Capital Markets Day Becoming the UKs leading income focused REIT 6 - PowerPoint PPT Presentation

Capital Markets Day Becoming the UK’s leading income focused REIT 6 February 2017

01 Redefine International P .L.C. Capital Markets Day Introduction and Strategic Overview Mike Watters Chief Executive Offjcer

02 Redefine International P .L.C. Capital Markets Day Agenda Introduction and Strategic Overview Mike Watters (CEO) Income Focused Portfolio Adrian Horsburgh (Property Director) Break Effjcient Capital Structure Stephen Oakenfull (Deputy CEO) Financial Discipline Donald Grant (CFO) Conclusion and Outlook Mike Watters (CEO) Q&A Asset showcase videos and an introduction to key members of our management team will be shown throughout the presentation Note: Webcast listeners please email all questions to questions@redefjneinternational.com

03 Redefi ne International P .L.C. Capital Markets Day Introduction to Redefj ne International P.L.C. Who we are and what we do • Income focused UK‑REIT Europe’s two largest real estate markets: • Superior, sustainable and growing shareholder distributions 77 % 23 % • £1.53bn portfolio UK Germany – Retail (55%), Offj ces (19%), Distribution (11%) and Hotels (15%) • Secure income: London London – Diversifj ed portfolio and tenant base Hamburg Edinburgh – 7.8 years WAULT with over 30% indexed leases Berlin – 6.9 years debt maturity with over 95% of interest costs Leeds fj xed or capped Germany Manchester – Industry leading cost ratios UK A FTSE 250 Company Bristol Top 20 assets by market value

04 Redefi ne International P .L.C. Capital Markets Day 10 year evolution to an established FTSE 250 UK REIT Internalisation of management UK-REIT conversion Main board listed Dual listed JSE UK-REIT conversion GRESB Corporate Governance Green Fest EPRA A A RBDL hotel management RBDL hotel management Sustainability Sustainability Main board listed RBDL hotel management UK-REIT conversion UK-REIT conversion Sustainability Sustainability >£700m market c >£700m market cap >£7 £700m m £700m m £700m m £700m m m market c m market c m market c m market c m market c et c et cap et cap GPR Index GPR Index Incentives aligned to shareholder returns Corporate Governance Corporate Governance Corporate Governance RBDL hotel management RBDL hotel management RBDL hotel management Internalisation of management Internalisation of management EPRA Internalisation of management Internalisation of management Internal Internalisation of management Internalisation of management Intern Inte Intern Inte Internal Inte Internalisation of management Internalisation of management Int ernalisation o ernalisation o of mana of mana f manag f manag gemen gemen ement ement UK-REIT conversion GPR Index GPR Index Foundation Foundation Foundation Internalisation of management Internalisation of management EPRA EPRA EPRA EPRA Incentives aligned to shareholder returns Incentives aligned to shareholder returns Foundation Foundation UK-REIT conversion EIT c EIT c conver conver ersion ersion Strengthened Board GRESB GPR Index Main board listed GRESB FTSE250 Dual listed JSE Sustainability Strengthened Board Strengthened Board Internalisation of management EPRA FTSE250 Sustainability FTSE250 Green Fest Marke Mark Market value of portfolio £1.53bn ket value of p ket value of p alue of portfolio £ alue of p alue of portfolio £ alue of p alue of p alue of portfolio £ io £1.5 io £1.5 .53bn 53bn GRESB GPR Index Dual listed JSE FTSE250 Sustainability Sustainability EPRA EPRA EPRA Strengthened Board Strengthened Board FTSE250 FTSE250 FTSE4Good FTSE4Good GRESB GRESB £490m AUK deal deal deal GRESB Dual listed JSE RBDL hotel management Green Fest FTSE250 Corporate Governance Sustainability Corporate Governance Dual listed JSE Dual listed JSE FTSE4Good FTSE4Good FTSE4Good GPR Index Green Fest RBDL hotel management Main board listed Strengthened Board Sustainability The foundations have been laid to support future income and value growth

05 Redefine International P .L.C. Capital Markets Day Introducing the management team • Lean but intensive management • Entrepreneurial approach balanced with disciplined asset management and capital recycling – Broad experience base • 36 permanent employees at the centre, 32 in the UK – Allows fmexible, fast and effjcient decision making and 4 in Germany • Incentives aligned to shareholder returns • 6 shopping centre managers and 184 staff employed by • Specialists in our various markets and functions Redefjne Retail Management (1) • All low margin activities are outsourced Skill set to deliver end-to-end value (1) Cost included in service charge

06 Redefi ne International P .L.C. Capital Markets Day Why income – the case for our business model • Total returns from property are largely driven The composition of historic UK property total returns by income • Increased attraction to: 65% 5 years – Predictable income returns – Capital preservation with growth potential 140% 10 years • Trend of compounding income delivering long term returns to continue • Management has ability to infm uence 74% 20 years income returns • Short term capital returns are volatile and affected by external factors 73% 30 years • Increasing income returns will drive sustainable capital growth Income return Capital return Source: MSCI, Lazarus Recurring and predictable income returns are increasingly highly valued in a low economic growth and low interest rate environment

07 Redefi ne International P .L.C. Capital Markets Day The role of REITs in an income deprived environment • Superior vehicle to traditional property funds Retail fund flows • Well placed to provide investors with access to commercial 4 20 real estate returns, with a corporate wrapper which provides: 3 10 – Corporate governance and transparency 2 0 – Scale and liquidity 1 (10) – Asset backed income 0 (20) – Regular, sustainable and growing income‑led total returns (1) (30) – Effj cient gearing (2) (40) Net retail sales, property funds (12 month rolling, £bn, LHS) – Optimal overhead structure Sector NAV premium/discount (%, RHS) (3) (50) – Transparent tax structure 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Lazarus analysis • Alignment to global REIT capital requirements REITs provide institutional and retail investors with access to transparent and liquid commercial real estate returns

08 Redefine International P .L.C. Capital Markets Day We are well placed to take the lead on income • Effjcient at converting gross income to shareholder returns • Active at generating marginal income • Effective at income-led asset management • Solid allocation of capital • Diversifjcation benefjts • Proven track record Income is part of our DNA and an essential part of our investment strategy

09 Redefi ne International P .L.C. Capital Markets Day Income focused – Strategy • Sustainable long term income – infm ation linked • Secure and growing distributions • Sensible debt levels • Limited volatility through the property cycle Our business model is designed to continue provide superior, sustainable and growing shareholder returns

10 Redefi ne International P .L.C. Capital Markets Day A strategy suitable for interesting times I think you will agree that we are living in most interesting times. J Chamberlain, 1898 • Decision to be more fj scally conservative • Move to EPRA distribution metric • Dividend to be rebased • Strong push to sell properties that have reached the “sell by” date for us • Higher growth rates going forward Deliberate decision to be more conservative to protect long term shareholder interests and reposition for attractive growth

11 Redefine International P .L.C. Capital Markets Day Strategic Priority: Become the UK’s leading income focused REIT • High quality portfolio • >£1bn market cap • Limited volatility through • Improved liquidity the cycle Scaleable Income • Recycle capital • Invest in opportunities Business Focused Portfolio across sectors • Limit volatility • Suffjcient scale • Multiple sources of capital • Cost effjcient portfolio Superior, sustainable and growing shareholder returns • Committed to deliver upper quartile income yield • Total returns driven by “real” income growth • Secure income • Capital appreciation • Effjcient conversion of rental • Strong balance sheet income into profjt Efficient Financial • Operational fmexibility • EPRA cost ratio Capital Structure Discipline (excl direct vacancies) <15% • Competitive cost of capital • Covered dividend