Acquisition of a multi-let industrial portfolio for £72.2 million

(Registered in Guernsey)
(Registration number 64865)
LSE share code: STP JSE share code: STP
("Stenprop" or the "Company")



24 December 2018

1.   Introduction

     Shareholders are advised that Stenprop has acquired a portfolio of multi-let industrial ("MLI") properties (the "Portfolio") for a gross
     purchase consideration of £72.2 million (the "Acquisition"), including acquisition costs of £4.3 million.

     The Portfolio is made up of 22 separate properties across the UK with a gross lettable area ("GLA") of approximately 1.16 million square feet
     (107,749 sq m) and a diversified base of approximately 281 tenancies. The current passing annual rent is £4.89 million and the forecast annual
     rental income for the year ending 31 March 2020 is £4.56 million. Further details of the Portfolio are set out in paragraph 4 below.

     Paul Arenson, CEO of Stenprop, said: "The acquisition of the Portfolio is a big step forward in delivering our strategy of becoming the leading
     MLI business in the UK. The Acquisition is earnings enhancing from inception and increases the MLI component of our portfolio to more than
     34%. The purchase has been funded partly from the sale proceeds of our Swiss and Aldi portfolios and partly from the short-term use of our
     Investec Revolving Credit Facility. We have other sales of non-MLI properties in the pipeline. Once these sales are completed, overall debt
     will reduce to approximately 44% LTV and the MLI component will represent more than 41% of our portfolio. We are on track to meet our
     timetable for the two-year strategic plan communicated to investors which envisaged being at 65% MLI by 31 March 2020 with 40% overall

2.   Rationale

     Stenprop has previously announced its strategic vision to become the leading MLI business in the UK. This strategy entails selling all its non-
     MLI properties over time and utilising the sale proceeds to acquire UK MLI properties which fit its acquisition criteria. A further material
     component of this strategy is to build a market leading MLI management platform using technology to improve efficiencies.

     The Acquisition assists Stenprop to meet these objectives. It materially increases the MLI component of Stenprop's portfolio and its coverage
     across the UK, and the Portfolio will benefit from Stenprop's technology-focused approach.

     Julian Carey, Executive Property Director, added: "The Portfolio comprises 22 purpose-built MLI estates with an average unit size of
     3,500 sq ft located in densely-populated urban areas where demand for flexible industrial accommodation continues to grow. The size of the
     individual units is comparable with our existing portfolio and is representative of the segment of the market where we feel there is the
     greatest potential for our serviced industrial concept. Furthermore, the average rent of £4.48/sq ft is around 20% lower than that on our
     existing MLI portfolio, providing room for rental growth to be captured through asset management. The Portfolio also boosts our
     representation in the key regional industrial markets around Manchester, Birmingham and Liverpool, and the investment we have made into
     our technology over the last year will enable us to quickly and efficiently absorb the assets onto our platform".

3.   Funding of the Acquisition

     Stenprop acquired the 18 freehold and 4 long-leasehold interests in the 22 properties from Hansteen Holdings PLC (the "Seller") for a
     purchase price, excluding acquisition costs, of £67.9 million (the "Purchase Price").

     Simultaneous exchange and completion of the transaction took place on 21 December 2018. The Purchase Price was paid in cash, using
     existing cash resources and a drawdown of £35.0 million under the Investec Revolving Credit Facility ("Investec RCF"). Stenprop intends to
     repay the Investec RCF using the proceeds from the disposal of assets held for sale and a bank loan of approximately £27.2 million to be
     secured against the Portfolio and which the Company expects to draw in late January 2019.

4.   Property specific information

     All properties in the Portfolio fall within the MLI sector.

                                                                                                                                 average rental
                                                                                      Geographic                      GLA       per square foot
              Property name                                                           location                      (sq.ft)            (£/sq.ft)
      1       Horsham, Star Road Industrial Estate, Partridge Green                   South East                   66,160                  6.46
      2       Burton upon Trent, Albion Gateway, Battista Road                        Midlands                     27,967                  6.20
      3       Burntwood, Chasewater Heaths Business Pk, Cobbett Road                  Midlands                     40,246                  5.46
      4       Stoke on Trent, Queensway Industrial Estate, Longbridge Road            Midlands                     64,571                  4.17
      5       Birmingham, Tyburn Trading Estate, Ashfold Farm Road                    Midlands                     51,297                  5.31
      6       Loughborough, Windmill Road Industrial Estate, Windmill Road            Midlands                     29,322                  5.09
      7       Holywell - Greenfield A-M, Greenfield Business Pk (A-M), Bagillt Road   Wales                       128,400                  3.04
      8       Rhyl, Tir Llwyd Industrial Estate, St. Asaph Avenue                     Wales                        68,042                  4.91
      9       Rochdale, Phoenix Close Ind Est, Heywood                                Yorkshire                    42,183                  5.90
      10      Sheffield, Holbrook Enterprise Park, Enterprise Way                     Yorkshire                    53,062                  5.01
      11      Darlington - Cleveland, Cleveland Trading Estate, Cleveland St          North East                   29,764                  4.12
      12      Ellesmere Port - Venture Point, Stanney Mill Road                       North West                   45,158                  5.60
      13      Huyton, Chapel Brook Trade Park, 13 Wilson Road                         North West                   84,762                  3.78
      14      Liverpool, Brasenose Road                                               North West                   85,132                  3.18
      15      Middleton - Hanson Park, Hanson Park, Hanson Close                      North West                   10,099                  6.14
      16      Middleton - Jubilee Park, Jubilee Park, Hanson Road                     North West                   15,300                  4.04
      17      Middleton - Townley Pk, Townley Park, Hanson Street                     North West                   32,608                  4.89
      18      Liverpool, Larch Lea Industrial Estate, Castor Street                   North West                   46,382                  3.80
      19      Liverpool, Link at Huyton Business Pk, Ellis Ashton Street              North West                   86,971                  3.74
      20      Prestwich, Mountheath Trading Est, Ardent Way                           North West                   36,596                  7.61
      21      Preston, Old Mill Industrial Estate, School Lane, Bamber Bridge         North West                  102,779                  3.60
      22      Darwen, Watery Lane                                                     North West                   13,004                  4.22
      Total                                                                                                     1,159,805                  4.48

     The Purchase Price payable for the Portfolio is considered to be its fair market value, as determined by the directors of the Company. The
     directors of the Company are not independent and are not registered as professional valuers or as professional associate valuers in terms of
     the Property Valuers Profession Act, No.47 of 2000.

5.   Financial information

     Set out below is the forecast financial information of the Portfolio (the "Forecast") for the three months and nine days ending 31 March 2019
     and the 12 months ending 31 March 2020 (together, the "Forecast Period").

     The Forecast, including the assumptions on which it is based and the financial information from which it has been prepared, is the
     responsibility of the directors of the Company. The Forecast has not been reviewed or reported on by independent reporting accountants.

     The Forecast presented in the table below has been prepared in accordance with the Company's accounting policies, which are in compliance
     with International Financial Reporting Standards.

                                                                                                      Forecast from 21      Forecast for the 12
                                                                                                   December 2018 to 31         months ending 31
                                                                                                            March 2019               March 2020


      Rental income (note 1)                                                                                 1,224,618                 4,564,115
      Property operating expenses                                                                              (84,025)                (450,257)
      Net rental income                                                                                      1,140,593                 4,113,857
      Administrative expenses                                                                                  (42,862)                (176,817)
      Net operating income                                                                                   1,097,732                 3,937,040
      Financing costs                                                                                        (149,240)                 (911,720)
      Profit before tax                                                                                        948,492                 3,025,321
      Taxation                                                                                                       -                         -
      Profit after tax                                                                                         948,492                 3,025,321
      Earnings available for distribution                                                                      948,492                 3,025,321
     Note 1 – Rental Income

                                                                                                         Forecast from           Forecast for the
                                                                                                   21 December 2018 to           12 months ending
       %                                                                                                 31 March 2019              31 March 2020

       Contracted                                                                                                    89                        83
       Uncontracted                                                                                                  11                        17
       Total                                                                                                        100                       100

     The Forecast incorporates the following material assumptions in respect of revenue and expenses:

     1. The Forecast is based on information derived from the lease contracts provided by the Seller, which have been the subject of a legal due
        diligence, as well as Stenprop's own view, in consultation with its advisors, of the expected income and expenditure associated with the
     2. Leases expiring during the Forecast Period are assumed to be re-let at current market rates after a 6.4-month void period on average,
        unless management believes the lessee has the intention to renew their lease.
     3. An average 3.5-month rent-free period has been assumed on all new leases included in the Forecast.
     4. Property operating expenses have been forecast on a property by property basis, and are based on service charge budgets, operating
        expenditure budgets, and forecast vacancy rates and thus landlord void costs for the respective units. A bad debt provision of 1.00% of
        rental income is included in the Forecast. This provision has been made to account for the estimated impact of irrecoverable rent arrears
        and tenant forfeiture.
     5. Senior debt of £27.2 million with a five-year term secured over the Portfolio has been assumed from 31 January 2019, based on a margin
        of 2.00% over 3-month LIBOR, hedged using a 5-year interest-rate swap at an assumed rate of 1.40%, giving an all-in cost of debt of
        3.40%. Upfront finance costs (including associated professional fees) have been assumed at 2.00% of the senior debt and are amortised
        over the term of the senior debt. Finance costs do not include the short-term cost of utilising the Investec RCF which has a financing cost
        of 1-month LIBOR   7.00%.
     6. No fair value adjustment is recognised.
     7. The Forecast assumes no unforeseen economic factors will affect the lessees’ ability to meet their commitments under existing lease

6.   Categorisation of the Acquisition

     The Acquisition is classified as a category 2 transaction in terms of the JSE Listings Requirements. Accordingly, it is not subject to approval
     by shareholders.

For further information:

Stenprop Limited                                                                            44(0)20 3918 6600
Paul Arenson
Patsy Watson
Julian Carey

Numis Securities Limited (Financial Adviser)                                                44(0)20 7260 1000
Hugh Jonathan
Vicki Paine

Tavistock (PR Adviser)                                                                      44(0)20 7920 3150
James Whitmore
James Verstringhe
Kirsty Allan

Instinctif Partners (SA Investor Relations and PR Adviser)                                  27 (0)11 447 3030
Keagile Makgoba

Java Capital Trustees and Sponsors Proprietary Limited                                      27 (0)11 722 3050
(JSE Sponsor)

About Stenprop:

Stenprop is a Guernsey-registered UK REIT. The objective of the Company is to deliver sustainable growing income to its investors. Stenprop's
investment policy is to invest in a diversified portfolio of UK multi-let industrial (MLI) properties with the strategic goal of becoming the leading
MLI business in the UK. For further information, go to


The information contained within this announcement is considered by the Company to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No.596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information
will be considered to be in the public domain.


This announcement contains certain 'forward-looking' statements. Such statements reflect current views on, among other things, our markets,
activities, projections, objectives and prospects. Such 'forward-looking' statements can sometimes, but not always, be identified by their reference
to a date or point in the future or the use of 'forward-looking' terminology, including terms such as 'believes', 'estimates', 'anticipates', 'expects',
'forecasts', 'intends', 'due', 'plans', 'projects', 'goal', 'outlook', 'schedule', 'target', 'aim', 'may', 'likely to', 'will', 'would', 'could', 'should' 
or similar expressions or in each case their negative or other variations or comparable terminology. By their nature, forward-looking statements involve
inherent risks, assumptions and uncertainties because they relate to future events and depend on circumstances which may or may not occur and
may be beyond our ability to control or predict. Forward-looking statements should be regarded with caution as actual results may differ materially
from those expressed in or implied by such statements.

Important factors that could cause actual results, performance or achievements of Stenprop to differ materially from any outcomes or results
expressed or implied by such forward-looking statements include, among other things: (a) general business and political, social and economic
conditions globally, (b) the consequences of the referendum on Britain leaving the EU, (c) industry and market trends (including demand in the
property market and property price volatility), (d) competition, (e) the behaviour of other market participants, (f) changes in government and other
regulation, including in relation to the environment, health and safety and taxation (in particular, in respect of Stenprop's status as a Real Estate
Investment Trust), (g) inflation and consumer confidence, (h) labour relations and work stoppages, (i) natural disasters and adverse weather
conditions, (j) terrorism and acts of war, (k) Stenprop's overall business strategy, risk appetite and investment choices in its portfolio management,
(l) legal or other proceedings against or affecting Stenprop, (m) reliable and secure IT infrastructure, (n) changes in occupier demand and tenant
default, (o) changes in financial and equity markets including interest and exchange rate fluctuations, (p) changes in accounting practices and the
interpretation of accounting standards and (q) the availability and cost of finance. Forward-looking statements in this announcement, or the
Stenprop website or made subsequently, which are attributable to Stenprop or persons acting on its behalf should therefore be construed in light
of all such factors.

Any forward-looking statements made by or on behalf of Stenprop speak only as of the date they are made. Such forward-looking statements are
expressly qualified in their entirety by the factors referred to above and no representation, assurance, guarantee or warranty is given in relation
to them (whether by Stenprop or any of its associates, directors, officers, employees or advisers), including as to their completeness, accuracy or
the basis on which they were prepared.

Other than in accordance with our legal and regulatory obligations (including under the JSE Listing Requirements, UK Financial Conduct Authority's
Listing Rules and Disclosure Rules, Transparency Rules, and the Market Abuse Regulation), Stenprop does not intend or undertake to update or
revise forward-looking statements to reflect any changes in Stenprop's expectations with regard thereto or any changes in information, events,
conditions or circumstances on which any such statement is based. This document shall not, under any circumstances, create any implication that
there has been no change in the business or affairs of Stenprop since the date of this document or that the information contained herein is correct
as at any time subsequent to this date.

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