Capital Markets Day · 02 Redefine International P.L.C. Capital Markets Day Note: Webcast listeners...

Capital Markets DayBecoming the UK’s leading

income focused REIT6 February 2017

Introduction and Strategic Overview

01Redefine International P.L.C.

Capital Markets Day

Mike Watters Chief Executive Officer


Capital Markets Day

Note: Webcast listeners please email all questions to [email protected]

Asset showcase videos and an introduction to key members of our management team will be shown throughout the presentation

Agenda

Introduction and Strategic Overview Mike Watters (CEO)

Income Focused Portfolio Adrian Horsburgh (Property Director)

Break

Efficient Capital Structure Stephen Oakenfull (Deputy CEO)

Financial Discipline Donald Grant (CFO)

Conclusion and Outlook Mike Watters (CEO)

Q&A

03Redefi ne International P.L.C.

Capital Markets Day

Introduction to Redefi ne International P.L.C.Who we are and what we do

• Income focused UK‑REIT

• Superior, sustainable and growing shareholder distributions

• £1.53bn portfolio

– Retail (55%), Offi ces (19%), Distribution (11%) and Hotels (15%)

• Secure income:

– Diversifi ed portfolio and tenant base

– 7.8 years WAULT with over 30% indexed leases

– 6.9 years debt maturity with over 95% of interest costs fi xed or capped

– Industry leading cost ratios

A FTSE 250Company

Europe’s two largest real estate markets:

Top 20 assets by market value

UK

ManchesterLeeds

EdinburghLondonLondon

Bristol

Germany

Berlin

Hamburg

77%UK

23%Germany


Capital Markets Day

10 year evolution to an established FTSE 250 UK REIT

UK-REIT conversion

>£700m market cap

Market value of portfolio £1.53bn£490m AUK deal

Internalisation of management>£700m market cap

Internalisation of management>£700m market capEPRA

EPRAEPRA

Internalisation of managementEPRA

Internalisation of management

EPRA

EPRAMarket value of portfolio £1.53bn

EPRAMarket value of portfolio £1.53bn

£490m AUK dealEPRA

£490m AUK dealMain board listed

Main board listed

Main board listed

Main board listed Dual listed JSE

Dual listed JSE

Dual listed JSE

Dual listed JSE

Dual listed JSE


Internalisation of managementInternalisation of management





Internalisation of managementFTSE250

FTSE250Market value of portfolio £1.53bn

FTSE250Market value of portfolio £1.53bn

FTSE250

FTSE250

FTSE250

FTSE250

GPR Index

GPR Index

GPR Index

Internalisation of managementGPR Index

Internalisation of managementInternalisation of managementEPRA

Internalisation of managementGPR Index

Internalisation of managementEPRA


GPR Index

RBDL hotel managementRBDL hotel managementEPRARBDL hotel managementEPRA >£700m market capRBDL hotel management

>£700m market capInternalisation of management

RBDL hotel management



RBDL hotel management>£700m market cap




Incentives aligned to shareholder returnsInternalisation of management

Incentives aligned to shareholder returnsInternalisation of management

Incentives aligned to shareholder returns

Corporate Governance



>£700m market capCorporate Governance

>£700m market capInternalisation of management




Corporate Governance>£700m market cap


Strengthened Board

Market value of portfolio £1.53bnStrengthened Board

Market value of portfolio £1.53bn

Strengthened Board

Strengthened BoardMarket value of portfolio £1.53bn

Strengthened BoardMarket value of portfolio £1.53bn

Strengthened Board

SustainabilityGPR Index

SustainabilityGPR Index

Sustainability>£700m market cap

Sustainability>£700m market cap

Sustainability

Sustainability

Sustainability

Sustainability

SustainabilityMarket value of portfolio £1.53bn

SustainabilityMarket value of portfolio £1.53bnGRESB

GRESB

UK-REIT conversionGRESB

UK-REIT conversion

GRESB

GRESBMarket value of portfolio £1.53bn

GRESBMarket value of portfolio £1.53bn

GRESB

FTSE4GoodMarket value of portfolio £1.53bn

FTSE4GoodMarket value of portfolio £1.53bn

FTSE4Good FTSE4GoodDual listed JSE

FTSE4GoodDual listed JSE

Green Fest

Green Fest

Green Fest

Green Fest

Foundation

UK-REIT conversionFoundation

UK-REIT conversionInternalisation of management

FoundationInternalisation of management

Foundation

UK-REIT conversionFoundation

UK-REIT conversion

UK-REIT conversion

UK-REIT conversion

UK-REIT conversion

UK-REIT conversion

>£700m market capUK-REIT conversion

>£700m market cap

The foundations have been laid to support future income and value growth


Capital Markets Day

Introducing the management team

• Lean but intensive management

– Broad experience base

– Allows flexible, fast and efficient decision making

• Incentives aligned to shareholder returns

• Specialists in our various markets and functions

• Entrepreneurial approach balanced with disciplined asset management and capital recycling

• 36 permanent employees at the centre, 32 in the UK and 4 in Germany

• 6 shopping centre managers and 184 staff employed by Redefine Retail Management(1)

• All low margin activities are outsourced

Skill set to deliver end-to-end value(1) Cost included in service charge


Capital Markets Day

Recurring and predictable income returns are increasingly highly valued in a low economic growth and low interest rate environment

Why income – the case for our business model

• Total returns from property are largely driven by income

• Increased attraction to:

– Predictable income returns

– Capital preservation with growth potential

• Trend of compounding income delivering long term returns to continue

• Management has ability to infl uence income returns

• Short term capital returns are volatile and affected by external factors

• Increasing income returns will drive sustainable capital growth

30 years 73%

20 years 74%

10 years 140%

5 years 65%

Capital returnIncome return

Source: MSCI, Lazarus

The composition of historic UK property total returns


Capital Markets Day

The role of REITs in an income deprived environment

• Superior vehicle to traditional property funds

• Well placed to provide investors with access to commercial

real estate returns, with a corporate wrapper which provides:

– Corporate governance and transparency

– Scale and liquidity

– Asset backed income

– Regular, sustainable and growing income‑led total returns

– Effi cient gearing

– Optimal overhead structure

– Transparent tax structure

• Alignment to global REIT capital requirements

REITs provide institutional and retail investors with access to transparent and liquid commercial real estate returns

Retail fund flows

2007(3)

Source: Lazarus analysis

Net retail sales, property funds (12 month rolling, £bn, LHS)Sector NAV premium/discount (%, RHS)

(2)

(1)

0

1

2

3

4

(50)

(40)

(30)

(20)

(10)

0

10

20

20132012201120102009 2014 20152008 2016


Capital Markets Day

• Efficient at converting gross income to shareholder returns

• Active at generating marginal income

• Effective at income-led asset management

• Solid allocation of capital

• Diversification benefits

• Proven track record

We are well placed to take the lead on income

Income is part of our DNA and an essential part of our investment strategy


Capital Markets Day

Income focused – Strategy

• Sustainable long term income – infl 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


Capital Markets Day

A strategy suitable for interesting times

Deliberate decision to be more conservative to protect long term shareholder interests and reposition for attractive growth

• Decision to be more fi 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

I think you will agree that we are living in most interesting times.J Chamberlain, 1898


Capital Markets Day

Strategic Priority: Become the UK’s leading income focused REIT

Superior, sustainable and growing shareholder returns

Scaleable Business

Efficient Capital Structure

Income Focused Portfolio

Financial Discipline

• High quality portfolio

• Limited volatility through the cycle

• Invest in opportunities across sectors

• Sufficient scale

• Cost efficient portfolio

• Efficient conversion of rental income into profit

• EPRA cost ratio (excl direct vacancies) <15%

• Covered dividend

• >£1bn market cap

• Improved liquidity

• Recycle capital

• Limit volatility

• Multiple sources of capital

• Strong balance sheet

• Operational flexibility

• Competitive cost of capital

• Committed to deliver upper quartile income yield

• Secure income

• Total returns driven by “real” income growth

• Capital appreciation


Capital Markets Day

Strategic Priority: Become the UK’s leading income focused REIT


Scaleable Business

Effi cient Capital Structure






• Suffi cient scale

• Cost effi cient portfolio

• Effi cient conversion of rental income into profi t





• Recycle capital




• Operational fl exibility



• Secure income




Capital Markets Day


Adrian Horsburgh Property Director


Capital Markets Day

Strategic Priority: Income Focused Portfolio



Scaleable Business














• Recycle capital







• Secure income




Capital Markets Day

Portfolio last reported

Market value £1.5bn as at 31 August 2016

Completed and integrated the transformational £490m AUK acquisition; ongoing steps to significantly improve the quality of the portfolio

Retail: 55% Commercial: 30%Hotels: 15%

UK shopping centres: 22% German retail: 20% UK retail parks: 13%

Logistics: 11%Offices: 19%

5.8%EPRA NIY

7.8yrsWAULT

97.7%Occupancy

77%UK

23%Germany

Sector specialism across Retail, Office, Logistics and Hotels



Capital Markets Day

Income-led property philosophy and strategyPrimary focus on acquiring and owning assets underpinned by occupier demand

• Invest in property fundamentals rather than being sector specific

• Understand occupier demand and economic rents:

– Each asset has an income-led business plan with clearly identified opportunities to add value

– Ongoing investment in our assets

– Recycle capital from assets once value has been maximised

Owners of strong property fundamentals with clearly identified value-add opportunities to support future income security

and delivery of market beating growth

Distribution and Industrial

Retail Parks

Current targeted sectors:

Areas undergoing structural change



Capital Markets Day

Continuously improving quality of portfolio

• Economic growth locations

• Positive structural change

• Long WAULTS (8.2 years)

• Indexed rents (53% indexed)

• High cash on cash returns

• Continued void reduction (void 7.2%)

• Commercialisation

• Expansion capex focused on high yielding opportunities

• Reconfiguration of existing space

• Since 31 August 2016 disposed of £98.9m assets

41% Core secure

income

32% Growth income

20% Income-led asset

management opportunities

7% Mature assets

All values as reported for 31 August 2016

We aim to have approximately 70% of total returns driven by secure and growing income; remainder through active asset management

% portfolio by market value



Capital Markets Day

Resilient income profile with 80% of gross rental income beyond 5 years to first break option

Income securityClear income visibility with WAULT of 7.8 years supported by diversified portfolio

FY2017 FY2018 FY2019 FY2020 FY2021 FY2026+FY2025FY2024FY2023FY2022

UK Retail UK Hotels EuropeUK Commercial

5.03.1

1.6

6.84.1

10.4 9.77.5 7.1

44.7

Tenant Profile

• Diverse and high quality sources of rental income

• Over 550 tenants

• Over 30% of portfolio subject to index‑linked rents

Top 10 tenantsAs at % of gross 31 August 2016 rental income Units

UK Government 5.4 10

B&Q 3.9 5

VBG(1) 3.5 4

Tesco 3.5 1

Edeka 3.3 34

Royal Mail 2.2 2

Primark 1.9 1

OBI 1.8 3

Debenhams 1.6 2

Wilko 1.6 4

(1) German government‑backed social insurance body (Note: sold post year end)All values as reported for 31 August 2016

Lease expiries to first break by gross rental income (%)



Capital Markets Day

Actively drive income growthCase study: £490m transformational AUK acquisition completed in March 2016

• Income yield (1) on purchase increased by 40 bps to 5.8%(2)

• Lettings – regional offices’ voids reduced from 20% to 3%(2)

• Distribution – rental growth +14% and WAULT +30%

• Retail Parks – 100% let and strong demand from F&B and leisure occupants

• Disposals – Grosvenor Street and Manchester, 14.6% premium to book value

210 Deansgate, Manchester

(1) EPRA topped up yield(2) Pro‑forma including 201 Deansgate, Manchester disposal and City Point, Leeds letting post 31 August 2016 Income

Focused Portfolio


Capital Markets Day

Delivering on business plansCase study: Camino Park, Crawley

Business Plan assumption

Exit price

IRR

Geared IRR

£46.8m

7.6%

11.8%

Revised targets

Exit price

IRR

Geared IRR

£55m (+17.5%)

11.5% (+390bps)

18.4% (+660 bps)

At acquisition

Price

Income

ERV

Vacancy

£42m

£2.4m(1)

£3.0m

4.1%(1)

Only 11 months later

Price

Income

ERV

Vacancy

£45m (+7.1%)

£2.7m (12.5%)

£3.2m (6.7%)

100% let

Every property has a business plan, each varies in its complexity, risk and return

(1) Following expiry of Northern Foods in December 2015 Income Focused Portfolio


Capital Markets Day

Further asset management opportunities identifi ed

Clear pipeline of further income-led asset management opportunities

Short term1 – 2 years

Long term5+ years

Medium term3‑5 years

Leasing activity

Reconfi guration/expansions/development

Rental income opportunity pipeline


Camino Park, Crawley

Charing Cross Road

Charing Cross RoadAlbion Street, Derby

Bahnhoff Center, Hamburg

Omnibus, Reigate

Crescent Centre, Bristol

Priory Retail Park, Merton

Banbury CrossRetail Park

The Arches Retail Park, Watford

City Arcaden, Ingolstadt

Charing Cross Road

Continued indexation

of circa 30% of portfolio


Capital Markets Day

Market outlook supports our asset allocation decisionsLargely insulated from potential Brexit volatility

UK Commercial: Offices

• Limited supply and speculative development

• Secondary space lost to residential and student accommodation

• Resilient take up in West End (London) and Southbank

UK Retail

• Not all retail is bad

– Convenience and value growing

– “Right” retail parks show strong demand from leisure, F&B and commercialisation

• Residential development

• Inflation impact on retailers

UK Hotels

• London limited service hotels showing resilient trading performance

UK Commercial: Logistics

• Focused on mid box and last mile distribution

• Positive impact from online retailing

Germany

• Berlin and Hamburg Europe’s top two investment cities (source: ULI)

• Largely index linked (98%)

• Historically low interest rates

• Return of inflation and higher interest rates

• Growing urbanisation

• Expand within sphere of influence where metrics support the case

We will continue to invest capital where we see the ability to deliver the best risk-adjusted returns Income

Focused Portfolio


Capital Markets Day

Disposal strategyAUK adds additional scale allowing a more active approach to repositioning our portfolio for growth

Strategic disposals

Low growth assets with potential long term structural income risks

VBG portfolio

• Acquired in JV in 2012

• Gross acquisition cost of €84.9m

• Yield on equity of c. 19%

• Sold in 2017 for €106.0m

• Geared IRR of 27%

Realising value following active asset management

Once income is maximised, through reconfiguration, refurbishment or lease activity, the asset is considered for potential disposal

Delta 900, Swindon

• Inherited through Wichford reverse take‑over

• Government tenant vacated in March 2014

• 15 year lease agreed with Oxford Brookes University at 20.8% above ERV

• Sale exchanged at £3.6m, a 31% premium to book value

Opportunistic disposals

Realise attractive prices are considered on a risk‑adjusted basis taking into consideration future capital commitments, planning and letting risk

201 Deansgate, Manchester

• Acquired as part of AUK transaction

• Purchase price of £25.8m

• Low initial yield

• Sold for £29.2m, 14% above book value

Higher quality portfolio to support longer term holds and lower transaction costs Income

Focused Portfolio

Conclusion: Income Focused Portfolio


Capital Markets Day


Sector/geographic agnostic

Property fundamentals

Leading income focused REIT


Capital Markets Day


Stephen Oakenfull Deputy Chief Executive


Capital Markets Day

Strategic Priority: Effi cient Capital Structure


Scaleable Business














• Recycle capital







• Secure income



Effi cientCapital

Structure


Capital Markets Day

• Weighted average debt maturity of 6.9 years

• No material maturities until 2020

• Weighted average cost of debt 3.4%

• Over 95% of debt at fixed or capped rates

• £303 million AUK facility provides flexible capital structure and cost of debt efficiencies

• Non‑recourse debt funding

• German assets funded with Euro debt providing natural FX hedge

• Net Euro exposure:(2)

– 21% of NAV

– 27% of EPS

Current capital structure last reported

(1) Net of £34.3m of cash(2) At 31 August 2016, prior to sale of VBG portfolio(3) Refinancing terms agreed to reduce LTV to 61.6% with LTV covenant of 85%

Proportionate borrowings (as at 31 August 2016)

LTV: 50.2%

LTV covenant ave: 68.9%

Weighted average maturity: 4.3 years

LTV: 70.2%(3)

LTV covenant ave: n/a


LTV: 59.7%



LTV: 53.4%(1)


UK bank debt £466.5m (55%)

Group £850.6m

UK-non bank (fixed rate) borrowings

£178.2m (21%)

Europe £205.9m (24%)

Well structured debt profile with covenant headroom

Efficient Capital

Structure


Capital Markets Day

Progress since 31 August 2016

• Pro‑forma leverage reduced to 49.6%(1) from 53.4%

• £107.8m of sales completed at an average net initial yield of 6.2%

• Debt reduced by £55.4m at average cost of debt of 4.2%

Au

g 1

7

GBP

Euro

Refi/Sold/Repaid

Aggregation of UK facilities to support ambition to move to unsecured debt financing

New

Au

g 1

8

Au

g 1

9

Au

g 2

0

Au

g 2

1

Au

g 2

2

Au

g 2

3

Au

g 2

4

Au

g 2

5

Au

g 2

6

Au

g 2

7

Au

g 2

8

Au

g 2

9

Au

g 3

0

Au

g 3

1

Au

g 3

2

Au

g 3

3

Au

g 3

4

Au

g 3

5

Au

g 3

6

Au

g 3

7

Au

g 3

8

Au

g 3

9

Au

g 4

0

Au

g 4

1

Au

g 4

2

12.8

40.9

22.7

103.5

9.0 10.2

89.5

28.5

50.0

151.4373.1

121.5

Debt maturity profi le (£m)

All data stated on a pro‑forma basis [refl ecting disposals of and debt reduction of £55.4m since 31 August 2016](1) Prior to any potential reinvestment of disposal proceeds

Limited refi nancing risk

Effi cientCapital

Structure


Capital Markets Day

Capital allocation

Target highest LTV facilities

• Increase covenant headroom on more highly geared facilities

• Greatest re-pricing benefit

• Typically removing amortisation and enhancing cash flow

UK non-bank debt(1) 31 August 2016 Pro-forma

Debt

Cost of debt

LTV

Share of net income(3)

£170.0m

5.8%

70.9%

50%

£146.0m

c. 5.6%(2)

61.6%

100%

Euro debt facility(1) 31 August 2016 Pro-forma

Debt

Cost of debt

Amortisation

LTV

£44.2m

3.68%

2.0% p/a

67.9%

£38.2m

c. 2.70%(2)

none

58.7%

Effective balance between leverage and reinvestment

Achieving marginal returns on equity in excess of our cost of debt

Yield on equity: c. 10.0%

Yield on equity: c. 9.8%

(1) Terms agreed, completion anticipated prior to 28 February 2017(2) Rates indicative and subject to completion(3) Restructuring terms include the “release” of a 50% income share (c. £1.5m pa) at a cost of c. £6.5m

Reducing leverage effectively whilst limiting impact on income

Efficient Capital

Structure


Capital Markets Day

• Disposals programme based on outlook for individual assets and independent of decision to reduce leverage

• Immediate focus on disposals of:

– Assets where business plans have been successfully executed and value creation maximised

– Assets with bottom quartile IRRs, and often with negative rental and/or capital growth expectations

• Continued capital recycling will be driven by:

– Commitment to improve the quality and growth profile of the portfolio

– Reduction in exposure to assets which are expected to deliver IRRs below our cost of capital

– Opportunistic sales where offer prices are above our view of asset value/worth

Capital recycling & disposals

Disposals Reversionary Net rental since 31 August 2016 NIY on yield on income Proportionate (£m) Completion Book value Sales price sales price sales price impact

Watford, Exchange House October 2016 11.8 13.3 6.9% 5.8% (1.0)

VBG portfolio January 2017 40.6 44.1 6.5% 4.9% (3.0)

Manchester, Deansgate January 2017 25.5 29.2 3.6% 7.0%(1) (1.1)

Other smaller sales Q2/Q3 FY2017 21.0 21.2 9.0% 7.4% (2.0)

Total 98.9 107.8 6.2% 6.0% (7.1)

(1) Reversionary yield assumes 16,643 sqft of vacant space fully let(2) 31 August 2016 FX rates assumed Efficient

Capital Structure


Capital Markets Day

Achieving a lower leverage model

• Refi nancing or extending facilities at lower leverage and a reduced margin

• Revised dividend policy and pay‑out ratio to provide recurring improvement in cashfl ow and net debt

• Capital recycling and investment to be undertaken at lower marginal leverage

• Resulting in a lower cost of capital to be used to support growth and investment

• Deleveraged balance sheet to support medium term target of moving toward a partially unsecured debt structure

Effi cientCapital

Structure


Capital Markets Day

• Continued incremental gains anticipated on cost of debt

• Over 95% of debt fixed or capped rates

• Ratcheted margin structure of £303m AUK facility

• Targeting average cost of debt of 3.3% in the short term

Cost of debtTrack record of reducing leverage effectively

Strategic target to strengthen our balance sheet by incrementally reducing LTV to 45% – 50%

FY201140%

FY17 targetLTV (%)Weighted cost of debt (%)

60%

55%

50%

45%

65%

70%

75%

80%

85%

LTV (%)

75.4%

53.4%

3.3%

45–50%

5.0%

Cost of debt (%)

5.5%

3.0%

3.5%

4.0%

4.5%

5.0%

FY2013 FY2014 FY2016FY2015 FY2017FY2012

Historic weighted average cost of debt and LTV

Efficient Capital

Structure


Capital Markets Day

Conclusion: Efficient capital structureMedium Term Guidance

Medium term target Strategic targets

Leverage • LTV: 45% – 50% • LTV: 40% – 50%

Sources of capital • More flexible debt facilities

• Revolving credit facilities

• Wider shareholder appeal

• Debt capital markets (unsecured)

• Investment grade credit rating

• Broad institutional shareholder base

Cost of capital • Capitalise on refinancing at historically low rates

• Enhanced equity rating

• Competitive cost of debt

• Premium equity rating

Allocation of capital • Disposal of mature assets

• Asset management capex

• Effective de‑leveraging

• Investment in growth assets

• Headroom and liquidity to capitalise on opportunities

Efficient Capital

Structure


Capital Markets Day

Financial discipline

Donald Grant Chief Financial Officer


Capital Markets Day

Strategic Priority: Financial Discipline


Scaleable Business














• Recycle capital







• Secure income




Capital Markets Day

Financial DisciplineYesterday, today and tomorrow

Historic August 2016 Medium term target

Rent collection 75% – 85% within 7 days Typically 90% within 7 days >95% within 7 days

Cost control (EPRA cost ratio) Typically < 20% 14.9% Target 15% or less

Interest cover 1.6x 2.7x >3x

LTV > 80% in 2012 53.4% 45% – 50%

Cashflow Distributable earnings 100%(102% FY15)

Distributable earnings 100% EPRA based dividend with 90% – 95% payout ratio

Liquidity

• No RCF

• Asset specific debt

• Minimal cash reserves

• Improved financial flexibility

– £34m cash

– £23m undrawn facilities

– £155m RCF

• Increase committed facilities

• Hold minimal cash at hand to avoid drag on earnings

• Unsecured debt model with limited amortisation



Capital Markets Day

Efficient conversion of rental income into profit

Managing an efficient cost base is one of our core competencies

• Focused on all items within the income statement

– Growing rental income;

– Managing and securing our cost of debt; and

– Driving efficiency from overheads

• Lean but extremely engaged management team and work force

• Close management of both administrative overheads and non‑recoverable costs (voids)

• Continuing to capitalise on low interest rate environment in both the UK and Germany

How do we do it?

• Cost conscious culture throughout the organisation

• Profitabillity focused performance management

• Competitive tendering, coupled with strong partnerships with advisers and service providers

• Create scale where possible to leverage volume discounts

• Flat internal structure, continued simplification of both Group structure and administrative processes



Capital Markets Day

One of the lowest EPRA cost ratios in the industry14.9% at FY16

UK

REIT

1

UK

REIT

2

Red

efin

eIn

tern

atio

na

l

UK

REIT

4

UK

REIT

5

UK

REIT

6

UK

REIT

7

UK

REIT

8

UK

REIT

9

UK

REIT

10

UK

REIT

11

UK

REIT

12

UK

REIT

13

UK

REIT

14

UK

REIT

15

0

10

20

30

40

EPRA cost ratio excluding vacancy

Market capitalisation>£3.5 billion

Source: Company reports and broker estimates Financial Discipline


Capital Markets Day

EPRA Based Dividend policy: Rebasing 2016Providing greater financial flexibility in support of repositioning and leverage reduction

FY16 FY16 Underlying earnings Reported Rebased [including share of joint venture] £m £m

Net rental income 89.3

Investment and other income 3.6

Administrative costs (11.4)

Net finance expense (33.1)

Wigan profit share (1.5) Profit share to be bought out from February 2017

Other items (2.8) Primarily minority interest

EPRA earnings 44.1 44.1

Company adjustments:

Reverse debt accretion charges (non‑cash) 3.1 3.1 Unwinding IFRS debt fair valuation

FX gains and losses (0.9) (0.9) Arising in the income statement on monetary items

Other items 3.1 — Discontinued Company adjustments

Underlying earnings 49.4 46.3

Profit on disposal of 16 Grosvenor Street (non‑recurring) 2.8 2.8 Included to normalise FY16 distributable earnings

Distributable earnings 52.2 49.1



Capital Markets Day

Impact of H1 2017 disposals and debt prepayments

(1) Full year impact of AUK acquisition expected to add £2.5 million in net rent during 2017

(2) Disposals of £99 million at an average NIY of 6.2% completed or targeted to complete since August 2016

– Annualised net rental impact of £7.1 million (c. £4.1 million in 2017)

(3) Debt prepayments of £55.4 million at an average cost of 4.2% since August 2016

– Annualised finance cost saving of £4.0 million (c. £2.2 million in 2017)

(4) Profit share buy‑out achieved following debt prepayment £1.5 million per annum (c. £0.7 million in 2017)

3.1 0.3

4.1 2.2 0.7

2016 Distributableearnings

DiscontinuedCompany

adjustments(cash retained)

2016 Rebased (1)Additional AUK

rent net ofGrosvenor Street gain

(£2.5m-£2.8m)

(2)Net rental

impactof disposals(£7.1m p.a.)

(3)Finance

cost savingfollowing disposals

(£4.0m p.a.)

(4)Profit share

buy-out(£1.5m p.a)

Adjusted 2016applying growthand reinvestment

assumptions

£52.2m £49.1m £47.6m(2.6pps)

c. 2.7 – 2.8pps

c. £48m – £52m

• Weighted average shares on issue 31 August 2016: 1,637.2m

• Shares on issue at 31 January 2017: 1,811.7m

Earnings £m



Capital Markets Day

Medium term guidance

• Future dividends derived from EPRA based earnings with alignment to operating cashflow

• Pro‑forma weighted average cost of debt expected to fall to 3.3%

• Pro‑forma LTV down to 50%

Medium term target

Net rental income growth 2% – 5%

Administrative overheads 15% EPRA cost ratio

Cost of debt 3.2% – 3.4%

LTV 45% – 50%

EPS basis Underlying earnings, an EPRA based measure

Pay‑out ratio 90% – 95%

EPS growth 3% – 5%, achieving “real” inflation adjusted growth


Committed to continue delivering upper quartile distributions for our shareholders


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Outlook & Conclusion

Mike Watters Chief Executive Officer


Capital Markets Day

Commitment to become the UK’s leading income-focused REITOutlook and conclusion


Scaleable Business




• Committed to deliver upper quartile income yield• Secure income

• Total returns driven by “real” income growth • Capital appreciation


Capital Markets Day

Appendices


Capital Markets Day

Mike WattersCEOe: [email protected]

Stephen OakenfullDeputy CEOe: [email protected]

Donald GrantCFOe: [email protected]

Adrian HorsburghProperty Directore: [email protected]

Janine AckermannHead of Investor Relations e: [email protected]

Redefine International P.L.C.2nd Floor, 30 Charles II StreetLondon SW1Y 4AEt: +44 (0) 20 7811 0100

Visit us online www.redefineinternational.com

@RedefinePLC

Redefine International

Redefine International Team


Capital Markets Day

Balanced exposure to retail, commercial and hotel sectors, supported by sector specialist asset managers

Where we operateGeographical focus in Europe’s two largest and most liquid property markets

Germany

Europe

UK Retail

15%

22%

36%

27%

UK Commercial

Market value£1.5bn

UK Hotels

UK

London

Jersey

Key UK Commercial UK Retail Hotels AUK German assets

All data as reported for 31 August 2016


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AUK acquisition consistent with investment philosophy to invest in assets with resilient and growing income returns

• Portfolio value increased by c.50%

• Transaction completed in two tranches:

– Tranche I: 10 assets, completed in September and October 2015 for £256m

– Tranche II: 9 assets, completed in March 2016 for £205m

• High quality institutional assets, 75% located in economic growth areas

• Pre‑completion disposal of Grosvenor Street, London realising £2.8m net profit

Transformational milestone achieved with AUK in 2016

AUK Retail valued at £200m(1)

(8 properties)AUK Offices valued at £132m(1)

(6 properties)AUK Distribution & Other valued at £125m(1) (5 properties)



Capital Markets Day

£1.5bn portfolio enhances ability to allocate & recycle capital into new opportunities to deliver the best risk adjusted returns

Portfolio repositioned for further income growthAUK improves portfolio exposure to sub-sectors with good income and value growth prospects

• Exposure to assets with stronger fundamentals providing income‑led asset management opportunities

• More active capital recycling

• Investment market remains strong for secure income

• Disposals to focus on mature and underperforming assets

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Greater London

Big 6 UK cities

Big 5 German cities

UK South

Dominant regionalshopping centres

Other

UK Retail Parks

UK Regional Offices

UK Hotels

UK London Offices

Germany

Other

UK Distribution & Industrial

UK Automotive

UK Shopping Centres

15%29%

10%

11%9%

17%

24%

12%

10%22%

22%

6%

4%2%

7%

Market value by geography Market value by sector



Capital Markets Day

Our strategy remains clearly focused on income-led total returns

Repositioning the portfolio for continued growthActively increasing our exposure to targeted sectors with positive growth expectations

Reported Reported Sector exposure Pro‑forma 2016(1) 2015 (1) by market value % % %

UK Shopping centres 23 22 33

UK Retail parks & other 14 13 —

UK Offices 13 16 12

UK Distribution & industrial 7 7 —

UK Automotive 5 4 4

UK Hotels 16 15 22

Germany 22 23 29

Overall 100 100 100 Camino Park, Crawley

(1) As reported at 31 August 2016


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Strategically targeted sectors

UK Retail – Market value £537m

UK Commercial – Market value £418m

UK Hotels – Market value £229m

Europe – Market value £345m

• 6 wholly‑owned regionally dominant shopping centres, tenanted by leading retailers including Tesco, Debenhams, Wilkos, Boots, H&M and TK Maxx

• 5 well located retail parks, of which 4 assets are in London, UK South and “Big 6” UK cities

• Other assets include high street retail assets and a retail warehouse

• 8 limited service hotels in Greater London and 1 hotel in Edinburgh

• Branded Holiday Inn, Holiday Inn Express, Crowne Plaza and DoubleTree by Hilton

• 25.3% holding in RedefineBDL, the UK’s largest independent hotel manager

• 15.5% holding in IHL, a hotel and leisure focused listed entity

• 4 Greater London offices some of which present alternate uses

• 20 regional offices, 5 AUK assets with high vacancies

• 2 well located distribution centres

• Vehicle dealership, service station and motor trade properties which provide defensive income on long leases, with leading brands including BP and Kwik Fit

• 87 properties in Germany

• Almost 50% by value contributed by 3 well located shopping centres in Berlin, Hamburg and Ingolstadt

• Other assets include retail parks, small discount supermarkets and government‑let offices

• Tenants are weighted to non‑discretionary food stores and discounters

Occupancy (%) 98.7

Lettable area (m2) 237,694

Annualised gross rental income (£m) 40.6

EPRA net initial yield (%) 6.3

# properties 14

WAULT (years) 8.8

Occupancy (%) 94.6




# properties 64

WAULT (years) 6.1

Occupancy (%) 100.0




# properties 9

WAULT (years) 10.3

Occupancy (%) 98.5




# properties 87

WAULT (years) 6.5



Capital Markets Day

Portfolio analysis – reportedPortfolio summary

Annualised EPRA Weighted Values as at % of portfolio by Market gross rental topped Reversionary average EPRA voids 31 August 2016 market value value (£m) Properties Area (m2) income (£m) ERV (£m) EPRA NIY up yield yield lease length (by ERV) Indexed

UK Shopping Centres 22% 337.2 6 157,175 26.4 27.3 6.3% 6.5% 7.6% 8.4 1.9% 21.9%UK Retail Parks 12% 168.5 5 50,971 11.7 10.7 6.2% 6.5% 5.9% 8.1 — 2.1%UK Retail – other 2% 31.4 3 29,548 2.5 2.3 7.2% 7.2% 6.8% 16.7 1.0% —UK Retail 36% 537.1 14 237,694 40.6 40.3 6.3% 6.5% 7.0% 8.8 1.3% 14.8%UK Offices – Greater London 6% 91.4 4 15,706 4.3 5.0 3.8% 4.3% 5.1% 6.3 — 36.6%UK Offices – Regional 10% 158.5 20 79,433 12.7 13.2 6.1% 7.0% 7.8% 4.2 9.5% 25.3%UK Distribution and Industrial 7% 100.3 4 98,991 6.2 7.0 5.5% 5.8% 6.5% 6.0 4.0% —UK Automotive 4% 67.3 36 22,699 4.3 3.4 5.9% 5.9% 4.8% 11.8 — 67.2%UK Commercial 27% 417.5 64 216,829 27.5 28.6 5.4% 5.9% 6.4% 6.1 5.4% 27.8%Greater London & RBDL portfolio 12% 183.9 7 29,426 12.3 12.0 6.2% 6.2% 6.1% 9.3 — —Edinburgh, DoubleTree by Hilton 2% 31.1 1 7,250 2.0 2.5 6.0% 6.0% 7.4% 9.5 — 4.4%London, Enfield Travelodge 1% 14.2 1 4,647 0.7 0.7 4.8% 4.8% 4.8% 30.9 — 100.0%UK Hotels 15% 229.2 9 41,323 15.0 15.2 6.1% 6.1% 6.2% 10.3 — 5.3%Total UK 78% 1,183.8 87 495,846 83.1 84.1 5.9% 6.2% 6.6% 8.2 2.5% 17.4%German Shopping Centres 10% 160.2 3 34,903 8.7 9.9 4.5% 4.5% 5.8% 5.0 0.6% 98.1%German Supermarkets and Retail Parks 9% 144.4 80 129,037 10.7 10.6 6.2% 6.2% 6.9% 7.5 2.1% 97.0%German Offices 3% 40.6 4 22,121 3.4 2.2 7.4% 7.4% 5.1% 6.9 2.7% 99.9%Europe 22% 345.2 87 186,061 22.8 22.7 5.6% 5.6% 6.2% 6.5 1.5% 97.9%Total 100% 1,529.0 174 681,907 105.9 106.8 5.8% 6.1% 6.5% 7.8 2.3% 34.7%

Wholly owned 91% 1,388.1 98 575,898 94.8 97.2 5.8% 6.0% 6.6% 7.8 2.4% 28.1%Held in joint ventures (proportionate) 9% 140.9 76 106,009 11.1 9.6 6.7% 7.7% 6.6% 8.0 1.3% 91.8%Portfolio (excl AUK) 70% 1,072.4 155 464,727 77.2 76.7 6.1% 6.2% 6.7% 7.9 1.3% 46.2%AUK portfolio 30% 456.6 19 217,180 28.7 30.1 5.1% 5.7% 6.2% 7.6 4.6% 4.0%



Capital Markets Day

Portfolio analysis – pro-formaPortfolio summary

% of Annualised EPRA Weighted portfolio by Market gross rental topped Reversionary average EPRA voids Total portfolio – Pro–forma(1) market value value (£m) income (£m) ERV (£m) EPRA NIY up yield yield lease length (by ERV) % Indexed

UK Shopping Centres 23% 337.2 26.4 27.3 6.3% 6.5% 7.6% 8.4 1.9% 21.9%UK Retail Parks 12% 168.5 11.7 10.7 6.2% 6.5% 5.9% 8.1 — 2.1%UK Other Retail 2% 31.4 2.5 2.3 7.2% 7.2% 6.8% 16.7 1.0% —UK Retail 37% 537.1 40.6 40.3 6.3% 6.5% 7.0% 8.8 1.3% 14.8%UK Offices – Greater London 6% 79.6 3.3 4.2 3.2% 3.8% 4.9% 7.7 — 17.7%UK Offices – Regions 8% 110.5 7.9 8.3 5.3% 6.4% 7.0% 4.7 6.6% 16.0%UK Distribution and Industrial 7% 100.3 6.2 7.0 5.5% 5.8% 6.5% 6.0 4.0% —UK Automotive 5% 67.3 4.3 3.4 5.9% 5.9% 4.8% 11.8 — 67.2%UK Commercial 26% 357.7 21.7 22.9 5.0% 5.6% 6.0% 6.9 3.6% 21.8%Greater London & UK South portfolio 13% 183.9 12.3 12.0 6.2% 6.2% 6.1% 9.3 — —Edinburgh 2% 31.1 2.0 2.5 6.0% 6.0% 7.4% 9.5 — 4.4%Enfield Travelodge 1% 14.2 0.7 0.7 4.8% 4.8% 4.8% 30.9 — 100.0%UK Hotels 16% 229.2 15.0 15.2 6.1% 6.1% 6.2% 10.3 — 5.3%Total UK 79% 1,124.0 77.3 78.4 5.8% 6.1% 6.5% 8.6 1.7% 14.9%German Shopping Centres 11% 160.2 8.7 9.9 4.5% 4.5% 5.8% 5.0 0.6% 98.1%German Supermarkets and Retail Parks 10% 144.4 10.7 10.6 6.2% 6.2% 6.9% 7.5 2.1% 97.0%German Offices — — — — — — — — — —Europe 21% 304.6 19.4 20.5 5.3% 5.3% 6.3% 6.4 1.4% 97.5%Total 100% 1,428.6 96.7 98.9 5.7% 5.9% 6.5% 8.1 1.6% 31.5%

(1) Pro‑forma including all disposals and City Point, Leeds letting post 31 August 2016


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AUK portfolio – reported

% of portfolio Annualised EPRA Weighted AUK portfolio as at by market Market value gross rental Gross EPRA topped Reversionary average Voids (by 31 August 2016 value (£m) Properties Area (m2) income (£m) ERV (£m) NIY up yield yield lease length gross ERV) Indexed

Retail Parks 36.9% 168.5 5 50,971 11.7 10.7 6.2% 6.5% 5.9% 8.1 — 2.1%Retail – Other 6.9% 31.4 3 29,548 2.5 2.3 7.2% 7.2% 6.8% 16.7 1.0% —Retail Portfolio 43.8% 199.9 8 80,519 14.2 13.0 6.3% 6.6% 6.1% 9.6 0.2% 1.7%Offices – Greater London 10.7% 49.0 1 3,776 1.8 2.3 2.6% 3.4% 4.4% 5.2 — 32.3%Offices – Regional 18.1% 82.7 5 27,866 5.2 6.7 3.9% 5.2% 7.6% 4.3 16.2% 6.2%Offices – Total 28.8% 131.7 6 31,642 7.0 9.0 3.4% 4.5% 6.4% 4.5 12.1% 12.9%Distribution and Industrial 22.0% 100.3 4 98,991 6.2 7.0 5.5% 5.8% 6.5% 6.0 4.0% —Automotive 5.4% 24.7 1 6,028 1.3 1.1 5.2% 5.2% 4.2% 8.6 — —Other – Total 27.4% 125.0 5 105,019 7.5 8.1 5.4% 5.7% 6.1% 6.5 3.5% —Commercial Portfolio 56.2% 256.7 11 136,661 14.5 17.1 4.4% 5.1% 6.3% 5.6 8.0% 6.1%Total Portfolio 100.0% 456.6 19 217,180 28.7 30.1 5.1% 5.7% 6.2% 7.6 4.6% 4.0%

Tranche I 53.8% 245.7 10 154,431 17.2 16.8 6.2% 6.5% 6.4% 8.1 1.8% 1.4%Tranche II 46.2% 210.9 9 62,749 11.5 13.3 4.1% 4.9% 5.9% 6.8 8.2% 7.8%

Figures as at 31 August 2016


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AUK portfolio – pro forma

% of Annualised EPRA Weighted portfolio by Market gross rental topped Reversionary average EPRA voids AUK portfolio – Pro–forma(1) market value value (£m) income (£m) ERV (£m) EPRA NIY up yield yield lease length (by ERV) % Indexed

Retail Parks 39.1% 168.5 11.7 10.7 6.2% 6.5% 5.9% 8.1 — 2.1%Retail – other 7.3% 31.4 2.5 2.3 7.2% 7.2% 6.8% 16.7 1.0% —Retail Portfolio 46.4% 199.9 14.2 13.0 6.3% 6.6% 6.1% 9.6 0.2% 1.7%Offices – Greater London 11.4% 49.0 1.8 2.3 2.6% 3.4% 4.4% 5.2 — 32.3%Offices – Regional 13.3% 57.2 4.0 4.5 4.5% 6.4% 7.4% 4.7 8.5% 7.9%Offices – Total 24.7% 106.2 5.8 6.8 3.6% 5.0% 6.0% 4.9 5.6% 15.5%Distribution and Industrial 23.3% 100.3 6.2 7.0 5.5% 5.8% 6.5% 6.0 4.0% —Automotive 5.7% 24.7 1.3 1.1 5.2% 5.2% 4.2% 8.6 — —Other – Total 29.0% 125.0 7.5 8.1 5.4% 5.7% 6.0% 6.5 3.5% —Commercial Portfolio 53.7% 231.2 13.3 14.9 4.6% 5.4% 6.1% 5.9 4.4% 6.6%Total Portfolio 100.1% 431.1 27.5 27.9 5.3% 5.9% 6.1% 7.8 2.4% 4.1%

(1) Pro‑forma including all disposals and City Point, Leeds letting post 31 August 2016


Capital Markets Day

Committed to delivering superior distributions to shareholders

Delivered value throughout a five year transformation

(1) Market cap as at 21 October 2016

Significant efforts over the last 5 years have transformed both the corporate structure and asset base

• Reverse takeover of Wichford P.L.C.

• Admitted to Premium listing

• UK‑REIT conversion Internalisation of management

• JSE secondary listing

• Acquisition of Weston Favell Shopping Centre for £84m

• Repayment of over £250m of legacy financing facilities

• £127m equity raise

• German shopping centre acquisition €189m

• Included in the FTSE 250 and EPRA indices

• £55m equity raise

• Acquisition of German Retail Portfolio €157m

• Sold non‑core assets, including Cromwell and Swiss portfolio

• £70m equity raise • £115m equity raise

• £490m AUK acquisition

2011 2012 2013 2014 2015 2016

31 August 2011

Market Cap (£m) 227

Portfolio Value (£m) 1,077

Underlying distributable earnings (£m) 20.3

LTV (%) 75.4

31 August 2016

Market Cap(1) (£m) 789

Portfolio Value (£m) 1,529

Underlying distributable earnings (£m) 52.2

LTV (%) 53.4


Capital Markets Day

Forward looking statements

This presentation does not and is not intended to constitute, and should not be construed as, an offer, inducement, invitation or commitment to purchase, subscribe to, provide or sell any securities of Redefine International P.L.C. (the “Company”) in any jurisdiction, or any part of any solicitation of any such offer, inducement, invitation or commitment, or to provide any recommendations for financial, securities, investment or other advice or to take any decision.

Neither the Company nor any of its members, directors, officers, employees, agents, affiliates, representatives, advisers or any other person (together, its “Related Persons”) makes any representation or warranty, express or implied, as to the accuracy or completeness of the information or opinions contained in this presentation. Nothing contained herein should be relied upon as a promise or representation as to the future. Neither the Company nor any of its Related Persons accepts any obligation or responsibility to advise any person of changes in the information set forth herein after the date hereof.

To the fullest extent permitted by law, none of the Company or any of its Related Persons accepts any liability whatsoever for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this presentation or its contents or otherwise in connection with the subject matter of this presentation or any transaction. The information contained in this presentation is not to be relied upon for any purpose whatsoever.

Certain statements in this presentation may be forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties and assumptions about the Company and its subsidiaries and investments that could cause actual results or events to differ materially from those expressed or implied by the forward looking statements. Forward looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Except as required by applicable law or regulation, neither the Company nor its Related Persons undertakes any obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. You should not rely on forward looking statements, which speak only as of the date of this presentation.


Capital Markets Day

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