Result of Placing

RNS Number : 1850K

Pacific Industrial & Log REIT PLC

06 April 2018

 

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX (TOGETHER, THE ANNOUNCEMENT), AND THE INFORMATION CONTAINED IN IT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL APPLICABLE SECURITIES LAWS OR REGULATIONS.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT IS NOT AN OFFER OF, OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR, SECURITIES IN THE UNITED STATES. THIS ANNOUNCEMENT HAS BEEN ISSUED BY AND IS THE SOLE RESPONSIBILITY OF THE COMPANY.

THE INFORMATION COMMUNICATED IN THIS ANNOUNCEMENT IS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014.

Pacific Industrial & Logistics REIT plc

("Pacific Industrial & Logistics" or "the "Company")

Result of Placing

Further to the announcement made earlier today, Pacific Industrial & Logistics (AIM: PILR) is pleased to announce the result of the Placing.

·           17,071,130 Placing Shares have been conditionally placed with Placees at 119.50 pence per Placing Share, raising gross proceeds of approximately £20.4 million. The Placing is not underwritten.

·           The Placing Shares represent, in aggregate, approximately 25.1 per cent. of the Ordinary Shares in issue as at 5 April 2018 (the latest practicable date prior to the release of this announcement) and will represent approximately 20.0 per cent. of the Enlarged Share Capital.

·           The Placing is conditional, inter alia, on the approval of the Resolutions to be proposed in connection of the Placing at the General Meeting of the Company to be held at 10.00 a.m. on 25 April 2018 and upon Admission of the Placing Shares to trading on AIM. It is expected that Admission of the Placing Shares will occur at 8.00 a.m. on 26 April 2018.

·           The net proceeds of the Placing, together with debt finance, are intended to be used by the Company to acquire two urban logistics portfolios with an aggregate gross acquisition price of c.£38.7 million (including estimated finance costs of c.£0.3 million), representing a blended net initial yield of 5.9 per cent. The additional £0.4 million that was raised will be deployed to support the Company's working capital.

Nigel Rich, Non-Executive Chairman, commented:

"In light of the current market conditions, we are delighted to have received support from existing and new shareholders for our Placing which will enable us to grow our portfolio of high-quality urban logistics assets. With this new acquisition we will build on the scale and momentum in the business to achieve attractive returns for Shareholders."

For further information contact: 

Pacific Industrial & Logistics REIT plc Richard Moffitt	[phone]
Montfort - Financial PR and IR adviser Olly Scott	[phone]
Canaccord Genuity - Nominated Adviser, Joint Financial Adviser and Sole Bookrunner Corporate Broking Simon Bridges Charlie Foster Andrew Buchanan ECM Sam Lucas Ben Griffiths	[phone]
Kinmont - Joint Financial Advisor Mat Thackery	[phone]
Radnor Capital Partners - Placing Agent Joshua Cryer Ben Gillen	[phone]

EXPECTED PLACING TIMETABLE

Publication of the Circular	9 April 2018
Latest time and date for receipt of Forms of Proxy	10.00 a.m. on 23 April 2018
General Meeting	10:00 a.m. on 25 April 2018
Announcement of results of General Meeting	25 April 2018
Admission of Placing Shares	8.00 a.m. on 26 April 2018
Expected date for CREST accounts to be credited in relation to Placing Shares	26 April 2018
Dispatch of definitive share certificates (where applicable) in relation to Placing Shares	by no later 3 May 2018

Certain of the events in the above timetable are conditional upon, amongst other things, the approval of the Resolutions at the General Meeting.

If any of the events contained in the timetable should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service.

A reference to a time in this announcement is to London time unless otherwise stated.

PLACING STATISTICS

Placing Price	119.50 pence
Number of Placing Shares	17,071,130
Gross proceeds of the Placing	£20.4 million
Number of Ordinary Shares in issue as at the date of this announcement	68,114,724
Number of Ordinary Shares at Admission following the issue of the Placing Shares *	85,185,854
Number of Warrants in issue at Admission*	2,962,000
Placing Shares expressed as a percentage of the Enlarged Share Capital*	20.0 per cent.

*Assuming no Warrants are exercised on or before Admission.

1.       Introduction

On 29 March 2018, the Company announced its intention to raise up to £20 million (before fees and expenses) by means of the Placing to fund an identified portfolio of urban logistics assets that meet the Company's investment objective and investing policy. Earlier today, the Company announced that it had received firm expressions of interest of approximately £20 million of Ordinary Shares in the Placing.

The Company is pleased to announce that it has conditionally placed 17,071,130 new Ordinary Shares at a price of 119.50 pence per Placing Share pursuant to the Placing, raising gross proceeds of £20.4 million. The new Ordinary Shares have been conditionally placed with a combination of new and existing shareholders.

The allotment of the Placing Shares is conditional, inter alia, upon the Company obtaining approval of the Shareholders at the General Meeting to grant the Directors the authority to allot such Ordinary Shares and to disapply statutory pre-emption rights which would otherwise apply to such allotment.

2.       Change of name

The Board will change the Company's name to "Urban Logistics REIT plc" with the ticker symbol "SHED" on or around admission of the Placing Shares.

The Board believes this change reflects the Company's focus and is consistent with its investment and growth strategy.

The Change of name will not affect any Shareholders' rights. New issues of Ordinary Share certificates will be in the Company's new name and existing Ordinary Share certificates and Warrant certificates will remain valid.

3.       Background to and reasons for the Placing

The Company was formed for the purposes of investing in single-let last mile and regional logistics properties in the UK with an average lot size of under £10 million, located in established logistics zones, and displaying, inter alia, the potential for rental growth and other asset management opportunities. The Company aims to achieve a target minimum 6.0 per cent. dividend yield and total returns between 10 and 15 per cent. per annum.

The Group has raised a total of c.£75 million of equity capital since its IPO, deploying the net proceeds, together with debt finance, in acquisitions worth in excess of £125 million at an all-in average debt interest cost of 3.3 per cent. and 7.4 per cent. average Net Initial Yield. The Company's portfolio features:

·              Valuation increase of 7.5 per cent. (for the six months to 30 September 2017) to £93.4 million, and a 12.3 per cent. increase over purchase price since IPO (as at 30 September 2017);

·              WAULT of 5.2 years as at 26 February 2018; and

·              Average capital value of £71 per sq. ft. against more than £130 per sq. ft. estimated replacement cost as at 26 February 2018

Since its IPO, the Company's highly-experienced Board and Management Team have implemented their strategy, completing acquisitions of 29 assets that meet the Company's investment criteria, and disposing of two assets. The Management Team has established a significant pipeline of potential asset acquisitions¹ and new capital is required to acquire identified asset opportunities.

The Directors believe that the Placing will have the following additional benefits for Shareholders, enabling the Company to:

·              continue diversifying its income and asset base by increasing the number of tenants and properties within the portfolio upon the capital being deployed;

·              gain additional commercial momentum, positioning it as an attractive and preferred counterparty for vendors;

·              increase its economies of scale and, since the Group's current operational capabilities can manage a substantially larger portfolio, reduce its total expense ratio, in turn enhancing the Company's dividend-paying capacity; and

·              diversify the Shareholder base by increasing the number of Ordinary Shares in issue, thereby providing the potential for additional liquidity.

4.       Market overview, portfolio and trading update and pipeline

The Company's position in a compelling market environment

Supply of, and demand for, urban logistics assets combined with the specific characteristics of these investments create what the Directors believe to be a compelling opportunity. The Directors believe the Company is the only closed-ended quoted or listed company in the UK solely focused on single-let, urban logistics properties.

Supply of urban logistics assets remains constrained:

·              Asset availability across the UK is over a third lower than the peak, post-recession, in 2009 (119 million square feet)

·              Development remains limited as occupiers shift to purpose-built properties; land availability remains constrained; and planning permissions are not supporting supply growth to meet demand

·              Asset supply is focussed on second hand properties with new and early marketed space contracting (CBRE Logistics Report H1 2017)

Changing economic dynamics drive growing demand:

·              For every £1 billion of new online retail sales, an additional 1.125 million square feet of new distribution space is required. Based on current online retail growth forecasts, this translates to an annual average incremental demand of c.4.5 million square feet (JPMorgan, June 2017)

·              The online retail sector accounted for more than a third of all lettings during H1 2017 and has been more acquisitive than traditional retail

·              Retailers and e-fulfilment supply chain businesses are investing in new distribution capability as parcel deliveries increase 18 per cent. year-on-year, representing an average 46 per household; and demand for reverse logistics rises to handle the 27 per cent. of all online sales that are returned (JPMorgan, June 2017)

·              A wide range of facilities are underpinning the sector's transformation - notably multi-floor XXL warehouses and urban logistics sites located in regions that are traditionally regarded as secondary (CBRE Logistics Report H1 2017)

Compelling market opportunities exist:

·              The Company is able to target acquisitions of quality income-producing assets at 30 per cent. to 70 per cent. of replacement cost

·              Targeted assets for acquisition present attractive income, capital growth and total return prospects. Investments can be made in the region of 6.0 per cent. to 7.5 per cent. Net Initial Yields, at affordable rents of £4.50 to £5.50 per square foot on an overall LTV in line with the Company's 35-40 per cent. target range

·              The Company's focus on smaller lot sizes of less than £10 million and under 250,000 square feet avoids competition with institutional investors for acquisitions, but tenant quality can be maintained

·              Despite a structural shortage of lettable space in the Company's focus subsector, it remains an active and well-traded market and the Directors expect £3 billion to £4 billion of assets to be transacted in 2018, enabling the Company to be selective in its acquisitions 

1. All information relating to the potential investments described in this Announcement is indicative, subject to detailed due diligence  and may subsequently change as a result.

Portfolio update

The Group has acquired 29 assets and disposed of one asset between the Company's IPO in April 2016 and 26 February 2018, at which time the tenanted portfolio comprised the properties in the table below. The Company subsequently disposed of the 16 Hudson Road asset in a transaction which completed on 5 April 2018. These have proven to be sound investments, with a good geographical spread and a diverse tenant base. The portfolio also presents a variety of asset management opportunities, which have the potential to provide both income growth and capital appreciation.

The average size of the properties in the portfolio at 26 February 2018 was 60,942 square feet. The WAULT at the same date was 5.2 years.

Portfolio as at 26 February 2018:

Tenant	Location	Month of acquisition	Acquisition cost2 (£'000s)	Net book value (£'000s)	Size (sq ft)
Price's Patent Candles	16 Hudson Road, Bedford	Apr 16	2,200	2,390	44,195
Jas Bowman & Sons	18 Edison Road, Bedford	Apr 16	2,675	3,325	39,306
The BSS Group	104-106 Riverside Way, Northampton	Apr 16	750	900	13,633
ACO Technologies	Caxton Road, Elm Farm Industrial Estate, Bedford	Apr 16	1,675	3,025	41,603
Blackburns Metals	Edison Road, Bedford	Apr 16	1,250	1,750	24,380
Ball and Young	Prima Foam House, Caxton Road, Bedford	Apr 16	1,100	1,650	22,535
Ideal Industries	Regent House, Bedford	Apr 16	2,850	2,300	42,392
Marshall Thermo King	Unit 11-14 Cemetery Road, Dunstable	Apr 16	600	900	10,050
Winit Corporation	Unit 73 Interlink Way, Interlink Business Park, Bardon	Apr 16	6,000	6,350	73,791
Void	Units B Postley Road, Bedford	Apr 16	1,393	1,629	21,137
Professional Fulfilment Services	Units A Postley Road, Bedford	Apr 16	1,394	1,631	21,162
Arqadia Limited	Units C-D Postley Road, Bedford	Apr 16	2,813	3,290	42,700
Void	National Distribution Centre, Park Road, Holmewood, Chesterfield	Jan 17	4,659	5,800	108,873
PUMA UK & New Day	Bruntcliffe Way, Leeds	Mar 17	6,050	6,250	63,979
HID Corporation Ltd	Plot 2000 Haverhill Business Park, Haverhill	Sep 17	4,090	4,300	37,355
Culina Logistics Ltd	Plot 5000 Haverhill Business Park, Haverhill	Sep 17	14,150	14,900	194,965
XPO Transport Solutions UK Ltd	Hope Carr Lane, Leigh	Sep 17	3,340	3,340	39,720
XPO Transport Solutions UK Ltd	Legbrannock Road, Motherwell	Sep 17	2,420	2,560	100,832
Void	Townsend Drive, Nuneaton LE10 3BZ	Sep 17	6,710	6,710	130,508
XPO Supply Chain UK Limited	Dodwells Road, Hinckley	Sep 17	3,280	3,280	62,082
XPO Transport Solutions UK Ltd	Pontefract Road, Normanton	Sep 17	6,110	6,110	94,102
J Sainsburys Plc	Unit A Belcon Industrial Estate, Hoddesdon	Sep 17	3,950	4,030	45,018
Travis Perkins (Properties) Ltd	Unit B Belcon Industrial Estate, Hoddesdon	Sep 17	1,480	1,540	10,935
Pharmacy 2U	Unit 3003 Victoria Road, Leeds LS14 2LA	Nov 17	1,337	1,337	19,130
Komori	Unit 3001 Victoria Road, Leeds LS14 2LA	Nov 17	1,558	1,558	22,290
Panther	Sandfield Close, Moulton Park, Northampton	Dec 17	3,025	3,025	42,553
DHL Supply Chain	1A Alston Road, Norwich	Dec 17	2,176	2,176	31,410
DHL Supply Chain	Aston Lane, Runcorn	Dec 17	8,083	8,083	122,478
GoCompare.com	Imperial House, Newport	Dec 17	4,644	4,644	26,672
Void	Leigh Commerce Park, Leigh	Dec 17	7,154	7,154	110,729
DHL Supply Chain	Wagonway Road, Hebburn	Dec 17	3,157	3,157	77,430
Manitowoc Crane Group	Radclive Road, Buckingham	Dec 17	6,286	6,286	29,378
Total at 26 February 2018			118,359	125,380	1,767,322

^2. All excluding purchaser costs.

CBRE independently valued the portfolio as at 30 September 2017 in accordance with the RICS Valuation - Professional Standards. The portfolio's market value at 30 September 2017 was £93.4 million, compared with the assets' combined purchase price of £83.2 million, excluding purchaser costs. This represents an increase of £10.2 million or 12.3 per cent., on the aggregate purchase price. The valuation increase reflects the Company's focus on asset management and buying well-located sites, and also highlights its success in sourcing off-market deals at attractive prices for the Group. The portfolio, as at 1 April 2017 increased by 7.5 per cent. in capital value during the six month period to 30 September 2017 on a like-for-like basis.

Trading update

As announced in the Company's trading update on 26 February 2018, the Board reiterates its expectation that year-end earnings and portfolio valuation to 31 March 2018 will be in line with market expectations.

Further to the announcement on the 29 March 2018, the Company's active asset management approach continues to enhance the value of the portfolio. The Company's 10,050 sq.ft. asset at Dunstable has now been re-let, through a simultaneous surrender and re-letting, on a new 10 year lease at a rent of £6.75 per sq.ft. from its previous level of £5.97 per sq.ft. The new rental level represents an increase of 13 per cent. and is expected to generate attendant benefits in valuation.

The disposal of 16 Hudson Road has completed ahead of the expected date of 6 April 2018. The proceeds from the sale were £3.2 million, representing a capital profit of approximately £1.2 million on the Company's equity investment of approximately £0.9 million in April 2016. Taken together with the income returns generated during the Company's ownership and the achieved sale price, reflects an achieved IRR on equity invested of 55.8 per cent.

Pipeline

As announced earlier today, the Company has today entered into non-binding heads of terms in respect of the acquisition of two portfolios of assets ("Portfolio 1" and "Portfolio 2", together the "Portfolio") from a single vendor.

·              Portfolio 1 comprises three urban logistics assets with an aggregate acquisition price of £19.5 million, representing a net initial yield of 6.0 per cent.

·              Portfolio 2 comprises three urban logistics assets and a plot of land which together have an aggregate acquisition price of £16.5 million, representing a net initial yield of 5.8 per cent.

·              Aggregate gross consideration for the Portfolio is c.£38.7 million (including estimated finance costs of c.£0.3 million), representing a blended net initial yield of 5.9 per cent.

·              The Company intends to exchange contracts on Portfolio 1 and Portfolio 2 on 10 April 2018 and completion will take place in a two-stage process:

·              Completion on Portfolio 1 is expected on 1 July 2018 and is conditional on completion of the Placing; and

·              Portfolio 2 is expected to complete on 1 September 2018. Its completion is conditional on the Placing and the Company obtaining the necessary debt finance to fund the acquisition.

·              The Portfolio is being acquired at an average capital value of £72 per sq.ft., substantially below the cost of replacement.

·              Significant reversionary potential across the Portfolio with average rents of £4.57 per sq.ft. and a weighted average unexpired lease term of 5.7 years.

·              Club financing deal expected with Santander as lead agent.

·              Based on the completion of the Placing and acquisition of the Revised Portfolio, the Company continues to target a dividend yield and total returns, once fully invested and on a full year basis, in line with investment policy guidance of in excess of 6 per cent. and 10 per cent. to - 15 per cent. respectively.

The acquisition of the Revised Portfolio is subject to amongst other things, completion of the required equity and debt financing, completion of final due diligence, completion of final negotiation of terms with the vendor, completion of legal documentation and the final approval of the Directors. There can be no guarantee of completion of the acquisition of the Revised Portfolio. All information relating to the Revised Portfolio described in this Announcement is indicative, subject to detailed due diligence and may subsequently change as a result.

5.       Interim dividend

Earlier today the Company declared a third interim dividend of 3.2 pence per share (the "Third Interim Dividend"), which brings the total dividends issued in respect of the 2018 financial year to 6.3 pence per share. The dividend is a PID and will have an ex-dividend date of 19 April 2018 and will be paid to shareholders who are on the register at a record date of 20 April 2018.

Any investors participating in the Placing, will not be eligible to receive the Third Interim Dividend payment in respect of any new Ordinary Shares issued to them as part of the Placing. The payment date will be 4 May 2018.

6.       Borrowing and gearing policy

The Company will seek to use gearing to enhance returns over the long-term and, in addition, will seek to fix its borrowing rates. It is the Directors' current intention to target gearing of not more than 40 per cent. and the Company has a club financing agreement in principle with Santander UK as lead agent.

7.       Details of the Placing

The Placing

17,071,130 Placing Shares have been placed with Placees at 119.50 pence per Ordinary Share to raise gross proceeds of approximately £20.4 million. The Placing is not underwritten.

The Placing is conditional, inter alia, on the approval of Resolutions 1 and 2 at the General Meeting of the Company to be held at 10.00 a.m. on 25 April 2018 and upon Admission of the Placing Shares to trading on AIM. It is expected that Admission of the Placing Shares will occur on 26 April 2018.

The Placing Agreement

Pursuant to the terms of the Placing Agreement: (i) Canaccord, as agent for the Company, conditionally agreed to use its reasonable endeavours to place the Placing Shares on a non-underwritten basis at the Placing Price; and (ii) Kinmont and Radnor conditionally agreed to use their respective reasonable endeavours to introduce potential Placees to Canaccord.

The Placing Agreement contains certain warranties from the Company and the Manager in favour of Canaccord, Kinmont and Radnor in relation to, inter alia, certain matters relating to the Company and its business. In addition, the Company and the Manager have agreed to indemnify Canaccord, Kinmont and Radnor in relation to certain liabilities they may incur in respect of the Placing. Canaccord has the right to terminate the Placing Agreement in certain circumstances prior to Admission including, without limitation, in the event of any material breach by the Company, the Investment Manager or PIML of their respective obligations under the Placing Agreement, the occurrence of a force majeure event or a material adverse change in the financial condition of the Company and/or the Group. Under the terms of the Placing Agreement the Company has agreed to pay each of Canaccord and Kinmont a corporate finance fee and commissions based on the number of Placing Shares which are the subject of the Placing, and to Radnor, commissions based on the number of Placing Shares which are the subject of the Placing, together with a discretionary additional fee to any or all of Canaccord, Radnor and Kinmont with reference to the number of Placing Shares which are the subject of the Placing.

8.       Related party transactions

Participation in the Placing by the Directors and the Management Team

Mr. Rich, Mr. Moffitt and Mr. Turner are subscribing for 41,841 Ordinary Shares, 41,841 Ordinary Shares and 41,841 Ordinary Shares at the Placing Price pursuant to the Placing respectively. Following Admission, Mr. Rich, Mr. Moffitt and Mr. Turner will be interested in 225,536 Ordinary Shares, 398,362 Ordinary Shares and 328,797 Ordinary Shares respectively. Mr. Moffitt and Mr. Turner are members of Pacific Industrial LLP and, accordingly, are interested in aggregate in a further 520,557 Ordinary Shares.

The independent Directors, having consulted with Canaccord, consider these related party transactions are fair and reasonable insofar as the Company's Shareholders are concerned.

M1 Agency fees

At the point the Company acquires certain properties in the pipeline portfolio, it will incur, on an arm's length basis, a commercial agency fee payable to M1 Agency LLP, which is expected to be 1.0 per cent. of the purchase price of the acquired portfolio (£360,000). M1 Agency LLP is a partnership in which Richard Moffitt is a designated member. The payment of fees by the Company to M1 Agency LLP will, at the time, be a related party transaction for the purposes of the AIM Rules.

To the extent that any related party transactions take place, the independent Directors, having consulted with Canaccord, consider they would be fair and reasonable insofar as the Company's Shareholders are concerned.

Participation in the Placing by Allianz Global Investors

Allianz Global Investors GmbH (UK) ("Allianz") is subscribing for 3,367,936 Ordinary Shares at the Placing Price pursuant to the placing which represents 19.7 per cent. of the Placing Shares to be issued. Allianz currently holds a 7,862,676 Existing Ordinary Shares, representing approximately 11.54 per cent. of the total outstanding Existing Ordinary Shares in the Company and is therefore a Substantial Shareholder of the Company as defined by the AIM Rules.

Allianz's participation in the Placing therefore constitutes a related party transaction. The Directors, having consulted with Canaccord, consider this related party transaction is fair and reasonable insofar as the Company's Shareholders are concerned.

9.       Admission and dealings

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Placing Shares will commence on 26 April 2018.

The new Ordinary Shares to be issued pursuant to the Placing will not rank for the third interim dividend of 3.2 pence per Ordinary Share which has an ex-dividend date of 19 April 2018 and will be payable to shareholders on the register on 20 April 2018. From Admission, the Ordinary Shares issued pursuant to the Placing will rank pari passu with the Company's existing Ordinary Share capital in all other respects.

10.     General meeting

A Circular and notice convening the General Meeting, at which the Company will seek shareholder approval to allot the shares and dis-apply pre-emption rights in respect of the Placing, will be posted to shareholders on 9 April 2018. The General Meeting is to be held at the offices of Gowling WLG (UK) LLP, 4 More London Riverside, London SE1 2AU at 10.00 a.m. on 25 April 2018. At the General Meeting, the following resolutions will be proposed:

Resolutions relating to the Placing (Resolutions 1 and 2)

Resolutions 1 and 2 will be proposed to grant the Directors the authority to allot the Placing Shares (which will represent approximately 20.0 per cent. of the Enlarged Share Capital) without first offering them to existing Shareholders on a pre-emptive basis.

The Directors believe it would not be in the Shareholders' best interests to incur the significant additional expense that would be required to implement a fully pre-emptive offer of Ordinary Shares to Shareholders. The Directors have therefore concluded that seeking general authority from Shareholders to issue the Placing Shares other than on a pre-emptive basis is the most flexible and cost-effective method available to the Company.

Resolutions relating to general authority to allot Ordinary Shares and waiver of pre-emption rights (Resolutions 3 and 4)

Resolutions 3 and 4 will, if passed, renew the authorities given to the Directors to allot Ordinary Shares on a non-pre-emptive basis at the 16 August 2017 general meeting, but reflecting the increased number of Ordinary Shares comprised in the Enlarged Share Capital broadly on the same terms as the equivalent resolution passed at that time. The authority sought under these resolutions will expire at the earlier of the conclusion of the annual general meeting of the Company in 2018 or 30 September 2018.

11.     Intentions of Directors and Management Team

The Directors and Management Team intend to vote in favour of each of the Resolutions in respect of their aggregate beneficial interest in respect of 1,098,041 Ordinary Shares, representing approximately 1.61 per cent. of the Existing Ordinary Shares.

DEFINITIONS

"Admission"	the admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules
"AIFMD"	the Alternative Investment Fund Managers Directive (2011/61/EU), including any implementing regulations and national legislation implementing the AIFMD into a member state of the EU, as applicable
"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
"Board"	the board of directors of the Company
"Canaccord"	Canaccord Genuity Limited, the Company's nominated adviser, broker, joint financial adviser and sole bookrunner
"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"	Pacific Industrial & Logistics REIT plc (to be renamed Urban Logistics REIT plc on or around Admission)
"CREST"	the relevant systems for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear UK & Ireland Limited in accordance with the CREST Regulations
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), including: (a)    any enactment or subordinate legislation which amends or supersedes those regulations; and (b)    any applicable rules made under those regulations for the time being in force
"Directors"	the directors of the Company
"Enlarged Share Capital"	the Ordinary Shares in issue immediately following the issue and allotment of the Placing Shares at Admission (assuming no Warrants are exercised before Admission)
"Existing Ordinary Shares"	the Ordinary Shares in issue as at the date of this Announcement
"FCA"	the Financial Conduct Authority
"FSMA"	the Financial Services and Markets Act 2000, as may be amended from time to time
"General Meeting"	the general meeting of the Company to be convened for 10.00 a.m. on 25 April 2018 (or any adjournment or postponement thereof)
"Group"	the Company, together with its subsidiaries and subsidiary undertakings
"Independent Directors"	Jonathan Gray, Bruce Anderson and Mark Johnson
"IPO"	the admission of the entire issued and to be issued ordinary share capital of the Company to trading on AIM, which took place on 13 April 2016
"Kinmont"	Kinmont Limited, joint financial adviser to the Company
"LTV"	the ratio of gross debt less cash, short-term deposits and liquid investments to the aggregate value of properties and investments
"London Stock Exchange"	London Stock Exchange plc
"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
"Net Initial Yield" or "NIY"	annualised current passing rent less non-recoverable property expenses such as empty rates, divided by the property valuation plus notional purchaser's costs
"Notice of General Meeting"	the notice of General Meeting
"Ordinary Shares"	ordinary shares of £0.01 each in the capital of the Company
Pacific Industrial LLP	Pacific Industrial LLP, a limited liability partnership registered in England and Wales with company number OC407145
"PIML"	Pacific Investments Management Limited, a company registered in England and Wales with company number 01722436
"Placee"	any person who has conditionally agreed to subscribe for the Placing Shares
"Placing"	the placing of the Placing Shares pursuant to the Placing Agreement
"Placing Agreement"	the placing agreement dated 6 April 2018 between the Company (1); the Manager (2); Canaccord (3); Kinmont (4); Radnor (5) and PIML (6) relating to the Placing
"Placing Price"	119.50 pence per Placing Share
"Placing Shares"	17,071,130 new Ordinary Shares which are to be placed in accordance with the terms of the Placing, conditional inter alia on the passing of Resolutions 1 and 2
"Radnor"	Radnor Capital Partners Limited, agent to the Placing
"Resolutions"	the resolutions to be set out in the Notice of General Meeting
"Shareholders"	holders of Ordinary Shares
"Subscription Period"	the period beginning on the date of the Warrant Instrument and ending on 12 March 2019
"Subscription Price"	the price of £0.97 per Ordinary Share at which the Subscription Rights are exercisable during the Subscription Period (or such adjusted price as may be determined from time to time in accordance with the provisions described in condition 3 of the Warrant Instrument)
"Subscription Right"	the right of a Warrant holder to subscribe for one new Ordinary Share at the Subscription Price for every Warrant of which he is the holder pursuant to the terms of the Warrant Instrument
"UK" or "United Kingdom"	the United Kingdom of Great Britain and Northern Ireland
UK Listing Authority	the FCA acting in its capacity as the competent authority for the purposes of FSMA
"Warrant holder"	a registered holder for the time being of Warrants
"Warrant Instrument"	the warrant instrument executed and delivered as a deed poll by the Company on 22 March 2016
"Warrants"	the 2,962,000 warrants, each compromising a Subscription Right in respect of one new Ordinary Share, constituted by the Warrant Instrument or the aggregate number for the time being issued and outstanding (and a reference to a Warrant is a reference to any one of the Warrants)
"WAULT"	the weighted average unexpired lease term remaining to first break, or expiry, across the portfolio weighted by contracted rental income (including rent-frees). The calculation excludes residential leases and properties allocated as developments

IMPORTANT NOTICE

The information contained in this Announcement is for information purposes only and does not purport to be full or complete. 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: (i) are professional investors (as defined in the Alternative Investment Fund Managers Directive (2011/61/eu) (the "AIFMD")); (ii) have professional experience in matters relating to investments who fall within the definition of "investment professionals" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"); (iii) are "high net worth companies", unincorporated associations or partnerships or trustees of high value trusts as described in article 49(2) of the Order; or (iv) it may otherwise be lawful to communicate this announcement to (each a "relevant person").

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, Canaccord, Kinmont or Radnor 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.

Canaccord which is a member of the London Stock Exchange, is authorised and regulated in the UK by the FCA and is acting as nominated adviser, joint financial adviser and sole bookrunner to the Company. Canaccord 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. Canaccord'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 or to any other person. No representation or warranty, express or implied, is made by Canaccord as to, and no liability is accepted by Canaccord in respect of, any of the contents of this Announcement.

Kinmont, is authorised and regulated in the UK by the FCA and is acting as joint 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.

Radnor, is authorised and regulated in the UK by the FCA and is acting as placing agent to the Company. Radnor 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 Radnor as to, and no liability is accepted by Radnor 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 Directors' current beliefs and expectations 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 UK Financial Conduct Authority, the London Stock Exchange Plc or by applicable law.

Information regarding markets, market size, market share, market position, growth rates and other industry data pertaining to the Group's business contained in this announcement consists of estimates based on (i) data and reports compiled by professional organisations and analysts; (ii) data from external sources; and (iii) the Company's and the Management Team's knowledge of the UK real estate market. Information regarding the macroeconomic environment in the UK has been compiled from publicly available sources. In many cases, there is no readily available external information (whether from trade associations, government bodies or other organisations) to validate market-related analyses and estimates, requiring the Company to rely on internally developed estimates. The Company takes responsibility for compiling, extracting and reproducing market or other industry data from external sources, including third parties or industry or general publications, but neither the Company, Canaccord, Kinmont nor Radnor has independently verified that data. The Company gives no assurance as to the accuracy and completeness of, and takes no further responsibility for, such data. Similarly, while the Company believes its and the Management Team's internal estimates to be reasonable, they have not been verified by any independent sources and the Company cannot give any assurances as to their accuracy.

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. 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.

 

END

 

 

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