Asset selection is central to the successful implementation of our strategy.

Our acquisition criteria balance a range of factors to ensure we buy the right assets at the right price; and that there are opportunities for us to add value through our active asset management approach.

All acquisitions must satisfy the following criteria:

Location

We focus on locations where there is strong tenant demand against limited supply of appropriate properties.

Lot size

Concentrating on smaller lot sizes (typically ‘mid box’ properties as opposed to smaller multi-let and larger distribution centres over 300,000 sq ft) under 200,000 sq.ft. in size means that active asset management can achieve greater results.

Tenancy

We are happy to take on properties with flexible short or medium-term tenancies, enabling us to effectively manage the assets and sign high-quality new tenants on strong covenants with longer-term leases.

Price

Many smaller size assets are acquired at 30%-70% of replacement cost, creating price resilience and enabling greater returns at realisation.

Financing

In all cases we adopt a conservative approach to financing, targeting LTV at between 30%-40% of portfolio value, consistent with the Company’s policy on borrowings and the maturity profile of our debt arrangements.

Overall market conditions

We consider the outlook for the logistics property sector, taking into account wider market conditions and sentiment in the sector.

Investing policy detail

The Company invests in assets that comprise an interest in freehold or leasehold property, (other than by way of security) which meet the following criteria:

• Single-let UK industrial or logistics properties; and

• Modern (typically post-1980) constructions.

In addition, the Company will seek to invest in properties where it has the potential to:

• Achieve rental growth and out-performance;

• Agree strong tenant financial covenants;

• Secure lease terms focusing on duration and rental growth; and

• Benefit from positive geographical characteristics, including age and repair; location; building quality; site cover; transportation links; workforce availability; and internal operational efficiencies.

The Company acquires properties in a variety of ways, including direct from owners, through holdings or via SPVs and other vehicles.

Other than investment properties requiring re-development, the Company will not invest in assets (including development assets) which are unoccupied or not producing income at the time of acquisition unless it is part of or less than 10 per cent. of Gross Asset Value. The Company may finance development assets using, inter alia, forward funding arrangements.