Regional REIT : Proposed Capital Raising

THIS ANNOUNCEMENT IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, NEW ZEALAND, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPANOR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

This announcement is not an offer of securities for sale, or an offer to buy or subscribe for, directly or indirectly, securities to any person in the United States of America or any other jurisdiction, including in or into Australia, New Zealand, Canada, the Republic of South Africa and Japan or any other jurisdiction in which such offer or solicitation is unlawful. This announcement is an advertisement and not a prospectus (or prospectus equivalent document). A prospectus in connection with the proposed firm placing, placing, open offer and offer for subscription (together, the 'Capital Raising') (the 'Prospectus') and the admission of the new ordinary shares of no par value ('New Ordinary Shares') in Regional REIT Limited ('Regional REIT' or the 'Company' and, together with its subsidiaries, the 'Group') to be issued pursuant to the Capital Raising to listing on the premium listing segment of the Official List of the Financial Conduct Authority ('FCA') and to trading on the Main Market for listed securities of London Stock Exchange plc (together, 'Admission') is expected to be published by the Company on or around 5 December 2017. A copy of the Prospectus will, following publication, be available on the Company's website (www.regionalreit.com) and be available for viewing at the National Storage Mechanism at https://www.morningstar.co.uk/uk/NSM.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

4 December 2017

Regional REIT Limited

('Regional REIT' or the 'Company')

Proposed Firm Placing, Placing, Open Offer and Offer For Subscription to raise up to £100 million at an Offer Price of 101 pence per Ordinary Share (the 'Capital Raising')

Regional REIT (LSE: RGL) is pleased to announce it has agreed to acquire a portfolio of three real estate properties from NW UK III Limited comprising office properties in Woking, Cheshunt and Edinburghand a portfolio of 17 office properties from Archimedes Real Estate LP (a fund managed by M7 Real Estate Limited) (the 'Acquisitions').

To finance the Acquisitions the Company is proposing a Capital Raising to raise gross proceeds of c.£50 million through the issue of New Ordinary Shares by way of a firm placing ('Firm Placing') and additional gross proceeds of up to £50 million by way of a placing, open offer and offer for subscription ('Placing, Open Offer and Offer For Subscription'), all at an Offer Price of 101 pence per New Ordinary Share. The Capital Raising is conditional, inter alia, on minimum gross proceeds of £65 million being raised pursuant to the Capital RaisingThe Board will have the ability to increase the size of the Issue by up to 25 per cent. should there be sufficient demand.

Transaction highlights

· Proceeds of the Capital Raising intended to be used as follows:

o up to £45.8 million to finance the First New Portfolio Acquisition;

o approximately £4 million in respect of the costs of refinancing certain of the Group's debt facilities;

o up to £47.6 million to finance the Second New Portfolio Acquisition;

o up to £4.9 million to finance a pipeline investment (the 'Pipeline Investment') which is in advanced negotiations and which the Company expects to complete by March 2018; and

o the remaining to capitalise on the pipeline of other investment and risk-controlled refurbishment opportunities

· Acquisitions have strong strategic rationale:

o consistent with the Company's strategy to invest in regional office and industrial assets that offer good income returns and value enhancement asset management opportunities;

o complementary to existing asset base and align well with the expertise and experience of the Asset Manager;

o further diversification of geographical location with reduction in Scottish weighting in favour of the South East and of risk through the creation of a wider spread of income through the addition of 183 units let; and

o immediately income and earnings accretive

Details of the Firm Placing and the Placing

The Firm Placing is being conducted by way of an accelerated bookbuild on the Company's behalf by Peel Hunt LLP ('Peel Hunt') as Sole Bookrunner in conjunction with Cenkos Securities plc (the 'Joint Placing Agent'). The bookbuild will open with immediate effect following this Announcement. The timing of the closing of the bookbuild and the final size of the Firm Placing are at the discretion of the Company, Peel Hunt and the Joint Placing Agent. A further announcement will be made following closing of the book confirming final details for the Firm Placing, expected to be made by 7.00am on 5 December 2017.

The Placing is being conducted by way of a bookbuild on the Company's behalf by Peel Hunt LLP as Sole Bookrunner in conjunction with the Joint Placing Agent. The final size of the Placing, Open Offer and Offer For Subscription and final allocations of New Ordinary Shares are at the discretion of the Company, Peel Hunt and the Joint Placing Agent. A further announcement will be made following closing of the book, confirming the final details of the Placing and Capital Raising, expected to be made by 7.00am on 20 December 2017.

The Appendix to this announcement (which forms part of the announcement) sets out the terms and conditions of the Firm Placing and the Placing. By choosing to participate in the Firm Placing and/or the Placing and by making an oral or written offer to acquire Firm Placing and/or Placing Shares, investors will be deemed to have read and understood this announcement in its entirety (including the Appendix) and to be making a legally binding offer on the terms and subject to the terms and conditions in it, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

Details of the Open Offer and Offer for Subscription will be set out in the Prospectus.

Stephen Inglis, Chief Executive Officer of London & Scottish Investments, the Asset Manager of Regional REIT, commented:'The proposed transaction represents a transformational step forward in Regional REIT's development. In our first two years as a listed entity we have put in place the foundations for growth, shown we can deliver on our objectives and built a strong track record in the market which ensures a healthy pipeline of opportunities.

'This Capital Raising will allow us to significantly increase our scale, strengthen and simplify our balance sheet, and position us to capitalise on other opportunities in due course. As we enter the next stage of Regional REIT's growth, we look forward to welcoming new shareholders to the Companyand would like to thank our existing shareholders for their ongoing commitment and support.'

For further information:

Expected timetable of principal events

Each of the times and dates in the table below is indicative only and may be subject to change.

Notes:

(i) CREST Shareholders should inform themselves of CREST's requirements in relation to electronic proxy appointments.

(ii) Subject to certain restrictions relating to Shareholders with a registered address outside the United Kingdom

The times and dates set out in the expected timetable of principal events above and mentioned throughout this document are indicative only and subject to change. If any of the times and/or dates change, the revised time and/or date will be notified to the London Stock Exchange, the UKLA and through a Regulatory Information Service.

Different deadlines and procedures may apply in certain cases. For example, Shareholders who hold their Existing Ordinary Shares through a CREST member or other nominee may be set earlier deadlines by the CREST member or other nominee than the times and dates noted above.

Background to, and reasons for, the Capital Raising

The Company is an established UK real estate investor, asset manager and developer which is listed on the premium listing segment of the Official List of the UKLA and is admitted to trading on the main market of the London Stock Exchange. The Company is managed by the Asset Manager and the Investment Manager and was formed from the combination of property funds previously created by the Managers. The Company's commercial property portfolio is located wholly in the UK and comprises, predominantly, quality offices and industrial units located in the regional centres of the UK outside of the M25 motorway. The portfolio is highly diversified, with 150 properties, 1,093 individual units and 823 tenants as at 30 June 2017, with a valuation of £640.4 million.

The Company pursues its investment objective by investing in, actively managing and disposing of regional property assets. The Group offers investors a highly differentiated play on the recovery prospects of UK regional property. The Company aims to deliver an attractive return to its Shareholders, targeting 10-15 per cent. per annum, with a strong focus on income and good capital growth prospects.

The Group continues to see opportunities to purchase assets at attractive yields and with the potential to secure good quality income streams which can be distributed to Shareholders through the Company's quarterly dividend programme. The Group's portfolio also offers continued potential for capital growth, which has the potential to supplement the income returns generated from the Group's assets.

The Directors continue to see a wide range of acquisition and development opportunities which meet the Group's acquisition and investment criteria, giving rise to a strong pipeline of capital deployment opportunities. These opportunities include the Acquisitions described below.

Accordingly, the Group is seeking to raise additional finance through the Capital Raising which it will seek to deploy, together with debt finance where relevant and appropriate, in line with its investment strategy, including, if sufficient proceeds are raised, in connection with the Acquisitions and put the Group in a position of strength when seeking to capitalise on this pipeline of investment and risk controlled refurbishment opportunities.

The Directors believe that the Capital Raising also provides the Group with the opportunity to capitalise on further economies of scale that an enhanced capital base may bring, including through debt refinancing. Moreover, an increase in the asset base of the business without a commensurate increase in the cost base would improve operational efficiency.

Key Terms of the Capital Raising

The Company is proposing to raise Gross Capital Raising Proceeds of up to £100 million (Net Capital Raising Proceeds of up to approximately £97m) by way of the Firm Placing, Placing, Open Offer and Offer for Subscription of up to 99,009,900 New Ordinary Shares, representing, in aggregate, 24.8 per cent. of the Enlarged Issued Share Capital, at an Issue Price, in each case, of 101 pence per New Ordinary Share.

The Capital Raising is not underwritten. Peel Hunt and the Joint Placing Agent have agreed to use their reasonable endeavours to place the Firm Placing Shares and the Placing Shares with institutional and other investors at the Issue Price. The Placing, but not the Firm Placing, may be scaled back in order to satisfy valid applications under the Open Offer and/or the Offer for Subscription, and the Offer for Subscription may be scaled back in favour of the Placing and the Open Offer. The Directors have the discretion to scale back the Placing and/or the Offer for Subscription in favour of the Open Offer.

The Placing and Open Offer Agreement is conditional (inter alia) upon the following:

· the Prospectus being formally approved by the UKLA;

· Open Offer Entitlements and of Qualifying Shareholders and the Excess Open Offer Entitlements being admitted to CREST and becoming enabled for settlement within CREST by not later than 8.00 a.m. on 6 December 2017;

· the Directors approving and authorising the Capital Raising;

· the Company allotting and issuing, subject only to Admission, the Placing Shares to Placees;

· there having been no material adverse change in relation to the Company, the Asset Manager or the Investment Manager.

· minimum Gross Capital Raising Proceeds of £65 million (the 'Minimum Proceeds') being raised pursuant to the Capital Raising;

· the Capital Raising Resolution being passed by the Shareholders at the Extraordinary General Meeting (without material amendment);

· the Placing and Open Offer Agreement becoming unconditional in all respects (save the condition relating to Admission) and not having been terminated in accordance with its terms before Admission; and

· Admission becoming effective by not later than 8.00 a.m. on 21 December 2017 (or such later time and/or date as the parties to the Placing and Open Offer Agreement may agree, being not later than 31 December 2017).

Accordingly, unless such conditions are satisified, or, if applicable, waived, the Capital Raising and the Acquisitions will not proceed, and any Open Offer Entitlements and Excess Open Offer Entitlements admitted to CREST will thereafter be disabled and application monies will be returned (at the applicants' risk) without interest as soon as possible.

The Placing and Offer for Subscription may be scaled back at the Company's discretion in consultation with Peel Hunt and Cenkos. Priority will be given to the Open Offer but there will be no priority given to applications under the Placing or the Offer for Subscription.

The Firm Placing

The Firm Placing is proposed to raise gross proceeds of c,£50 million. The Firm Placing is subject to the same conditions as the Placing and Open Offer. The Firm Placing Shares are not subject to clawback to satisfy the valid applications by Qualifying Shareholders under the Open Offer and not part of the Placing, Open Offer or Offer for Subscription.

Regional REIT, Peel Hunt and Cenkos reserve the right to alter the relative sizes of the Firm Placing and the Placing, Open Offer and Offer For Subscription.

The Placing and Open Offer

The Placing and Open Offer is proposed to raise gross proceeds of up to £50 million for Regional REIT. Peel Hunt and the Joint Placing Agent, as placing agents of the Company, have agreed to use reasonable endeavours to place the Placing Shares with institutional investors. The number of Placing Shares issued may be scaled back to satisfy valid applications by Qualifying Shareholders under the Open Offer. Subject to the satisfaction or, where applicable, waiver of the conditions and the Placing and Open Offer Agreement not having been terminated in accordance with its terms, any Open Offer Shares not subscribed for under the Open Offer may be allocated to Placees or anyone subscribing for Offer for Subscription Shares under the Offer for Subscription, with the net proceeds of the Placing being retained by the Company.

The Board will have the ability to increase the size of the Issue by up to 25 per cent. should there be sufficient demand.

The Placing may be scaled back at the Directors' discretion (in consultation with Peel Hunt and Cenkos) to satisfy demand under the Open Offer by allocating New Ordinary Shares that could otherwise be available under the Placing to be available to Qualifying Shareholders through the Excess Application Facility.

Open Offer Entitlements

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

1 New Ordinary Share for every 8 Existing Ordinary Shares

held by them and registered in their names at the Record Time. Fractions of Ordinary Shares will not be allotted and each Qualifying Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number. Fractional entitlements to New Ordinary Shares will be aggregated and will ultimately accrue for the benefit of the Company.

The Directors fully recognise the importance of pre-emption rights for Shareholders and consequently 37,567,988 New Ordinary Shares are expected to be offered to existing Shareholders by way of the Open Offer. The Directors consider this appropriate and in the best interests of Shareholders having regard to the ease of execution of the Acquisitions.

Excess Application Facility

Qualifying Shareholders will be able to apply to subscribe for Excess Shares using the Excess Application Facility, should they wish. Qualifying Non-CREST Shareholders wishing to apply to subscribe for Excess Shares will be able to do so by completing the relevant sections on the Open Offer Application Form. Qualifying CREST Shareholders who wish to apply to subscribe for more than their Open Offer Entitlements will have Excess Open Offer Entitlements credited to their stock account in CREST and should refer to the Prospectus for further information on how to apply for Excess Shares pursuant to the Excess Application Facility.

The Excess Application Facility is expected to comprise Open Offer Shares that are not taken up by Qualifying Shareholders under the Open Offer pursuant to their Open Offer Entitlements. Qualifying Shareholders' applications for Excess Shares will, therefore, be satisfied only to the extent that corresponding applications by other Qualifying Shareholders are made for less than their pro rata Open Offer Entitlements. If there is an over-subscription resulting from excess applications, allocations in respect of such excess applications will be scaled-back at the absolute discretion of Peel Hunt in consultation with the Board, who will have regard to the pro rata number of Excess Shares applied for by Qualifying Shareholders under the Excess Application Facility. No assurances can therefore be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full, in part or at all.

Offer for Subscription

New Ordinary Shares will also be available under the Offer for Subscription at the Issue Price. Further information on the Offer for Subscription and the terms and conditions of the Offer for Subscription, including the procedure for application and payment, will be set out in the Prospectus and, where relevant, in the Subscription Form. The number of Offer for Subscription Shares issued may be scaled back to satisfy valid applications by Qualifying Shareholders under the Open Offer.

The Offer for Subscription may be scaled back at the Directors' discretion (in consultation with Peel Hunt and the Joint Placing Agent) to satisfy demand under the Open Offer by allocating New Ordinary Shares that could otherwise be available under the Offer for Subscription to be available to Qualifying Shareholders through the Excess Application Facility.

Dividend Entitlement

At the time of 2015 Admission, the Company stated that it would assemble a property portfolio supporting a target dividend between seven to eight pence per annum at 100 pence per Existing Ordinary Share.

As a REIT, the Company is required to distribute at least 90 per cent. of the profits from its property rental business as dividends.

Currently, the Company pays dividends on a quarterly basis with dividends declared in or around February, May, August and November in each year and paid as soon as practicable thereafter.

Other than the dividend declared on 14 November 2017, which is expected to be paid on 22 December 2017, the Board has declared and paid the following dividends totalling 14.05 pence per Ordinary Share in respect of the period from 2015 Admission to the date of publication of this announcement:

Year Declaration Date Amount

2015

Q4 (pursuant to 2015 Admission on

6 November 2015) 7 March 2016 1.00 pence per share

2016

Q1 27 May 2016 1.75 pence per share

Q2 1 September 2016 1.75 pence per share

Q3 17 November 2016 1.75 pence per share

Q4 23 February 2017 2.40 pence per share

2017

Q1 25 May 2017 1.80 pence per share

Q2 31 August 2017 1.80 pence per share

Q3 14 November 2017 1.80 pence per share

The next dividend is expected to be declared in March 2018 and paid in April 2018 (the 'Q4 Top Up Dividend'). The Board's current intention is to pay an amount of approximately 2.45 pence per share in relation to the Q4 Top Up Dividend.

The New Ordinary Shares issued in connection with the Capital Raising will rank, from Admission, pari passu in all respects with the Existing Ordinary Shares and will have the right to receive all dividends and distributions declared in respect of issued Ordinary Share capital of the Company after Admission, including the Q4 Top Up Dividend.

The Company intends to pursue a progressive dividend policy and its quarterly dividends provide a source of regular income for Shareholders, thus improving their cashflow return profile.

The level of future dividends will be determined by the Board having regard to, among other things, the financial position and performance of the Group at the relevant time, UK REIT requirements and the interests of Shareholders, as a whole.

Use of Proceeds and acquisition-related debt financing

The Company is seeking to raise Gross Capital Raising Proceeds of up to £100 million from the Capital Raising and Peel Hunt and the Joint Placing Agent have agreed to use their reasonable endeavours to place the Firm Placing Shares and the Placing Shares with institutional and other investors.

The Directors intend to use the proceeds of the Capital Raising in the following order of priority:

· up to £45.8 million of the Net Capital Raising Proceeds to finance the First New Portfolio Acquisition (described below);

· approximately £4 million of the Net Capital Raising Proceeds in respect of the costs of

refinancing certain of the Group's debt facilities (the 'Refinancing');

· up to £47.6 million of the net proceeds of the Net Capital Raising Proceeds to finance the Second New Portfolio Acquisition (described below);

· approximately up to £4.9 million of the Net Capital Raising Proceeds to finance a pipeline investment (the 'Pipeline Investment') which is in advanced negotiations and which the Company expects to complete by March 2018; and

· the remaining net proceeds to capitalise on the pipeline of other investment and risk-controlled refurbishment opportunities

Debt financing

First New Portfolio Facility

The Company intends to put in place a new debt facility of £19.4 million as soon as possible following completion of the First New Portfolio Acquisition in order to refinance the First New Portfolio Acquisition (the 'First New Portfolio Facility'). The First New Portfolio Facility is fully committed.

The Directors intend to use approximately £17.4 million of the First New Portfolio Facility to refinance the First New Portfolio Acquisition and approximately £2 million to part finance the Pipeline Investment.

The First New Portfolio Facility will be provided by Royal Bank of Scotland Plc to the First Portfolio Target Companies, and will be provided at an interest rate equal to the aggregate of (i) two per cent. per annum and (ii) LIBOR for sterling for the relevant interest period.

Second New Portfolio Facility

As part of the Company's proposed refinancing of the Second New Portfolio Acquisition, the Company and Santander UK have agreed indicative terms and conditions in relation to a new debt facility (the 'Second New Portfolio Facility').

The Directors intend for the agreement in relation to the Second New Portfolio Facility (the 'Second New Portfolio Facility Agreement') to be signed on or shortly following completion of the Second New Portfolio Acquisition.

The Second New Portfolio Facility will be provided at an interest rate of 2.15 per cent. per annum. The availability of the Second New Portfolio Facility is conditional upon completion of the Refinancing.

The Acquisitions

The First New Portfolio

The Company (through its wholly owned subsidiary Midco) has conditionally agreed to acquire a portfolio of three real estate properties from NW UK III Limited for aggregate cash consideration expected to be approximately £43.44 million after any relevant completion account adjustments (the 'First New Portfolio Acquisition').

The First New Portfolio comprises office properties in Woking, Cheshunt and Edinburgh with 25 lettable units with a total of 18 individual tenants and a high level of occupancy (88 per cent. by lettable area). The First New Portfolio was valued at £43.5 million as at 8 November 2017, with a combined contracted rent roll of £3.6 million per annum reflecting a yield of 8 per cent. on a weighted average unexpired lease term of 6.4 years (3.3 years to first break).

The aggregate cash consideration payable for the First New Portfolio is expected to be equal to the aggregate market value of the First New Portfolio, which takes into account costs of the acquisition, and therefore the Directors expect there to be little or no diminution in the Company's Net Asset Value as a result of the First New Portfolio Acquisition.

The Company estimates that the First New Portfolio Acquisition will be immediately earnings enhancing.

The Pipeline Investment comprises an office property in Portsmouth and, combined with the First New Portfolio, would result in a portfolio of 26 lettable units with a total of 19 individual tenants and occupancy of 90 per cent. by lettable area. The combined portfolio is estimated to have a total contracted rent roll of £4 million per annum reflecting a yield of 8.1 per cent. on a weighted average unexpired lease term of 6.6 years (3.4 years to first break).

The Second New Portfolio

The Company (through its wholly owned subsidiary Midco) has conditionally agreed to acquire a portfolio of 17 office properties from Archimedes Real Estate LP (a fund managed by M7 Real Estate Limited) for aggregate cash consideration equal to the estimated net asset value of the assets of the corporate owner of the Second New Portfolio, less its aggregate liabilities, immediately prior to completion of the acquisition (the 'Second New Portfolio Acquisition').

The Second New Portfolio comprises office properties with 210 lettable units with a total of 136 individual tenants and 75 per cent. occupancy by lettable area. The portfolio was valued at £44.8 million as at 8 November 2017, with a combined contracted rent roll of £4.2 million per annum reflecting a yield of 9.2 per cent. on a weighted average unexpired lease term of 3.1 years (2.1 years to first break).

The Second New Portfolio Acquisition is conditional upon the Company raising and being in receipt of net proceeds of at least £75 million pursuant to the Capital Raising (the 'Second New Portfolio Capital Raising Condition'). After the refinancing of the First New Portfolio Acquisition, and assuming minimum net proceeds pursuant to the Capital Raising of at least £75 million, the consideration for the Second New Portfolio Acquisition is expected to be funded using the proceeds of the Capital Raising.

The Company expects to be able to waive the Second New Portfolio Capital Raising Condition if the Minimum Proceeds are raised and the Second New Portfolio Facility is available.

The Company estimates the Second New Portfolio Acquisition will be immediately earnings-enhancing.

The Refinancing

The Asset Manager is in the process of arranging a new 10 year long term debt facility (the 'Long- term Facility'), in relation to which terms have been agreed and credit approval has been obtained with two lenders (the 'New Lenders'). The Long-term Facility will replace the following five of the Group's existing bank facilities with Santander UK, The Royal Bank of Scotland Plc and Lloyds Banking Group, which in aggregate amounts to approximately £164 million:

The total interest cost of the refinancing is anticipated to be 3.3 per cent. to 3.4 per cent. fixed for the duration of the Long-term Facilities. It is anticipated that the Long-term Facilities will contain customary undertakings and events of default, along with financial covenants, including in relation to historic interest, projected interest cover and loan to value ratio. Completion of the Long-term Facilities is expected to take place in December 2017.

The Group's remaining borrowings consist of the Zero Dividend Preference Shares (comprising a total amount of approximately £37 million due to mature in January 2019) and the ICG Longbow Ltd facility of £65 million (due to mature in August 2019). The Group intends, in due course, to refinance the Zero Dividend Preference Shares or alternatively to repay them using existing resources raised at the time in the ordinary course of the Group's business and to refinance the ICG Longbow Ltd facility.

Current trading and prospects

On 14 September 2017, the Company released its interim financial results to 30 June 2017. A summary of the key financial and operational highlights from those results is set out below:

Financial highlights

In the period to 30 June 2017, the gross investment property portfolio was £640.4 million. This represents a like-for-like valuation increase of £7.5 million.

In a 'NAV-for-NAV' transaction, the Group acquired a mixed portfolio of office, industrial, retail and leisure properties for approximately £129 million from The Conygar Investment Company plc (the 'Conygar Acquisition').

Gross bank borrowings rose from £220.1 million for the year ended 31 December 2016, to £298.7 million for the six months ended 30 June 2017, with the increase part funding the Conygar Acquisition. The overall cost of bank debt declined in the period to 3.3 per cent. per annum. As part of the Conygar Acquisition, the Group also acquired zero dividend preference shares, and as 4 December 2017 approximately £37 million is outstanding on these shares.

Following the Conygar Acquisition, net LTV reduced from 49 per cent. to 47.3 per cent. Operating profit increased to £21.8 million, up from £12.1 million for the year ending 31 December 2016.

The fully diluted EPRA NAV was 107.3 pence per share, up from 106.9 pence per share for the year ending 31 December 2016. Dividends declared for the period ending 30 June 2017 amounted to 3.60 pence per share, which represented an increase of 2.9 per cent. from the period ending 30 June 2016.

Operational highlights

In the period to 30 June 2017, occupancy (by value) was 83.3 per cent., up from 82.7 per cent. for the year ended 31 December 2016. Occupancy by area was at 83.1 per cent., down from 83.8 per cent. for the year ended 31 December 2016.

Office real estate amounted to 62.8 per cent. (by value) of the Existing Property Portfolio for the period ending 30 June 2017, while industrial real estate amounted to 26 per cent. of the Existing Property Portfolio. Retail and other real estate sectors remain non-core to the Group, amounting to 11.2 per cent. of the Existing Property Portfolio.

As at 30 June 2017, the largest single tenant represented 3 per cent. of gross rental income, while the largest property represented 5 per cent. of the Existing Property Portfolio.

Since 2015 Admission, the Company has achieved total shareholder return of 17.8 per cent., at an annualised rate of 10.7 per cent.

Activities since 30 June 2017

Since 30 June 2017, the following significant events have occurred:

· The Group completed the acquisition of Woodlands Court, Bristol, for £6.55 million, a development of four single-storey offices buildings totalling 37,952 sq. ft., providing a rental income of £595,000 pa. The property is located proximate to the Group's existing properties in the north Bristol area.

· The Group disposed of St James House, Bath, a fully-let modern office development over the ground and three upper floors, totalling 14,507 sq. ft. with 30 parking spaces, situated to the south of Bath city centre, producing a rental income of £297,662 pa. The property was sold for £4.6 million, a net initial yield of 6.1 per cent. including costs, well ahead of its 31 December 2016 valuation.

· The Group has secured a number of additional lettings and re-gears. Most notably, the Group agreed a letting with SCS of Unit 1A, a 65,503 sq. ft. industrial warehouse, the largest void at Juniper Park, Basildon, effective September 2017. The lease will be for 10 years, with a break at year five, at an initial average rent of some £328,000 pa. In addition, industrial occupancy will also be improved following a lease agreement and the imminent completion of landlord works at Unit 131B Heathhall Industrial Estate, Dumfries (50,661 sq.ft.).

· On 10 November 2017, the Group exchanged contracts to sell a development site in Leeds for £10.5 million on a subject-to-planning basis to Unite Students, the UK's leading manager and developer of student accommodation. The 21,000 sq ft site currently provides leisure accommodation over two levels. It was acquired by the Group in March 2016 as part of the Wing Portfolio together with the adjacent 19 storey Arena Point office tower. The sale sees the Group retaining the 77,000 sq ft 19 storey landmark Arena Point office tower. The Group continues to invest in the refurbishment of the remaining floors, having recently let the 6th and 7th floors to Interserve.

· On 23 November 2017, the Group agreed a new £52.4 million secured facility with Santander UK with a 5-year term maturing in November 2022, replacing, at a competitive rate, the current three-year debt facility with Santander UK of £47.8 million, which was due to mature in December 2018.

Future prospects

In the third quarter of 2017 the Group maintained a strong pace of lettings and continued to see a good level of interest in both its office and industrial properties, which is expectedto improve occupancy rates across the portfolio in the near term.

While the Board is aware of general economic caution in light of uncertainty over the recent UK general election result and negotiations in respect of the UK's decision to exit the European Union and the potential for rises in inflation and interest rates, it believes that the Group is well placed to meet the challenges that could arise in this environment. The Group owns a sizeable portfolio with critical mass. It is cash generative with an occupier base representing some of the strongest covenants in the UK office and light industrial sectors. The Board therefore remains optimistic in its outlook for the Company.

Prospectus

The Prospectus containing full details of how Regional REIT Shareholders can participate in the Open Offer, and containing the notice of the General Meeting expected to be held at 11.00 a.m. on 19 December 2017, is expected to be published on, or around 5 December 2017. Completion of the Capital Raising is conditional upon, inter alia, the Company raising the Minimum Proceeds and the passing of the Capital Raising Resolution to be proposed at the General Meeting.

The persons responsible for arranging for the release of this announcement on behalf of the Company are the Directors.

Definitions

The following terms apply throughout this document unless the context otherwise requires:

'2015 Admission' the admission of the Existing Ordinary Shares to the Official List and trading on the London Stock Exchange's
main market for listed securities which occurred on 6 November 2015;

'Acquisitions' the First New Portfolio Acquisition and the Second New Portfolio Acquisition;

'Admission' admission of New Ordinary Shares to be issued pursuant to the Capital Raising to (i) the Official List and (ii)trading on the London Stock Exchange's main market for listed securities becoming effectivein accordance with, respectively,the Listing Rules and the Admission and Disclosure Standards;

'Asset Manager' London & Scottish InvestmentsLimited, a privatelimited company incorporated in Scotland with registered number SC407794 and whose registered office is at 8 Elmbank Gardens, Glasgow, G2 4NQ;

'Board' the board of Directors of the Company;

'Business Day' any day (other than a Saturday or Sunday or any public holiday in England and Wales) on which banks generally are open for the transaction of normal banking business in the City of London;

'certificated' or 'in certificated form'

in relation to a share or other security,a share or other security, title to which is recorded in the relevant register of the share or other security concerned as being held in certificated form (that is, not in CREST);

'Capital Raising' the Firm Placing, the Placing, the Open Offer and the Offer for

Subscription;

'Capital Raising Resolution' the resolution to be proposed at the Extraordinary General

Meeting to approvethe allotment of New Ordinary Shares pursuant to the Capital Raising;

'Chairman' the chairman of the Company;

'Companies Law' The Companies (Guernsey) Law 2008, as amended;

'Company' Regional REIT Limited, a limited company incorporated in Guernsey, Channel Islands with registered number 60527 and whose registered office is at Mont Crevelt House, Bulwer Avenue, St Sampson, Guernsey GY2 4LH;

'CREST' the paperless settlement procedure operated by Euroclear enabling system securities to be evidencedotherwise than by certificatesand transferred otherwise than by written instrument;

'CREST Deposit Form' the form used to deposit securities into the CREST system in the

United Kingdom;

'CREST member' a person who has been admitted by Euroclear as a system-member

(as defined in the CREST Regulations;

'CREST Regulations' the Uncertificated Securities Regulations 2001 (SI 2001/3755);

'Directors' the directors of the Company (each a 'Director');

'Disapplication Resolution' the resolution todisapply pre-emption rights to be proposedat the Extraordinary General Meeting ;

'Disclosure Guidance and Transparency Rules'

the disclosure guidance and transparency rules made by the FCA pursuant to Part 6 FSMA, as amended from time to time;

'Enlarged Issued Share Capital' the Existing Ordinary Shares together with the New Ordinary

Shares to be issued pursuant to the Capital Raising;

'EEA' the European Economic Area;

'EPRA' the European Public Real Estate Association;

'EPRA NAV' a measure of net asset value designed by EPRA to present net asset value excluding the value of instruments that are held for long term benefit, net of tax;

'Euroclear' Euroclear UK & Ireland Limited, a company registered in England and Wales under registered number 02878738;

'Excess Application Facility' the facility for Qualifying Shareholders to apply for Excess Shares

in excess of their Open Offer Entitlements;

'Excess Open Offer Entitlements' in respect of each Qualifying CREST Shareholder who has taken up

his Open Offer Entitlement in full, the entitlement (in addition to the Open Offer Entitlement) to apply for Excess Shares, up to the number of Open Offer Shares, credited to his stock account in CREST pursuant to the Excess Application Facility, which may be subject to scaling-back in accordance with the terms of this document;

'Excess Shares' Open Offer Shares which may be applied for in addition to Open Offer Entitlements;'Existing Ordinary Shares' the existing Ordinary Shares in issue at the date of this document;

'Extraordinary General Meeting' the extraordinary general meeting of the Company to be

held to consider the Capital Raising Resolution, the Disapplication Resolution,

'

'FCA' the UK Financial Conduct Authority (or any successor regulatory organisation);

'Firm Placee' any personwho conditionally agrees to subscribe for Firm Placing Shares;

'Firm Placing' the placing by Peel Hunt, as agent of and on behalf of the Company, of the Firm Placing Shares on the terms and subject to the conditions contained in the Placing and Open Offer Agreement;

'Firm Placing Shares' c.50,000,000 New Ordinary Shares proposed to be allotted and issued by

the Company pursuant to the Firm Placing;

'First New Portfolio' the property portfolio which the Company (through Midco) hasagreed toindirectly acquire;

'First New Portfolio Acquisition' the acquisition by Midco of the First New Portfolio;

'FSMA' the Financial Services and Markets Act 2000, as amended;

'Gross Capital Raising Proceeds' up to £100 million;

'Group' the Companyand its subsidiary undertakings from time to time and 'Group Company' shall mean any one of them;

'Investment Manager' Toscafund Asset Management LLP, registered in England and

Wales with registered number OC320318;

'Issue Price' 101 pence per New Ordinary Share;

'Joint Placing Agent' Cenkos Securities plc;

'Link Asset Services' a trading name of Link Market Services Limited;

'Listing Rules' the rules and regulations made by the FCA under section 73A of FSMA;

'London Stock Exchange' London Stock Exchange plc;

'LTV' loan-to-value;

'Midco' Regional Commercial Midco Limited, a private limited company incorporated in Jersey, Channel Islands with registered number 118888 and whose registered office is at First Floor, Le Masurier House, La Rue Le Masurier, St Helier, Jersey JE2 4YE;

'Net Asset Value' or 'NAV' the aggregate value of the assets of the Company after deduction of

all liabilities, determined in accordance with the accounting policies adopted by the Company from time to time;

'Net Capital Raising Proceeds' the Gross Capital Raising Proceeds less applicable fees and

expenses of the Capital Raising;

'New Ordinary Shares' the Firm Placing Shares, the Placing Shares, the Open Offer Shares and the Offer for Subscription Shares;

'Offer for Subscription' the offerfor subscription of NewOrdinary Shares at the Issue Price

on the terms set out in this document;

'Offer for Subscription Shares' New Ordinary Shares proposed to be allotted and issued by

the Company pursuant to the Offer for Subscription;

'Official List' the Official List of the UKLA;

'Open Offer' the invitation by the Company to Qualifying Shareholder(s) to apply for Open Offer Shares, on the term and conditions set out in this document and, in the case of Qualifying non-CREST shareholders, in the Open Offer Application Form;'Open Offer Application Form' the personalised application form through which QualifyingNon-CREST Shareholders may apply for New Ordinary Shares under the Open Offer;

'Open Offer Entitlements' the entitlement of a Qualifying Shareholder to apply for 1 Open

Offer Shares for every 8 Existing Ordinary Share held by him on the Record Date;

'Open Offer Shares' New Ordinary Shares being offered to Qualifying Shareholders pursuant to the Open Offer;

'Peel Hunt' Peel Hunt LLP;

'Placing' the proposed placing, by Peel Hunt and Joint Placing Agent, as agent of and on behalf of the Company, of the Placing Shares on the terms and subject to the conditions contained in the Placing and Open Offer Agreement;

'Placing Placee' any person whowill conditionally agree to subscribe for the Placing Shares;

'Placing and Open Offer Agreement' the Placing and Open Offer Agreement dated 4 December 2017 between the Company and Peel Hunt,

'Placing Shares' New Ordinary Shares proposed to be allotted and issued by the Company pursuant to the Placing;

'Prospectus Directive' EU Prospectus Directive (2003/71/EU), and amendments thereto,

including the 2010 PD Directive to the extent implemented in the Relevant Member State) and includes any relevant implementing measure;

'Prospectus Directive Regulation' Commission Regulation (EC) No 809/2004;

'Prospectus Rules' the prospectus rules made by the FCA pursuant to Part 6 FSMA, as amended from time to time;

'Qualified Investor' persons in member states of the EEA who are 'qualified investors'within the meaning of Article 2(1)(e) of the Prospectus Directive;'Qualifying CREST Shareholders' Qualifying Shareholders holding Ordinary Shares in uncertificated

form;

'Qualifying Non-CREST Shareholders'

Qualifying Shareholders holding Ordinary Shares in certificated form;

'Qualifying Shareholder' holders of Ordinary Shares on the register of members of the

Company at the Record Time other than Restricted Shareholders;

'Record Time' 6.00 p.m. on 1 December 2017;

'Receiving Agent' Link Asset Services;

'Regulatory Information Service' or 'RIS'

any channel recognised as a channel for the dissemination of regulatory information by listed companies as defined in the Listing Rules;

'Regulation D' Regulation D under the US Securities Act;

'Regulation S' Regulation S under the US Securities Act;

'Regulations' the Uncertificated Securities (Guernsey) Regulations 2001 (SI 2001/3755);

'REIT' a company or group to which Part 12 CTA 2010 applies;

'

'Relevant Member State' each member state of the EEA which has implemented the

Prospectus Directive;'Restricted Jurisdiction' any jurisdiction, including but not limited to Australia, NewZealand, Canada, the Republic of South Africa, Japan and the United States, where the extension or availability of the Capital Raising (and any other transaction contemplated thereby) would(i) result in a requirement to comply with any governmental or other consent or any registration filing or other formality which the Company regards as unduly onerous; or (ii) otherwise breach any applicable law or regulation;'Restricted Shareholder' subject to certain exceptions, Shareholders who have registered

addresses in, who are incorporated in, registered in or otherwise resident or located in, the United States or any other Restricted Jurisdiction;

'Second New Portfolio' the property portfolio which the Company (through Midco) has

agreed to indirectly acquire;

'Second New Portfolio Acquistion' the acquisition byMidco of the Second New Portfolio;

'Shareholder' a holder of an Ordinary Share (together 'Shareholders');

'Sterling' pounds sterling, the lawful currency of the United Kingdom;

'Subscription Form' the application form in the Prospectus for use in

connection with the Offer for Subscription;

'UKLA' the UK Listing Authority, being a division of the FCA and the competent authority in the United Kingdom for the purposes of Part VI of FSMA;

'uncertificated' or 'in uncertificated form' in relation to a share or other security,a share or other security, title to which is recorded in the relevant register of the share or other security concerned as being held in uncertificated form (that is, in CREST) and title to which may be transferred by using CREST;

'United Kingdom' or 'UK' the United Kingdom of Great Britain and Northern Ireland;'United States' or 'US' the United States of America, its territories and possessions, any

state of the United States of America, the District of Columbia, and all other areas subject to its jurisdiction, including its territories;

'US Investment Company Act' the United States Investment Company Act of 1940, as amended;

'US Person' has the meaning given to it in Rule 902 under the US Securities Act, except where such term is used in connection with taxation; and

'US Securities Act' the United States Securities Act of 1933, as amended.

Important Notices

This announcement has been issued by Regional REIT and is the sole responsibility of Regional REIT. The information in this announcement is for background purposes only and does not purport to be full or complete. The material set out herein is for information purposes only and should not be construed as an offer of securities for sale in the United States or any other jurisdiction. The information contained in this announcement is given at the date of its publication (unless otherwise stated) and is subject to updating, revision and amendment. In particular, the proposals referred to herein are tentative and are subject to verification, material updating, revision and amendment.

This announcement is not an offer of securities for sale, or an offer to buy or subscribe for, directly or indirectly, securities to any person in the United States of America or any other jurisdiction, including in or into Australia, New Zealand, Canada, the Republic of South Africa and Japan or any other jurisdiction in which such offer or solicitation is unlawful. This announcement is an advertisement and not a prospectus (or prospectus equivalent document). A prospectus in connection with the proposed firm placing, placing, open offer and offer for subscription (together, the 'Capital Raising') and the admission of the new ordinary shares of no par value in the Company ('New Ordinary Shares') to be issued pursuant to the Capital Raising to listing on the premium listing segment of the Official List of the Financial Conduct Authority ('FCA') and to trading on the Main Market for listed securities of London Stock Exchange plc (together, 'Admission') is expected to be published by the Company on or around 5 December 2017. A copy of the Prospectus will, following publication, be available on the Company's website (www.regionalreit.co.uk) and be available for viewing at the National Storage Mechanism athttps://www.morningstar.co.uk/uk/NSM.

The distribution or publication of this announcement, any related documents, and the offer, sale and/or issue of the New Ordinary Shares in certain jurisdictions may be restricted by law. Persons into whose possession any document or other information referred to herein comes are required to inform themselves about and to observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdiction.

This announcement does not constitute or form part of an offer to sell, or the solicitation of an offer to buy or subscribe for, New Ordinary Shares to any person in the United States, Australia, New Zealand, Canada, the Republic of South Africa and Japan, or in any jurisdiction to whom or in which such offer or solicitation is unlawful and, in particular, is not for release, publication or distribution in or into the United States, Australia, New Zealand, Canada, the Republic of South Africa and Japan.

No action has been, or will be, taken by Regional REIT or any other person to permit a public offer or distribution of this announcement, or any related documents, in any jurisdiction where action for that purpose may be required, other than in the United Kingdom.

This announcement is not an offer of securities for sale in the United States, and is not for publication or distribution, directly or indirectly, in or into the United States. This announcement is not an offer of securities for sale into the United States. The New Ordinary Shares and the Open Offer Entitlements referred to herein have not been, and will not be, registered under the US Securities Act or any relevant securities laws of any state or other jurisdiction of the United States and, subject to limited certain exceptions, may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States. No public offering of securities is being made in the United States and the New Ordinary Shares are being offered or sold outside the United States in reliance on Regulation S. The Company has not been, and will not be, registered under the US Investment Company Act of 1940, as amended (the 'US Investment Company Act'), and investors will not be entitled to the benefits of that Act. The New Ordinary Shares made available under the Firm Placing and Placing are being offered and sold (i) in the United States only to persons reasonably believed to be (a) qualified institutional buyers (each a 'QIB') as defined in Rule 144A under the US Securities Act who are also qualified purchasers ('QPs') as defined in section 2(a)(51) of the US Investment Company Act and (b) accredited investors (each an 'Accredited Investor') as defined in Rule 501 of Regulation D under the US Securities Act who are also QPs and, in each such case, in reliance on Section 4(a)(2) of, and Rule 506(b) under, the US Securities Act or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act; and (ii) outside of the United States to persons who are not US Persons (as defined in Regulation S) in offshore transactions in reliance on Regulation S. For a description of these and certain further restrictions on offers, sales and transfers of the New Ordinary Shares, see Terms and Conditions of the Firm Placing and the Placing.

The New Ordinary Shares and the Open Offer Entitlements have not been and will not be registered under the applicable securities laws of Australia, New Zealand, Canada, the Republic of South Africa and Japan. Subject to certain exceptions, the New Ordinary Shares and the Open Offer Entitlements referred to herein may not be offered or sold in Australia, New Zealand, Canada, the Republic of South Africa or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, New Zealand, Canada, the Republic of South Africa or Japan. There will be no public offer of securities in Australia, New Zealand, Canada, the Republic of South Africa and Japan.

The New Ordinary Shares are only suitable for investors who understand the potential risk of capital loss, for whom an investment in the New Ordinary Shares is part of a diversified investment programme and who fully understand and are willing to assume the risks involved in such an investment programme. There is no guarantee that the Capital Raising will proceed and that Admission will occur and you should not base your financial decisions on Regional REIT's intention in relation to the Capital Raising and Admission at this stage. Acquiring New Ordinary Shares to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. When considering what further action you should take you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) ('FSMA'), if you are resident in the United Kingdom, or, if not, from another appropriately authorised independent financial adviser. This announcement does not constitute a recommendation concerning the Capital Raising. The price and value of the New Ordinary Shares may decrease as well as increase. Information in this announcement, past performance and any documents relating to the Capital Raising or Admission cannot be relied upon as a guide to future performance. Potential investors should consult a professional adviser as to the suitability of the Capital Raising for the person concerned.

This announcement contains statements which are based on the Directors' current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. These statements include forward-looking statements both with respect to the Group and the markets in which the Group operates. Statements which include the words 'expects', 'intends', 'plans', 'believes', 'projects', 'anticipates', 'will', 'targets', 'aims', 'may', 'would', 'could', 'continue' or, in each case, their negative or other variations, and similar statements of a future or forward-looking nature, identify forward-looking statements. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables which could cause actual results or trends to differ materially, including (but not limited to) any limitations of Regional REIT's internal financial reporting controls; an increase in competition; an unexpected decline in turnover, rental income or the value of all or part of the Group's property portfolio; legislative, fiscal and regulatory developments; and currency and interest rate fluctuations. Each forward-looking statement speaks only as of the date of this announcement. Except as required by the rules of the FCA (and, in particular, the Disclosure Guidance and Transparency Rules and the Market Abuse Regulation), the London Stock Exchange, the Listing Rules or by law (in particular, FSMA), Regional REIT expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in Regional REIT's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. All subsequent written and oral forward-looking statements attributable to any person involved in the preparation of this announcement or to persons acting on Regional REIT's behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this announcement.

By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Group's actual results of operations, financial condition, prospects, growth, strategies and dividend policy, and the development of the industry in which it operates, may differ materially from the impression created by the forward-looking statements contained in this announcement. In addition, even if the results of operations, financial condition, prospects, growth, strategies and the dividend policy of Regional REIT, and the development of the industry in which it operates, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods.

Any forward-looking statement contained in this announcement based on past or current trends and/or activities of the Group should not be taken as a representation that such trends or activities will continue in the future. No statement in this announcement is intended to be a profit forecast or to imply that the earnings of the Group for the current year or future years will necessarily match or exceed the historical or published earnings of the Group.

Each ofPeel Hunt and Cenkos and their respective affiliates, expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

Peel Hunt is authorised and regulated by the FCA in the United Kingdom. Peel Hunt is acting exclusively for Regional REIT and no-one else in connection with the Capital Raising, and will not regard any other person as its client in relation to the Capital Raising, and will not be responsible for providing the protections afforded to Peel Hunt clients, nor for giving advice in relation to the Capital Raising, or any arrangement referred to in, or information contained in, this announcement.

Cenkos, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for Regional REIT in connection with the Capital Raising and will not be responsible to anyone other than Regional REIT for providing the protections afforded to clients of Cenkos or for providing advice in relation to the matters described in this announcement.

In connection with the Capital Raising, each of Peel Hunt and Cenkos, or any of their respective affiliates, may take up a portion of the New Ordinary Shares and/or related instruments in connection with the Capital Raising as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own account(s) such New Ordinary Shares and/or related instruments in connection with the Capital Raising or otherwise. Accordingly, references in the Prospectus, once published, to the New Ordinary Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by Peel Hunt and Cenkos, or any of their respective affiliates, acting as investors for their own accounts. Except as required for legal or regulatory obligations to do so, Peel Hunt and Cenkos do not propose to make any disclosure in relation to the extent of any such investments or transactions.

None of Peel Hunt and Cenkos, any of their respective affiliates, or any of their or their affiliates' respective directors, officers or employees, advisers or agents accepts any responsibility or liability whatsoever for the contents of this announcement, or no representation or warranty, express or implied, is made as to the accuracy, completeness, correctness or fairness of the information or opinions contained in, this announcement or any document referred to in this announcement (or whether any information has been omitted from this announcement or any document referred to in this announcement) or any other information relating to Regional REIT or their respective subsidiaries or affiliates, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Accordingly, each of Peel Hunt and Cenkos, their respective affiliates, and each of their and their affiliates' respective directors, officers, employees and agents, and any other person acting on their behalf, expressly disclaims any and all liability whatsoever for any loss howsoever arising from, or in reliance upon, the whole or any part of the contents of this announcement, whether in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

The contents of this announcement are not to be construed as legal, financial or tax advice. Each prospective investor should consult his own legal adviser, financial adviser or tax adviser for legal, financial or tax advice, respectively.

APPENDIX: TERMS AND CONDITIONS OF THE FIRM PLACING AND THE PLACING

1. ELIGIBLE PARTICIPANTS

Members of the public are not eligible to take part in the Firm Placing or the Placing. This appendix and the terms and conditions set out herein are for information purposes only and are directed only at:

(a) persons in member states of the European Economic Area who are 'qualified investors' within the meaning of article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC, as amended by the 2010 PD Amending Directive (Directive 2010/73/EU)) ('Qualified Investors'),

(b) where addressed to and directed to persons in the United Kingdom, to persons who are also those:

(i) who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the 'FPO'); or

(ii) who are high net worth entities as described in article 49(2) of the FPO; or

(iii) to whom it may otherwise be lawfully communicated and in all cases who are capable of being categorised as a professional client or an eligible counterparty for the purposes of the FCA Conduct of Business Rules (all such persons being together referred to as 'Relevant Persons'). This appendix and these terms and conditions must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which these terms and conditions relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

Furthermore, the New Ordinary Shares may not be offered or sold in the United States, except to persons reasonably believed to be (a) QIBs who are also QPs and (b) Accredited Investors who are also QPs and, in each such case, in reliance on Section 4(a)(2) of, and Rule 506(b) under, the US Securities Act or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act.

2.INTRODUCTION

Participation in the Firm Placing and/or the Placing is only available to persons who are invited to participate by Peel Hunt and/or Cenkos. This appendix and the terms and conditions set out herein apply to persons making an offer to subscribe for Firm Placing Shares under the Firm Placing and/or Placing Shares under the Placing. Each of the Firm Placees and the Placing Placees (together, for the purposes of this appendix, the 'Placees' and each a 'Placee') agrees with Peel Hunt, Cenkos and the Company to be bound by these terms and conditions as being the terms and conditions upon which Firm Placing Shares will be sold under the Firm Placing and Placing Shares will be sold under the Placing (as applicable). A Placee shall, without limitation, become so bound if Peel Hunt or Cenkos (as the case may be) confirms its allocation of Firm Placing Shares under the Firm Placing and/or Placing Shares under the Placing (as applicable) to such Placee at the Issue Price.

Upon being notified of its allocation of Firm Placing Shares under the Firm Placing and/or Placing Shares under the Placing (whether orally or in writing, which includes e-mail) by Peel Hunt or Cenkos (as the case may be), a Placee shall, subject to the provisions of paragraph 7 of this appendix with respect to the Placing Shares, be contractually committed to acquire the number of Firm Placing Shares and/or Placing Shares allocated to them at the Issue Price and to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate or otherwise withdraw from such commitment (the 'Placing Commitment'). Each of Peel Hunt and Cenkos may require any Placee to agree to such further terms and/or conditions and/or give such additional warranties and/or representations as it may, in its absolute discretion, see fit and/or may require such Placee to execute a separate placing letter. Dealing may not begin before any notification is made.

None of the New Ordinary Shares have been or will be registered under the US Securities Act, or under any securities laws of any state or other jurisdiction of the United States and, subject to the limited exceptions described herein, may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States.

This announcement (including this appendix) will not constitute an offer or an invitation to apply for or an offer or an invitation to acquire any New Ordinary Shares in the United States. Subject to certain exceptions, all persons applying for New Ordinary Shares and wishing to hold such New Ordinary Shares in registered form must provide an address for registration of the New Ordinary Shares outside the United States.

Subject to certain exceptions, any person who applies for New Ordinary Shares will be deemed to have declared, warranted and agreed that they are not, and that at the time of application they will not be, in the United States, or acting on a non-discretionary basis for a person located within the United States.

Subject to certain limited exceptions described herein, the Company reserves the right to treat as invalid any application for New Ordinary Shares which does not contain a warranty to the effect that the person applying for New Ordinary Shares does not have a registered address and is not otherwise located in the United States and is not applying for New Ordinary Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of the New Ordinary Shares in the United States or where the Company believes application for such New Ordinary Shares may infringe applicable legal or regulatory requirements.

3. AGREEMENT TO ACQUIRE FIRM PLACING SHARES AND/OR PLACING SHARES

a) Each of the Firm Placing and the Placing is conditional upon the following conditions, amongst others:

b) the Capital Raising Resolution being passed at the Extraordinary General Meeting;

c) the Placing and Open Offer Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms before Admission;

d) minimum Gross Capital Raising Proceeds of £65 million (the 'Minimum Proceeds') being raised pursuant to the Capital Raising; and Admission becoming effective by not later than 8.00 a.m. (London time) on 21 December 2017 (or such later time and/or date as the Company, Peel Hunt and Cenkos may agree (being no later than 31 December 2017)).

Subject to the above conditions, a Placee agrees to become a shareholder in the Company and agrees to acquire Firm Placing Shares and/or Placing Shares (as applicable) at the Issue Price. The number of Firm Placing Shares issued to a Firm Placee under the Firm Placing and/or Placing Shares issued to a Placing Placee under the Placing (as applicable) shall be in accordance with the arrangements described above, subject to the provisions of paragraph 7 of this appendix with respect to the Placing Shares.

The Company has undertaken that the Firm Placing Shares and the Placing Shares will, when issued and fully paid, rank pari passuin all respects with the Existing Ordinary Shares and will have the same rights and restrictions as each Existing Ordinary Share, including in respect of any dividends or distributions declared in respect of the New Ordinary Shares following Admission.

4. PAYMENT FOR FIRM PLACING SHARES AND/OR PLACING SHARES

Each Placee undertakes to pay the Issue Price for the Firm Placing Shares and/or Placing Shares (as applicable) issued to such Placee (the 'Total Amount') in such manner as shall be directed by Peel Hunt or Cenkos (as the case may be). In the event of any failure by a Placee to pay as so directed by Peel Hunt or Cenkos (as the case may be), the relevant Placee shall be deemed hereby to have appointed Peel Hunt, and/or Cenkos or any of its or their nominees to sell (in one or more transactions) any or all of the Firm Placing Shares and/or Placing Shares (as applicable) in respect of which payment shall not have been made as so directed and to have agreed to indemnify on demand Peel Hunt or Cenkos (as the case may be) in respect of any liability for UK stamp duty and/or stamp duty reserve tax arising in respect of any such sale or sales. A sale of all or any of such Firm Placing Shares and/or Placing Shares shall not release the relevant Placee from the obligation to make such payment for Firm Placing Shares and/or Placing Shares to the extent that Peel Hunt, Cenkos or its or their nominee has failed to sell such Firm Placing Shares and/or Placing Shares at a consideration which after deduction of expenses of such sale and payment of stamp duty and/or stamp duty reserve tax as aforementioned, is equal to or exceeds the Issue Price per Firm Placing Share and/or Placing Share.

5. REPRESENTATIONS AND WARRANTIES

By receiving this announcement, each Placee and/or any person confirming his agreement to subscribe for Firm Placing Shares and/or Placing Shares on behalf of a Placee or authorising Peel Hunt and/or Cenkos to notify a Placee's name to the Receiving Agent, is deemed to acknowledge, agree, undertake, represent and warrant to each of Peel Hunt, Cenkos, the Receiving Agent and the Company that:

(A) it has read and understood this announcement (including this appendix) in its entirety and that its acquisition of the New Ordinary Shares is made solely on the terms and subject to the conditions, representations, warranties, acknowledgements, agreements and undertakings contained herein;

(B) it has made its own assessment of the New Ordinary Shares and has relied on its owninvestigation of the business, financial or other position of the Company in accepting a participation in the Firm Placing and/or the Placing;

(C) neither Peel Hunt, Cenkos, nor any of its or their affiliates or any person acting on behalf of any of them has provided, or will provide the Placee, with any material or information regarding the New Ordinary Shares, the Firm Placing or the Placing other than this announcement; nor has the Placee requested Peel Hunt, Cenkos, the Company or any of its or their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

(D) the content of this announcement is exclusively the responsibility of the Company and that none of Peel Hunt, Cenkos, their respective affiliates or any person acting on their behalf has or shall have any responsibility or liability for any information, representation or statement contained in this announcement or any information previously or subsequently published by or on behalf of the Company;

(E) it has made its own assessment of the Company and the terms of the Firm Placing and Placing based on this announcement (including this appendix) and the Company's publicly available information, such information being all that it deems necessary to make an investment decision in respect of the New Ordinary Shares and that it has neither received nor relied on any information given or representations, warranties or statements made by Peel Hunt, Cenkos or the Company or any of their affiliates or any person acting on behalf of any of them and neither Peel Hunt, Cenkos, nor the Company nor any of its or their affiliates nor any person acting on behalf of any of them will be liable for any Placee's decision to accept an invitation to participate in the Firm Placing and/or Placing based on any information, representation, warranty or statement other than that contained in this announcement;

(F) it will not hold Peel Hunt, Cenkos or any of their respective affiliates or any person acting on their behalf responsible or liable for any misstatements in or omission from any publicly available information relating to the Company and that none of Peel Hunt and Cenkos nor any person acting on their behalf makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such information or accepts any responsibility for any such information;

(G) it acknowledges that the New Ordinary Shares will be admitted to the Official List of the FCA and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the FCA and the Placee is able to obtain or access such information without undue difficulty and is able to obtain access to such information or comparable information concerning any other publicly traded company without undue difficulty;

(H) it has the funds available to pay the Total Amount payable pursuant to its Placing Commitment and acknowledges, agrees and undertakes that it will pay the Total Amount in accordance with the terms of this appendix on the due time and dates notified by Peel Hunt and/or Cenkos (as the case may be), failing which the relevant New Ordinary Shares may be placed with other placees or sold at such price as Peel Hunt and/or Cenkos determines;

(I) it:

(i) is duly incorporated and validly existing under the laws of its jurisdiction of incorporation;

(ii) is entitled to subscribe for the New Ordinary Shares under the laws of all relevant jurisdictions which apply to it;

(iii) has fully observed such laws;

(iv) has the requisite capacity and authority and is entitled to enter into and to perform its obligations as a subscriber for New Ordinary Shares and to execute and deliver all documents necessary for such subscription and will honour such obligations; and

(v) has obtained all necessary consents and authorities (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this appendix) to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if it is a pension fund or investment company it is aware of and acknowledge it is required to comply with all applicable laws and regulations with respect to its subscription for the New Ordinary Shares;

(J) after giving effect to its subscription of the New Ordinary Shares comprised in its Placing Commitment, it will inform Peel Hunt and/or Cenkos (as the case may be) if such acquisition will cause it to be required to make a notification to the Company in accordance with Rule 5.1.2R of the Disclosure Guidance and Transparency Rules;

(K) after giving effect to its subscription of the New Ordinary Shares comprised in its Placing Commitment, its total aggregate holding of issued Ordinary Shares, together with any such Ordinary Shares held by any person acting in concert with its (as that term is used for the purposes of the City Code), will not exceed 29.9 per cent. of the voting rights of the Company;

(L) it is not, and any person who it is acting on behalf of is not, and at the time the New Ordinary Shares are subscribed will not be, a resident of, or with an address in, Australia, New Zealand, The Republic of South Africa, Canada or Japan, and it acknowledges and agrees that the New Ordinary Shares have not been and will not be registered or otherwise qualified under the securities legislation of Australia, New Zealand, The Republic of South Africa, Canada or Japan and, subject to certain exceptions, may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;

(M) it is outside the United States and, subject to certain exceptions, the New Ordinary Shares have not been and are not being offered or sold to any Placee except outside the United States in an 'offshore transaction' (within the meaning of Regulation S under the US Securities Act) and it will not offer, sell or deliver, directly or indirectly, any New Ordinary Shares in or into the United States. It acknowledges and agrees that there is no present intention to register any of the New Ordinary Shares for sale or re-sale under the US Securities Act and that there can be no representation as to the availability of any exemption under the US Securities Act;

(N) it is not acting on a non-discretionary basis for the account or benefit of a person located within the United States at the time the undertaking to subscribe for New Ordinary Shares is given and it is not acquiring the New Ordinary Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any New Ordinary Shares into the United States;

(O) it is:

(i) a person described in Article 19(5) (Investment Professionals) and/or 49(2) (high net worth companies etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the 'FPO'), and/or an authorised person as defined in section 31 of the FSMA; or

(ii) a high net worth entity as described in article 49(2) of the FPO; or

(iii) a 'qualified investor' falling within Articles 2.1(e)(i), (ii) or (iii) of the Prospectus Directive; or

(iv) a person to whom this Announcement may otherwise lawfully be communicated and in all cases who is capable of being categorised as a professional client or an eligible counterparty for the purposes of the FCA Conduct of Business Rules.

For such purposes, it undertakes that it will acquire, hold, manage and (if applicable) dispose of any New Ordinary Shares that are allocated to it for the purposes of its business only;

(P) it has such knowledge, sophistication and experience in financial and business matters that it iscapable of evaluating the merits and risks of its purchase of the New Ordinary Shares comprised in its Placing Commitment, and it is able to bear the economic risk and financial risk (including sustaining a complete loss) of the purchase of such New Ordinary Shares and it has had sufficient time to consider and conduct its own investigation with respect to its purchase of the New Ordinary Shares including the legal, regulatory, tax, business, currency and other economic and financial considerations relevant to such investment and it will not look to the Company, Peel Hunt, Cenkos or any of their respective affiliates or any person acting on their behalf for all or part of any loss it may suffer in connection with its purchase of such New Ordinary Shares;

(Q) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to the New Ordinary Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that this announcement is not being issued by either Peel Hunt or Cenkos in its capacity as an authorised person under section 21 of the FSMA and it may not therefore be subject to the controls which would apply if it were made or approved as a financial promotion by an authorised person;

(R) it is aware of and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the New Ordinary Shares in, from or otherwise involving, the United Kingdom;

(S) it will not make any offer to the public of the New Ordinary Shares and has not offered or sold and will not offer or sell any New Ordinary Shares to persons in the United Kingdom or elsewhere in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA or an offer to the public in any EEA State within the meaning of the Prospectus Directive (which includes any relevant implementing measure in any EEA State);

(T) it has not been engaged to subscribe for the New Ordinary Shares on behalf of any other person who is not a Qualified Investor unless the terms on which it is engaged to enable it to make decisions concerning the acceptance of offers of transferable securities on the client's behalf without reference to the client as described in section 86(2) of the FSMA;

(U) it is aware of and acknowledges that it is required to comply with its obligations in connection with money laundering under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by such laws and regulations;

(V) it is aware of and has complied with its obligations under the Criminal Justice Act 1993, the Market Abuse Regulation and confirms that it will continue to comply with those obligations;

(W) the allocation, allotment, issue and delivery to the Placee, or the person specified by it for registration as a holder of New Ordinary Shares, will not give rise to a stamp duty or stamp duty reserve tax liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that no instrument under which it subscribes for New Ordinary Shares (whether as principal, agent or nominee) would be subject to stamp duty or the increased rates referred to in those sections and that it, or the person specified by it for registration as a holder of New Ordinary Shares, is not participating in the Firm Placing and/or the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of New Ordinary Shares would give rise to such a liability;

(X) it, or the person specified by it for registration as a holder of the New Ordinary Shares, will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto), if any, payable on acquisition of any of the New Ordinary Shares or the agreement to subscribe for the New Ordinary Shares and acknowledges and agrees that neither Peel Hunt, Cenkos nor the Company nor any of its or their respective affiliates nor any person acting on behalf of any of them will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement;

(Y) neither Peel Hunt, Cenkos nor any of its or their affiliates nor any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Firm Placing and/or the Placing and that its participation in the Firm Placing and/or the Placing is on the basis that it is not and will not be a client of Peel Hunt and/or Cenkos (as the case me be) and that neither Peel Hunt nor Cenkos has any duties or responsibilities to it for providing the protections afforded to their clients or customers under the rules of the FCA or for providing advice in relation to the Firm Placing and/or the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing and Open Offer Agreement nor for the exercise or performance of any of their respective rights and obligations thereunder, including any rights to waive or vary any conditions or exercise any termination right. In addition, any payment by them will not be treated as client money governed by the rules of the FCA;(Z) in order to ensure compliance with the Money Laundering Regulations, Peel Hunt and Cenkos (for themselves and as agents on behalf of the Company) or the Company's registrars may, in its or their absolute discretion, require verification of any Placee's identity. Pending the provision to Peel Hunt, Cenkos or the Receiving Agent, as applicable, of evidence of identity, definitive certificates in respect of the New Ordinary Shares may be retained at its or their absolute discretion or, where appropriate, delivery of the New Ordinary Shares to it in uncertificated form, may be retained at Peel Hunt's, Cenkos's or the Receiving Agent's, as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity Peel Hunt, Cenkos (for themselves and as agents on behalf of the Company) or the Receiving Agent have not received evidence satisfactory to them, Peel Hunt, Cenkos and/or the Company may, at the absolute discretion of each, terminate its commitment in respect of the Firm Placing and/or the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;

(AA) save in the event of fraud (and to the extent permitted by the rules of the FCA), none of Peel Hunt and Cenkos nor any of their respective affiliates shall be liable to a Placee for any matter arising out of the role of Peel Hunt and Cenkos as the Company's brokers under the Firm Placing and/or Placing and each Placee waives any claim against Peel Hunt and/or Cenkos or any of their respective affiliates with it may have in respect thereof;

(BB) the Placee irrevocably appoints any duly authorised officer of Peel Hunt, Cenkos and/or as its agent for the purpose of executing and delivering to the Company and/or the Receiving Agent any documents on its behalf necessary to enable it to be registered as the holder of any of the Firm Placing Shares and/or Placing Shares (as applicable) for which it agrees to subscribe or purchase upon the terms of this appendix;

(CC) it agrees to indemnify and hold the Company, Peel Hunt and Cenkos and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of any breach of the representations, warranties, undertakings, agreements and acknowledgements set out in this appendix.

Notwithstanding anything to the contrary set forth immediately above, the New Ordinary Shares made available under the Firm Placing and Placingmay be offered and sold in the United States only to persons reasonably believed to be (a) QIBs who are also QPs and (b) Accredited Investors who are also QPs and, in each such case, in reliance on Section 4(a)(2) of, and Rule 506(b) under, the US Securities Act or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. In addition to the applicable acknowledgements, agreements, undertakings, representations and warranties set forth above, each Placee in the United States will be deemed to have made the following additional acknowledgements, agreements, undertakings, representations and warranties to each of Peel Hunt, Cenkos, the Receiving Agent and the Company:

(A) None of the New Ordinary Shares or the Open Offer Entitlements have been, or will be, registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, within the United States or to, or for the account or benefit of, US Persons except in reliance on an exemption from the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States and under circumstances that will not require the Company to register under the US Investment Company Act. There will be no public offer of the New Ordinary Shares or the Open Offer Entitlements in the United States. The Company has not been, and will not be, registered under the US Investment Company Act and investors will not be entitled to the benefits of that Act. The New Ordinary Shares made available under the Firm Placing and Placing are being offered and sold in the United States only to persons reasonably believed to be (a) QIBs who are also QPs and (b) Accredited Investors who are also QPs and, in each such case, in reliance on Section 4(a)(2) of, and Rule 506(b) under, the US Securities Act or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. Accordingly, the Company is not extending the Open Offer into the United States or to, or for the account or benefit of, US Persons unless an exemption from the registration requirements of the US Securities Act is available and, subject to certain exceptions set out below. The Company reserves the right to treat as invalid any Open Offer subscription that appears to the Company or its agents to have been executed in, or despatched from, the United States, or that provides an address in the United States for the receipt of New Ordinary Shares, or where the Company believes acceptance of such subscription may infringe applicable legal or regulatory requirements. Notwithstanding the foregoing, New Ordinary Shares may be made available under the Open Offer to a limited number of qualifying shareholders in the United States or who are US Persons who are both (i) QIBs and QPs or (ii) Accredited Investors and QPs, in the sole discretion of or as otherwise agreed by the Company, in consultation with Peel Hunt and Cenkos, and in a manner designed not to require registration of the New Ordinary Shares under the US Securities Act or registration of the Company under the US Investment Company Act. Any person in the United States or any US Person into whose possession this document comes should inform himself or herself about and observe any applicable legal restrictions; any such person in the United States or US Person who is not a QIB and a QP o an Accredited Investor and a QP is required to disregard this announcement. No representation has been, or will be, made by the Company or any of Peel Hunt and Cenkos as to the availability of Rule 144 under the US Securities Act or any other exemption under the US Securities Act or any state securities laws for the reoffer, pledge or transfer of the New Ordinary Shares.

The Placee acknowledges and understands that the Company, Peel Hunt and Cenkos will rely upon the truth and accuracy of the foregoing representations, warranties, agreements, acknowledgements and undertakings.

The Placee indemnifies on an after-tax basis and holds harmless each of Peel Hunt and Cenkos and each person affiliated with Peel Hunt and/or Cenkos and any person acting on its or their behalf from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings set out in this appendix and further agrees that the provisions of this appendix shall survive after completion of the Firm Placing and the Placing.

6. CLAWBACK OF THE PLACING SHARES

The commitments of a Placee to subscribe for the number of Placing Shares allotted to them is subject to the right of the Company (in consultation with Peel Hunt and Cenkos) to clawback any or all of such Placing Shares in order to satisfy valid applications by Qualifying Shareholders under the Open Offer and, at the discretion of the Company (in consultation with Peel Hunt and Cenkos) under the Excess Application Facility. The number of Placing Shares to be clawed back from Placing Placees will be calculated pro ratato each Placee's commitment to subscribe for Placing Shares.

7. MISCELLANEOUS

The rights and remedies of Peel Hunt, Cenkos, the Receiving Agent and the Company under this appendix and the terms and conditions contained herein are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

On application, each Placee may be asked to disclose, in writing or orally to Peel Hunt and/or Cenkos (as the case may be):

(A) if he is an individual, his nationality; or

(B) if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

All documents will be sent at the Placee's risk. They may be sent by post to such Placee at an address notified to Peel Hunt and/or Cenkos (as the case may be).

The provisions of these terms and conditions of the Firm Placing and/or the Placing may be waived, varied or modified as regards specific Placees or on a general basis by Peel Hunt and/or Cenkos (as the case may be) without reference to any Placee and with no liability to any Placee whatsoever.

The contract to subscribe for New Ordinary Shares and the appointments and authorities mentioned herein will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of Peel Hunt, Cenkos, the Company and the Receiving Agent, each Placee irrevocably submits to the exclusive jurisdiction of the English courts in respect of these matters. This does not prevent an action being taken against a Placee in any other jurisdiction.

In the case of a joint agreement to subscribe for New Ordinary Shares, references to a 'Placee' in these terms and conditions are to each of such Placees and such joint Placees' liability is joint and several.

In addition to the provisions of paragraph 7 of this appendix, Peel Hunt, Cenkos and the Company each expressly reserve the right to modify the Firm Placing and/or the Placing (including, without limitation, its timetable and settlement) at any time before allocations of Firm Placing Shares under the Firm Placing and/or of Placing Shares under the Placing are determined.