Disposal of Euston House, 24 Eversholt ST, London STENPROP LIMITED (Registered in Guernsey) (Registration number 64865) LSE share code: STP JSE share code: STP ISIN: GG00BFWMR296 ("Stenprop" or the "Company") THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION DISPOSAL OF EUSTON HOUSE, 24 EVERSHOLT ST, LONDON 10 January 2019 1. Introduction Shareholders are advised that Stenprop has reached agreement to dispose of its London office building known as Euston House (the "Property") via a sale of all the shares of a special purpose vehicle (the "Property Company") owned by Stenprop to Erel 4 S.a.r.l (the "Buyer"), for a consideration which values the Property at £95 million and which will release cash proceeds of approximately £66.0 million after sales costs, rental top-ups and the repayment of external debt (the "Disposal"). The Buyer is a wholly owned subsidiary of Eurazeo, an investment management business listed on NYSE Euronext Paris, in partnership with investment and asset management business, Arax Properties. Paul Arenson, CEO of Stenprop, said: "The sale of Euston House is the last of our Central London offices to be sold and completes a sales programme of more than £216.6 million of Central London offices. The net proceeds will be used partly to reduce debt and partly to acquire additional multi-let industrial ("MLI") assets in line with our transition strategy into a 100% UK MLI business. Following completion of the sale and before any further MLI acquisitions, the MLI component of our portfolio will represent more than 40% of our total assets and our overall debt will reduce to a loan-to-value ratio of less than 45%. This sale represents another important step in the implementation of our two-year strategic transition plan communicated to shareholders, which envisages being at 65% MLI by 31 March 2020 with no more than 40% overall leverage". 2. Rationale for the disposal Stenprop previously announced its strategic vision to become the leading multi-let Industrial ("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, and to reduce debt. The disposal of the Property, which is at a £14.5 million premium to its current book value of £80.5 million, is in line with this strategy. The net proceeds from the Disposal will be used to reduce the short-term borrowings used to fund the acquisition of the portfolio of MLI properties announced by Stenprop on 24 December 2018 and to fund further acquisitions in the MLI sector. 3. Terms of the disposal Completion of the Disposal is conditional upon Stenprop carrying out a corporate reorganisation in respect of the entities that hold the Property and Dekabank Deutsche Girozentrale ("Dekabank") consenting to such reorganisation. Completion is expected to occur by no later than 5 April 2019. Failure to complete by this date due in certain circumstances to a default by the Buyer will result in Stenprop (UK) Limited (the "Seller"), a wholly-owned subsidiary of Stenprop, retaining the deposit of €5 million (£4.50 million) which was paid by the Buyer on exchange on 10 January 2019. The Buyer will acquire the Property Company for an aggregate initial consideration of £44.3 million, which is based on the estimated net asset value of the Property Company (the "purchase consideration"), which values the Property at £95 million. In addition, the Buyer will fund the repayment of a shareholder loan owing by the Property Company to the Seller of approximately £22.9 million. The purchase consideration is subject to a further post-completion adjustment to take account of any difference between the actual and the estimated net asset value at completion. Normal warranties and indemnities for a transaction of this nature have been provided by the Seller. However, as the Buyer is proposing to obtain warranty and indemnity insurance, the Seller’s liability for breach of general warranties is capped at £1 under the SPA. 4. Property specific information Property name Geographic location Sector NLA (sq.ft) Weighted average rental per square foot (£ psf) 1 Euston House Central London Office 112,597 £39.80 The value attributable to the Property in Stenprop's consolidated statement of financial position at 30 September 2018 was £80.5 million, being 12% of the total portfolio asset value, and was determined in accordance with Royal Institution of Chartered Surveyors standards by Roger Meeds, a director of Jones Lang LaSalle Limited who is an external valuer registered with the Royal Institution of Chartered Surveyors. This compares with the value derived from the purchase consideration of £95 million. The after-tax EPRA earnings attributable to the special purpose vehicle owning the Property in Stenprop's consolidated statement of comprehensive income for the six months ended 30 September 2018, which was subject to an independent review by Deloitte LLP and prepared under the International Financial Reporting Standards ("IFRS") in accordance with IAS 34 'Interim Financial Reporting', was £1,202,606. The equivalent after tax IFRS earnings were £2,192,955. 5. Stenprop portfolio Following completion of the Disposal, and assuming no further acquisitions, MLI assets will increase from 34% to over 40% of Stenprop's total portfolio, with 54.7% of the total portfolio located in the UK, 42.5% in Germany and 2.8% in Switzerland. Total leverage will reduce from approximately 48% to under 45%. 6. Categorisation of the acquisition The Disposal is classified as a category 2 transaction in terms of the JSE Listings Requirements. Accordingly, it is not subject to approval by shareholders. Stenprop has a primary listing on the Main Board of the JSE and a listing on the Specialist Fund Segment of the Main Market of the LSE. 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 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 www.stenprop.com. MAR 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. Date: 11/01/2019 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.