Redefine International : Acquisition of Four Flexible London Offices

RDI REIT P.L.C.

('RDI' the 'Company' or the 'Group')

(Registered number 010534V)

LSE share code: RDI

JSE share code: RPL

ISIN: IM00B8BV8G91

LEI: 2138006NHZUMMRYQ1745

ACQUISITION OF FOUR FLEXIBLE LONDON OFFICES VALUED AT £161.7 MILLION

- Live webcast today at 9:30am (UK time) -

RDI, the FTSE 250 income focused UK-REIT, announces the acquisition of an 80% interest in a portfolio of four established, strategically located and high quality flexible offices in Central London from Forum Partners, Kailong Group and Office Space in Town ('OSIT').

The portfolio value of £161.7 million reflects an anticipated net initial yield of over 6.0%. The acquisition includes existing debt facilities of £73.5 million reflecting a loan to value ('LTV') of 45%, in line with the strategic priority of reducing Group leverage. The equity consideration for RDI's 80% interest in the portfolio of £72.5 million, including transaction costs of less than 1.0%, is a timely and efficient reinvestment of the majority of the proceeds from the recent disposal of the German supermarket portfolio. The net cash yield on equity is anticipated to be in excess of 9.0%. The acquisition supports the Company's strategy of recycling capital into assets and locations benefiting from sustainable long-term growth opportunities, structural change in occupational demand and strategic infrastructure investment.

OSIT, the Company's new strategic partner, will continue as the operator and retain a 20% interest in the portfolio. OSIT is one of the sector's most experienced managers with a track record of over 25 years developing and managing serviced offices in the UK. OSIT is led by founders Giles Fuchs and Niki Fuchs, who have extensive industry experience and will have a strong alignment of interests through OSIT's 20% co-investment and an EBITDA based management fee.

London is the global leader in the serviced office market, where structural and behavioural changes are driving strong demand for quality, flexible, cost efficient space. In a global workplace with technology supporting employee mobility and flexibility, businesses are demanding the ability to adapt and save costs. This trend is not only seen in small and start-up companies, but also large corporates which are increasingly embracing flexible space.

Within the flexible office sector there are operators that own the assets outright and others operating a property leased model, essentially sub-letting the space. As owners of the assets, the Company has direct control over the building management, design (including density and service provision), desk rates, cost base and use of the properties. In addition, RDI has the freedom to leverage asset management opportunities and synergies with its existing London portfolio.

OSIT provides a premium flexible office service at mid-market rates which has consistently delivered high levels of occupancy and client satisfaction. The newly acquired assets offer a high ratio of quality shared and amenity space, while design and services are focused on key client requirements including sound attenuation and market leading IT services. All four properties have been extensively refurbished and redeveloped by OSIT in the last four years and each presents a unique identity with flexibility in design to accommodate customers' bespoke requirements.

Portfolio details:

Portfolio statistics (as at 31 December 2017)	St Dunstan's, EC3R	Boundary Row, SE1	Little Britain, EC1A	New Broad Street, EC2M	Total
Market value (£m)	63.7	36.3	32.3	29.4	161.7
Capital value per sqft	1,090	902	984	830	971
Nearest Underground station	Monument	Southwark	St Paul's	Liverpool Street
Lettable area (sqft)	58,432	35,796	36,908	35,419	166,555
Implied rent per sqft	78	66	50	63	65
Number of desks	694	453	328	352	1,827
Number of clients	58	29	27	35	149
Average monthly desk rate (£, licence fees only)	814	635	663	644	705
Occupancy (%)	86	99	92	96	92
Average stay (months)	n/a(1)	30	23	30	26

Note: 1) Average stay for St. Dunstan's not yet applicable given it has only traded since 2015

The four assets are all individually established with proven trading records, while three of the four were recently rated in the top ten serviced offices in London. All are strategically positioned within short walking distances of London Underground stations. New Broad Street and Little Britain are near the new Elizabeth Line Crossrail stations. St Dunstan's is set between Monument, Tower Hill and London Fenchurch Street stations and Boundary Row, near London Waterloo, provides the Company with further exposure to London's Southbank market which is benefitting from large scale investment and redevelopment.

In an exciting and growing market, this acquisition presents a scalable platform which could be easily integrated with potential future acquisitions and which complements RDI's existing portfolio, through strategic optionality and synergies.

Trading update

The Company has had an active period since the end of the 2017 financial year. At a corporate level, our change of name and rebranding exercise has been well received by the market and we look forward to establishing the Company and our brand as the UK's leading income focused REIT.

We have seen continued strong tenant performance and a positive letting market. Over 50 lease events have been completed since 31 August 2017 and occupancy levels remain high across the portfolio. Our retail tenants have had varied but generally satisfactory trading over the Christmas period and our hotels continue to trade ahead of budgeted expectations.

Our stake in the IHL hotel portfolio was successfully increased from 17% to 74% and disposal of the Leopard portfolio of German supermarkets was confirmed at €205 million, a 10.8% premium to the 31 August 2017 valuation. Three further disposals totalling £28.8 million were completed in the period and included the Crescent Centre, Bristol and the House of Fraser store in Hull.

An office and light industrial park was acquired opportunistically for £18.8 million reflecting a net initial yield of 5.8%. The park is extremely well located in Kingston-upon-Thames and is in close proximity to the mainline railway station and town centre. The acquisition, while fully let, is expected to be part of a larger mixed-use redevelopment in the medium term.

Mike Watters, CEO of RDI commented:

'We are very pleased to have secured this opportunity to efficiently recycle the majority of the proceeds from the recent disposal of German retail assets into four high quality flexible London offices whilst maintaining our high-quality income profile. The long-term market outlook for the flexible office sector remains extremely positive, with structural and behavioural change driving the momentum behind strong occupier demand. Our detailed analysis of the market suggests that this sector is resilient and well positioned to withstand any market uncertainty.

'One of the many benefits of our diversified portfolio strategy is that it provides us with the ability and agility to invest across sectors where we see the best growth prospects. Given our experience with our hotel portfolio, we are confident in investing in operational real estate, as well as collaborating and aligning interests with high quality operational partners.

'This earnings accretive acquisition enhances our exposure to areas of long-term economic growth and supports our strategic priority of buying and owning assets with strong property fundamentals in order to continue delivering superior, sustainable and growing income returns. Furthermore, and in line with our strategy to reduce leverage, this portfolio is currently financed at 45% LTV, which is at the lower end of our medium-term target of between 45.0% and 50.0%. Our medium-term target of delivering between 3.0% and 5.0% growth in underlying earnings per share remains unchanged.'

Presentation and webcast

There will be a presentation and a live audio webcast today at 9.30am (UK time), 11.30am (SA time), which can be accessed via the homepage of the Company's website:www.rdireit.com. The webcast will give a business update, elaborate on the deal and sector, comment on the outlook for the year ahead and allow for live questions.

Participant dial in numbers and access code

United Kingdom Local: 020 3936 2999

South Africa Local: 087 550 8441

All other locations: [phone]

Participation Access Code: 10 87 62

For further information:

RDI REIT P.L.C. Mike Watters, Stephen Oakenfull, Janine Ackermann	Tel: [phone]
FTI Consulting UK Public Relations Adviser Dido Laurimore, Claire Turvey, Ellie Sweeney	Tel: [phone]
Instinctif Partners SA Public Relations Adviser Frederic Cornet, Lizelle du Toit	Tel: [phone]

Note to editors:

About RDI

RDI is a FTSE 250 UK Real Estate Investment Trust (UK-REIT) committed to becoming the UK's leading income focused REIT. The Company's income-led business model and strategic priorities are designed to offer shareholders superior, sustainable and growing income returns, with a target growth in underlying earnings per share of 3%-5% across the medium term.

Income sustainability is underpinned by a diversified portfolio and tenant base, with no overreliance on any one sector or tenant, together with an efficient capital structure. The secure and growing income stream is 39% indexed and has a WAULT of 7.4 years to first break (8.5 years to expiry). This is complemented by an average debt maturity of 7.3 years of which over 90% of interest costs are either fixed or capped. The Company is focused on all aspects impacting shareholder distributions and reports one of the lowest cost ratios in the industry whilst maintaining a low cost of debt. All figures as at 31 August 2017.

The Company owns properties independently valued at £1.5bn in the United Kingdom and Germany, Europe's two largest and most transparent property markets. RDI invests in assets with strong property fundamentals spread across UK shopping centres, UK retail parks, UK offices, UK logistics, UK hotels and German retail.

RDI holds a primary listing on the London Stock Exchange and a secondary listing on the Johannesburg Stock Exchange and is included within the FTSE 250, EPRA and GPR indices.

For more information on RDI, please refer to the Company's websitewww.rdireit.com

About Office Space in Town

Office Space in Town ('OSIT') was established in 2009 by a brother and sister team, Giles and Niki Fuchs, who have both been involved in the Serviced Office Industry for over 25 years.

It is a service company that offers businesses and individuals workspace solutions through providing serviced offices, managed offices, co-working space, meeting rooms and virtual offices in London, Cardiff, Northampton, and Edinburgh.

The company currently manages six London and five regional flexible offices, including the four offices acquired by RDI.

For more information on OSIT, please refer to the company's websitewww.officespaceintown.com

Proforma portfolio

Proforma Portfolio	% of portfolio by market value	Market value (£m)	Annual-ised gross rental income (£m)	ERV (£m)	EPRA NIY	EPRA topp-ed up yield	Reversion-ary yield	Weighted average lease length	EPRA voids (by ERV)	% Indexed
UK Shopping Centres	19%	316.5	26.2	27.1	6.4%	6.8%	8.0%	8.0	3.3%	27.5%
UK Retail Parks	10%	169.9	11.4	10.8	5.8%	6.2%	6.0%	7.7	3.8%	4.7%
UK Other Retail	2%	28.3	2.3	2.3	7.5%	7.5%	7.8%	16.6	-	-
UK Retail	31%	514.7	39.9	40.2	6.3%	6.6%	7.3%	8.4	3.2%	19.4%
UK Offices - Greater London	6%	90.2	3.4	4.4	2.8%	3.3%	4.6%	5.1	4.1%	23.7%
UK Offices - Flexible London	10%	161.7	10.3	10.3	6.0%	6.0%	6.0%	2.2	5.6%	-
UK Offices - Regions	7%	113.6	9.6	9.2	6.9%	7.7%	7.6%	3.3	4.2%	23.0%
UK Distribution & Industrial	7%	117.6	6.3	7.5	4.8%	5.0%	6.0%	5.0	3.7%	-
UK Automotive	3%	42.8	2.9	2.3	6.3%	6.3%	5.0%	12.3	-	100.0%
UK Commercial	33%	525.9	32.5	33.7	5.4%	5.7%	6.0%	4.3	4.2%	18.2%
Greater London RBL portfolio	11%	184.4	11.9	12.5	6.0%	6.0%	6.4%	8.3	-	-
Edinburgh - RBL portfolio	2%	39.1	2.6	3.0	6.1%	6.1%	7.1%	8.5	-	3.4%
IHL Hotels - RBL Portfolio	5%	75.4	6.0	6.0	7.5%	7.5%	7.5%	10.0	-	-
IHL Hotels - Travelodge Portfolio	2%	29.0	1.6	1.6	5.3%	5.3%	5.3%	21.1	-	100.0%
Enfield Travelodge	1%	16.1	0.7	0.7	4.2%	4.2%	4.2%	29.9	-	100.0%
UK Hotels	21%	344.0	22.8	23.8	6.2%	6.2%	6.5%	10.3	-	10.5%
Total UK	85%	1,384.6	95.2	97.7	5.9%	6.2%	6.6%	7.5	2.8%	16.9%
German Shopping Centres	11%	181.3	9.4	10.6	4.2%	4.3%	5.5%	4.8	0.6%	94.5%
German Supermarkets and Retail Parks	4%	68.7	4.8	4.9	5.9%	5.9%	6.6%	5.2	3.2%	94.4%
Total Europe	15%	250.0	14.2	15.5	4.7%	4.7%	5.8%	4.9	1.4%	94.5%
Total	100%	1,634.6	109.4	113.2	5.7%	6.0%	6.5%	7.1	2.6%	27.0%

Note: Portfolio data as at 31 August 2017 adjusted for three major transactions since year end, the IHL and OSIT acquisitions and the disposal of the German supermarket portfolio