The investment policy of the Group is to establish a property portfolio that is diverse by sector (whether industrial, retail, office, or residential), by tenant and by capital value. The Group's key criterion for property acquisitions is the potential for rental and capital value growth through active property management and/or through a re-characterisation of the acquired real estate. Re-characterisation may arise purely as a result of the so called "Olympic effect" on the location, or it may need to be actively encouraged. Bringing about such re-characterisation may range from a simple image improvement programme for a previously neglected industrial estate to attract better quality tenants, to a full redevelopment scheme following the grant of planning consent for a change of use (for example from commercial to a residential or mixed-use project).

Whilst the majority of properties acquired are income-producing, the creation of further value through development or refurbishment is actively pursued. Development may be undertaken selectively across the sectors either by the acquisition of sites, with or without the benefit of planning consent, or through the management of income-producing properties into development opportunities. In certain locations a site assembly programme may be pursued with a view to obtaining planning consent for a comprehensive re-development. Joint ventures may also be entered into in circumstances where the continuing involvement of existing landowners, local authorities or central government agencies is necessary, or for large projects where a sharing of financial risk is appropriate. The Group may also pursue other indirect investments through property investment partnerships or unit trusts or investments in the equities of other property investment or property holding companies.

The structure used for each property acquisition is reviewed at purchase. Accordingly, the Company may, without limit, incorporate further subsidiaries to hold property or may acquire the share capital of companies, units in unit trusts, or partnership interests in partnerships which own one or more properties.

Investment Restrictions

·      less than 75% of Gross Property Asset Value will be situated within the Target Area; or

·      any single tenant, other than any government or governmental (central or local), quasi-governmental, supranational statutory or regulatory body will account for more than 20% of contracted rental income.

Provided that these restrictions will not apply if Gross Property Asset Value is less than £100 million.

Life span of the Company

There are no specific provisions for the life span of the Company, although the Directors estimate it to be up to 12 years. In accordance with the Articles of Incorporation, a resolution will be proposed at the Annual General Meeting of the Company to be held in 2014 and at each Annual General Meeting held every two years thereafter giving Shareholders the opportunity to vote on whether the Company should continue as an investment company or to call for a winding up of the Company and a return of its distributable assets to Shareholders.

Dividend Policy

The initial focus of the Company is the delivery of capital growth for Shareholders and therefore the Company will only consider the payment of dividends as and when it is appropriate to do so. To the extent that any dividends are paid they will be paid in accordance with any applicable laws and the regulations to which the Company is subject.

Borrowings

Borrowings will not normally exceed 65% of the value of the Group's property portfolio at the time new borrowings are drawn down. Interest rate hedging is considered in the light of prevailing conditions at that time.