculation Date and an annualised 10.0% hurdle thereon (adjusted for any new issue of shares, all distributions including inter alia dividends and any returns of capital).

If there is a change of control, the LTIP will continue to be assessed by applying the relevant offer value to the EPRA NAV element and the share price element calculations at the date of the change of control.

The LTIP will be paid in shares and/or, at the Board's discretion, cash.

Related party transactions

The amendment to the management fee, the early crystallisation of the LTIP and the variation of the LTIP (each as described above) are considered to be related party transactions for the purposes of the AIM Rules. The independent Directors, having consulted with N+1 Singer Advisory LLP, consider the terms of the related party transaction fair and reasonable insofar as the Company's shareholders are concerned.

Other Company matters

The Directors consider that the current external management structure of the Company has worked well to date and provided a cost-effective and appropriate service for a company of this size. In addition, the Directors believe the performance of the Company since its flotation has been excellent. However as the Company grows in size, the Directors will keep the management structure under review and consider whether the Company and its shareholders may benefit from an internalised management structure. The Directors will also consider the benefits of a Main Market listing on the London Stock Exchange.

The Nominations Committee of the Board met on 6 February 2020 and agreed to instigate a process to appoint a further independent non-executive director.

Circular

The Circular, providing further details of the Issue and Admission and convening the General Meeting at which the Directors are seeking authority to, inter alia, disapply pre-emption rights in respect of the Issue is expected to be posted to Shareholders on 18 February 2020 following announcement of the results of the Placing.

The Circular will be made available on the Company's website https://www.urbanlogisticsreit.com/.

Expected timetable of principal events

Latest time and date for commitments under the Placing	1.00 p.m. on 14 February 2020
Announcement of results of the Placing	17 February 2020
Publication of the Circular including the dispatch of the Form of Proxy, Open Offer Application Form and Offer for Subscription Application Form to Qualifying non-Crest Shareholders	on or around 18 February 2020
General Meeting	10.00 a.m. on or around 9 March 2020
Admission and dealings in the New Ordinary Shares commence	8.00 a.m. on or around 11 March 2020

Each of the times and dates above refer to London time and are subject to change by the Company. Any such change will be notified to shareholders by an announcement on a Regulatory Information Service. The Circular will contain further details of the expected timetable for the Placing, Open Offer and Offer for Subscription and the General Meeting.

Enquiries

Urban Logistics REIT plc Richard Moffitt	[phone]
Montfort - Financial PR and IR adviser Olly Scott	[phone]
N+1 Singer - Nominated Adviser and Joint Bookrunner James Maxwell / James Moat (Corporate Finance) Alan Geeves / James Waterlow / Sam Greatrex (Sales)	[phone]
Panmure Gordon (UK) Limited - Joint Bookrunner Chloe Ponsonby (Corporate Broking) Emma Earl (Corporate Finance) David Hawkins / Tom Scrivens (Sales)	[phone]

DEFINITIONS

The following definitions apply throughout this Announcement, unless the context requires otherwise:

Admission	the admission of the Placing Shares to be issued pursuant to the Placing, together with any Ordinary Shares to be issued pursuant to the Open Offer and Offer for Subscription and the LTIP, to trading on AIM in accordance with the AIM Rules
AIFMD	the Directive 2011/61/EU of the European Parliament and of the Council on Alternative Investment Fund Managers, as amended
AIM	the market of that name operated by the London Stock Exchange
AIM Rules	the AIM Rules for Companies published by the London Stock Exchange governing admission to and trading on AIM, as may be amended from time to time
AIM Rules for Nominated Advisers	the AIM Rules for Nominated Advisers published by the London Stock Exchange setting out the eligibility, on-going obligations and certain disciplinary matters in relation to nominated advisers, as may be amended from time to time
Articles	the articles of association of the Company
Basic Entitlement(s)	the pro rata entitlement to subscribe for Open Offer Shares, allocated to a Qualifying Shareholder pursuant to the Open Offer
Board	the board of directors of the Company
CBRE	CBRE Limited, a company registered in England and Wales with company number 03536032, in its capacity as the Company's independent valuer
certificated or in certificated form	the description of a share or security which is not in uncertificated form (that is, not in CREST)
Company	Urban Logistics REIT plc of 124 Sloane Street, London SW1X 9BW
CREST	the relevant systems for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear in accordance with the CREST Regulations
CREST Regulations	the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), including (i) any enactment or subordinate legislation which amends or supersedes those regulations and (ii) any applicable rules made under those regulations for the time being in force
Directors	the directors of the Company
Distribution	a disposal or transfer (however effected) by a person of his rights to a Distribution from the Company such that he is not beneficially entitled (directly or indirectly) to such a Distribution and no person who is so entitled subsequent to such disposal or transfer (whether the immediate transferee or not) is (whether as a result of the transfer or not) a Substantial Shareholder
EEA	the European Economic Area
EPRA NAV per Ordinary Share	Net Asset Value, adjusted to exclude interest rate derivatives, divided by the number of Ordinary Share in issue at the balance sheet date
Euroclear	Euroclear UK & Ireland Limited, the operator of CREST
Excess Application Facility	the facility pursuant to which Qualifying Shareholders may apply to subscribe for such number of Open Offer Shares in excess of their Basic Entitlements
Excess Entitlement(s)	in respect of each Qualifying Shareholder, the entitlement (provided that the Qualifying Shareholder has agreed to take up its Basic Entitlement in full) to apply for Open Offer Shares in excess of the Basic Entitlement but not in excess of the total number of Open Offer Shares, allocated to a Qualifying Shareholder pursuant to the Open Offer
Excluded Territory	Canada, Japan, Australia, New Zealand, the Republic of South Africa, any Member State of the EEA (save for any Member State where Placing Shares may lawfully be marketed under any applicable legislation implementing the AIFMD) and the U.S. and any jurisdiction where the extension or availability of the Placing (and any other transaction contemplated thereby) would breach any applicable laws or regulations, and "Excluded Territories" shall mean any of them
Existing Ordinary Shares	the Ordinary Shares in issue as at the date of this announcement
FCA	the Financial Conduct Authority
Form of Proxy	the form of proxy for use by Shareholders in connection with the General Meeting
FSMA	the Financial Services and Markets Act 2000, as may be amended from time to time
General Meeting	the general meeting of the Company at which the Resolutions will be proposed and expected to be convened for 10.00 a.m. on 9 March 2020 (or any adjournment or postponement thereof)
Group	the Company, together with its subsidiaries and subsidiary undertakings
IPO	the initial admission of the entire issued ordinary share capital of the Company to trading on AIM, which took place on 13 April 2016
Issue	the Placing, the Open Offer and the Offer for Subscription
Issue Price	£1.375 per New Ordinary Share
Joint Bookrunners	N+1 Singer and Panmure Gordon
Libor	the London Interbank Offered Rate, being the average rate of interest that leading banks in London charge when lending to other banks
London Stock Exchange	London Stock Exchange plc
LTIP	the long-term incentive plan for the benefit of PIML as described in this announcement
LTIP Shares	the 1,809,607 New Ordinary Shares to be issued pursuant to the LTIP
Management Team	Richard Moffitt and Christopher Turner
Manager	Pacific Capital Partners Limited, a company registered in England and Wales with company number 02849777, the manager to the Company
Member State	a sovereign state which is a member of the European Union
N+1 Singer	Nplus1 Singer Advisory LLP, acting as the Company's nominated adviser and joint bookrunner in relation to the Issue
Net Asset Value or NAV	the net asset value of the Company as calculated in accordance with the Company's accounting policies
Net Initial Yield	annualised current passing rent less non-recoverable property expenses such as empty rates, divided by the property valuation plus notional purchaser's costs
New Ordinary Shares	the Placing Shares, the Open Offer Shares, the Subscription Shares and the LTIP Shares
Offer for Subscription	the offer for subscription of Subscription Shares at the Issue Price on the terms and subject to the conditions set out in the Circular
Official List	the official list maintained by the FCA
Open Offer	the conditional invitation by the Company to Qualifying Shareholders to apply for the Open Offer Shares at the Issue Price on the terms and subject to the conditions set out in the Circular and, in the case of the Qualifying Non-CREST Shareholders only, the Open Offer Application Form
Open Offer Application Form	the application form accompanying the Circular to be used by Qualifying Non-CREST Shareholders in connection with the Open Offer
Open Offer Entitlements	an entitlement to subscribe for Open Offer Shares, allocated to a Qualifying Shareholder under the Open Offer (and, for the avoidance of doubt, references to Open Offer Entitlements include Basic Entitlements and Excess Entitlements)
Open Offer Shares	up to 4,875,089 Ordinary Shares to be allotted and issued to Qualifying Shareholders under the Open Offer conditional inter alia on the passing of Resolutions 1 and 2
Ordinary Shares	ordinary shares of £0.01 each in the capital of the Company
Overseas Shareholders	Shareholders with registered addresses outside the UK or who are citizens of, incorporated in, registered in or otherwise resident in, countries outside the UK
PID or Property Income Distribution	the distribution by the Company of the profits of the Group's Property Distribution Rental Business, including distributions received by the Group from other UK REITs, by way of a dividend in cash or the issue of share capital in lieu of a cash dividend in accordance with Section 530 of the CTA 2010
PIML	Pacific Investments Management Limited, a company registered in England and Wales with company number 01722436
Pacific Group	PIML and its affiliates
Panmure Gordon	Panmure Gordon (UK) Limited, acting as the Company's joint bookrunner in relation to the Issue
Placee	any person to whom the offer of New Shares may be lawfully communicated (including individuals, funds or otherwise) by whom or on whose behalf a commitment to subscribe for Placing Shares has been given
Placing	the conditional placing of the Placing Shares at the Placing Price on the terms and subject to the conditions set out in this announcement
Placing Agreement	the Placing Agreement dated on or around the date of this announcement between the Company (1) N+1 Singer (2) Panmure Gordon (3) the Manager (4) and PIML (5) relating to the Issue
Placing Price	means 137.5 pence per Placing Share
Placing Shares	the New Ordinary Shares which are proposed to be placed in accordance with the terms of the Placing
Property Rental Business	the qualifying property rental business in the UK and elsewhere of UK resident companies within a REIT and non-UK resident companies within a REIT with a UK qualifying property rental business
Prospectus Regulation	Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC
Prospectus Regulation Rules	the Prospectus Regulation Rules made by the FCA under Part VI of FSMA
Qualifying CREST Shareholders	Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are held in uncertificated form
Qualified Investor	a qualified investor within the meaning of Article 2(e) of the Prospectus Regulation
Qualifying Non-CREST Shareholders	Qualifying Shareholders whose Existing Ordinary Shares on the registers of members of the Company on the Record Date are held in certificated form
Qualifying Shareholders	holders of Existing Ordinary Shares on the register of members of the Company at the Record Date with the exception of Shareholders resident in or citizens of any Open Offer Restricted Jurisdiction
Receiving Agent	Computershare Investor Services PLC
Record Date	6.00 p.m. on 17 February 2020 being the latest time by which transfers of Existing Ordinary Shares must be received for registration by the Company in order to allow transferees to be recognised as Qualifying Shareholders
REIT	a Real Estate Investment Trust as defined in Part 12 of the CTA 2010
Regulatory Information Service	a regulated information service approved by the FCA and on the list of Regulatory Information Services maintained by the FCA
Regulation S	Regulation S promulgated under the Securities Act, as amended from time to time
Resolutions	the resolutions to be set out in the notice of General Meeting
Securities Act	the US Securities Act of 1933, as amended
SDLT	stamp duty land tax
Shareholders	holders of Ordinary Shares
Special Dividend	a special dividend of 3.85 pence per share in respect of the financial year ending 31 March 2020, expected to be declared at the time the Company announces the results of the Placing
Sterling or £	the lawful currency of the United Kingdom
Subscription Shares	the New Ordinary Shares which are proposed to be offered in accordance with the terms of the Offer for Subscription
Substantial Shareholder	any person whose interest in the Company, whether legal or beneficial, direct or indirect, may cause the Company to be liable to pay tax under Section 551 of CTA 2010 (as such legislation may be modified, supplemented or replaced from time to time) on or in connection with the making of a Distribution to or in respect of such person including, at the date of adoption of the Articles, any holder of excessive rights as defined in Section 553 of CTA 2010
Substantial Shareholding	the shares in relation to which or by virtue of which (in whole or in part) a person is a Substantial Shareholder
UK or United Kingdom	the United Kingdom of Great Britain and Northern Ireland
U.S. or United States	the United States of America, its states, territories and possessions, including the District of Columbia
U.S. Investment Company Act	the U.S. Investment Company Act of 1940, as amended
U.S. Person	has the meaning given in Regulation S

IMPORTANT NOTICE

This announcement contains inside information for the purposes of Article 7 of MAR. Upon publication of this announcement, the inside information is now considered to be in the public domain for the purposes of MAR. The person responsible for arranging the release of this announcement on behalf of the Company is Pacific Capital Partners Limited.

The contents of this announcement, which have been prepared and issued by, and are the sole responsibility of the Company, have been approved by the Manager solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 ("FSMA").

The information contained in this announcement is for information purposes only and does not purport to be full or complete. The information contained in this announcement is given at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment from time to time. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

This announcement is directed only at persons in the United Kingdom who: (a) are Professional Investors (within the meaning of the Alternative Investment Fund Managers Directive (2011/61/EU)) (b) have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (c) fall within article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc) of the Order; or (d) are persons to whom it may otherwise be lawfully communicated.

This announcement has been issued by, and is the sole responsibility of, the Company. No undertaking, representation, warranty or other assurance, express or implied, is made or given by or on behalf of the Company or any member of the Company's group, Pacific Investments Management Limited, the Manager, Nplus 1 Singer Advisory LLP ("N+1 Singer"), Panmure Gordon (UK) Limited ("Panmure Gordon") or Kinmont Limited ("Kinmont") or any of their respective directors, officers, partners, employees, agents or advisers or any other person as to the accuracy or completeness of the information or opinions contained in this announcement and no responsibility or liability is accepted by any of them for any such information or opinions or for any errors, omissions or misstatements, negligence or otherwise in this announcement.

N+1 Singer, which is a member of the London Stock Exchange, is authorised and regulated in the UK by the Financial Conduct Authority ("FCA") and is acting as nominated adviser and joint broker to the Company. N+1 Singer is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of this announcement or on any transaction or arrangement referred to in this announcement. N+1 Singer's responsibilities as the Company's nominated adviser under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company, any director of the Company or to any other person. No representation or warranty, express or implied, is made by N+1 Singer as to, and no liability is accepted by N+1 Singer in respect of, any of the contents of this announcement.

Panmure Gordon is authorised and regulated in the UK by the FCA and is acting as joint broker to the Company. Panmure Gordon is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of this announcement or on any transaction or arrangement referred to in this announcement. No representation or warranty, express or implied, is made by Panmure Gordon as to, and no liability is accepted by Panmure Gordon in respect of, any of the contents of this announcement.

Kinmont Limited ("Kinmont") is authorised and regulated in the UK by the FCA and is acting as financial adviser to the Company. Kinmont is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of this announcement or on any transaction or arrangement referred to in this announcement. No representation or warranty, express or implied, is made by Kinmont as to, and no liability is accepted by Kinmont in respect of, any of the contents of this announcement.

The information in this announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of applicable securities laws and regulations of other jurisdictions.

This announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events and the Company's future financial condition and performance. These statements, which sometimes use words such as "aim", "anticipate'', "believe", "may", "will", "should", "intend", "plan", "assume'', "estimate", "expect' (or the negative thereof) and words of similar meaning, reflect the current beliefs and expectations of the directors of the Company and/or the Manager and involve known and unknown risks, uncertainties and assumptions, many of which are outside the Company's control and difficult to predict, that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. The information contained in this announcement speaks only as of the date of this announcement and is subject to change without notice and the Company does not assume any responsibility or obligation to, and does not intend to, update or revise publicly or review any of the information contained to this announcement, whether as a result of new information, future events or otherwise, except to the extent required by the FCA, the London Stock Exchange or by applicable law.

Any information in this announcement in respect of past performance (including without limitation past performance of the Company, its group, shares in the Company and/or the Company's portfolio) cannot be relied upon as a guide to future performance. The price of shares and the income from them may fluctuate upwards or downwards and cannot be guaranteed.

The acquisition of any potential investments by the Company is subject, among other things, to the Company completing satisfactory due diligence, successful negotiation of terms with vendors and the approval of the directors of the Company. There can be no guarantee that any of the potential investments described in this announcement will be completed. All information relating to the potential investments described in this announcement are indicative, subject to detailed due diligence and may subsequently change as a result.

Appendix - Terms and Conditions of the Placing

INTRODUCTION

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING.

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, AND THE INFORMATION IN IT, IS RESTRICTED, AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART TO U.S. PERSONS OR, IN OR INTO THE UNITED STATES, THE EXCLUDED TERRITORIES OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

THE PLACING SHARES THAT ARE THE SUBJECT OF THE PLACING ARE NOT BEING OFFERED OR SOLD TO ANY PERSON IN THE EUROPEAN UNION OR THE UK, OTHER THAN TO QUALIFIED INVESTORS, WHICH INCLUDES LEGAL ENTITIES WHICH ARE REGULATED BY THE FCA OR ENTITIES WHICH ARE NOT SO REGULATED WHOSE CORPORATE PURPOSE IS SOLELY TO INVEST IN SECURITIES.

MEMBERS OF THE PUBLIC IN THE UK OR ELSEWHERE ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) QUALIFIED INVESTORS; (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) FALL WITHIN ARTICLE 19(5) OF THE ORDER, FALL WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER; OR ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED AND (II) ARE A "PROFESSIONAL CLIENT" OR AN "ELIGIBLE COUNTERPARTY" WITHIN THE MEANING OF CHAPTER 3 OF THE FCA'S CONDUCT OF BUSINESS SOURCEBOOK; OR (C) OTHER PERSONS TO WHOM IT MAY LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

THIS APPENDIX, AND THE ANNOUNCEMENT OF WHICH IT FORMS PART, IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. IF YOU ARE IN ANY DOUBT AS TO WHETHER YOU ARE A RELEVANT PERSON YOU SHOULD CONSULT A PROFESSIONAL ADVISER FOR ADVICE.

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, IS NOT AN OFFER FOR SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES. THE PRICE OF THE PLACING SHARES IN THE COMPANY AND THE INCOME FROM THEM (IF ANY) MAY GO DOWN AS WELL AS UP AND INVESTORS MAY NOT GET BACK THE FULL AMOUNT INVESTED ON DISPOSAL OF THE PLACING SHARES.

Placees will be deemed to have read and understood this announcement and these terms and conditions in their entirety and to be making such offer on the terms and conditions and to be providing the representations, warranties, acknowledgements, and undertakings contained in this Appendix. In particular, each such Placee represents, warrants and acknowledges that:

1.   it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

2.   in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation, (i) the Placing Shares acquired by it have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the EEA or the UK other than Qualified Investors or in circumstances in which the prior consent of the Joint Bookrunners has been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in any Member State of the EEA or the UK other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Regulation as having been made to such persons; and/or

3.   (i) (1) it is not a U.S. Person, (2) it is not located in the United States, and (3) it is not acquiring the Placing Shares for the account or benefit of a U.S. Person; or (ii) it is a dealer or other professional fiduciary in the United States acting for a discretionary account (other than an estate or trust) held for the benefit or account of a non U.S. person in reliance on Regulation S.

The Company, the Manager and the Joint Bookrunners will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements. Neither of the Joint Bookrunners makes any representation to any Placee regarding an investment in the Placing Shares referred to in this announcement (including this Appendix).

This announcement (including this Appendix) does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. This announcement (including this Appendix) and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, the Excluded Territories or in any jurisdiction in which such publication or distribution is unlawful. Persons who come into possession of this announcement are required by the Company to inform themselves about and to observe any restrictions of transfer of this announcement. No public offer of securities of the Company under the Placing is being made in the United Kingdom, the United States or any Excluded Territory.

In particular, the Placing Shares referred to in this announcement have not been and will not be registered under the Securities Act or under any laws of, or with any securities regulatory authority of, any state or other jurisdiction of the United States, and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, U.S. Persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction in the United States, and under circumstances that would not result in the Company being in violation of the U.S. Investment Company Act. The Placing Shares are only being offered and sold outside the United States in offshore transactions to persons who are not U.S. Persons in accordance with Regulation S under the Securities Act.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of any of the Excluded Territories. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the Excluded Territories or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the announcement of which it forms part should seek appropriate advice before taking any action.

DETAILS OF THE PLACING

The Joint Bookrunners have entered into the Placing Agreement with the Company, the Manager and PIM under which the Joint Bookrunners have, on the terms and subject to the conditions set out therein, undertaken to use their reasonable endeavours to procure, as agents for the Company, subscribers for the Placing Shares at the Placing Price.

The Placing Agreement contains customary warranties given by the Company, the Manager and PIM to the Joint Bookrunners as to matters relating to the Company and its business and a customary indemnity given by the Company to the Joint Bookrunners in respect of liabilities arising out of, or in connection with, the Placing.

The Joint Bookrunners (after consultation with the Company and the Investment Manager) reserve the right to scale back the number of Placing Shares to be subscribed by any Placee in the event of applications in excess of the target amount under the Placing. The Company and the Joint Bookrunners also reserve the right not to accept offers to subscribe for Placing Shares or to accept such offer in part rather than in whole. The Joint Bookrunners shall be entitled to effect the Placing by such method as they shall in their sole discretion determine. To the fullest extent permissible by law, neither of the Joint Bookrunners nor any holding company of a Joint Bookrunner nor any subsidiary branch or affiliate of a Joint Bookrunner (each an affiliate) nor any person acting on behalf of any of the foregoing shall have any liability to the Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither of the Joint Bookrunners, nor any affiliate thereof nor any person acting on their behalf shall have any liability to Placees in respect of their conduct of the Placing.

Each Placee's obligations will be owed to the Company and to the Joint Bookrunners. Following the confirmation referred to below in the paragraph entitled "Participation in, and principal terms of, the Placing", each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Joint Bookrunners, to pay to the Joint Bookrunners (or as the Joint Bookrunners may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares which such Placees has agreed to acquire.

Each Placee agrees to indemnify on demand and hold each of the Joint Bookrunners, the Company, the Manager and PIM and their respective affiliates harmless from any all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the acknowledgments, undertakings, representations, warranties and agreements set forth in these terms and conditions and any contract note.

The Placing is also conditional upon the Placing Agreement becoming unconditional and the Placing Agreement not being terminated in accordance with its terms. Further details of conditions in relation to the Placing are set out below in the paragraph entitled "Conditions of the Placing".

A Placee agrees to become a member of the Company and agrees to subscribe for those Placing Shares allocated to it by the Joint Bookrunners at the Placing Price, conditional on: (i) Admission occurring and becoming effective by 8.00 a.m. on 11 March 2020 (or such later time and/or date, not being later than 8.00 a.m. on 10 April 2020, as the Company, the Manager and the Joint Bookrunners may agree); (ii) the Placing Agreement becoming otherwise unconditional in all respects and not having been terminated in accordance with its terms on or before the date of Admission; and (iii) the Joint Bookrunners confirming to the Placees their allocation of Placing Shares.

To the fullest extent permitted by law, each Placee acknowledges and agrees that it will not be entitled to exercise any remedy of rescission at any time. This does not affect any other rights the Placee may have. Fractions of Placing Shares will not be issued.

APPLICATION FOR ADMISSION TO TRADING

Application will be made to the London Stock Exchange for Admission. It is expected that settlement of any such New Ordinary Shares (including the Placing Shares) and Admission will become effective on or around 8.00 a.m. on 11 March 2020 and that dealings in the New Ordinary Shares (including the Placing Shares) will commence at that time.

PAYMENT FOR SHARES

Each Placee has a separate, irrevocable and binding obligation to pay the Placing Price in cleared funds for the number of Placing Shares duly allocated to the Placee under the Placing in the manner and by the time directed by the Joint Bookrunners. If any Placee fails to pay as so directed and/or by the time directed, the relevant Placee's application for Placing Shares shall at the Joint Bookrunners' discretion either be rejected or accepted in which case the paragraph below entitled "Registration and Settlement" shall apply to such application.

PARTICIPATION IN, AND PRINCIPAL TERMS OF, THE PLACING

The Joint Bookrunners (whether through themselves or any of their affiliates) are arranging the Placing as placing agents of the Company for the purpose of using reasonable endeavours to procure Placees at the Placing Price for the Placing Shares.

Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Joint Bookrunners. The Joint Bookrunners and their affiliates may participate in the Placing as principal.

By participating in the Placing, Placees will be deemed to have read and understood this announcement, including this Appendix, in its entirety and to be participating and making an offer for Placing Shares on the terms and conditions, and to be providing the representations, warranties, acknowledgements, agreements and undertakings contained in this Appendix.

This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

The number of Placing Shares to be issued, and the extent of each Placee's participation in the Placing (which will not necessarily be the same for each Placee), will be agreed between the Joint Bookrunners, (following consultation with the Company and the Manager) following completion of the bookbuilding process in respect of the Placing (the "Bookbuild"). No element of the Placing will be underwritten. The aggregate number of Placing Shares will be announced on a Regulatory Information Service following completion of the Bookbuild.

A Placee's commitment to acquire a fixed number of Placing Shares under the Placing will be agreed orally with a Joint Bookrunner as agent of the Company. Each Placee's allocation will be confirmed to Placees orally or by email by the relevant Joint Bookrunner, and a form of confirmation or contract note will be dispatched as soon as possible thereafter. The oral or email confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of the Joint Bookrunners and the Company, under which it agrees to acquire the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the articles of incorporation of the Company.

Except as required by law or regulation, no press release or other announcement will be made by a Joint Bookrunner or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under the paragraph entitled "Registration and Settlement".

All obligations under the Placing will be subject to fulfilment or (where applicable) waiver of, amongst other things, the conditions referred to below and to the Placing not being terminated on the basis referred to below.

By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

To the fullest extent permissible by law, none of the Company, the Joint Bookrunners or any of their respective affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise under these terms and conditions). In particular, none of the Company, the Joint Bookrunners or any of their respective affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunners' conduct of the Placing. Each Placee acknowledges and agrees that the Company is responsible for the issue of the Placing Shares to the Placees and the Joint Bookrunners shall have no liability to the Placees for the failure of the Company to fulfil those obligations.

CONDITIONS OF THE PLACING

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

The Joint Bookrunners' obligations under the Placing Agreement in respect of the Placing Shares are conditional on, inter alia:

1.   the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement;

2.   Admission taking place not later than 8.00 a.m. on 11 March 2020 (or such later date as may be agreed in writing between the Company and the Joint Bookrunners); and

3.   the passing of certain required shareholder resolutions to be proposed at the general meeting of the Company to be held on or around 9 March 2020, or any adjournment thereof.

If (a) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by the Joint Bookrunners by the respective time or date where specified (or such later time or date as the Company and the Joint Bookrunners may agree not being later than 5.00 p.m. on 10 April 2020 (the "Final Date")); or (b) the Placing Agreement is terminated as described below, the Placing in relation to the Placing Shares will lapse and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

The Placing is not conditional on the Open Offer or the Offer for Subscription.

Subject to certain exceptions, the Joint Bookrunners may, at their absolute discretion and upon such terms as they think fit, waive, or extend the period (up to the Final Date) for, compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement. Any such extension or waiver will not affect Placees' commitments as set out in this announcement.

Neither the Joint Bookrunners nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Joint Bookrunners.

RIGHT TO TERMINATE UNDER THE PLACING AGREEMENT

Either Joint Bookrunner is entitled, at any time before Admission, to terminate the Placing Agreement by giving notice to the Company in certain circumstances, including, inter alia:

1.   the Company has failed to comply with any of its obligations under the Placing Agreement which is material in the context of the Issue and/or Admission; or

2.   any of the warranties given by the Company to the Joint Bookrunners under the Placing Agreement not being true or accurate or being misleading when given or deemed given or repeated or deemed repeated (by reference to the facts and circumstances in each case then existing) in a respect which is material in the context of the Issue and/or Admission.

Following Admission, the Placing Agreement is not capable of termination to the extent that it relates to the Placing of the Placing Shares.

The rights and obligations of the Placees shall terminate only in the circumstances described in these terms and conditions and in the Placing Agreement and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by a Joint Bookrunner of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of such Joint Bookrunner, and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise or decision not to exercise. Placees will have no rights against the Joint Bookrunners, the Company or any of their respective directors or employees under the Placing Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 (as amended).

NO PROSPECTUS

The Placing Shares are being offered to Relevant Persons only and will not be offered in such a way as to require a prospectus in the United Kingdom or elsewhere. No offering document or prospectus has been or will be submitted to be approved by the FCA in relation to the Issue (including the Placing) and Placees' commitments will be made solely on the basis of the information contained in this announcement (including this Appendix) and certain business and financial information the Company is required to publish in accordance with the AIM Rules and the rules and practices of the FCA (collectively "Exchange Information").

Each Placee, by accepting a participation in the Placing, agrees that the content of this announcement, including this Appendix, is exclusively the responsibility of the Company and confirms that it has not relied on any other information (other than the Exchange Information), representation, warranty, or statement made by or on behalf of the Company or a Joint Bookrunner or any other person and neither of the Joint Bookrunners nor the Company nor the Manager nor PIM nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

REGISTRATION AND SETTLEMENT

Settlement of transactions in the Placing Shares (ISIN: GB00BYV8MN78) following Admission will take place within CREST provided that, subject to certain exceptions, the Joint Bookrunners reserve the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that they deem necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or contract note stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to the relevant Joint Bookrunner (as agent for the Company) and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the CREST or certificated settlement instructions that it has in place with the relevant Joint Bookrunner.

It is expected that settlement in respect of the Placing Shares will be on or around 11 March 2020 on a T+2 basis in accordance with the instructions set out in the trade confirmation.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above Libor as determined by the relevant Joint Bookrunner.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Joint Bookrunners may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the relevant Joint Bookrunner's account and benefit (as agent for the Company), an amount equal to the aggregate amount owed by the Placee plus any interest due. Any excess proceeds will pass to the relevant Placee at its risk. The relevant Placee will, however, remain liable and shall indemnify the Joint Bookrunners on demand for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on the Joint Bookrunners all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which the Joint Bookrunners lawfully take in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation or contract note is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax or securities transfer tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

REPRESENTATIONS, WARRANTIES AND FURTHER TERMS

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) makes the following representations, warranties, acknowledgements, agreements and undertakings (as the case may be) to the Company and the Joint Bookrunners, namely that, each Placee (and any person acting on such Placee's behalf):

1.   represents and warrants that it has read and understood this announcement, including this Appendix, in its entirety and that its subscription of Placing Shares is subject to, and based upon, all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this announcement (including this Appendix);

2.   acknowledges that no offering document or prospectus has been prepared in connection with the placing of the Placing Shares and represents and warrants that it has not received a prospectus or other offering document in connection therewith;

3.   acknowledges that the Placing Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules (collectively the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that the Placee is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

4.   acknowledges that the content of this announcement (including this Appendix) is exclusively the responsibility of the Company, and that neither of the Joint Bookrunners, their affiliates or any person acting on their behalf has or shall have any liability for any information, representation or statement contained in this announcement (including this Appendix) or any information previously or concurrently published by or on behalf of the Company (including any Exchange Information), and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this announcement (including this Appendix) or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this announcement (including this Appendix) and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by a Joint Bookrunner, the Company, the Manager or PIM or any of their respective directors, officers or employees or any person acting on behalf of any of them (including with respect to the Company, the Placing, the Placing Shares or the accuracy, completeness or adequacy of any publicly available information), or, if received, it has not relied upon any such information, representations, warranties or statements, and neither of the Joint Bookrunners nor the Company nor the Manager nor PIM will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it may not place the same degree of reliance on this announcement as it may otherwise place on a prospectus or admission document. Each Placee further acknowledges and agrees that it has relied solely on its own investigation of the business, financial or other position of the Company and the terms of the Placing in deciding to participate in the Placing and it will not rely on any investigation that the Joint Bookrunners, their affiliates or any other person acting on their behalf has or may have conducted;

5.   represents and warrants that it has neither received nor relied on any confidential price sensitive information concerning the Company in accepting this invitation to participate in the Placing;

6.   acknowledges that the Joint Bookrunners do not have any duties or responsibilities to it, or its clients, similar or comparable to the duties of "best execution" and "suitability" imposed by the Conduct of Business Sourcebook in the FCA's Handbook of Rules and Guidance and that the Joint Bookrunners are not acting for it or its clients and that the Joint Bookrunners will not be responsible for providing protections to it or its clients;

7.   acknowledges that neither of the Joint Bookrunners, any of their affiliates or any person acting on behalf of them has or shall have any liability for any publicly available or filed information (including any Exchange Information) or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

8.   that, save in the event of fraud on the part of the relevant Joint Bookrunner (and to the extent permitted by the FCA), neither of the Joint Bookrunners, their respective ultimate holding companies nor any direct or indirect subsidiary undertakings of such holding companies, nor any of their respective directors and employees shall be liable to Placees for any matter arising out of either Joint Bookrunner's role as placing agent or otherwise in connection with the Placing and that where any such liability nevertheless arises as a matter of law, Placees will immediately waive any claim against any of such persons which it may have in respect thereof;

9.   represents and warrants that a) (i) it is not in the United States; (ii) it is not a U.S. Person; and (iii) it is not acting for the account or benefit of a U.S. Person or b) it is a dealer or other professional fiduciary in the United States acting for a discretionary account (other than an estate or trust) held for the benefit or account of a non U.S. Person in reliance on Regulation S;

10.  acknowledges that the Placing Shares are only being offered and sold outside the United States in offshore transactions to persons who are not U.S. Persons pursuant to Regulation S under the Securities Act, and the Placing Shares have not been and will not be registered under the Securities Act or under any laws of, or with any securities regulatory authority of, any state or other jurisdiction of the United States, and agrees not to reoffer, resell, pledge, transfer or deliver any Placing Shares, directly or indirectly, in the United States or to, or for the account or benefit of, U.S. Persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction in the United States;

11.  unless otherwise specifically agreed in writing with the Joint Bookrunners, represents and warrants that neither it nor the beneficial owner of such Placing Shares will be a resident of Excluded Territories;

12.  acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of Excluded Territories and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;

13.  represents and warrants that the issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares into a clearance system;

14.  represents and warrants that: (i) it has complied with and will continue to comply with its obligations under the Market Abuse Regulation (EU) No. 596/2014, Criminal Justice Act 1993 and Part VIII of the Financial Services and Markets Act 2000, as amended ("FSMA") and other applicable law; (ii) in connection with money laundering and terrorist financing, it has complied with its obligations under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) 2017 Regulations, and any other applicable law (where all such legislation listed under this (ii) shall together be referred to as the "AML Legislation"); and (iii) it is not a person: (1) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (2) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (3) subject to financial sanctions imposed pursuant to a regulation of the EU or a regulation adopted by the United Nations (together, the "Regulations"); and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and pursuant to AML Legislation and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to the Joint Bookrunners or the Company such evidence, if any, as to the identity or location or legal status of any person (including in relation to the beneficial ownership of any underlying investor) which the Joint Bookrunners or the Company may request from it in connection with the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise or any other information as may be required to comply with legal or regulatory requirements (including in particular under the AML Legislation)) in the form and manner requested by the Joint Bookrunners or the Company on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the Joint Bookrunners may decide at their sole discretion;

15.  if a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation, represents and warrants that the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a Member State of the EEA or the UK other than Qualified Investors, or in circumstances in which the prior consent of the Joint Bookrunners has been given to the offer or resale;

16.  represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the EEA or the UK prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any Member State of the EEA or the UK within the meaning of the Prospectus Regulation;

17.  represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to the Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person;

18.  represents and warrants that it has complied and will comply with all applicable provisions of the FSMA and the Financial Services Act 2012 with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

19.  if in a Member State of the EEA or the UK, unless otherwise specifically agreed with the Joint Bookrunners in writing, represents and warrants that it is a Qualified Investor and that it is a person to whom Placing Shares may lawfully be marketed to under any applicable legislation implementing the AIFMD;

20.  if in the United Kingdom, represents and warrants that it is a person who: (i) falls with Articles 49(2)(A) to (D) or 19(5) of the Order or it is a person to whom the Placing Shares may otherwise be lawfully offered under such Order or, if it is receiving the offer in circumstances under which the laws or regulations of a jurisdiction other than the United Kingdom would apply, it is a person to whom the Placing Shares may be lawfully offered under that other jurisdiction's laws and regulations; and (ii) is a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of the FCA's Conduct of Business Sourcebook;

21.  represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities and taken any other necessary actions to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this announcement (including this Appendix)) and will honour such obligations;

22.  where it is acquiring Placing Shares for one or more managed accounts, represents and warrants that it is authorised in writing by each managed account: (i) to acquire the Placing Shares for each managed account; (ii) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Appendix and the Announcement of which it forms part; and (iii) to receive on its behalf any investment letter relating to the Placing in the form provided to it by a Joint Bookrunner;

23.  undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this announcement (including this Appendix) on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as the Joint Bookrunners may in their sole discretion determine and without liability to such Placee and it will remain liable and will indemnify the Joint Bookrunners on demand for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear the liability for any stamp duty or stamp duty reserve tax or security transfer tax (together with any interest or penalties due pursuant to or referred to in these terms and conditions) which may arise upon the placing or sale of such Placee's Placing Shares on its behalf;

24.  acknowledges that neither of the Joint Bookrunners, any of their affiliates, or any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be treated for these purposes as a client of either Joint Bookrunner and that neither of the Joint Bookrunners has any duties or responsibilities to it for providing the protections afforded to their respective clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of their rights and obligations thereunder, including any rights to waive or vary any conditions or exercise any termination right;

25.  undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself; or (ii) its nominee, as the case may be. Neither of the Joint Bookrunners nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and the Joint Bookrunners in respect of the same on the basis that the Placing Shares will be issued to the CREST stock account of a Joint Bookrunner who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

26.  acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreement shall be governed by and construed in accordance with the laws of England and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter (including non-contractual matters) arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or a Joint Bookrunner in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

27.  acknowledges that time shall be of the essence as regards to obligations pursuant to this Appendix;

28.  agrees that the Company, the Joint Bookrunners and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to each Joint Bookrunners on its own behalf and on behalf of the Company and are irrevocable and are irrevocably authorised to produce this announcement or a copy thereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby;

29.  agrees to indemnify on an after-tax basis and hold the Company, the Joint Bookrunners and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

30.  acknowledges that no action has been or will be taken by any of the Company, the Joint Bookrunners or any person acting on behalf of the Company or a Joint Bookrunner that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

31.  acknowledges that it is an institution that has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and in this sector and is aware that it may be required to bear, and it, and any accounts for which it may be acting, are able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved;

32.  acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the trade confirmation or contract note will continue, notwithstanding any amendment that may in the future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing;

33.  acknowledges that a Joint Bookrunner or any of its affiliates acting as an investor for its own account may take up shares in the Company and in that capacity may retain, purchase or sell for its own account such shares and may offer or sell such shares other than in connection with the Placing;

34.  represents and warrants that, if it is a pension fund or investment company, its purchase of Placing Shares is in full compliance with all applicable laws and regulation; and

35.  to the fullest extent permitted by law, it acknowledges and agrees to the disclaimers contained in the announcement, including this Appendix.

The representations, warranties, acknowledgments and undertakings contained in this Appendix are given to the Joint Bookrunners and the Company and are irrevocable and shall not be capable of termination in any circumstances.

The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor the Joint Bookrunners will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Joint Bookrunners in the event that any of the Company and/or the Joint Bookrunners has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Joint Bookrunners accordingly.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

Each Placee, and any person acting on behalf of the Placee, acknowledges that the Joint Bookrunners do not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that a Joint Bookrunner or any of its affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with a Joint Bookrunner, any money held in an account with such Joint Bookrunner on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under the FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the relevant Joint Bookrunner's money in accordance with the client money rules and will be used by that Joint Bookrunner in the course of its own business and the Placee will rank only as a general creditor of that Joint Bookrunner.

All times and dates in this announcement (including this Appendix) may be subject to amendment, and Placees' commitments, representations and warranties are not conditional on any of the expected times and dates in this announcement (including this Appendix) being achieved. The Joint Bookrunners shall notify the Placees and any person acting on behalf of the Placees of any changes.

Past performance is no guide to future performance and persons needing advice should consult an appropriately qualified independent financial adviser.

A Joint Bookrunner is entitled, at its discretion and out of its own resources, at any time to rebate to some or all of its investors, or to other parties (including the Investment Manager, PIM and/or any of their affiliates), part or all of its fees relating to the Placing.

MISCELLANEOUS

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 "Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares 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, Placees should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing 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, the Joint Bookrunners 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 Placing Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

The content of this announcement has been prepared by, and is the sole responsibility of, Urban Logistics REIT plc.

The information contained in this announcement is given at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment from time to time. Neither the content of the Company's website nor any website accessible by hyperlinks to the Company's website is incorporated in, or forms part of, this announcement.

Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "could", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Company's businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the FCA, the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Nplus1 Singer Advisory LLP ("N+1 Singer"), which is authorised and regulated in the United Kingdom by the FCA, is acting as nominated adviser and joint bookrunner to the Company in connection with the Placing and Admission and to no-one else 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 Placing or Admission or any other matter referred to in this Announcement. N+1 Singer's responsibilities as the Company's nominated adviser under the AIM Rules for Nominated Advisers are owed solely to London Stock Exchange plc and are not owed to the Company or to any director of the Company or to any other person in respect of any decision to acquire shares in the Company in reliance on any part of this announcement.

Panmure Gordon (UK) Limited ("Panmure Gordon"), which is authorised and regulated in the United Kingdom by the FCA, is acting as joint bookrunner to the Company in connection with the Placing and Admission and to no-one else 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 Placing or Admission or any other matter referred to in this Announcement.

None of the Investment Manager, PIM, the Joint Bookrunners, or any of their respective directors, officers, employees, advisers, affiliates or agents, accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or for any loss howsoever arising from any use of the announcement or its contents. The Investment Manager, PIM, the Joint Bookrunners and their respective directors, officers, employees, advisers, affiliates or agents, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

Data Protection

The processing of a Placee's personal data by the Company will be carried out in compliance with the applicable data protection legislation and with its Privacy Notice, a copy of which can be found on the Company's website https://www.urbanlogisticsreit.com/site-services/privacy-and-cookies/.

Each Placee acknowledges that it has read and understood the processing activities carried out by the Company as informed in the referred Privacy Notice.

 

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